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By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

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2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

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Related Issuers
Rating Action:

Moody's assigns definitive long-term deposit rating of A1 to Barclays' ring-fenced bank Barclays Bank UK PLC; outlook stable

03 Apr 2018

Action follows UK authorities' approval to complete the group's restructuring to comply with ring-fencing rules

London, 03 April 2018 -- Moody's Investors Service ("Moody's") has assigned a definitive long-term deposit rating of A1 and affirmed its standalone Baseline Credit Assessment (BCA) of a3 to Barclays Bank UK PLC (Barclays Bank UK), the ring-fenced bank of Barclays PLC (Barclays, LT issuer rating Baa2 on review for downgrade). The rating assignment reflects Moody's assessment of Barclays Bank UK's moderate asset risk, robust capitalization, solid funding and adequate liquidity.

"Barclays Bank UK's creditors benefit from good and stable profits from the group's domestic retail and business banking activities, which are underpinned by the bank's strong franchise in the UK", said Mr. Andrea Usai, Senior Vice President at Moody's. "Nevertheless, we also expect the bank's profitability to be challenged by the weakening operating conditions in the UK and residual conduct costs, over the next 12-18 months".

Moody's has also assigned a definitive short-term deposit rating of Prime-1 to the bank and a (P)Prime-1 programme rating to its GBP10 billion Euro Commercial Paper Programme. The bank's Counterparty Risk (CR) assessment of Aa2(cr)/Prime-1(cr) were affirmed.

The assignment of the A1 long-term deposit rating to Barclays Bank UK reflects the a3 standalone BCA and incorporates a one-notch uplift resulting from Moody's advanced Loss Given Failure (LGF) analysis. The A1 long-term deposit rating also includes one notch of government support, reflecting Moody's assessment of a moderate probability of support for Barclays Bank UK from the government of the United Kingdom (Aa2 stable), if needed.

The list of assigned ratings is available at the bottom of this press release

RATINGS RATIONALE

On 30 October 2017, Moody's assigned provisional deposit ratings of (P)A1/(P)Prime-1 to Barclays Bank UK, conditional on the set-up of Barclays Bank UK in line with its expectation in 2018. Barclays has obtained approvals from the UK Prudential Regulation Authority and the High Court of Justice of England and Wales on 9 March 2018, to complete the separation of its retail and business banking operations from Barclays Bank PLC (LT deposits and senior unsecured debt A1 review for downgrade, BCA baa2 review for downgrade). On 1 April 2018, the group has therefore implemented the relevant legal changes, ahead of ring-fencing regulation coming into force on 1 January 2019.

The affirmation of Barclays Bank UK's a3 BCA reflects that the set-up of Barclays' ring-fenced bank has been executed in line with Moody's expectations. Barclays Bank UK's a3 BCA reflects the bank's (1) moderate asset risk, given that its activities will focus predominantly on secured and unsecured lending to retail and small business customers, (2) robust capitalisation and adequate leverage, (3) good and stable profits from the retail and business banking activities, underpinned by the bank's strong franchise in the UK. However, Moody's considers that Barclays Bank UK holds a higher proportion of problem loans than rated peers, partly reflecting greater exposures to higher margin, unsecured retail lending. Moody's also expects that Barclays Bank UK's profitability could be challenged by the weakening operating conditions in the UK and residual conduct costs, over the next 12-18 months. The a3 BCA also incorporates Moody's assessment of Barclays Bank UK's (4) solid funding profile, owing to a large deposit base and limited reliance on wholesale funding; and, (5) adequate liquidity.

WHAT COULD MOVE THE RATINGS UP/DOWN

An upgrade of the bank's a3 BCA could result from a much lower asset risk, a considerable increase in profitability and liquidity. A higher BCA could then lead to a rating upgrade. An upgrade of Barclays Bank UK's long-term deposit rating could also result from a higher stock of bail-in-able liabilities that would provide higher protection for its junior depositors.

The bank's BCA could be downgraded in the case of a deterioration in operating conditions in the UK, beyond Moody's current expectations, which would increase its asset risk and weaken profitability. Lower capitalisation or a deterioration in the bank's liquidity profile could also lead to a lower BCA. A downgrade of the BCA would likely lead to a rating downgrade. The ratings could also be downgraded in the case of a reduction in the stock of bail-in-able debt that would reduce protection for junior creditors.

LIST OF AFFECTED RATINGS

Issuer: Barclays Bank UK PLC

Assigned Definitive:

....LT Bank Deposits, Assigned A1 Stable from (P)A1

....ST Bank Deposits, Assigned P-1 from (P)P-1

Assignment:

....Commercial Paper, Assigned (P)P-1

Affirmations:

....Adjusted Baseline Credit Assessment, Affirmed a3

....Baseline Credit Assessment, Affirmed a3

....LT Counterparty Risk Assessment, Affirmed Aa2(cr)

....ST Counterparty Risk Assessment, Affirmed P-1(cr)

Outlook Actions:

....Outlook, Changed To Stable From No Outlook

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks published in September 2017. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Andrea Usai
Senior Vice President
Financial Institutions Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Ana Arsov
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

No Related Data.
© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

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MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY550,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​
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