Bank of Spain added to Barclays’ woes in the country on Thursday, declaring that the UK group must inject more than €500m ($690m) to meet new capital requirements.

Barclays announced recently that its Spanish unit – one of its biggest outside its home market – was heavily lossmaking, having generated corporate loan impairments of £900m ($1.44bn) last year, triple the 2009 figure.


In a potential embarrassment to Bob Diamond, chief executive, Barclays is one of only four private sector banks in Spain with a capital shortfall – and has the biggest deficit among them: €552m, compared with €333m for Bankinter, €182m for Deutsche Bank, and €8m for the tiny Bankpyme.

Barclays declined to comment but people close to the bank said it would comply with the requirement to post additional capital by a September deadline.

The transfer would be made from the UK plc without causing any problems with UK capital levels, the people said.

Barclays has prided itself in recent times on the strength of its capital ratios. It said last month that it had a core tier one capital ratio of 10.8 per cent, among the highest in Europe. Its Spanish subsidiary currently has a ratio of only 5.2 per cent and must raise that to the new 8 per cent Spanish minimum.

It emerged this week that Barclays was looking to close more than 100 of its 600 branches in Spain.