Barclays is reportedly on the verge of raising £4 billion from overseas investors.
The banking giant is holding talks with six potential investors over the cash injection as it seeks to repair the damage done by credit crunch losses and grow the business, reports said yesterday.
The China Development Bank and Temasek, a Singaporean government-backed fund – both nursing paper losses from the stakes they bought in Barclays last year – are said to be among the possible investors.
The capital-raising exercise follows major rights issues from the Royal Bank of Scotland – which raised £12 billion – and Halifax Bank of Scotland, whose shareholders are being asked for £4 billion.
Barclays is likely to choose three investors for its plans.
The bank is said to be keen to prevent the holdings of existing shareholders from being diluted by giving them a chance to buy shares, but the sovereign wealth funds will underwrite the placing by buying up any unwanted stock.
Barclays is ready to complete the fundraising within the next fortnight and may update the stock market on the situation this week.
According to the reports, the bank’s profits are in line with expectations and it does not plan to cut its dividend – unlike HBOS and RBS.
But it wants the funds to strengthen its capital position and help its expansion into Pakistan, where it has recently gained a banking licence, as well as stepping up its businesses in the United Arab Emirates and the US.
