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BARCLAYS LONG-TERM BANK RATING FOR STRUCTURED TRANSACTIONS LOWERED TO 'AA-' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Nov. 4 /PRNewswire/ -- Barclays Bank PLC's long-term bank rating for structured transactions is lowered to 'AA-' from 'AA' by Fitch. The short-term 'F-1+' rating is affirmed. The downgrade is based on the expectation of protracted loan quality problems in the U.K. and Europe, uncertainty regarding provision levels, and a potentially weaker competitive position in the U.K. as the economy emerges from a three- year recession. Despite these pressures, Barclays' underlying earnings are expected to strengthen in the near-term, particularly due to higher dealing profits. The bank is soundly capitalized and enjoys broad access to global funding sources.
 Following a careful review of the bank's loan underwriting and provisioning practices, Fitch concluded that Barclays may face higher provision needs. The more liberal use of general provisions at Barclays indicates the inability to quantify specific loan losses. In the first half of 1993, Barclays set aside a general provision of 118 million pounds sterling, primarily to cover U.S. loan problems, although new loan problems emerged in France and Germany and the bank continued to identify small business loan problems in the U.K. Loan quality pressures could persist as the stalled economy in continental Europe may hurt longer term prospects for U.K. economic recovery, which has depended on consumer confidence and exports to the continent.
 About 70 percent of provisions at June 30, 1993 involved credits under 5 million pounds. The more recent small business loan problems are likely to require more capital and personnel resources than the larger property credit problems experienced in 1992. Barclays has the largest commercial property and construction portfolio of any major U.K. bank, equivalent to 12 percent of total loans.
 Management recently reorganized the credit review function and continues to develop credit scoring as well as credit data monitoring systems. However, as most changes have been geared toward senior management, it will take time for credit policy changes to have a material effect at branch levels. To date, a decentralized credit process along with adverse market conditions have resulted further deterioration on some pre-existing nonperformers. Loan quality in much of the large U.K. corporate and residential mortgage portfolios remains sound.
 Another credit consideration is Barclays' competitiveness, given the expectation of further consolidation in U.K. banking and the prolonged nature of Barclays' problems compared to National Westminster Bank and Midland Bank. Although Barclays has diversified throughout continental Europe, losses from European, primarily French operations, have depressed pretax return on assets by 20 percent-50 percent since 1990. In addition, the U.S. operation continues to show losses, although management is committed to a rapid resolution of problem loans including possible sales.
 Despite these pressures, Barclays remains a pre-eminent U.K. banking institution with a strong franchise among major U.K. corporations. As a universal bank, Barclays will continue to offer competitive products in trading, insurance, and mortgage lending. Through a broad branch network in the U.K., Spain, Portugal, and France, Barclays enjoys strong liquidity and ready access to major U.K. institutions for funding and capital raising. With Tier 1 capital equal to 5.57 percent of risk- adjusted assets as of June 30, capitalization is appropriate for a 'AA' category institution.
 Also downgraded to 'AA-/F-1+' are the following issues backed by Barclays Bank letters of credit:
 -- Allegheny County Industrial Development Authority, PA, pollution control revenue refunding series 1990A due Dec. 1, 2013 (Duquesne Light Co. project).
 -- Beaver County Industrial Development Authority, PA pollution control revenue refunding series 1990A, 1990B, 1990C (Duquesne Light Co. project).
 -0- 11/4/93
 /CONTACT: Ricardo J. Kleinbaum, 212-908-0525, or Marc R. Pinto, 212-908-0618, both of Fitch/


CO: Barclays Bank PLC ST: IN: FIN SU: RTG

WB -- NY052 -- 0671 11/04/93 11:29 EST
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Date:Nov 4, 1993
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