Barclays shares surge 40% as it reassures investors
Shares in Barclays have received a much-needed boost this morning after it reassured investors that it was on target to announce profits of over £5.3 billion for 2008.
Shares in the banking giant were up 19.7p (38.5%) at 70.9p in early trading today as an open letter from chairman Marcus Agius and chief executive John Varley to investors said that the bank would raise no extra capital.
Barclays’ rise seemed to have a positive effect on other banks with Lloyds Banking Group stock rising 13.5% to 56p, while RBS saw a rise of 7.4% to 13p.
Shares in the above-mentioned banks all took a battering last week following rumours of nationalisation.
Last week, Barclays stock also plummeted when it was revealed that the bank could see its Middle East investors gain majority control of the bank as a result of a clause in the terms of a deal last October.
Mr Aguis and Mr Varley said the bank is well funded and we are profitable and felt it was necessary to communicate now with employees, customers, clients and shareholders.
These figures demonstrate that, although we have been heavily impacted by the credit crunch, our income generation was at a record level in 2008 and has enabled us to withstand this impact and still produce strong profits, continued Mr Aguis and Mr Varley.
Furthermore, the bank said its Tier 1 capital exceeded the minimum set by the authorities by £17 billion.
Barclays is to publish full-year results on February 9.