In addition to affirming the A+ Issuer Rating of Barclays Bank PLC, Scope has affirmed outstanding ratings related to various debt securities of the group:

• Barclays Bank PLC senior unsecured preferred debt ratings at A+
• Barclays Bank PLC short-term debt ratings at S-1+
• Barclays Bank PLC Tier 2 securities ratings at BBB+
• Barclays PLC senior unsecured MREL/TLAC-eligible debt ratings at A
• Barclays PLC Tier 2 securities ratings at BBB+
• Barclays PLC AT1 securities ratings at BB+

The rating agency further assigned new Issuer Ratings of A+ to the group, Barclays PLC, and to the ring-fenced bank, Barclays Bank UK PLC. All ratings have a Stable Outlook.

To comply with UK ring-fencing requirements, which take effect from 1 January 2019, Barclays has successfully changed its legal structure to implement ring-fencing. Barclays Bank PLC, previously the main operating bank of the group, now encompasses the group’s corporate and investment banking as well as international consumer, cards and payments activities. Meanwhile, Barclays Bank UK PLC, the newly created ring-fenced bank, comprises UK retail and business banking activities. Scope expects both entities to remain integral parts of the Barclays group.

In assigning an Issuer Rating of A+/Stable to the newly created ring-fenced bank, Barclays Bank UK PLC, Scope notes that this is a retail and business banking business with a strong domestic franchise. In Scope’s opinion, ring-fencing is mainly intended for the benefit of domestic retail and business depositors and other customers rather than institutional investors. The rating agency also expects ring-fenced banks to remain part of larger banking groups which will continue to be supervised and regulated as groups.

Scope does not believe that debt investors in ring-fenced entities of a group are automatically better off than debt investors in non-ring-fenced entities of the same group. Under the Bank of England’s preferred resolution strategy for banking groups subject to ring-fencing – bail-in at the holding company level – it is not clear that ring-fenced entities would receive preferential treatment.

In affirming the A+/Stable Issuer Rating on Barclays Bank PLC, Scopes acknowledges the progress the group has made in right-sizing and de-risking its investment banking activities, through the run-down of its non-core division, and the profitability of the consumer, cards and payment businesses. Based on the current reporting of the Barclays International business division, Barclays Bank PLC accounts for about two-thirds of the group’s revenues.

Scope has also assigned an Issuer Rating of A+/Stable to the Barclays PLC group. The rating is underpinned by the progress made in adapting the group’s business model to evolving operating conditions, the resilience of the various businesses although profitability can be improved, and management’s continued attention to maintaining appropriate levels of capital and liquidity. The rating agency views positively the recent resolution of certain material legal and conduct issues.

Scope highlights the following as potential negative rating change drivers: (i) a deviation in management’s strategy to maintain a balanced mix of consumer and wholesale businesses, (ii)
further substantial conduct risk costs, and (iii) the inability to effectively manage potential disruption to or weakening of business conditions due to Brexit.

Meanwhile, continued reshaping of the group, which leads to a track record of sustainable earnings, would be a potential positive rating change driver.

Stress testing & cash flow analysis
No stress testing was performed. No cash flow analysis was performed.

Methodology
The methodology used for this rating(s) and/or rating outlook(s) Bank Ratings Methodology is available on www.scoperatings.com.
Historical default rates of Scope Ratings can be viewed in the rating performance report on https://www.scoperatings.com/#governance-and-policies/regulatory-ESMA Please also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. A comprehensive clarification of Scope’s definition of default as well as definitions of rating notations can be found in Scope’s public credit rating methodologies on www.scoperatings.com.
The rating outlook indicates the most likely direction of the rating if the rating were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information 
The rating was not requested by the rated entity or its agents. The rated entity and/or its agents participated in the rating process. Scope had no access to accounts, management and/or other relevant internal documents for the rated entity or related third party.
The following substantially material sources of information were used to prepare the credit rating: public domain, the rated entity, third parties.
Scope considers the quality of information available to Scope on the rated entity or instrument to be satisfactory. The information and data supporting Scope’s ratings originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data.” 
Prior to the issuance of the rating or outlook action, the rated entity was given the opportunity to review the rating and/or outlook and the principal grounds on which the credit rating and/or outlook is based. Following that review, the rating was not amended before being issued.

Regulatory Disclosures 
This credit rating and/or rating outlook is issued by Scope Ratings GmbH.
Lead analyst Pauline Lambert, Executive Director
Person responsible for approval of the rating: Samuel Theodore, Group Managing Director 
Barclays Bank PLC’s issuer rating/outlook were first released by Scope on 02.04.2014. The ratings/outlooks were last updated on 01.06.2016. 
Barclays Bank PLC’s short-term rating/outlook were first released by Scope on 22.05.2014. The ratings/outlooks were last updated on 26.10.2017.
Barclays Bank PLC’s senior unsecured debt rating/outlook were first released by Scope on 02.04.2014. The ratings/outlooks were last updated on 01.06.2016.
Barclays Bank PLC’s rating/outlook on Tier 2 bank capital securities were first released by Scope on 09.10.2014.
Barclays PLC’s issuer rating/outlook were first released by Scope on 08.05.2018.
Barclays PLC’s senior unsecured debt rating/outlook were first released by Scope on 02.04.2014.
Barclays PLC’s rating/outlook on Tier 2 bank capital securities were first released by Scope on 19.12.2016.
Barclays PLC’s rating/outlook on AT1 bank capital securities were first released by Scope on 09.10.2014. The ratings/outlooks were last updated on 15.06.2017.
Barclays Bank UK PLC’s issuer rating/outlook were first released by Scope on 08.05.2018. 

Potential conflicts 
Please see www.scoperatings.com. for a list of potential conflicts of interest related to the issuance of credit ratings.

Conditions of use / exclusion of liability
© 2018 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings GmbH, Scope Analysis GmbH, Scope Investor Services GmbH and Scope Risk Solutions GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided ‘as is’ without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or other damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party as, opinions on relative credit risk and not a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings GmbH at Lennéstrasse 5 D-10785 Berlin.

Scope Ratings GmbH, Lennéstrasse 5, 10785 Berlin, District Court for Berlin (Charlottenburg) HRB 192993 B, Managing Director(s): Dr. Stefan Bund, Torsten Hinrichs.