TIDM96ES TIDMBARC
RNS Number : 3677U
Barclays Bank PLC
29 July 2015
Barclays Bank PLC
Results Announcement
30 June 2015
Table of Contents
Interim Results Announcement
Basis of Preparation
Statement of Directors' Responsibilities
Independent Auditors' Review Report
Condensed Consolidated Income Statement
Condensed Consolidated Statement of Comprehensive
Income
Condensed Consolidated Balance Sheet
Condensed Consolidated Statement of Changes in Equity
Condensed Consolidated Cash Flow Statement
Financial Statement Notes
Appendix
Barclays PLC Results Announcement
BARCLAYS BANK PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED
KINGDOM. TELEPHONE: +44 (0) 20 7116 1000. COMPANY NO. 1026167
Notes
The term Barclays or Group refers to Barclays PLC together with
its subsidiaries and the term Barclays Bank PLC Group refers to
Barclays Bank PLC together with its subsidiaries. The term 'The
Group' refers to Barclays Bank PLC together with its subsidiaries.
Unless otherwise stated, the income statement analysis compares the
six months to 30 June 2015 to the corresponding six months of 2014
and balance sheet analysis as at 30 June with comparatives relating
to 31 December 2014. The abbreviations 'GBPm' and 'GBPbn' represent
millions and thousands of millions of Pounds Sterling respectively;
the abbreviations '$m' and '$bn' represent millions and thousands
of millions of US Dollars respectively; and 'EURm' and 'EURbn'
represent millions and thousands of millions of Euros
respectively.
Comparatives pre Q214 have been restated to reflect the
implementation of the Group structure changes and the reallocation
of elements of the Head Office results under the revised business
structure. These restatements were detailed in our announcement on
10 July 2014, accessible at
http://www.barclays.com/barclays-investor-relations/results-and-reports.
Adjusted profit before tax, adjusted attributable profit and
adjusted performance metrics have been presented to provide a more
consistent basis for comparing business performance between
periods. Adjusting items are considered to be significant but not
representative of the underlying business performance. Items
excluded from the adjusted measures are: the impact of own credit;
goodwill impairment; provisions for UK customer redress; gain on US
Lehman acquisition assets; provisions for investigations and
litigation relating to financial benchmarks; loss on sale of the
Spanish business; Education, Social Housing, and Local Authority
(ESHLA) valuation revision; and gain on valuation of a component of
the defined retirement benefit liability. As management reviews
adjusting items at a Group level, results by business are presented
excluding these items. The reconciliation of adjusted to statutory
performance is done at a Group level only.
Relevant terms that are used in this document but are not
defined under applicable regulatory guidance or International
Financial Reporting Standards (IFRS) are explained in the Results
glossary that can be accessed at www.Barclays.com/results.
The information in this announcement, which was approved by the
Board of Directors on 28 July 2015 does not comprise statutory
accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2014, which
included certain information required for the Joint Annual Report
on Form 20-F of Barclays PLC and Barclays Bank PLC to the US
Securities and Exchange Commission (SEC) and which contained an
unqualified audit report under Section 495 of the Companies Act
2006 (which did not make any statements under Section 498 of the
Companies Act 2006) have been delivered to the Registrar of
Companies in accordance with Section 441 of the Companies Act
2006.
These results will be furnished as a Form 6-K to the SEC as soon
as practicable following their publication. Once furnished with the
SEC, copies of the Form 6-K will also be available from the
Barclays Investor Relations website
www.barclays.com/investorrelations and from the SEC's website at
http://www.sec.gov.
Barclays is a frequent issuer in the debt capital markets and
regularly meets with investors via formal road-shows and other ad
hoc meetings. Consistent with its usual practice, Barclays expects
that from time to time over the coming quarter it will meet with
investors globally to discuss these results and other matters
relating to the Group.
Forward-looking statements
This document contains certain forward-looking statements within
the meaning of Section 21E of the US Securities Exchange Act of
1934, as amended, and Section 27A of the US Securities Act of 1933,
as amended, with respect to the Group. Barclays cautions readers
that no forward-looking statement is a guarantee of future
performance and that actual results or other financial condition or
performance measures could differ materially from those contained
in the forward-looking statements. These forward-looking statements
can be identified by the fact that they do not relate only to
historical or current facts. Forward-looking statements sometimes
use words such as 'may', 'will', 'seek', 'continue', 'aim',
'anticipate', 'target', 'projected', 'expect', 'estimate',
'intend', 'plan', 'goal', 'believe', 'achieve' or other words of
similar meaning. Examples of forward-looking statements include,
among others, statements regarding the Group's future financial
position, income growth, assets, impairment charges and provisions,
business strategy, capital, leverage and other regulatory ratios,
payment of dividends (including dividend pay-out ratios), projected
levels of growth in the banking and financial markets, projected
costs or savings, original and revised commitments and targets in
connection with the strategic cost programme and the Group Strategy
Update, run-down of assets and businesses within Barclays Non-Core,
estimates of capital expenditures and plans and objectives for
future operations, projected employee numbers and other statements
that are not historical fact. By their nature, forward-looking
statements involve risk and uncertainty because they relate to
future events and circumstances. These may be affected by changes
in legislation, the development of standards and interpretations
under International Financial Reporting Standards, evolving
practices with regard to the interpretation and application of
accounting and regulatory standards, the outcome of current and
future legal proceedings and regulatory investigations, future
levels of conduct provisions, the policies and actions of
governmental and regulatory authorities, geopolitical risks and the
impact of competition. In addition, factors including (but not
limited to) the following may have an effect: capital, leverage and
other regulatory rules (including with regard to the future
structure of the Group) applicable to past, current and future
periods; UK, US, Africa, Eurozone and global macroeconomic and
business conditions; the effects of continued volatility in credit
markets; market related risks such as changes in interest rates and
foreign exchange rates; effects of changes in valuation of credit
market exposures; changes in valuation of issued securities;
volatility in capital markets; changes in credit ratings of any
entities within the Group or any securities issued by such
entities; the potential for one or more countries exiting the
Eurozone; the implementation of the strategic cost programme; and
the success of future acquisitions, disposals and other strategic
transactions. A number of these influences and factors are beyond
the Group's control. As a result, the Group's actual future
results, dividend payments, and capital and leverage ratios may
differ materially from the plans, goals, and expectations set forth
in the Group's forward-looking statements. Additional risks and
factors which may impact the Group's future financial condition and
performance are identified in our filings with the SEC (including,
without limitation, our Annual Report on Form 20-F for the fiscal
year ended 31 December 2014), which are available on the SEC's
website at http://www.sec.gov.
Subject to our obligations under the applicable laws and
regulations of the United Kingdom and the United States in relation
to disclosure and ongoing information, we undertake no obligation
to update publicly or revise any forward looking statements,
whether as a result of new information, future events or
otherwise.
Basis of Preparation
More extensive disclosures are contained in the Barclays PLC
Results Announcement for the period ended 30 June 2015, attached,
including risk exposures, business performance and certain notes to
the Barclays PLC condensed consolidated financial statements, which
are materially the same as those for Barclays Bank PLC.
Barclays Bank PLC is a wholly owned subsidiary of Barclays PLC,
which is the Group's ultimate parent company. The business
activities of Barclays Bank PLC Group and Barclays PLC Group are
fundamentally the same as the only difference is the holding
company, Barclays PLC. Reporting differences between Barclays Bank
PLC and Barclays PLC are driven by the holding company and
resulting differences in funding structures. The significant
differences are described below.
Instrument Type Barclays PLC Barclays Bank PLC Primary reason for difference
GBPm GBPm
================================== ============= ================== ===============================================
Preference shares - 5,846 Preference shares and capital notes issued by
Barclays Bank PLC are included within share
capital in Barclays Bank PLC, and presented as
non-controlling interests in the financial
statements of Barclays PLC Group.
================================== ============= ================== ===============================================
Other shareholders' equity - 487
================================== ============= ================== ===============================================
Non-controlling interests (NCI) 6,294 2,153
================================== ============= ================== ===============================================
Treasury shares (82) - Barclays PLC shares held for the purposes of
employee share schemes and for trading are
recognised
as available for sale investments and trading
portfolio assets respectively within Barclays
Bank PLC. Barclays PLC deducts these treasury
shares from shareholders' equity.
Capital Redemption Reserve (CRR) 394 24 Arising from the redemption or exchange of
Barclays PLC or Barclays Bank PLC shares
respectively.
Barclays Bank PLC Contingent Capital Notes (CCNs)
Barclays Bank PLC has in issue two series of CCNs. These both
pay interest and principal to the holder unless the consolidated
CRD IV CET 1 ratio (FSA October 2012 transitional statement) of
Barclays PLC falls below 7%, in which case they are cancelled from
the consolidated perspective. The coupon payable on the CCNs is
higher than a market rate of interest for a similar note without
this risk.
The accounting for these instruments differs between the
consolidated financial statements of Barclays PLC and Barclays Bank
PLC as follows:
-- In the case of the 7.675% CCN issuance, the cancellation is
effected by an automatic legal transfer from the holder to Barclays
PLC. In these circumstances, Barclays Bank PLC remains liable to
Barclays PLC. Barclays Bank PLC does not benefit from the
cancellation feature although it pays a higher than market rate for
a similar note, and therefore the initial fair value of the note
recognised was higher than par. The difference between fair value
and par is amortised to the income statement over time.
-- In the case of the 7.75% CCN issuance, the cancellation is
directly effected in Barclays Bank PLC. For Barclays Bank PLC, the
cancellation feature is separately valued from the host liability
as an embedded derivative with changes in fair value reported in
the income statement. The initial fair value of the host liability
recognised was higher than par by the amount of the initial fair
value of the derivative and the difference is amortised to the
income statement over time.
Statement of Directors' Responsibilities
The Directors (who are listed below) confirm that the condensed
consolidated interim financial statements set out on pages 4 to 10
have been prepared in accordance with International Accounting
Standard 34, 'Interim Financial Reporting', as adopted by the
European Union, and that the interim management report herein
includes a fair review of the information required by Disclosure
and Transparency Rules 4.2.7R and 4.2.8R namely:
-- an indication of important events that have occurred during
the six months ended 30 June 2015 and their impact on the condensed
consolidated interim financial statements, and a description of the
principal risks and uncertainties for the remaining six months of
the financial year
-- material related party transactions in the six months ended
30 June 2015 and any material changes in the related party
transactions described in the last Annual Report
Signed on behalf of the Board by
John McFarlane Tushar Morzaria
Executive Chairman Group Finance Director
Barclays Bank PLC Board of Directors:
Executive Directors Non-executive Directors
John McFarlane (Executive Chairman) Mike Ashley
Tushar Morzaria (Group Finance Director) Tim Breedon
Crawford Gillies
Reuben Jeffery
Wendy Lucas-Bull
Dambisa Moyo
Frits van Paasschen
Sir Michael Rake
Diane de Saint Victor
Diane Schueneman
Steve Thieke
Independent Auditors' Review Report to Barclays Bank PLC
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed the condensed consolidated interim financial
statements, defined below, in the interim results announcement of
Barclays Bank PLC for the six months ended 30 June 2015. Based on
our review, nothing has come to our attention that causes us to
believe that the condensed consolidated interim financial
statements are not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
This conclusion is to be read in the context of what we say in
the remainder of this report.
What we have reviewed
The condensed consolidated interim financial statements, which
are prepared by Barclays Bank PLC, comprise:
-- the condensed consolidated Balance Sheet as at 30 June 2015;
-- the condensed consolidated Income Statement for the six months ended 30 June 2015
-- the condensed consolidated statement of Comprehensive Income for the period then ended;
-- the condensed consolidated statement of Cash Flows for the period then ended;
-- the condensed consolidated statement of Changes in Equity for the period then ended; and
-- the related notes to the condensed consolidated interim financial statements.
As disclosed in note 1, the financial reporting framework that
has been applied in the preparation of the full annual financial
statements of the group is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European
Union.
The condensed consolidated interim financial statements included
in the interim results announcement have been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
What a review of condensed consolidated financial statements
involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK and
Ireland) and, consequently, does not enable us to obtain assurance
that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
We have read the other information contained in the interim
results announcement and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed consolidated interim financial
statements.
Responsibilities for the condensed consolidated interim
financial statements and the review
Our responsibilities and those of the directors(1,2)
The interim results announcement, including the condensed
consolidated interim financial statements, is the responsibility
of, and has been approved by, the directors. The directors are
responsible for preparing the results announcement in accordance
with the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Our responsibility is to express to the company a conclusion on
the condensed consolidated interim financial statements in the
interim results announcement based on our review. This report,
including the conclusion, has been prepared for and only for the
company for the purpose of complying with the Disclosure and
Transparency Rules of the Financial Conduct Authority and for no
other purpose. We do not, in giving this conclusion, accept or
assume responsibility for any other purpose or to any other person
to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
28 July 2015
London, United Kingdom
1 The maintenance and integrity of the Barclays website is the
responsibility of the directors; the work carried out by the
auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that may have occurred to the financial statements since they
were initially presented on the website.
2 Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Condensed Consolidated Financial Statements
Condensed Consolidated Income Statement
(Unaudited)
Half Year Half Year
Ended Ended
Continuing Operations 30.06.15 30.06.14
Notes(1) GBPm GBPm
=============================================== ======== ========= =========
Net interest income 6,231 6,110
Net fee and commission income 4,013 4,270
Net trading income 2,662 2,545
Net investment income 923 356
Net premiums from insurance contracts 351 336
Other income (11) 13
=============================================== ======== ========= =========
Total income 14,169 13,630
Net claims and benefits incurred on insurance
contracts (248) (240)
=============================================== ======== ========= =========
Total income net of insurance claims 13,921 13,390
Credit impairment charges and other provisions (973) (1,086)
Net operating income 12,948 12,304
Staff costs (4,864) (5,730)
Infrastructure costs (1,590) (1,568)
Administration and general expenses (3,211) (2,482)
Operating expenses (9,665) (9,780)
Loss on disposal of undertakings and
share of results of associates and joint
ventures (136) (20)
Profit before tax 3,147 2,504
Tax (1,010) (906)
=============================================== ======== ========= =========
Profit after tax 2,137 1,598
Attributable to:
=============================================== ======== ========= =========
Equity holders of the parent 1,972 1,446
Non-controlling interests 2 165 152
=============================================== ======== ========= =========
Profit after tax 2,137 1,598
1 For notes specific to Barclays Bank PLC see pages 9 to 10 and
for those that also relate to Barclays PLC see pages 56 to 90
in the Barclays PLC Results Announcement.
Condensed Consolidated Statement of Comprehensive
Income (Unaudited)
Half Year Half Year
Ended Ended
Continuing Operations 30.06.15 30.06.14
Notes(1) GBPm GBPm
========================================== ========= ========= =========
Profit after tax 2,137 1,598
Other comprehensive (loss)/income that
may be recycled to profit or loss:
========================================== ========= ========= =========
Currency translation reserve (590) (1,056)
Available for sale reserve (278) 336
Cash flow hedge reserve (646) 254
Other 41 (18)
===================================================== ========= =========
Total comprehensive (loss)/income that
may be recycled to profit or loss (1,473) (484)
Other comprehensive (loss)/income not
recycled to profit or loss:
========================================== ========= ========= =========
Retirement benefit remeasurements (93) 236
Other comprehensive loss for the period (1,566) (248)
Comprehensive income for the period 571 1,350
Attributable to:
========================================== ========= ========= =========
Equity holders of the parent 543 1,324
Non-controlling interests 28 26
===================================================== ========= =========
Total comprehensive income for the period 571 1,350
1 For notes specific to Barclays Bank PLC see pages 9 to 10 and
for those that also relate to Barclays PLC see pages 56 to 90
in the Barclays PLC Results Announcement.
Condensed Consolidated Balance Sheet (Unaudited)
As at As at
30.06.15 31.12.14
Assets Notes(1) GBPm GBPm
=================================================== ======== ========= =========
Cash and balances at central banks 33,341 39,695
Items in the course of collection from other
banks 1,227 1,210
Trading portfolio assets 98,105 114,755
Financial assets designated at fair value 33,335 38,300
Derivative financial instruments 341,470 440,076
Available for sale investments 96,255 86,105
Loans and advances to banks 45,107 42,657
Loans and advances to customers 430,719 427,767
Reverse repurchase agreements and other similar
secured lending 93,138 131,753
Prepayments, accrued income and other assets 3,775 3,604
Investments in associates and joint ventures 577 711
Property, plant and equipment 3,620 3,786
Goodwill 4,832 4,887
Intangible assets 3,357 3,293
Current and deferred tax assets 4,510 4,464
Retirement benefit assets 33 56
Non-current assets classified as held for sale 4,154 15,574
=================================================== ======== ========= =========
Total assets 1,197,555 1,358,693
Liabilities
=================================================== ======== ========= =========
Deposits from banks 55,978 58,390
Items in the course of collection due to other
banks 1,539 1,177
Customer accounts 438,445 427,868
Repurchase agreements and other similar secured
borrowing 85,092 124,479
Trading portfolio liabilities 41,818 45,124
Financial liabilities designated at fair value 51,284 56,972
Derivative financial instruments 342,964 439,320
Debt securities in issue 75,525 86,099
Subordinated liabilities 20,155 21,685
Accruals, deferred income and other liabilities 11,854 11,432
Provisions 3,287 4,135
Current and deferred tax liabilities 904 1,278
Retirement benefit liabilities 1,091 1,574
Liabilities included in disposal groups classified
as held for sale 1,909 13,115
=================================================== ======== ========= =========
Total liabilities 1,131,845 1,292,648
Equity
=================================================== ======== ========= =========
Called up share capital and share premium 4 14,472 14,472
Other reserves 948 2,322
Retained earnings 43,787 42,650
=================================================== ======== ========= =========
Shareholders' equity attributable to ordinary
shareholders of parent 59,207 59,444
Other equity instruments 4,350 4,350
=================================================== ======== ========= =========
Total equity excluding non-controlling interests 63,557 63,794
Non-controlling interests 2 2,153 2,251
=================================================== ======== ========= =========
Total equity 65,710 66,045
Total liabilities and equity 1,197,555 1,358,693
1 For notes specific to Barclays Bank PLC see pages 9 to 10 and
for those that also relate to Barclays PLC see pages 56 to 90
in the Barclays PLC Results Announcement.
Condensed Consolidated Statement of Changes in Equity (Unaudited)
Called
up Share
Capital Other
and Share Equity Other Retained Non-controlling Total
Premium(1) Instruments Reserves Earnings Total Interests(1) Equity
Half Year Ended 30.06.15 GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------- ----------- ------------ --------- --------- ------- ---------------- ---------------
Balance at 1 January
2015 14,472 4,350 2,322 42,650 63,794 2,251 66,045
Profit after tax - 159 - 1,813 1,972 165 2,137
Currency translation
movements - - (463) - (463) (127) (590)
Available for sale
investments - - (279) - (279) 1 (278)
Cash flow hedges - - (634) - (634) (12) (646)
Retirement benefit
remeasurements - - - (94) (94) 1 (93)
Other - - - 41 41 - 41
------------------------- ----------- ------------ --------- --------- ------- ---------------- ---------------
Total comprehensive
income
for the year - 159 (1,376) 1,760 543 28 571
Other equity instruments
coupons paid - (159) - 32 (127) - (127)
Equity settled share
schemes - - - 303 303 - 303
Vesting of Barclays PLC
shares under
share-based
payment schemes - - - (706) (706) - (706)
Dividends paid - - - (595) (595) (129) (724)
Dividends on preference
shares and other
shareholders'
equity - - - (171) (171) - (171)
Capital contribution
from Barclays PLC - - - 560 560 - 560
Other reserve movements - - 2 (46) (44) 3 (41)
------------------------- ----------- ------------ --------- --------- ------- ---------------- ---------------
Balance at 30 June 2015 14,472 4,350 948 43,787 63,557 2,153 65,710
Half Year Ended 31.12.14
------------------------- ----------- ------------ --------- --------- ------- ---------------- ---------------
Balance at 1 July 2014 14,479 4,350 (558) 44,718 62,989 2,130 65,119
Profit after tax - 160 - (1,078) (918) 174 (744)
Currency translation
movements - - 1,501 - 1,501 41 1,542
Available for sale
investments - - 87 - 87 3 90
Cash flow hedges - - 1,284 - 1,284 2 1,286
Retirement benefit
remeasurements - - - (32) (32) 1 (31)
Other - - - (1) (1) - (1)
------------------------- ----------- ------------ --------- --------- ------- ---------------- ---------------
Total comprehensive
income
for the year - 160 2,872 (1,111) 1,921 221 2,142
Redemption of preference
shares (7) - 8 (792) (791) - (791)
Other equity instruments
coupons paid - (160) - 35 (125) - (125)
Equity settled share
schemes - - - 314 314 - 314
Vesting of Barclays PLC
shares under
share-based
payment schemes - - - (91) (91) - (91)
Dividends paid - - - (185) (185) (93) (278)
Dividends on preference
shares and other
shareholders'
equity - - - (204) (204) - (204)
Capital contribution - - - - - - -
from Barclays PLC
Other reserve movements - - - (34) (34) (7) (41)
------------------------- ----------- ------------ --------- --------- ------- ---------------- ---------------
Balance at 31 December
2014 14,472 4,350 2,322 42,650 63,794 2,251 66,045
Half Year Ended 30.06.14
------------------------- ----------- ------------ --------- --------- ------- ---------------- ---------------
Balance at 1 January
2014 14,494 2,078 (233) 44,670 61,009 2,211 63,220
Profit after tax - 90 - 1,356 1,446 152 1,598
Currency translation
movements - - (941) - (941) (115) (1,056)
Available for sale
investments - - 340 - 340 (4) 336
Cash flow hedges - - 260 - 260 (6) 254
Retirement benefit
remeasurements - - - 237 237 (1) 236
Other - (-) - (-) - (18) (18) - (18)
------------------------- ----------- ------------ --------- --------- ------- ---------------- ---------------
Total comprehensive
income
for the year - (-) 90 (-) (341)(-) 1,575 1,324 26 (-) 1,350
Buyback and issue of
equity instruments (15) 2,272 16 (1,683) 590 - 590
Other equity instruments
coupons paid - (90) - 19 (71) - (71)
Equity settled share
schemes - - - 379 379 - 379
Vesting of Barclays PLC
shares under
share-based
payment schemes - - - (775) (775) - (775)
Dividends paid - - - (636) (636) (97) (733)
Dividends on preference
shares and other
shareholders'
equity - - - (237) (237) - (237)
Capital contribution
from Barclays PLC - - - 1,412 1,412 - 1,412
Other reserve movements - - - (6) (6) (10) (16)
------------------------- ----------- ------------ --------- --------- ------- ---------------- ---------------
Balance at 30 June 2014 14,479 4,350 (558) 44,718 62,989 2,130 65,119
1 Details of share capital and non-controlling interests are shown
on page 10.
Condensed Consolidated Cash Flow Statement (Unaudited)
Half Year Half Year
Ended Ended
Continuing Operations 30.06.15 30.06.14
GBPm GBPm
====================================================== ========== ==========
Profit before tax 3,147 2,504
Adjustment for non-cash items 2,407 935
Changes in operating assets and liabilities 6,971 (3,795)
Corporate income tax paid (929) (624)
====================================================== ========== ==========
Net cash from operating activities 11,596 (980)
Net cash from investing activities (13,569) 7,463
Net cash from financing activities (1,019) (629)
Effect of exchange rates on cash and cash equivalents (255) (1,380)
====================================================== ========== ==========
Net increase/(decrease) in cash and cash equivalents (3,247) 4,474
Cash and cash equivalents at beginning of the
period 78,479 81,754
====================================================== ========== ==========
Cash and cash equivalents at end of the period 75,232 86,228
Financial Statement Notes
1. Accounting Policies
These condensed consolidated interim financial statements for
the six months ended 30 June 2015 have been prepared in accordance
with the Disclosure and Transparency Rules of the Financial Conduct
Authority and with IAS 34 Interim Financial Reporting, as adopted
by the European Union. The condensed consolidated interim financial
statements should be read in conjunction with the annual financial
statements for the year ended 31 December 2014, which have been
prepared in accordance with IFRSs as adopted by the European
Union.
The accounting policies and methods of computation used in these
condensed consolidated interim financial statements are the same as
those used in the 2014 Annual Report.
Future accounting developments
During July 2015 the IASB confirmed the deferral of the
effective date of IFRS 15 Revenue from Contracts with Customers by
one year to 1 January 2018.
For further information on future accounting changes, refer to
the Barclays 2014 Annual Report.
Going Concern
The Directors confirm they are satisfied that the Group has
adequate resources to continue in business for the foreseeable
future. They confirm that it is appropriate to adopt the going
concern basis for preparing accounts and there are no material
uncertainties.
2. Non-controlling Interests
Profit Attributable Equity Attributable
to Non-controlling to Non-controlling
Interest Interest
===================== =====================
Half Year Half Year
Ended Ended As at As at
30.06.15 30.06.14 30.06.15 31.12.14
GBPm GBPm GBPm GBPm
Barclays Africa Group
Limited 165 149 2,149 2,247
Other non-controlling
interests - 3 4 4
======================== ========== ========= ========== =========
Total 165 152 2,153 2,251
3. Dividends
Half Year Half Year
Ended 30.06.15 Ended 30.06.14
Dividends paid during the period GBPm GBPm
================================= =============== ===============
Ordinary shares 595 636
Preference shares 171 237
================================= =============== ===============
Total 766 873
4. Equity and Reserves
Ordinary Shares
At 30 June 2015 the issued ordinary share capital comprised
2,342 million (2014: 2,342 million) ordinary shares of GBP1
each.
Preference Shares
At 30 June 2015 the issued preference share capital comprised
1,000 Sterling Preference Shares of GBP1 each (2014: 1,000); 31,856
Euro Preference Shares of EUR100 each (2014: 31,856); 20,930
Sterling Preference Shares of GBP100 each (2014: 20,930); 58,133 US
Dollar Preference Shares of $100 each (2014: 58,133); and 237
million US Dollar Preference Shares of $0.25 each (2014: 237
million).
Other Equity Instruments
Other equity instruments of GBP4,350m (2014: GBP4,350m) include
Additional Tier 1 (AT1) securities issued by Barclays Bank PLC
during 2013 and 2014.
The AT1 securities are perpetual securities with no fixed
maturity and qualify as AT1 instruments under CRD IV.
Appendix: Barclays PLC Results Announcement
Barclays PLC
Results Announcement
30 June 2015
Table of Contents
Results Announcement
Performance Highlights
Executive Chairman's Review
Group Finance Director's Review
Results by Business
* Personal and Corporate Banking
* Barclaycard
* Africa Banking
* Investment Bank
* Head Office
* Barclays Non-Core
Quarterly Results Summary
Quarterly Core Results by Business
Performance Management
* Returns and equity by business
* Margins and balances
Risk Management
* Overview
* Funding Risk - Liquidity
* Funding Risk - Capital
* Credit Risk
* Market Risk
Statement of Directors' Responsibilities
Independent Auditors' Review Report to Barclays PLC
Condensed Consolidated Financial Statements
Financial Statement Notes
Shareholder Information
BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED
KINGDOM. TELEPHONE: +44 (0) 20 7116 1000. COMPANY NO. 48839
Notes
The term Barclays or Group refers to Barclays PLC together with
its subsidiaries. Unless otherwise stated, the income statement
analysis compares the six months to 30 June 2015 to the
corresponding six months of 2014 and balance sheet analysis as at
30 June with comparatives relating to 31 December 2014. The
abbreviations 'GBPm' and 'GBPbn' represent millions and thousands
of millions of Pounds Sterling respectively; the abbreviations '$m'
and '$bn' represent millions and thousands of millions of US
Dollars respectively; and 'EURm' and 'EURbn' represent millions and
thousands of millions of Euros respectively.
Comparatives pre Q214 have been restated to reflect the
implementation of the Group structure changes and the reallocation
of elements of the Head Office results under the revised business
structure. These restatements were detailed in our announcement on
10 July 2014, accessible at
http://www.barclays.com/barclays-investor-relations/results-and-reports.
References throughout this document to 'provisions for ongoing
investigations and litigation primarily relating to Foreign
Exchange' means 'provisions held for certain aspects of ongoing
investigations involving certain authorities and litigation
primarily relating to Foreign Exchange.'
Adjusted profit before tax, adjusted attributable profit and
adjusted performance metrics have been presented to provide a more
consistent basis for comparing business performance between
periods. Adjusting items are considered to be significant but not
representative of the underlying business performance. Items
excluded from the adjusted measures are: the impact of own credit;
goodwill impairment; provisions for UK customer redress; gain on US
Lehman acquisition assets; provisions for ongoing investigations
and litigation primarily relating to Foreign Exchange; loss on sale
of the Spanish business; Education, Social Housing, and Local
Authority (ESHLA) valuation revision; and gain on valuation of a
component of the defined retirement benefit liability. As
management reviews adjusting items at a Group level, results by
business are presented excluding these items. The reconciliation of
adjusted to statutory performance is done at a Group level
only.
Relevant terms that are used in this document but are not
defined under applicable regulatory guidance or International
Financial Reporting Standards (IFRS) are explained in the Results
glossary that can be accessed at www.Barclays.com/results.
The information in this announcement, which was approved by the
Board of Directors on 28 July 2015 does not comprise statutory
accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2014, which
included certain information required for the Joint Annual Report
on Form 20-F of Barclays PLC and Barclays Bank PLC to the US
Securities and Exchange Commission (SEC) and which contained an
unqualified audit report under Section 495 of the Companies Act
2006 (which did not make any statements under Section 498 of the
Companies Act 2006) have been delivered to the Registrar of
Companies in accordance with Section 441 of the Companies Act
2006.
These results will be furnished as a Form 6-K to the SEC as soon
as practicable following their publication. Once furnished with the
SEC, copies of the Form 6-K will also be available from the
Barclays Investor Relations website
www.barclays.com/investorrelations and from the SEC's website at
http://www.sec.gov.
Barclays is a frequent issuer in the debt capital markets and
regularly meets with investors via formal road-shows and other ad
hoc meetings. Consistent with its usual practice, Barclays expects
that from time to time over the coming quarter it will meet with
investors globally to discuss these results and other matters
relating to the Group.
Forward-looking statements
This document contains certain forward-looking statements within
the meaning of Section 21E of the US Securities Exchange Act of
1934, as amended, and Section 27A of the US Securities Act of 1933,
as amended, with respect to the Group. Barclays cautions readers
that no forward-looking statement is a guarantee of future
performance and that actual results or other financial condition or
performance measures could differ materially from those contained
in the forward-looking statements. These forward-looking statements
can be identified by the fact that they do not relate only to
historical or current facts. Forward-looking statements sometimes
use words such as 'may', 'will', 'seek', 'continue', 'aim',
'anticipate', 'target', 'projected', 'expect', 'estimate',
'intend', 'plan', 'goal', 'believe', 'achieve' or other words of
similar meaning. Examples of forward-looking statements include,
among others, statements regarding the Group's future financial
position, income growth, assets, impairment charges and provisions,
business strategy, capital, leverage and other regulatory ratios,
payment of dividends (including dividend pay-out ratios), projected
levels of growth in the banking and financial markets, projected
costs or savings, original and revised commitments and targets in
connection with the strategic cost programme and the Group Strategy
Update, run-down of assets and businesses within Barclays Non-Core,
estimates of capital expenditures and plans and objectives for
future operations, projected employee numbers and other statements
that are not historical fact. By their nature, forward-looking
statements involve risk and uncertainty because they relate to
future events and circumstances. These may be affected by changes
in legislation, the development of standards and interpretations
under International Financial Reporting Standards, evolving
practices with regard to the interpretation and application of
accounting and regulatory standards, the outcome of current and
future legal proceedings and regulatory investigations, future
levels of conduct provisions, the policies and actions of
governmental and regulatory authorities, geopolitical risks and the
impact of competition. In addition, factors including (but not
limited to) the following may have an effect: capital, leverage and
other regulatory rules (including with regard to the future
structure of the Group) applicable to past, current and future
periods; UK, US, Africa, Eurozone and global macroeconomic and
business conditions; the effects of continued volatility in credit
markets; market related risks such as changes in interest rates and
foreign exchange rates; effects of changes in valuation of credit
market exposures; changes in valuation of issued securities;
volatility in capital markets; changes in credit ratings of any
entities within the Group or any securities issued by such
entities; the potential for one or more countries exiting the
Eurozone; the implementation of the strategic cost programme; and
the success of future acquisitions, disposals and other strategic
transactions. A number of these influences and factors are beyond
the Group's control. As a result, the Group's actual future
results, dividend payments, and capital and leverage ratios may
differ materially from the plans, goals, and expectations set forth
in the Group's forward-looking statements. Additional risks and
factors which may impact the Group's future financial condition and
performance are identified in our filings with the SEC (including,
without limitation, our Annual Report on Form 20-F for the fiscal
year ended 31 December 2014), which are available on the SEC's
website at http://www.sec.gov.
Subject to our obligations under the applicable laws and
regulations of the United Kingdom and the United States in relation
to disclosure and ongoing information, we undertake no obligation
to update publicly or revise any forward looking statements,
whether as a result of new information, future events or
otherwise.
Performance Highlights
Continued progress on our strategy:
-- 11% growth in Group adjusted profit before tax to GBP3,729m
reflecting improvements in all Core operating businesses. Group
adjusted return on average shareholders' equity increased to 7.7%
(H114: 6.5%)
-- Solid return on average equity performance across the
businesses resulted in an increase in Core return on average equity
to 11.1% (H114: 11.0%), driven by a 10% increase in profit before
tax to GBP4,241m through positive cost to income jaws, with an
increase in average allocated equity of GBP6bn to GBP47bn
-- Further run down of the Non-Core business, with risk weighted
assets (RWAs) decreasing to GBP57bn (December 2014: GBP75bn).
Non-Core dilution of the Group's return on average equity was 3.4%
(2014: 4.5%), having reduced average allocated equity by GBP4bn to
GBP10bn
-- Strong progress on capital and leverage, with the fully
loaded common equity tier 1 (CET1) ratio increasing to 11.1%
(December 2014: 10.3%) and the leverage ratio increasing to 4.1%
(December 2014: 3.7%), achieving our 2016 targets
-- A 7% reduction in total adjusted operating expenses to
GBP8,262m and a 5% reduction in operating expenses excluding costs
to achieve to GBP7,946m, driven by savings from strategic cost
programmes
-- Progress on legacy litigation and conduct matters, with
settlements of GBP1,608m reached with a number of authorities in
Q215 in relation to industry-wide investigations into certain sales
and trading practices in the Foreign Exchange market and an
industry-wide investigation into the setting of the US Dollar
ISDAFIX benchmark
-- Net tangible asset value per share decreased to 279p
(December 2014: 285p) as profit generated for the period was more
than offset by dividend distributions and the impact of changes in
major forward interest rates and currency movements on reserves
-- Statutory profit before tax increased 25% to GBP3,114m, which
included a net loss in adjusting items of GBP615m (H114:
GBP848m)
Material adjusting items:
-- Additional provisions of GBP800m (H114: GBPnil) were made in
H115 for ongoing investigations and litigation primarily relating
to Foreign Exchange, taking the total provisions to GBP2,050m
-- Additional UK customer redress provisions of GBP1,032m (H114:
GBP900m) were taken based on an updated estimate of future redress
and associated costs. This included an additional provision of
GBP850m recognised in Q215
-- A GBP496m (H114: GBPnil) gain on US Lehman acquisition assets
was recognised in Q215 reflecting a settlement to resolve
outstanding litigation with the Trustee of Lehman Brothers Inc.
