91Èȱ¬

I must confess, when I heard earlier today that the Chief Exec (I refice to call him an ''officer'' as per the current US trend sweeping the UK - a role that no legal status!) - was to step down with ''immediate effect'' - I thought ''Ooops! what now''.

Well Robert, thanks for that report - but on the scale of ''what on earth next'' - this one does not look too bad at all.

cheers

I like the quote:

'"It has a trading problem, not a funding problem", said a banker.'

Yeah, right. That's why they've just had to go cap in hand to a private equity company for £150m, and press ahead with a £250m right issue at a miserably low price.

Because they don't have a funding problem.

Lol!

So the original rights issue plan gets torn up, and the subscription price drops another 40%? What happens to the original underwriters' commitments? Some shredded nerves at the FSA this weekend I imagine, and it will be interesting to see how the public reacts. If nothing else, this must scare off anyone looking to underwrite any other banks' rights...

Should Barclays have raised funds while they had the chance?

I also liked the "trading problem, not a funding problem". This reminds me of how we were told that Northern Rock had "a liquidity problem, not a solvency problem", when it clearly had both.

The biggest problem with the government rescue of NR was the terrible precedent it set. It was always going to be interesting to see what would happen when a second bank got into trouble, and a third...

We're about to find out by the look of it.

Curious that the 91Èȱ¬ is announcing this story "exclusively" on the 10 o'clock news and, presumably, using leaked price sensitive information. This sounds like a good deal for shareholders and depositors, so I am not sure what value there is in premature publication. If the deal is not yet a done deal and falls as a result of this early story, will the 91Èȱ¬ compensate depositors and shareholders for any loss? Robert obviously considers this to be responsible public service broadcasting. What is the public benefit of leaking this story in advance of the company announcement? I note that no regulatory statement had been made by the company at the time of the 10 o'clock news story. What are the FSA rules on obtaining and using price sensitive information Robert? Is getting the scoop worth potentially endangering a deal or making it more difficult?

No.2.

TPG buying in at a fraction of NBV. (Already clobbered by write-downs, which may or may not be needed).

LoL!

They certainly will do.

You've missed the point by continualling banging on about BTL which constitutes ~12% of the banks business.

It's the other ~88% which seems either to have suddenly worsened or they have miscalculated.

Talk about a lesson in how not to conduct a fund raising exercise, I don't think those responsible could have handled it any worse.

I wonder if they'll disappear under a flood of class action lawsuits.

By the way, Robert, perhaps you could investigate how the FSA is getting on with its widely-trumpeted inquiry into the short-sellers of HBOS? That story has gone a bit quiet. Perhaps they'd be better employed investigating the directors of Bradford and Bingley for creating a false market in their company's shares by telling everyone, on April 14, that they were "not intending to issue equity capital by way of a rights issue or otherwise".

Will my 32 thousand pounds loss, give old Crawshaw a boost in his back pocket.......... now I am skint with no hope of my extra few shillings to pay my Gas/ Electric Bills..... 50 years of hard graft wasted... I should have never worked I would be living the life of Reilly..........Just another mug who trusted the experts with his hard earned savings to see him through his twilight years. I will never vote Labour again Gordy...............

#3 and #7 Paul

Yes it does seem that the game is hotting up. As the banking sector shrinks it squeals and squeaks.

Assume the policy makers will not let a bank go bust. So it is quite safe for another vulture to gobble up the weakened morsel bank. The new vulture has a good bargaining position because the weakened bank is desperate for cash.

Perhaps the sequence starts once a weak bank decides it will need to start begging for billions. They try to sell off various assets, like insurance companies or whatever.

This does not raise enough so they go cap in hand to their shareholders, by announcing a rights issue.

Of course, individual shareholders are incandescent because the price is so low. Institutional shareholders care somewhat less, because it is not their money. However, they are uneasy because they must have a good story to tell their bosses or else lose their job or credibility.

Share price will tend to fall towards the rights issue price. For this reason, in parenthesis, as this process continues with other banks, is it not likely that shareholders may decide to sell the moment a rights issue is announced?

Anyway, a passing vulture sizes up the situation, notices the rights issue, and says to the weakened bank, look we can give you some cash now. We will also be on board for later, when you will need some more. But we would like a big discount. Poor existing shareholders!

Is this how it happens? As you mention in # 3, it will be interesting to see what happens as more banks get into trouble. The big fish eat the smaller and so on down the food chain.

I agree that Barclays should have raised funds while they had the chance. They really do not seem to know how to get it right when the going gets tough, what do you think? And do you see what has happened to their pals at RBS? Their share price has come down quite a bit since their rights issue was announced.

If the RBS price drops further, surely this will affect rights issues announced by other banks?

With regard to your # 7 post, are you not being ungenerous in your assessment of the motives of the B and B directors? Surely they will have a good reason or story for the sudden change?

More proof that the banking sector has been "selling short " and the money merry-go- round needs to get back to basic banking and building societies should be encouraged .

Lets get back to the good old days when you had to save to get a mortgage, bank managers did not want to sell you their "products" your bank manager was a trusted friend ....or its all a retro dream.

Personal banking has gone out of the window its all now banking by exception and the sector is now reaping what it has sown. To quote "Income 100 expenditure 95 result happiness, expenditure 105 result misery" sorry banking sector no sympathy.

Can we be assured that this news was not broken by using embargoed information in a press release?

What a great deal TPG. This private equity group has a great track record and I certainly will be following their lead and investing today.

It is a great shame that several of your posters do not have a grasp on business issues and cannot differentiate between liquidity and solvency problems.

Perhaps a short explanation mey help them.
Say you have £100K invested in a 12mth bond - but no cash. Then you are solvent but have liquidity problems. Its real simple if you think about it.

Dear Robert
"What is it with Banks, yet another has problems and it immeadiately ADDS more debt to its portfolio,"?
AND, banks think they are excused regulation outside of their industry, the FSA, AND OFT, need to ramp these people into a corner, and tell them, they have to treate people with respect, in stead of ripping them off, Barclays are into new charges because they are on a profits warning, and trading is down, due to the credit crunch, they are to recoup, with additional current account charges, which will be in excess of the charges for over drafts etc.
Banks are legal crooks, they prey on people, to make a fast Buck, and the Adverts ob TV relating to banks activities, go to show what banks are really like, there is truth in the adverts after all.

An expert comment about the worsening situation at HBOS/Halifax would be appreciated. £3.78! and a year ago £11 - looks like their rights offer of £2.76 will be overtaken by the normal share price soon.

do you think TPG are betting on a government bail out ?

TPG are buying our Pension Fund assets at one massive discount!

Remember over 70% of B and B was owned by our Pension Funds!

I think the shortselling hedgefunds etc should be investigated for helping to bring about this fiasco!

One point whose going to buy Shares when the overseas financiers can slash a Share price at a stroke of keyboard ?

Better to buy property to let!

At least you have the Bricks and Mortar when inflation takes off.

Moderators,

Are my comments getting through ?

Well it looks like Crawshaw like Applegarth has a nice little pension. However mine has gone up in a puff of smoke.............anyone here voting Labour

18.
I'll never vote labour again either, or Tory for that matter (remember Thatcher).

We need a cultural shift. Oil shortage. Speculation. Profit motive. Accelarated depreciation. I say, again and again and again, we need, desperately, a cultural shift to a micro level.

Oh, and trade deficits.