Barclays plans £5.8bn rights issue
The announcement came as Barclays unveiled its results for the first half of the year which revealed larger than expected provisions against the cost of compensating customers’ mis-sold payment protection insurance and interest rate hedging products.
The bank also blamed a recalculation of the Prudential Regulation Authority’s leverage ratio from 2.2% to 3%.
Anthony Jenkins, chief executive at Barclays, said its fundraising was a “bold but balanced plan” which would see it meet regulatory demands by June next year.
Barclays will also issue £2bn of bonds that will be turned into shares or wiped out should the bank gets into trouble.
The Bank of England has welcomed Barclays’ capital plan as a credible way of meeting its obligations.
A Bank of England spokesperson said: “Following constructive discussions the PRA has agreed and welcomes Barclays’ capital plan announced today.
“We have considered all elements of the plan, including new capital issuance, planned dividends and management actions to be taken and based on Barclays’ projections conclude that it is a credible plan to meet a leverage ratio of 3%, after adjustments, by June 2014 without cutting back on lending to the real economy.”
Despite the shortfall there were some positives in Barclays’ results. The bank reported a pretax profit of £1.7bn for the six months ended June, almost double its £871m profit a year ago.