RE: Are Barclays shares the most undervalued stock in the FTSE 100?13 Jul 2020 12:16
13/07/2020 11:06am
UK Regulatory (RNS & others)
TIDMBARC
RNS Number : 8187S
Barclays PLC
13 July 2020
Barclays PLC (the "Company")
Update on the Group's CET1 capital ratio
Since the Company's Q1 2020 Results Announcement published on 29 April 2020, there have been a number of developments, including regulatory changes, which will positively impact the Group's Common Equity Tier 1 ("CET1") capital ratio as at 30 June 2020.
The Company currently expects to report an increase in the Group's CET1 capital ratio from 13.1% as at 31 March 2020 to c.14% at 30 June 2020, ahead of market expectations. Regulatory changes contributing to the improvement in the capital ratio as at the end of Q2 2020 include amendments to the Capital Requirements Regulation that were implemented in June 2020, including transitional relief relating to IFRS9 impairment and implementation of revised rules for the calculation of the prudential valuation adjustment to capital. In addition, risk weighted assets ("RWAs") as at 30 June 2020 are expected to be lower than previously anticipated.
In the second half of the year there may be headwinds to the CET1 ratio from procyclical effects on RWAs, and reduced transitional relief on IFRS9 impairment.
The Group's Maximum Distributable Amount hurdle is expected to reduce from the Q1 2020 level of 11.5% to 11.2% following the Prudential Regulation Authority's statement that it will calculate Pillar 2A requirements as a nominal amount instead of a percentage of RWAs.
Further details will be provided in the Company's Interim Results to be published on 29 July 2020, which are expected to reflect the challenging income and impairment conditions for the consumer and corporate businesses, and continuing strength of markets income.
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