(Alliance News) - Moody's Investors Service upgraded Barclays PLC's long-term senior unsecured debt rating to Baa2 from Baa3 following an improved "operating performance and profitability", the credit ratings agency said late Wednesday.
Moody's also changed the outlook to Stable from Positive following the debt rating upgrade.
Moody's Senior Vice President Alessandro Roccati said: "Barclays' profitability has improved over the past year and its earnings are less volatile, benefitting from both stronger revenues, particularly from its non ring-fenced subsidiary, Barclays Bank PLC, improved efficiency and lower litigation and conduct charges."
The ratings agency noted that the bank's capital markets activities accounted for a third of its revenue in the first of 2019.
And on litigation costs, Barclays resolved a matter with the US Department of Justice.
In the first half of 2018, Barclays paid a GBP1.42 billion settlement to resolve the civil complaint brought by the US government department in December 2016. This was in relation to residential mortgage-backed securities sold by the lender between 2005 and 2007.
"A reduction in further provisions for payment protection insurance claims, will also reduce earnings volatility," Moody's summarised.
In the three months to September 30, Barclays said it took GBP1.4 billion in payment protection insurance provisions. The deadline to make PPI claims passed on August 29, 2019.
Moody's added: "Moody's believes that going forward, Barclays is positioned to continue to demonstrate not only an improved profitability in both its retail and commercial banking businesses, but also from its investment banking and capital markets franchise in the US and Europe."
By Eric Cunha; ericcunha@alliancenews.com
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Barclays (BARC)