A tryst with middle Arab countries investors can cost Barclays a lot more than just addition in the number of new shareholders. Barclays , is that global bank which was considered as a giant in banking and was also trusted in other sectors like retail and commercial banking, and a lot other financial services to make working easy for the customers. It has an extensive presence in Europe and no wonder, the recession has badly hit Barclays as well. With the global analyst predicting that till the year end, only two banks would survive in UK, things will get difficult for financial services.
The management at Barclays wants to go for re-election with 13 executives asking the shareholders to use the “to back us or to sack us” policy. The clause that was not well thought upon during the Arab deal, was the one in which, more equity could get risked in the hands of the Arab shareholders. This can bring adverse conditions that can leave Barclays completely in the hands of those Arab investors.
The worst bit in this deal is that Barclays has lost the trust of many of its existing shareholders. Since the bank has lost 28pc of the banks assets to the new comers, the existing investors feel like they have been meted out with a step motherly treatment. It has not only costed them new addition in shareholders but has also led to dilution thus decreasing liquidity.
If Barclay agrees for this deal then, the government looses vast control on the bank and can not even rescue the bank in time of need, since control or power both are vested in the hands of others.
Another worry that is eating up Barclays bosses are these that, in the last nine days of trading the stock value has gone down considerably, and the sad news is this that Barclays has been dumped chiefly not by the short sellers but by the long investors.
Today the treasury is still maintaining a calm face in the face of the public and has said that all is well everywhere, the bank has to get ready to slog it out with rest of the banks in the world.
