Update: Barclays PLC

This increasing diversification and geographic breadth support earnings stability in a challenging period for the global economy, with persistently high inflation in the U.K. and U.S., unemployment showing early signs of increasing, and rising rates putting economic growth under pressure. The positive outlook reflects our view that Barclays is delivering a stronger business profile and stably stronger financial performance. We expect it to navigate the difficult and uncertain environment well, recording material profitability even as major economies face economic contraction and persistent inflation, amid elevated geopolitical risk. We think Barclays is entering a difficult economic period with solid provision coverage. At the same time, we project impairment charges will increase materially in 2022 and 2023, assuming that difficult economic conditions

...Barclays' diverse and profitable international business model continues to support our positive outlook. The positive outlook reflects S&P Global Ratings' expectation that Barclays' creditworthiness will likely strengthen because of its consistent strategic execution. After resilient performance through the pandemic, we expect continued strong earnings generation in 2022-2023, propelled by the impact of rising rates on its diverse income base, alongside containable credit losses and operating costs even as the global economy falters. A diversified business model and rising interest rates bolster Barclays against the difficult economic environment. Through its consistent strategic focus, Barclays has successfully built an international, well-diversified universal bank. It is run across two divisions, Barclays UK (BUK; 25% of income in the nine months to Sept. 30, 2022) and Barclays International (BI; 75%), with BI at the heart of the group's strong growth in the past few years. In particular,...

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