Barclays suffer downgrading

Barclays Bank have suffered a downgrading to their credit rating by the agency Moody’s, who expect significant further losses on their credit-related write-downs which has resulted in the downgrading.

The banks financial strength rating is now a C from B and long-term debt rating has also been cut.

The banks shares have seen a sharp increase last week after a statement revealed that the bank was well funded and that no support form the UK government would be needed.

Moody’s latest statement has reflected the reasons for the downgrading as the write-downs on credit market exposures would weaken profitability.

Moody’s own analysis indicate that the case for government support is high, the annual profit is expected to be greater than £5.3 billion even though its investment bank has announced £8 billion in losses.

The share rebound came after Barclays issued a statement last week saying that it was well funded, and that it would not be seeking any financial support from the UK government.

Chairman Marcus Agius and chief executive John Varley have written a letter that said the bank will report its 2008 profit which will be above market targets.

It is a long way off from the middle of January whereby shares were trading at under 50p.

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