Hallatauer
Member
Problem is.... nobody's buying...
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Barclays throwing the towel?
- Thread starter mario
- Start date
http://online.wsj.com/article/SB123715936247135321.html?mod=mktw
LONDON -- Barclays PLC has asked J.P. Morgan Cazenove to shop its exchange-traded-funds business as it seeks to shore up its capital cushion, according to a person familiar with the matter.
Selling the iShares business -- which is part of Barclays Global Investors, the British bank's San Francisco-based asset-management arm -- could fetch £4 billion ($5.6 billion), the person said. But the business also could bring less, given that some analysts have valued the whole of Barclays Global Investors at about £5 billion.
Exploration of a sale is part of a process that finds Barclays, one of the most thinly capitalized U.K. banks, trying to raise cash to avoid turning to the government for help. Analysts have said Barclays may have to raise money by selling assets or issuing shares. One option would be for the bank to issue shares to the U.K. government, which Barclays has said it wants to avoid in order to maintain commercial independence.
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Barclays is trying to raise cash to avoid seeking U.K. government help.
Scrutiny of Barclays's capital levels comes as the bank debates whether it will take part in the U.K. government's asset-insurance plan. The plan would help Barclays limit future losses, but the cost to participate could deplete the bank's capital cushion, a key measure of its financial strength.
A Barclays spokesman declined to comment on the possibility of asset sales. Barclays may seek to raise capital regardless of whether it participates in the government's insurance plan, people close to the matter say. The bank must decide by the end of the month whether it will insure a pool of troubled assets under the plan.
The exchange-traded funds business has been a rare bright spot in the financial industry in the past year. Investors have continued to pour cash into these funds, which track indexes ranging from big-company U.S. stocks, to bonds, commodities and real estate. Barclays took in $56.3 billion in new assets in 2008, just shy of its 2007 total, giving it $254.7 billion in assets.
Index funds have low fees so require large scale to be profitable. Barclays has that scale, so its business is attractive to firms including other big index players and possible new entrants.
LONDON -- Barclays PLC has asked J.P. Morgan Cazenove to shop its exchange-traded-funds business as it seeks to shore up its capital cushion, according to a person familiar with the matter.
Selling the iShares business -- which is part of Barclays Global Investors, the British bank's San Francisco-based asset-management arm -- could fetch £4 billion ($5.6 billion), the person said. But the business also could bring less, given that some analysts have valued the whole of Barclays Global Investors at about £5 billion.
Exploration of a sale is part of a process that finds Barclays, one of the most thinly capitalized U.K. banks, trying to raise cash to avoid turning to the government for help. Analysts have said Barclays may have to raise money by selling assets or issuing shares. One option would be for the bank to issue shares to the U.K. government, which Barclays has said it wants to avoid in order to maintain commercial independence.
View Full Image
Getty Images
Barclays is trying to raise cash to avoid seeking U.K. government help.
Scrutiny of Barclays's capital levels comes as the bank debates whether it will take part in the U.K. government's asset-insurance plan. The plan would help Barclays limit future losses, but the cost to participate could deplete the bank's capital cushion, a key measure of its financial strength.
A Barclays spokesman declined to comment on the possibility of asset sales. Barclays may seek to raise capital regardless of whether it participates in the government's insurance plan, people close to the matter say. The bank must decide by the end of the month whether it will insure a pool of troubled assets under the plan.
The exchange-traded funds business has been a rare bright spot in the financial industry in the past year. Investors have continued to pour cash into these funds, which track indexes ranging from big-company U.S. stocks, to bonds, commodities and real estate. Barclays took in $56.3 billion in new assets in 2008, just shy of its 2007 total, giving it $254.7 billion in assets.
Index funds have low fees so require large scale to be profitable. Barclays has that scale, so its business is attractive to firms including other big index players and possible new entrants.
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