Barclays tight on capital as Agricole eyes sales

By Steve Slater

LONDON (Reuters) - Britain's Barclays held off bolstering its capital on Thursday, prompting criticism it was in denial, but French rival Credit Agricole and other European banks took steps to boost balance sheets hit by the credit crunch.

Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) confidence about its capital position was not matched by analysts and shares dipped on concern that with one of the thinnest capital cushions in Europe its future growth could be constrained.

The bank refused to rule out a rights issue in the future. "We are clear that all options remain available ... we are not going to rule in or rule out anything," said Chris Lucas, finance director.

Analysts at Citi said the bank was "in denial" about its capital position.

European banks unveiled over 3 billion euros ($4.6 billion) in losses on Thursday as the impact of the U.S. subprime housing crisis and its fallout on asset valuations took a further toll.

Asset sales, cost cutting and possibly more rights issues could all be used to shore up capital, especially as revenue and profits appear set to fall or slow in fragile financial markets.

Regulators and investors are encouraging banks to hold more capital as a buffer to protect depositors, due to heightened concern about more losses.

Credit Agricole (CAGR.PA: Quote, Profile, Research, Stock Buzz), France's biggest retail bank, confirmed it plans to raise 5.9 billion euros through a rights issue and said it wants to sell assets and restructure its investment bank arm, Calyon.