BARCLAYS may have to raise £17bn of fresh capital under new proposals put forward by the Basel Committee on Banking Supervision, analysts at Credit Suisse warned yesterday.
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.”