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Balance sheet demands to rise says Barclays FD

David Jetuah, Accountancy Age, 16 May 2008

Chris Lucas predicts regulators will raise the bar on balance sheet requirements as Barclays stands its ground on questions of capital strength

Companies will come under greater pressure to bolster their balance sheets, according to Barclays FD Chris Lucas.

Lucas made the forecast as he faced tough questions during a Barclays communication with the City.

'[Barclays]would agree that regulators will be over time looking for higher capital ratios and looking for less leverage in institutions,' said Lucas. 'That will be an industry-wide phenomenon and we will have to be part of that.'

The bank is looking at raising its capital ratios after disclosing it had written down the value of debt securities on its balance sheet by £1.7bn.

The bank has a target of a 5.25% core tier one capital ratio, a figure which reflects balance sheet strength.

Analysts and investors view the ratio as low when placed alongside other banks such as Royal Bank of Scotland, which recently raised its target ratio to 6%.

Further reading:

Ex-Barclays FD to advise FSA

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