Barclays eyes possible Korea investor - paper

LONDON, May 4 (Reuters) - British bank Barclays (BARC.L: Quote, Profile, Research) has held talks with an investment fund backed by the Korean government as it explores options for raising billions of pounds of fresh capital, the Sunday Telegraph said.

The newspaper said it was unclear whether the talks with Korea Investment Corporation (KIC) were still live, but added that Britain's third-biggest bank had held discussions with several other unnamed prospective investors.

Barclays, which already counts Singaporean government investor Temasek [TEM.UL] and state-owned lender China Development Bank [CHDB.UL] among its shareholders, declined to comment. KIC could not immediately be reached for comment.

Barclays is to release a trading update on May 15, when analysts are keen to hear how the bank has limited its losses from risky assets -- as signalled in guidance it gave last week -- at a time when such hits have soared at other banks and led Royal Bank of Scotland (RBS.L: Quote, Profile, Research) and HBOS (HBOS.L: Quote, Profile, Research) to launch multi-billion pound rights issues.

Barclays has not ruled out a cash call, but has said it has other options to rebuild capital, and it could be left with the thinnest capital cushion among UK banks.

The bank is likely to write down another 3 billion pounds ($5.95 billion) in the first half of this year, analysts at Dresdner Kleinwort said in a note on Friday.

They forecast Barclays will try to boost its capital ratios by raising the 3 billion pounds in equity and paying its interim dividend in shares. (Reporting by Mark Potter; Editing by Richard Hubbard)