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(Alliance News) - Barclays PLC said it will start its delayed GBP1.00 billion share buyback programme on Tuesday.
The programme, initially announced in February, had been delayed in March after the bank admitted it sold more financial products to investors than it was allowed to.
The London-based bank said at the time that securities offered and sold under its US shelf registration statement for an approximate one-year period had exceeded a registered amount. This, the bank explained, gave the purchasers of the affected securities a right of rescission, requiring Barclays Bank to repurchase the affected securities at their original purchase price.
Late on Monday, Barclays provided further explanation.
"The provision for over-issuance of US securities is particularly sensitive to equity market movements, however, this would be expected to be substantially offset by hedging arrangements, including specific hedging and overall portfolio positioning," it said.
Barclays said it had found "one material weakness" in its internal controls.
"The material weakness that has been identified relates to a weakness in controls over the identification of external regulatory limits related to securities issuance and monitoring against these limits. As a result of this weakness, BBPLC issued securities in excess of the amount registered under the US shelf," it said.
Barclays said on Tuesday it has contracted JP Morgan Securities PLC, part of US bank JPMorgan Chase & Co, to conduct the buyback.
The buyback will cover ordinary shares only, with no American depositary receipts to be purchased. The shares that are bought will be cancelled to reduce share capital.
Barclays shares were 1.9% higher at 160.70 pence each in London on Tuesday morning.
By Tom Budszus; tombudszus@alliancenews.com
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