Barclays defends £15 billion private credit book after reported BoE scrutiny

Barclays States £15bn Private Credit Exposure Meets Regulatory Standards

Barclays’ Private Credit Exposure and Regulatory Compliance

Oct 19 (Reuters) - Barclays said its £15 billion ($19.97 billion) private credit exposure was treated in line with accounting and regulatory capital requirements after a report the Bank of England was examining if its traders had understated the risk.

Key Details of Barclays’ Statement

Here are some details:

Treatment of Total Return Swaps

• Its treatment of total return swaps is consistent with accounting and regulatory capital requirements, Barclays said in a statement to Reuters on Monday

Bank of England’s Examination

• The Financial Times reported earlier in the day that the BoE was examining whether Barclays traders misrepresented illiquid private credit loans

Exposure Breakdown

• Barclays said the mark-to-market value of its exposure to loan total return swaps linked to private credit assets was about £300 million, based on roughly £1.5 billion of underlying notional assets

• It said its total private credit exposure stood at £15 billion, with the vast majority held in the banking book

Capital Rules and Governance

• It was required to meet certain conditions under capital rules to classify the treatment as trading book, and those conditions had been met and supported by internal governance and external advisers, the bank said

Currency Conversion

($1 = 0.7512 pounds)

Reporting Credits

(Reporting by Sri Hari N S in Bengaluru; Editing by Aseem Gujar and Pooja Desai)