17th May 2019 10:06
LONDON (Alliance News) - Moody's Investor Service affirmed the long-term senior unsecured debt ratings of Barclays PLC Friday and upgraded the lender's outlook to positive.
Moody's also revised its outlook to positive from stable for Barclays Bank PLC but left its outlook at stable for Barclays Bank UK PLC.
The Baa3 rating - the lowest investment grade Moody's offers - was affirmed to reflect Barclays' "ample liquidity". Moody's also affirmed Barclays' Commercial Paper ratings at P-3.
The credit ratings agency added Barclays capital sitting above regulatory requirements, mitigating risks from large exposure to capital markets, and the lender's "moderate" credit risk played a role in the affirmation.
"With large litigations settled and restructuring costs declining, Barclays' profitability is on a path to recovery and the bank is better positioned to mitigate against Brexit-related risks and tail risk from its large capital markets activities," said Alessandro Roccati, senior vice president at Moody's. "Capital generation through earnings will likely be sustained and the bank's liquidity is strong."
The positive outlook for the group reflects Moody's belief the lender's operating performance and profitability prospects "will improve", as litigation and conduct risks reduce "significantly". Non-recurring charges are expected to "moderate" over the next eighteen months.
Additionally, Moody's affirmed all ratings of Barclays Bank PLC to coincide with the upgraded outlook on Barclays Bank's senior debt and deposit ratings.
The affirmation and positive outlook for Barclays Bank reflects Moody's opinion the ring-fenced bank's operating performance will "moderately improve". Moody's is expecting "improved" revenue as the lender's recent restructuring "starts to bear fruit".
Moody's expects Barclays Bank UK's operating performance to remain "broadly stable".
Shares in Barclays were down 1.2% Friday morning at 158.68 pence each.
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