Standard & Poor’s (S&P) has warned that a shake-up in Barclays (LON:BARC) strategy could damage the bank’s credit worthiness, The Telegraph reports. The comments come amid the FTSE 100 group’s battle with activist investor Edward Bramson, whose Sherborne Investors snapped up a little over five percent in the blue-chip lender earlier this year.
Barclays’ share price has fallen deep into the red in London in today’s session, having given up 1.75 percent to 185.70p as of 10:27 BST. The shares are underperforming the broader market sell-off with the benchmark FTSE 100 index having given up 0.94 percent to 7,565.14 points so far this morning.
S&P warns against strategy shake-up
The Telegraph reported last night that S&P had reaffirmed its credit rating of BBB+ on Barclays this month, leaving it three notches above junk, while warning that the rating would be put at risk if “our confidence in the predictability of its management and strategy waned”. S&P further criticised Bramson’s Sherborne Investors, arguing that its intervention was an “additional constraint”.
‘Substantial progress’ under Jes Staley
The Telegraph also noted that the S&P had urged continuity, arguing that the FTSE 100 group had made ‘substantial progress’ under its chief executive Jes Staley’s leadership.
The comments come after it emerged in May that Bramson wanted Barclays to axe all parts of its investment banking operation which did not directly serve corporate clients. His plan would see the blue-chip lender keep its M&A advisory business and the equity and debt capital markets teams responsible for leading high-value initial public offerings and bond sales, while culling its cash equities, currency and fixed income trading desks.
Barclays is scheduled to update investors on its half-year performance on August 2.