Barclays raised £7.3B from Gulf investors in 2008 to dodge the bailout

On October 31, 2008 Barclays announced it would raise up to £7.3 billion from Middle East investors rather than accept UK government rescue money. Sheikh Mansour Bin Zayed Al Nahyan of Abu Dhabi would invest up to £3.5 billion for 16.3%, with Qatar Holdings, Challenger and institutional investors providing the rest — together almost a third of the bank.

Chairman Marcus Agius said the plan kept Barclays "strong, independent and well-capitalised." At the same moment the government was injecting £37 billion into Royal Bank of Scotland, Lloyds TSB and HBOS in exchange for large stakes and a ban on cash bonuses — a path Barclays explicitly refused.

The market initially worried about the price of the private capital, and shares fell on the news, but the strategy held. For 2010 Barclays reported pre-tax profit of £6.07 billion, up from £4.59 billion in 2009, with underlying profit up 11% — while RBS and Lloyds were still digesting state ownership.

Raised up to £7.3B privately (including £3.5B from Sheikh Mansour), avoided government ownership, and posted 2010 pre-tax profit of £6.07B.

Avoiding the state kept Barclays' management and board intact and out of government pay rules.

Private placements could be done faster and on the bank's own terms than the Treasury scheme.

The capital satisfied the regulator's requirements while preserving the investment banking franchise.

Private rescue capital may be expensive, but it can buy independence — and the freedom to set your own strategy through the recovery.

Barclays avoided the nationalization that reshaped RBS and Lloyds, and its 2010 results — £6.07 billion pre-tax, with Barclays Capital's profit nearly doubling — showed the independent path could work. The rescue kept the bank out of government ownership for good.