Analysts yesterday heaped further pressure on Barclays by predicting a £3 billion capital raising this month, on top of £3 billion in further writedowns, and the payment of a paper, rather than cash, dividend.

The note from analysts at Dresdner Kleinwort came amid speculation that Barclays’s chief operating officer was departing because of infighting at the top of the bank and an absence of merger and acquisition activity. Paul Idzik will step down later this year.

Barclays has so far played down the possibility of a cash injection, despite plans by Royal Bank of Scotland (RBS) and HBOS to raise £12 billion and £4 billion respectively in rights issues to bolster their capital cushions.

Dresdner yesterday downgraded Barclays from “hold” to “reduce”, ahead of the bank’s first quarter update on May 15. James Invine, banks analyst, said a further £3 billion in writedowns would drop Barclays’s equity Tier 1 ratio – a measure of financial strength – to 4.7 per cent. RBS’s rights issue will boost its ratio to 6 per cent and HBOS is aiming for closer to 7 per cent.

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Mr Invine said that doing nothing was not an option for Barclays. “We don’t think that the market would be willing to give the benefit of the doubt,” he said.

The analyst expected Barclays to raise £3 billion from a foreign investor, and save about £800 million by paying its interim dividend in shares.

Sandy Chen, banks analyst at Panmure Gordon, said: “We’ve long held the view that both the prospect of further writedowns and increasing capital pressures from Basel II would impact on RBS and HBOS and we see similar pressures on Barclays. We won’t be surprised if they announce something in May.”

But other analysts pointed out that it was almost impossible to predict Barclays’s losses on the basis of those revealed already by RBS. One said: “If they can avoid major writedowns, they can avoid a rights issue, end of story.”

Mr Idzik’s departure is not thought to be connected to impending writedowns. Paul Measday, banks analyst at Cazenove, said his decision to leave was “an unwelcome loss to Barclays”, given the turbulent market backdrop. But insiders at the bank scoffed at reports that the American, 47, acted as a peacemaker between John Varley, Barclays’ chief executive, and Bob Diamond, president of Barclays and head of Barclays Capital.

There have been rumours of tensions between the two since Mr Varley beat Mr Diamond to the top job in 2003. But one senior bank employee said of Mr Idzik: “The idea of him as a unifying force is laughable. He’s much more of a stirrer than a peacemaker.”

Mr Idzik is thought to have been frustrated by a lack of managerial opportunities, with Mr Diamond, and retail and commercial head Frits Seegers, firmly in place.

Mr Idzik famously leapt security barriers, snapped pens bearing the name of other banks, objected to employees’ bags advertising rival companies and berated staff who dressed in a way he thought inappropriate.

A source said: “He’s got energy, fire and force and introduced some good discipline. But, although the stuff with the pens sounds funny, it’s not funny when you’re on the receiving end.”

Tiers before bedtime

May 6: Lloyds TSB first-quarter update. The bank is the most exposed of its peers to the British economy and thus a recession. It has a relatively strong capital base, with an equity Tier 1 ratio of 7.4 per cent, but capital raising cannot be ruled out

May 7: Standard Chartered first-quarter update. The bank has avoided the worst of the credit crunch and will benefit from strong macro factors in emerging markets. It has one of the strongest equity Tier 1 ratios in Europe at 8.2 per cent

Sources: Collins Stewart, Morgan Stanley

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