Banking giant Barclays has said it is to sell its 6.1 billion US dollar (£3.8 billion) stake in investment manager Blackrock as it comes under pressure to improve its return to shareholders.
Barclays said the asset management firm has agreed to repurchase 1 billion US dollars (£632 million) worth of the 19.6% stake the bank holds, while the remainder will be listed on a stock exchange, with pricing to be confirmed.
The move comes after Barclays faced steep criticism over its return on equity, which fell to 6.6% in 2011, from 6.8% the previous year, and well below its 13% target.
Barclays, which employs 140,000 staff worldwide, is also preparing to meet the impact of new regulation, which requires the bank to increase cash reserves to protect against potential future financial crises.
Barclays is expected to sell the stake at a discount to the market price of 6.1 billion US dollars, but having written down the value last September to about 5.5 billion US dollars it should now see a small book gain.
Chief executive Bob Diamond, who is expected to relinquish his position on Blackrock’s board after the sale completes, admitted his bank’s return on equity in 2011 was unacceptable and has warned the 13% target may not be achieved as hoped in 2013.
The scale of investor fury was underlined at the bank’s annual meeting where nearly a third of shareholder votes failed to back its bumper pay awards.
Some 32% of investors voted against or withheld votes for the bank’s pay report, while 24% failed to back the re-election of remuneration committee chairman Alison Carnwath.
No comments:
Post a Comment