TIDMBARC TIDM96ES
RNS Number : 6098X
Barclays PLC
23 February 2017
Barclays PLC
Results Announcement
31 December 2016
Table of Contents
Results Announcement Page
Notes 1
Performance Highlights 2-6
Group Finance Director's Review 7-11
Results by Business
-- Barclays UK 12-14
* Barclays International 15-17
* Head Office 18
19-20
* Barclays Non-Core 21
* Discontinued Operation - Africa Banking
Quarterly Results Summary 22-24
Quarterly Core Results by Business 25-29
Quarterly Discontinued Operation Results 30
Performance Management
* Margins and Balances 31
* Remuneration 32-33
Risk Management
* Liquidity 34-37
* Capital 38-44
* Credit Risk 45-49
Statement of Director's Responsibilities 50
Condensed Consolidated Financial Statements 51-55
Financial Statement Notes 56-64
Appendix: Non-IFRS performance measures 65-75
Shareholder Information 76
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 year ended 31 December 2016 to the
corresponding twelve months of 2015 and balance sheet analysis as
at 31 December 2016 with comparatives relating to 31 December 2015.
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 the abbreviations 'EURm'
and 'EURbn' represent millions and thousands of millions of Euros
respectively.
Comparatives have been restated to reflect the implementation of
the Group business reorganisation. These restatements were detailed
in our announcement on 14 April 2016, accessible at
home.barclays/results.
There are a number of key judgement areas, for example
impairment calculations, which are based on models and which are
subject to ongoing adjustment and modifications. Reported numbers
reflect best estimates and judgements at the given point in
time.
Notable items as set out on page 5 are considered to be
significant items impacting comparability of performance and have
been called out for each of the business segments. Results
excluding notable items have been included in the appendix.
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 home.barclays/results.
The information in this announcement, which was approved by the
Board of Directors on 22 February 2017, does not comprise statutory
accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2016, 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 20-F to the SEC as
soon as practicable following their publication. Once furnished
with the SEC, copies of the Form 20-F will also be available from
the Barclays Investor Relations website home.barclays/results and
from the SEC's website at 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.
Non-IFRS performance measures
Barclays management believes that the non-IFRS performance
measures included in this document provide valuable information to
the readers of the financial statements as they enable the reader
to identify a more consistent basis for comparing the business'
performance between financial periods, and provide more detail
concerning the elements of performance which the managers of these
businesses are most directly able to influence or are relevant for
an assessment of the Group. They also reflect an important aspect
of the way in which operating targets are defined and performance
is monitored by Barclays' management. However, any non-IFRS
performance measures in this document are not a substitute for IFRS
measures and readers should consider the IFRS measures as well.
Refer to the appendix on pages 65-75 for further information,
reconciliations and calculations of non-IFRS performance measures
included throughout this document, and the most directly comparable
IFRS measures.
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 or guidance regarding the Group's future
financial position, income growth, assets, impairment charges,
provisions, notable items, business strategy, structural reform,
capital, leverage and other regulatory ratios, payment of dividends
(including dividend pay-out ratios and expected payment
strategies), 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, rundown of assets and
businesses within Barclays Non-Core, sell down of the Group's
interest in Barclays Africa Group Limited, 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, future levels of notable items, 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 implications of the results of the 23 June 2016
referendum in the United Kingdom and the disruption that may result
in the UK and globally from the withdrawal of the United Kingdom
from the European Union; 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, expectations
and guidance 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 2016), which are
available on the SEC's website at 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
Transatlantic Consumer, Corporate and Investment Bank with
Global Reach
Our strategy is on track with good progress in 2016
-- Core returns:
* Core business performed well reflecting the benefits
