British bank Barclays Plc
Barclays ... confirms that it has held discussions with a number of potentially interested parties as part of its practice of regularly reviewing the group's portfolio of businesses, the bank said in a statement on Monday, adding that it had not decided whether to proceed with any disposals.
Weekend press reports said that Barclays was in talks to sell iShares, a exchange-traded funds provider, for up to 5 billion pounds ($7 billion).
Analysts said Barclays could use the proceeds of any disposal to cover the cost of joining a government scheme to insure banks against losses on risky assets, removing the need for it to sell new shares, or issue them directly to the state.
It would enable Barclays to avoid surrendering a stake to the government, in contrast to rivals Royal Bank of Scotland (RBS)
If this is the case, they could bullet proof the balance and there'll be no government stake, which is invaluable, said Fox Pitt, Kelton analyst Pawel Uszko.
By 1225 GMT (8:25 a.m. EDT), Barclays shares were 20.4 percent higher at 89 pence, while the FTSE 100 share index was up 2.1 percent.
Barclays also confirmed it was in talks with the government about joining the scheme, under which the state insures banks against losses on risky debt-related assets in return for a fee.
The bank said it would decide whether or not to take part in the scheme based on the economic merits to shareholders.
Joining the asset protection program would strengthen Barclays' capital reserves, which are currently lower than those of rivals who have accepted government money or launched rights issues.
Barclays so far has avoided accepting government help because as it feared doing so could compromise its commercial freedom.
The bank last year raised 7 billion pounds from Middle Eastern investors in preference to taking government money.
Lloyds and RBS, which gave ownership stakes to the government as part of a 37 billion pound bailout last October, could see the state's holdings in them rise to as much as 77 percent and 95 percent, respectively under the terms of their entry into the asset protection scheme.
Barclays also said on Monday that it had enjoyed a strong trading performance so far this year.
Barclays' businesses continue to perform well and have had a strong start to 2009, it said.
Analysts said the bank's trading update echoed upbeat comments last week from U.S. lenders Citi, JP Morgan and Bank of America.
With apparently positive operating trends ... this stock feels oversold, in our view, Collins Stewart analyst Alex Potter wrote in a note.
At the weekend, Barclays was confirmed as one of the main recipients of insurance paid out by U.S. insurer AIG
iShares, part of Barclays' asset management division, is a leading provider of exchange-traded funds, popular investment vehicles that allow investors to bet on the direction of share price indices.
(Additional reporting by Steve Slater; editing by Karen Foster)