Barclays bank shares slide after credit rating downgrade
The remarkable recovery in the Barclays bank share prices was halted today with news that credit rating agency Moody's has downgraded its rating on Barclays bank. The downgrade comes as the group announced it expected "significant further losses" on credit related write-downs. There is also potential for a substantial write-down on the company's property exposure where commercial property is coming more and more under the spotlight.
However, the shares are currently around 95p and considering they fell below 30p in recent times the shares have still performed remarkably well in the short term. While many investors believe the worst may be over, there is some speculation that the company will need to improve its financial ratios which could see Barclays bank eventually go to shareholders for extra funding or alternatively take up any future offer from the government.
Barclays bank has been in the spotlight for some time since the directors decided against using the last government funded bailout and instead chose to raise funds in the Middle East. The terms of the Middle East deal came under intense scrutiny as did the extra cost of raising finance, which was substantially more than what was on offer from the government. While the recent bounce in the UK banking sector has been welcomed, there may still be worse to come.
Share this..
Related stories
British Gas and E.ON reduce energy tariffs
As energy prices continue to fluctuate in the UK, today saw British Gas and E.ON reduce their dual tariffs to under £1000 a year. As soon as the British Gas Web Saver 4 tariff was released, E.ON introduced its own FixOnline 3 which is £10 cheaper at £984 a year.
The E.ON tariff also enables customers to fix their prices until 1 December 2010 which on the surface seems very attrac...
EDF Admits UK Energy Costs Higher Than French Costs
French energy giant EDF has responded to some strong criticism by the Ed Mayo, the government's consumer watchdog, with regards to the price French customers pay for their electricity against that charged to their UK counterparts - both supplied by EDF.
Official figures show that the UK consumer will pay around £442 a year for electricity against £332 for those supplied by EDF in...
Is The Housing Crisis Slowing Down The Roll Out Of Broadband
News that four of the top six broadband providers in the UK have seen a fall in demand for broadband connections over the last couple of months is being blamed on the housing crisis. It seems as though a house move is seen by many as the opportune moment to introduce broadband to their lives. However, there is a suspicion that with people looking to make cost savings across the board broadband i...
Read MoreThe great US bailout - the negative points
After all of the euphoria of the multi billion dollar bailout has calmed down and markets begin to settle there may be some uncomfortable realisations for the investment world. The financial markets of tomorrow will be very different to the ones we are seeing today, but how different?
The negative points :-
Many people are very concerned that the US bailout will giv...
FSA set to increase fines by up to 300%
In a sign of the times, the Financial Services Authority (FSA) has today issued proposals with regards to a significant increase in fines and penalties for those found guilty of market abuse in the future. If the proposals become law we will see fines increased by up to 300% and individuals in line for a minimum £100,000 fine if found guilty in cases of market abuse.
The broad fram...