of diversification across customers and clients,
geographies and products, with a 4% growth in profit
before tax excluding notable items(1) to GBP6,436m,
delivering a 9.4% return on average allocated
tangible equity that was GBP4bn higher at GBP41bn
* Return on average allocated tangible equity (RoTE)
excluding notable items in Barclays UK was 19.3% and
in Barclays International was 8.0%
---------------------- --------------------------------------------------------------
-- Non-Core rundown:
* GBP22bn reduction in risk weighted assets (RWAs) to
GBP32bn, despite adverse foreign exchange (FX)
movements
* Completed the sale of a number of businesses during
the year, including the Asia wealth and investment
management, and Southern European cards businesses in
Q416, and signed the agreement for the sale of the
French retail business in the quarter
* Good progress on the accelerated rundown of Non-Core;
decision taken to close the unit six months ahead of
plan on 30 June 2017 with RWAs expected to be
approximately GBP25bn at this date
---------------------- --------------------------------------------------------------
-- Common Equity
Tier 1 (CET1) * Profit before tax of GBP3,230m drove strong organic
ratio: capital ratio growth with 100bps of CET1 ratio
accretion to 12.4%
* In Q416, the CET1 ratio increased 80bps through
reduced RWAs, and an increase in reserves, including
from the GBP1.1bn improvement in the deficit of the
UK Retirement Fund (UKRF) defined benefit pension
scheme
* On track to meeting revised end-state CET1 capital
ratio of 150bps to 200bps above the minimum
regulatory level
---------------------- --------------------------------------------------------------
-- Core costs:
* Decision taken in Q416, relating to 2016 compensation
awards, to more closely align income statement
recognition with performance awards and harmonise
deferral structures across the Group
* The total incentive awards granted reduced 1% to
GBP1,533m, with the changes to awards resulting in a
GBP395m income statement charge in Q416, of which
GBP390m was in Core. As a result, Core costs for 2016
exceeded the guidance of GBP13.0bn(2) by that amount
-- Core cost: income ratio excluding notable items
improved from 62% to 61%
---------------------- --------------------------------------------------------------
-- Barclays Africa -- First sale of 12.2% stake completed in May 2016,
Group Limited resulting in a c.10bps benefit to the CET1 ratio
(BAGL) sell down: * Separation terms now agreed with BAGL, subject to
regulatory approval. These terms include
contributions totalling GBP765m payable over the
period through to completion of the next sale of
Barclays' stake in BAGL to below 50%
* Remain on track to achieve regulatory deconsolidation,
with further sell down subject to regulatory
approval. Estimate in excess of 75bps Group CET1
ratio accretion on regulatory deconsolidation based
on the 31 December 2016 BAGL share price and ZAR
exchange rate
---------------------- --------------------------------------------------------------
-- Holding Company
(HoldCo) transition: * Progressed the transition to HoldCo funding with
GBP12.1bn of issuance and GBP7.4bn of Operating
Company (OpCo) capital and debt repurchased or
redeemed
* Moody's upgraded the HoldCo's long-term senior rating
one notch to Baa2 on 12 December 2016
---------------------- --------------------------------------------------------------
1 Notable items in Core totalled a net loss before tax of GBP420m
(2015: GBP2,442m), as detailed on page 5. Refer to the appendix
on pages 65-75 for further information, reconciliations and calculations
of non-IFRS performance measures included throughout this document.
2 Guidance excluded litigation and conduct charges and was adjusted
for FX at Q316.
Group Chief Executive Officer's Review
"A year ago we laid out our intention to accelerate the
restructuring of Barclays and refocus our business as a
transatlantic, consumer, corporate and investment bank, anchored in
London and New York.
We have made strong progress against this agenda in 2016.
Our Core businesses, Barclays UK and Barclays International, are
doing well, with profit before tax excluding notable items up 4% to
GBP6.4bn.
Barclays UK produced an impressive RoTE of 19.3% excluding
notable items, and continues to deliver market-leading innovation
for customers, including voice security, contactless cash, a new
direct investing platform, and in airing the first fraud prevention
TV ad campaign from a major UK bank.
Barclays International delivered a RoTE of 8.0% excluding
notable items. We brought further focus to the Corporate and
Investment Bank, with income growing 6%, solidifying our position
in the bulge bracket. We also saw strong growth in Consumer, Cards
and Payments, as income increased 21%, driven by improvements in
all key businesses.
Combined, the Core RoTE, excluding notable items, was 9.4%.
