Will Barclays' rights issue impact consumer brand perception?

The world of finance received a shock today when shares in Barclays plunged after the company announced a rights issue that was far bigger than many analysts expected. Following new regulatory demands that leave the bank with a £12.8bn shortfall, Barclays is set to issue £5.8bn in new shares to plug its capital hole and shore up its finances.

In order to prevent existing shareholders from having their stake diluted, the sale will be in the form of a rights issue. This means that existing investors will be given the option to buy new shares.

News of this rights issue spread rapidly, particularly on Twitter. So far today, we can see that 47.5% of UK Twitter users have been exposed to a mention of the bank on their private feeds. This is up from just 9.3% yesterday.

Leaving no uncertainty as to what is driving this significant increase in reach, we can see that the most popular words found next to Barclays today are ‘issue’, ‘5.8bn’, ‘shares’, ‘new’, and ‘capital’.

YouGov’s social media analysis tool, SoMA, is also able to offer interesting insight into what demographic audiences have been exposed to a mention of Barclays. So far today 62% of those who have heard a mention of the bank on Twitter are male, 35% are aged 18-34 while 26% earn £30k-£50k.

General business and brand strength

Today’s half year results come at a difficult time for Barclays. The bank has had to put aside a further £2bn for mis-selling, including £1.35bn as compensation for mis-selling payment protection insurance.

However, even when such provisions are excluded, pre-tax profits for the first six months of 2013 fell 17% to £3.6 billion.

What impact has this had on Barclay’s brand health?

In the past month Barclays has dramatically improved its Index score (a composite of six key measures of brand health), with it currently standing at -5.6. This is much closer to its score for July 2012 (-4.2).

As Barclay’s attempts to meet regulatory demands without compromising its commitment to lending, and with so many people having heard about its latest rights issue and disappointing second quarter results, it will be interesting to see whether these latest tribulations will impede (and potentially reverse) the bank’s recent improvement in brand health.

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