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06. Apr 2017 Monitoring note  – Banks

New analysis on Barclays Bank plc

Scope Ratings has updated its rating report on Barclays Bank plc, rated A+ with Stable Outlook.

For full-year 2016, the group reported an attributable profit of GBP 1.6bn, compared to a loss of GBP 394m in the prior year. The core businesses improved their profitability year-over-year and generated a return on average tangible equity of 8.4%. Meanwhile, the Non-Core division reported an attributable loss of GPB 1.9bn. The group’s solvency continued to strengthen, with the fully loaded CET1 and leverage ratios at 12.4% and 4.6%, respectively as of year-end 2016.

Barclays’ ratings are driven by the group's progress in adapting its business model to a changing operating environment. Excluding the Africa business which Barclays intends to sell down to the point of regulatory deconsolidation, over half of the group’s revenues stem from consumer businesses with strong franchises (UK retail and business banking, credit cards). The investment banking business has been reduced and refocused.

Management expects to complete key elements of the group’s restructuring this year, notably the early closure of Non-Core in mid-2017, however the run-down will negatively impact financial performance. The various core businesses have demonstrated encouraging resilience although profitability has room to improve. Potential conduct and litigation costs remain a risk.
 

Download updated rating report on Barclays.

Contact

Scope Ratings AG    Phone: +49 (0)30 27891-0
Pauline Lambert    p.lambert@scoperatings.com
Samuel Theodore    s.theodore@scoperatings.com
Oliver Müller    press@scopegroup.com


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