Accelerating the closure of Barclays Non-Core is a key part of
realising the potential of Barclays. In 2016 we reduced Non-Core
RWAs by GBP22bn, with GBP12bn of that reduction coming in the final
quarter alone. Today, we are announcing that we will close Non-Core
on 30 June 2017, six months earlier than previously targeted.
We reduced our ownership of Barclays Africa with an initial sale
of 12.2% in May. In the fourth quarter we agreed with local
management and submitted to regulators our proposed separation
arrangements for Barclays Africa. This is a key milestone before a
further reduction in our stake at the appropriate time.
The progress on our priorities resulted in organic profit
generation which strengthened our CET1 capital ratio by 100 basis
points in 2016 to 12.4%. This puts us well on track to meet our
end-state target and we are well positioned to absorb headwinds
over the next few years. Certain legacy conduct issues remain and
we intend to make further progress on them.
In short, we have accomplished a lot in a year, and I am
thankful to each and every one of our colleagues who have made this
possible. Their efforts mean that, in 2017, we can begin to move on
from the restructuring of Barclays, shifting our focus solely to
the future, and in particular to how we can generate attractive,
sustainable, and distributable returns for our shareholders.
This means increasing management focus on Barclays UK and
Barclays International, the future of this firm. Together, they
encompass a diverse set of market leading consumer and wholesale
businesses, giving us growth opportunities across a wide
waterfront, and resilience in earnings.
And we intend to build these businesses on a foundation of world
class operations and technology, where core functions for our Group
are standardised across the company, streamlining costs, driving
high quality analytics, and hugely improving the experience of our
customers and clients, which is key to driving loyalty and long
term growth.
We are now just months away from completing the restructuring of
Barclays, and I am more optimistic than ever for our prospects in
2017, and beyond."
James E Staley, Group Chief Executive Officer
Barclays Group results
for the year ended 31.12.16 31.12.15 YoY
GBPm GBPm % Change
============================================ ========== ========== ========
Total income 21,451 22,040 (3)
Credit impairment charges and other
provisions (2,373) (1,762) (35)
============================================ ========== ========== ========
Net operating income 19,078 20,278 (6)
Operating expenses (14,565) (13,723) (6)
UK bank levy (410) (426) 4
Litigation and conduct (1,363) (4,387) 69
============================================ ========== ========== ========
Total operating expenses (16,338) (18,536) 12
Other net income/(expenses) 490 (596)
============================================ ========== ========== ========
Profit before tax 3,230 1,146
Tax charge (993) (1,149) 14
============================================ ========== ========== ========
Profit/(loss) after tax in respect
of continuing operations 2,237 (3)
Profit after tax in respect of discontinued
operation(1) 591 626 (6)
Non-controlling interests in respect
of continuing operations (346) (348) 1
Non-controlling interests in respect
of discontinued operation(1) (402) (324) (24)
Other equity holders(2) (457) (345) (32)
============================================ ========== ========== ========
Attributable profit/(loss) 1,623 (394)
Performance measures
============================================ ========== ========== ========
Return on average tangible shareholders'
equity(2) 3.6% (0.7%)
Average tangible shareholders' equity
(GBPbn) 48.7 47.7
Cost: income ratio 76% 84%
Loan loss rate (bps) 53 42
Basic earnings/(loss) per share(2) 10.4p (1.9p)
Dividend per share 3.0p 6.5p
Balance sheet and capital management
============================================ ========== ========== ========
Tangible net asset value per share 290p 275p
Common equity tier 1 ratio 12.4% 11.4%
Common equity tier 1 capital GBP45.2bn GBP40.7bn
Risk weighted assets GBP366bn GBP358bn
Leverage ratio 4.6% 4.5%
Fully loaded tier 1 capital GBP52.0bn GBP46.2bn
Leverage exposure GBP1,125bn GBP1,028bn
Funding and liquidity
============================================ ========== ========== ========
Group liquidity pool GBP165bn GBP145bn
CRD IV liquidity coverage ratio 131% 133%
Loan: deposit ratio(3) 83% 86%
1 Refer to page 21 for further information on the Africa Banking
discontinued operation.
