Barclays sees �7bn plan approved

Barclays opted not to accept a rescue deal from the government

Barclays shareholders have voted overwhelmingly in favour of a plan to raise �7bn, mainly from investors in the Middle East.

Some 87% of shareholders approved the initiative, which had initially faced strong opposition.

Critics said Barclays should have used money offered by the UK government instead - a strategy adopted by other major British banks.

Markets have welcomed the news, with Barclays' shares gaining 10%.

Apologies

Before the vote, Barclays' chairman Marcus Agius apologised to shareholders for the firm's performance over the past year.

In a speech at Barclays' general meeting, he said the bank "greatly regretted" the experience shareholders had gone through.

"I want you to know that we will do all in our power, across Barclays, to create the conditions that will enable a higher price to be placed on our shares over time."

The bank's board agreed to accept �5.3bn from state investment fund Qatar Holding, and Sheikh Mansour Bin Zayed Al Nahyan, a member of Abu Dhabi's royal family.

Despite criticisms that it would have been cheaper for Barclays to take a bail-out deal from the UK government, Mr Agius has outlined why the bank instead chose the Middle Eastern investment.

Firstly, he said Barclays could not accept the UK government's demand that it couldn't pay a dividend to shareholders.

"We believe that the freedom to determine dividend policy is important to shareholders," said Mr Agius.

Secondly, he said that "for reasons that we understand and respect", the UK government would expect Barclays to have put its domestic customers first.

Mr Agius said that because Barclays was now such an international bank, this would not have been possible.

Finally, he said Barclays wished to maintain "complete control" over its future policies.

'Extraordinary circumstances'

While �5.3bn is due to come from the Middle East, the remaining �1.7bn is coming from institutional investors, many of whom are UK-based.

Last week the bank took the unusual step of saying that "in recognition of the extraordinary circumstances" of the way it wished to raise money from the Middle East, all its directors would offer themselves for re-election at its annual general meeting in the spring, rather than the standard third.

The firm also said its top executives, including president Bob Diamond and chief executive John Varley, would not be paid bonuses for 2008.