Barclay’s boss in subprime warning

The head of Barclay’s PLC has delivered a worrying verdict on the subprime crisis…

According to Marcus Agius, chairman of Barclays PLC, the the global subprime crisis ‘has yet to run its course’. He observed: "The crisis is not near an end. I think it will have a little further to go, but we are beginning to see trades taking place and assets beginning to come to their real value. It will work its way out."

A meltdown in the U.S. subprime mortgage market which began last year and ensuing turmoil in global credit markets has forced financial firms around the world to take more than $300 billion in write downs on risky securities linked to housing markets. Investors fear more losses are to come and are bracing for poor results this week from major Wall Street investment banks Goldman Sachs, Lehman Brothers and Morgan Stanley. Lehman recently forecast a quarterly loss of roughly $2.8 billion and said it had raised $6 billion to shore up its capital.

Barclays reported on May 15 that it had taken a 1 billion pound loss on its assets in the first quarter, less than many other banks but leaving group profits lower than a year ago. Talk has been circulating for weeks that it could raise billions from a rights issue or by selling shares to sovereign wealth funds.

Barclay's shares fell to a 10-year low on Thursday amid speculation that it will raise 3 billion pounds, following similar moves by some of its UK rivals such as Royal Bank of Scotland.