British bank Barclays said profits fell by an undisclosed amount in the first quarter and refused to rule out a rights issue after a £1 billion ($1.95 billion) writedown on assets tarnished by the credit crunch.
That was less than the hit taken by many other banks but its capital cushion remains thin compared with rivals, especially after Royal Bank of Scotland and HBOS unveiled big rights issues.
Barclays, Britain's third-biggest bank, said today the writedown for its investment bank arm Barclays Capital (BarCap) was net of a £700 million gain on the fair valuation of debt it carries on its own books.
By 7.30am, Barclays shares were down 1.6 per cent at 420 pence, alongside a weak UK bank sector.
The bank expects its core tier-1 capital ratio to be slightly lower at the end of June than the 5.1 per cent it reported at the end of 2007, but intends to lift this to 5.25 per cent "in time".
Finance Director Chris Lucas said Barclays was keeping its options open in regard to boosting capital.
When asked if that meant it could launch a rights issue, he said: "We are clear that all options remain available ... we are not going to rule in or rule out anything."
Mr Lucas said the bank did not intend to follow the lead of several rivals by paying its dividend in shares to save cash.
"Our view on scrip dividends is they are not really a dividend, and therefore are not attractive to us," he told reporters on a conference call.
Other options to lift capital are by retaining earnings and slower lending. Lucas said risk-weighted asset growth would be lower this year than in 2007.