Qatar Investment Authority slashes Barclays stake

Barclays shares slipped on Tuesday after Qatar’s sovereign wealth fund began selling nearly half its stake in the banking giant.

Qatar Holding, a subsidiary of the Qatar Investment Authority, intends to sell around £510million of Barclays stock, thereby reducing its stake in the company from 5.3 per cent to 2.9 per cent, according to the Reuters news agency.

Barclays shares fell 4.5 per cent on Tuesday morning before rebounding to be 2.4 per cent lower in the late afternoon at 139.5p. Shares are down by around 15 per cent since the start of the year.

QIA is the bank’s second-largest shareholder in Barclays, although it reduced its stake in the British lender by 5 per cent in 2021 and 10 per cent last year.

It first invested in Barclays during the global financial crisis in 2008 when the lender launched emergency cash calls to bolster its balance sheet.

Barclays avoided a UK government bailout after it raised £4billion from Qatar and billions more from other Middle Eastern investors.

The fundraising became the subject of a Serious Fraud Office investigation looking into whether the bank had funnelled secret fees to Qatari investors in exchange for the funding.

Three former Barclays executives were cleared of fraud in 2020 following a seven-year probe into the allegations and a trial costing £12.2million of taxpayers’ money.

However, Barclays was fined £50million by the Financial Conduct Authority last year and branded ‘reckless and lacking integrity’ for not disclosing the ‘advisory fees’ paid to Qatar.

Since then, the company has struggled with falling investment banking fees amid less appetite for mergers and acquisitions dealmaking, as well as squeezed margins in its British high street division.

Barclays reported profits declined by 16 per cent to £1.3billion in the three months ending September, while many other major British and American banks scored bumper results.

The FTSE 100 group warned that the full-year net interest margin – the difference between what banks earn from loans and the amount they pay to savers – in its UK retail bank would be lower than expected at between 3.05 and 3.1 per cent.

Its chief executive, CS Venkatakrishnan – commonly known as Venkat – also told journalists the bank was seeking ‘efficiencies’ to help cut ‘structural costs’.

Reuters reported late last month that Barclays was looking to axe up to 2,000 jobs as part of £1billion in cost-saving measures, with those in the legal, compliance and human resources departments set to be among the most affected.

Barclays also plans to offload its German consumer finance arm and is considering offloading a partial stake in its UK payments business.