Barclays PLC to write-off £1.3 billion

Source: Exec Digital UK

Date :15/11/2007 12:36:07

Barclays PLC, the UK's third biggest bank, is to write-down £1.3 billion on credit-related securities tied to the American sub-prime mortgage market collapse, it said today.

The Bank brought forward its trading update by more than ten days to allay market fears which had been speculating it would need to write-off £10 billion.

Barclays will write-down and take net charges of £500 million for the third quarter and £800 million for October, the London-based bank said this morning.

So far this month, Barclays’ shares have fallen twelve percent over investors’ concerns the bank may have write-downs following the collapse of the $6 trillion market for home-loan bonds.

Strength and Resilience

"Today's extensive disclosure demonstrates the strength and resilience of our performance during the year and in particular during the turbulent month of October," said Barclays’ chief executive John Varley.

The group said that both the commercial bank and its investment bank, Barclays Capital, recorded an increase in net income and pretax profit for the ten months to October, ahead of the same period last year.

The group said the October charges and write-downs reflected the impact of rating agency downgrades on a broad range of collateralized debt obligations (CDOs) and the subsequent market downturn.

Barclays said it will provide its normal scheduled trading update on 27 November.

November 15, 2007