The credit rating agency Moody’s has downgraded Barclays Plc’s debt rating outlook to negative from stable, the news reports said.
The company stated resignations of senior executives including Chief Executive Bob Diamond in the wake of an interest rate-rigging scandal.
According to Moody’s the downgrade reflects the concerns that the departures and the consequent uncertainty surrounding the bank’s direction would be negative to bondholders.
The ratings agency said the shareholder and the political pressure on Barclays can lead to pressure on the bank to shift its business model away from the investment banking and to reform perceived failures in its business culture.
Barclays announced the resignation of Diamond on Tuesday and his departure was followed later by that of Chief Operating Officer Jerry del Missier.
Chairman of the company Marcus Agius has also announced his intention of leaving once the successors are found. Moody’s also said, it could struggle to find a suitable candidate to step into Diamond’s shoes.
Moody’s also said, “The bank could be challenged to replace the three senior staff and in particular find a new CEO who not only has sufficient understanding of the investment banking business to run Barclays, but also has the credibility and ability to swiftly address the weaknesses that the Libor incident revealed and the stakeholders’ perceptions of the investment bank,” it said.
Moody’s also cut its outlook on Barclay’s C-baa2 standalone bank financial strength rating to negative from stable. The C-/baa2 standalone BFSR as well as the A2 long-term and Prime 1 short-term debt ratings remain unchanged.
Barclays Plc is a British multinational banking and financial services company based in London. The company has operations in more than 50 countries and territories across Africa, Asia, Europe, North America and South America.
Moody’s Investor Service is the bond credit rating business of Moody’s Corporation. It provides international financial research on bonds issued by commercial and government entities.