LONDON â€" The sovereign wealth fund Qatar Holding said on Monday that it had sold its remaining warrants in Barclays in a deal that has led to a $1.2 billion share sale in the British bank.
Qatar Holding had acquired the warrants, which are financial instruments that can be exchanged for stock, during the financial crisis. Barclays raised £7 billion ($10.5 billion) in 2008 from new investors.
In a statement, Qatar Holding, which remains the largest shareholder in the British bank, said it had monetized 379 million units of Barclays warrants.
Goldman Sachs and Deutsche Bank sold 303.3 million of the converted shares to investors priced at a 4 percent discount on Barclays' closing share price on Friday, according to statements from the banks. In total, the share sale raised around $1.2 billion.
Investors reacted negatively to the announcement on Monday. Shares in the British bank fell 4.1 percent, to £2.44, in morning trading in London.< /p>
Despite the share sale, Qatar Holding said it continued to support Barclays, which has been hit by a number of scandals in recent months.
The British firm agreed to pay $450 million earlier this year to settle allegations that some of its employees manipulated the London interbank offered rate, or Libor. British and American authorities also continue to investigate payments that Barclays made to Qatar Holding as part of the 2008 fundraising.
“We maintain our confidence in the long term prospects for the business,†Qatar Holding's chief executive, Ahmad Al-Sayed, said in a statement.
The announcement came after some of Barclays investors called on the bank's new chief executive, Antony Jenkins, to pare back the firm's investment banking division, according to a report in The Financial Times.
The steps would follow similar moves by Swiss rival UBS, which announced 10,000 layoffs in its own investment banking unit last month in an effort to foc us on its profitable wealth management business.
Despite Barclays' leading position in several trading areas, particularly its fixed income business, a reduction in its investment banking unit would help to increase the bank's return on equity, a key measure of a firm's profitability, according to a research note by JPMorgan Chase.
“We believe that a credible new strategy requires balance sheet reduction in investment banking over time, alongside further cost cuts group-wide,†the JPMorgan Chase analysts' said in the note to investors on Monday.
A spokesman for Barclays declined to comment.
