Barclays shares dip as Qatar's sovereign fund slashes stake with $657 million sell off

By Louis Goss

Shares in Barclays dipped on Tuesday after Qatar's sovereign wealth fund started selling its stake in the British bank, just weeks before the lender is set to unveil a new strategy to improve its performance and boost profitability in February 2024.

Barclay's (UK:BARC) (BCS) top shareholder, Qatar Holding, which is a fully-owned subsidiary of Qatar Investment Authority (QIA), has started selling off 362 million shares in the bank, worth around GBP510 million ($657 million), with a view to slashing its stake from 5.3% to 3.2%, according to Reuters.

Shares in Barclays fell 2% on Tuesday having lost 11% of their value over the previous 12 months. Qatar Holding sold shares at 141 pence marking a 1.4% discount on Barclays' closing price on Monday.

Qatar's sell off comes as Barclays faces mounting pressure from investors to improve its financial performance following a series of underwhelming results on the back of a slowdown in its investment banking division.

Led by CEO C.S Venkatakrishna, the London-headquartered bank is now drawing up plans to cut its costs by up to GBP1 billion, which could include a push to slash 2,000 back office staff in Barclays' operational support division, Barclays Execution Services or BX.

The Barclays CEO, who is known as Venkat inside the bank, has faced growing pressure to boost the lender's share price, which has fallen by 28% since he took up his position in November 2021.

The QIA became Barclays biggest shareholder after launching a GBP4 billion bailout of the bank during the 2008 financial crisis. As of December 2022, QIA was Barclays largest shareholder with a 6.75% stake in the bank, data from Factset shows.

The U.K.'s Serious Fraud Office (SFO) later launched a criminal investigation into Barclays over allegations it paid QIA secret fees in return for the cash injection it used to avoid a government bailout in the wake of the 2008 crash.

The financial arrangements saw Barclays pay GBP322 million to Qatar, which the bank failed to disclose to markets or shareholders. Shares in Barclays have lost more than half of their value since Qatar first invested in the bank in 2008.

A criminal court later dismissed the SFO's charges against Barclays in 2018. The bank was, however, fined GBP50 million by the U.K.'s Financial Conduct Authority (FCA) in 2022 for failing to disclose its financial arrangements with QIA during the bailout in 2008.

Barclays and QIA were approached by MarketWatch for comment.

-Louis Goss

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12-05-23 1006ET

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