(Alliance News) - Barclays PLC said on Monday it expects a GBP450 million hit due to the over-issuance of structured notes and exchange traded notes.
The London-based bank explained that securities offered and sold under its US shelf registration statement for an approximate one-year period had exceeded a registered amount.
This, the bank explained, gives the purchasers of the affected securities a right of rescission, requiring Barclays Bank to repurchase the affected securities at their original purchase price.
Barclays Bank has elected to do so, and the company says details of the rescission offer will be published "in due course".
Barclays expects the rescission losses, net of tax, to be GBP450 million and the CET1 ratio to be in the middle of the 13 to 14% target range at March 31.
The company explained that this reflects a 14 basis points reduction from the estimated loss and a further 15 basis points reduction due to an increase in risk weighted assets in respect of short-term hedging arrangements designed to manage the risks arising out of the rescission offer.
The equivalent impact on Barclays Bank's CET1 ratio at March 31 is expected to be a reduction of 23 basis points in respect of the estimated loss and 23 basis points in respect to the hedging impact. Though Barclays notes that the hedging impacts will reverse on conclusion of the rescission offer.
The bank adds that its GBP1 billion share buyback programme is now expected to commence in the second quarter of 2022, following the publication of its first quarter results.
Shares in Barclays were down 2.9% at 162.40 pence on Monday morning in London.
By Heather Rydings; heatherrydings@alliancenews.com
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Barclays (BARC)