-- A GBP429m (H114: GBPnil) gain was recognised in Q115 as the
valuation of a component of the defined retirement benefit
liability was aligned to statutory provisions
-- A GBP118m (H114: GBPnil) loss was recognised in Q115
primarily relating to accumulated currency translation reserves
recycled upon the completion of the Spanish business sale
Barclays Group results Adjusted Statutory
============================ ================================
for the six months ended 30.06.15 30.06.14 30.06.15 30.06.14
GBPm GBPm % Change GBPm GBPm % Change
================================ ======== ======== ======== ========== ========== ========
Total income net of insurance
claims 12,982 13,332 (3) 13,888 13,384 4
Credit impairment charges
and other provisions (973) (1,086) 10 (973) (1,086) 10
================================ ======== ======== ======== ========== ========== ========
Net operating income 12,009 12,246 (2) 12,915 12,298 5
Operating expenses (7,812) (8,172) 4 (7,383) (8,172) 10
Litigation and conduct (134) (211) 36 (1,966) (1,111) (77)
================================ ======== ======== ======== ========== ========== ========
Operating expenses excluding
costs to achieve (7,946) (8,383) 5 (9,349) (9,283) (1)
Costs to achieve (316) (494) 36 (316) (494) 36
================================ ======== ======== ======== ========== ========== ========
Total operating expenses (8,262) (8,877) 7 (9,665) (9,777) 1
Other net expenses (18) (20) 10 (136) (20)
================================ ======== ======== ======== ========== ========== ========
Profit before tax 3,729 3,349 11 3,114 2,501 25
Tax charge(1) (1,077) (1,109) 3 (1,006) (895) (12)
================================ ======== ======== ======== ========== ========== ========
Profit after tax 2,652 2,240 18 2,108 1,606 31
Non-controlling interests (338) (390) 13 (338) (390) 13
Other equity interests(2) (159) (90) (77) (159) (90) (77)
================================ ======== ======== ======== ========== ========== ========
Attributable profit 2,155 1,760 22 1,611 1,126 43
Performance measures
================================ ======== ======== ======== ========== ========== ========
Return on average tangible
shareholders' equity(2) 9.1% 7.5% 6.9% 4.9%
Average tangible shareholders'
equity (GBPbn) 48 47 48 47
Return on average shareholders'
equity(2) 7.7% 6.5% 5.9% 4.2%
Average shareholders' equity
(GBPbn) 56 55 56 54
Cost: income ratio 64% 67% 70% 73%
Loan loss rate (bps) 40 45 40 45
Basic earnings per share(2) 13.1p 10.9p 9.9p 7.0p
Dividend per share 2.0p 2.0p 2.0p 2.0p
Balance sheet and leverage 30.06.15 31.12.14
================================ ======== ======== ======== ========== ========== ========
Net tangible asset value
per share 279p 285p
Net asset value per share 328p 335p
Leverage exposure GBP1,139bn GBP1,233bn
Capital management 30.06.15 31.12.14
================================ ======== ======== ======== ========== ========== ========
CRD IV fully loaded
Common equity tier 1 ratio 11.1% 10.3%
Common equity tier 1 capital GBP42.0bn GBP41.5bn
Tier 1 capital GBP46.5bn GBP46.0bn
Risk weighted assets GBP377bn GBP402bn
Leverage ratio 4.1% 3.7%
Funding and liquidity 30.06.15 31.12.14
================================ ======== ======== ======== ========== ========== ========
Group liquidity pool GBP145bn GBP149bn
Estimated CRD IV liquidity
coverage ratio 121% 124%
Loan: deposit ratio(3) 88% 89%
Adjusted profit reconciliation for the 30.06.15 30.06.14
six months ended
==================================================== ======== ========== ========== ========
Adjusted profit before tax 3,729 3,349
Own credit 410 52
Gain on US Lehman acquisition
assets 496 -
Gain on valuation of a component of the
defined retirement benefit liability 429 -
Provisions for ongoing investigations and litigation
primarily relating to Foreign Exchange (800) -
Provisions for UK customer
redress (1,032) (900)
Loss on sale of the Spanish
business (118) -
Statutory profit before
tax 3,114 2,501
1 The effective tax rate for H115 is the expected full year rate
adjusted for the impact of significant one-off items. The tax
impacts of such items, which include adjusting items and the
UK bank levy, are recognised in the period in which they occur.
2 The profit after tax attributable to other equity holders of
GBP159m (H114: GBP90m) is offset by a tax credit recorded in
reserves of GBP32m (H114: GBP19m). The net amount of GBP127m
(H114: GBP71m), along with non-controlling interests (NCI) is
deducted from profit after tax in order to calculate earnings
per share, return on average tangible shareholders' equity and
return on average shareholders' equity.
3 Loan: deposit ratio for PCB, Barclaycard, Africa Banking and
Non-Core retail.
Barclays Core and Non-Core Barclays Core Barclays Non-Core
results for the six
months ended 30.06.15 30.06.14 30.06.15 30.06.14
GBPm GBPm % Change GBPm GBPm % Change
============================= ========= ========= ========= ========= ========= =========
Total income net of
insurance claims 12,940 12,674 2 42 658 (94)
Credit impairment charges
and other provisions (936) (937) - (37) (149) 75
============================= ========= ========= ========= ========= ========= =========
Net operating income 12,004 11,737 2 5 509 (99)
Operating expenses (7,359) (7,314) (1) (453) (860) 47
Litigation and conduct (89) (177) 50 (45) (33) (36)
Costs to achieve (293) (453) 35 (23) (41) 44
============================= ========= ========= ========= ========= ========= =========
Total operating expenses (7,741) (7,944) 3 (521) (934) 44
Other net (expenses)/income (22) 47 4 (66)
============================= ========= ========= ========= ========= ========= =========
Profit/(loss) before
tax 4,241 3,840 10 (512) (491) (4)
Tax (charge)/credit (1,250) (1,233) (1) 173 124 40
============================= ========= ========= ========= ========= ========= =========
Profit/(loss) after
tax 2,991 2,607 15 (339) (367) 8
Non-controlling interests (306) (315) 3 (32) (75) 57
Other equity interests (128) (68) (88) (31) (22) (41)
============================= ========= ========= ========= ========= ========= =========
Attributable profit/(loss) 2,557 2,224 15 (402) (464) 13
Performance measures
============================= ========= ========= ========= ========= ========= =========
Return on average tangible
equity(1) 13.4% 13.5% (4.3%) (6.0%)
Average allocated tangible
equity (GBPbn) 39 33 10 14
Return on average equity(1) 11.1% 11.0% (3.4%) (4.5%)
Average allocated equity
(GBPbn) 47 41 10 14
Period end allocated
equity (GBPbn) 47 42 8 13
Cost: income ratio 60% 63% n/m n/m
Loan loss rate (bps) 44 46 10 45
Basic earnings per share
contribution 15.5p 13.8p (2.4p) (2.9p)
Capital management 30.06.15 31.12.14 30.06.15 31.12.14
============================= ========= ========= ========= ========= ========= =========
Risk weighted assets GBP320bn GBP327bn GBP57bn GBP75bn
Leverage exposure GBP973bn GBP956bn GBP166bn GBP277bn
30.06.15 30.06.14
Income by business GBPm GBPm % Change
========================================== ======== ======== ========
Personal and Corporate Banking 4,384 4,361 1
Barclaycard 2,357 2,124 11
Africa Banking 1,858 1,773 5
Investment Bank 4,299 4,257 1
Head Office 42 159 (74)
========================================== ======== ======== ========
Barclays Core 12,940 12,674 2
Barclays Non-Core 42 658 (94)
========================================== ======== ======== ========
Barclays Group adjusted total income 12,982 13,332 (3)
30.06.15 30.06.14
Profit/(loss) before tax by business GBPm GBPm % Change
========================================== ======== ======== ========
Personal and Corporate Banking 1,528 1,468 4
Barclaycard 795 764 4
Africa Banking 540 484 12
Investment Bank 1,440 1,058 36
Head Office (62) 66
========================================== ======== ======== ========
Barclays Core 4,241 3,840 10
Barclays Non-Core (512) (491) (4)
========================================== ======== ======== ========
Barclays Group adjusted profit before tax 3,729 3,349 11
1 Return on average equity and average tangible equity for Barclays
Non-Core represents its impact on the Group, being the difference
between Barclays Group returns and Barclays Core returns. This
does not represent the return on average equity and average
tangible equity of the Non-Core business.
Executive Chairman's Review
"The results reported today represent continued good progress
for the business.
Group profits are up on both an adjusted and statutory basis,
and our core franchises have performed well. Non-Core rundown
continues, costs remain under control, and we continue to seek to
put conduct issues behind us. We announced settlements with certain
authorities in the first half in respect of Foreign Exchange and
ISDAFIX, although there is more to resolve. I am pleased that our
CET1 and leverage ratios are now above 11% and 4% respectively.
These are satisfactory, although we will continue to build capital
in the medium-term, balancing the need to fund growth with the need
to strengthen the ratios.
Barclays today has a good portfolio of businesses. However, we
need to accelerate the execution of the strategy. There is more
that can be done to deliver better returns for shareholders,
faster, and that work has begun under three Group priorities which
I have established since becoming Executive Chairman earlier this
month.
Our first priority is to deliver on our strategy, with increased
focus on our core franchises: what we are good at, where we are
good at it and what is financially compelling to us.
That means aligning our effort and investment behind our key
franchises of UK personal and commercial banking, investment
banking in Europe and the US, our cards business, and on Africa. We
will also act quickly to curtail activity which is marginal or
which will not deliver the return on equity we require.
A sensibly planned faster run-down of Barclays Non-Core will be
implemented, resulting in it having around GBP20bn of RWAs in 2017
when we expect to reintegrate it into the Core.
I am personally pleased with recent progress in the Investment
Bank. It has generated a double-digit return in H1, and the
challenge for the team is to convert this performance into
sustainable economic returns through subsequent periods.
The second major priority of the group is to accelerate the
delivery of shareholder value.
It was particularly pleasing this half to a see strong recovery
in earnings, broadly flat costs on a statutory basis, a CET1 ratio
that has risen above 11% for the first time and a leverage ratio
above 4%, both achieving our 2016 targets.
However, the Group return on equity is 5.9% on a statutory
basis, well short of our cost of equity, and our cost-income ratio
is 70%, which is high for our business mix.
We need to accelerate growth in earnings, return on equity, and
capital generation. To do this, we intend to grow revenues at least
in line with the market, reduce our Group cost-income ratio into
the mid 50s, accrete and deploy capital wisely, and thereby over
time achieve a Group return on equity above our cost of equity.
The Board has concluded that it is appropriate to plan for a
6.5p dividend for 2015, the same level as 2014, as we focus on
improving the returns of the business and accelerating the
implementation of the strategy, while maintaining capital strength.
Over time, rather than targeting a particular payout ratio range,
we will aim to maintain a sustainable and progressive dividend
policy, recognising the importance of dividend yield in delivering
returns to shareholders.
I am not issuing new targets for the Group, but can confirm that
we will adhere to our remaining targets. Now that we have achieved
an 11% CET1 ratio, we would like this to continue to improve over
time so that we reach our end state.
The third priority is to instil a high performance ethic and
process across the Group, underpinned by an enhanced values driven
culture. We need to be much more customer and client orientated in
our approach, to streamline and eliminate unnecessary and
cumbersome bureaucracy, and to embed direct accountability for
activities within our businesses. Crucially we must do this in a
way which is consistent with our values, and with strong controls
in place, so that we build this business in the right way.
There is a lot we can do to accelerate our progress and the work
has already begun."
John McFarlane, Executive Chairman
Group Finance Director's Review
Income statement
Group performance
-- Adjusted profit before tax increased 11% to GBP3,729m
reflecting improvements in all Core operating businesses
-- Adjusted income decreased 3% to GBP12,982m as Non-Core income
reduced GBP616m to GBP42m. This was partially offset by Core income
increasing 2% to GBP12,940m
-- Impairment reduced 10% to GBP973m, with the Group loan loss rate improving 5bps to 40bps
-- Adjusted total operating expenses were down 7% to GBP8,262m
as a result of savings from strategic cost programmes, particularly
in Non-Core and the Investment Bank. Costs to achieve were GBP316m
(H114: GBP494m) and litigation and conduct charges were GBP134m
(H114: GBP211m)
-- Statutory profit before tax was GBP3,114m (H114: GBP2,501m)
which also included an additional GBP1,032m (H114: GBP900m) of
provisions for UK customer redress, a GBP496m gain (H114: GBPnil)
on US Lehman acquisition assets, GBP800m (H114: GBPnil) of
additional provisions for ongoing investigations and litigation
primarily relating to Foreign Exchange, a GBP429m (H114: GBPnil)
gain on the valuation of a component of the defined retirement
benefit liability, a GBP118m (H114: GBPnil) loss on the sale of the
Spanish business and an own credit gain of GBP410m (H114:
GBP52m)
-- The effective tax rate on adjusted profit before tax
decreased to 28.9% (H114: 33.1%) and on statutory profit before tax
decreased to 32.3% (H114: 35.8%). The reduction reflects the
expected full year rate adjusted for the impact of significant
one-off items, including adjusting items and the UK bank levy,
which is recognised in the period in which they occur
-- Adjusted attributable profit was GBP2,155m (H114: GBP1,760m)
resulting in an adjusted return on average shareholders' equity of
7.7% (H114: 6.5%)
Core performance
-- Profit before tax increased 10% to GBP4,241m with
improvements of 36% to GBP1,440m in the Investment Bank, 12% to
GBP540m in Africa Banking, 4% to GBP1,528m in Personal and
Corporate Banking (PCB) and 4% to GBP795m in Barclaycard
-- Income increased 2% to GBP12,940m
- Barclaycard income increased 11% to GBP2,357m reflecting
growth in US cards and Business Solutions
- Africa Banking income increased 5% to GBP1,858m reflecting
strong growth in Retail and Business Banking (RBB) due to the
continued progress on the retail banking turnaround in South
Africa
- PCB income increased 1% to GBP4,384m due to good growth in
Corporate, partially offset by a reduction in Personal income due
to mortgage margin pressure
- Net interest income in PCB, Barclaycard and Africa Banking
increased 7% to GBP5,975m driven by lending and deposit growth and
margin improvement in PCB, and volume growth in Barclaycard and
Africa Banking. Net interest margin increased 11bps to 4.17%
- Investment Bank income increased 1% to GBP4,299m reflecting an
improvement in Macro income due to higher income in rates and
currency products, and an increase in Equities income, partially
offset by lower Banking and Credit income
-- Credit impairment charges were in line at GBP936m (H114:
GBP937m). This reflected lower impairments in PCB due to the
improving UK economic environment resulting in lower default rates
and charges in Corporate, offset by an increase of 5% in
Barclaycard which was accompanied by loans and advances growth of
11% from June 2014. The loan loss rate reduced 2bps to 44bps
-- Total operating expenses decreased 3% to GBP7,741m,
reflecting savings from strategic cost programmes, principally in
the Investment Bank and lower costs to achieve of GBP293m (2014:
GBP453m). Barclaycard total operating expenses increased 19% to
GBP1,017m primarily due to continued investment in business growth
and the impact of one-off items, including certain marketing costs
and the non-recurrence of a H114 VAT refund
-- Attributable profit increased 15% to GBP2,557m, while average
allocated equity increased GBP6bn to GBP47bn as capital was
redeployed from Non-Core, resulting in an increase in Core return
on average equity to 11.1% (H114: 11.0%)
Non-Core performance
-- Loss before tax increased to GBP512m (H114: GBP491m) reflecting:
- A reduction in income of GBP616m to GBP42m following assets
and securities run-down, business disposals including the impact of
the sale of the Spanish business, and fair value losses on the
Education, Social Housing, and Local Authority (ESHLA) portfolio of
GBP175m (H114: GBP29m)
- An improvement in impairment to GBP37m (H114: GBP149m)
primarily reflecting the sale of the Spanish business and higher
recoveries in Europe
- A 44% reduction in total operating expenses to GBP521m due to
savings from strategic cost programmes, the sale of the Spanish
business and reduced costs to achieve
-- Non-Core return on average equity dilution was 3.4% (H114:
4.5%) reflecting a reduction in average allocated equity to GBP10bn
(H114: GBP14bn). Period end allocated equity reduced to GBP8bn
(December 2014: GBP11bn)
Balance sheet and capital
Balance sheet
-- Total assets decreased 12% to GBP1,197bn compared to 31
December 2014, primarily due to reductions in derivatives and
reverse repurchase agreements
- Total loans and advances increased GBP5bn to GBP475bn as a net
GBP8bn increase in settlement and cash collateral balances was
partially offset by a GBP3bn decrease due to the run-down of
European retail assets within Non-Core
-- Customer accounts increased GBP11bn to GBP438bn primarily due
to a GBP12bn increase within the Investment Bank as a result of
higher settlement balances, partially offset by a GBP2bn decrease
in Non-Core due to the run-down of the business
-- Total shareholders' equity including non-controlling
interests was GBP65.6bn (December 2014: GBP66.0bn). Excluding
non-controlling interests, shareholders' equity was GBP59.3bn
(December 2014: GBP59.6bn) reflecting a reduction in other reserves
of GBP1.4bn including a GBP0.6bn decrease in the cash flow hedging
reserve, due to the impact of forward interest rate movements, and
a GBP0.5bn decrease in the currency translation reserve as GBP
strengthened against ZAR, EUR and USD. This was partially offset by
a GBP0.7bn increase in share capital and share premium, due to the
issuance of shares under employee share schemes and scrip
dividends, and an increase of GBP0.4bn in retained earnings due to
generated profit of GBP1.8bn offset by GBP0.7bn of dividends paid
and GBP0.7bn of shares vesting in relation to employee share
schemes
-- Net asset value and net tangible asset value per share
decreased to 328p (December 2014: 335p) and 279p (December 2014:
285p) respectively as profit generated for the period was more than
offset by the overall decrease in shareholders' equity as detailed
above
Leverage exposure
-- Leverage exposure decreased GBP94bn to GBP1,139bn driven by:
- Securities Financing Transactions decreased by GBP40bn,
primarily due to IFRS reverse repurchase agreements reducing
GBP39bn to GBP93bn. This was driven by reductions in matched book
trading as the balance sheet was deleveraged
- The Potential Future Exposure (PFE) on derivatives decreased
GBP19bn to GBP160bn, mainly as a result of continued legacy
portfolio run down and optimisation including trade compressions
and tear-ups
- Derivative leverage exposure, excluding PFE, decreased GBP26bn
partly due to a decrease in IFRS assets of GBP99bn to GBP341bn,
offset by a decrease in derivative netting of GBP87bn to GBP308bn.
These decreases were primarily due to increases in major forward
rate curves and continued legacy portfolio run down
Capital ratios
-- The fully loaded CRD IV CET1 ratio increased to 11.1%
(December 2014: 10.3%) due to a GBP25bn reduction in RWAs to
GBP377bn and an increase in the fully loaded CRD IV CET1 capital of
GBP0.5bn to GBP42.0bn
- The increase in CET1 capital was driven by GBP1.8bn profits
after absorbing adjusting items. After further adjusting for the
impacts of own credit and regulatory dividends paid and foreseen,
capital generated from earnings increased CET1 capital by
GBP0.3bn
- The reduction in RWAs was primarily driven by the reduction in
Non-Core of GBP19bn to GBP57bn including the sale of the Spanish
business, run-down of legacy structured and credit products, and a
GBP7bn reduction in the Investment Bank driven by risk reduction in
the trading book
-- The leverage ratio increased to 4.1% (December 2014: 3.7%)
driven by a decrease in the leverage exposure to GBP1,139bn
(December 2014: GBP1,233bn)
Funding and liquidity
-- The Group continued to maintain surpluses to its internal and
regulatory requirements in H115 with a liquidity pool of GBP145bn
(December 2014: GBP149bn). The Liquidity Coverage Ratio (LCR)
decreased to 121% (December 2014: 124%), equivalent to a surplus of
GBP26bn (December 2014: GBP30bn). The surpluses were built to
position the Group for outflows associated with credit rating
changes as a result of credit rating agencies' assessment of
sovereign support. Whilst the ratings changes occurred during Q215,
the expected funding impacts had not fully materialised by the end
of H115
-- Wholesale funding outstanding excluding repurchase agreements
was GBP157bn (December 2014: GBP171bn). The Group issued GBP6bn of
term funding net of early redemptions during H115, of which GBP3bn
was in senior unsecured debt issued by the holding company,
Barclays PLC. These proceeds have been used to subscribe for senior
unsecured debt at Barclays Bank PLC, the operating company. This
demonstrates further progress on the transition towards a holding
company capital and funding model
Other matters
-- Provisions of GBP484m (December 2014: GBP1,690m) are held for
Legal, Competition and Regulatory matters
- Additional provisions of GBP800m (H114: GBPnil) were made for
ongoing investigations and litigation primarily relating to Foreign
Exchange, taking the total provisions recognised to GBP2,050m.
Settlements of GBP1,608m were reached in Q215 with a number of
authorities in relation to industry-wide investigations into
certain sales and trading practices in the Foreign Exchange market
and an industry-wide investigation into the setting of the US
Dollar ISDAFIX benchmark
-- Additional UK customer redress provisions of GBP1,032m (H114:
GBP900m) were recognised including GBP850m in Q215. This includes
additional charges for PPI redress based on an updated estimate of
future redress costs of GBP750m (H114: GBP900m), GBP600m of which
was recognised in Q215. As at June 2015 the PPI redress provision
held was GBP1,268m (December 2014: GBP1,059m)
-- A GBP496m (H114: GBPnil) gain on US Lehman acquisition assets
was recognised in Q215. Barclays has reached a settlement with the
Securities Investor Protection Act Trustee for Lehman Brothers Inc.
(LBI) to resolve outstanding litigation between the parties
relating to the acquisition of most of the assets of LBI in
September 2008
-- A GBP429m (H114: GBPnil) gain was recognised in Q115 as the
valuation of a component of the defined retirement benefit
liability was revised to use the long term Consumer Price Index
rather than the Retail Price Index, consistent with statutory
provisions
-- A GBP118m (H114: GBPnil) loss was recognised in Q115
primarily relating to accumulated currency translation reserves
recycled upon the completion of the Spanish business sale
Dividends
-- The Board recognises the importance of paying returns to
shareholders by way of dividends and expects to deliver, over time,
a dividend that is sustainable and progressive rather than
targeting a particular payout ratio range
-- For 2015, the Board has concluded that it is appropriate to
plan for a 6.5p distribution, the same level as 2014, while we
focus on improving the returns of the business and accelerating the
implementation of the strategy whilst maintaining capital
strength
-- A second interim dividend of 1p will be paid on 14 September 2015
Barclays Non-Core Guidance
-- We have made significant progress in running down Barclays
Non-Core since it was established as a separate unit in 2014.
Non-Core RWAs have been reduced from GBP110bn in December 2013 to
GBP57bn, resulting in an equity allocation of GBP8.3bn as at June
2015, 15% of the Group total and down from GBP15.1bn as at December
2013
-- We now have greater visibility as to the options available to
us in order to reduce Non-Core's influence on the Group's financial
results through lower capital requirements and operating losses. We
therefore plan to reduce Non-Core RWAs to around GBP20bn by the end
of 2017, at which point we expect the Non-Core unit will be
reintegrated into the Core business where it will continue to be
managed down. This revised guidance replaces previous guidance of
reducing Non-Core RWAs to GBP45bn at the end of 2016
Tushar Morzaria, Group Finance Director
Results by Business
Personal and Corporate Banking Half year Half year
ended ended
30.06.15 30.06.14 YoY
Income statement information GBPm GBPm % Change
======================================= ============== ============== ==============
Net interest income 3,203 3,057 5
Net fee, commission and other income 1,181 1,304 (9)
======================================= ============== ============== ==============
Total income 4,384 4,361 1
Credit impairment charges and other
provisions (178) (230) 23
======================================= ============== ============== ==============
Net operating income 4,206 4,131 2
Operating expenses (2,466) (2,525) 2
Litigation and conduct (25) (29) 14
Costs to achieve (139) (115) (21)
Total operating expenses (2,630) (2,669) 1
Other net (expenses)/income (48) 6
======================================= ============== ============== ==============
Profit before tax 1,528 1,468 4
Attributable profit 1,102 1,039 6
As at 30.06.15 As at 31.12.14 As at 30.06.14
Balance sheet information GBPbn GBPbn GBPbn
======================================= ============== ============== ==============
Loans and advances to customers at
amortised cost 217.5 217.0 216.7
Total assets 289.9 285.0 268.1
Customer deposits 298.5 299.2 298.3
Risk weighted assets 120.6 120.2 117.9
Half year Half year
ended ended
Key facts 30.06.15 30.06.14
======================================= ==============
Average LTV of mortgage lending(1) 51% 55%
Average LTV of new mortgage lending(1) 62% 64%
Client assets(2) GBP142.6bn GBP151.3bn
Number of branches 1,448 1,546
Performance measures
======================================= ============== ============== ==============
Return on average tangible equity 16.4% 16.1%
Average allocated tangible equity
(GBPbn) 13.6 13.0
Return on average equity 12.3% 12.1%
Average allocated equity (GBPbn) 18.1 17.3
Cost: income ratio 60% 61%
Loan loss rate (bps) 16 21
YoY
Analysis of total income GBPm GBPm % Change
======================================= ============== ============== ==============
Personal 2,014 2,053 (2)
Corporate 1,877 1,768 6
Wealth 493 540 (9)
======================================= ============== ============== ==============
Total income 4,384 4,361 1
As at 30.06.15 As at 31.12.14 As at 30.06.14
Analysis of loans and advances to GBPbn GBPbn GBPbn
customers at amortised cost
======================================= ============== ============== ==============
Personal 137.8 136.8 135.9
Corporate 66.0 65.1 64.8
Wealth 13.7 15.1 16.0
======================================= ============== ============== ==============
Total loans and advances to customers
at amortised cost 217.5 217.0 216.7
Analysis of customer deposits
======================================= ============== ============== ==============
Personal 146.3 145.8 141.6
Corporate 120.3 122.2 123.7
Wealth 31.9 31.2 33.0
======================================= ============== ============== ==============
Total customer deposits 298.5 299.2 298.3
1 Average LTV of mortgage lending and new mortgage lending calculated
on the balance weighted basis.
2 Includes assets managed or administered by Barclays on behalf
of clients including assets under management (AUM), custody assets,
assets under administration, and Wealth client deposits and client
lending.
Personal and Corporate Banking
Income statement - H115 compared to H114
-- Profit before tax increased 4% to GBP1,528m with a return on
average equity of 12.3% (H114: 12.1%). Total operating expenses
reduced due to increased automation and the net closure of 98
branches. Operating expenses were also impacted by investment in
digital and the customer experience across multiple channels.
Impairment reduced due to the improving economic environment in the
UK
-- PCB results were significantly impacted by GBP171m of charges
in Wealth relating to customer redress in the US and the announced
disposal of the US business. Income was impacted by GBP29m,
operating expenses by GBP87m of which GBP56m were costs to achieve,
and other net expenses included a GBP55m loss on sale
-- Total income increased 1% to GBP4,384m
- Personal income reduced 2% to GBP2,014m due to mortgage margin
pressure from existing customer rate switching and lower fee
income, partially offset by balance growth and improved savings
margins
- Corporate income increased 6% to GBP1,877m with balance growth
in both average lending and deposits, and improved deposits
margins, partially offset by lending margin compression
- Wealth income reduced 9% to GBP493m primarily as a result of
the impact of customer redress in the US
- Net interest income increased 5% to GBP3,203m driven by margin
improvement, lending and deposit growth and the launch of a revised
overdraft proposition in H214, which recognises the majority of
overdraft income as net interest income as opposed to fee
income
- Net interest margin improved 5bps to 3.01% due to higher
deposit margins within Corporate and Personal. This was partially
offset by the impact of mortgage margin pressure from existing
customer rate switching
- Net fee, commission and other income reduced 9% to GBP1,181m
due to the launch of the revised overdraft proposition in H214 and
the impact of customer redress in the US
-- Credit impairment charges improved 23% to GBP178m and the
loan loss rate reduced 5bps to 16bps due to the improving economic
environment in the UK, particularly impacting Corporate which
benefited from lower defaults of large UK Corporate clients
-- Total operating expenses reduced 1% to GBP2,630m. This
reflected savings realised from strategic cost programmes relating
to restructuring of the branch network and technology improvements
to increase automation, partially offset by costs to achieve of
GBP56m relating to the announced disposal of the US Wealth
business
-- Client assets decreased GBP8.7bn to GBP142.6bn primarily due
to the announced disposal of the US Wealth business and ongoing
strategic market exits
Balance sheet - 30 June 2015 compared to 31 December 2014
-- Loans and advances to customers increased GBP0.5bn to
GBP217.5bn due to growth in mortgages and Corporate lending
-- Total assets increased GBP4.9bn to GBP289.9bn primarily
driven by an increase in the allocation of liquidity pool assets
and the growth in loans and advances to customers
-- Customer deposits decreased GBP0.7bn to GBP298.5bn
-- RWAs increased GBP0.4bn to GBP120.6bn primarily driven by
growth in mortgages and Corporate lending
Barclaycard Half year Half year
ended ended
30.06.15 30.06.14 YoY
Income statement information GBPm GBPm % Change
===================================== ============== ============== ==============
Net interest income 1,704 1,500 14
Net fee, commission and other income 653 624 5
===================================== ============== ============== ==============
Total income 2,357 2,124 11
Credit impairment charges and other
provisions (563) (537) (5)
===================================== ============== ============== ==============
Net operating income 1,794 1,587 13
Operating expenses (961) (822) (17)
Costs to achieve (56) (36) (56)
Total operating expenses (1,017) (858) (19)
Other net income 18 35 (49)
===================================== ============== ==============
Profit before tax 795 764 4
Attributable profit 566 539 5
As at 30.06.15 As at 31.12.14 As at 30.06.14
Balance sheet information GBPbn GBPbn GBPbn
===================================== ============== ============== ==============
Loans and advances to customers at
amortised cost 36.9 36.6 33.2
Total assets 41.9 41.3 36.2
Customer deposits 7.7 7.3 5.9
Risk weighted assets 40.3 39.9 37.7
Half year Half year
ended ended
Key facts 30.06.15 30.06.14
===================================== ============== ============== ==============
30 day arrears rates - UK cards 2.4% 2.4%
30 day arrears rates - US cards 1.9% 1.9%
Total number of Barclaycard consumer
customers 29.9m 27.8m
Total number of Barclaycard business
clients 343,000 352,000
Value of payments processed GBP145bn GBP124bn
Performance measures
===================================== ============== ============== ==============
Return on average tangible equity 22.9% 23.6%
Average allocated tangible equity
(GBPbn) 5.0 4.6
Return on average equity 18.2% 18.9%
Average allocated equity (GBPbn) 6.3 5.7
Cost: income ratio 43% 40%
Loan loss rate (bps) 293 311
Barclaycard
Income statement - H115 compared to H114
-- Profit before tax increased 4% to GBP795m. The diversified
consumer and merchant business model led to income growth of 11% to
GBP2,357m with substantial business growth in US cards. The
continued focus on risk management is reflected in stable 30-day
delinquency rates and a falling loan loss rate. Although total
operating expenses increased, this was a result of continued
investment for growth, as loans and advances increased 11% from
June 2014 and the customer base increased across all geographies
over the same period. Return on average equity continued to be
strong at 18.2% (H114: 18.9%)
-- Total income increased 11% to GBP2,357m driven by business
growth in US cards and the appreciation of average USD against GBP,
partially offset by the impact of rate capping from European
Interchange Fee Regulation
-- Net interest income increased 14% to GBP1,704m driven by
business growth, whilst the net interest margin was maintained at
9.05% (H114: 9.05%)
-- Net fee, commission and other income increased 5% to GBP653m
due to growth in US cards and Business Solutions, partially offset
by the impact of changes to European Interchange Fee Regulation
-- Credit impairment charges increased 5% to GBP563m with loans
and advances growth of 11% to GBP36.9bn over the same period.
Delinquency rates remained stable and the loan loss rate improved
18bps to 293bps
-- Total operating expenses increased 19% to GBP1,017m due to
continued investment in business growth, higher costs to achieve,
the appreciation of average USD against GBP and the impact of
one-off items, including certain marketing costs and the
non-recurrence of a VAT refund in H114
Balance sheet - 30 June 2015 compared to 31 December 2014
-- Loans and advances to customers increased 1% to GBP36.9bn with balance growth in US cards
-- Total assets increased 1% to GBP41.9bn mainly due to the
increase in loans and advances to customers
-- Customer deposits increased 5% to GBP7.7bn driven by the deposits funding strategy in the US
-- RWAs increased GBP0.4bn to GBP40.3bn primarily driven by
growth in loans and advances to customers
Africa Banking Half year Half year
ended ended
30.06.15 30.06.14 YoY
Income statement information GBPm GBPm % Change
======================================= ============== ============== ==============
Net interest income 1,068 1,007 6
Net fee, commission and other income 871 850 2
======================================= ============== ============== ==============
Total income 1,939 1,857 4
Net claims and benefits incurred
under insurance contracts (81) (84) 4
======================================= ============== ============== ==============
Total income net of insurance claims 1,858 1,773 5
Credit impairment charges and other
provisions (193) (196) 2
======================================= ============== ============== ==============
Net operating income 1,665 1,577 6
Operating expenses (1,116) (1,082) (3)
Costs to achieve (13) (17) 24
Total operating expenses (1,129) (1,099) (3)
Other net income 4 6 (33)
======================================= ============== ============== ==============
Profit before tax 540 484 12
Attributable profit 208 181 15
As at 30.06.15 As at 31.12.14 As at 30.06.14
Balance sheet information GBPbn GBPbn GBPbn
======================================= ============== ============== ==============
Loans and advances to customers at
amortised cost 33.8 35.2 33.8
Total assets 54.0 55.5 52.4
Customer deposits 34.4 35.0 33.2
Risk weighted assets 36.4 38.5 36.5
Constant currency(1)
======================================= ============== ============== ==============
Loans and advances to customers at
amortised cost 33.8 33.2 32.1
Total assets 54.0 52.2 49.9
Customer deposits 34.4 33.1 31.6
Risk weighted assets 36.4 36.3 34.7
Half year Half year
ended ended
Key facts 30.06.15 30.06.14
======================================= ============== ============== ==============
Average LTV of mortgage lending(2) 59% 61%
Average LTV of new mortgage lending(2) 76% 75%
Performance measures
======================================= ============== ============== ==============
Return on average tangible equity 14.0% 13.3%
Average allocated tangible equity
(GBPbn) 3.0 2.7
Return on average equity 10.3% 9.6%
Average allocated equity (GBPbn) 4.0 3.8
Cost: income ratio 61% 62%
Loan loss rate (bps) 105 110
Constant currency results are calculated by converting ZAR results
1 into GBP using the 30 June 2015 exchange rate for the balance
sheet to eliminate the impact of movement in the exchange rate
between the reporting periods.
2 Calculated on the balance weighted basis.
Africa Banking
Income statement - H115 compared to H114
-- Based on average rates, ZAR depreciated against GBP by 2% in
H115 against H114. The deterioration was not a significant
contributor to the movement in the reported income statement
results of Africa Banking; therefore, the discussion of business
performance below is based on reported results in GBP
-- Profit before tax increased 12% to GBP540m reflecting strong
growth in Retail and Business Banking (RBB) due to the continued
progress on the retail banking turnaround in South Africa.
Performance in South Africa also showed good growth in corporate
banking and Wealth, Investment Management and Insurance (WIMI),
partially offset by lower trading performance. Performance outside
of South Africa showed strong growth in trading performance and
WIMI, partially offset by a small reduction in growth in corporate
banking
-- Total income net of insurance claims increased 5% to GBP1,858m
- Net interest income increased 6% to GBP1,068m driven by higher
average loans and advances to customers in Corporate and Investment
Banking (CIB) and growth in customer deposits in the South African
RBB and Corporate businesses. Net interest margin increased 10bps
to 5.97% as CIB continued the strategy of replacing swaps with
currency matched funding. This has resulted in an improvement in
net interest income and a reduction in hedging income recognised in
net fee, commission and other income
- Net fee, commission and other income increased 2% to GBP871m
mainly reflecting increased transactional revenue in South Africa,
partially offset by lower hedging income
-- Credit impairment charges were broadly in line at GBP193m
(H114: GBP196m) and the loan loss rate improved 5bps to 105bps
driven by reduced impairments in the South Africa mortgages
portfolio and business banking, partially offset by increased
impairments in CIB and additional coverage on performing loans
-- Total operating expenses increased 3% to GBP1,129m reflecting
inflationary impacts on staff costs and increased investment spend
on key initiatives, partially offset by savings from strategic cost
programmes mainly in property and technology
Balance sheet - 30 June 2015 compared to 31 December 2014
-- Based on closing rates, ZAR depreciated against GBP by 6% at
30 June 2015 against 31 December 2014. The deterioration was a
significant contributor to the movement in the reported balance
sheet results of Africa Banking; therefore, the discussion of
business performance below is based on results on a constant
currency basis
-- Loans and advances to customers increased 2% to GBP33.8bn
driven by strong CIB growth in South Africa and growth in RBB,
which included a modest reduction in the South Africa mortgages
portfolio
-- Total assets increased 3% to GBP54.0bn primarily due to the
increase in loans and advances to customers and banks
-- Customer deposits increased 4% to GBP34.4bn reflecting strong
growth in the RBB South Africa and Corporate businesses
-- RWAs increased GBP0.1bn to GBP36.4bn primarily driven by
growth in loans and advances to customers
Investment Bank Half year Half year
ended ended
30.06.15 30.06.14 YoY
Income statement information GBPm GBPm % Change
============================================ ============== ============== ==============
Net interest income 276 334 (17)
Net trading income 2,423 2,137 13
Net fee, commission and other income 1,600 1,786 (10)
============================================ ============== ============== ==============
Total income 4,299 4,257 1
Credit impairment (charges)/releases
and other provisions (1) 26
============================================ ============== ============== ==============
Net operating income 4,298 4,283 -
Operating expenses (2,738) (2,848) 4
Litigation and conduct (57) (95) 40
Costs to achieve (63) (282) 78
Total operating expenses (2,858) (3,225) 11
Profit before tax 1,440 1,058 36
Attributable profit 761 435 75
As at 30.06.15 As at 31.12.14 As at 30.06.14
Balance sheet information GBPbn GBPbn GBPbn
============================================ ============== ============== ==============
Loans and advances to banks and customers
at amortised cost(1) 123.1 106.3 117.2
Trading portfolio assets 81.8 94.8 101.2
Derivative financial instrument assets 118.5 152.6 104.2
Derivative financial instrument liabilities 127.7 160.6 109.5
Reverse repurchase agreements and
other similar secured lending 58.4 64.3 83.0
Total assets 420.1 455.7 446.2
Risk weighted assets 115.3 122.4 123.9
Half year Half year
ended ended
Performance measures 30.06.15 30.06.14
============================================ ============== ============== ==============
Return on average tangible equity 10.9% 6.0%
Average allocated tangible equity
(GBPbn) 14.2 14.7
Return on average equity 10.2% 5.7%
Average allocated equity (GBPbn) 15.1 15.4
Cost: income ratio 66% 76%
YoY
Analysis of total income GBPm GBPm % Change
===== ===== ========
Investment banking fees 1,135 1,174 (3)
Lending 205 169 21
========================= ===== ========
Banking 1,340 1,343 -
Credit 546 616 (11)
Equities 1,235 1,220 1
Macro 1,178 1,056 12
========================= ===== ===== ========
Markets 2,959 2,892 2
========================= ===== ===== ========
Banking & Markets 4,299 4,235 2
Other - 22
Total income 4,299 4,257 1
1 As at 30 June 2015 loans and advances included GBP99.1bn (December
2014: GBP86.4bn) of loans and advances to customers, including
settlement balances of GBP40.4bn (December 2014: GBP25.8bn) and
cash collateral of GBP28.6bn (December 2014: GBP32.2bn) and loans
and advances to banks of GBP24.0bn (December 2014: GBP19.9bn),
including settlement balances of GBP5.9bn (December 2014: GBP2.7bn)
and cash collateral of GBP6.4bn (December 2014: GBP6.9bn).
