Barclays gets capital boost ahead of potential coronavirus loan losses

FILE PHOTO: A Barclays bank building is seen at Canary Wharf in London, Britain May 17, 2017. REUTERS/Stefan Wermuth/File Photo

LONDON (Reuters) - Barclays BARC.L told investors on Monday that recent regulatory changes had boosted its core capital, giving the British bank a bigger buffer to absorb any further loan losses during the coronavirus crisis.

The bank said it expected to report a CET1 capital ratio of 14% in half-year results later this month, up from 13.1% at the end of March and ahead of market expectations.

Barclays also said it expected risk-weighted assets to be lower than previously anticipated.

The bank said its half-year results would reflect challenging income and impairments in its consumer and corporate business, but strength in its markets income.

Barclays shares were up nearly 2% at 1135 GMT following the announcement, making them the biggest gainers among FTSE 100 banks on the day.

John Cronin, banking analyst at Goodbody, said it was likely other banks could see a similar boost to capital from the recent rules changes, including a softening of capital accounting rules rolled out in June.

“The fresh guidance is also suggestive of lower-than-consensus impairments, which is not surprising given improved market expectations in a GDP and unemployment trough context,” Cronin added.

“However, many customers are still on payment breaks and it is very early days in a loan losses context.”

Reporting by Iain Withers; Editing by Tom Arnold and Jane Merriman