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Barclays could cut lending

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Barclays could cut lending

Post  Panda on Sat 29 Jun - 13:24

Barclays could cut lending to meet PRA capital rules, warns chief Antony Jenkins
Barclays could cut lending in the UK if it is forced to quickly meet new financial strength targets imposed by the regulator, the bank’s chief executive has warned.

Barclays was one of only two firms whose net UK lending was more than £1bn in the first quarter Photo: Bloomberg News
By Andrew Trotman
9:10PM BST 28 Jun 2013
The Prudential Regulation Authority told lenders last week that they must meet a 3pc leverage ratio. The PRA notified Barclays it fell short of these new rules by 0.5 percentage points and gave the bank until the end of July to say how it would close the gap.

However, Barclays chief Antony Jenkins said the lender would hit the target by 2015 and that any move to speed up this process could harm its domestic business.

“We have options to accelerate with minor income effects, but an aggressive acceleration requirement from the PRA would require additional actions ...,” he said, adding that this could include squeezing “lending to the UK and other economies, which is something we want to avoid”.

Mr Jenkins added that he is confident of an agreement with the PRA in the next month, with the regulator mindful that Barclays was one of only two firms whose net UK lending exceeded £1bn in the first quarter. Nationwide was the other.

“Given our starting point, we expect the July discussions will centre on possible acceleration,” he said, before arguing that the leverage ratio was a “crude” measure.

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A Bank of England spokesman said: "We have made it very clear that any plans that restrict lending to the economy will not be accepted.”

Barclays also said it plans to move 4,000 jobs, mainly focused on administration and the management of the bank’s computers and data. The announcement is part of a plan to save £250m over the next two years.

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