Barclays writes down BlackRock stake

Barclays has written down the value of its stake in asset manager BlackRock after a sharp fall in the US firm's share price.

Barclays said in its results statement yesterday that its holding in BlackRock had resulted in a £1.8bn hit to its asset management division.

The hit caused Barclays to report a loss before tax from its investment management arm of £1.78bn for the nine months to end of September. The group signalled it did not expect BlackRock's share price to recover after stating its holding was "impaired".

In its results it said: "The loss before tax of £1,778m resulted from an assessment for accounting purposes that there was objective evidence that the Group's investment in BlackRock, Inc. was impaired.

"The impairment reflects the recycling through the income statement of the cumulative reduction in market value previously recognised in equity, since the Group's acquisition of its holding in BlackRock."

Barclays acquired a 19% stake in BlackRock as part of its deal to sell the US firm Barclays Global Investors back in 2009.

Barclays added it now valued the stake in BlackRock at £3.6bn, after sharp falls in the value of the group's shares.

According to the Financial Times, BlackRock's share price has tumbled from $227 when the Barclays deal was completed to a low of $140 in September. Yesterday it closed down at $158.