Qatar slashes stake in Barclays with £510mn share sale

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Qatar’s sovereign wealth fund is slashing its stake in Barclays, the UK bank that is coming under pressure from investors to overhaul its strategy and improve its performance.

Qatar Holding, a subsidiary of the Qatar Investment Authority that helped bail out Barclays during the global financial crisis, launched the sale on Monday of almost 362mn shares, worth about £510mn.

The QIA is Barclays’ second-biggest shareholder, according to Bloomberg data, and the stock sale is expected to reduce its stake from 5.3 per cent to 2.9 per cent.

CS Venkatakrishnan, Barclays’ chief executive, is under pressure to win round investors to a strategic overhaul he is planning to reveal next spring.

Investors are hoping he will reduce Barclays’ reliance on investment banking and return more capital to investors, with a public announcement expected in February.

The Financial Times reported last week that Barclays was exploring a plan to drop thousands of clients at its investment bank as part of the overhaul that is meant to cut £1bn of costs and boost profits.

Barclays executives have met several times this year to thrash out the restructuring, codenamed Minerva after the Roman goddess of wisdom, according to people briefed on the discussions.

The company’s shares are down more than 12 per cent this year, and are trading close to their lowest levels since the Covid-19 pandemic. Barclays’ valuation is among the cheapest of any big global bank.

The QIA, which has been a top Barclays shareholder for more than a decade, helped the company raise more than £11bn in emergency cash from investors in 2008. However, the fundraising led to an investigation by the UK’s Serious Fraud Office and subsequent lawsuits.

The case centred around alleged financial assistance the bank gave to Qatar through a $3bn loan for acquiring shares directly or indirectly in a Barclays fundraising. This helped the bank avoid a state bailout during the financial crisis.

The SFO’s case was dismissed by a UK criminal court in 2018, but Barclays was fined £50mn last year by British regulators for failing to disclose arrangements tied to the fundraising.

The Financial Conduct Authority said at the time that Barclays had failed to make appropriate disclosures about paying “hundreds of millions of pounds in fees to certain Qatari investors so that they would contribute new capital”. Barclays said it would appeal against the fine.

Filings show that the QIA trimmed its Barclays stake by five per cent last year and 10 per cent in 2021. The stock sale announced on Monday is the biggest it has made in the company for several years.

Barclays declined to comment. The QIA did not immediately respond to a request for comment.