Barclays Unveils Plans To Fill £5.8bn Gap In Share Sale

30/07/2013 12:17 | Updated 30 July 2013

Barclays has unveiled plans to raise £5.8 billion in cash from investors in a massive share sale in order to meet City regulators' requirements to steady its balance sheet.

The banking giant will offer investors one new ordinary share, priced at 185p in a 40.1% discount of the bank's closing price on 29 July 2013, for every four ordinary share currently held. This comes as part of a wider fundraising effort to shore up its finances by a further £12.8 billion to help it handle any future financial adversity.

Details of Barclays' share sale came as the bank announced its half-year results, which saw a further £2 billion allocated to cover compensation for mis-selling financial products, including £1.35 billion for payment protection insurance and £650 million for interest rate swap products being missold to small businesses. This takes Barclays' total compensation bill to £5.5 billion.

Nick Rowles-Davies, consultant to litigation funding company Vannin Capital, said: “The rate-swap mis-selling is one of the biggest blots on the copybooks of the banks involved."


Barclays bank revealed underlying pre-tax profits fell 17% to £3.6 billion over the first half of 2013, leaving aside the extra costs for mis-selling compensation.

The news of Barclays' share sale plan was met with a cold response in the City, with the banks' share price falling 5% as the shares sale was deemed far greater than expected. Barclays also plans to issue £2 billion in bonds that can be converted into shares or wiped out if the bank falls into further financial problems.

Barclays chief executive Antony Jenkins said: "I am certain the decisive and prompt action we are taking will leave Barclays stronger."

The Prudential Regulation Authority said it had "agreed and welcomed" the bank's plans.

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