Investment Bank
Income statement - H115 compared to H114
-- Profit before tax increased 36% to GBP1,440m. The Investment
Bank continued to build on its origination led strategy, whilst the
re-sized Macro business benefited from increased market volatility
in H115 reflecting uncertainty around Greece and the Eurozone.
Higher income as well as a continued focus on driving cost savings
and RWA efficiencies resulted in a return on average equity of
10.2% (H114: 5.7%)
-- Total income increased 1% to GBP4,299m
- Banking income was in line at GBP1,340m (H114: GBP1,343m).
Investment banking fee income decreased 3% to GBP1,135m driven by
lower equity underwriting and financial advisory fees. Lending
income increased 21% to GBP205m due to lower fair value losses on
hedges
- Markets income increased 2% to GBP2,959m
- Equities increased 1% to GBP1,235m due to higher income in
equity financing and cash equities, partially offset by lower
income in equity derivatives
- Macro increased 12% to GBP1,178m due to higher income in rates
and currency products, reflecting increased market volatility
- Credit decreased 11% to GBP546m driven by lower income in
distressed credit and securitised products, partially offset by
increased income in credit flow trading
-- Credit impairment charges were GBP1m (H114: release of GBP26m)
-- Total operating expenses decreased 11% to GBP2,858m
reflecting lower costs to achieve, a reduction in compensation
costs and savings from strategic cost programmes including business
restructuring, system decommissioning and a reduction in real
estate infrastructure
Balance sheet - 30 June 2015 compared to 31 December 2014
-- Derivative financial instrument assets and liabilities
decreased 22% to GBP118.5bn and 20% to GBP127.7bn respectively, due
to increases in major forward rate curves
-- Trading portfolio assets decreased 14% to GBP81.8bn due to a decrease in equity securities
-- Total assets decreased 8% to GBP420.1bn due to a decrease in
derivative financial instrument assets, trading portfolio assets
and reverse repurchase agreements, partially offset by an increase
in settlement balances within loans and advances to customers and
banks
-- RWAs decreased 6% to GBP115.3bn primarily driven by risk reductions in the trading book
Head Office Half year Half year
ended ended
30.06.15 30.06.14
Income statement information GBPm GBPm
==================================== ============== ==============
Total income 42 159
Credit impairment charges and other
provisions (1) -
==================================== ============== ==============
Net operating income 41 159
Operating expenses (78) (37)
Litigation and conduct (7) (54)
Costs to achieve (22) (2)
Total operating expenses (107) (93)
Other net income 4 -
==================================== ============== ==============
(Loss)/profit before tax (62) 66
Attributable (loss)/profit (80) 30
As at 30.06.15 As at 31.12.14 As at 30.06.14
Balance sheet information GBPbn GBPbn GBPbn
==================================== ============== ============== ==============
Total assets 52.6 49.1 43.3
Risk weighted assets 7.5 5.6 7.6
Head Office
Income statement - H115 compared to H114
-- Loss before tax of GBP62m moved from a profit of GBP66m in H114
-- Total income decreased GBP117m to GBP42m due to the
non-recurrence of net gains from foreign exchange recycling arising
from the restructure of Group subsidiaries and gains resulting from
a liability management exercise in H114
-- Total operating expenses increased GBP14m to GBP107m due to
costs relating to structural reform and an increase in costs to
achieve, partially offset by the non-recurrence of H114 litigation
and conduct charges
Balance sheet - 30 June 2015 compared to 31 December 2014
-- Total assets increased GBP3.5bn to GBP52.6bn reflecting
additional cash held to meet daily treasury operational
settlements
-- RWAs increased GBP1.9bn to GBP7.5bn primarily due to
reallocations of Group-wide market and operational risk
Barclays Non-Core Half year Half year
ended ended
30.06.15 30.06.14 YoY
Income statement information GBPm GBPm % Change
============================================ ============== ============== ==============
Net interest income 128 183 (30)
Net trading income (250) 116
Net fee, commission and other income 331 514 (36)
============================================ ============== ============== ==============
Total income 209 813 (74)
Net claims and benefits incurred
under insurance contracts (167) (155) (8)
============================================ ============== ============== ==============
Total income net of insurance claims 42 658 (94)
Credit impairment charges and other
provisions (37) (149) 75
============================================ ============== ============== ==============
Net operating income 5 509 (99)
Operating expenses (453) (860) 47
Litigation and conduct (45) (33) (36)
Costs to achieve (23) (41) 44
Total operating expenses (521) (934) 44
Other net income/(expenses) 4 (66)
============================================ ============== ============== ==============
Loss before tax (512) (491) (4)
Attributable loss (402) (464) 13
As at 30.06.15 As at 31.12.14 As at 30.06.14
Balance sheet information GBPbn GBPbn GBPbn
============================================ ============== ============== ==============
Loans and advances to banks and customers
at amortised cost(1) 53.9 63.9 75.5
Loans and advances to customers at
fair value 17.0 18.7 17.0
Trading portfolio assets 11.6 15.9 22.9
Derivative financial instrument assets 220.9 285.4 227.0
Derivative financial instrument liabilities 213.6 277.1 215.0
Reverse repurchase agreements and
other similar secured lending 15.6 49.3 86.8
Total assets 338.2 471.5 468.6
Customer deposits 19.6 21.6 28.6
Risk weighted assets 56.6 75.3 87.5
Leverage exposure 166.3 277.5 381.7
Half year Half year
ended ended
Performance measures 30.06.15 30.06.14
============================================ ============== ============== ==============
Return on average tangible equity(2) (4.3%) (6.0%)
Average allocated tangible equity
(GBPbn) 9.7 14.2
Return on average equity(2) (3.4%) (4.5%)
Average allocated equity (GBPbn) 9.8 14.5
Period end allocated equity (GBPbn) 8.3 12.7
YoY
Analysis of total income net of insurance GBPm GBPm % Change
claims
============================================ ============== ============== ==============
Businesses 275 546 (50)
Securities and Loans (115) 153
Derivatives (118) (41)
============================================ ============== ============== ==============
Total income net of insurance claims 42 658 (94)
1 As at 30 June 2015 loans and advances included GBP42.7bn (December
2014: GBP51.6bn) of loans and advances to customers (including
settlement balances of GBP1.0bn (December 2014: GBP1.6bn) and
cash collateral of GBP18.0bn (December 2014: GBP22.1bn) and loans
and advances to banks of GBP11.2bn (December 2014: GBP12.3bn)
(including settlement balances of GBP0.2bn (December 2014: GBP0.3bn)
and cash collateral of GBP10.5bn (December 2014: GBP11.3bn)).
2 Return on average equity and average tangible equity for Barclays
Non-Core represents its impact on the Group, being the difference
between Barclays Group returns and Barclays Core returns. This
does not represent the return on average equity and average tangible
equity of the Non-Core business.
Barclays Non-Core
Income statement - H115 compared to H114
-- Loss before tax increased 4% to GBP512m. Barclays Non-Core
(BNC) continued to make good progress in exiting and running down
businesses, securities and derivative assets during H115. RWAs
reduced a further GBP18.7bn to GBP56.6bn from December 2014
-- Total income net of insurance claims reduced 94% to GBP42m
- Businesses income reduced 50% to GBP275m due to the impact of
the sale of the Spanish business and the sale and run-down of
legacy portfolio assets
- Securities and loans income reduced GBP268m to an expense of
GBP115m primarily due to fair value losses on the ESHLA portfolio
of GBP175m (H114: GBP29m) and the active run-down of securities,
partially offset by a GBP91m release of a litigation provision
- Derivatives income reduced GBP77m to an expense of GBP118m
reflecting the active run-down of the portfolios and fair value
movements
-- Credit impairment charges reduced 75% to GBP37m due to the
sale of the Spanish business and higher recoveries in Europe
-- Total operating expenses improved 44% to GBP521m reflecting
savings from the exit of the Spanish, UAE, commodities, and several
principal investment businesses
Balance sheet - 30 June 2015 compared to 31 December 2014
-- Loans and advances to banks and customers reduced 16% to
GBP53.9bn due to a reduction in Europe retail driven by the run-off
of assets and a reduction in cash collateral balances
-- Trading portfolio assets reduced 27% to GBP11.6bn due to the
sale and run-down of legacy portfolio assets
-- Derivative financial instrument assets and liabilities both
decreased 23% to GBP220.9bn and GBP213.6bn respectively, driven by
increases in major forward rate curves and the unwinding of trade
positions
-- Total assets decreased 28% to GBP338.2bn with reduced
derivative financial assets, reverse repurchase agreements and
other similar secured lending, loans and advances to banks and
customers, and trading portfolio assets
-- Leverage exposure reduced 40% to GBP166.3bn driven by a
reduction in derivatives and reverse repurchase agreements
-- RWAs decreased GBP18.7bn to GBP56.6bn including the sale of
the Spanish business and run down of legacy structured and credit
products. Period end allocated equity decreased GBP2.7bn to
GBP8.3bn
Quarterly Results Summary
Barclays results by quarter Q215 Q115(1) Q414 Q314 Q214 Q114 Q413 Q313(2)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================================ ======= ======= ======= ======= ======= ======= ======= =======
Adjusted basis
Total income net of insurance
claims 6,552 6,430 6,018 6,378 6,682 6,650 6,639 6,445
Credit impairment charges
and other provisions (496) (477) (573) (509) (538) (548) (718) (722)
================================ ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 6,056 5,953 5,445 5,869 6,144 6,102 5,921 5,723
Operating expenses (3,897) (3,915) (3,942) (3,879) (4,042) (4,130) (4,500) (4,223)
Litigation and conduct (77) (57) (140) (98) (146) (65) (277) (39)
Costs to achieve (196) (120) (339) (332) (254) (240) (468) (101)
UK bank levy - - (462) - - - (504) -
================================ ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (4,170) (4,092) (4,883) (4,309) (4,442) (4,435) (5,749) (4,363)
Other net (expenses)/income (37) 19 1 30 (46) 26 19 25
================================ ======= ======= ======= ======= ======= ======= ======= =======
Adjusted profit before
tax 1,849 1,880 563 1,590 1,656 1,693 191 1,385
Adjusting items
================================ ======= ======= ======= ======= ======= ======= ======= =======
Own credit 282 128 (62) 44 (67) 119 (95) (211)
Gain on US Lehman acquisition
assets 496 - - 461 - - - -
ESHLA valuation revision - - (935) - - - - -
Gain on valuation of a
component of the defined
retirement benefit liability - 429 - - - - - -
Provisions for ongoing
investigations and litigation
primarily relating to Foreign
Exchange - (800) (750) (500) - - - -
Provisions for UK customer
redress (850) (182) (200) (10) (900) - - -
Goodwill impairment - - - - - - (79) -
Loss on sale of the Spanish
business - (118) (82) (364) - - - -
Statutory profit/(loss)
before tax 1,777 1,337 (1,466) 1,221 689 1,812 17 1,174
Tax (charge)/credit (394) (612) 85 (601) (298) (597) (531) (446)
================================ ======= ======= ======= ======= ======= ======= ======= =======
Statutory profit/(loss)
after tax 1,383 725 (1,381) 620 391 1,215 (514) 728
Attributable to:
================================ ======= ======= ======= ======= ======= ======= ======= =======
Ordinary equity holders
of the parent 1,146 465 (1,679) 379 161 965 (642) 511
Other equity holders 79 80 80 80 41 49 - -
Non-controlling interests 158 180 218 161 189 201 128 217
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
================================ ======= ======= ======= ======= ======= ======= ======= =======
Total assets 1,196.7 1,416.4 1,357.9 1,365.7 1,314.9 1,362.1 1,343.6 n/a
Risk weighted assets 376.7 395.9 401.9 412.9 411.1 436.3 442.5 n/a
Adjusted performance measures
-------------------------------- ------- ------- ------- ------- ------- ------- ------- -------
Return on average tangible
shareholders' equity 9.1% 9.0% 1.7% 7.1% 7.5% 7.6% (3.4%) 6.7%
Average tangible shareholders'
equity (GBPbn) 47.7 48.7 48.9 47.6 47.5 47.2 47.1 43.5
Return on average shareholders'
equity 7.8% 7.7% 1.5% 6.1% 6.4% 6.5% (2.9%) 5.7%
Average shareholders' equity
(GBPbn) 56.0 57.0 57.1 55.6 55.3 54.8 54.9 51.3
Cost: income ratio 64% 64% 81% 68% 66% 67% 87% 68%
Loan loss rate (bps) 41 37 48 42 44 45 59 58
Basic earnings/(loss) per
share 6.5p 6.6p 1.3p 5.2p 5.4p 5.5p (2.8p) 5.4p
Statutory performance measures
-------------------------------- ------- ------- ------- ------- ------- ------- ------- -------
Return on average tangible
shareholders' equity 9.8% 4.0% (13.8%) 3.4% 1.4% 8.4% (5.5%) 4.8%
Average tangible shareholders'
equity (GBPbn) 47.2 48.1 48.3 46.8 46.7 46.4 46.3 42.8
Return on average shareholders'
equity 8.4% 3.4% (11.8%) 2.9% 1.2% 7.2% (4.7%) 4.0%
Average shareholders' equity
(GBPbn) 55.5 56.3 56.4 54.8 54.5 54.0 54.1 50.6
Cost: income ratio 68% 71% 116% 70% 81% 66% 89% 70%
Basic earnings/(loss) per
share 7.0p 2.9p (10.2p) 2.4p 1.0p 6.0p (4.5p) 3.8p
1 Q115 adjusted total operating expenses and profit before tax
has been revised to account for the reclassification of GBP32m
of charges relating to UK customer redress to aid comparability
with Q215.
2 RWAs are on a CRD IV fully loaded basis. CRD IV rules came into
effect in Q413; therefore no Q313 comparative is available. Average
allocated equity and tangible equity are shown on an estimated
CRD IV basis. Balance sheet comparative figures have also been
restated from Q413 to adopt the offsetting amendments to IAS32,
Financial Instruments: Presentation; therefore no Q313 comparative
is available.
Barclays Core Q215 Q115(1) Q414 Q314 Q214 Q114 Q413 Q313(2)
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================== ======= ======= ======= ======= ======= ======= ======= =======
Total income net of insurance
claims 6,520 6,420 5,996 6,008 6,397 6,277 6,189 6,076
Credit impairment charges
and other provisions (488) (448) (571) (492) (456) (481) (542) (554)
============================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 6,032 5,972 5,425 5,516 5,941 5,796 5,647 5,522
Operating expenses (3,663) (3,696) (3,614) (3,557) (3,602) (3,710) (4,045) (3,758)
Litigation and conduct (41) (48) (56) (16) (136) (43) (69) (18)
Costs to achieve (184) (109) (298) (202) (237) (216) (365) (84)
UK bank levy - - (371) - - - (395) -
============================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (3,888) (3,853) (4,339) (3,775) (3,975) (3,969) (4,874) (3,860)
Other net (expenses)/income (39) 17 9 6 27 20 15 15
============================== ======= ======= ======= ======= ======= ======= ======= =======
Profit before tax 2,105 2,136 1,095 1,747 1,993 1,847 788 1,677
Attributable profit 1,273 1,284 638 1,002 1,171 1,053 601 1,009
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
============================== ======= ======= ======= ======= ======= ======= ======= =======
Total assets 858.5 949.6 886.5 899.3 846.3 863.7 832.4 n/a
Risk weighted assets 320.1 331.1 326.6 331.9 323.6 330.3 332.6 n/a
Performance measures
============================== ======= ======= ======= ======= ======= ======= ======= =======
Return on average tangible
equity 13.3% 13.5% 7.0% 11.5% 13.8% 13.2% 7.6% 15.1%
Average allocated tangible
equity (GBPbn) 38.6 38.5 37.0 35.2 34.0 32.2 31.4 26.7
Return on average equity 11.0% 11.1% 5.8% 9.5% 11.3% 10.7% 6.2% 11.8%
Average allocated equity
(GBPbn) 46.7 46.7 45.0 43.0 41.6 39.6 38.9 34.2
Cost: income ratio 60% 60% 72% 63% 62% 63% 79% 64%
1 Q115 adjusted total operating expenses and profit before tax
has been revised to account for the reclassification of GBP32m
of charges relating to UK customer redress to aid comparability
with Q215.
2 RWAs are on a CRD IV fully loaded basis. CRD IV rules came into
effect in Q413; therefore no Q313 comparative is available. Average
allocated equity and tangible equity are shown on an estimated
CRD IV basis. Balance sheet comparative figures have also been
restated from Q413 to adopt the offsetting amendments to IAS32,
Financial Instruments: Presentation; therefore no Q313 comparative
is available.
Barclays Non-Core Q215 Q115 Q414 Q314 Q214 Q114 Q413 Q313(1)
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ====== ====== ====== ====== ====== ====== ======= =======
Businesses 153 122 228 327 245 301 322 354
Securities and Loans (42) (73) (142) 106 66 87 121 60
Derivatives (79) (39) (64) (63) (26) (15) 7 (46)
-------------------------------- ------ ------ ------ ------ ------ ------ ------- -------
Total income net of insurance
claims 32 10 22 370 285 373 450 368
Credit impairment charges
and other provisions (8) (29) (2) (17) (82) (67) (176) (168)
================================ ====== ====== ====== ====== ====== ====== ======= =======
Net operating income/(expense) 24 (19) 20 353 203 306 274 200
Operating expenses (234) (219) (329) (321) (441) (419) (456) (464)
Litigation and conduct (36) (9) (83) (82) (10) (23) (208) (21)
Costs to achieve (12) (11) (41) (130) (17) (24) (103) (17)
UK bank levy - - (91) - - - (109) -
================================ ====== ====== ====== ====== ====== ====== ======= =======
Total operating expenses (282) (239) (544) (533) (468) (466) (876) (502)
Other net income/(expense) 2 2 (8) 23 (72) 6 4 10
================================ ====== ====== ====== ====== ====== ====== ======= =======
Loss before tax (256) (256) (532) (157) (337) (154) (598) (292)
Attributable loss (203) (199) (448) (173) (294) (171) (997) (274)
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
================================ ====== ====== ====== ====== ====== ====== ======= =======
Loans and advances to banks
and customers at amortised
cost 53.9 65.6 63.9 64.5 75.5 83.4 81.9 n/a
Loans and advances to customers
at fair value 17.0 18.5 18.7 18.1 17.0 17.5 17.6 n/a
Trading portfolio assets 11.6 14.6 15.9 19.2 22.9 29.4 30.7 n/a
Derivative financial instrument
assets 220.9 301.9 285.4 249.6 227.0 231.5 239.3 n/a
Derivative financial instrument
liabilities 213.6 295.6 277.1 240.0 215.0 220.9 228.3 n/a
Reverse repurchase agreements
and other similar secured
lending 15.6 42.8 49.3 73.9 86.8 98.3 104.7 n/a
Total assets 338.2 466.8 471.5 466.5 468.6 498.4 511.2 n/a
Customer deposits 19.6 20.5 21.6 22.2 28.6 30.7 29.3 n/a
Risk weighted assets 56.6 64.8 75.3 81.0 87.5 106.0 109.9 n/a
Performance measures
================================ ====== ====== ====== ====== ====== ====== ======= =======
Return on average tangible
equity(2) (4.2%) (4.5%) (5.3%) (4.4%) (6.3%) (5.6%) (11.0%) (8.4%)
Average allocated tangible
equity (GBPbn) 9.1 10.2 11.9 12.4 13.5 15.0 15.7 16.8
Return on average equity(2) (3.2%) (3.4%) (4.3%) (3.4%) (4.9%) (4.2%) (9.1%) (6.1%)
Average allocated equity
(GBPbn) 9.3 10.3 12.1 12.6 13.7 15.2 16.0 17.1
Period end allocated equity
(GBPbn) 8.3 9.7 11.0 12.1 12.7 14.9 15.1 16.3
1 RWAs are on a CRD IV fully loaded basis. CRD IV rules came into
effect in Q413; therefore no Q313 comparative is available. Average
allocated equity and tangible equity are shown on an estimated
CRD IV basis. Balance sheet comparative figures have also been
restated from Q413 to adopt the offsetting amendments to IAS32,
Financial Instruments: Presentation; therefore no Q313 comparative
is available.
2 Return on average equity and average tangible equity for Barclays
Non-Core represents its impact on the Group, being the difference
between Barclays Group returns and Barclays Core returns. This
does not represent the return on average equity and average tangible
equity of the Non-Core business.
Personal and Corporate Q215 Q115(1) Q414 Q314 Q214 Q114 Q413 Q313(2)
Banking
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------ -------- -------- -------- -------- -------- -------- -------- --------
Total income 2,210 2,174 2,231 2,236 2,188 2,173 2,166 2,252
Credit impairment charges
and other provisions (99) (79) (123) (129) (95) (135) (169) (153)
============================== ======== ======== ======== ======== ======== ======== ======== ========
Net operating income 2,111 2,095 2,108 2,107 2,093 2,038 1,997 2,099
Operating expenses (1,232) (1,234) (1,204) (1,222) (1,247) (1,278) (1,371) (1,313)
Litigation and conduct (23) (2) (15) (10) (9) (20) (17) (5)
Costs to achieve (97) (42) (195) (90) (58) (57) (219) (73)
UK bank levy - - (70) - - - (66) -
============================== ======== ======== ======== ======== ======== ======== ======== ========
Total operating expenses (1,352) (1,278) (1,484) (1,322) (1,314) (1,355) (1,673) (1,391)
Other net (expenses)/income (50) 2 4 4 1 5 3 1
============================== ======== ======== ======== ======== ======== ======== ======== ========
Profit before tax 709 819 628 789 780 688 327 709
Attributable profit 500 602 441 578 559 480 281 518
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
============================== ======== ======== ======== ======== ======== ======== ======== ========
Loans and advances
to customers at amortised
cost 217.5 219.0 217.0 215.7 216.7 215.5 212.2 210.1
Total assets 289.9 294.1 285.0 275.7 268.1 271.5 278.5 278.3
Customer deposits 298.5 298.1 299.2 295.9 298.3 297.2 295.9 289.3
Risk weighted assets 120.6 122.5 120.2 120.0 117.9 116.1 118.3 n/a
Performance measures
============================== ======== ======== ======== ======== ======== ======== ======== ========
Return on average tangible
equity 14.9% 17.8% 13.3% 17.8% 17.5% 14.7% 8.6% 15.4%
Average allocated tangible
equity (GBPbn) 13.6 13.6 13.4 13.1 12.9 13.1 13.1 13.5
Return on average equity 11.2% 13.4% 10.0% 13.4% 13.1% 11.1% 6.5% 11.8%
Average allocated equity
(GBPbn) 18.1 18.1 17.8 17.5 17.2 17.4 17.4 17.6
Cost: income ratio 61% 59% 67% 59% 60% 62% 77% 62%
Loan loss rate (bps) 18 14 22 23 17 25 31 28
Analysis of total income GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------ -------- -------- -------- -------- -------- -------- -------- --------
Personal 1,005 1,009 1,045 1,061 1,027 1,026 1,037 1,033
Corporate 970 907 922 902 889 879 866 956
Wealth 235 258 264 273 272 268 263 263
------------------------------ -------- -------- -------- -------- -------- -------- -------- --------
Total income 2,210 2,174 2,231 2,236 2,188 2,173 2,166 2,252
Analysis of loans and
advances to customers
at amortised cost GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
------------------------------ ======== ======== ======== ======== ======== ======== ======== ========
Personal 137.8 137.5 136.8 136.5 135.9 134.9 133.8 132.7
Corporate 66.0 66.5 65.1 63.1 64.8 64.2 62.5 62.5
Wealth 13.7 15.0 15.1 16.1 16.0 16.4 15.9 14.9
------------------------------ -------- -------- -------- -------- -------- -------- -------- --------
Total loans and advances
to customers at amortised
cost 217.5 219.0 217.0 215.7 216.7 215.5 212.2 210.1
Analysis of customer
deposits
------------------------------ -------- -------- -------- -------- -------- -------- -------- --------
Personal 146.3 145.3 145.8 143.0 141.6 141.3 140.5 139.2
Corporate 120.3 120.9 122.2 120.7 123.7 120.9 118.5 114.5
Wealth 31.9 31.9 31.2 32.2 33.0 35.0 36.9 35.6
------------------------------ -------- -------- -------- -------- -------- -------- -------- --------
Total customer deposits 298.5 298.1 299.2 295.9 298.3 297.2 295.9 289.3
1 Q115 adjusted total operating expenses and profit before tax
has been revised to account for the reclassification of GBP32m
of charges relating to UK customer redress to aid comparability
with Q215.
2 RWAs are on a CRD IV fully loaded basis. CRD IV rules came into
effect in Q413; therefore no Q313 comparative is available. Average
allocated equity and tangible equity are shown on an estimated
CRD IV basis.
Barclaycard Q215 Q115 Q414 Q314 Q214 Q114 Q413 Q313(1)
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------ ------ ------ ------ ------ ------ ------ ------ --------
Total income 1,222 1,135 1,109 1,123 1,082 1,042 1,034 1,050
Credit impairment charges
and other provisions (273) (290) (362) (284) (268) (269) (266) (290)
============================== ====== ====== ====== ====== ====== ====== ====== ========
Net operating income 949 845 747 839 814 773 768 760
Operating expenses (496) (465) (456) (449) (420) (402) (446) (442)
Litigation and conduct - - - - - - (11) (13)
Costs to achieve (31) (25) (50) (32) (23) (13) (38) (6)
UK bank levy - - (29) - - - (22) -
============================== ====== ====== ====== ====== ====== ====== ====== ========
Total operating expenses (527) (490) (535) (481) (443) (415) (517) (461)
Other net income 7 11 1 4 25 10 5 12
============================== ====== ====== ====== ====== ====== ====== ====== ========
Profit before tax 429 366 213 362 396 368 256 311
Attributable profit 307 259 137 262 285 254 169 214
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
============================== ====== ====== ====== ====== ====== ====== ====== ========
Loans and advances
to customers at amortised
cost 36.9 36.8 36.6 34.8 33.2 31.9 31.5 30.4
Total assets 41.9 42.4 41.3 38.9 36.2 35.0 34.4 33.4
Customer deposits 7.7 8.0 7.3 6.5 5.9 5.8 5.1 4.7
Risk weighted assets 40.3 39.9 39.9 38.6 37.7 36.4 35.7 n/a
Performance measures
============================== ====== ====== ====== ====== ====== ====== ====== ========
Return on average tangible
equity 24.9% 21.0% 11.2% 21.8% 24.7% 22.6% 16.1% 20.2%
Average allocated tangible
equity (GBPbn) 5.0 5.0 4.9 4.8 4.6 4.5 4.2 4.2
Return on average equity 19.7% 16.6% 9.0% 17.5% 19.7% 18.2% 12.7% 15.9%
Average allocated equity
(GBPbn) 6.3 6.3 6.2 6.0 5.8 5.6 5.3 5.4
Cost: income ratio 43% 43% 48% 43% 41% 40% 50% 44%
Loan loss rate (bps) 283 305 374 309 309 325 320 360
1 RWAs are on a CRD IV fully loaded basis. CRD IV rules came into
effect in Q413; therefore no Q313 comparative is available. Average
allocated equity and tangible equity are shown on an estimated
CRD IV basis.
Africa Banking Q215 Q115 Q414 Q314 Q214 Q114 Q413 Q313(1)
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================== ====== ====== ====== ====== ====== ====== ====== ========
Total income net of
insurance claims 910 948 963 928 895 878 980 1,004
Credit impairment charges
and other provisions (103) (90) (79) (74) (100) (96) (104) (101)
============================== ====== ====== ====== ====== ====== ====== ====== ========
Net operating income 807 858 884 854 795 782 876 903
Operating expenses (557) (559) (590) (572) (545) (537) (616) (605)
Litigation and conduct - - (1) (1) - - - -
Costs to achieve (7) (6) (23) (11) (8) (9) (15) (2)
UK bank levy - - (45) - - - (42) -
============================== ====== ====== ====== ====== ====== ====== ====== ========
Total operating expenses (564) (565) (659) (584) (553) (546) (673) (607)
Other net income 2 2 3 2 2 4 - 3
============================== ====== ====== ====== ====== ====== ====== ====== ========
Profit before tax 245 295 228 272 244 240 203 299
Attributable profit 96 112 88 91 78 103 30 104
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
============================== ====== ====== ====== ====== ====== ====== ====== ========
Loans and advances
to customers at amortised
cost 33.8 35.7 35.2 34.5 33.8 35.0 34.9 36.5
Total assets 54.0 57.8 55.5 54.6 52.4 54.1 54.9 57.3
Customer deposits 34.4 35.0 35.0 33.4 33.2 34.0 34.6 35.4
Risk weighted assets 36.4 39.3 38.5 37.9 36.5 36.6 38.0 n/a
Performance measures
============================== ====== ====== ====== ====== ====== ====== ====== ========
Return on average tangible
equity 13.2% 14.7% 11.9% 13.1% 11.3% 15.5% 4.2% 14.1%
Average allocated tangible
equity (GBPbn) 2.9 3.1 2.9 2.8 2.8 2.7 2.8 3.0
Return on average equity 9.7% 10.8% 8.7% 9.5% 8.1% 11.1% 3.0% 10.0%
Average allocated equity
(GBPbn) 3.9 4.1 4.0 3.8 3.8 3.7 4.0 4.1
Cost: income ratio 62% 60% 68% 63% 62% 62% 69% 60%
Loan loss rate (bps) 112 94 83 79 111 104 105 104
Constant currency(2)
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm
============================== ====== ====== ====== ====== ====== ======
Total income net of
insurance claims 910 913 919 906 870 851
Credit impairment charges
and other provisions (103) (87) (75) (71) (97) (93)
============================== ====== ====== ====== ====== ====== ======
Net operating income 807 826 844 835 773 758
Operating expenses (557) (539) (564) (559) (530) (521)
Litigation and conduct - - (1) (1) - -
Costs to achieve (7) (6) (22) (10) (9) (8)
UK bank levy - - (45) - - -
============================== ====== ====== ====== ====== ====== ======
Total operating expenses (564) (545) (632) (570) (539) (529)
Other net income 2 2 3 1 2 4
============================== ====== ====== ====== ====== ====== ======
Profit before tax 245 283 215 266 236 233
Attributable profit 96 107 83 88 80 99
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
============================== ====== ====== ====== ====== ====== ======
Loans and advances
to customers at amortised
cost 33.8 33.7 33.2 33.1 32.1 32.1
Total assets 54.0 54.6 52.2 52.2 49.9 49.7
Customer deposits 34.4 33.0 33.1 32.0 31.6 31.3
Risk weighted assets 36.4 37.0 36.3 36.3 34.7 33.6
1 RWAs are on a CRD IV fully loaded basis. CRD IV rules came into
effect in Q413; therefore no Q313 comparative is available.
2 Constant currency results are calculated by converting ZAR results
into GBP using the average exchange rate for the three months
ended 30 June 2015 for the income statement and the 30 June 2015
closing exchange rate for the balance sheet to eliminate the
impact of movement in exchange rates between the reporting periods.
Investment Bank Q215 Q115 Q414 Q314 Q214 Q114 Q413 Q313(1)
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=====================================
Investment banking fees 586 549 527 410 661 513 571 526
Lending 122 83 111 137 66 103 68 42
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Banking 708 632 638 547 727 616 639 568
Credit 272 274 173 255 270 346 231 308
Equities 616 619 431 395 629 591 421 524
Macro 554 624 424 470 504 552 494 457
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Markets 1,442 1,517 1,028 1,120 1,403 1,489 1,146 1,289
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Banking & Markets 2,150 2,149 1,666 1,667 2,130 2,105 1,785 1,857
Other - - - (2) 24 (2) (3) (6)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income 2,150 2,149 1,666 1,665 2,154 2,103 1,782 1,851
Credit impairment (charges)/releases
and other provisions (12) 11 (7) (5) 7 19 (6) (10)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 2,138 2,160 1,659 1,660 2,161 2,122 1,776 1,841
Operating expenses (1,328) (1,410) (1,351) (1,305) (1,357) (1,491) (1,575) (1,373)
Litigation and conduct (13) (44) (33) (1) (85) (10) (31) -
Costs to achieve (32) (31) (22) (70) (152) (130) (71) (3)
UK bank levy - - (218) - - - (236) -
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (1,373) (1,485) (1,624) (1,376) (1,594) (1,631) (1,913) (1,376)
Profit/(loss) before
tax 765 675 35 284 567 491 (137) 465
Attributable profit/(loss) 417 344 (150) 112 204 231 (74) 283
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Loans and advances to
banks and customers
at amortised cost 123.1 134.4 106.3 123.1 117.2 129.7 104.5 n/a
Trading portfolio assets 81.8 99.1 94.8 98.8 101.2 101.2 96.6 n/a
Derivative financial
instrument assets 118.5 175.9 152.6 131.4 104.2 99.9 108.7 n/a
Derivative financial
instrument liabilities 127.7 186.0 160.6 137.6 109.5 106.7 116.6 n/a
Reverse repurchase agreements
and other similar secured
lending 58.4 58.0 64.3 82.8 83.0 86.6 78.2 n/a
Total assets 420.1 509.6 455.7 488.4 446.2 469.4 438.0 n/a
Risk weighted assets 115.3 123.0 122.4 127.9 123.9 125.2 124.4 n/a
Performance measures
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Return on average tangible
equity 12.2% 9.7% (3.9%) 3.3% 5.6% 6.4% (2.1%) 7.5%
Average allocated tangible
equity (GBPbn) 13.9 14.5 14.7 14.2 14.8 14.7 14.4 15.1
Return on average equity 11.5% 9.1% (3.7%) 3.1% 5.3% 6.1% (2.0%) 7.2%
Average allocated equity
(GBPbn) 14.8 15.4 15.6 15.0 15.5 15.4 15.1 15.7
Cost: income ratio 64% 69% 97% 83% 74% 78% 107% 74%
1 RWAs are on a CRD IV fully loaded basis. CRD IV rules came into
effect in Q413; therefore no Q313 comparative is available. Average
allocated equity and tangible equity are shown on an estimated
CRD IV basis. Balance sheet comparative figures have also been
restated from Q413 to adopt the offsetting amendments to IAS32,
Financial Instruments: Presentation; therefore no Q313 comparative
is available.
Head Office Q215 Q115 Q414 Q314 Q214 Q114 Q413 Q313(1)
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================================== ===== ===== ===== ===== ===== ===== ===== =======
Total income/(expenses) 28 14 27 56 78 81 227 (81)
Credit impairment (charges)/releases
and other provisions (1) - - - - - 3 -
===================================== ===== ===== ===== ===== ===== ===== ===== =======
Net operating income/(expenses) 27 14 27 56 78 81 230 (81)
Operating expenses (50) (28) (11) (9) (34) (3) (37) (25)
Litigation and conduct (5) (2) (8) (4) (42) (12) (10) -
Costs to achieve (17) (5) (8) - 5 (7) (22) -
UK bank levy - - (9) - - - (29) -
===================================== ===== ===== ===== ===== ===== ===== ===== =======
Total operating expenses (72) (35) (36) (13) (71) (22) (98) (25)
Other net income/(expenses) 2 2 - (3) (1) 1 7 (1)
===================================== ===== ===== ===== ===== ===== ===== ===== =======
(Loss)/profit before
tax (43) (19) (9) 40 6 60 139 (107)
Attributable (loss)/profit (47) (33) 122 (41) 45 (15) 192 (110)
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
===================================== ===== ===== ===== ===== ===== ===== ===== =======
Total assets 52.6 45.7 49.1 41.5 43.3 33.7 26.6 n/a
Risk weighted assets 7.5 6.3 5.6 7.5 7.6 16.0 16.2 n/a
Average allocated tangible
equity 3.2 2.3 1.1 0.3 (1.1) (2.8) (3.1) (9.1)
Average allocated equity 3.6 2.8 1.4 0.7 (0.7) (2.5) (2.9) (8.6)
1 RWAs are on a CRD IV fully loaded basis. CRD IV rules came into
effect in Q413; therefore no Q313 comparative is available. Average
allocated equity and tangible equity are shown on an estimated
CRD IV basis. Balance sheet comparative figures have also been
restated from Q413 to adopt the offsetting amendments to IAS32,
Financial Instruments: Presentation; therefore no Q313 comparative
is available.
Performance Management
Returns and equity by business
Returns on average equity and average tangible equity are
calculated as profit for the period attributable to ordinary equity
holders of the parent (adjusted for the tax credit recorded in
reserves in respect of interest payments on other equity
instruments) divided by average allocated equity or average
allocated tangible equity for the period as appropriate, excluding
non-controlling and other equity interests for businesses, apart
from Africa Banking (see below). Allocated equity has been
calculated as 10.5% of CRD IV fully loaded risk weighted assets for
each business, adjusted for CRD IV fully loaded capital deductions,
including goodwill and intangible assets, reflecting the
assumptions the Group uses for capital planning purposes. Head
Office equity includes the unallocated Group equity arising from
the difference between the CRD IV CET1 ratio and 10.5%. Allocated
tangible equity is calculated using the same method, but excludes
goodwill and intangible assets.
