Barclays PLC said it expects to record a 450 million-pound ($593.1 million) hit net of tax after over-issuing securities under its U.S. shelf registration exceeded the registered amount.
The U.K. bank said Monday that after determining it oversold the securities for around a year, it has given rise to a right of rescission, or cancellation, among certain purchasers of the securities, requiring it to repurchase them at the original purchase price.
The estimated loss of GBP450 million is based on current market prices of the affected securities and the estimated pool of potential eligible purchases choosing to partake in the rescission offer.
The company also said it expects its combined group common equity tier 1 ratio–a key measure of balance sheet strength–to be in the middle of the 13%-14% target range as of March 31, reflecting a 14-basis-point reduction from the estimated loss, and a further 15-basis-point reduction from an increase in risk weighted assets to manage risks arising from the offer.
The company said its GBP1 billion share buyback program announced on Feb. 23 will now be held in the second quarter of the year, and it has commissioned an independent review of the matter.
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