Barclays held open the possibility of a rights issue yesterday but hinted that it was seeking other ways of beefing up its balance sheet.

Marcus Agius, the bank’s chairman, refused to rule out a cash call but told investors at its annual meeting that Barclays had other options open to it.

Barclays, Britain’s third-biggest bank, has been fighting off speculation of a rights issue since Royal Bank of Scotland (RBS) broke the ice with a £12 billion capital raising to prop up its balance sheet earlier this week.

However, Mr Agius said that Barclays could boost its Tier 1 capital, a core measure of financial strength, by retaining earnings – paying out a smaller dividend – managing its balance sheet or raising new equity. He said: “Because of the relative strength of our performance, we have options and we will take those options.”

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Mr Agius was speaking after Barclays said that its first-quarter profits would fall from a year ago, after disruptions in the financial markets hit Barclays Capital and Barclays Global Investors, its investment banking and fund management arms.

The focus has turned on Barclays since, next to RBS, it has the lowest Tier 1 capital ratios in the sector. Those ratios are expected to come under further pressure as Barclays takes more writedowns on its assets. It gave no futher details yesterday but Alex Potter, banks analyst at Collins Stewart, said the writedowns could be as high as £6.2 billion in the first quarter. Barclays wrote down £1.6 billion for 2007.

Simon Maughan, banks analyst at MF Global, said that he interpreted the lack of detail from Barclays as good news. He said: “This suggests to us that Barclays has no immediate problems, however, others are interpreting it as the bank is hiding something”.

He said any capital raising was most likely to be via a scrips dividend, or payment of the dividend in shares not cash. A placing with a foreign investor or a rights issue were less likely, he said.

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