The ratings on Barclays Bank PLC reflect its good income levels, strengthened risk management, and strong U.K. market position. Profitability is robust on an international basis, although correlated with U.K. economic performance. Strategic decisions in the late 1990s have positioned Barclays to provide a resilient performance in more difficult economic conditions, and income should remain good in absolute terms. Increased competition in U.K. financial services restrains earnings growth, even though Barclays does not compete solely on price across its entire portfolio, but the earnings base is increasingly diversified. Profitability should be underpinned by initiatives to improve productivity. Barclays is growing several global business lines such as asset management, Barclays Capital (BarCap)--which is its wholesale and investment banking division--and credit cards.
