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High dividend

Starving for capital and hell-bent on retaining its handsome dividend, Barclays PLC (ADR: BCS) plans to raise $8.9 billion (4.5 billion pounds) by selling shares to investment banks and sovereign wealth funds around the world.

As much as 1.58 million shares will be sold to existing investors China Investment Bank and Singapore’s Temasek Holdings Pte. Ltd., as well as new investors Japan’s Sumitomo Mitsui Banking Corp., Qatar Investment Authority and Challenger - a fund that represents "the beneficial interests" of Qatar’s royal family. The investment, which will be made through the group’s Sumitomo Mitsui Banking Corp. unit, underscores an evolving trend among large Japanese banks that have so far been unaffected by the subprime collapse.

Barclays, Britian’s fourth-largest bank, said the proceeds will help lift the bank’s Tier 1 capital ratio above its 5.25% target, preserve capital for its dividend and help the bank’s veiled acquisition plans, or "opportunities for new business," as Chief Executive Officer John Varley put it in a statement. And though Varley didn’t say it, the capital is needed to catch up with rivals including Royal Bank of Scotland Group PLC (ADR: RBS) and also give a layer of armor to protect itself from the credit plague circulating throughout European banks.