Barclays looks to soothe investors with capital raising clawback

19 November 2008

The UK's second biggest bank, Barclays, is to scrap annual bonuses for executive directors this year and offer investors an opportunity to "clawback" around £500 million ($332.5 million) in reserve capital instruments (RCI) earmarked for new Middle East investors in a bid to head off a shareholders revolt.

It follows talks between senior bank officers and institutional investors who were reportedly unhappy at being unable to participate in the capital raising undertaken by the bank on October 31st, when it approached Qatar Holding and Sheikh Mansour Bin Zayed Al Nahyan to inject it with fresh resources.

Barclays has now negotiated with its new investors to each make £250 million of their RCIs available for existing institutional shareholders.

Meanwhile, Barclays has confirmed that in addition to cancelling its executive bonuses this year, the financial institution's entire board will stand for re-election in April.

Industry analysts told Reuters that the moves will dampen down revolt among shareholders and increase the prospects of the capital raising plan being approved when investors meet on November 24th.

Barclays operates in over 50 countries, employing some 150,000 people. It has around 42 million customers worldwide.

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