LONDON - Barclays Bank PLC has emerged as the top recovery stock on many analysts' lists following the United Kingdom banking sector's half-year reporting season, but there are lingering uncertainties over its longer term rating and risks.

Barclays' results last month gave a foretaste of future benefits to be reaped from falling bad debt provisions, with pretax profit at $508 million, up from $77 million previously.

"It is still the best recovery play, but a lot of that is already showing in the price," said banking analyst Rod Barrett of Goldman Sachs.

Share Price Is Up

The bank's share price was at about the $4.53 level when it cut its dividend last year. It is now above $7.55, which Mr. Barrett said was within 5% of what he would regard as long-term fair value. "The upside will be determined more by its long-term rating than recovery," he said.

The bank's huge loan loss reserves stem from a spending spree in the late 1980s, when it lent heavily to the U.K. property and construction sector, which was devastated during the past three years of recession.

The highest proportion of problem lending among U.K. banks is a risk still to be taken into account, said banking analyst Robert Law at Lehman Bros.

Possible Risks

"The risks also include profitability difficulties in all of its three main markets [the U.S., Britain, and Europe] and remaining uncertainties over future management structure and strategy," he said.

Despite the risks, Mr. Law said he favored Barclays as the prime recovery play among U.K. banks.

Worries about the management structure were largely dispelled last month when the bank announced the appointment of Martin Taylor, currently chairman of Courtaulds Textiles PLC, as the bank's chief executive.

The move was widely applauded by shareholders, who had been waiting since the beginning of the year for chairman Andrew Buxton to find a candidate for the job, thus enabling him to split his dual role.

But some analysts, while looking for a substantial boost in Barclays' profits, are taking a more cautious stance on the bank as an investment.

David Poutney, banking analyst at the broker Stewart Collins, said he recommended a hold on Barclays.

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