Update: Barclays PLC

To this end, as part of its third quarter results, Barclays outlined its intention to reduce structural costs through significant one-off actions to be announced in February 2024. Management has suggested material severance costs on top of the structural expense reduction efforts already underway. Much of the year-to-date structural cost actions, which totaled £119 million, fell within the U.K. retail banking business, and we would expect future cost-cutting efforts to widen in scope to include Barclays International, which represents the majority of group revenue, capital, and funding. We would expect these measures, if successfully executed, to support medium-term returns, containing the cost to income ratio and supporting profitability as revenue cools and global rates reach their peak. On balance, we

... diversification, and cautious balance-sheet management support the rating. Barclays' strategic and geographical diversification has enabled the bank to generate good earnings and significant excess capital. At the same time, Barclays has cautiously managed its balance sheet, leaving it well positioned in an uncertain global financial environment. To this end, Barclays' lending book is in a strong position, its liquidity pool is dominated by central bank reserves, and its funding is granular and well diversified. Planned actions to reduce structural costs could further support earnings resilience. Barclays' broad strategic platform and the earnings resilience it brings drove our rating actions in May 2023 (see "Barclays PLC Upgraded To '###+' On Business Diversification And Resilient Performance; Outlook Stable", published May 19, 2023). However, the cost to income has remained elevated versus the U.K. and international universal bank peer...

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