Barclays shares plunge as credit rating cut
Shares in Barclays have plunged 9% to 96p this morning after Moody’s downgraded the bank’s long-term debt rating from Aa1 to Aa3, while its financial strength rating was cut from B to C.
Moody’s said it expects the bank to announce considerable further losses on credit related write-downs.
Barclays stock has been hit hard over the last month with shares falling 31% in January alone, as fears grew that the bank might have to be nationalised.
However, Barclays’ shares received a much-needed boost last week after chairman Marcus Agius and chief executive John Varley sought to reassure investors that it was on target to announce profits of over £5.3 billion for 2008.
In a statement, Moody’s said “the downgrades reflect our expectation of potentially significant further losses at Barclays as a result of write-downs on credit market exposures as well as an increase in impairments in the UK, which could weaken profitability and capital ratios“.
Barclays is to publish full-year results on February 9.
In related news, it is understood that South Africa has reported Barclays to the Serious Fraud Office over accusations connected to breaches of its foreign-exchange controls.
Barclays is strongly denying the accusation.