Barclays to issue £5.8bn new shares to boost capital

30 July 2013

Barclays is set to issue £5.8 billion ($8.9 billion) in new shares to meet the new regulator demands.

The UK-based institution currently has a £12.8 billion capital shortfall and was told to close the gap by the Prudential Regulation Authority.

Analysts expected a much smaller rights issue than the one Barclays has come up with.

It is also issuing £2 billion of bonds that are turned into shares or wiped out if the bank gets into trouble.

Chief executive Antony Jenkins said the new plan would not reduce lending to small businesses and households, after he initially claimed the new capital requirements could stop the bank from doing so.

Existing investors will now have the opportunity to buy new shares in the company so their current stakes do not become diluted.

Barclays will also reduce the level of risky assets on its balance sheet by between £60 billion to £80 billion.

"I am certain the decisive and prompt action we are taking will leave Barclays stronger," Mr Jenkins remarked.

By Tony Aynsley

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