The Middle Eastern state's decision to cut support for Barclays comes as a blow to chief executive CS Venkatakrishnan. Photo: Lam Yik/Bloomberg
Barclays' backers in Qatar are to halve their stake in the lender in the biggest share sale since the Gulf state bailed out the banks during the financial crisis.
Qatar Investment Authority (QIA), Barclays' second-largest shareholder, announced plans on Monday to raise £510 million through a share sale.
The deal will halve QIA's stake in Barclays, reducing its stake from 5% to about 2.4%.
Qatar has been a cornerstone investor in Barclays since 2008, when the Gulf kingdom pumped £4 billion into the bank to help it avoid a state bailout. Since then, Barclays' share price has halved.
On Monday evening, QIA put 362 million Barclays shares up for sale — about 45% of QIA's 810 million shares.
At its peak, Qatar owned more than 1 billion shares in the bank. This week's sale is the largest direct share sale since the Gulf country first invested. In 2012, Qatar sold about 300 million warrants to investment banks, which allow investors to buy Barclays shares at a specified price, worth about £740 million.
The Middle Eastern state's decision to cut support for Barclays is a blow to chief executive CS Venkatakrishnan, known as Venkat, who is currently overhauling the bank in a bid to improve its efficiency.
Barclays plans to quit. up to 2,000 employees across legal, compliance and HR teams to achieve savings of around £1 billion.
His investment bank also plans to cut thousands of unprofitable clients, including sovereign wealth funds, governments and large institutional investors. Up to 2,500 shares could be cut.
Mr Venkatakrishnan hopes the overhaul will help boost Barclays' share prices, which have fallen nearly 10% this year and are lagging rivals.
The sell-off in Qatar's shares comes at a dark time for the global banking sector. Ratings agency Moody's on Monday issued a «negative» outlook for the industry for 2024, warning that losses are likely to rise sharply as high interest rates hit both households and businesses. High unemployment and low consumer confidence could lead to a surge in «non-performing loans» in the UK, a report says.
Lloyds Bank chief executive Charlie Nunn warned last week that international investors were experiencing «nervousness» about about support. European banks fear unexpected taxes in this sector.
Investment bankers at Citi and Bank of America are handling the sale of Barclays shares, according to Bloomberg, which first reported the news.
Shares were selling for 141 pence, a slight discount to the 142.98 pence price at which they closed on Monday.
Qatar is likely to remain Barclays' second-largest shareholder even after the sale, as passive fund giants Blackrock and Vanguard are the bank's first and third-largest shareholders, respectively.
Qatar first invested in the bank at the height of the financial crisis. Desperate to avoid government bailouts like Lloyds Bank and RBS, Barclays struck a deal that sparked more than a decade of legal and regulatory recriminations.
The Financial Conduct Authority recently fined the bank £50 million for » «irresponsible» failure to disclose commissions paid to Qatar as part of the transaction.
QIA is also Sainsbury's largest shareholder and owns a number of assets around the world. UK.
Barclays is an unusual entry in the UK banking sector as it operates a large US investment bank that competes with Wall Street titans such as Goldman Sachs and Citi.
However, recent results show profit. at its investment bank and consumer division fell, and deposits in the UK also fell.
Its net interest margin, which measures its profitability, also fell.
Mr Venkatakrishnan is expected to fall set out details of its restructuring in the bank's full-year results in February.
Barclays currently employs 44,000 people in the UK and 43,000 in the rest of the world.
The bank's employees are expected to The brunt of the cuts will come from the bank's executive services division, which serves as the bank's back office.
Barclays declined to comment. QIA has been contacted for comment.
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