LONDON – The sovereign wealth fund Qatar Holding said on Monday that it had sold its remaining warrants in Barclays in a deal that has led to a $1.2 billion share sale in the British bank.
Qatar Holding had acquired the warrants, which are financial instruments that can be exchanged for stock, during the financial crisis.
Barclays raised £7 billion ($10.5 billion) in 2008 from new investors.
In a statement, Qatar Holding, which remains the largest shareholder in Barclays, said it had monetized 379 million units of Barclays warrants.
Goldman Sachs and Deutsche Bank sold 303.3 million of the converted shares to investors, priced at a 4 percent discount to the closing Barclays share price on Friday, according to statements from the banks. In total, the share sale raised around $1.2 billion.
Investors reacted negatively to the announcement on Monday, and shares in Barclays fell 4.1 percent, to £2.44, in morning trading in London.
Despite the share sale, Qatar Holding said it continued to support Barclays, which has been hit by a number of scandals in recent months.
The bank agreed to pay $450 million earlier this year to settle allegations that some of its employees manipulated the London interbank offered rate, or Libor.
British and American authorities also continue to investigate payments Barclays made to Qatar Holding as part of the 2008 fund-raising.
“We maintain our confidence in the long-term prospects for the business,” Qatar Holding’s chief executive, Ahmad Al-Sayed, said in a statement.
The announcement came after some of Barclays investors called on the bank’s chief executive, Antony P. Jenkins, to pare back the firm’s investment banking division, according to a report in The Financial Times.
The steps would follow similar moves by the Swiss bank UBS, which announced 10,000 layoffs in its investment banking unit last month in an effort to focus on its profitable wealth management business.
Despite a leading position in several trading areas, particularly fixed income, a reduction in the Barclays investment banking unit would help increase the bank’s return on equity, a crucial measure of a firm’s profitability, according to a research note on Monday from JPMorgan Chase.
“We believe that a credible new strategy requires balance sheet reduction in investment banking over time, alongside further cost cuts groupwide,” the JPMorgan Chase analysts said in the note to investors. A spokesman for Barclays declined to comment.
nytimes.com
Qatar Holding had acquired the warrants, which are financial instruments that can be exchanged for stock, during the financial crisis.
Barclays raised £7 billion ($10.5 billion) in 2008 from new investors.
In a statement, Qatar Holding, which remains the largest shareholder in Barclays, said it had monetized 379 million units of Barclays warrants.
Goldman Sachs and Deutsche Bank sold 303.3 million of the converted shares to investors, priced at a 4 percent discount to the closing Barclays share price on Friday, according to statements from the banks. In total, the share sale raised around $1.2 billion.
Investors reacted negatively to the announcement on Monday, and shares in Barclays fell 4.1 percent, to £2.44, in morning trading in London.
Despite the share sale, Qatar Holding said it continued to support Barclays, which has been hit by a number of scandals in recent months.
The bank agreed to pay $450 million earlier this year to settle allegations that some of its employees manipulated the London interbank offered rate, or Libor.
British and American authorities also continue to investigate payments Barclays made to Qatar Holding as part of the 2008 fund-raising.
“We maintain our confidence in the long-term prospects for the business,” Qatar Holding’s chief executive, Ahmad Al-Sayed, said in a statement.
The announcement came after some of Barclays investors called on the bank’s chief executive, Antony P. Jenkins, to pare back the firm’s investment banking division, according to a report in The Financial Times.
The steps would follow similar moves by the Swiss bank UBS, which announced 10,000 layoffs in its investment banking unit last month in an effort to focus on its profitable wealth management business.
Despite a leading position in several trading areas, particularly fixed income, a reduction in the Barclays investment banking unit would help increase the bank’s return on equity, a crucial measure of a firm’s profitability, according to a research note on Monday from JPMorgan Chase.
“We believe that a credible new strategy requires balance sheet reduction in investment banking over time, alongside further cost cuts groupwide,” the JPMorgan Chase analysts said in the note to investors. A spokesman for Barclays declined to comment.
nytimes.com
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