Broker snap: Ringfencing risk not immediate, UBS upgrades Barclays to buy

Delays to the Independent Commission on Banking's (ICB's) proposal to ringfence banks have prompted UBS to upgrade UK lender Barclays from neutral to buy.The broker highlighted "substantial potential value in Barclays if the proposals from the ICB did not precipitate a sharp near-term funding cost as a result of the introduction of ring fencing proposals."Press reports on Thursday indicated that it may take the UK government two to three months to respond to the ICB proposals and the suggested that the implementation of structural reforms will likely be pushed by until after the next general election in 2015."The ability to have more time to get a balance sheet into the right place is likely to lead to lower restructuring costs to get there," the broker said.The broker said that unchanged price target of 208p still reflects a "significant haircut to book value as a result of regulatory uncertainty." Shares were 3.94% lower at 173.25p by 10:56.BC