Shares in Britain's Barclays Plc, battered over the past two months, rose more than 3 percent on Monday after a weekend charm offensive helped further ease concerns over the bank's financial health.
Britain's third-largest lender has been hit by a string of negative headlines over the past fortnight -- being forced to deny several hundred million dollars of exposure to highly leveraged debt vehicles arranged by its investment banking arm, and twice tapping the Bank of England's emergency lending facility.
Barclays' lower share price, meanwhile, has meant the gap between its bid for Dutch bank ABN AMRO and a higher, mostly cash offer from rival suitors led by Royal Bank of Scotland has widened to about 10 billion euros ($13.7 billion).
It was unfortunate that the silence from senior management was deafening, David Buik at Cantor Index said in a note. The market wanted to hear from the organ grinder, not his monkey.
Responding to the concerns, Bob Diamond -- the bank's charismatic president and head of its investment banking unit -- told two Sunday newspapers there was no black hole in the bank, days after a spokesman denied liquidity concerns in the aftermath of the BoE loan.
We are weathering the storm. Everyone is getting some pain in July and August, but I've already said that our July results were better this year than last year. We'll manage our way through August as well, Diamond told the Sunday Telegraph.
We've said that at these distressed levels we don't expect losses from (highly leveraged vehicles) SIV-lites to be material, he said.
In a separate interview with the Sunday Times, Diamond confirmed the bank expected potential SIV-lite losses to amount to a maximum of 75 million pounds.
People feel reassured when they read Barclays is awash with liquidity, as opposed to worrying that it has to borrow from the Bank of England at a penalty rate -- they'd got overly concerned, analyst Antony Broadbent at Sanford Bernstein said.
Sentiment was quite negative last week, probably excessively so, relative to the likely impact on earnings. People had got themselves excessively concerned. Shares in Barclays have dropped 10 percent since the beginning of July, making it one of the sector's top losers, but the stock was up 2.9 percent at 631 pence by 0845 GMT, off an earlier high of 634 pence. The FTSE was up 0.4 percent.