The Bank of England's Prudential Regulation Authority has begun reviewing Barclays' handling of loans connected to the private credit sector, the Financial Times reports.
The PRA opened the review this year after an insider at Barclays raised concerns, according to the Financial Times. The concerns centre on how derivatives, a type of financial contract, were recorded in Barclays' accounts. The bank may have logged these contracts incorrectly in a way that potentially inflated its profits, the report states.
Private credit has faced scrutiny in recent months over leverage, valuation practices and investor protection. Barclays is a major player in the sector through its investment banking and asset management operations.
The Financial Times did not name the insider or provide details about which specific loans or derivatives contracts triggered the review. The scope of the PRA's investigation and any potential findings remain unclear.
A Barclays spokesperson declined to comment when approached by the Financial Times. The bank has not disclosed the review publicly. The PRA, which regulates large financial institutions in the UK, does not typically comment on ongoing investigations.
This marks the latest regulatory attention on private credit practices. The US Securities and Exchange Commission and other global authorities have also signalled scrutiny of valuation transparency and risk disclosure in the sector.