Barclays Shares Fall After Qatar’s Wealth Fund Reveals Stake Cut
Barclays PLC shares fell on Thursday after Qatar’s sovereign wealth fund revealed it had cut its stake in the British bank.
Qatar Investment Authority Reduces Stake
The Qatar Investment Authority (QIA) said it had reduced its stake in Barclays to 6.5% from 7.7%. The fund, which is the Gulf state’s main investment vehicle, said it had sold shares worth £1.2 billion ($1.6 billion).
The sale comes after the QIA increased its stake in Barclays in 2018. At the time, the fund said it was a long-term investor in the bank and that it had confidence in its strategy.
Barclays Shares Fall After Announcement
Barclays shares fell by as much as 4.3% in London trading after the announcement. The stock was trading at 162.3 pence at 10:30 a.m. local time, down from a close of 169.3 pence on Wednesday.
The QIA’s sale of Barclays shares follows a similar move by the fund in October. At that time, the QIA sold a stake in the bank worth £1.1 billion.
QIA Remains Major Shareholder
Despite the sale, the QIA remains one of the bank’s major shareholders. The fund is the second-largest shareholder in Barclays, behind BlackRock Inc.
The QIA’s stake in Barclays is part of a wider portfolio of investments in the banking sector. The fund also holds stakes in Credit Suisse Group AG, UBS Group AG, and Deutsche Bank AG.
Barclays Struggles Amid Pandemic
Barclays has struggled in recent months amid the economic fallout from the coronavirus pandemic. The bank reported a loss of £1.4 billion in the third quarter of 2020, its first quarterly loss since the financial crisis.
The bank has also been hit by a series of scandals in recent years. In 2018, it was fined £1.4 billion by U.S. and U.K. regulators for its role in a foreign exchange rate-rigging scandal.
Barclays Focuses on Cost-Cutting
In response to the pandemic, Barclays has focused on cost-cutting and restructuring. The bank has announced plans to cut up to 14,000 jobs and close 200 branches in the U.K.
The bank has also announced plans to sell its stake in its African business. The sale is expected to raise up to £2.5 billion for the bank.
Barclays Seeks to Strengthen Capital Position
Barclays is also seeking to strengthen its capital position. The bank has raised £2.5 billion in a rights issue and is in the process of selling its Spanish retail banking business.
The bank is also looking to raise up to £2 billion from the sale of its stake in its U.S. credit card business.
Barclays CEO Sees Bright Future
Despite the challenges, Barclays CEO Jes Staley remains optimistic about the bank’s future. He said the bank is well-positioned to benefit from the economic recovery and that it is well-capitalized to support its customers.
Staley also said the bank is focused on delivering long-term value for shareholders. He said the bank is committed to delivering sustainable returns and that it is well-positioned to capitalize on the opportunities that will arise in the coming years.