For Africa Banking, the equity used for return on average equity
is Barclays' share of the statutory equity of the BAGL entity
(together with that of the Barclays Egypt and Zimbabwe businesses
which remain outside the BAGL corporate entity), as well as the
Barclays' goodwill on acquisition of these businesses. The tangible
equity for return on tangible equity uses the same basis, but
excludes both the Barclays' goodwill on acquisition and the
goodwill and intangibles held within the BAGL statutory equity.
Half year ended Half year ended
30.06.15 30.06.14
Return on average tangible equity % %
==================================== =============== ===============
Personal and Corporate Banking 16.4% 16.1%
Barclaycard 22.9% 23.6%
Africa Banking 14.0% 13.3%
Investment Bank 10.9% 6.0%
==================================== =============== ===============
Barclays Core excluding Head Office 14.9% 12.6%
Head Office impact(1) (1.5%) 0.9%
==================================== =============== ===============
Barclays Core 13.4% 13.5%
Barclays Non-Core impact(1) (4.3%) (6.0%)
==================================== =============== ===============
Barclays Group adjusted total 9.1% 7.5%
Half year ended Half year ended
30.06.15 30.06.14
Return on average equity %%
==================================== =============== ==============
Personal and Corporate Banking 12.3% 12.1%
Barclaycard 18.2% 18.9%
Africa Banking 10.3% 9.6%
Investment Bank 10.2% 5.7%
==================================== =============== ===============
Barclays Core excluding Head Office 12.3% 10.5%
Head Office impact(1) (1.2%) 0.5%
==================================== =============== ===============
Barclays Core 11.1% 11.0%
Barclays Non-Core impact(1) (3.4%) (4.5%)
==================================== =============== ===============
Barclays Group adjusted total 7.7% 6.5%
Half year ended Half year ended
Profit/(loss) attributable to ordinary 30.06.15 30.06.14
equity holders of the parent GBPm GBPm
======================================= =============== ===============
Personal and Corporate Banking 1,114 1,044
Barclaycard 570 540
Africa Banking 208 181
Investment Bank 774 441
Head Office (83) 31
======================================= =============== ===============
Barclays Core 2,583 2,237
Barclays Non-Core (396) (458)
======================================= =============== ===============
Barclays Group adjusted total 2,187 1,779
1 Return on average equity and average tangible equity for Head
Office and Barclays Non-Core represents their impact on Barclays
Core and the Group respectively. This does not represent the
return on average equity and average tangible equity of Head
Office or the Non-Core business.
Half year ended Half year ended
30.06.15 30.06.14
Average allocated tangible equity GBPbn GBPbn
================================== =============== ===============
Personal and Corporate Banking 13.6 13.0
Barclaycard 5.0 4.6
Africa Banking 3.0 2.7
Investment Bank 14.2 14.7
Head Office(1) 2.7 (1.9)
================================== =============== ===============
Barclays Core 38.5 33.1
Barclays Non-Core 9.7 14.2
================================== =============== ===============
Barclays Group adjusted total 48.2 47.3
Half year ended Half year ended
30.06.15 30.06.14
Average allocated equity GBPbn GBPbn
================================== =============== ===============
Personal and Corporate Banking 18.1 17.3
Barclaycard 6.3 5.7
Africa Banking 4.0 3.8
Investment Bank 15.1 15.4
Head Office(1) 3.2 (1.6)
================================== =============== ===============
Barclays Core 46.7 40.6
Barclays Non-Core 9.8 14.5
================================== =============== ===============
Barclays Group adjusted total 56.5 55.1
As at 30.06.15 As at 31.12.14
Period end allocated equity GBPbn GBPbn
================================== =============== ===============
Personal and Corporate Banking 17.9 17.9
Barclaycard 6.3 6.2
Africa Banking 3.9 4.0
Investment Bank 13.7 14.7
Head Office(1) 5.2 2.1
================================== =============== ===============
Barclays Core 47.0 44.9
Barclays Non-Core 8.3 11.0
================================== =============== ===============
Barclays Group adjusted total 55.3 55.9
1 Based on risk weighted assets and capital deductions in Head
Office and Other Operations, plus the residual balance of average
ordinary shareholders' equity and tangible ordinary shareholders'
equity.
Margins and balances
Half year ended 30.06.15 Half year ended 30.06.14
===================================== =====================================
Average Average
Net interest customer Net interest Net interest customer Net interest
income assets margin income assets margin
GBPm GBPm % GBPm GBPm %
======================== ============ ========= ============ ============ ========= ============
Personal and Corporate
Banking 3,203 214,906 3.01 3,057 208,160 2.96
Barclaycard 1,704 37,967 9.05 1,500 33,410 9.05
Africa Banking 1,068 36,096 5.97 1,007 34,574 5.87
======================== ============ ========= ============ ============ ========= ============
Total Personal and
Corporate Banking,
Barclaycard and Africa
Banking 5,975 288,969 4.17 5,564 276,144 4.06
Investment Bank 276 334
Head Office (178) 1
======================== ============ ========= ============ ============ ========= ============
Core 6,073 5,899
Barclays Non-Core 128 183
======================== ============ ========= ============ ============ ========= ============
Total net interest
income 6,201 6,082
-- Total PCB, Barclaycard and Africa Banking NII increased 7% to 5,975m due to:
- An increase in average customer assets to GBP289.0bn (2014:
GBP276.1bn) with growth in PCB Mortgages, Barclaycard, and Africa
Banking
- Net interest margin increased 11bps to 4.17% primarily due to
higher deposits margins within Personal and Corporate Banking,
partially offset by the impact of mortgage margin pressure from
existing customer rate switching and lower Corporate debt margins.
Group NII increased to GBP6.2bn (2014: GBP6.1bn) including net
structural hedge contributions of GBP0.7bn (2014: GBP0.8bn)
-- Net interest margin by business reflects movements in the
Group's internal funding rates which are based on the cost to the
Group of alternative funding in wholesale markets. The internal
funding rate prices intra-group funding and liquidity to
appropriately give credit to businesses with net surplus liquidity
and to charge those businesses in need of alternative funding at a
rate that is driven by prevailing market rates and includes a term
premium
Quarterly analysis for PCB, Barclaycard
and Africa Banking:
Quarter ended 30.06.15
=====================================
Average
Net interest customer Net interest
income assets margin
GBPm GBPm %
======================================== ============ ========= ============
Personal and Corporate Banking 1,602 215,069 2.99
Barclaycard 883 38,025 9.31
Africa Banking 521 35,610 5.87
======================================== ============ ========= ============
Total Personal and Corporate Banking,
Barclaycard and Africa Banking 3,006 288,704 4.18
Quarter ended 31.03.15
======================================== =====================================
Personal and Corporate Banking 1,601 214,645 3.02
Barclaycard 821 37,909 8.78
Africa Banking(1) 547 36,603 6.06
======================================== ============ ========= ============
Total Personal and Corporate Banking,
Barclaycard and Africa Banking 2,969 289,157 4.18
Quarter ended 31.12.14
======================================== =====================================
Personal and Corporate Banking 1,619 212,444 3.02
Barclaycard 757 36,932 8.13
Africa Banking 546 36,465 5.94
======================================== ============ ========= ============
Total Personal and Corporate Banking,
Barclaycard and Africa Banking 2,922 285,841 4.06
Quarter ended 30.09.14
======================================== =====================================
Personal and Corporate Banking 1,622 210,859 3.05
Barclaycard 787 35,308 8.84
Africa Banking 540 35,026 6.12
======================================== ============ ========= ============
Total Personal and Corporate Banking,
Barclaycard and Africa Banking 2,949 281,193 4.16
1 Q115 Net Interest Income has been revised by GBP14m to accurately
reflect the classification of income across financial statement
line items.
Risk Management
Risk management and principal risks
Barclays risk management responsibilities are laid out in the
Enterprise Risk Management Framework (ERMF), which creates clear
ownership and accountability, with the purpose that the Group's
most significant risk exposures are understood and managed in
accordance with agreed risk appetite, and that there is regular
reporting of both risk exposures and the operating effectiveness of
controls. It includes those risks incurred by Barclays that are
foreseeable, continuous, and material enough to merit establishing
specific bank-wide control frameworks. These are known as Key Risks
and are grouped into five Principal Risks: Credit Risk; Market
Risk; Funding Risk; Operational Risk; and Conduct Risk.
Further detail on these risks and how they are managed is
available from the 2014 Annual Report and Accounts or online at
www.barclays.com/investorrelations. For 2015, reputation risk has
been recognised as a Key Risk within conduct risk given the close
alignment between them and the fact that as separate Principal
Risks they had a common Principal Risk Officer. There has been no
other significant change to the Key Risks, risk management or
principal uncertainties during the period or expected for the
remaining six months of the financial year.
While the risks to the Eurozone have receded slightly following
the recent agreement for a bailout of Greece, should this agreement
falter the potential for a default by Greece and subsequent Euro
exit would re-emerge, which could disrupt capital markets as well
as local markets and adversely impact Barclays' performance where
it has larger asset and funding positions, e.g. Italy and
Portugal.
The following section gives an overview of the performance in
Funding Risk - Liquidity, Funding Risk - Capital, Credit Risk and
Market Risk for the period.
Funding & liquidity
Whilst Barclays has a comprehensive framework for managing the
Group's liquidity risks, liquidity risk is managed separately at
Barclays Africa Group Limited (BAGL) due to local currency and
funding requirements. Unless stated otherwise, all disclosures in
this section exclude BAGL, which is reported on a stand-alone
basis. Adjusting for local requirements, BAGL's liquidity risk is
managed on a consistent basis to Barclays Group.
Liquidity stress testing
Compliance with internal and regulatory stress Barclays' LRA (30 day Barclays specific Estimated CRDIV LCR
tests requirement)(1)
=============================================== ============================================== ===================
GBPbn GBPbn
Eligible liquidity buffer 145 150
Net stress outflows 122 124
=============================================== ============================================== ===================
Surplus 23 26
Liquidity pool as a percentage of anticipated
net outflows as at 30 June 2015 119% 121%
=============================================== ============================================== ===================
Liquidity pool as a percentage of anticipated
net outflows as at 31 December 2014 124% 124%
Barclays manages the Group's liquidity position against the
Group's internally defined Liquidity Risk Appetite (LRA) and
regulatory metrics, such as the Individual Liquidity Guidance (ILG)
provided by the PRA, and the CRD IV Liquidity Coverage Ratio (LCR).
As at 30 June 2015, the Group held eligible liquid assets
significantly in excess of 100% of net stress outflows for both the
30 day Barclays-specific LRA and the LCR. The surpluses were built
to position the Group for outflows associated with credit rating
changes as a result of revised assessment of sovereign support.
Whilst the ratings changes occurred during Q215, the expected
funding impacts had not fully materialised by the end of H115.
Barclays estimated its Net Stable Funding Ratio (NSFR) at 106%
(2014: 102%) based on the final NSFR guidelines published by the
BCBS in October 2014.
1 Of the three stress scenarios monitored as part of the LRA, the
30 day Barclays specific scenario results in the lowest ratio
at 119% (2014: 124%). This compares to 149% (2014: 135%) under
the 90 day market-wide scenario and 121% (2014: 127%) under the
30 day combined scenario.
Funding Risk - Liquidity
Composition of the Group Liquidity
Pool
Liquidity Liquidity Liquidity pool Liquidity
pool 30.06.2015 pool of of which CRDIV pool 31.12.2014
which LCR-eligible(2)
PRA eligible(1)
================ ================ ================== ================
Level Level
1 2A
As at 30.06.2015 GBPbn GBPbn GBPbn GBPbn GBPbn
================ ================ ======== ======== ================
Cash and deposits with central
banks(3) 31 28 28 1 37
Government bonds(4)
AAA rated 74 73 73 - 73
AA+ to AA- rated 9 8 9 - 12
Other government bonds 3 2 - 2 -
====================================== ================ ================ ======== ======== ================
Total Government bonds 86 83 82 2 85
Other
Supranational bonds and multilateral
development banks 7 3 7 - 9
Agencies and agency mortgage-backed
securities 15 - 9 6 11
Covered bonds (rated AA- and
above) 3 - 3 - 3
Other 3 - - - 4
====================================== ================ ================ ======== ======== ================
Total other 28 3 19 6 27
Total as at 30 June 2015 145 114 129 9
====================================== ================ ================ ======== ========
Total as at 31 December 2014 149 122 136 7
Barclays manages the liquidity pool on a centralised basis. The
liquidity pool is held unencumbered and is not used to support
payment or clearing requirements. As at 30 June 2015, 93% (2014:
92%) of the liquidity pool was located in Barclays Bank PLC and was
available to meet liquidity needs across the Barclays Group. The
residual liquidity pool is held predominantly within Barclays
Capital Inc. The portion of the liquidity pool outside of Barclays
Bank PLC is held primarily against entity-specific stressed
outflows and regulatory requirements.
Deposit funding
As at 30.06.2015 As at 31.12.14
================================== ==============
Funding of loans and advances Loans and Loan to Loan to
to customers advances Customer deposit deposit
(including BAGL) to customers deposits ratio ratio
GBPbn GBPbn % %
==================================== ------------- --------- -------- ==============
Personal and Corporate banking 217 298
Barclaycard 37 8
Africa Banking 34 34
Non-Core retail 18 7
==================================== ============= ========= ======== ==============
Total Retail funding 306 347 88 89
Investment Bank, Non-core wholesale
and Head Office 37 14
Trading settlement balances
and collateral 88 77
==================================== ============= ========= ======== ==============
Total 431 438 98 100
PCB, Barclaycard, Africa Banking and Non-Core retail are largely
funded by customer deposits. The loan to deposit ratio for these
businesses was 88% (2014: 89%). The customer deposits in excess of
loans and advances are primarily used to fund liquidity buffer
requirements for these businesses. The Investment Bank is funded
with wholesale liabilities and does not rely on customer deposit
funding from these businesses. The loan to deposit ratio for the
Group was 98% (2014: 100%).
1 GBP114bn (2014: GBP122bn) of the liquidity pool is PRA eligible
as per BIPRU 12.7. In addition, there are GBP12bn (2014: GBP12bn)
of Level 2 assets available, as per the PRA's announcement in
August 2013 that certain assets specified by PRA as Level 2 assets
can be used on a transitional basis.
2 The LCR-eligible assets presented in this table represent only
those assets which are also eligible for the Group liquidity
pool and do not include any Level 2B assets as defined by the
CRDIV Delegated Act.
3 Of which over 95% (2014: over 95%) was placed with the Bank of
England, US Federal Reserve, European Central Bank, Bank of Japan
and Swiss National Bank.
4 Of which over 90% (2014: over 95%) are comprised of UK, US, Japanese,
French, German, Danish, Swiss and Dutch securities.
Wholesale funding
Funding of other assets
As at 30.06.15
Assets GBPbn Liabilities GBPbn
================================= ===== ================================ =====
Trading Portfolio Assets 33 Repurchase agreements 85
Reverse repurchase agreements 52
Reverse repurchase agreements 41 Trading Portfolio Liabilities 41
Derivative Financial Instruments 340 Derivative Financial Instruments 342
Less than 1 year wholesale
Liquidity pool (1) 105 debt 68
Other unencumbered assets Greater than 1 year wholesale
(2) 115 debt and equity 150
-- Trading portfolio assets are largely funded by repurchase
agreements with 57% (2014: 54%) secured against highly liquid
assets(3) (.) The weighted average maturity of these repurchase
agreements secured against less liquid assets was 77 days (2014: 56
days)
-- The majority of reverse repurchase agreements are matched by
repurchase agreements. As at 30 June 2015, 55% (2014: 66%) of
matched book activity was secured against highly liquid assets(3) .
The remainder of reverse repurchase agreements are used to settle
trading portfolio liabilities
-- Derivative assets and liabilities are largely matched. A
substantial proportion of balance sheet derivative positions
qualify for counterparty netting and the remaining portions are
largely offset once netted against cash collateral received and
paid
-- The Group liquidity pool is primarily funded by wholesale
debt with the remainder being funded by customer deposits and other
assets are largely matched by term wholesale debt and equity
1 The portion of the liquidity pool estimated to be funded by wholesale
funds.
2 Predominantly available for sale investments, trading portfolio
assets, financial assets designated at fair value and loans and
advances to banks.
3 Highly liquid assets are limited to government bonds, US agency
securities and US agency mortgage-backed securities.
Composition of wholesale funding(1)
In preparation for a Single Point of Entry resolution model, the
Group has started to issue debt capital and term senior unsecured
funding out of Barclays PLC, the holding company. The Group expects
to refinance most debt capital and term senior unsecured debt out
of Barclays PLC over time.
Maturity profile
Over Over
one three Over six Over Over two
month months months nine years
but not but not but not months Over one but not
more more more but not year but more
Not more than than than more Sub-total not more than Over
than one three six nine than one less than than two five five
month months months months year one year years years years Total
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
====================== ======== ======= ======= ======== ======== ========= ======== ======== ======== =====
Barclays PLC
Senior unsecured
(Public Benchmark) - - - - - - - 2.5 2.0 4.5
Subordinated
liabilities - - - - - - - 0.8 - 0.8
====================== ======== ======= ======= ======== ======== ========= ======== ======== ======== =====
Barclays Bank PLC
Deposits from Banks 11.4 6.3 1.2 0.7 0.5 20.1 0.5 - 0.4 21.0
Certificates of
Deposit and
Commercial Paper 1.1 6.2 6.3 4.2 2.3 20.1 0.8 1.8 0.7 23.4
Asset Backed
Commercial Paper 3.2 1.9 0.6 - - 5.7 - - - 5.7
Senior unsecured
(Public benchmark) - 1.0 - 1.3 - 2.3 4.8 5.4 3.6 16.1
Senior unsecured
(Privately placed)(2) 1.8 1.7 2.0 2.1 2.7 10.3 6.9 11.4 10.5 39.1
Covered bonds/ABS - 1.1 0.2 0.9 1.1 3.3 4.1 6.2 4.0 17.6
Subordinated
liabilities - - - - - - - 3.0 15.3 18.3
Other(3) 2.9 0.9 1.1 1.0 0.2 6.1 1.7 1.1 1.6 10.5
====================== ======== ======= ======= ======== ======== ========= ======== ======== ======== =====
Total as at 30.06.15 20.4 19.1 11.4 10.2 6.8 67.9 18.8 32.2 38.1 157.0
====================== ======== ======= ======= ======== ======== ========= ======== ======== ======== =====
Of which secured 4.7 3.8 1.5 1.4 1.3 12.7 4.4 6.3 4.1 27.5
Of which unsecured 15.7 15.3 9.9 8.8 5.5 55.2 14.4 25.9 34.0 129.5
====================== ======== ======= ======= ======== ======== ========= ======== ======== ======== =====
Total as at 31.12.14 16.8 23.2 14.4 13.5 7.5 75.4 14.0 36.6 45.4 171.4
====================== ======== ======= ======= ======== ======== ========= ======== ======== ======== =====
Of which secured 5.3 7.8 1.7 1.9 0.3 17.0 2.7 7.6 6.0 33.3
Of which unsecured 11.5 15.4 12.7 11.6 7.2 58.4 11.3 29.0 39.4 138.1
====================== ======== ======= ======= ======== ======== ========= ======== ======== ======== =====
Outstanding wholesale funding includes GBP39bn (2014: GBP45bn)
of privately placed senior unsecured notes in issue. These notes
are issued through a variety of distribution channels including
intermediaries and private banks. Although not a requirement, the
liquidity pool exceeded wholesale funding maturing in less than one
year by GBP77bn (2014: GBP74bn).
The average maturity of wholesale funding net of the liquidity
pool was at least 120 months (2014: 105 months).
Term financing
The Group issued GBP6bn of term funding net of early redemptions
during H115. Barclays has GBP9bn of term funding maturing in the
remainder of 2015 and GBP13bn in 2016(4) .
The Group expects to issue more public wholesale debt in the
remainder of 2015, in order to maintain a stable and diverse
funding base by type, currency and distribution channel.
1 The composition of wholesale funds comprises the balance sheet
reported Deposits from Banks, Financial liabilities at Fair Value,
Debt Securities in Issue and Subordinated Liabilities, excluding
cash collateral and settlement balances. It also does not include
collateral swaps, including participation in the Bank of England's
Funding for Lending Scheme.
2 Includes structured notes of GBP33bn, GBP9bn of which matures
within one year.
3 Primarily comprised of fair value deposits GBP5bn and secured
financing of physical gold GBP4bn.
4 Includes GBP1bn of bilateral secured funding in 2015 and GBP1bn
in 2016.
Credit rating
Barclays Bank PLC Standard Moody's Fitch
& Poor's
-------------------- ------------ ------------- ----------
Long Term (Outlook) A- (Stable) A2 (Stable) A (Stable)
Short Term A-2 P-1 F1
Standalone rating(1) bbb+ baa2 a
Barclays PLC Standard Moody's Fitch
& Poor's
-------------------- ------------ ------------- ----------
Long Term (Outlook) BBB (Stable) Baa3 (Stable) A (Stable)
Short Term A-2 P-3 F1
During Q215 all three credit rating agencies took industry-wide
rating actions driven by their assessment of sovereign support
and/or methodology updates. S&P downgraded the long- and
short-term senior unsecured ratings of Barclays Bank PLC by one
notch from A/A-1 to A-/A-2. This was driven by the removal of two
notches of sovereign support, partially offset by a one notch
uplift to reflect "Additional Loss Absorbing Capacity". Moody's
downgraded the long- and short-term senior unsecured debt ratings
of Barclays PLC from A3/P-2 to Baa3/P-3 due to the removal of three
sovereign support notches with no methodology driven uplift. Fitch
affirmed both Barclays and Barclays Bank PLC's senior unsecured
ratings at A/F1. Barclays' standalone credit ratings have not been
impacted by these actions. The outlook on all credit ratings is now
stable.
Barclays Africa Group Limited
-- Liquidity risk is managed separately at BAGL due to local
currency, funding and regulatory requirements
-- In addition to the Group liquidity pool, BAGL held GBP7bn
(2014: GBP7bn) of liquidity pool assets against BAGL-specific
anticipated stressed outflows. The liquidity pool consists of South
African government bonds and Treasury bills
-- The BAGL loan to deposit ratio was 100% (2014: 102%)
-- As at 30 June 2015, BAGL had GBP10bn of wholesale funding
outstanding (2014: GBP9bn), of which GBP5bn matures in less than
one year (2014: GBP5bn)
1 Refers to Standard & Poor's Stand-Alone Credit Profile (SACP),
Moody's Baseline Credit Assessment (BCA) and Fitch's Viability
Rating (VR).
Funding Risk - Capital
CRD IV capital
The Capital Requirements Regulation and Capital Requirements
Directive implemented Basel 3 within the EU (collectively known as
CRD IV) on 1 January 2014. The rules are supplemented by Regulatory
Technical Standards and the PRA's rulebook, including the
implementation of transitional rules. However, rules and guidance
are still subject to change as certain aspects of CRD IV are
dependent on final technical standards and clarifications to be
issued by the EBA and adopted by the European Commission and the
PRA. All capital, RWA and leverage calculations reflect Barclays'
interpretation of the current rules.
Capital ratios As at As at As at
30.06.15 31.03.15 31.12.14
=================================================== ======== ======== ========
Fully loaded Common Equity Tier 1 11.1% 10.6% 10.3%
PRA Transitional Common Equity Tier 1(1,2) 11.1% 10.6% 10.2%
PRA Transitional Tier 1(3,4) 14.0% 13.3% 13.0%
PRA Transitional Total Capital(3,4) 17.4% 16.8% 16.5%
Capital resources GBPm GBPm GBPm
=================================================== ======== ======== ========
Total equity (excluding non-controlling
interests) per the balance sheet 59,281 60,693 59,567
Less: Other equity instruments (recognised
as AT1 capital) (4,325) (4,323) (4,322)
Adjustment to retained earnings for foreseeable
dividends (731) (981) (615)
Minority interests (amount allowed in consolidated
CET1) 1,200 1,249 1,227
Other regulatory adjustments and deductions:
Additional value adjustments (PVA) (1,506) (1,984) (2,199)
Goodwill and intangible assets (8,145) (8,255) (8,127)
Deferred tax assets that rely on future
profitability excluding temporary differences (1,132) (1,180) (1,080)
Fair value reserves related to gains or
losses on cash flow hedges (1,185) (2,029) (1,814)
Excess of expected losses over impairment (1,536) (1,727) (1,772)
Gains or losses on liabilities at fair value
resulting from own credit 127 497 658
Direct and indirect holdings by an institution
of own CET1 instruments (57) (56) (25)
Other regulatory adjustments 1 (72) (45)
=================================================== ======== ======== ========
Fully loaded CET1 capital 41,992 41,833 41,453
Regulatory adjustments relating to unrealised
gains(1) - - (583)
=================================================== ======== ======== ========
PRA Transitional CET1 capital 41,992 41,833 40,870
Additional Tier 1 (AT1) capital
Capital instruments and related share premium
accounts 4,325 4,323 4,322
Qualifying AT1 capital (including minority
interests) issued by subsidiaries 6,666 6,815 6,870
Other regulatory adjustments and deductions (130) (130) -
=================================================== ======== ======== ========
Transitional Additional Tier 1 capital 10,861 11,008 11,192
=================================================== ======== ======== ========
PRA Transitional Tier 1 capital 52,853 52,841 52,062
Tier 2 (T2) capital
Capital instruments and related share premium
accounts 792 840 800
Qualifying T2 capital (including minority
interests) issued by subsidiaries 12,268 13,126 13,529
Other regulatory adjustments and deductions (254) (254) (48)
=================================================== ======== ======== ========
PRA Transitional total regulatory capital 65,659 66,553 66,343
Risk weighted assets 376,683 395,899 401,900
1 The transitional regulatory adjustment for unrealised gains is
no longer applicable from 1 January 2015 resulting in CET 1 capital
on a fully loaded basis being equal to that on a transitional
basis.
2 The CRD IV CET1 ratio (FSA October 2012 transitional statement)
as applicable to Barclays' Tier 2 Contingent Capital Notes was
12.7% based on GBP47.9bn of transitional CRD IV CET1 capital
and GBP376.7bn of RWAs.
3 The PRA transitional capital is based on guidance provided in
policy statement PS 7/13 on strengthening capital standards published
in December 2013.
4 As at 30 June 2015, Barclays' fully loaded Tier 1 capital was
GBP46,468m, and the fully loaded Tier 1 ratio was 12.3%. Fully
loaded total regulatory capital was GBP60,913m and the fully
loaded total capital ratio was 16.2%. The fully loaded Tier 1
capital and total capital measures are calculated without applying
the transitional provisions set out in CRD IV and assessing compliance
of AT1 and T2 instruments against the relevant criteria in CRD
IV.
Movement in Common Equity Tier 1 (CET1) capital Three months Six months
ended ended
30.06.15 30.06.15
GBPm GBPm
------------------------------------------------------ ------------ ----------
Opening CET1 capital 41,833 41,453
Profit for the period 1,225 1,770
Movement in own credit (370) (531)
Movement in dividends (559) (989)
------------------------------------------------------ ------------ ----------
Retained regulatory capital generated from earnings 296 250
Movement in reserves - net impact of share schemes 293 313
Movement in available for sale reserves (240) (295)
Movement in currency translation reserves (1,276) (463)
Movement in retirement benefits 220 (94)
Other reserves movements 16 (18)
------------------------------------------------------ ------------ ----------
Movement in other qualifying reserves (987) (557)
Minority interests (49) (27)
Additional value adjustments (PVA) 478 693
Goodwill and intangible assets 110 (18)
Deferred tax assets that rely on future profitability
excluding those arising from temporary differences 48 (52)
Excess of expected loss over impairment 191 236
Direct and indirect holdings by an institution of
own CET1 instruments (1) (32)
Other regulatory adjustments 73 46
------------------------------------------------------ ------------ ----------
Movement in regulatory adjustments and deductions 850 846
Closing CET1 capital 41,992 41,992
-- Fully loaded CRD IV CET1 ratio increased in H115 to 11.1%
(December 2014; 10.3%) reflecting an increase in CET1 capital of
GBP0.5bn to GBP42.0bn and decrease in RWAs of GBP25.2bn to
GBP377bn
-- Capital generated from earnings increased CET1 capital by
GBP0.3bn after absorbing adjusting items, own credit and dividends
paid and foreseen. Other material movements in CET1 capital
were:
- GBP0.6bn decrease in other qualifying reserves largely due to
a GBP0.5bn decrease in the currency translation reserve as GBP
strengthened against EUR, USD and ZAR
- GBP0.8bn increase due to lower regulatory adjustments and
deductions largely as a result of a GBP0.7bn decrease in the PVA
deduction, which includes a tax credit of GBP0.4bn applied in Q2
and GBP0.3bn reductions across Non-Core
-- Transitional total capital decreased by GBP0.7bn to GBP65.7bn
largely due to capital redemptions in the period of $225m fixed
rate subordinated notes and GBP265m fixed rate guaranteed perpetual
subordinated notes (T2 capital). Further decreases were as a result
of higher capital deductions for holdings in own paper and
ineligible minority interest
Risk weighted assets by risk type and business
Counterparty Operational Total
Credit risk credit risk Market risk risk RWAs
============== =========== =======
Std IRB Std IRB Std IMA
As at 30.06.15 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=================== ====== ======= ====== ====== ====== ====== =========== =======
Personal and
Corporate Banking 31,687 71,481 268 859 108 - 16,176 120,579
Barclaycard 16,149 18,624 - - - - 5,505 40,278
Africa Banking 8,003 20,749 18 416 306 1,266 5,604 36,362
Investment Bank 4,501 36,117 15,263 11,412 12,656 15,718 19,621 115,288
Head Office 487 3,071 102 87 1 1,695 2,104 7,547
=================== ====== ======= ====== ====== ====== ====== =========== =======
Total Core 60,827 150,042 15,651 12,774 13,071 18,679 49,010 320,054
Barclays Non-Core 7,300 13,761 2,532 13,267 1,226 10,893 7,650 56,629
=================== ====== ======= ====== ====== ====== ====== =========== =======
Total RWAs 68,127 163,803 18,183 26,041 14,297 29,572 56,660 376,683
As at 31.12.14
======= ====== ====== ====== ====== =========== =======
Personal and
Corporate Banking 32,657 70,080 238 1,049 26 - 16,176 120,226
Barclaycard 15,910 18,492 - - - - 5,505 39,907
Africa Banking 9,015 21,794 10 562 948 588 5,604 38,521
Investment Bank 5,773 36,829 13,739 11,781 18,179 16,480 19,621 122,402
Head Office 506 2,912 234 62 7 521 1,326 5,568
=================== ====== ======= ====== ====== ====== ====== =========== =======
Total Core 63,861 150,107 14,221 13,454 19,160 17,589 48,232 326,624
Barclays Non-Core 10,679 19,416 3,023 18,406 2,236 13,088 8,428 75,276
=================== ====== ======= ====== ====== ====== ====== =========== =======
Total RWAs 74,540 169,523 17,244 31,860 21,396 30,677 56,660 401,900
Movement analysis of risk weighted assets
Credit Counterparty Market Operational
risk credit risk(2) risk
risk(1) Total
Risk weighted assets GBPbn GBPbn GBPbn GBPbn GBPbn
============================= ====== ============ ======== =========== =====
As at 1 January 2015 244.0 49.1 52.1 56.7 401.9
Book size 3.0 (6.1) (4.4) - (7.5)
Acquisitions and disposals (9.6) - (0.3) - (9.9)
Book quality (1.7) (0.7) 0.7 - (1.7)
Model updates (1.7) (1.3) (2.3) - (5.3)
Methodology and policy 1.9 3.2 (1.9) - 3.2
Foreign exchange movement(3) (4.1) - - - (4.1)
Other 0.1 - - - 0.1
============================= ====== ============ ======== =========== =====
As at 30 June 2015 231.9 44.2 43.9 56.7 376.7
RWAs decreased GBP25.2bn to GBP376.7bn:
-- Book size decreased RWAs by GBP7.5bn, due to risk reductions
in the Investment Bank and Non-Core trading books, offset by
increased PCB loans and advances to customers
-- Acquisitions and disposals decreased RWAs by GBP9.9bn,
primarily driven by disposals in Non-Core, including the sale of
the Spanish business
-- Book quality improved, resulting in a RWA reduction of
GBP1.7bn, primarily driven by changes in risk profile within PCB
and Non-Core
-- Model updates decreased RWAs by GBP5.3bn, following the
implementation of diversification benefits across advanced general
and specific market risk, as well as a recalibration of a credit
risk model within the Investment Bank and Non-Core
-- Methodology and policy changes increased RWAs by GBP3.2bn,
due to the capture of an extended margin period of risk for
securities financing transactions within the Investment Bank
-- Foreign exchange movements decreased RWAs by GBP4.1bn, as GBP
appreciated against ZAR, USD and EUR
1 RWAs in relation to default fund contributions are included in
counterparty credit risk.
2 RWAs in relation to CVA (GBP13.3bn) are included in market risk.
3 Foreign exchange movements do not include movements for counterparty
credit risk or market risk.
Leverage ratio requirements
In January 2014, the Basel Committee finalised its revised
standards (BCBS 270) for calculating the Basel 3 leverage ratio.
The European Commission has implemented the amendments into the CRR
via a delegated act which came into force from January 2015. The
leverage calculation below uses the end-point CRR definition of
Tier 1 capital for the numerator and the CRR definition of leverage
exposure as adopted by a European Union delegated act.
Barclays does not believe that there is a material difference
between the BCBS 270 leverage exposure previously disclosed and a
leverage exposure calculated in accordance with the delegated
act.
At 30 June 2015 Barclays leverage ratio was 4.1%, which exceeds
the expected minimum fully loaded requirement outlined by the
Financial Policy Committee (FPC)(1) of 3.7%, comprising the 3%
minimum requirement, and the fully phased-in G-SII buffer.
Leverage exposure and ratio
As at As at As at
30.06.15 31.03.15 31.12.14
Leverage exposure GBPbn GBPbn GBPbn
=============================================== ========= ======== ========
Accounting assets
Derivative financial instruments 341 480 440
Cash collateral 60 80 73
Reverse repurchase agreements 93 124 132
Loans and advances and other assets 703 732 713
=============================================== ========= ======== ========
Total IFRS assets 1,197 1,416 1,358
Regulatory consolidation adjustments (5) (8) (8)
Derivatives adjustments
Derivatives netting (308) (436) (395)
Adjustments to cash collateral (47) (63) (53)
Net written credit protection 20 25 27
Potential Future Exposure (PFE) on derivatives 160 176 179
=============================================== ========= ======== ========
Total derivatives adjustments (175) (298) (242)
Securities financing transactions (SFTs)
adjustments 24 46 25
Regulatory deductions and other adjustments (14) (15) (15)
Weighted off-balance sheet commitments 112 114 115
Total fully loaded leverage exposure 1,139 1,255 1,233
Fully loaded CET1 capital 42.0 41.8 41.5
Fully loaded AT1 capital 4.5 4.5 4.6
=============================================== ========= ======== ========
Fully loaded Tier 1 capital 46.5 46.3 46.0
Fully loaded leverage ratio 4.1% 3.7% 3.7%
During H115 leverage exposure decreased GBP94bn to
GBP1,139bn:
-- SFTs decreased by GBP40bn, primarily due to a reduction in
IFRS reverse repurchase agreements of GBP39bn to GBP93bn, driven by
reductions in matched book trading as a result of balance sheet
deleveraging
-- Total derivative exposures(2) decreased GBP45bn primarily due
to a GBP19bn reduction in the PFE and a GBP19bn net reduction in
IFRS derivatives and cash collateral.
- The PFE on derivatives decreased GBP19bn to GBP160bn, mainly
as a result of continued legacy portfolio run down and optimisation
including trade compressions and tear-ups
- Other derivatives exposures decreased GBP19bn to GBP46bn,
driven by a net decrease in IFRS derivatives, primarily due to
increases in major forward rate curves and continued legacy
portfolio run down
- Net written credit protection decreased GBP7bn to GBP20bn
primarily due to a reduction in business activity and improved
portfolio netting
-- Loans and advances and other assets decreased by GBP10bn to
GBP703bn primarily driven by a reduction in trading portfolio
assets
1 In July 2015 the PRA set out a consultation on how it proposes
to implement the FPC recommendations in the UK. The PRA is expected
to publish a policy statement, finalised rules and supervisory
statements by the end of 2015.
2 Total derivative exposures include IFRS derivative financial
instruments, cash collateral and total derivatives adjustments.
