Private fundraising plans are underway at Barclays.
Barclays is reportedly looking to raise over £6 billion from a number of investors to strengthen its balance sheet and prevent it turning to taxpayers for support. The bank is expected to make a formal announcement later today.
It is believed to have been in talks with new and existing investors from the Middle East, including the governments of Qatar and Abu Dhabi. Like many of its rivals, Barclays has lost billions of pounds from the writedown of credit-related assets, although experts believe it has coped slightly better with the financial crisis.
It now hopes to gain a competitive advantage by securing funds privately rather than accepting government bailout funds. Indeed, a successful private fundraising effort would allow Barclays to evade government restrictions on bonuses and dividends, which have been forced on those banks that have received financial support from the government.
Earlier this month, Lloyds TSB, Halifax Bank of Scotland and the Royal Bank of Scotland all took part in a recapitalisation exercise which saw the government pump up to £37 billion into the three financial institutions. The government is now a major shareholder in these banks. At the time, Barclays insisted it would raise the money it needed to shore up its balance sheet on its own.
