Barclays investors fear for the future
It has been revealed that a number of banking research analysts have expressed concern at the additional cost which Barclays bank has taken on to accommodate the Middle East multibillion pound refinancing. Initially there had been some cheer that the bank had organised the refinancing with such strong investment partners but the disclosure of the cost of raising the finance compared to the UK government's rescue package on offer has concerned some followers.
The massive fundraising will also dilute the power of existing shareholders who were privately concerned that they were not allowed to take part in fundraising. The Barclays share price was down 5% today at £1.70 which is not far off the group's recent low and fully reflects the worries of some investors.
There are also concerns within government circles that Barclays bank seems intent on continuing a long-term high risk strategy for some of its core operations. In the current economic environment there are growing fears that unless the bank looks for a period of consolidation there could be further problems ahead in the short term. At a time when the authorities are looking to take away as much of the risk from the UK banking sector as possible, this development is the last thing they needed.
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