London: Singapore state investor Temasek sold its stake in British bank Barclays Plc several months ago at a big loss, people familiar with the matter said on Wednesday.
After spending over £1 billion ($1.66 billion) on the shares in the last two years, unlisted Temasek may have lost over £800 million on the investment, according to calculations by Reuters.
Temasek’s sale of shares in Britain’s second-biggest bank at a loss is in sharp contrast to Abu Dhabi which sold more than 11% of the bank’s shares on Tuesday, making a $2.5 billion profit from its investment in just seven months.
Temasek sold its near 2% stake in December and January, one of the sources said. The sources declined to be named due to the confidential nature of the investment.
By 0915 GMT Barclays shares were down 4.9% at 260 pence, with the European bank sector down 2%.
Temasek and Barclays declined to comment, and details of the price it sold at were not known.
Temasek paid £975 million buying Barclays shares at 720 pence apiece in July 2007. It pledged to spend up to £200 million last July to buy more shares at 282p each as part of bigger fundraising, but it never disclosed how many it bought.
It would have spent about £90 million to maintain its holding at around 2%, giving it 167 million shares.
Only investors with more than 3% need to disclose changes in their holdings.
Barclays shares traded between 136p and 167.8p in December and between 47.3p and 190.6p in January, when the shares crashed to a 24-year low on fears Britain’s government would need to inject funds to boost its capital. The weighted average for the shares was 148p in December and 105p in January.
Based on the average of those prices, Temasek would have lost about £850 million ($1.4 billion) on its investment.
Barclays shares have soared more than five-fold from its January low after Britain’s regulator said its capital was adequate and business and sentiment across the sector improved.
Temasek owns stakes in a number of financial firms, and losses in several of them last year hit the value of its portfolio.
It invested over $5 billion in Merrill Lynch in late 2007 and took a hit of at least $3 billion when it sold its stake in Merrill’s new parent Bank of America in the first quarter.
It still holds large stakes in banks such as DBS, Standard Chartered and India’s ICICI.