Offloading Barclays eyes £5bn sale of funds arms

Sail away: iShares might be sold off as part of Barclays' fundraising bid

Sail away: iShares might be sold off as part of Barclays' fundraising bid

Barclays is thought to be in talks with potential buyers from the US and from private equity about snapping up part of its huge fund management arm, which could raise up to £5billion.

Talk has been rife that the bank is looking to offload Barclays Global Investors, but it is reported to be sounding out suitors for iShares - the division that specialises in exchange-traded funds, which allow investors to buy entire indices in one trade.

The lender is mulling asset sales as it weighs up whether to participate in the government's scheme to insure losses on toxic loans.

Any cash raised could help Barclays to pay the fees associated with the so-called Asset Protection Scheme (APS).

This is the government's latest attempt to stop losses on banks' poisonous loans from infecting the good parts of the banking system.

Barclays has managed to evade the clutches of the Treasury by securing cash injections from wealthy Middle Eastern backers.

If Barclays participates in APS, it is determined to pay any government charge in cash rather than being forced to hand over a stake to the state, like Lloyds Banking Group and Royal Bank of Scotland.

Lloyds and RBS have put about £600billion of bad loans into APS. As a result, the taxpayer now owns up to 77 per cent of Lloyds and up to 95 per cent of RBS.

Barclays was also yesterday accused of making £1billion a year from an international web of financial schemes designed to avoid paying tax in the UK and abroad.

A Barclays spokesman disputed this saying: 'Barclays does not encourage or condone tax evasion. We comply with taxation laws in the UK and the other countries in which we operate.'

It comes as small investor body, the UK Shareholders Association (UKSA) formed an action group that is considering legal action against Lloyds following its latest bail-out from taxpayers.

The UKSA has received complaints from 200 shareholders in the former Lloyds TSB so far following its takeover of struggling HBOS last autumn.

UKSA spokesman Roger Lawson said: 'A bad bank has simply been combined with a good bank to make one larger bad bank.' 

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