Credit Risk
Analysis of loans and advances to customers and banks
Loans and advances at amortised cost net of impairment allowances,
by industry sector and geography
Africa
United and Middle
As at 30.06.15 Kingdom Europe Americas East Asia Total
GBPm GBPm GBPm GBPm GBPm GBPm
============================= ======== ====== ======== =========== ====== =======
Banks 7,092 12,377 14,510 2,617 4,374 40,970
Other financial institutions 24,091 20,546 52,379 2,873 5,910 105,799
Home loans 133,491 17,476 695 12,450 229 164,341
Cards, unsecured loans and
other personal lending 27,863 4,691 15,628 8,561 1,413 58,156
Construction and property 18,207 1,035 1,612 1,909 326 23,089
Other 41,403 13,266 11,228 12,052 4,963 82,912
----------------------------- -------- ------ -------- ----------- ------ -------
Net loans and advances to
customers and banks 252,147 69,391 96,052 40,462 17,215 475,267
Impairment allowance 2,484 1,091 581 957 80 5,193
----------------------------- -------- ------ -------- ----------- ------ -------
Gross loans and advances
to customers and banks 254,631 70,482 96,633 41,419 17,295 480,460
----------------------------- -------- ------ -------- ----------- ------ -------
Loans and advances at FV 16,472 405 666 1,002 1 18,546
----------------------------- -------- ------ -------- ----------- ------ -------
As at 31.12.14
============================= ======== ====== ======== =========== ====== =======
Banks 6,900 12,611 12,917 2,499 5,338 40,265
Other financial institutions 23,685 22,114 49,160 4,123 4,306 103,388
Home loans 132,775 19,713 769 13,356 361 166,974
Cards, unsecured loans and
other personal lending 28,061 5,226 15,666 8,605 1,356 58,914
Construction and property 17,837 1,175 1,655 1,888 287 22,842
Other 39,757 11,972 9,621 12,020 4,125 77,495
============================= ======== ====== ======== =========== ====== =======
Net loans and advances to
customers and banks 249,015 72,811 89,788 42,491 15,773 469,878
Impairment allowance 2,653 1,219 499 1,001 83 5,455
----------------------------- -------- ------ -------- ----------- ------ -------
Gross loans and advances
to customers and banks 251,668 74,030 90,287 43,492 15,856 475,333
----------------------------- -------- ------ -------- ----------- ------ -------
Loans and advances at FV 17,627 1,041 894 635 1 20,198
----------------------------- -------- ------ -------- ----------- ------ -------
Analysis of retail and wholesale loans and advances
and impairment
CRLs
% of Loan
Gross Impairment L&A net Credit gross Loan impairment loss
As at 30.06.15 L&A allowance of impairment risk loans L&A charges(1) rates
GBPm GBPm GBPm GBPm % GBPm bps
====================== ======= ========== ============== =========== ====== =============== ======
Personal & Corporate
Banking 137,311 730 136,581 1,486 1.1 125 18
Africa Banking 20,414 649 19,765 1,029 5.0 154 152
Barclaycard 38,689 1,759 36,930 1,735 4.5 563 293
====================== ======= ========== ============== =========== ====== =============== ======
Barclays Core 196,414 3,138 193,276 4,250 2.2 842 86
Barclays Non-Core 17,625 420 17,205 1,077 6.1 51 58
====================== ======= ========== ============== =========== ====== =============== ======
Total Group Retail 214,039 3,558 210,481 5,327 2.5 893 84
Investment Bank 123,094 31 123,063 56 - (6) (1)
Personal & Corporate
Banking 86,395 835 85,560 1,846 2.1 54 13
Africa Banking 16,548 243 16,305 642 3.9 39 48
Head Office and
Other Operations 3,169 - 3,169 4 0.1 1 6
====================== ======= ========== ============== =========== ====== =============== ======
Barclays Core 229,206 1,109 228,097 2,548 1.1 88 8
Barclays Non-Core 37,215 526 36,689 754 2.0 (24) (13)
====================== ======= ========== ============== =========== ====== =============== ======
Total Group Wholesale 266,421 1,635 264,786 3,302 1.2 64 5
Group Total 480,460 5,193 475,267 8,629 1.8 957 40
Traded Loans 2,048 n/a 2,048
Loans and advances
designated at fair
value 18,546 n/a 18,546
====================== ======= ========== ==============
Loans and advances
held at fair value 20,594 n/a 20,594
Total loans and
advances 501,054 5,193 495,861
As at 31.12.14
====================== ======= ========== ============== =========== ====== =============== ======
Personal & Corporate
Banking(2) 136,544 766 135,778 1,582 1.2 215 16
Africa Banking 21,334 681 20,653 1,093 5.1 295 138
Barclaycard 38,376 1,815 36,561 1,765 4.6 1,183 308
====================== ======= ========== ============== =========== ====== =============== ======
Barclays Core 196,254 3,262 192,992 4,440 2.3 1,693 86
Barclays Non-Core 20,259 428 19,831 1,209 6.0 151 75
====================== ======= ========== ============== =========== ====== =============== ======
Total Group Retail 216,513 3,690 212,823 5,649 2.6 1,844 85
Investment Bank 106,377 44 106,333 71 0.1 (14) (1)
Personal & Corporate
Banking(2) 88,192 873 87,319 2,112 2.4 267 30
Africa Banking 16,312 246 16,066 665 4.1 54 33
Head Office and
Other Operations 3,240 - 3,240 - - - -
====================== ======= ========== ============== =========== ====== =============== ======
Barclays Core 214,121 1,163 212,958 2,848 1.3 307 14
Barclays Non-Core 44,699 602 44,097 841 1.9 53 12
====================== ======= ========== ============== =========== ====== =============== ======
Total Group Wholesale 258,820 1,765 257,055 3,689 1.4 360 14
Group Total 475,333 5,455 469,878 9,338 2.0 2,204 46
Traded Loans 2,693 n/a 2,693
Loans and advances
designated at fair
value 20,198 n/a 20,198
====================== ======= ========== ==============
Loans and advances
held at fair value 22,891 n/a 22,891
Total loans and
advances 498,224 5,455 492,769
-- Loans and advances to customers and banks at amortised cost
net of impairment increased to GBP475.3bn (2014: GBP469.9bn)
- Investment Bank increased by GBP16.7bn to GBP123.1bn
reflecting a net increase in cash collateral and settlement
balances driven principally by higher trading volumes
- Non-Core decreased by GBP10.0bn to GBP53.9bn due to a net
reduction in cash collateral and settlements and the run off of
assets in Europe
1 Excludes impairment charges on available for sale investments
and reverse repurchase agreements. H115 impairment charges represent
six months charge, whereas December 2014 impairment charges represent
12 months charge.
2 UK Business Banking has been reclassified from Retail to Wholesale
in line with how the business is now managed. 2014 figures have
been restated to reflect this, with net loans and advances of
GBP8.4bn, credit risk loans of GBP482m and impairment charges
of GBP48m being reclassified to Wholesale.
Analysis of potential credit risk loans and
coverage ratios
CRLs PPLs PCRLs
==================== ==================== ====================
As at As at As at As at As at As at
30.06.15 31.12.14 30.06.15 31.12.14 30.06.15 31.12.14
GBPm GBPm GBPm GBPm GBPm GBPm
================================== ========= ========= ========= ========= ========= =========
Personal & Corporate Banking(1) 1,486 1,582 151 143 1,637 1,725
Africa Banking 1,029 1,093 170 161 1,199 1,254
Barclaycard 1,735 1,765 217 227 1,952 1,992
================================== ========= ========= ========= ========= ========= =========
Barclays Core 4,250 4,440 538 531 4,788 4,971
Barclays Non-Core 1,077 1,209 24 26 1,101 1,234
================================== ========= ========= ========= ========= ========= =========
Total Group Retail 5,327 5,649 562 557 5,889 6,205
Investment Bank 56 71 270 107 326 178
Personal & Corporate Banking(1) 1,846 2,112 498 614 2,344 2,726
Africa Banking 642 665 66 94 708 759
Head Office and Other Operations 4 - - - 4 -
================================== ========= ========= ========= ========= ========= =========
Barclays Core 2,548 2,848 834 815 3,382 3,663
Barclays Non-Core 754 841 29 119 783 960
================================== ========= ========= ========= ========= ========= =========
Total Group Wholesale 3,302 3,689 863 934 4,165 4,623
Group Total 8,629 9,338 1,425 1,491 10,054 10,828
Impairment CRL coverage PCRL coverage
allowance
==================== ==================== ====================
As at As at As at As at As at As at
30.06.15 31.12.14 30.06.15 31.12.14 30.06.15 31.12.14
GBPm GBPm % % % %
================================== ========= ========= ========= ========= ========= =========
Personal & Corporate Banking(1) 730 766 49.1 48.4 44.6 44.4
Africa Banking 649 681 63.1 62.3 54.1 54.3
Barclaycard 1,759 1,815 101.4 102.8 90.1 91.1
================================== ========= ========= ========= ========= ========= =========
Barclays Core 3,138 3,262 73.8 73.5 65.5 65.6
Barclays Non-Core 420 428 39.0 35.4 38.1 34.7
================================== ========= ========= ========= ========= ========= =========
Total Group Retail 3,558 3,690 66.8 65.3 60.4 59.5
Investment Bank 31 44 55.4 62.0 9.5 24.7
Personal & Corporate Banking(1) 835 873 45.2 41.3 35.6 32.0
Africa Banking 243 246 37.9 37.0 34.3 32.4
Head Office and Other Operations - - - - - -
================================== ========= ========= ========= ========= ========= =========
Barclays Core 1,109 1,163 43.5 40.8 32.8 31.7
Barclays Non-Core 526 602 69.8 71.6 67.2 62.7
================================== ========= ========= ========= ========= ========= =========
Total Group Wholesale 1,635 1,765 49.5 47.8 39.3 38.2
Group Total 5,193 5,455 60.2 58.4 51.7 50.4
- Credit Risk Loans (CRLs) decreased 8% to GBP8.6bn with a 10%
decrease to GBP3.3bn in wholesale portfolios and 6% to GBP5.3bn in
retail portfolios. This is primarily driven by reductions in PCB
and Non-Core Europe due to improving economic conditions
1 UK Business Banking has been reclassified from Retail to Wholesale
in line with how the business is now managed. 2014 figures have
been restated to reflect this, with credit risk loans of GBP482m,
PPLs of GBP32m and PCRLs of GBP514m being reclassified to Wholesale.
Analysis of forbearance programmes
Balances Impairment Allowance coverage
allowance
==================== ==================== =====================
As at As at As at As at As at As at
30.06.15 31.12.14 30.06.15 31.12.14 30.06.15 31.12.14
GBPm GBPm GBPm GBPm % %
================================= ========= ========= ========= ========= ========== =========
Personal & Corporate Banking(1) 1,744 2,011 45 46 2.6 2.3
Africa Banking 268 299 36 45 13.4 15.1
Barclaycard 805 972 285 394 35.4 40.5
================================= ========= ========= ========= ========= ========== =========
Barclays Core 2,817 3,282 366 485 13.0 14.8
Barclays Non-Core 365 419 40 49 11.0 11.7
================================= ========= ========= ========= ========= ========== =========
Total Retail 3,182 3,701 406 534 12.8 14.4
Investment Bank 174 106 13 10 7.5 9.4
Personal & Corporate Banking(1) 1,841 1,830 291 255 15.8 13.9
Africa Banking 152 132 11 7 7.2 5.3
================================= ========= ========= ========= ========= ========== =========
Barclays Core 2,167 2,068 315 272 14.5 13.2
Barclays Non-Core 265 651 104 271 39.2 41.6
================================= ========= ========= ========= ========= ========== =========
Total Wholesale 2,432 2,719 419 543 17.2 20.0
Group Total 5,614 6,420 825 1,077 14.7 16.8
-- Retail balances on forbearance reduced by 14% to GBP3.2bn
primarily due to PCB and Barclaycard
- PCB: UK home loans decreased, principally due to a reduction
in the proportion of accounts meeting the Mortgage Current Account
reserve forbearance classification criteria
- Barclaycard: Reduction primarily due to an asset sale in Q115
and updated entry criteria for forbearance programmes, which
reduced inflows in the UK cards portfolio
-- Wholesale balances on forbearance reduced by 11% to GBP2.4bn
due to a reduction in Non-Core. Core balances on forbearance rose
by 5% to GBP2.2bn reflecting small increases in all businesses
Analysis of specific core portfolios/businesses
Secured home loans
-- The principal home loan portfolios listed below primarily
comprise first lien mortgages and account for 87% (2014: 86%) of
total home loans in the Group's retail core portfolios
Home loans principal portfolios
Recoveries
90 day Non performing Annualised proportion Recoveries
arrears, proportion gross of impairment
Gross loans excluding of outstanding charge-off outstanding coverage
and advances recoveries balances rates balances ratio
As at 30.06.15 GBPm % % % % %
======================= ============= =========== =============== =========== ============ ===========
PCB - UK 127,551 0.2 0.6 0.4 0.4 8.9
Africa - South Africa 11,046 0.7 4.2 1.7 3.5 27.7
As at 31.12.14
======================= ============= =========== =============== =========== ============ ===========
PCB - UK 126,668 0.2 0.6 0.4 0.4 8.3
Africa - South Africa 11,513 0.7 4.8 1.9 4.1 31.1
1 UK Business Banking forbearance has been reclassified from Retail
to Wholesale, in line with the way the business is now managed.
2014 balances of GBP240m and impairment allowances of GBP30m
have been restated to reflect this.
Home loans principal portfolios - distribution
of balances by LTV(1)
PCB - UK Africa - South
Africa
30.06.15 31.12.14 30.06.15 31.12.14
% % % %
=============================================== ======== ======== ======== ========
<=75% 90.7 90.2 76.7 74.6
>75% and <=80% 4.0 4.2 7.2 7.7
>80% and <=85% 2.2 2.3 5.7 5.9
>85% and <=90% 1.5 1.4 3.8 4.3
>90% and <=95% 0.9 1.0 2.4 2.5
>95% and <=100% 0.3 0.4 1.5 1.5
>100% 0.4 0.5 2.7 3.5
Portfolio Marked To Market LTV:
Balance weighted % 51.0 51.6 58.5 59.9
Valuation weighted % 39.1 39.8 39.4 40.2
For > 100% LTV:
=============================================== ======== ======== ======== ========
Balances GBPm 528 641 294 390
Marked to market collateral GBPm 439 558 247 324
Average LTV: Balance weighted % 126.2 120.9 122.5 124.2
Average LTV: Valuation weighted % 120.2 114.8 118.8 120.3
% Balances in Recovery Book 5.0 4.4 34.8 37.1
-- PCB - UK: Arrears and charge-off rates remained steady,
reflecting the continuing low base rate and benign economic
conditions. Balance weighted LTV reduced to 51.0% (2014: 51.6%) as
average house prices increased. This increase also contributed to a
reduction in home loans that have LTV >100% of 18% to
GBP528m
-- Africa - South Africa: The decrease in non-performing
balances to 4.2% (2014: 4.8%) was due to a further reduction in the
recoveries book and continued strong performance of new lending.
Balances with >100% LTV reduced 25% to GBP294m as the recoveries
book decreased, and average house price appreciated
Home loans principal portfolios - new lending
PCB - UK Africa - South
Africa
================== ==================
30.06.15 30.06.14 30.06.15 30.06.14
======================================== ======== ======== ======== ========
New bookings (GBPm)(2) 9,549 10,162 811 763
New mortgages proportion above
85% LTV (%) 8.3 5.0 39.2 32.9
Average LTV on new mortgages: balance
weighted (%) 62.3 64.4 75.1 75.0
Average LTV on new mortgages: valuation
weighted (%) 53.6 57.2 66.2 65.6
-- PCB - UK: New lending during H115 reduced by 6%, in line with
the reduction in market activity in the prime residential segment.
The increase in mortgages with LTV above 85% to 8.3% (2014: 5.0%)
reflected increased appetite for higher LTV lending in the UK as
confidence in the housing market improved
-- Africa - South Africa: The proportion of new home loans with
LTV above 85% increased to 39.2% (2014: 32.9%) due to a revised
strategy which allows a greater proportion of higher LTV loans to
be booked for lower risk customers
Exposures to interest only home loans
-- The Group provides interest-only mortgages to customers,
mainly in the UK. Interest-only mortgages account for GBP51bn
(2014: GBP51bn) of the total balance of GBP128bn (2014: GBP127bn)
of UK home loans. This comprised GBP41bn (2014: GBP42bn) to
owner-occupied customers, and GBP10bn (2014: GBP9bn) to buy-to-let
customers.
-- Of the GBP41bn exposure to owner-occupied customers, GBP35bn
(2014: GBP35bn) was interest-only, with the remaining GBP6bn (2014:
GBP7bn) representing the interest-only component of Part and
Part(3) mortgages.
Exposure to interest only owner-occupied home
loans As at As at
30.06.15 31.12.14
---------------------------------------------- -------- --------
Interest only balances (GBPm) 34,855 35,328
Total Impairment Coverage (bps) 10 8
Marked to market LTV: Balance weighted % 47.5 48.7
Marked to market LTV: Valuation weighted % 36.8 37.6
1 Portfolio marked to market based on the most updated valuation
including recoveries balances. Updated valuations reflect the
application of the latest house price index available in the
country as at 30 June 2015.
2 2014 new bookings for South Africa Home Loan was revised to include
new advances to existing customers.
3 A Part and Part Home Loan is a product in which part of the loan
is interest only and part is amortising. Analysis excludes the
interest only portion of the part and part book which contributes
GBP6.4bn (2014: GBP6.6bn) to the total interest-only balance
of GBP41.1bn (2014: GBP41.9bn). Total exposure on the part and
part book is GBP9.1bn (2014: GBP9.8bn) and represents 7% of total
UK home loans portfolio.
Credit cards, overdrafts and unsecured loans
-- The principal portfolios listed below accounted for 94%
(2014: 94%) of the Group's total credit cards, overdrafts and
unsecured loans
Recoveries
30 Day 90 Day Annualised Proportion Recoveries
Gross Arrears, Arrears, Gross of Impairment
Loans excluding excluding Charge-off Outstanding Coverage
Principal Portfolios and Advances recoveries recoveries Rates Balances Ratio
As at 30.06.15 GBPm % % % % %
-------------------------- ============= =========== =========== =========== ============ ===========
Barclaycard
UK cards(1) 17,378 2.4 1.2 5.6 5.3 85.4
US cards(1) 14,299 1.9 0.9 3.9 2.1 88.2
Barclays Partner Finance 3,734 1.4 0.6 2.3 2.5 80.6
Germany cards 1,300 2.6 1.0 3.8 3.0 81.9
Iberia cards 901 6.0 2.6 8.0 6.2 84.2
Personal & Corporate
Banking
UK personal loans 5,232 1.8 0.7 3.0 7.9 75.1
UK overdrafts 839 5.0 3.7 8.0 11.4 87.4
Africa Banking
South Africa cards 2,278 9.4 5.2 5.4 6.6 74.8
South Africa personal
loans 972 5.9 3.0 7.8 8.0 72.5
As at 31.12.14
-------------------------- ------------- ----------- ----------- ----------- ------------ -----------
Barclaycard
UK cards(1) 17,447 2.5 1.2 4.3 4.9 87.6
US cards(1) 14,005 2.1 1.0 3.7 1.8 87.1
Barclays Partner Finance 3,399 1.5 0.7 2.4 2.7 76.8
Germany cards 1,355 2.5 1.1 3.8 3.4 82.8
Iberia cards 968 6.0 2.5 8.2 6.3 84.9
Personal & Corporate
Banking
UK personal loans 4,953 2.0 0.9 3.4 10.0 76.3
UK overdrafts 902 5.8 4.0 7.1 11.0 89.9
Africa Banking
South Africa cards 2,364 8.1 4.6 7.6 5.9 75.7
South Africa personal
loans 993 5.4 2.6 8.1 7.8 70.8
-- UK cards: Primary driver for the increased charge-off rate to
5.6% (2014: 4.3%) was debt sale activity on legacy forbearance
plans, which required early acceleration of accounts to charge-off
prior to sale. The decrease in recovery coverage ratio was due to
recent improvements in cash recoveries and further refinements to
modelled impairment methodologies, including the use of more
granular account segmentation
-- US cards: Arrears rates remained stable due to a strategy
focused on high quality customers and low risk partnerships
-- UK personal loans: Arrears and charge-off rates fell despite
a 5% growth in gross loans and advances and reflected the benign
economic conditions
-- Barclays Partner Finance: The increase in recoveries
impairment coverage was due to a reclassification of management
adjustments to the impairment allowance that were previously held
at the portfolio level, to the recoveries segment. The overall
coverage remains unchanged
-- South Africa cards: Increased arrears in part reflected the
growth of bookings in 2014 in line with business strategy, as well
as seasonal trends. The level of arrears was in line with the same
period in 2014
1 For UK and US cards, outstanding recoveries balances for acquired
portfolios recognised at fair value (which have no related impairment
allowance) have been excluded from the recoveries impairment
coverage ratio. Losses have been recognised where related to
additional spend from acquired accounts in the period post acquisition.
Group exposures to Eurozone countries
-- The Group recognises the credit and market risk resulting
from the ongoing volatility in the Eurozone and continues to
monitor events closely while taking coordinated steps to mitigate
the risks associated with the challenging economic environment
-- During H115 the Group's net on-balance sheet exposures to
Spain, Italy, Portugal, Ireland, Cyprus and Greece decreased by
GBP17.7bn to GBP25.6bn primarily due to a GBP13.2bn reduction in
Spain following the sale of Spanish business
-- As at 30 June 2015, the local net funding deficit in Italy
was EUR4.8bn (2014: EUR9.9bn) and the deficit in Portugal was
EUR1.7bn (2014: EUR1.9bn). The net funding surplus in Spain was
EUR3.3bn (2014: EUR4.3bn)
-- The following table shows Barclays exposure to Eurozone
countries monitored internally as being higher risk and thus being
the subject of particular management focus. The basis of
preparation is consistent with that described in the 2014 Annual
Report
-- The net exposure provides the most appropriate measure of the
credit risk to which the Group is exposed. The gross exposure is
also presented below, alongside off-balance sheet contingent
liabilities and commitments
Net Gross Contingent
Other on-balance on-balance liabilities
Financial Residential retail Sheet sheet and
Sovereign institutions Corporate mortgages lending exposure exposure commitments
As at 30.06.15 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============== ========= ============= ========= =========== ======== ============ ============ ============
Spain 173 697 1,099 15 311 2,295 9,285 1,865
Italy 1,333 426 972 11,895 832 15,458 21,899 2,468
Portugal 36 28 350 2,641 1,105 4,160 4,420 1,365
Ireland 38 2,101 1,247 61 51 3,498 7,077 2,208
Cyprus 26 7 44 17 31 125 379 22
Greece 6 5 15 6 3 35 972 -
============== ========= ============= ========= =========== ======== ============ ============ ============
Total 1,612 3,264 3,727 14,635 2,333 25,571 44,032 7,928
As at 31.12.14
============== ========= ============= ========= =========== ======== ============ ============ ============
Spain 108 14,043 1,149 12 248 15,560 24,873 2,863
Italy 1,716 485 1,128 13,530 1,114 17,973 25,967 3,033
Portugal 105 7 531 2,995 1,207 4,845 5,050 1,631
Ireland 37 3,175 1,453 43 50 4,758 9,445 2,070
Cyprus 28 12 61 6 16 123 707 26
Greece 1 11 15 - - 27 1,279 -
============== ========= ============= ========= =========== ======== ============ ============ ============
Total 1,995 17,733 4,337 16,586 2,635 43,286 67,321 9,623
Market Risk
Analysis of Management VaR
-- The table below shows the total Management VaR on a
diversified basis by risk factor. Total Management VaR includes all
trading positions in the Investment Bank, Non-Core, Africa Banking
and Head Office
-- Limits are applied against each risk factor VaR as well as
total Management VaR, which are then cascaded further by risk
managers to each business
Management VaR (95%) by asset
class
Six months ended 30.06.15 31.12.14 30.06.14
Daily High(1) Low(1) Daily High(1) Low(1) Daily High(1) Low(1)
Avg Avg Avg
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================= ===== ======= ====== ===== ======= ====== ===== ======= ======
Credit risk 10 13 8 10 13 9 12 15 9
Interest rate
risk 7 12 4 12 17 7 10 14 6
Spread risk 3 6 2 4 5 3 5 8 3
Basis risk 3 4 3 3 5 2 6 8 4
Equity risk 9 17 5 10 15 6 12 23 8
Commodity risk 2 2 1 2 3 1 3 8 2
Foreign exchange
risk 3 5 1 4 23 1 4 6 2
Inflation risk 3 5 2 2 3 2 3 4 2
Diversification
effect (22) - - (26) - - (32) - -
================= ===== ======= ====== ===== ======= ====== ===== ======= ======
Total Management
VaR 18 25 13 21 36 17 23 31 18
-- With the exception of Interest Rate Risk, all asset class VaRs remained stable during H115
-- Average Interest Rate Risk Management VaR decreased by 42% to
GBP7m, as certain positions included within the liquidity pool were
transferred to Head Office Treasury banking book. These high
quality and liquid banking book assets are now reported as
non-traded market risk exposures to ensure consistent management of
the liquidity pool
-- This decrease together with a reduction in exposure in
Non-Core led to a fall in total Management VaR of 14% to GBP18m
Analysis of net interest income sensitivity
The table below shows sensitivity analysis on the pre-tax net
interest income for the non-trading financial assets and financial
liabilities held at 31 May 2015 and 31 December 2014
Net interest income sensitivity (AEaR) by
business
==============================================================
Personal
& Corporate
Banking Barclaycard Africa Non-core Other(4) Total
Period ended 31.05.15(2,3) GBPm GBPm GBPm GBPm GBPm GBPm
=========================== ============ =========== ====== ======== ======== =====
+200bps 302 (28) 20 19 (87) 226
+100bps 150 (15) 10 10 (62) 93
-100bps (392) 16 (4) - 63 (317)
-200bps (442) 19 (4) (1) 64 (364)
Period ended 31.12.14(3)
=========================== ============ =========== ====== ======== ======== =====
+200bps 464 (59) 26 6 (97) 340
+100bps 239 (27) 13 3 (58) 170
-100bps (426) 26 (9) (1) 26 (384)
-200bps (430) 29 (17) (1) 39 (380)
-- In PCB, the reduction in NII sensitivity was due to increased
hedging of certain deposit products exposure to interest rate
changes
1 The high and low DVaR figures reported for each category did
not necessarily occur on the same day as the high and low DVaR
reported as a whole. Consequently a diversification effect balance
for the high and low DVaR figures would not be meaningful and
is therefore omitted from the above table.
2 Based on May 2015 data, being the latest available.
3 Excluding investment banking operations.
4 Excluding the banking book assets of the liquidity pool held
in Head Office.
Statement of Directors' Responsibilities
The Directors (who are listed below) confirm that the condensed
consolidated interim financial statements set out on pages 51 to 89
have been prepared in accordance with International Accounting
Standard 34, 'Interim Financial Reporting', as adopted by the
European Union, and that the interim management report herein
includes a fair review of the information required by Disclosure
and Transparency Rules 4.2.7R and 4.2.8R namely:
-- An indication of important events that have occurred during
the six months ended 30 June 2015 and their impact on the condensed
consolidated interim financial statements, and a description of the
principal risks and uncertainties for the remaining six months of
the financial year
-- Material related party transactions in the six months ended
30 June 2015 and any material changes in the related party
transactions described in the last Annual Report
Signed on behalf of the Board by
John McFarlane Tushar Morzaria
Executive Chairman Group Finance Director
Barclays PLC Board of Directors:
Executive Directors Non-executive Directors
John McFarlane (Executive Chairman) Mike Ashley
Tushar Morzaria (Group Finance Director) Tim Breedon
Crawford Gillies
Reuben Jeffery
Wendy Lucas-Bull
Dambisa Moyo
Frits van Paasschen
Sir Michael Rake
Diane de Saint Victor
Diane Schueneman
Steve Thieke
Independent Auditors' Review Report to Barclays PLC
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed the condensed consolidated interim financial
statements, defined below, in the interim results announcement of
Barclays PLC for the six months ended 30 June 2015. Based on our
review, nothing has come to our attention that causes us to believe
that the condensed consolidated interim financial statements are
not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European
Union and the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
This conclusion is to be read in the context of what we say in
the remainder of this report.
What we have reviewed
The condensed consolidated interim financial statements, which
are prepared by Barclays PLC, comprise:
-- the condensed consolidated Balance Sheet as at 30 June 2015;
-- the condensed consolidated Income Statement for the six months ended 30 June 2015;
-- the condensed consolidated statement of Comprehensive Income for the period then ended;
-- the condensed consolidated statement of Cash Flows for the period then ended;
-- the condensed consolidated statement of Changes in Equity for the period then ended; and
-- the related notes to the condensed consolidated interim financial statements.
As disclosed in note 1, the financial reporting framework that
has been applied in the preparation of the full annual financial
statements of the group is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European
Union.
The condensed consolidated interim financial statements included
in the interim results announcement have been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
What a review of condensed consolidated financial statements
involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK and
Ireland) and, consequently, does not enable us to obtain assurance
that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
We have read the other information contained in the interim
results announcement and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed consolidated interim financial
statements.
Responsibilities for the condensed consolidated interim
financial statements and the review
Our responsibilities and those of the directors(1,2)
The interim results announcement, including the condensed
consolidated interim financial statements, is the responsibility
of, and has been approved by, the directors. The directors are
responsible for preparing the results announcement in accordance
with the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Our responsibility is to express to the company a conclusion on
the condensed consolidated interim financial statements in the
interim results announcement based on our review. This report,
including the conclusion, has been prepared for and only for the
company for the purpose of complying with the Disclosure and
Transparency Rules of the Financial Conduct Authority and for no
other purpose. We do not, in giving this conclusion, accept or
assume responsibility for any other purpose or to any other person
to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
28 July 2015
London, United Kingdom
1 The maintenance and integrity of the Barclays website is the
responsibility of the directors; the work carried out by the
auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that may have occurred to the financial statements since they
were initially presented on the website.
2 Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Condensed Consolidated Financial Statements
Condensed consolidated income statement (unaudited)
Half year Half year
ended ended
Continuing operations 30.06.15 30.06.14
Notes(1) GBPm GBPm
=============================================== ======== ========= =========
Net interest income 6,201 6,082
Net fee and commission income 4,004 4,256
Net trading income 2,660 2,575
Net investment income 923 356
Net premiums from insurance contracts 351 336
Other income (3) 19
=============================================== ======== ========= =========
Total income 14,136 13,624
Net claims and benefits incurred on insurance
contracts (248) (240)
=============================================== ======== ========= =========
Total income net of insurance claims 13,888 13,384
Credit impairment charges and other provisions (973) (1,086)
=============================================== ======== ========= =========
Net operating income 12,915 12,298
Staff costs 2 (4,864) (5,730)
Infrastructure costs 3 (1,590) (1,568)
Administration and general expenses 3 (3,211) (2,479)
Operating expenses (9,665) (9,777)
Loss on disposal of undertakings and share
of results of associates and joint ventures (136) (20)
=============================================== ======== ========= =========
Profit before tax 3,114 2,501
Tax 4 (1,006) (895)
=============================================== ======== ========= =========
Profit after tax 2,108 1,606
Attributable to:
=============================================== ======== ========= =========
Ordinary equity holders of the parent: 1,611 1,126
Other equity holders(2) 159 90
----------------------------------------------- -------- --------- ---------
Total equity holders of the parent(2) 1,770 1,216
Non-controlling interests 5 338 390
=============================================== ======== ========= =========
Profit after tax 2,108 1,606
Earnings per share from continuing operations
=============================================== ======== ========= =========
Basic earnings per ordinary share(2) 6 9.9p 7.0p
Diluted earnings per ordinary share(2) 6 9.7p 7.0p
1 For notes to the Financial Statements see pages 56 to 89.
2 The profit after tax attributable to other equity holders of
GBP159m (H114: GBP90m) is offset by a tax credit recorded in
reserves of GBP32m (H114: GBP19m). The net amount of GBP127m
(H114: GBP71m), along with non-controlling interests (NCI) is
deducted from profit after tax in order to calculate earnings
per share.
Condensed consolidated statement of comprehensive income (unaudited)
Half year Half year
ended ended
Continuing operations 30.06.15 30.06.14
Notes(1) GBPm GBPm
=============================================== ======== ========= =========
Profit after tax 2,108 1,606
Other comprehensive (loss)/income that may
be recycled to profit or loss:
=============================================== ======== ========= =========
Currency translation reserve 15 (590) (1,056)
Available for sale reserve 15 (294) 341
Cash flow hedge reserve 15 (646) 254
Other 41 (53)
=============================================== ======== ========= =========
Other comprehensive loss that may be recycled
to profit or loss (1,489) (514)
Other comprehensive (loss)/income not recycled
to profit or loss:
Retirement benefit remeasurements 12 (93) 236
Other comprehensive loss for the period (1,582) (278)
Comprehensive income for the period 526 1,328
=============================================== ======== ========= =========
Attributable to:
=============================================== ======== ========= =========
Equity holders of the parent 325 1,064
Non-controlling interests 201 264
=============================================== ======== ========= =========
Total comprehensive income for the period 526 1,328
=============================================== ======== ========= =========
1 For notes, see pages 56 to 89.
Condensed consolidated balance sheet (unaudited)
As at As at
Assets 30.06.15 31.12.14
Notes(1) GBPm GBPm
========================================= ========= ========== ==========
Cash and balances at central banks 33,341 39,695
Items in the course of collection
from other banks 1,227 1,210
Trading portfolio assets 98,048 114,717
Financial assets designated at fair
value 33,335 38,300
Derivative financial instruments 8 341,312 439,909
Available for sale investments 96,210 86,066
Loans and advances to banks 44,548 42,111
Loans and advances to customers 430,719 427,767
Reverse repurchase agreements and
other similar secured lending 93,138 131,753
Prepayments, accrued income and other
assets 3,778 3,607
Investments in associates and joint
ventures 577 711
Property, plant and equipment 3,620 3,786
Goodwill 4,832 4,887
Intangible assets 3,357 3,293
Current and deferred tax assets 4 4,490 4,464
Retirement benefit assets 12 33 56
Non-current assets classified as held
for sale 4,154 15,574
========================================= ========= ========== ==========
Total assets 1,196,719 1,357,906
Liabilities
========================================= ========= ========== ==========
Deposits from banks 55,978 58,390
Items in the course of collection
due to other banks 1,539 1,177
Customer accounts 438,270 427,704
Repurchase agreements and other similar
secured borrowing 85,092 124,479
Trading portfolio liabilities 41,818 45,124
Financial liabilities designated at
fair value 51,284 56,972
Derivative financial instruments 8 342,964 439,320
Debt securities in issue 75,525 86,099
Subordinated liabilities 10 19,664 21,153
Accruals, deferred income and other
liabilities 11,838 11,423
Provisions 11 3,287 4,135
Current and deferred tax liabilities 4 885 1,283
Retirement benefit liabilities 12 1,091 1,574
Non-current liabilities classified
as held for sale 1,909 13,115
========================================= ========= ========== ==========
Total liabilities 1,131,144 1,291,948
Equity
========================================= ========= ========== ==========
Called up share capital and share
premium 13 21,523 20,809
Other reserves 15 1,334 2,724
Retained earnings 32,099 31,712
========================================= ========= ========== ==========
Shareholders' equity attributable
to ordinary shareholders of parent 54,956 55,245
Other equity instruments 14 4,325 4,322
========================================= ========= ========== ==========
Total equity excluding non-controlling
interests 59,281 59,567
Non-controlling interests 5 6,294 6,391
========================================= ========= ========== ==========
Total equity 65,575 65,958
========================================= ========= ========== ==========
Total liabilities and equity 1,196,719 1,357,906
1 For notes, see pages 56 to 89.
Condensed consolidated statement of changes in equity (unaudited)
Called
up share
capital Other
and share equity Other Retained Non-controlling Total
premium(1) instruments(1) reserves(1) earnings Total interests(2) equity
Half year ended 30.06.15 GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================ =========== =============== ============ ========= ======= =============== =======
Balance at 1 January 2015 20,809 4,322 2,724 31,712 59,567 6,391 65,958
Profit after tax - 159 - 1,611 1,770 338 2,108
Currency translation
movements - - (463) - (463) (127) (590)
Available for sale
investments - - (295) - (295) 1 (294)
Cash flow hedges - - (634) - (634) (12) (646)
Retirement benefit
remeasurements - - - (94) (94) 1 (93)
Other - - - 41 41 - 41
============================ =========== =============== ============ ========= ======= =============== =======
Total comprehensive income
for the year - 159 (1,392) 1,558 325 201 526
Issue of new ordinary shares 118 - - - 118 - 118
Issue of shares under
employee
share schemes 596 - - 303 899 - 899
Other equity instruments
coupons paid - (159) - 32 (127) - (127)
Treasury shares - - 2 (706) (704) - (704)
Dividends paid - - - (746) (746) (301) (1,047)
Other reserve movements - 3 - (54) (51) 3 (48)
============================ =========== =============== ============ ========= ======= =============== =======
Balance at 30 June 2015 21,523 4,325 1,334 32,099 59,281 6,294 65,575
Half year ended 31.12.14
============================ =========== =============== ============ ========= ======= =============== =======
Balance at 1 July 2014 20,655 4,326 (154) 33,241 58,068 6,957 65,025
Profit/(loss) after tax - 160 - (1,300) (1,140) 379 (761)
Currency translation
movements - - 1,501 - 1,501 41 1,542
Available for sale
investments - - 69 - 69 3 72
Cash flow hedges - - 1,284 - 1,284 2 1,286
Retirement benefit
remeasurements - - - (32) (32) 1 (31)
Other - - - 10 10 1 11
============================ =========== =============== ============ ========= ======= =============== =======
Total comprehensive income
for the period - 160 2,854 (1,322) 1,692 427 2,119
Issue of new ordinary shares 86 - - - 86 - 86
Issue of shares under
employee
share schemes 68 - - 314 382 - 382
Other equity instruments
coupons paid - (160) - 35 (125) - (125)
Redemption of preference
shares - - - (104) (104) (687) (791)
Treasury shares - - 24 (91) (67) - (67)
Dividends paid - - - (329) (329) (297) (626)
Other reserve movements - (4) - (32) (36) (9) (45)
============================ =========== =============== ============ ========= ======= =============== =======
Balance at 31 December
2014 20,809 4,322 2,724 31,712 59,567 6,391 65,958
Half year ended 30.06.14
============================ =========== =============== ============ ========= ======= =============== =======
Balance at 1 January 2014 19,887 2,063 249 33,186 55,385 8,564 63,949
Profit after tax - 90 - 1,126 1,216 390 1,606
Currency translation
movements - - (941) - (941) (115) (1,056)
Available for sale
investments - - 345 - 345 (4) 341
Cash flow hedges - - 260 - 260 (6) 254
Retirement benefit
remeasurements - - - 237 237 (1) 236
Other - - - (53) (53) - (53)
============================ =========== =============== ============ ========= ======= =============== =======
Total comprehensive income
for the year - 90 (336) 1,310 1,064 264 1,328
Issue of new ordinary shares 64 - - - 64 - 64
Issue of shares under
employee
share schemes 704 - - 379 1,083 - 1,083
Issue and exchange of equity
instruments - 2,263 - (155) 2,108 (1,527) 581
Other equity instruments
coupons paid - (90) - 19 (71) - (71)
Treasury shares - - (67) (775) (842) - (842)
Dividends paid - - - (728) (728) (334) (1,062)
Other reserve movements - - - 5 5 (10) (5)
============================ =========== =============== ============ ========= ======= =============== =======
Balance at 30 June 2014 20,655 4,326 (154) 33,241 58,068 6,957 65,025
1 Details of Share Capital, Other Equity Instruments and Other
Reserves are shown on page 71.
