INVESTORS in Barclays are being undermined by regulators, Standard Life Investments' (SLI) head of equities David Cumming warned, as the London bank announced plans to raise £5.8 billion from its shareholders to plug a larger than expected capital shortfall.

The Scottish fund management chief cautioned that "a regulatory regime which appears both capricious and hostile" could also damage the sale of the Government's stakes in Royal Bank of Scotland and Lloyds Banking Group.

Barclays reported a pre-tax profit of £1.7bn for the six months to the end of June, almost double its earnings of £871m profit for the same period last year.

Its adjusted pre-tax profit was £3.6bn, just below the average forecast of £3.7bn from analysts.

The Prudential Regulation Authority said Barclays needs an extra £12.8bn of capital to protect itself against market shocks, up from an estimate of £7bn.

Barclays chief executive Antony Jenkins, who is trying to turn around the scandal-hit bank after the resignation of Bob Diamond last year, said: "I am certain the decisive and prompt action we are taking will leave Barclays stronger."

But the demand angered SLI, whose 1.3% stake makes it the fifth largest shareholder in the bank.

Mr Cumming said: "We are long term investors who are supportive of the new management leadership at Barclays, who recognise the need for change.

"However this supportive stance is undermined by the actions of a regulatory regime which appears both capricious and hostile to banks and is in consequence raising the cost of capital for the banking sector, notably through a lack of stability or consistency in its policy on capital.

"From a taxpayer and investor viewpoint this must change. If not, funding available for business both large and small will be reduced while funds realised from future government share sales will be materially below the levels achievable if we had a more objective and coherent regulatory policy."

The Government could start selling its 39% stake in Lloyds, owner of the Bank of Scotland as soon as next month.

Investors' dismay was also shown in Barclays' share price which closed down 17.75p or 5.7% at 291.3p.

Barclays said it is contesting the preliminary findings of an investigation into its agreements with Qatari investors who led a rescue fundraising of the bank during the 2008 financial crisis.

Neither Barclays nor the Financial Conduct Authority disclosed what the findings were. But the bank said it received them on June 27 and contested them five days ago.