Barclays has stated it is planning to raise up to £4.5bn in a share issue for bolstering its balance sheet. The company has sold its shares to new investors like the Qatar Investment Authority as well as existing shareholders (China Development Bank). Barclays stated the fundraising move is aimed at strengthening its capital base.

Following HBOS and the Royal Bank of Scotland, it is the latest British bank, seeking to raise funds to ease the adverse impact of the credit crunch. Barclays shares rose in reaction to the move. The state owned investment arm of the Gulf state, Qatar Investment Authority, will invest close to £1.7bn in Barclays, making it a key new shareholder. A separate Qatari firm Challenger, controlled by Sheikh Hamad Bin Jassim Bin Jabr al-Thani, is set to invest £533m in the business. Sumitomo Mitsui Corporation, a Japanese bank, has also agreed to buy £500m in new shares.

“We will strengthen our capital base through our capital raising and also give ourselves additional resources for pursuing our strategy of growth through earnings diversification,” Barclays chief executive John Varley stated.

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