Barclays says may raise capital to boost ratios

LONDON (Reuters) - Barclays said it is considering raising capital and other options as part of the country's plan to strengthen balance sheets across the sector.

"Barclays confirms that it is considering a number of options, including capital raising, relating to the industry wide commitment to increase tier 1 capital in the sector by an aggregate 25 billion pounds," the bank said on Friday.

Barclays, the country's second biggest bank, would boost its capital by offering existing investors the chance to take preference shares or other instruments, Reuters reported on Thursday, citing people familiar with the matter.

Earlier this year, it raised 4.5 billion pounds, mainly by attracting several big outside investors, rather than through a conventional rights issue. Its biggest shareholders now include Qatar's sovereign wealth fund, state-owned China Development Bank, Singapore's Temasek and Japanese bank Sumitomo Mitsui.

Barclays needs about 5.5 billion pounds of extra capital, analysts at Bernstein estimate. Deutsche Bank analysts estimated it needs 2.5 billion pounds.

The government is offering up to 25 billion pounds for banks to boost their capital, but said there is no obligation on banks to use the government funds and they can raise capital privately. Capital needs to be boosted by the end of the year.

"Barclays will update the market on its plans in accordance with this timetable," the bank said.

By 10:30 a.m. its shares were down 14 percent at 208 pence, one of the weakest stocks in a broad European share sell-off.

(Reporting by Steve Slater; Editing by Paul Bolding)