Barclays outlines plan to buy back $17.6bn in securities sold in error

UK bank Barclays on Monday outlined plans to buy back up to $17.6bn in securities that it sold by mistake after exceeding registered amounts under US regulations.

The so-called recission offer covers $14.8bn of structured notes and $2.8 billion of exchange-traded notes and is expected to start on August 1 and remain open for 30 US business days.

Barclays in March put aside £540m to cover the costs of the over-issuance, saying it had had accidentally issued about $15bn over a $20.8bn limit agreed with US regulators.

Buyers of the 3,015 affected securities have a the right of rescission, meaning they can make the bank by them back at their original purchase price plus interest.

Barclays is expected to set aside £979m in litigation and conduct charges for the second quarter, mainly to cover costs arising from the error, according to a consensus forecast of analyst estimates it published ahead of its earnings statement on Thursday.

The forecasts also estimate pre-tax profits for the quarter of £1.6bn and annual profits of £6.6bn.

Barclays chief executive C.S. Venkatakrishnan, known as Venkat, who took charge of the bank in November in April said the incident had been “entirely avoidable”.

Reporting by Frank Prenesti at Sharecast.com