Barclays CEO seeks to calm fears as shares slump

Barclays shares slumped for the ninth straight day on Friday as concerns persisted that the bank may require further capital or be nationalised, despite another attempt by its chief executive to calm investors.

Chief Executive John Varley said he was confident a second bailout plan unveiled by the UK government on Monday would boost credit supply and the economy, and if his bank takes part in an asset insurance plan it would probably pay in cash rather than shares.

"Our predisposition would be to pay in cash," Varley said in a video interview aired late on Thursday.

Varley said there was little the bank could do about its share price, which has fallen more than two-thirds since Jan. 12 amid fears the government may need to inject more cash or nationalise more banks.

By 0903 GMT Barclays shares were down 12.1 percent at 51.9 pence.

"The sentiment in the banking sector at the moment, whether it's in the United Kingdom or the United States or Europe, is at a low point in the cycle," Varley said.

Tough capital market conditions in the fourth quarter and fears about writedowns and capital prompted the bank to issue a rushed trading update last Friday saying 2008 profits would be "well ahead" of analyst consensus forecast of 5.3 billion pounds ($7.31 billion), even after writedowns. "It would be irreconcilable for our trading performance in the fourth quarter to have been very bad for us to have been able to say what we said about our performance relative to consensus," Varley said.