Barclays to add €1.3bn to Spanish unit’s capital

THE Spanish arm of Barclays is to undertake a €1.3bn (£1.1bn) capital hike to meet new Bank of Spain minimum solvency ratios, the bank said yesterday.

The parent bank will subscribe to the entire increase, a spokesman for Barclays Spain said.

“The board approved the capital increase to meet new capital requirements in Spain,” said a spokesman for Barclays in London.

Spain has demanded banks raise their core capital solvency ratios to reassure markets of the stability of its financial system after a housing boom and bust left bankrupt property developers owing billions of euros.

Spain’s Central Bank said in March that among a number of lenders Barclays Spain did not meet new capital requirements, falling short by €552m.

Barclays said at the time that it would be in compliance by the September deadline and that there would be no need to raise any external capital.

Barclays opened its first office in Spain in 1974. It is the country’s largest foreign bank with more than 590 branches and nearly 1m customers.

Barclays Corporate made heavy losses in Spain last year, where corporate bad debts more than trebled to £898m due to losses in the property and construction sector.