2 The profit after tax attributable to other equity holders of GBP457m
(2015: GBP345m) is offset by a tax credit recorded in reserves
of GBP128m (2015: GBP70m). The net amount of GBP329m (2015: GBP275m),
along with non-controlling interests (NCI) is deducted from profit
after tax in order to calculate earnings per share and return on
average tangible shareholders' equity.
3 Loan: deposit ratio for Barclays UK, Barclays International and
Non-Core, excluding investment banking businesses.
Barclays Core and Non-Core Barclays Core Barclays Non-Core
results for the year ended
============================== ============================
31.12.16 31.12.15 YoY 31.12.16 31.12.15 YoY
GBPm GBPm % Change GBPm GBPm % Change
====================================== ========== ======== ======== ======== ======== ========
Total income 22,615 21,428 6 (1,164) 612
Credit impairment charges and
other provisions (2,251) (1,628) (38) (122) (134) 9
====================================== ========== ======== ======== ======== ======== ========
Net operating income/(expenses) 20,364 19,800 3 (1,286) 478
Operating expenses (13,056) (11,765) (11) (1,509) (1,958) 23
UK bank levy (334) (338) 1 (76) (88) 14
Litigation and conduct (1,117) (3,887) 71 (246) (500) 51
====================================== ========== ======== ======== ======== ======== ========
Total operating expenses (14,507) (15,990) 9 (1,831) (2,546) 28
Other net income/(expenses) 159 (61) 331 (535)
====================================== ========== ======== ======== ======== ======== ========
Profit/(loss) before tax 6,016 3,749 60 (2,786) (2,603) (7)
Tax (charge)/credit (1,975) (1,479) (34) 982 330
====================================== ========== ======== ======== ======== ======== ========
Profit/(loss) after tax 4,041 2,270 78 (1,804) (2,273) 21
Non-controlling interests (297) (266) (12) (49) (82) 40
Other equity holders (394) (282) (40) (63) (63) -
====================================== ========== ======== ======== ======== ======== ========
Attributable profit/(loss)(1) 3,350 1,722 95 (1,916) (2,418) 21
Performance measures
====================================== ========== ======== ======== ======== ======== ========
Return on average allocated
tangible equity 8.4% 4.8%
Average allocated tangible
equity (GBPbn)(1) 41.0 36.8 7.8 10.9
Period end allocated tangible
equity (GBPbn)(1) 43.8 37.8 5.4 8.5
Cost: income ratio 64% 75% n/m n/m
Loan loss rate (bps) 58 45 22 23
Basic earnings/(loss) per share
contribution 20.5p 10.7p (11.3p) (14.4p)
Capital management
====================================== ========== ======== ======== ======== ======== ========
Risk weighted assets(1) GBP334bn GBP304bn GBP32bn GBP54bn
Leverage exposure(1) GBP1,024bn GBP879bn GBP101bn GBP149bn
Notable items
====================================== ========== ======== ======== ======== ======== ========
Total income
Own credit (35) 430 - -
Gain on disposal of Barclays'
share of Visa Europe Limited 615 - - -
Gains on US Lehman acquisition
assets - 496 - -
Litigation and conduct
Provisions for UK customer
redress (1,000) (2,649) - (123)
Provisions for ongoing investigations
and litigation including Foreign
Exchange - (1,036) - (201)
Operating expenses
Gain on valuation of a component
of the defined retirement benefit
liability - 429 - -
Impairment of goodwill and
other assets relating to businesses
being disposed - - - (96)
Other net expenses
Losses on sale relating to
the Spanish, Portuguese and
Italian businesses - (112) - (468)
-------------------------------------- ---------- -------- -------- -------- -------- --------
Total notable items (420) (2,442) - (888)
Excluding notable items, the Core return on average allocated
tangible equity was 9.4% (2015: 11.2%) and the Core basic earnings
per share was 23.1p (2015: 24.9p). Excluding notable items, the
Non-Core basic loss per share was 11.3p (2015: 10.2p).
