Barclays to weather Brexit headwinds by tightening lending criteria
Barclays is making its lending criteria tighter to accommodate a UK economy falling behind the rest of the world, according to the bank’s boss.
Chief exec Jes Staley said uncertainty around Brexit was affecting the economy, with growth down to 1.2% in the last 12 months, compared with 2.5% in the eurozone and 2.2% in the US.
He told the BBC that Barclays must “be mindful of weaknesses in the economy” and “protect the integrity of the bank” by tightening some lending criteria.
Mr Staley said doing so was “prudent”, although he went on to clarify that the changes would not be “radical”.
He explained: “We will look at our credit exposures and see whether that’s proper given the direction of the economy.
“We can at the margin tighten some of our underwriting criteria and credit standards just to be prudent for the stability of the bank.”
Measures could include looking at how big a loan Barclays would provide as a percentage of a residential property’s value (the ‘loan-to-value’ ratio), particularly in London and the wider South East.
The Government has understood from the outset of the EU Referendum that businesses, especially those based overseas, will be cautious about investing in the UK while Brexit discussions are ongoing.
However, the fact that uncertainty is making a UK bank like Barclays, which has more than £1tn in UK loans, explicitly express concern is a new development, the BBC reported.