Barclays Moves Attract Traders

Highlights include Barclays plc (BCS - Analyst Report), The Royal Bank of Scotland Group plc (RBS - Analyst Report) and Lloyds Banking Group plc (LYG - Analyst Report).

As reported today, Barclays plc (BCS - Analyst Report) is in discussions about the sale of its iShares business, a leading provider of exchange-traded funds. While no decisions have yet been made, this sale could help Barclays in its capital-raising efforts.

To date, Barclays has been able to raise sufficient capital from private sources and avoid participating in the UK government's capitalization scheme, under which the government has purchased majority stakes in The Royal Bank of Scotland Group plc (RBS - Analyst Report) and Lloyds Banking Group plc (LYG - Analyst Report).

In other news, Barclays also confirmed that it is in discussions with the UK government regarding its potential participation in its Asset Protection Scheme (APS), under which the government insures the bank against losses on its most toxic assets (e.g., mortgage-backed securities and property loans) in return for a small fee and an obligation by the bank to increase lending to consumers and businesses.

The bank absorbs the first 10% of the losses, with the government assuming responsibility for the remaining 90%. As previously reported, both RBS and LYG have decided to participate in the Asset Protection Scheme.

Barclays also noted that it has had a strong start to 2009. In its 2008 full-year report, Barclays reported pretax earnings down 14% year over year to £6.1 billion from 2007's £7.1 billion, including a number of nonoperating items. This was a better performance than most other large non-US banks in developed markets.

We currently have a Hold on BCS. The current Zacks rank is 3, indicating no near-term up or down bias in Barclays' share price. In morning trading, BCS shares are up 12% from Friday's closing price of $4.42.