Barclays reveals plans for £6bn cash call to plug capital gap Barclays is asking investors to support a £6bn shortfall. Barclays is asking shareholders for almost £6bn of cash as the bank's new management team races to comply with a demand by the Bank of England that it plug a £12.8bn capital shortfall. As Antony Jenkins admitted on Tuesday the bank was increasing its provisions for mis-selling financial products by £2bn, the Barclays chief executive conceded he had been forced to change plans he put in place only six months ago as a result of the actions of the Bank of England, which showed the bank's finances were in a worse state than previously thought. The size of the cash call on investors - in the form of a rights issue, which will be launched in September - is bigger than expected and follows a request by the Bank of England that it meet a new measure of financial health, known as the leverage ratio. Barclays shares were volatile in early trading, falling around 6% to 290p after the larger-than-expected rights issue was announced. After careful consideration of the options, the board and I have determined that Barclays should respond quickly and decisively to meet this new target. We have developed a bold and balanced plan to do so," said Jenkins, who was promoted to chief executive only 11 months in the wake of the Libor-rigging crisis. The size of the capital gap identified by the Bank of England of £12.8bn is almost double the amount the City had been expecting and comes after a torrid 12 months for Barclays during which Jenkins' predecessor Bob Diamond quit, with two other senior colleagues. Jenkins, who insisted Barclays had not been forced to embark on the cash call, has had to rethink parts of his "transform" programme put in place only in February - delaying the targets for return on equity by a year to 2016 - as a result of the cash call which be priced at a 40% discount to Monday's share price of 309.5p. Investors will be offered one share at 185p for every four shares they already own through the rights issue. The bank will raise £5.95bn from shareholders through the rights issue - the equivalent to £5.8bn after fees have been paid to the investment banks guaranteeing the cash call - and also raise a further £2bn from bond holders. It will also take action to reduce some of the activities in engages - but crucially will not pull back from lending to the economy - and hold on to more of its profits in the future. In pursuing a rights issue, Jenkins will hope to avoid the controversy caused by the bank during the 2008 banking crisis when it turned to investors in the Middle East to raise cash and infuriated City investors, who would have expected to have been given the chance to buy shares first through a rights issue. At the time, Barclays raised £7.3bn from these outside investors and the disclosures it made are now being investigated by the Serious Fraud Office and the City regulator the Financial Conduct Authority. Barclays disclosed on Tuesday that the FCA had, on 27 June, provided its preliminary findings about its investigation and that it was now contesting the findings. "Barclays expects further developments in the near term," the bank said. The Bank of England's regulatory arm, the Prudential Regulation Authority, made clear that it had approved the latest capital plan because it did not involve "cutting back on lending to the real economy" after it has asked Barclays to achieve a leverage ratio of 3% by June 2014. This is later than the end of 2013 target than was originally expected but earlier than the end of 2015 target that Jenkins had been originally intending to reach. If the bank had not raised any capital it would have needed to reduce its balance sheet by £427m, which it concluded would had a damaging impact on its businesses and had a "negative impact" on its ability to lend to small businesses. Jenkins had warned last month that meeting the leverage ratio could forced the bank to reduce lending. Of the rights issue, the chief executive said: "The board and I are aware of the implications of a rights issue for shareholders. We hope to balance this reduced uncertainty in the outlook for Barclays and with enhancement of our dividend policy from 2014. He said the cash call should make the bank a more investable proposition for shareholders. Barclays announced the cash call - which it dubbed its leverage plan - along side its first half adjusted profits of £3.5bn, but this does not include another £1.35bn provision for payment protection insurance - taking the total to £4bn - and a further £650m for interest rate swap mis-selling, taking the total to £1.5bn. Including these costs, and a cost of buying back its own debt, the statutory profits were £1.7bn, up 93% from the same time last year.