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Moody’s downgrades Barclays' credit rating to just above ‘junk’

Published: 15:33 05 Apr 2018 BST

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The agency added that Barclays faces "ongoing profitability challenges"

Barclays PLC (LON:BARC) has seen its credit rating downgraded to one level above ‘junk’ status by ratings agency Moody’s.

The agency said the FTSE 100-listed lender's £1bn effort to ring-fence its UK retail arm had made it a riskier investment overall.

READ: Barclays agrees US$2bn settlement in US over mortgage-backed securities lawsuit

Barclays became the first UK lender to ring-fence its retail arm over the weekend as it sought to comply with new rules to protect British businesses and customers from the fallout of another potential financial crisis.

Moody’s said the changes are likely to make UK banks safer but could lead to downgrades for the separated investment banking businesses.

The agency added that Barclays specifically faces "ongoing profitability challenges".

The downgrade adds pressure on chief executive Jes Staley to revive the lender's investment bank following its recent underperformance.

Barclays’ shares were up 1.5% at 210.5p in late-afternoon trading Thursday.

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