BusinessCorporate FinanceMinimal profits’ impact for Barclays under IFRS

Minimal profits' impact for Barclays under IFRS

Barclays Bank has said its balance sheet and equity will suffer the biggest impact from the switch to international financial reporting standards, but there will be 'minimal impact' on profits.

Link: Atkins shows profit and readiness for IFRS

The new rules will require Barclays to account for its assets and liabilities using fair value and bring some conduit vehicles on balance sheet, which are currently off balance sheet.

In a statement on Tuesday the UK’s third largest bank said: ‘It is expected that the change to IFRS will have a minimal overall impact on both profit before tax and earnings per share.’

Cathy Turner, head of investor relations, told Accountancy Age that under IFRS profit before tax would be reduced by £125m. Barclays profit before tax for 2003 was £3.85bn.

Barclays is the first of the UK’s commercial banks to outline its approach to IFRS and the impact the new rules will have on its business. The bank said there would be ‘no change’ to the economics of the business or risk and that its capital position remains strong.

It will publish its first set of half year results under IFRS in August 2005. An IFRS transistion document including some figures will be published in spring next year.

The bank said it would apply in full IAS39, the controversial rule on accounting for financial instruments, rather than the EU carve out.

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