Barclays shares ended the day 22% up as the bank confirmed it is in talks over a possible sale of its iShares fund management business. Whilst potential suitors have yet to confirm a deal, initial thoughts are that the sale could raise anything up to £5bn. (more…)

The FTSE fell 104 points (1.78%) to end the day at 5,723.30 amid fears that the UK economy is heading for even tougher times. Leading the charge south were the banking stocks with HBOS closing 11.64% lower at 258p. This leaves the share price lower than existing investors have been offered shares as part of the £4bn rights issue. Royal Bank of Scotland was also hit, falling 9% to close at 212.25p. (more…)

The Royal Bank of Scotland (RBS) will annouce that over 90% of its shareholders have signed up for its £12bn rights issue. With growing negativity in the banking sector following recent bad news, including a poor set of results from the Bradford & Bingley, there had been concerns that investors would shy away from the rights issue. (more…)

HBOS is expected to follow in the footsteps of RBS and turn to its shareholders for extra funds in a move to shore up its balance sheet. The nnouncement of the rights issue is due on Tuesday and it is thought  it will be in the region of £4bn, some way off the £12bn requested by RBS. (more…)

Following a meeting between Mervyn King, Governor of the Bank of England and the Chief Executives of Barclays, HBOS, HSBC, Lloyds TSB and RBS, it is understood that Mr. King is considering allowing the use of a wider range of assets to stand as collateral. Importantly this includes mortgages.

Mr. King had been reluctant to do this as he did not want to be seen to be bailing out Banks that had acted irresponsibly in the current economic climate. Whilst considering relaxing the criteria, the Bank has agreed to make an additional £5bn a week available to the Banks until the next interest rate meeting on the 9th April.

The extra funding was much needed as it was three times oversubscribed. This very fact indicates there is still significant pressure within the banking system.

The FTSE 100 closed on Friday at 5,631.7, down 60.7 points (1.1%) amid news the US’s fifth largest bank, Bear Stearns, was in trouble and had sought emergency funding from the Federal Reserve.  Unlike with the Northern Rock debacle the Americans have acted fast to try and stop a major bank collapsing. However, the funding to prop up Bear Stearns is only for an initial period of 28 days.

Not surprisingly the UK Banks bore the brunt of the losses with Royal Bank of Scotland (RBS) falling 8.5 points (2.48%) to 333.75p and Barclays (BARC.L) falling 17.75p (3.94%) to 433p. The biggest loser was HBOS (HBOS.L) , tumbling a significant 34p (6.05%) to 528p. Although this is also due to speculation of further writedowns at the Bank.

The FTSE 250 reflected the fortunes of the FTSE 100, losing 1% to 9,706.1.