2 Details of Non-controlling Interests are shown on page 59.
Condensed consolidated cash flow statement (unaudited)
Half year ended Half year ended
Continuing operations 30.06.15 30.06.14
GBPm GBPm
======================================================== ================ ================
Profit before tax 3,114 2,501
Adjustment for non-cash items 2,998 1,760
Changes in operating assets and liabilities 6,976 (3,082)
Corporate income tax paid (929) (586)
======================================================== ================ ================
Net cash from operating activities 12,159 593
Net cash from investing activities (13,569) 7,463
Net cash from financing activities (1,582) (2,202)
Effect of exchange rates on cash and cash equivalents (255) (1,380)
======================================================== ================ ================
Net (decrease)/increase in cash and cash equivalents (3,247) 4,474
Cash and cash equivalents at beginning of the period 78,479 81,754
======================================================== ================ ================
Cash and cash equivalents at end of the period 75,232 86,228
Financial Statement Notes
1. Basis of preparation
These condensed consolidated interim financial statements for
the six months ended 30 June 2015 have been prepared in accordance
with the Disclosure and Transparency Rules of the Financial Conduct
Authority and with IAS 34 Interim Financial Reporting, as adopted
by the European Union. The condensed consolidated interim financial
statements should be read in conjunction with the annual financial
statements for the year ended 31 December 2014, which have been
prepared in accordance with IFRSs as adopted by the European
Union.
The accounting policies and methods of computation used in these
condensed consolidated interim financial statements are the same as
those used in the 2014 Annual Report.
Future accounting developments
During July 2015 the IASB confirmed the deferral of the
effective date of IFRS 15 Revenue from Contracts with Customers by
one year to 1 January 2018.
For further information on future accounting changes, refer to
the Barclays 2014 Annual Report.
Going concern
The Directors confirm they are satisfied that the Group has
adequate resources to continue in business for the foreseeable
future. They confirm that it is appropriate to adopt the going
concern basis for preparing accounts and there are no material
uncertainties.
2. Staff costs
Half year Half year
ended ended
30.06.15 30.06.14
Compensation costs GBPm GBPm
==================================================== ========= =========
Deferred bonus charge 472 573
Current year bonus charges 456 430
Sales commissions, commitments and other incentives 66 111
==================================================== ========= =========
Performance costs 994 1,114
Salaries 2,503 2,510
Social security costs 307 363
Post retirement benefits (163) 327
Other compensation costs 217 296
==================================================== ========= =========
Total compensation costs 3,858 4,610
Other resourcing costs
==================================================== ========= =========
Outsourcing 543 532
Redundancy and restructuring 71 253
Temporary staff costs 316 263
Other 76 72
==================================================== ========= =========
Total other resourcing costs 1,006 1,120
Total staff costs 4,864 5,730
Total staff costs decreased 15% to GBP4,864m:
-- Group performance costs reduced 11% to GBP994m primarily
reflecting lower deferred bonus charges
-- A gain in post retirement benefits of GBP163m (H114: GBP327m
expense) due to a GBP429m (H114:GBPnil) credit recognised in Q115
as the valuation of a component of the defined retirement benefit
liability was aligned to statutory provisions
-- Other resourcing costs decreased 10% to GBP1,006m primarily
due to a reduction in redundancy and restructuring costs of 72% to
GBP71m due to one-off restructurings in H114
As a result Group compensation: adjusted net operating income
ratio reduced to 32% (2014: 38%).
No awards have yet been granted in relation to the 2015 bonus
pool as decisions regarding incentive awards are not taken by the
Remuneration Committee until the performance for the full year can
be assessed. The current year bonus charge for the first six months
represents an accrual for estimated costs in accordance with
accounting requirements.
3. Administration and general expenses
Half year Half year
ended ended
30.06.15 30.06.14
GBPm GBPm
----------------------------------------------------------- --------- ---------
Infrastructure costs
Property and equipment 714 727
Depreciation of property, plant and equipment 279 292
Operating lease rentals 228 288
Amortisation of intangible assets 315 251
Impairment of property, equipment and intangible
assets 54 10
----------------------------------------------------------- --------- ---------
Total infrastructure costs 1,590 1,568
Other costs
Consultancy, legal and professional fees 493 729
Subscriptions, publications, stationery and communications 409 378
Marketing, advertising and sponsorship 267 260
Travel and accommodation 113 97
Provisions for ongoing investigations and litigation
primarily relating to Foreign Exchange 800 -
Provisions for UK customer redress 1,032 900
Other administration and general expenses 97 115
----------------------------------------------------------- --------- ---------
Total other costs 3,211 2,479
Total administration and general expenses 4,801 4,047
Administration and general expenses have increased 19% to
GBP4,801m primarily driven by an increase in provisions for ongoing
investigations and litigation primarily relating to Foreign
Exchange. This was partially offset by savings from strategic cost
programmes across infrastructure costs.
4. Tax
Assets Liabilities
================== ==================
Current and deferred tax assets and
liabilities 30.06.15 31.12.14 30.06.15 31.12.14
GBPm GBPm GBPm GBPm
==================================== ======== ======== ======== ========
Current tax 459 334 (689) (1,021)
Deferred tax 4,031 4,130 (196) (262)
==================================== ======== ======== ======== ========
Total 4,490 4,464 (885) (1,283)
The deferred tax asset of GBP4,031m (2014: GBP4,130m) mainly
relates to amounts in the US and UK.
The tax charge for H115 was GBP1,006m (2014: GBP895m),
representing an effective tax rate of 32.3% (2014: 35.8%). The
effective tax rate is higher than the UK statutory tax rate of
20.25% (2014: 21.5%) mainly due to profits outside of the UK taxed
at higher local statutory tax rates, non-creditable taxes,
non-deductible expenses and changes in non-UK tax rates, partially
offset by the effect of non-taxable gains and income, changes in
measurement of deferred tax assets and other items.
The UK Summer Budget introduced a number of changes impacting
banks. These changes have not yet been substantively enacted and
are therefore not reflected in H115 results.
5. Non-controlling interests
Profit attributable to non-controlling Equity attributable to non-controlling
interests interests
============================================ ==============================================
Half year ended Half year ended
30.06.15 30.06.14 As at 30.06.15 As at 31.12.14
GBPm GBPm GBPm GBPm
====================== ===================== ===================== ====================== ======================
Barclays Bank PLC
Issued:
- Preference shares 172 237 3,654 3,654
- Upper Tier 2
instruments 1 1 487 486
Barclays Africa Group
Limited 165 149 2,149 2,247
Other non-controlling
interests - 3 4 4
====================== ===================== ===================== ====================== ======================
Total 338 390 6,294 6,391
Equity attributable to non-controlling interest decreased 2% to
GBP6,294m mainly driven by the depreciation of ZAR against GBP.
6. Earnings per share
Half Year Half Year
Ended Ended
30.06.15 30.06.14
GBPm GBPm
====================================================== ========= ---------
Profit attributable to ordinary equity holders of
the parent from continuing operations 1,611 1,126
Tax credit on profit after tax attributable to other
equity holders 32 19
Profit attributable to equity holders of the parent
from continuing operations including dilutive impact
on convertible options 1,643 1,145
====================================================== ========= ---------
Basic weighted average number of shares in issue 16,678 16,296
Number of potential ordinary shares 345 127
====================================================== ========= ---------
Diluted weighted average number of shares 17,023 16,423
Basic earnings per ordinary share(1) 9.9p 7.0p
Diluted earnings per ordinary share(1) 9.7p 7.0p
7. Dividends on ordinary shares
It is Barclays policy to declare and pay dividends on a
quarterly basis. The first interim dividend for 2015 of 1p per
share was paid on 15 June 2015. The Board has decided to pay on 14
September 2015, a second interim dividend for 2015 of 1p per
ordinary share to shareholders on the share register on 7 August
2015, making a total for H115 of 2p (H114: 2p).
Half year ended Half year ended
30.06.15 30.06.14
================== ==================
Dividends paid during the period Per share Total Per share Total
Pence GBPm Pence GBPm
====================================== ========== ====== ========== ======
Final dividend paid during period 3.5p 578 3.5p 564
Interim dividends paid during period 1.0p 168 1.0p 164
====================================== ========== ====== ========== ======
For qualifying US and Canadian resident ADR holders, the second
interim dividend of 1p per ordinary share becomes 4p per ADS
(representing four shares). The ADR depositary will post the second
interim dividend on 14 September 2015 to ADR holders on the record
at close of business on 7 August 2015.
1 The profit after tax attributable to other equity holders of
GBP159m (H114: GBP90m) is offset by a tax credit recorded in
reserves of GBP32m (H114: GBP19m). The net amount of GBP127m
(H114: GBP71m), along with non-controlling interests (NCI) is
deducted from profit after tax in order to calculate earnings
per share.
8. Derivative financial instruments
Contract
notional
amount Fair value
====================
As at 30.06.15 Assets Liabilities
GBPm GBPm GBPm
================================================= ========== ======= ===========
Foreign exchange derivatives 3,613,760 56,725 (61,705)
Interest rate derivatives 23,653,217 241,937 (234,009)
Credit derivatives 1,076,180 18,343 (16,677)
Equity and stock index and commodity derivatives 933,049 23,316 (30,006)
================================================= ========== ======= ===========
Derivative assets/(liabilities) held for
trading 29,276,206 340,321 (342,397)
Derivatives in Hedge Accounting Relationships
================================================= ========== ======= ===========
Derivatives designated as cash flow hedges 135,758 180 (69)
Derivatives designated as fair value hedges 154,444 747 (484)
Derivatives designated as hedges of net
investments 4,033 64 (14)
================================================= ========== ======= ===========
Derivative assets/(liabilities) designated
in hedge accounting relationships 294,235 991 (567)
Total recognised derivative assets/(liabilities) 29,570,441 341,312 (342,964)
As at 31.12.14
================================================= ========== ======= ===========
Foreign exchange derivatives 3,758,858 74,433 (79,281)
Interest rate derivatives 26,570,719 308,343 (299,881)
Credit derivatives 1,183,963 23,507 (22,367)
Equity and stock index and commodity derivatives 1,110,802 31,987 (37,094)
================================================= ========== ======= ===========
Derivative assets/(liabilities) held for
trading 32,624,342 438,270 (438,623)
Derivatives in hedge accounting relationships
================================================= ========== ======= ===========
Derivatives designated as cash flow hedges 102,698 240 (60)
Derivatives designated as fair value hedges 162,898 1,379 (590)
Derivatives designated as hedges of net
investments 2,852 20 (47)
================================================= ========== ======= ===========
Derivative assets/(liabilities) designated
in hedge accounting relationships 268,448 1,639 (697)
Total recognised derivative assets/(liabilities) 32,892,790 439,909 (439,320)
Derivative assets decreased by GBP99bn to GBP341bn primarily
reflecting an increase in the major interest rate forward curves
and continued legacy portfolio run down.
Derivative asset exposures would be GBP308bn (2014: GBP398bn)
lower than reported under IFRS if the netting of financial
instruments and financial collateral were permitted for all amounts
that are covered by enforceable netting arrangements, irrespective
of whether the stricter requirements of IAS 32 were met. Similarly,
derivative liabilities would be GBP310bn (2014: GBP397bn) lower.
Netting posted on the balance sheet under IFRS for derivative
assets and liabilities was GBP98bn (2014: GBP182bn) and GBP101bn
(2014: GBP184bn) respectively.
9. Fair value of financial instruments
This section should be read in conjunction with Note 18 Fair
value of financial instruments of the 2014 Annual Report, which
provides more detail about accounting policies adopted, the
definitions of the three levels of the fair value hierarchy,
valuation methodologies used in calculating fair value and, the
valuation control framework which governs oversight of valuations.
There have been no changes in the accounting policies adopted or
the valuation methodologies used.
Valuation
The following table shows the Group's assets and liabilities
that are held at fair value disaggregated by valuation technique
(fair value hierarchy) and balance sheet classification:
Valuation technique using
===================================
Quoted Significant
market Observable unobservable
prices inputs inputs
(Level (Level (Level
1) 2) 3) Total
As at 30.06.15 GBPm GBPm GBPm GBPm
==================================== ======== ========== ============= =========
Trading portfolio assets 39,784 52,580 5,684 98,048
Financial assets designated at fair
value 7,101 8,226 18,008 33,335
Derivative financial assets 7,162 330,543 3,607 341,312
Available for sale assets 46,821 47,585 1,804 96,210
Other(1) - - 4,310 4,310
==================================== ======== ========== ============= =========
Total assets 100,868 438,934 33,413 573,215
Trading portfolio liabilities (24,306) (17,497) (15) (41,818)
Financial liabilities designated
at fair value (9) (49,329) (1,946) (51,284)
Derivative financial liabilities (7,205) (332,479) (3,280) (342,964)
Other(1) - - (1,909) (1,909)
==================================== ======== ========== ============= =========
Total liabilities (31,520) (399,305) (7,150) (437,975)
As at 31.12.14 GBPm GBPm GBPm GBPm
==================================== ======== ========== ============= =========
Trading portfolio assets 48,962 59,428 6,327 114,717
Financial assets designated at fair
value 9,934 8,461 19,905 38,300
Derivative financial assets 9,863 425,301 4,745 439,909
Available for sale assets 44,234 40,519 1,313 86,066
Other(1) 33 198 15,550 15,781
==================================== ======== ========== ============= =========
Total assets 113,026 533,907 47,840 694,773
Trading portfolio liabilities (26,840) (17,935) (349) (45,124)
Financial liabilities designated
at fair value (15) (55,141) (1,816) (56,972)
Derivative financial liabilities (10,313) (424,687) (4,320) (439,320)
Other(1) - - (13,115) (13,115)
==================================== ======== ========== ============= =========
Total liabilities (37,168) (497,763) (19,600) (554,531)
1 Other includes assets and liabilities held for sale of GBP4,154m
(2014: GBP15,574m) and GBP1,909m (2014: GBP13,115m) respectively,
which are measured at fair value on a non-recurring basis. This
decreased due to the sale of the Spanish business in Q115. It
also includes investment property of GBP156m (2014: GBP207m).
The following table shows the Group's assets and liabilities
that are held at fair value disaggregated by valuation technique
(fair value hierarchy) and product type:
Assets Liabilities
Valuation technique Valuation technique
using using
-------------------------------- ---------------------------------- -----------------------------------
Quoted Significant Quoted Significant
market Observable unobservable market Observable unobservable
prices inputs inputs prices inputs inputs
(Level (Level (Level (Level (Level (Level
1) 2) 3) 1) 2) 3)
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------- ---------- ------------- -------- ---------- -------------
As at 30.06.15
Interest rate derivatives - 241,954 901 - (233,622) (938)
Foreign exchange derivatives 52 56,635 110 (45) (61,570) (106)
Credit derivatives(1) - 16,600 1,743 - (16,416) (260)
Equity derivatives 4,855 7,931 794 (4,851) (13,054) (1,670)
Commodity derivatives 2,255 7,422 59 (2,309) (7,816) (306)
Government and government
sponsored debt 61,373 60,197 867 (9,957) (13,361) (12)
Corporate debt 215 12,689 3,071 (22) (3,189) (29)
Certificates of deposit,
commercial paper and
other money market instruments 88 1,101 - (5) (5,182) (857)
Reverse repurchase and
repurchase agreements - 4,571 - - (4,785) -
Non-asset backed loans - 1,964 16,396 - - -
Asset backed securities - 16,246 1,202 - (354) -
Commercial real estate
loans - - 613 - - -
Issued debt - - - - (36,715) (726)
Equity cash products 32,025 8,044 207 (14,326) (1,277) -
Funds and fund linked
products - 1,752 562 - (1,904) (161)
Physical commodities - 861 - - (28) -
Other(2) 5 967 6,888 (5) (32) (2,085)
-------------------------------- ------- ---------- ------------- -------- ---------- -------------
Total 100,868 438,934 33,413 (31,520) (399,305) (7,150)
As at 31.12.14
Interest rate derivatives - 308,706 1,239 (5) (299,181) (1,344)
Foreign exchange derivatives 4 74,358 108 (3) (79,188) (138)
Credit derivatives(1) - 21,541 1,966 - (21,958) (409)
Equity derivatives 3,847 9,750 1,247 (3,719) (13,780) (2,092)
Commodity derivatives 6,012 10,946 185 (6,586) (10,580) (337)
Government and government
sponsored debt 62,577 48,296 1,014 (11,563) (14,002) (346)
Corporate debt 151 22,036 3,061 - (3,572) (13)
Certificates of deposit,
commercial paper and
other money market instruments 78 921 - (4) (6,276) (665)
Reverse repurchase and
repurchase agreements - 5,236 - - (5,423) -
Non-asset backed loans 1 2,462 17,744 - - -
Asset backed securities 30 16,211 1,631 - (67) -
Commercial real estate
loans - - 1,180 - - -
Issued debt - - - (10) (40,592) (749)
Equity cash products 40,252 7,823 171 (15,276) (699) -
Funds and fund linked
products - 2,644 631 - (2,060) (210)
Physical commodities 4 1,447 - - (363) -
Other(2) 70 1,530 17,663 (2) (22) (13,297)
-------------------------------- ------- ---------- ------------- -------- ---------- -------------
Total 113,026 533,907 47,840 (37,168) (497,763) (19,600)
Assets and liabilities reclassified between Level 1 and Level
2
There were no transfers between Level 1 and 2 during the period
(2014: nil).
1 Credit derivatives also includes derivative exposure to monoline
insurers.
2 Other includes non-current assets and liabilities held for sale,
private equity investments, asset backed loans, US Lehman acquisition
assets and investment property.
Level 3 movement analysis
The following table summarises the movements in the Level 3
balance during the year. The table shows gains and losses and
includes amounts for all financial assets and liabilities
transferred to and from Level 3 during the year. Transfers have
been reflected as if they had taken place at the beginning of the
year.
Total gains
and losses
in the period
recognised
in the income
statement Transfers
================= ============
Total
gains
or losses
As at Trading Other recognised As at
01.01.15 Purchases Sales Issues Settlements income income in OCI In Out 30.06.15
------- -------- ----- -----
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------- -------- --------- ------- ------ ----------- ------- -------- ---------- ----- ----- --------
Government
and government
sponsored
debt 685 27 (28) - (2) (12) - - 15 (142) 543
Corporate
debt 3,026 112 (66) - - 53 - - 2 (91) 3,036
Asset backed
securities 1,610 1,305 (1,274) - (549) 60 - - 56 (24) 1,184
Non-asset
backed loans 273 171 (217) - (3) (12) - - - - 212
Funds and
fund linked
products 589 - (7) - (32) (50) - - 20 - 520
Other 144 71 (15) - (9) (2) - - - - 189
--------------- -------- --------- ------- ------ ----------- ------- -------- ---------- ----- ----- --------
Trading
portfolio
assets 6,327 1,686 (1,607) - (595) 37 - - 93 (257) 5,684
Commercial
real estate
loans 1,179 1,538 (1,916) - (185) (6) - - - - 610
Non-asset
backed loans 17,471 - - - (364) (925) - - - - 16,182
Asset backed
loans 393 470 (444) - - 6 - - - (1) 424
Private equity
investments 701 72 (110) - (2) 2 (22) - - - 641
Other 161 2 (4) - - (10) 2 - - - 151
--------------- -------- --------- ------- ------ ----------- ------- -------- ---------- ----- ----- --------
Financial
assets
designated
at fair value 19,905 2,082 (2,474) - (551) (933) (20) - - (1) 18,008
Asset backed
securities 1 - - - - - - - - (1) -
Government
and government
sponsored
debt 327 195 (203) - - - - 3 - - 322
Other 985 11 (32) - - - 499 17 19 (17) 1,482
--------------- -------- --------- ------- ------ ----------- ------- -------- ---------- ----- ----- --------
Available
for sale
investments 1,313 206 (235) - - - 499 20 19 (18) 1,804
Other(1) 207 - (65) - - - 14 - - - 156
Trading
portfolio
liabilities (349) - - - - - - - (14) 348 (15)
Certificates
of deposit,
commercial
paper and
other
money market
instruments (666) - - (35) - - (9) - (397) 249 (858)
Issued debt (748) - - (1) 130 22 - - (163) 15 (745)
Other (402) - - - - (7) 56 - - 10 (343)
--------------- -------- --------- ------- ------ ----------- ------- -------- ---------- ----- ----- --------
Financial
liabilities
designated
at fair value (1,816) - - (36) 130 15 47 - (560) 274 (1,946)
Interest rate
derivatives (105) - (4) - (46) 18 - - (40) 138 (39)
Credit
derivatives 1,557 276 (12) - (6) (321) - - (11) - 1,483
Equity
derivatives (845) 138 - (352) 96 101 - - (30) 18 (874)
Commodity
derivatives (152) - - - 8 16 - - (241) 123 (246)
Foreign
exchange
derivatives (30) - (1) (3) 25 9 - - (21) 24 3
--------------- -------- --------- ------- ------ ----------- ------- -------- ---------- ----- ----- --------
Net derivative
financial
instruments(2) 425 414 (17) (355) 77 (177) - - (343) 303 327
Total 26,012 4,388 (4,398) (391) (939) (1,058) 540 20 (805) 649 24,018
--------------- -------- --------- ------- ------ ----------- ------- -------- ---------- ----- ----- --------
1 Other consists of investment property. Non-current assets held
for sale of GBP4,154m (2014: GBP15,574m) and liabilities in a
disposal group classified as held for sale of GBP1,909m (2014:
GBP13,115m) are not included as these are measured at fair value
on a non-recurring basis.
2 The derivative financial instruments are represented on a net
basis. On a gross basis derivative financial assets as at 30
June 2015 totalled GBP3,607m (2014: GBP4,745m) and derivative
financial liabilities totalled GBP3,280m (2014: GBP4,320m).
Total gains
and losses
in the period
recognised
in the income
statement Transfers
================ ============
Total
gains
or losses
As at Trading Other recognised As at
01.01.14 Purchases Sales Issues Settlements income income in OCI In Out 31.12.14
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------- -------- --------- ------- ------ ----------- ------- ------- ---------- ----- ----- --------
Government
and government
sponsored
debt 161 96 (198) - (46) 5 - - 676 (9) 685
Corporate
debt 3,039 177 (332) - (370) 484 - - 39 (11) 3,026
Asset backed
securities 2,111 1,037 (1,552) - (141) 178 - - 8 (31) 1,610
Non-asset
backed loans 176 250 (30) - (49) 2 - - 13 (89) 273
Funds and
fund linked
products 494 - (92) - - (17) - - 204 - 589
Other 440 8 (369) - 54 22 - - - (11) 144
--------------- -------- --------- ------- ------ ----------- ------- ------- ---------- ----- ----- --------
Trading
portfolio
assets 6,421 1,568 (2,573) - (552) 674 - - 940 (151) 6,327
Commercial
real estate
loans 1,198 2,919 (2,678) - (334) 76 (2) - - - 1,179
Non-asset
backed loans 15,956 2 (177) - (81) 1,830 9 - - (68) 17,471
Asset backed
loans 375 855 (777) - (4) 19 - - 1 (76) 393
Private equity
investments 1,168 173 (500) - (11) 4 82 - - (215) 701
Other 73 75 (1) - (35) 9 32 - 2 6 161
--------------- -------- --------- ------- ------ ----------- ------- ------- ---------- ----- ----- --------
Financial
assets
designated
at fair value 18,770 4,024 (4,133) - (465) 1,938 121 - 3 (353) 19,905
Asset backed
securities 1 - - - - - - - - - 1
Government
and government
sponsored
debt 59 281 (12) - (1) - - - - - 327
Other 2,085 37 (78) - (1,694) 1 586 74 4 (30) 985
--------------- -------- --------- ------- ------ ----------- ------- ------- ---------- ----- ----- --------
Available
for sale
investments 2,145 318 (90) - (1,695) 1 586 74 4 (30) 1,313
Other(1) 451 47 (238) - - - 5 - - (58) 207
Trading
portfolio
liabilities - - - - - (3) - - (346) - (349)
Certificates
of deposit,
commercial
paper and
other money
market
instruments (409) - - (254) 12 2 88 - (108) 3 (666)
Issued debt (1,164) - - (16) 293 88 - - (48) 99 (748)
Other (67) - - (341) 10 6 30 - (40) - (402)
--------------- -------- --------- ------- ------ ----------- ------- ------- ---------- ----- ----- --------
Financial
liabilities
designated
at fair value (1,640) - - (611) 315 96 118 - (196) 102 (1,816)
Interest rate
derivatives (15) 5 45 (5) 7 (358) - - 103 113 (105)
Credit
derivatives 1,420 11 - - 42 121 - - (81) 44 1,557
Equity
derivatives (601) 86 (12) (305) 113 (278) - - (14) 166 (845)
Commodity
derivatives (141) - - (3) (10) 4 - - (11) 9 (152)
Foreign
exchange
derivatives 31 - (12) (4) (71) (6) - - 29 3 (30)
--------------- -------- --------- ------- ------ ----------- ------- ------- ---------- ----- ----- --------
Net derivative
financial
instruments(2) 694 102 21 (317) 81 (517) - - 26 335 425
Total 26,841 6,059 (7,013) (928) (2,316) 2,189 830 74 431 (155) 26,012
1 Other consists of investment property. Non-current
assets held for sale of GBP4,154m (2014: GBP15,574m)
and liabilities in a disposal group classified
as held for sale of GBP1,909m (2014: GBP13,115m)
are not included as these are measured at fair
value on a non-recurring basis.
2 The derivative financial instruments are represented
on a net basis. On a gross basis derivative financial
assets as at 30 June 2015 totalled GBP3,607m (2014:
GBP4,745m) and derivative financial liabilities
totalled GBP3,280m (2014: GBP4,320m).
Asset and liability moves between Level 2 and Level 3 are
primarily due to i) an increase or decrease in observable market
activity related to an input or ii) a change in the significance of
the unobservable input, with assets and liabilities classified as
Level 3 if an unobservable input is deemed significant.
Net transfers into Level 3 totalled GBP(805)m (2014: GBP431m).
This was primarily due to GBP(397)m of certificates of deposit,
commercial paper and other money market instruments and GBP(163)m
of issued debt which are designated at fair value driven by less
observable inputs for securities with maturities beyond 5 years. A
further GBP(241)m of commodity derivatives were transferred into
Level 3 due to a decrease in observable pricing for crude oil.
Net transfers out of Level 3 totalled GBP649m (2014: GBP155m).
This was primarily due to GBP348m of government and government
sponsored debt held as trading portfolio liabilities and GBP249m of
certificates of deposit, commercial paper and other money market
instruments which are designated at fair value as a result of more
observable valuation inputs.
Unrealised gains and losses on Level 3 financial assets and
liabilities
The following table discloses the unrealised gains and losses
recognised in the year arising on Level 3 financial assets and
liabilities held at the period end.
Unrealised gains and losses recognised during the period on Level
3 financial assets and liabilities held at period end(1)
===============================================================================================================
As at 30.06.15 As at 31.12.14
----------------------------------- -----------------------------------
Income statement Income statement
================== ==================
Other Other
compre- compre-
Trading Other hensive Trading Other hensive
income income income Total income income income Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================================== ======== ======== ======== ===== ======== ======== ======== =====
Trading portfolio assets (55) - - (55) 466 - - 466
Financial assets designated
at fair value (763) (70) - (833) 1,849 (9) - 1,840
Available for sale assets - 470 42 512 - 572 80 652
Trading portfolio liabilities - - - - (3) - - (3)
Financial liabilities designated
at fair value 16 50 - 66 98 118 - 216
Net derivative financial instruments (267) - - (267) (238) - - (238)
Other - (8) - (8) - 5 - 5
Total (1,069) 442 42 (585) 2,172 686 80 2,938
Valuation techniques and sensitivity analysis
A sensitivity analysis is performed on products with significant
unobservable inputs (Level 3) to generate a range of reasonably
possible alternative valuations. The sensitivity methodologies
applied take account of the nature of valuation techniques used, as
well as the availability and reliability of observable proxy and
historical data and the impact of using alternative models.
Current year valuation and sensitivity methodologies are
consistent with those described within Note 18 Fair value of
financial instruments in the 2014 Annual Report.
1 Amounts as at 30.06.15 represent six months unrealised gains
and losses, whereas as at 31.12.14 represent 12 months.
Sensitivity analysis of valuations
using unobservable inputs
================================================= ============ ====== ============= =======
Fair value Favourable changes Unfavourable changes
-------------------------- ===================== ==================== ======================
Total Total Income Income
Product type assets liabilities statement Equity statement Equity
GBPm GBPm GBPm GBPm GBPm GBPm
========================== ======= ============ ============ ====== ============= =======
As at 30.06.15
Interest rate derivatives 901 (938) 91 - (101) -
Foreign exchange
derivatives 110 (106) 18 - (18) -
Credit derivatives(1) 1,743 (260) 32 - (76) -
Equity derivatives 794 (1,670) 151 1 (151) (1)
Commodity derivatives 59 (306) 24 - (24) -
Government and government
sponsored debt 867 (12) - 1 (7) -
Corporate debt 3,071 (29) 12 - (10) -
Certificates of deposit,
commercial paper
and other money market
instruments - (857) 3 - 3 -
Non-asset backed
loans 16,396 - 1,124 - (748) -
Asset backed securities 1,202 - 24 - (16) -
Commercial real estate
loans 613 - 15 - (9) -
Issued debt - (726) - - - -
Equity cash products 207 - - 9 - (9)
Funds and fund linked
products 562 (161) 2 - (2) -
Physical commodities - - - - - -
Other(2) 6,888 (2,085) 151 68 (165) (57)
-------------------------- ======= ============ ============ ====== ============= =======
Total 33,413 (7,150) 1,647 79 (1,324) (67)
As at 31.12.14
Interest rate derivatives 1,239 (1,344) 70 - (71) -
Foreign exchange
derivatives 108 (138) 36 - (36) -
Credit derivatives(1) 1,966 (409) 81 - (229) -
Equity derivatives 1,247 (2,092) 220 - (220) -
Commodity derivatives 185 (337) 46 - (46) -
Government and government
sponsored debt 1,014 (346) - - (2) -
Corporate debt 3,061 (13) 26 (1) (9) (4)
Certificates of deposit,
commercial paper
and other money market
instruments - (665) 3 - 3 -
Non-asset backed
loans 17,744 - 1,164 - (820) -
Asset backed securities 1,631 - 46 1 (72) (1)
Commercial real estate
loans 1,180 - 20 - (19) -
Issued debt - (749) - - - -
Equity cash products 171 - - 11 - (11)
Funds and fund linked
products 631 (210) 14 - (14) -
Other(2) 17,663 (13,297) 180 82 (156) (55)
========================== ======= ============ ============ ====== ============= =======
Total 47,840 (19,600) 1,906 93 (1,691) (71)
The effect of stressing unobservable inputs to a range of
reasonably possible alternatives alongside considering the impact
of using alternative models would be to increase fair values by up
to GBP1,647m (2014: GBP1,906m) or to decrease fair values by up to
GBP1,324m (2014: GBP1,691m) with substantially all the potential
effect impacting profit and loss rather than equity.
1 Credit derivatives includes derivative exposure to monoline insurers.
2 Other includes non-current assets and liabilities held for sale,
which are measured at fair value on a non-recurring basis, private
equity investments, asset backed loans, US Lehman acquisition
assets and investment property.
Significant unobservable inputs
The valuation techniques and significant unobservable inputs for
assets and liabilities recognised at fair value and classified as
Level 3 are consistent with Note 18 Fair value of financial
instruments in the 2014 Annual Report. The description of the
significant unobservable inputs and the sensitivity of fair value
measurement of the instruments categorised as Level 3 assets or
liabilities to increases in significant unobservable inputs is also
found in Note 18 Fair value of financial instruments of the 2014
Annual Report. Non-current assets held for sale of GBP4,154m (2014:
GBP15,574m) and liabilities in a disposal group classified as held
for sale of GBP1,909m (2014: GBP13,115m) are not included as these
are measured at fair value on a non-recurring basis.
Fair value adjustments
Key balance sheet valuation adjustments that may be of interest
from a financial statement user perspective are quantified
below:
30.06.15 31.12.14
GBPm GBPm
------------------------------------------------ --------- ---------
Bid-offer valuation adjustments (389) (396)
Other exit adjustments (148) (169)
Funding Fair Value Adjustments (FFVA) (80) (100)
Derivative credit valuation adjustments (CVA):
- Monolines (9) (24)
- Other derivative CVA (343) (394)
Derivative debit valuation adjustments (DVA) 239 177
------------------------------------------------ --------- ---------
- FFVA decreased by GBP20m to GBP80m as a result of an interest
rate sell-off
- CVA decreased by GBP66m to GBP352m as a result of reduced
exposures from interest rate moves on both Monolines and other
derivative counterparties
- DVA increased by GBP62m to GBP239m as a result of a widening
in Barclays' credit spread
Portfolio exemption
The Group uses the portfolio exemption in IFRS 13 Fair Value
Measurement to measure the fair value of certain groups of
financial assets and financial liabilities. Assets and liabilities
are measured using the price that would be received to sell a net
long position (i.e. an asset) for a particular risk exposure or to
transfer a net short position (i.e. a liability) for a particular
risk exposure in an orderly transaction between market participants
at the balance sheet date under current market conditions.
Unrecognised gains as a result of the use of valuation models
using unobservable inputs
The amount that has yet to be recognised in income that relates
to the difference between the transaction price (the fair value at
initial recognition) and the amount that would have arisen had
valuation models using unobservable inputs been used on initial
recognition, less amounts subsequently recognised, is GBP105m
(2014: GBP96m). There are additions of GBP21m (2014: nil) and
GBP12m (2014: GBP41m) of amortisation and releases.
The reserve held for unrecognised gains is predominantly related
to derivative financial instruments.
Third party credit enhancements
Structured and brokered certificates of deposit issued by
Barclays Group are insured up to $250,000 per depositor, by the
Federal Deposit Insurance Corporation (FDIC) in the United States
of America. The FDIC is funded by premiums that Barclays and other
banks pay for deposit insurance coverage. The carrying value of
these issued certificates of deposit that are designated under the
IAS 39 fair value option includes this third party credit
enhancement. At 30 June 2015, the on-balance sheet value of these
brokered certificates of deposit was GBP3,428m (2014:
GBP3,650m).
Comparison of carrying amounts and fair values for assets and
liabilities not held at fair value
Valuation methodologies employed in calculating the fair value
of financial assets and liabilities measured at amortised cost are
consistent with the 2014 Annual Report disclosure.
