Ind-Ra assigns Barclays India AAA with stable outlook

India Ratings and Research (Ind-Ra) has assigned long-term issuer default rating for Indian branch of Barclays Bank Plc (BBPLC) at AAA with a stable outlook.

India Ratings and Research (Ind-Ra) has assigned long-term issuer default rating for the Indian branch of Barclays Bank Plc (BBPLC) at AAA with a stable outlook.

The Indian operations remain strategically important to BBPLC as part of its global presence, it said.

Barclays India has direct head office linkages with BBPLC, and Barclays India's liquidity and risk management practices are aligned with BBPLC's global practices with the former benefiting from the latter's oversight and management expertise.

Barclays India is a branch and its liabilities are those of Barclays, said Ind-Ra.

Barclays India mainly lends to corporates with exposures largely to highly-rated clients and subsidiaries and operations of multinational companies.

The majority of Barclays India's loans constitute bill discounting (42 per cent of the loan portfolio in FY21) and working capital loans (43 per cent) which are mostly short-term.

The bank's loan book reduced 22 per cent yoy to Rs 8,050 crore in FY21 largely led by higher repayments in the shorter tenure of the book.

Priority sector obligations have been complied with largely through acquiring priority sector lending certificates rather than an over-reliance on export-related financing.

Barclays expects to achieve loan book of about Rs 12,000 crore in FY22, largely focusing on working capital financing. During 1Q FY22, the loan book recovered 26 per cent qoq to Rs 10,170 crore.

As of 1Q FY22, Barclays India reduced its exposure to banks to Rs 1,430 crore. The total exposure to non-bank financial institutions and trading segment increased to Rs 1,480 crore in 1Q FY22.

The bank's exposure to the infrastructure sector reduced to about Rs 3,000 crore in 1Q FY22 billion), although it is restricted to highly-rated corporates.