Barclays Expects GBP 450 Mln Loss On Bond Blunder

Barclays plc (BARC.L,BCS), in an update on the capital and other impacts of certain securities issuances identified by Barclays Bank PLC as being in excess of registered amounts, said that it expects the rescission losses (net of tax) to be about 450 million pounds. It is based on current market prices of the affected securities and the estimated pool of potentially eligible purchasers electing to participate in the rescission offer.

The company now expects to commence the 1 billion pounds share buy-back program, which was announced on 23 February 2022, in the second-quarter of 2022.

Group CET1 ratio is expected to be in the middle of the 13-14% target range as at 31 March 2022. This reflects about 14 bps reduction from the estimated loss and a further about 15 bps reduction due to an increase in risk weighted assets in respect of short-term hedging arrangements designed to manage the risks to Barclays arising out of the rescission offer.

Barclays Bank PLC, a subsidiary of Barclays PLC, is a frequent issuer of structured notes and exchange traded notes in the United States and elsewhere. The securities are often issued to meet actual and anticipated client demand for such securities.

Barclays Bank determined that the securities offered and sold under its US shelf registration statement during a period of approximately one year exceeded the registered amount giving rise to a right of rescission among certain purchasers of Affected Securities requiring Barclays Bank to repurchase the Affected Securities at their original purchase price. As a result, Barclays Bank has elected to conduct a rescission offer to eligible purchasers of the Affected Securities.

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