The following table summarises the fair value of financial
assets and liabilities measured at amortised cost on the Group's
balance sheet where carrying amount is not a reasonable
approximation of fair value:
As at 30.06.15 As at 31.12.14
===================== =====================
Carrying Carrying
amount Fair value amount Fair value
Financial assets GBPm GBPm GBPm GBPm
======================================== ========= ========== ========= ==========
Loans and advances to banks 44,548 44,111 42,111 42,088
Loans and advances to customers:
- Home loans 164,341 158,023 166,974 159,602
- Credit cards, unsecured and other
retail lending 59,480 59,315 63,583 63,759
- Finance lease receivables 5,118 5,020 5,439 5,340
- Corporate loans 201,780 200,552 191,771 188,805
Reverse repurchase agreements and
other similar secured lending 93,138 93,138 131,753 131,753
Financial liabilities
Deposits from banks (55,978) (55,974) (58,390) (58,388)
Customer accounts:
- Current and demand accounts (134,345) (134,325) (143,057) (143,085)
- Savings accounts (133,294) (133,340) (131,163) (131,287)
- Other time deposits (170,632) (170,701) (153,484) (153,591)
Debt securities in issue (75,525) (76,609) (86,099) (87,522)
Repurchase agreements and other similar
secured borrowing (85,092) (85,092) (124,479) (124,479)
Subordinated liabilities (19,664) (20,944) (21,153) (22,718)
======================================== ========= ========== ========= ----------
10. Subordinated liabilities
As at As at
30.06.15 31.12.14
GBPm GBPm
================================================= ======== ========
Opening balance as at 1 January 21,153 21,695
Issuances 144 826
Redemptions (534) (1,695)
Other (1,099) 327
================================================= ======== ========
Total dated and undated subordinated liabilities
as at period end 19,664 21,153
Subordinated liabilities decreased 7% to GBP19,664m:
-- There were new issuances of GBP97m Floating Rate Subordinated
Notes (ZAR 1,693m) and GBP47m 10.05% Fixed Rate Subordinated Notes
(ZAR 807m)
-- Redemptions include GBP265m 6.140% Fixed Rate Guaranteed
Perpetual Subordinated Notes, GBP116m 8.1% Subordinated Callable
Notes (ZAR 2,000m) and GBP97m 4.75% Fixed Rate Subordinated Notes
2015 (US$ 150m)
-- Other movements of GBP1.1bn include a GBP443m reduction as
GBP strengthened against USD, EUR and ZAR and a GBP402m reduction
in accrued interest
11. Provisions
As at As at
30.06.15 31.12.14
GBPm GBPm
=========================================== ======== ================================
UK Customer Redress
- Payment Protection Insurance redress 1,268 1,059
- Interest rate hedging product redress 108 211
- Packaged Bank Accounts 250 -
Other customer redress 398 375
Legal, competition and regulatory matters 484 1,690
Redundancy and restructuring 261 291
Undrawn contractually committed facilities
and guarantees 79 94
Onerous contracts 164 205
Sundry provisions 275 210
------------------------------------------- -------- --------------------------------
Total 3,287 4,135
Payment Protection Insurance Redress
As at 30 June 2015 Barclays had recognised cumulative provisions
totalling GBP6.0bn against the cost of Payment Protection Insurance
(PPI) redress and associated processing costs with utilisation of
GBP4.7bn leaving a residual provision of GBP1.3bn.
Through to 30 June 2015, 1.4m (31 December 2014: 1.3m) customer
initiated claims(1) had been received and processed. The volume of
claims received during H115 decreased 14% compared to H214. This
rate of decline however was slower than previously expected, due to
steady levels of claims from Claims Management Companies in
particular.
As a result of the lower than expected decline in claims
additional provisions totalling GBP750m have been recognised during
H115.
The provision is calculated using a number of key assumptions
which continue to involve significant management judgement and
modelling:
-- Customer initiated claim volumes - claims received but not
yet processed and an estimate of future claims initiated by
customers where the volume is anticipated to decline over time
-- Proactive response rate - volume of claims in response to proactive mailing
-- Uphold rate - the percentage of claims that are upheld as being valid upon review
-- Average claim redress - the expected average payment to
customers for upheld claims based on the type and age of the
policy/policies
These assumptions remain subjective, in particular due to the
uncertainty associated with future claims levels, which include
complaints driven by CMC activity.
The current provision represents Barclays' revised best estimate
of all future expected costs of PPI redress, however, it is
possible the eventual outcome may differ from the current estimate.
If this were to be material, the provision will be increased or
decreased accordingly. The current forecast indicates that the
large majority of costs included in the provision will be incurred
during 2015 and 2016.
The following table details by key assumption, actual data
through to 30 June 2015, forecast assumptions used in the provision
calculation and a sensitivity analysis illustrating the impact on
the provision if the future expected assumptions prove too high or
too low.
Assumption Cumulative Sensitivity
actual Analysis increase/decrease
to 30.06.15 Future Expected in provision
----------------------------------- ------------ ---------------- ---------------------------
Customer initiated claims received
and processed(1) 1,420k 270k 50k = GBP91m
Proactive mailing 680k 133k 50k = GBP15m
Response rate to proactive mailing 25% 23% 1% = GBP4m
Average uphold rate per claim(2) 84% 87% 1% = GBP6m
Average redress per valid claim(3) GBP1,794 GBP1,781 GBP100 = GBP30m
1 Total claims received to date, including those received via CMCs
but excluding those for which no PPI policy exists and excluding
responses to proactive mailing. This sensitivity includes the
associated costs of FOS referrals and operating costs.
2 Average uphold rate per claim excludes those for which no PPI
policy exists.
3 Average redress stated on a per policy basis.
A 2014 decision of the UK Supreme Court (Plevin) held that,
judged on its own facts, non-disclosure of the amount of
commissions payable in connection with the sale of single premium
PPI to a customer could create an unfair relationship under the
provisions of the UK Consumer Credit Act. Barclays is in an active
dialogue with the FCA and the FOS to determine any possible wider
impact of such decision on its historical sales of PPI. Due to this
uncertainty it is not currently practicable to provide an estimate
of the financial impact the Plevin decision could have and there
can be no assurance that the outcome of this matter will not be
material.
Packaged bank account redress
As at 30 June 2015 Barclays holds a provision of GBP250m for
customer redress and associated operational costs to be incurred in
response to complaints received relating to Packaged Bank
Accounts.
The provision has been calculated using a number of assumptions
which involve significant management judgment; the most significant
assumption being volume of future complaints, together with average
complaint uphold rate and average redress per claim.
12. Retirement benefits
As at 30 June 2015, the Group's IAS19 pension deficit across all
schemes was GBP1.1bn (2014: GBP1.5bn). The UK Retirement Fund
(UKRF), which is the Group's main scheme, had a deficit of GBP0.7bn
(2014: GBP1.1bn).
The movement for the UKRF is due to an increase in asset values,
the Bank paying GBP150m of deficit contributions during 2015 and a
decrease in the liabilities. The decrease in the liabilities can be
linked to an increase in the discount rate to 3.79% pa (2014: 3.67%
pa) partially offset by an increase in long term expected inflation
to 3.25% pa (2014: 3.05% pa). In addition, the assumptions have
been updated for current market conditions, and in Q115 the
valuation of a component of the defined benefit liability was
revised to use the long term Consumer Price Index rather than the
Retail Price Index, consistent with statutory provisions, resulting
in a GBP429m (H114: GBPnil) gain.
The UKRF discount rate assumption at 30 June 2015 is set using a
variant of the Towers Watson RATE:Link model where AA spot yields
are assumed to remain flat after year 30 and the corporate bond
universe includes bonds rated AA by at least one of the four
largest rating agencies. This compares to the RATE:Link model
previously used which incorporated the slope of the government
yield curve in extrapolating corporate spot yields beyond year 30,
and only included bonds rated AA by either of the two largest
rating agencies. The impact of this change on the UKRF Defined
Benefit Obligation at 30 June 2015 was a GBP0.4bn decrease with no
impact on current year profit. It is not possible to estimate the
effects on profits after 2015.
The latest triennial actuarial valuation of the UKRF was carried
out with an effective date of 30 September 2013. This was completed
in 2014 and showed a deficit of GBP3.6bn and a funding level of
87.4%. The Bank and the Trustee agreed a scheme-specific funding
target, statement of funding principles, a schedule of
contributions and a recovery plan to eliminate the deficit of the
UKRF. The main differences between the funding and IAS 19
assumptions are a more prudent longevity assumption for funding and
a different approach to setting the discount rate.
The recovery plan to eliminate the deficit will result in the
Bank paying deficit contributions to the Fund until 2021. Deficit
contributions of GBP300m are payable in 2015, and also in 2016.
Further deficit contributions of GBP740m pa are payable during 2017
to 2021. Up to GBP500m of the 2021 deficit contributions are
payable in 2017 depending on the deficit level at that time. These
deficit contributions are in addition to the regular contributions
to meet the Group's share of the cost of benefits accruing over
each year.
In non-valuation years, the Scheme Actuary prepares an actuarial
annual update of the funding position. The latest annual update was
carried out as at 30 September 2014 and showed a deficit of
GBP4.6bn and a funding level of 85.4%. The increase in funding
deficit over the year to 30 September 2014 can be mainly attributed
to the fall in real gilt yields over the year.
13. Called up share capital
Called up share capital comprises 16,773m (2014: 16,498m)
ordinary shares of 25p each. The increase was largely due to the
issuance of shares under employee share schemes and the Barclays
PLC Scrip Dividend Programme.
14. Other equity instruments
Other Equity Instruments of GBP4,325m (2014: GBP4,322m) include
Additional Tier 1 (AT1) securities issued by Barclays PLC during
2013 and 2014.
The AT1 securities are perpetual securities with no fixed
maturity and are structured to qualify as AT1 instruments under CRD
IV.
15. Other reserves
As at As at
30.06.15 31.12.14
GBPm GBPm
============================== ========= =========
Currency translation reserve (1,045) (582)
Available for sale reserve 267 562
Cash flow hedging reserve 1,183 1,817
Other 929 927
============================== ========= =========
Total 1,334 2,724
Currency translation reserve
As at 30 June 2015 there was a debit balance of GBP1,045m (2014:
GBP582m debit) in the currency translation reserve. The increase of
GBP463m debit (2014: GBP560m credit) principally reflected the
depreciation of ZAR, EUR and USD against GBP. The currency
translation reserve associated with non-controlling interests
increased by GBP127m debit (2014: GBP74m debit) due to the
depreciation of ZAR against GBP.
During the period a GBP87m net loss (2014: GBP91m net gain) from
recycling of the currency translation reserve was recognised in the
Income Statement. This principally related to the disposal of the
Spanish business.
Available for sale reserve
As at 30 June 2015 there was a balance of GBP267m (2014:
GBP562m) in the available for sale reserve. The decrease of GBP295m
(2014: GBP414m increase) was largely driven by GBP1,014m losses
from changes in fair value on Government Bonds offset by GBP853m
due to fair value hedging, GBP312m of net gains transferred to net
profit and a tax credit of GBP96m.
Cash flow hedging reserve
The cash flow hedging reserve represents the cumulative gains
and losses on effective cash flow hedging instruments that will be
recycled to the income statement when the hedged transactions
affect profit or loss.
As at 30 June 2015 there was a balance of GBP1,183m (2014:
GBP1,817m) in the cash flow hedging reserve. The decrease of
GBP634m (2014: GBP1,544m increase) principally reflected a GBP697m
decrease in the fair value of interest rate swaps held for hedging
purposes as interest rate forward curves increased, GBP98m gains
transferred to net profit, partially offset by a tax credit of
GBP159m.
Treasury shares
During the period GBP568m (2014: GBP909m) net purchases of
treasury shares were made, principally reflecting the increase in
shares held for the purposes of employee share schemes, and GBP570m
(2014: GBP866m) was transferred to retained earnings reflecting the
vesting of deferred share based payments.
16. Contingent liabilities and commitments
As at As at
30.06.15 31.12.14
GBPm GBPm
======================================================= ======== ========
Guarantees and letters of credit pledged as collateral
security 15,131 14,547
Performance guarantees, acceptances and endorsements 5,215 6,777
======================================================= ======== ========
Contingent liabilities 20,346 21,324
------------------------------------------------------- -------- --------
Documentary credits and other short-term trade related
transactions 1,163 1,091
------------------------------------------------------- -------- --------
Forward starting reverse repurchase agreements 15,459 13,856
======================================================= ======== ========
Standby facilities, credit lines and other commitments 269,404 276,315
Further details on contingent liabilities relating to legal,
competition and regulatory matters can be found in Note 17.
17. Legal, competition and regulatory matters
Barclays PLC (BPLC), Barclays Bank PLC (BBPLC) and the Group
face legal, competition and regulatory challenges, many of which
are beyond our control. The extent of the impact on BPLC, BBPLC and
the Group of these matters cannot always be predicted but may
materially impact our operations, financial results, condition and
prospects. Matters arising from a set of similar circumstances can
give rise to either a contingent liability or a provision, or both,
depending on the relevant facts and circumstances. The Group has
not disclosed an estimate of the potential financial effect on the
Group of contingent liabilities where it is not currently
practicable to do so.
Investigations into certain agreements
The Financial Conduct Authority (FCA) has alleged that BPLC and
BBPLC breached their disclosure obligations in connection with two
advisory services agreements entered into by BBPLC. The FCA has
imposed a GBP50m fine. BPLC and BBPLC are contesting the findings.
The United Kingdom (UK) Serious Fraud Office (SFO) is also
investigating these agreements. The US Department of Justice (DOJ)
and US Securities and Exchange Commission (SEC) are investigating
whether the Group's relationships with third parties who help it to
win or retain business are compliant with the US Foreign Corrupt
Practices Act.
Background Information
The FCA has investigated certain agreements, including two
advisory services agreements entered into by BBPLC with Qatar
Holding LLC (Qatar Holding) in June and October 2008 respectively,
and whether these may have related to BPLC's capital raisings in
June and November 2008.
The FCA issued warning notices (Warning Notices) against BPLC
and BBPLC in September 2013.
The existence of the advisory services agreement entered into in
June 2008 was disclosed but the entry into the advisory services
agreement in October 2008 and the fees payable under both
agreements, which amount to a total of GBP322m payable over a
period of five years, were not disclosed in the announcements or
public documents relating to the capital raisings in June and
November 2008. While the Warning Notices consider that BPLC and
BBPLC believed at the time that there should be at least some
unspecified and undetermined value to be derived from the
agreements, they state that the primary purpose of the agreements
was not to obtain advisory services but to make additional
payments, which would not be disclosed, for the Qatari
participation in the capital raisings.
The Warning Notices conclude that BPLC and BBPLC were in breach
of certain disclosure-related listing rules and BPLC was also in
breach of Listing Principle 3 (the requirement to act with
integrity towards holders and potential holders of the Company's
shares). In this regard, the FCA considers that BPLC and BBPLC
acted recklessly. The financial penalty in the Warning Notices
against the Group is GBP50m. BPLC and BBPLC continue to contest the
findings.
Other Investigations and Litigation
The FCA has agreed that the FCA enforcement process be
temporarily stayed pending progress in the SFO's investigation into
the agreements referred to above, including the advisory services
agreements, in respect of which the Group has received and has
continued to respond to requests for further information. The DOJ
and SEC are investigating these same agreements and are also
undertaking an investigation into whether the Group's relationships
with third parties who assist BPLC to win or retain business are
compliant with the US Foreign Corrupt Practices Act. Certain
regulators in other jurisdictions have also been briefed on the
investigations into certain of the Group's relationships with third
parties. It is possible that civil litigation relating to certain
of these matters may be brought in the future against BPLC and/or
its affiliates.
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the
financial impact of the actions described on the Group or what
effect that they might have upon the Group's operating results,
cash flows or financial position in any particular period.
Alternative Trading Systems and High-Frequency Trading
The SEC, the New York State Attorney General (NYAG), the FCA and
regulators in certain other jurisdictions have been investigating a
range of issues associated with alternative trading systems (ATSs),
including dark pools, and the activities of high-frequency traders.
Barclays Capital Inc. (BCI) has been providing information to the
relevant regulatory authorities in response to their enquiries.
Various parties, including the NYAG, have filed complaints against
BPLC and BCI and certain of the Group's current and former officers
in connection with ATS related activities. BPLC and BCI continue to
defend against these actions.
Background Information
Civil complaints have been filed in the New York Federal Court
on behalf of a putative class of plaintiffs against BPLC and BCI
and others generally alleging that the defendants violated the
federal securities laws by participating in a scheme in which
high-frequency trading firms were given informational and other
advantages so that they could manipulate the US securities market
to the plaintiffs' detriment. These complaints have been
consolidated and BPLC has filed a motion to dismiss this
action.
In June 2014, the NYAG filed a complaint (NYAG Complaint)
against BPLC and BCI in the Supreme Court of the State of New York
(NY Supreme Court) alleging, amongst other things, that BPLC and
BCI engaged in fraud and deceptive practices in connection with LX
Liquidity Cross, the Group's SEC-registered ATS. BPLC and BCI filed
a motion to dismiss the Complaint in July 2014.
BPLC and BCI have also been named in a class action by an
institutional investor client under California law based on
allegations similar to those in the Complaint. This California
class action has been consolidated with the class action filed in
the New York Federal Court described above.
Also, following the filing of the NYAG Complaint, BPLC and BCI
were named in a shareholder securities class action along with its
current and certain of its former CEOs and CFOs and an employee in
Equities Electronic Trading on the basis that investors suffered
damages when their investments in Barclays American Depository
Receipts declined in value as a result of the allegations in the
NYAG Complaint. BPLC and BCI have filed a motion to dismiss the
complaint, which the court granted in part and denied in part.
It is possible that additional complaints relating to these or
similar matters may be brought in the future against BPLC and/or
its affiliates.
Recent Developments
In February 2015, the NYAG filed an amended complaint and the NY
Supreme Court subsequently granted in part and denied in part BPLC
and BCI's motion to dismiss the NYAG Complaint. Proceedings in this
matter are continuing.
Claimed Amounts/Financial Impact
The complaints seek unspecified monetary damages and injunctive
relief. It is not currently practicable to provide an estimate of
the financial impact of the matters in this section or what effect
that these matters might have upon operating results, cash flows or
the Group's financial position in any particular period.
FERC
The US Federal Energy Regulatory Commission (FERC) has filed a
civil action against BBPLC and certain of its former traders in the
US District Court in California seeking to collect on an order
assessing a $435m civil penalty and the disgorgement of $34.9m of
profits, plus interest, in connection with allegations that BBPLC
manipulated the electricity markets in and around California. The
US Attorney's Office in the SDNY has informed BBPLC that it is
looking into the same conduct at issue in the FERC matter and a
civil class action complaint was filed in the US District Court for
the SDNY against BBPLC asserting antitrust allegations that mirror
those raised in the civil suit filed by FERC.
Background Information
In October 2012, FERC issued an Order to Show Cause and Notice
of Proposed Penalties (Order and Notice) against BBPLC and four of
its former traders in relation to their power trading in the
western US. In the Order and Notice, FERC asserted that BBPLC and
its former traders violated FERC's Anti-Manipulation Rule by
manipulating the electricity markets in and around California from
November 2006 to December 2008, and proposed civil penalties and
profit disgorgement to be paid by BBPLC.
In July 2013, FERC issued an Order Assessing Civil Penalties in
which it assessed a $435m civil penalty against BBPLC and ordered
BBPLC to disgorge an additional $34.9m of profits plus interest
(both of which are consistent with the amounts proposed in the
Order and Notice).
In October 2013, FERC filed a civil action against BBPLC and its
former traders in the US District Court in California seeking to
collect the penalty and disgorgement amount. FERC's complaint in
the civil action reiterates the allegations previously made by FERC
in its October 2012 Order and Notice and its July 2013 Order
Assessing Civil Penalties.
In September 2013, BBPLC was contacted by the criminal division
of the US Attorney's Office in SDNY and advised that such office is
looking at the same conduct at issue in the FERC matter.
In December 2013, BBPLC and its former traders filed a motion to
dismiss the action for improper venue or, in the alternative, to
transfer it to the SDNY, and a motion to dismiss the complaint for
failure to state a claim.
Recent Developments
In May 2015, the US District Court in California denied a motion
filed by BBPLC and the former traders to dismiss the action for
improper venue or, in the alternative, to transfer it to the SDNY,
and a motion to dismiss the complaint for failure to state a
claim.
In June 2015, a civil class action complaint was filed in the US
District Court for the SDNY against BBPLC by Merced Irrigation
District, a California utility company, asserting antitrust
allegations in connection with BBPLC's purported manipulation of
the electricity markets in and around California. The allegations
mirror those raised in the civil suit filed by FERC against BBPLC
currently pending in the US District Court in California.
Claimed Amounts/Financial Impact
FERC has made claims against BBPLC and certain of its former
traders totalling $469.9m, plus interest, for civil penalties and
profit disgorgement. This amount does not necessarily reflect the
BBPLC's potential financial exposure if a ruling were to be made
against it. The civil class action complaint refers to damages of
$139.3m.
Investigations into LIBOR, other Benchmarks, ISDAFIX, Foreign
Exchange Rates and Precious Metals
Regulators and law enforcement agencies from a number of
governments have been conducting investigations relating to BBPLC's
involvement in manipulating Foreign Exchange rates and financial
benchmarks. BBPLC, BPLC and BCI have reached settlements with the
relevant law enforcement agency or regulator in certain of the
investigations, but others, including those set out in more detail
below, remain pending.
Background Information
The FCA, the US Commodity Futures Trading Commission (CFTC), the
SEC, the DOJ Fraud Section (DOJ-FS) and Antitrust Division
(DOJ-AD), the European Commission (Commission), the SFO, the
Monetary Authority of Singapore, the Japan Financial Services
Agency, the Administrative Council for Economic Defence in Brazil,
the South African Competition Commission, the prosecutors' office
in Trani, Italy and various US state attorneys general are amongst
various authorities that opened investigations in connection with
efforts to manipulate Foreign Exchange rates and into submissions
made by BBPLC and other financial institutions to the bodies that
set or compile various financial benchmarks, such as LIBOR and
EURIBOR.
In June 2012, BBPLC announced that it had reached settlements
with the Financial Services Authority (FSA) (as predecessor to the
FCA), the CFTC and the DOJ-FS in relation to their investigations
concerning certain benchmark interest rate submissions, and BBPLC
agreed to pay total penalties of GBP290m, which were reflected in
operating expenses for 2012. The settlements were made by entry
into a Settlement Agreement with the FSA, a Settlement Order with
the CFTC (CFTC LIBOR Order) and a Non-Prosecution Agreement (NPA)
with the DOJ-FS. In addition, BBPLC was granted conditional
leniency from the DOJ-AD in connection with potential US antitrust
law violations with respect to financial instruments that reference
EURIBOR. Summaries of the NPA and the CFTC LIBOR Order are set out
below. The full text of the CFTC LIBOR Order and the NPA are
publicly available on the websites of the CFTC and the DOJ,
respectively. The terms of the Settlement Agreement with the FSA
are confidential, but the Final Notice of the FSA in relation to
LIBOR is available on the FCA's website.
CFTC LIBOR Order
In addition to a $200m civil monetary penalty, the CFTC LIBOR
Order requires BBPLC to cease and desist from further violations of
specified provisions of the US Commodity Exchange Act (CEA) and
take specified steps to ensure the integrity and reliability of its
benchmark interest rate submissions, including LIBOR and EURIBOR,
and improve related internal controls.
Investigations by the US State Attorneys General
Following the settlements announced in June 2012, 31 US State
Attorneys General commenced their own investigations into LIBOR,
EURIBOR and the Tokyo Interbank Offered Rate. The NYAG, on behalf
of this coalition of Attorneys General, issued a subpoena in July
2012 to BBPLC (and subpoenas to a number of other banks) to produce
wide-ranging information and has since issued additional
information requests to BBPLC for both documents and transactional
data. BBPLC is responding to these requests on a rolling basis.
Investigation by the SFO
In addition, following the settlements announced in June 2012,
the SFO announced in July 2012 that it had decided to investigate
the LIBOR matter, in respect of which BBPLC has received and
continues to respond to requests for information.
Investigations by the European Commission
The Commission has also been conducting investigations into the
manipulation of, amongst other things, EURIBOR. On 4 December 2013,
the Commission announced that it had reached a settlement with the
Group and a number of other banks in relation to anti-competitive
conduct concerning EURIBOR. The Group had voluntarily reported the
EURIBOR conduct to the Commission and cooperated fully with the
Commission's investigation. In recognition of this cooperation, the
Group was granted full immunity from the financial penalties that
would otherwise have applied.
DOJ Non-Prosecution Agreement
As part of the NPA, BBPLC agreed to pay a $160m penalty. In
addition, the DOJ agreed not to prosecute BBPLC for any crimes
(except for criminal tax violations, as to which the DOJ cannot and
did not make any agreement) related to BBPLC's submissions of
benchmark interest rates, including LIBOR and EURIBOR, contingent
upon BBPLC's satisfaction of specified obligations under the
NPA.
In June 2014, BBPLC and DOJ-FS entered into a letter agreement
which gave DOJ-FS until 27 June 2015 to make a determination under
the NPA solely as to whether any of BBPLC's trading activities in
the Foreign Exchange market during the two-year period from 26 June
2012 constituted the commission of a 'United States crime'.
Recent Developments
The Foreign Exchange settlements described below under 'Foreign
Exchange Trading Investigations' include a $60m penalty imposed by
the DOJ as a consequence of certain practices that continued after
entry into the NPA; however, the DOJ exercised its discretion not
to declare a breach of the NPA. The NPA and the letter agreement
have now expired.
Foreign Exchange Trading Investigations
Various regulatory and enforcement authorities, including the
FCA, the Commission, the CFTC, the DOJ-FS, the DOJ-AD, the SEC and
the New York State Department of Financial Services (NYDFS) have
been investigating a range of issues associated with Foreign
Exchange sales and trading, including electronic trading. Certain
of these investigations involve multiple market participants in
various countries.
Recent Developments
On 20 May 2015, the Group announced that it had reached
settlements with the CFTC, the NYDFS, the DOJ, the Board of
Governors of the Federal Reserve System (Federal Reserve) and the
FCA (together, the Resolving Authorities) in relation to
investigations into certain sales and trading practices in the
Foreign Exchange market, that it had agreed to pay total penalties
of approximately $2.38bn, including a $60m penalty imposed by the
DOJ as a consequence of certain practices continuing after entry
into the NPA, and that BPLC had agreed to plead guilty to a
violation of US anti-trust law.
Under the plea agreement with the DOJ, BPLC agreed to (i) pay a
criminal fine of $650m and (ii) a term of probation of three years
from the date of the final judgment in respect of the plea
agreement. During the term of probation, BPLC must, amongst other
things:
-- Commit no crime whatsoever in violation of the federal laws of the United States;
-- Notify the probation officer appointed by the court upon
learning of the commencement of any federal criminal investigation
in which it is a target, or federal criminal prosecution against
it;
-- Implement and continue to implement a compliance program
designed to prevent and detect the conduct that gave rise to the
plea agreement;
-- Strengthen its compliance and internal controls as required
by the CFTC, the FCA and any other regulatory or enforcement
agencies that have addressed the conduct set forth in the plea
agreement; and
-- Bring to the DOJ's attention (i) all credible information
regarding criminal violations by BPLC or any of its employees that
relates to US anti-trust laws or fraud laws, including securities
or commodities markets fraud, as to which BPLC's Board of
Directors, management or legal and compliance personnel is aware
(ii) all criminal or regulatory investigations, administrative
proceedings or civil actions brought by any governmental authority
in the US by or against BPLC or its employees that alleges
violations of US anti-trust or fraud laws, or including securities
or commodities markets fraud.
Pursuant to the settlement with the CFTC, BBPLC consented to the
entry of an order requiring it to (i) cease and desist from
violating provisions of the US Commodity Exchange Act, (ii) pay a
civil monetary penalty of $400m and (iii) undertake certain
remediation efforts to the extent not already undertaken,
including:
-- Implementing and improving its internal controls and
procedures in a manner reasonably designed to ensure the integrity
of its participation in the fixing of any Foreign Exchange
benchmark rate, including measures to identify and address internal
or external conflicts of interest; and
-- Implementing additional remediation improvements will include
internal controls and procedures relating to, amongst other things:
(i) detection and deterrence of improper communications concerning
Foreign Exchange benchmark rates and trading or other conduct
potentially intended to manipulate Foreign Exchange benchmark
rates, (ii) routine and on-going training of all traders,
supervisors and others who are involved in the fixing of any
Foreign Exchange benchmark rate and (iii) its system for reporting,
handling and investigating any suspected misconduct or
questionable, unusual or unlawful activity relating to the fixing
of any Foreign Exchange benchmark rate.
Pursuant to its settlement with the Federal Reserve, BBPLC and
BBPLC's New York branch consented to an order imposing a civil
monetary penalty of $342m and ordering BBPLC and BBPLC's New York
branch to submit in writing to the Federal Reserve Bank of New York
for its approval (i) an enhanced internal controls and compliance
program to comply with applicable US laws and regulations with
respect to certain Foreign Exchange activities and certain
activities in certain other wholesale markets for commodities and
interest rate products, (ii) a plan to improve its compliance risk
management program regarding BBPLC's and BBPLC's New York branch's
compliance with applicable US laws and regulations with respect to
certain Foreign Exchange activities and certain activities in
certain other wholesale markets for commodities and interest rate
products and (iii) enhanced internal audit program regarding
BBPLC's and BBPLC's New York branch's compliance with applicable US
laws and regulations with respect to certain Foreign Exchange
activities and certain activities in certain other wholesale
markets for commodities and interest rate products. Under the
Federal Reserve order, BBPLC and its institution-affiliated parties
must not in the future directly or indirectly retain any individual
as an officer, employee, agent, consultant or contractor of BBPLC
or of any subsidiary of BBPLC who, based on the investigative
record compiled by US authorities, has done all of the following:
(i) participated in the misconduct underlying the order, (ii) been
subject to formal disciplinary action as a result of BBPLC's and
BBPLC's New York branch's internal disciplinary review or
performance review in connection with the conduct described in the
order, and (iii) either separated from BBPLC or any subsidiary
thereof or had his or her employment terminated in connection with
the conduct described in the order.
Pursuant to the settlement with the NYDFS, BBPLC and BBPLC's New
York branch consented to an order imposing a civil monetary penalty
of $485m and requiring BBPLC and BBPLC's New York branch to take
all steps necessary to terminate four identified employees. BBPLC
and BBPLC's New York branch must also continue to engage the
independent monitor previously selected by the NYDFS to conduct,
consistent with applicable law, a comprehensive review of
compliance programs, policies, and procedures, with respect to the
business activities discussed within the order, in place at BBPLC
that pertain to or affect activities conducted by or through
BBPLC's New York branch. The monitor will submit to the NYDFS and
BBPLC's Board of Directors a preliminary written report of
findings, including proposed corrective measures and thereafter
BBPLC and BBPLC's New York branch must submit to the NYDFS (i) a
written plan designed to improve and enhance current compliance
programs that pertain to or affect activities conducted by or
through BBPLC's New York branch, incorporating any relevant
corrective measures identified in the monitor's report and (ii) a
written plan to improve and enhance management oversight of
compliance programs, policies, and procedures now in place at BBPLC
that pertain to or affect activities conducted by or through
BBPLC's New York branch.
The FCA issued a Final Notice and imposed a financial penalty of
GBP284m on BBPLC for failing to control business practices in its
Foreign Exchange business in London (including G10 and emerging
market spot Foreign Exchange trading, Foreign Exchange options and
Foreign Exchange sales). As announced in November 2014, the FCA has
required an industry-wide remediation programme which Barclays
remains committed to completing.
The full text of the DOJ plea agreement, the CFTC, NYDFS and
Federal Reserve orders, and the FCA Final Notice referred to above
are publicly available on the Resolving Authorities' respective
websites.
The settlements reached on 20 May 2015 did not encompass ongoing
investigations of electronic trading in the Foreign Exchange
market. In addition, certain authorities continue to investigate
sales and trading practices of various sales and trading personnel,
including Foreign Exchange personnel, among multiple market
participants, including BBPLC, in various countries. The Group is
continuing to review these and certain other practices relating to
Foreign Exchange and continues to cooperate with the relevant
authorities.
ISDAFIX Investigation
Regulators and law enforcement agencies, including the CFTC,
have conducted separate investigations into historical practices
with respect to ISDAFIX, amongst other benchmarks.
On 20 May 2015, the CFTC entered into a settlement order with
BPLC, BBPLC and BCI pursuant to which BPLC, BBPLC and BCI agreed to
pay a civil monetary penalty of $115m in connection with the CFTC's
industry-wide investigation into the setting of the US Dollar
ISDAFIX benchmark. In addition, the CFTC order requires BPLC, BBPLC
and BCI to cease and desist from violating provisions of the US
Commodity Exchange Act, fully cooperate with the CFTC in related
investigations and litigation and undertake certain remediation
efforts to the extent not already undertaken, including, amongst
other things:
-- Continuing to implement and improve its internal controls and
procedures in a manner reasonably designed to ensure the integrity
of the fixing of any interest-rate swap benchmark; and
-- Implementing additional remediation improvements, including
reasonable internal controls and procedures relating to, amongst
other things: (i) the detection and deterrence of trading or other
conduct potentially intended to manipulate directly or indirectly
swap rates, including benchmarks based on interest-rate swaps, (ii)
routine and on-going training of all swaps and options desk
personnel relating to the trading of any product that references a
benchmark based on interest-rate swaps and (iii) a system for
reporting, handling and investigating any suspected misconduct or
questionable, unusual or unlawful activity relating to the fixing
of any benchmark based on interest-rate swaps.
The full text of the CFTC order relating to ISDAFIX is publicly
available on the CFTC website.
Certain other regulatory and enforcement authorities have
requested information regarding the setting of, and trading
intended to influence, the USD ISDAFIX benchmark.
Precious Metals Investigation
BBPLC has been providing information to the DOJ and other
authorities in connection with investigations into precious metals
and precious metals-based financial instruments.
For a discussion of litigation arising in connection with these
investigations see 'LIBOR and other Benchmarks Civil Actions',
'Civil Actions in Respect of ISDAFIX', 'Civil Actions in Respect of
Foreign Exchange Trading' and 'Civil Actions in Respect of the Gold
Fix' below.
Claimed Amounts/Financial Impact
The fines in connection with the May 2015 settlements with the
Resolving Authorities are covered by the Group's existing
provisions of GBP2.05bn. It is not currently practicable to provide
an estimate of the financial impact of certain of the other matters
in this section, or what effect that these matters might have upon
the Group's operating results, cash flows or financial position in
any particular period.
LIBOR and other Benchmark Civil Actions
Following the settlements of the investigations referred to
above in 'Investigations into LIBOR, other Benchmarks, ISDAFIX,
Foreign Exchange Rates and Precious Metals', a number of
individuals and corporates in a range of jurisdictions have
threatened or brought civil actions against Group in relation to
LIBOR and/or other benchmarks.
Background Information
A number of individuals and corporates in a range of
jurisdictions have threatened or brought civil actions against the
Group and other banks in relation to manipulation of LIBOR and/or
other benchmark rates. While several of such cases have been
dismissed and one has settled subject to final approval from the
court, others remain pending and their ultimate impact is
unclear.
USD LIBOR Cases in MDL Court
The majority of the USD LIBOR cases, which have been filed in
various US jurisdictions, have been consolidated for pre-trial
purposes before a single judge in the SDNY (MDL Court).
The complaints are substantially similar and allege, amongst
other things, that BBPLC and the other banks individually and
collectively violated provisions of the US Sherman Antitrust Act,
the CEA, the US Racketeer Influenced and Corrupt Organizations Act
(RICO) and various state laws by manipulating USD LIBOR rates.
The lawsuits seek unspecified damages with the exception of five
lawsuits, in which the plaintiffs are seeking a combined total in
excess of $1.25bn in actual damages against all defendants,
including BBPLC, plus punitive damages. Some of the lawsuits also
seek trebling of damages under the US Sherman Antitrust Act and
RICO.
The proposed class actions purport to be brought on behalf of
(amongst others) plaintiffs that (i) engaged in USD LIBOR-linked
over-the-counter transactions (OTC Class); (ii) purchased USD
LIBOR-linked financial instruments on an exchange (Exchange-Based
Class); (iii) purchased USD LIBOR-linked debt securities (Debt
Securities Class); (iv) purchased adjustable-rate mortgages linked
to USD LIBOR (Homeowner Class); or (v) issued loans linked to USD
LIBOR (Lender Class).
In August 2012, the MDL Court stayed all newly filed proposed
class actions and individual actions (Stayed Actions), so that the
MDL Court could address the motions pending in three lead proposed
class actions (Lead Class Actions) and three lead individual
actions (Lead Individual Actions).
In March 2013, the MDL Court issued a decision dismissing the
majority of claims against BBPLC and other panel bank defendants in
the Lead Class Actions and Lead Individual Actions.
Following the decision, the plaintiffs in the Lead Class Actions
sought permission to either file an amended complaint or appeal an
aspect of the March 2013 decision. In August 2013 and June 2014,
the MDL Court denied the majority of the motions presented in the
Lead Class Actions. As a result, the:
-- Debt Securities Class has been dismissed entirely;
-- The claims of the Exchange-Based Class have been limited to claims under the CEA; and
-- The claims of the OTC Class have been limited to claims for
unjust enrichment and breach of the implied covenant of good faith
and fair dealing.
Subsequent to the MDL Court's March 2013 decision, the
plaintiffs in the Lead Individual Actions filed a new action in
California state court (since moved to the MDL Court) based on the
same allegations as those initially alleged in the proposed class
action cases discussed above. The Debt Securities Class attempted
to appeal the dismissal of their action to the US Court of Appeals
for the Second Circuit (Second Circuit), but the Second Circuit
dismissed the appeal as untimely on the grounds that the MDL Court
had not reached a decision resolving all of the claims in the
consolidated actions. In January 2015, the US Supreme Court
reversed the Second Circuit's decision, ruling that the Second
Circuit must hear the Debt Securities Class' appeal. The OTC Class
and the Exchange-Based Class have received permission to join this
appeal. Certain other proposed class actions that had previously
been stayed by the MDL Court have also received permission to join
the appeal as to the dismissal of their antitrust claims.
In December 2014, the MDL Court granted preliminary approval for
the settlement of the remaining Exchange-Based Class claims for
$19.98m and requested that the plaintiffs present a plan for
allocation of the settlement proceeds. In January 2015, plaintiffs
filed a motion for an order approving their proposed process of
allocation and class notice for the settlement, and that motion is
pending before the MDL Court.
