Analyst Jonathan Pierce said Barclays equity tier one capital ratio – which currently stands at 9.6 per cent – could feasibly fall to around five per cent under the Basel proposals, which are yet to be finalised.
The decrease is set to occur as a result of a £135bn–£165bn rise in risk-weighted assets at the bank, as well as Barclays being forced to deduct the value of its stake in asset manager BlackRock, its minority holdings, deferred tax assets and B securities from its common equity.
Pierce said Barclays could raise as much as £20bn over the next three years through offloading half of its BlackRock stake, buying in minorities from its South African bank ABSA and restructuring its B securitisation exposures.
But he said the key question for the bank would be whether or not it can tighten up its business enough to control its risk-weighted assets.
“In practice, restraining the bank to such an extent might not – understandably – be the preferred choice of management,” Pierce said. “We think a capital raise at some point in the future cannot be ruled out.”