Qatar’s wealth fund selling almost half its shares in Barclays

London – Qatar’s sovereign wealth fund is offloading almost half of its shares in Barclays, a surprise move that comes as the bank’s executives ready a strategic overhaul for early 2024.

Qatar Holding, which is owned by the Qatar Investment Authority (QIA), is selling 361.7 million shares in the British firm, according to terms of the offering seen by Bloomberg News. The sale is expected to raise £510 million (S$862 million).

The shares are expected to be priced at 141 pence, representing a 1.4 per cent discount to their close on Dec 4. The offering represents about 2.4 per cent of Barclays’ outstanding shares, according to the terms.

The Middle East state invested about £4 billion in Barclays during a series of sales in the 2008 financial crisis, becoming one of its largest backers. It had a 5 per cent stake at the end of 2022, according to a United States regulatory filing in January. The accelerated book-build on Dec 4 reflects about 45 per cent of that position.

“The timing is slightly odd and it’s hardly a ringing endorsement ahead of the investor update,” said Mr Adam Terelak, an analyst at Mediobanca.

A Barclays spokesman declined to comment. A representative of the QIA did not immediately respond to a request for comment.

Barclays’ shares have fallen by a 10th in 2023, underperforming many of its peers, as executives work on ways to boost returns that are set to include job cuts. In Britain, the tailwind from higher interest rates is slowing, while Barclays’ traders and investment bankers have struggled to keep pace with US peers.

The group comprises one of Britain’s largest retail banks, as well as an international credit card business and a global investment bank.

But investors have been wary of its capital markets ambitions. It trades at a paltry price-to-book ratio of 0.39, lagging rivals.

Earlier in 2023, chief executive officer C.S. Venkatakrishnan tapped Boston Consulting Group to do a wide-ranging review of the firm’s strategy, with executives expected to unveil a series of more ambitious financial targets in February. A range of options are being considered, from expanding the advisory business to acquiring a wealth manager, people familiar with the matter have said.

While Qatar’s 2008 intervention helped the bank avoid a government bailout, the emergency fund raising has been a legal headache ever since.

In 2022, the Financial Conduct Authority said it planned to fine Barclays £50 million for failing to disclose an agreement to pay advisory fees to Qatari investment vehicles during the fund-raising efforts. The bank has said it plans to challenge the regulator’s proposal. Former executives at Barclays were cleared of fraud in connection with the transactions in 2020. BLOOMBERG