Additionally, the MDL Court has begun to address the claims in
the Stayed Actions, many of which, including state law fraud and
tortious interference claims, were not asserted in the Lead Class
Actions. As a result, in October 2014, the direct action plaintiffs
(those who have opted out of the class actions) filed their amended
complaints and in November 2014, the defendants filed their motions
to dismiss. In November 2014, the plaintiffs in the Lender Class
and Homeowner Class actions filed their amended complaints. In
January 2015, the defendants filed their motions to dismiss.
Until there are further decisions, the ultimate impact of the
MDL Court's decisions will be unclear, although it is possible that
the decisions will be interpreted by courts to affect other
litigation, including the actions described below, some of which
concern different benchmark interest rates.
Additional USD LIBOR Case in the SDNY
An additional individual action was commenced in February 2013
in the SDNY against BBPLC and other panel bank defendants. The
plaintiff alleged that the panel bank defendants conspired to
increase USD LIBOR, which caused the value of bonds pledged as
collateral for a loan to decrease, ultimately resulting in the sale
of the bonds at a low point in the market. This action is not
assigned to the MDL Court; it is proceeding on a different schedule
before a different judge in the SDNY. The panel bank defendants
moved to dismiss the action, and the motion was granted in April
2015. In June 2015, plaintiff sought leave to file a further
amended complaint; that motion is pending.
Sterling LIBOR Case in SDNY
An additional class action was commenced in May 2015 in the SDNY
against BBPLC and other Sterling LIBOR panel banks by a plaintiff
involved in exchange-traded and over-the-counter derivatives that
were linked to Sterling LIBOR. The complaint alleges, among other
things, that BBPLC and other panel banks manipulated the Sterling
LIBOR rate between 2005 and 2010 and, in so doing, committed CEA,
antitrust, and RICO violations.
Securities Fraud Case in the SDNY
BPLC, BBPLC and BCI have also been named as defendants along
with four former officers and directors of BBPLC in a proposed
securities class action pending in the SDNY in connection with
BBPLC's role as a contributor panel bank to LIBOR. The complaint
asserted claims under the US Securities Exchange Act of 1934,
principally alleging that BBPLC's Annual Reports for the years 2006
to 2011 contained misstatements and omissions concerning (amongst
other things) BBPLC's compliance with its operational risk
management processes and certain laws and regulations. The
complaint also alleged that BBPLC's daily USD LIBOR submissions
constituted false statements in violation of US securities law. The
complaint was brought on behalf of a proposed class consisting of
all persons or entities that purchased BPLC-sponsored American
Depositary Receipts on a US securities exchange between 10 July
2007 and 27 June 2012. In May 2013, the district court granted
BBPLC's motion to dismiss the complaint in its entirety. The
plaintiffs appealed, and, in April 2014, the Second Circuit issued
an order upholding the dismissal of certain of the plaintiffs'
claims, but reversing the dismissal of the plaintiffs' claims that
BBPLC's daily USD LIBOR submissions constituted false statements in
violation of US securities law. The action has been remanded back
to the district court for further proceedings, and discovery is
expected to be substantially complete by the end of 2015. In April
2015, plaintiffs filed a motion to certify the class, and that
motion is pending.
Complaint in the US District Court for the Central District of
California
In July 2012, a purported class action complaint in the US
District Court for the Central District of California was amended
to include allegations related to USD LIBOR and name BBPLC as a
defendant. The amended complaint was filed on behalf of a purported
class that includes holders of adjustable rate mortgages linked to
USD LIBOR. In January 2015, the court granted BBPLC's motion for
summary judgement and dismissed all of the remaining claims against
BBPLC. The plaintiff has appealed the court's decision to the US
Court of Appeals for the Ninth Circuit.
Japanese Yen LIBOR Case in SDNY
An additional class action was commenced in April 2012 in the
SDNY against BBPLC and other Japanese Yen LIBOR panel banks by a
plaintiff involved in exchange-traded derivatives. The complaint
also names members of the Japanese Bankers Association's Euroyen
Tokyo Interbank Offered Rate (Euroyen TIBOR) panel, of which BBPLC
is not a member. The complaint alleges, amongst other things,
manipulation of the Euroyen TIBOR and Yen LIBOR rates and breaches
of the CEA and US Sherman Antitrust Act between 2006 and 2010. The
defendants filed a motion to dismiss and, in March 2014, the Court
issued a decision granting in part and denying in part that motion.
Specifically, the court dismissed the plaintiff's antitrust claims
in full, but sustained the plaintiff's CEA claims. The defendants'
motion for reconsideration of the decision concerning the CEA
claims was denied by the Court in October 2014. The plaintiff moved
for leave to file a third amended complaint adding additional
claims, including a RICO claim, which was denied in March 2015.
Plaintiff has sought an immediate appeal of that decision, and that
request is pending. Discovery commenced in May 2015.
EURIBOR Cases
In February 2013, a EURIBOR -related class action was filed
against BPLC, BBPLC, BCI and other EURIBOR panel banks. The
plaintiffs assert antitrust, CEA, RICO, and unjust enrichment
claims. In particular, BBPLC is alleged to have conspired with
other EURIBOR panel banks to manipulate EURIBOR. The lawsuit is
brought on behalf of purchasers and sellers of NYSE LIFFE EURIBOR
futures contracts, purchasers of Euro currency-related futures
contracts and purchasers of other derivative contracts (such as
interest rate swaps and forward rate agreements that are linked to
EURIBOR) during the period 1 June 2005 through 31 March 2011. All
proceedings were stayed until May 2015, when the court modified the
stay to permit document discovery to proceed.
In addition, BBPLC has been granted conditional leniency from
the DOJ-AD in connection with potential US antitrust law violations
with respect to financial instruments that reference EURIBOR. As a
result of that grant of conditional leniency, BBPLC is eligible for
(i) a limit on liability to actual rather than treble damages if
damages were to be awarded in any civil antitrust action under US
antitrust law based on conduct covered by the conditional leniency
and (ii) relief from potential joint-and-several liability in
connection with such civil antitrust action, subject to BBPLC
satisfying the DOJ-AD and the court presiding over the civil
litigation of fulfilment of its cooperation obligations.
Non-US Benchmarks Cases
In addition to US actions, legal proceedings have been brought
or threatened against the Group in connection with alleged
manipulation of LIBOR and EURIBOR in a number of jurisdictions. The
number of such proceedings in non-US jurisdictions, the benchmarks
to which they relate, and the jurisdictions in which they may be
brought have increased over time.
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the
financial impact of the actions described on the Group or what
effect that they might have upon the Group's operating results,
cash flows or financial position in any particular period.
Civil Actions in respect of ISDAFIX
Since September 2014, a number of ISDAFIX related civil actions
have been filed in the SDNY on behalf of a proposed class of
plaintiffs, alleging that BBPLC, a number of other banks and one
broker, violated the US Sherman Antitrust Act and several state
laws by engaging in a conspiracy to manipulate the USD ISDAFIX. A
consolidated amended complaint was filed in February 2015.
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the
financial impact of the actions described on the Group or what
effect that they might have upon the Group's operating results,
cash flows or financial position in any particular period.
Civil Actions in respect of Foreign Exchange Trading
Since November 2013, a number of civil actions have been filed
in the SDNY on behalf of proposed classes of plaintiffs alleging
manipulation of Foreign Exchange markets under the US Sherman
Antitrust Act and New York state law and naming several
international banks as defendants, including BBPLC. In February
2014, the SDNY combined all then-pending actions alleging a class
of US persons in a single consolidated action.
Recent Developments
In January 2015, the SDNY denied the motion to dismiss the
consolidated action but dismissed two actions alleging classes of
non-US persons.
Since February 2015, several additional civil actions have been
filed in the SDNY, and one civil action has been filed in the
Northern District of California, on behalf of proposed classes of
plaintiffs alleging injuries related to Barclays' alleged
manipulation of Foreign Exchange rates and naming several
international banks as defendants, including BPLC, BBPLC and BCI.
One of the newly filed actions asserts claims under the US Employee
Retirement Income Security Act (ERISA) statute and includes
allegations that are duplicative of allegations in the other cases,
as well as additional allegations about Foreign Exchange sales
practices and ERISA plans. All of the other newly filed actions
assert claims under the US Sherman Antitrust Act and/or the US
Commodity Exchange Act.
Claimed Amounts/Financial Impact
The financial impact of the actions described on the Group or
what effect that they might have upon the Group's operating
results, cash flows or financial position in any particular period
is currently uncertain.
Civil Actions in respect of the Gold Fix
Since March 2014, a number of civil complaints have been filed
in US federal courts, each on behalf of a proposed class of
plaintiffs, alleging that BBPLC and other members of The London
Gold Market Fixing Ltd. manipulated the prices of gold and gold
derivative contracts in violation of the CEA, the US Sherman
Antitrust Act, and state antitrust and consumer protection laws.
All of the complaints have been transferred to the SDNY and
consolidated for pretrial purposes.
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the
financial impact of the potential exposure of the actions described
or what effect that they might have upon operating results, cash
flows or the Group's financial position in any particular
period.
US Residential and Commercial Mortgage-related Activity and
Litigation
The Group's activities within the US residential mortgage sector
during the period from 2005 through 2008 included:
-- Sponsoring and underwriting of approximately $39bn of private-label securitisations;
-- Economic underwriting exposure of approximately $34bn for
other private-label securitisations;
-- Sales of approximately $0.2bn of loans to government sponsored enterprises (GSEs);
-- Sales of approximately $3bn of loans to others; and
-- Sales of approximately $19.4bn of loans (net of approximately
$500m of loans sold during this period and subsequently
repurchased) that were originated and sold to third parties by
mortgage originator affiliates of an entity that the Group acquired
in 2007 (Acquired Subsidiary).
Throughout this time period affiliates of the Group engaged in
secondary market trading of US residential mortgaged-backed
securities (RMBS) and US commercial mortgage-backed securities
(CMBS), and such trading activity continues today.
In connection with its loan sales and certain private-label
securitisations, on 30 June 2015, the Group had unresolved
repurchase requests relating to loans with a principal balance of
approximately $2.6bn at the time they were sold, and civil actions
have been commenced by various parties alleging that the Group must
repurchase a substantial number of such loans.
In addition, the Group is party to a number of lawsuits filed by
purchasers of RMBS asserting statutory and/or common law claims.
The current outstanding face amount of RMBS related to these
pending claims against the Group as of 30 June 2015 was
approximately $0.8bn.
Regulatory and governmental authorities, including amongst
others, the DOJ, SEC, Special Inspector General for the US Troubled
Asset Relief Program, the US Attorney's Office for the District of
Connecticut and the US Attorney's Office for the Eastern District
of New York have initiated wide-ranging investigations into market
practices involving mortgage-backed securities, and the Group is
co-operating with several of those investigations.
RMBS Repurchase Requests
Background
The Group was the sole provider of various loan-level
representations and warranties (R&Ws) with respect to:
-- Approximately $5bn of Group sponsored securitisations;
-- Approximately $0.2bn of sales of loans to GSEs; and
-- Approximately $3bn of loans sold to others.
In addition, the Acquired Subsidiary provided R&Ws on all of
the $19.4bn of loans it sold to third parties.
R&Ws on the remaining Group sponsored securitisations were
primarily provided by third-party originators directly to the
securitisation trusts with a Group subsidiary, such as the
depositor for the securitisation, providing more limited R&Ws.
There are no stated expiration provisions applicable to most
R&Ws made by the Group, the Acquired Subsidiary or these third
parties.
Under certain circumstances, the Group and/or the Acquired
Subsidiary may be required to repurchase the related loans or make
other payments related to such loans if the R&Ws are
breached.
The unresolved repurchase requests received on or before 30 June
2015 associated with all R&Ws made by the Group or the Acquired
Subsidiary on loans sold to GSEs and others and private-label
activities had an original unpaid principal balance of
approximately $2.6bn at the time of such sale.
A substantial number (approximately $2.2bn) of the unresolved
repurchase requests discussed above relate to civil actions that
have been commenced by the trustees for certain RMBS
securitisations in which the trustees allege that the Group and/or
the Acquired Subsidiary must repurchase loans that violated the
operative R&Ws. Such trustees and other parties making
repurchase requests have also alleged that the operative R&Ws
may have been violated with respect to a greater (but unspecified)
amount of loans than the amount of loans previously stated in
specific repurchase requests made by such trustees. All of the
litigation involving repurchase requests remain at early
stages.
In addition, the Acquired Subsidiary is subject to a civil
action seeking, among other things, indemnification for losses
allegedly suffered by a loan purchaser as a result of alleged
breaches of R&Ws provided by the Acquired Subsidiary in
connection with loan sales to the purchaser during the period
1997-2007. This litigation is in early stages.
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the
financial impact of the actions described on the Group or what
effect that they might have upon the Group's operating results,
cash flows or financial position in any particular period.
RMBS Securities Claims
Background
As a result of some of the RMBS activities described above, the
Group is party to a number of lawsuits filed by purchasers of RMBS
sponsored and/or underwritten by the Group between 2005 and 2008.
As a general matter, these lawsuits allege, among other things,
that the RMBS offering materials allegedly relied on by such
purchasers contained materially false and misleading statements
and/or omissions and generally demand rescission and recovery of
the consideration paid for the RMBS and recovery of monetary losses
arising out of their ownership.
The original face amount of RMBS related to the pending civil
actions against the Group total approximately $2.3bn, of which
approximately $0.8bn was outstanding as at 30 June 2015.
Cumulative realised losses reported on these RMBS as at 30 June
2015 were approximately $0.2bn.
Claimed Amounts/Financial Impact
If the Group were to lose the pending actions the Group believes
it could incur a loss of up to the outstanding amount of the RMBS
at the time of judgement (taking into account further principal
payments after 30 June 2015), plus any cumulative losses on the
RMBS at such time and any interest, fees and costs, less the market
value of the RMBS at such time and less any provisions taken to
date.
Although the purchasers in these securities actions have
generally not identified a specific amount of alleged damages, the
Group has estimated the total market value of these RMBS as at 30
June 2015 to be approximately $0.4bn. The Group may be entitled to
indemnification for a portion of such losses.
Other Mortgage-related Investigations
In addition to the RMBS Repurchase Requests and RMBS Securities
Claims, numerous regulatory and governmental authorities, amongst
them the DOJ, SEC, Special Inspector General for the US Troubled
Asset Relief Program, the US Attorney's Office for the District of
Connecticut and the US Attorney's Office for the Eastern District
of New York have been investigating various aspects of the
mortgage-related business, including issuance and underwriting
practices in primary offerings of RMBS and trading practices in the
secondary market for both RMBS and CMBS. The Group continues to
respond to requests relating to the RMBS Working Group of the
Financial Fraud Enforcement Task Force (RMBS Working Group), which
was formed to investigate pre-financial crisis mortgage-related
misconduct. In connection with several of the investigations by
members of the RMBS Working Group, a number of financial
institutions have entered into settlements involving substantial
monetary payments.
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the
financial impact of the actions described on the Group or what
effect that they might have upon the Group's operating results,
cash flows or financial position in any particular period.
Lehman Brothers
Since September 2009, BCI and BBPLC have been engaged in
litigation with various entities that have sought to challenge
certain aspects of the transaction pursuant to which BCI, BBPLC and
other companies in the Group acquired most of the assets of Lehman
Brothers Inc. (LBI) in September 2008, as well as the court order
(Order) approving the sale (Sale). In May 2015, BCI and BBPLC
reached a settlement with the SIPA Trustee for Lehman Brothers Inc.
(Trustee) to resolve outstanding litigation between them relating
to the Sale. The settlement was approved by the United States
Bankruptcy Court for the SDNY (Bankruptcy Court) on 29 June 2015,
thereby bringing the litigation challenging the Sale to an end.
Background Information
In September 2009, motions were filed in the Bankruptcy Court by
Lehman Brothers Holdings Inc. (LBHI), the Trustee and the Official
Committee of Unsecured Creditors of Lehman Brothers Holdings Inc.
(Committee) challenging certain aspects of the Sale, as well as the
Order. The claimants sought an order voiding the transfer of
certain assets to BCI, requiring BCI to return to the LBI estate
any excess value BCI allegedly received, and declaring that BCI is
not entitled to certain assets that it claims pursuant to the Sale
documents and the Order (Rule 60 Claims).
In January 2010, BCI filed its response to the motions and also
filed a motion seeking delivery of certain assets that LBHI and LBI
had failed to deliver as required by the Sale documents and the
Order (together with the Trustee's competing claims to those
assets, Contract Claims).
In 2011, the Bankruptcy Court rejected the Rule 60 Claims and
decided some of the Contract Claims in the Trustee's favour and
some in favour of BCI. BCI and the Trustee each appealed the
Bankruptcy Court's adverse rulings on the Contract Claims to the
SDNY. LBHI and the Committee did not appeal the Bankruptcy Court's
ruling on the Rule 60 Claims.
In July 2012, the SDNY issued an opinion on the Contract Claims
stating that BCI and BBPLC were entitled to receive:
-- $1.1bn (GBP0.7bn) from the Trustee in respect of 'clearance
box' assets (Clearance Box Assets); and
-- Property held at various institutions in respect of the
exchange traded derivatives accounts transferred to BCI in the Sale
(ETD Margin).
The Trustee appealed to the Second Circuit. In August 2014, the
Second Circuit affirmed the SDNY's decision as to the Clearance Box
Assets and the ETD Margin.
In October 2014, the Trustee filed a motion with the SDNY to
confirm the scope of the SDNY's judgement regarding the ETD Margin
that BCI and BBPLC were entitled to receive. With that motion, the
Trustee challenged the entitlement of BCI and BBPLC to
approximately $1.1bn of assets that the Trustee asserted did not
constitute ETD Margin. In April 2015, the SDNY ruled in favour of
BCI and BBPLC, confirming that they were entitled to all of the ETD
Margin.
In October 2014, the Trustee made a payment to BBPLC of $1.1bn
(GBP0.7bn), fully discharging the Trustee's obligations in respect
of the Clearance Box Assets.
Recent Developments
In December 2014, the Trustee requested that the US Supreme
Court review the rulings of the SDNY and the Second Circuit
regarding the ETD margin. In May 2015, the US Supreme Court
published its denial of the Trustee's request.
In May 2015, the parties reached a settlement to resolve
outstanding litigation between them relating to the Sale
(Settlement). The Settlement was approved by the Bankruptcy Court
on 29 June 2015. Pursuant to the Settlement, BBPLC has received all
of the assets that the Trustee had asserted did not constitute ETD
Margin with the exception of $80m (GBP51m) of assets that the
Trustee is entitled to retain and approximately $0.3bn of ETD
Margin still owed to BBPLC but expected to be received from third
parties.
Financial Impact
As at 30 June 2015, BBPLC recognised as a financial asset on its
balance sheet approximately $1.6bn (GBP1.0bn) in respect of assets
to which BBPLC is entitled as part of the Sale and the Settlement
but which it had not received as of that date. The financial asset
reflects an increase of approximately $0.8bn (GBP0.5bn) recognised
in profit and loss for the six month period ended 30 June 2015 as a
result of the Settlement. Pursuant to the Settlement, the Trustee
made a payment to BBPLC on 2 July 2015 of approximately $1.3bn
(GBP0.9bn), representing the value of the ETD Margin held by the
Trustee less the $80m of ETD Margin that the Trustee is entitled to
retain under the terms of the Settlement, thereby fully discharging
the Trustee's payment in respect of the ETD Margin or otherwise
relating to the Sale. After application of this payment from the
Trustee, BBPLC has a financial asset of approximately $0.3bn on its
balance sheet in respect of ETD Margin still owed to BBPLC but
expected to be received from third parties.
American Depositary Shares
BPLC, BBPLC and various former members of BPLC's Board of
Directors have been named as defendants in a securities class
action consolidated in the SDNY alleging misstatements and
omissions in offering documents for certain American Depositary
Shares issued by BBPLC in April 2008 with an original face amount
of approximately $2.5 billion (the April 2008 Offering).
Background Information
The plaintiffs have asserted claims under the Securities Act of
1933, alleging that the offering documents for the April 2008
Offering contained misstatements and omissions concerning (amongst
other things) BBPLC's portfolio of mortgage-related (including US
subprime-related) securities, BBPLC's exposure to mortgage and
credit market risk, and BBPLC's financial condition. The plaintiffs
have not specifically alleged the amount of their damages.
In June 2014, the SDNY denied defendants' motion to dismiss the
claims. The case is in discovery.
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the
financial impact of the action described on the Group or what
effect that they might have upon the Group's operating results,
cash flows or financial position in any particular period.
BDC Finance L.L.C.
BDC Finance L.L.C. (BDC) filed a complaint against BBPLC in the
NY Supreme Court alleging breach of contract in connection with a
portfolio of total return swaps governed by an ISDA Master
Agreement (collectively, the Agreement). A ruling was made against
BBPLC, but the New York State Court of Appeals effectively reversed
that ruling. Parties related to BDC have also sued BBPLC and BCI in
Connecticut State Court in connection with BBPLC's conduct relating
to the Agreement.
Background Information
In October 2008, BDC filed a complaint in the NY Supreme Court
alleging that BBPLC breached the Agreement when it failed to
transfer approximately $40m of alleged excess collateral in
response to BDC's October 2008 demand (Demand).
BDC asserts that under the Agreement BBPLC was not entitled to
dispute the Demand before transferring the alleged excess
collateral and that even if the Agreement entitled BBPLC to dispute
the Demand before making the transfer, BBPLC failed to dispute the
Demand.
BDC demands damages totalling $298m plus attorneys' fees,
expenses, and prejudgement interest.
In August 2012, the NY Supreme Court granted partial summary
judgement for BBPLC, ruling that BBPLC was entitled to dispute the
Demand before transferring the alleged excess collateral, but
determining that a trial was required to determine whether BBPLC
actually did so. The parties cross-appealed to the Appellate
Division of the NY Supreme Court (NY Appellate Division).
In September 2011, BDC's investment advisor, BDCM Fund Adviser,
L.L.C. and its parent company, Black Diamond Capital Holdings,
L.L.C. also sued BBPLC and BCI in Connecticut State Court for
unspecified damages allegedly resulting from BBPLC's conduct
relating to the Agreement, asserting claims for violation of the
Connecticut Unfair Trade Practices Act and tortious interference
with business and prospective business relations. The parties have
agreed to a stay of that case.
In October 2013, the NY Appellate Division reversed the NY
Supreme Court's grant of partial summary judgement in favour of
BBPLC, and instead granted BDC's motion for partial summary
judgement, holding that BBPLC breached the Agreement. The NY
Appellate Division did not rule on the amount of BDC's damages,
which has not yet been determined by the NY Supreme Court.
Recent Developments
In February 2015, in connection with the BBPLC appeal of the
October 2013 decision, the New York Court of Appeals modified the
NY Appellate Division's grant of partial summary judgement to BDC,
holding that summary judgement in either party's favour cannot be
granted because a material issue of fact remains as to whether
BBPLC breached the Agreement. The New York Court of Appeals ordered
that the matter be referred back to the NY Supreme Court for
further proceedings.
Claimed Amounts/Financial Impact
BDC has made claims against the Group totalling $298m plus
attorneys' fees, expenses, and pre-judgement interest. This amount
does not necessarily reflect the Group's potential financial
exposure if a ruling were to be made against it.
Civil Actions in respect of the US Anti-Terrorism Act
In April 2015, an amended civil complaint was filed in the US
Federal Court in the Eastern District of New York by a group of
approximately 250 plaintiffs, alleging that the Group and a number
of other banks engaged in a conspiracy and violated the US
Anti-Terrorism Act (ATA) by facilitating US dollar denominated
transactions for the Government of Iran and various Iranian banks,
which in turn funded Hezbollah attacks that injured the plaintiffs'
family members. Plaintiffs seek to recover for pain, suffering and
mental anguish pursuant to the provisions of the ATA, which allows
for the tripling of any proven damages.
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the
financial impact of the matters in this section or what effect that
these matters might have upon operating results, cash flows or the
Group's financial position in any particular period.
Credit Default Swap (CDS) Antitrust Investigations and Civil
Actions
The Commission and the DOJ-AD commenced investigations in the
CDS market, in 2011 and 2009, respectively. In July 2013 the
Commission addressed a Statement of Objections to BBPLC, 12 other
banks, Markit Ltd. and ISDA. The case relates to concerns that
certain banks took collective action to delay and prevent the
emergence of exchange traded credit derivative products.
If the Commission does reach a decision in this matter it has
indicated that it intends to impose sanctions. The Commission's
sanctions can include fines. The DOJ-AD's investigation is a civil
investigation and relates to similar issues. BPLC is also
contesting a proposed, consolidated class action alleging similar
issues that has been filed in the US. Discovery in the case is
ongoing.
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the
financial impact of the actions described on the Group or what
effect that they might have upon the Group's operating results,
cash flows or financial position in any particular period.
Portuguese Competition Authority Investigation
The Portuguese Competition Authority is investigating whether
competition law was infringed by the exchange of information about
retail credit products amongst 15 banks in Portugal, including the
Group, over a period of 11 years with particular reference to
mortgages, consumer lending and lending to small and medium
enterprises. The Group is co-operating with the investigation.
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the
financial impact of these matters or what effect that they may have
upon operating results, cash flows or the Group's financial
position in any particular period.
General
The Group is engaged in various other legal, competition and
regulatory matters both in the UK and a number of overseas
jurisdictions. It is subject to legal proceedings by and against
the Group which arise in the ordinary course of business from time
to time, including (but not limited to) disputes in relation to
contracts, securities, debt collection, consumer credit, fraud,
trusts, client assets, competition, data protection, money
laundering, employment, environmental and other statutory and
common law issues.
The Group is also subject to enquiries and examinations,
requests for information, audits, investigations and legal and
other proceedings by regulators, governmental and other public
bodies in connection with (but not limited to) consumer protection
measures, compliance with legislation and regulation, wholesale
trading activity and other areas of banking and business activities
in which the Group is or has been engaged.
At the present time, the Group does not expect the ultimate
resolution of any of these other matters to have a material adverse
effect on its financial position. However, in light of the
uncertainties involved in such matters and the matters specifically
described in this note, there can be no assurance that the outcome
of a particular matter or matters will not be material to the
Group's results of operations or cash flow for a particular period,
depending on, amongst other things, the amount of the loss
resulting from the matter(s) and the amount of income otherwise
reported for the reporting period.
18. Related party transactions
Related party transactions in the period ended 30 June 2015 were
similar in nature to those disclosed in the Group's 2014 Annual
Report. No related party transactions that have taken place in 2015
have materially affected the financial position or the performance
of the Group during this period and there were no changes in the
related parties transactions described in the 2014 Annual Report
that could have a material effect on the financial position or
performance of the Group in the current period.
19. Segmental reporting
Personal
and Corporate Africa Investment
Analysis of results by business Banking Barclaycard Banking Bank
Half year ended 30.06.15 GBPm GBPm GBPm GBPm
------------------------------------- -------------- ----------- --------- ---------------
Total income net of insurance claims 4,384 2,357 1,858 4,299
Credit impairment charges and other
provisions (178) (563) (193) (1)
------------------------------------- -------------- ----------- --------- ---------------
Net operating income 4,206 1,794 1,665 4,298
Operating expenses (2,491) (961) (1,116) (2,795)
Costs to achieve (139) (56) (13) (63)
Other net (expense)/income(1) (48) 18 4 -
------------------------------------- -------------- ----------- --------- ---------------
Profit before tax 1,528 795 540 1,440
GBPbn GBPbn GBPbn GBPbn
------------------------------------- -------------- ----------- --------- ---------------
Total assets 289.9 41.9 54.0 420.1
------------------------------------- -------------- ----------- --------- ---------------
Barclays Barclays Barclays
Analysis of results by business Head Office Core Non-Core Group Adjusted
Half year ended 30.06.15 GBPm GBPm GBPm GBPm
------------------------------------- -------------- ----------- --------- ---------------
Total income net of insurance claims 42 12,940 42 12,982
Credit impairment charges and other
provisions (1) (936) (37) (973)
------------------------------------- -------------- ----------- --------- ---------------
Net operating income 41 12,004 5 12,009
Operating expenses (85) (7,448) (498) (7,946)
Costs to achieve (22) (293) (23) (316)
Other net income/(expense)(1) 4 (22) 4 (18)
------------------------------------- -------------- ----------- --------- ---------------
(Loss)/profit before tax (62) 4,241 (512) 3,729
GBPbn GBPbn GBPbn GBPbn
------------------------------------- -------------- ----------- --------- ---------------
Total assets 52.6 858.5 338.2 1,196.7
------------------------------------- -------------- ----------- --------- ---------------
Personal
and Corporate Africa Investment
Analysis of results by business Banking Barclaycard Banking Bank
Half year ended 30.06.14 GBPm GBPm GBPm GBPm
------------------------------------- -------------- ----------- --------- ---------------
Total income net of insurance claims 4,361 2,124 1,773 4,257
Credit impairment charges and other
provisions (230) (537) (196) 26
------------------------------------- -------------- ----------- --------- ---------------
Net operating income 4,131 1,587 1,577 4,283
Operating expenses (2,554) (822) (1,082) (2,943)
Costs to achieve (115) (36) (17) (282)
Other net income(1) 6 35 6 -
------------------------------------- -------------- ----------- --------- ---------------
Profit before tax 1,468 764 484 1,058
GBPbn GBPbn GBPbn GBPbn
------------------------------------- -------------- ----------- --------- ---------------
Total assets 268.1 36.2 52.4 446.2
------------------------------------- -------------- ----------- --------- ---------------
Barclays Barclays Barclays
Analysis of results by business Head Office Core Non-Core Group Adjusted
Half year ended 30.06.14 GBPm GBPm GBPm GBPm
------------------------------------- -------------- ----------- --------- ---------------
Total income net of insurance claims 159 12,674 658 13,332
Credit impairment charges and other
provisions - (937) (149) (1,086)
------------------------------------- -------------- ----------- --------- ---------------
Net operating income 159 11,737 509 12,246
Operating expenses (91) (7,491) (893) (8,383)
Costs to achieve (2) (453) (41) (494)
Other net income/(expense)(1) - 47 (66) (20)
------------------------------------- -------------- ----------- --------- ---------------
Profit/(loss) before tax 66 3,840 (491) 3,349
GBPbn GBPbn GBPbn GBPbn
------------------------------------- -------------- ----------- --------- ---------------
Total assets 43.3 846.2 468.6 1,314.9
------------------------------------- -------------- ----------- --------- ---------------
1 Other income/(expense) represents: share of post-tax results
of associates and joint ventures; profit or (loss) on disposal
of subsidiaries, associates and joint ventures; and gains on
acquisitions.
Gain on
Provisions for valuation
ongoing of a
investigations component
and litigation Loss on of the
Provision Gain on US primarily sale of defined
Reconciliation of Barclays for UK Lehman relating to the retirement Barclays
adjusted basis to Group customer acquisition Foreign Spanish benefit Group
statutory basis adjusted Own credit redress assets Exchange business liability statutory
Half year ended
30.06.15 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Total income net
of insurance
claims 12,982 410 - 496 - - - 13,888
Credit impairment
charges and
other provisions (973) - - - - - - (973)
Net operating
income 12,009 410 - 496 - - - 12,915
Operating
expenses (7,946) - (1,032) - (800) - 429 (9,349)
Costs to achieve (316) - - - - - - (316)
Other net
(expense)/income (18) - - - - (118) - (136)
Profit/(loss) 3,729 410 (1,032) 496 (800) (118) 429 3,114
Half year ended
30.06.14 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Total income net
of insurance
claims 13,332 52 - - - - - 13,384
Credit impairment
charges and
other provisions (1,086) - - - - - - (1,086)
Net operating
income 12,246 52 - - - - - 12,298
Operating
expenses (8,383) - (900) - - - - (9,283)
Costs to achieve (494) - - - - - - (494)
Other net
(expense)/income (20) - - - - - - (20)
Profit/(loss) 3,349 52 (900) - - - - 2,501
20. Barclays PLC parent balance sheet
As at As at
30.06.15 31.12.14
Assets GBPm GBPm
=========================================== ======== ========
Investments in subsidiary 34,303 33,743
Loans and advances to subsidiary 5,318 2,866
Derivative financial instrument 194 313
Other assets 184 174
=========================================== ======== ========
Total assets 39,999 37,096
Liabilities
=========================================== ======== ========
Deposits from banks 519 528
Subordinated liabilities 800 810
Debt securities in issue 4,518 2,056
Other liabilities - 10
=========================================== ======== ========
Total liabilities 5,837 3,404
Equity
=========================================== ======== ========
Called up share capital 4,193 4,125
Share premium account 17,330 16,684
Other equity instruments 4,326 4,326
Capital redemption reserve 394 394
Retained earnings 7,919 8,163
=========================================== ======== ========
Total shareholders' equity 34,162 33,692
=========================================== ======== ========
Total liabilities and shareholders' equity 39,999 37,096
Investment in subsidiary
The investment in subsidiary of GBP34,303m (2014: GBP33,743m)
represents investments made into Barclays Bank PLC, including
GBP4,326m (2014: GBP4,326m) of AT1 securities. The increase of
GBP560m during the period was due to a cash contribution made to
Barclays Bank PLC.
Loans and advances to subsidiary and debt securities in
issue
During H115, Barclays PLC issued $4bn of Fixed Rate Senior
Notes, accounted for as debt securities in issue. The proceeds
raised through these transactions were used to make $4bn of Fixed
Rate Senior Loans to Barclays Bank PLC, with a ranking
corresponding to the notes issued by Barclays PLC.
Shareholder Information
Results timetable(1) Date
Ex-dividend date 6 August 2015
Dividend Record date 7 August 2015
Scrip reference share price set and made available to 13 August 2015
shareholders
Cut off time of 4.30 pm (London time) for the receipt 21 August 2015
of Mandate Forms or Revocation Forms
(as applicable)
Dividend Payment date /first day of dealing in New 14 September 2015
Shares
Q3 2015 Interim Management Statement 29 October 2015
For qualifying US and Canadian resident ADR holders, the second interim dividend of 1p per
ordinary share becomes 4p per ADS (representing four shares). The ADR depositary will post
the second interim dividend on Monday, 14 September 2015 to ADR holders on the record at close
of business on Friday, 7 August 2015. The ex-dividend date will be Wednesday, 5 August 2015.
Change(3)
Exchange rates(2) 30.06.15 31.12.14 30.06.14 31.12.14 30.06.14
Period end - US$/GBP 1.57 1.56 1.71 1% (8%)
6 month average - US$/GBP 1.52 1.63 1.67 (7%) (9%)
3 month average - US$/GBP 1.53 1.58 1.68 (3%) (9%)
Period end - EUR/GBP 1.41 1.28 1.25 10% 13%
6 month average - EUR/GBP 1.37 1.26 1.22 9% 12%
3 month average - EUR/GBP 1.38 1.27 1.23 9% 12%
Period end - ZAR/GBP 19.12 18.03 18.17 6% 5%
6 month average - ZAR/GBP 18.16 17.85 17.82 2% 2%
3 month average - ZAR/GBP 18.49 17.75 17.76 4% 4%
Share price data 30.06.15 31.12.14 30.06.14
Barclays PLC (p) 260.50 243.50 212.80
Barclays PLC number of shares (m) 16,773 16,498 16,417
Barclays Africa Group Limited (formerly Absa Group Limited)
(ZAR) 182.98 182.00 161.50
Barclays Africa Group Limited (formerly Absa Group Limited)
number of shares (m) 848 848 847
For further information please contact
Investor relations Media relations
Kathryn McLeland +44 (0) 20 7116 4943 Will Bowen +44 (0) 20 3134 7744
More information on Barclays can be found on our website:
Barclays.com
Registered office
1 Churchill Place, London, E14 5HP, United Kingdom. Tel: +44 (0) 20 7116 1000. Company number:
48839
Registrar
Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA
United Kingdom.
Tel: 0871 384 2055(4) from the UK or +44 121 415 7004 from
overseas.
1 Note that these announcement dates are provisional and subject
to change. Any changes to the Scrip Dividend Programme dates
will be made available at Barclays.com/dividends.
2 The average rates shown above are derived from daily spot rates
during the year.
3 The change is the impact to Sterling reported information.
4 Calls cost 8p per minute plus network extras. Lines open 8.30am
to 5.30pm UK time, Monday to Friday excluding UK public holidays.
Listing
The principal trading market for Barclays PLC ordinary shares is
the London Stock Exchange. Trading on the New York Stock Exchange
is in the form of ADSs under the ticker symbol 'BCS'. Each ADS
represents four ordinary shares of 25p each and is evidenced by an
ADR. The ADR depositary is JP Morgan Chase Bank, whose
international telephone number is +1-651-453-2128, domestic
telephone number is 1-800-990-1135 and address is JPMorgan Chase
Bank, PO Box 64504, St. Paul, MN 55164-0504, USA.
Barclays PLC Scrip Dividend Programme
Shareholders may have their dividends reinvested in Barclays
shares by joining the Barclays PLC Scrip Dividend Programme (the
Programme). The Programme enables shareholders, if they wish, to
receive new fully paid ordinary shares in Barclays PLC instead of a
cash dividend, without incurring dealing costs or stamp duty.
For further details, including the full Terms and Conditions and
information about how to join or leave the Programme, please visit
Barclays.com/dividends. Alternatively contact our Registrar:
Equiniti, by telephoning 0871 384 2055(1) from the UK or +44 121
415 7004 from overseas, or write to Equiniti, Aspect House, Spencer
Road, Lancing, West Sussex BN99 6DA United Kingdom.
1 Calls cost 8p per minute plus network extras. Lines open 8.30am
to 5.30pm UK time, Monday to Friday excluding UK public holidays.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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