1 Attributable profit in respect of the Africa Banking discontinued
operation is reported at the Group level only. Allocated tangible
equity, RWAs and leverage exposure are reported in Head Office
within Core.
Year ended Year ended
31.12.16 31.12.15 YoY
Income by business GBPm GBPm % Change
======================= ========== ========== ========
Barclays UK 7,517 7,343 2
Barclays International 14,995 13,747 9
Head Office 103 338 (70)
======================= ========== ========== ========
Barclays Core 22,615 21,428 6
Barclays Non-Core (1,164) 612
======================= ========== ========== ========
Barclays Group 21,451 22,040 (3)
Profit/(loss) before tax by business
===================================== ======= ======= ===
Barclays UK 1,738 585
Barclays International 4,211 3,278 28
Head Office 67 (114)
===================================== ======= ======= ===
Barclays Core 6,016 3,749 60
Barclays Non-Core (2,786) (2,603) (7)
===================================== ======= ======= ===
Barclays Group 3,230 1,146
Group Finance Director's Review
2016 reflected the good operational performance of Barclays UK
and Barclays International with the benefits of diversification
across customers and clients, geographies and products coming
through. The Core business generated a RoTE excluding notable items
of 9.4% (2015: 11.2%) on a GBP4bn increased average allocated
tangible equity base of GBP41bn. The Core business also generated
positive cost: income jaws and we intend to continue to reduce the
Group's structural cost base, targeting a Group cost: income ratio
of less than 60% over time. The accelerated Non-Core rundown
resulted in a reduction in RWAs of GBP22bn to GBP32bn resulting in
the decision to close the unit six months ahead of plan on 30 June
2017. Capital ratio progression towards end-state target of 150bps
to 200bps above the minimum regulatory level was strong with a CET1
ratio of 12.4% (December 2015: 11.4%), largely reflecting profit
generation in the period.
Group performance
-- Return on average tangible shareholders' equity was 3.6% (2015:
(0.7%)) and basic earnings per share was 10.4p (2015: (1.9p))
-- Profit before tax increased to GBP3,230m (2015: GBP1,146m). The
Group performance reflected good Core results whilst being impacted
by the Non-Core loss before tax of GBP2,786m (2015: GBP2,603m)
and provisions for UK customer redress of GBP1,000m (2015: GBP2,772m).
The appreciation of average USD and EUR against GBP positively
impacted income and adversely affected impairment and operating
expenses
-- Total income decreased 3% to GBP21,451m as Non-Core income reduced
GBP1,776m to a net expense of GBP1,164m due to the acceleration
of the Non-Core rundown, while Core income increased 6% to GBP22,615m
driven by Barclays International
-- Credit impairment charges increased GBP611m to GBP2,373m including
a GBP320m charge in Q316 following the management review of the
UK and US cards portfolio impairment modelling. This resulted in
a 11bps increase in the loan loss rate to 53bps
-- Total operating expenses reduced 12% to GBP16,338m reflecting lower
litigation and conduct charges. This was partially offset by the
non-recurrence of the prior year gain of GBP429m on the valuation
of a component of the defined retirement benefit liability, increased
structural reform implementation costs, and a GBP150m charge in
Barclays International in Q316, relating to a reduction in the
real estate footprint which will generate savings in future periods.
Operating expenses also included a GBP395m additional charge in
Q416 relating to 2016 compensation awards
-- The effective tax rate on profit before tax decreased to 30.7%
(2015: 100.3%) principally as a result of a reduction in non-deductible
charges
-- Profit after tax in respect of continuing operations increased
to GBP2,237m (2015: loss of GBP3m). Profit after tax in relation
to the Africa Banking discontinued operation decreased 6% to GBP591m
as increased credit impairment charges and operating expenses were
partially offset by income growth
-- Notable items totalled a net loss before tax of GBP420m (2015:
GBP3,330m) comprising provisions for UK customer redress of GBP1,000m
(2015: GBP2,772m), a GBP615m (2015: GBPnil) gain on disposal of
Barclays' share of Visa Europe Limited and an own credit loss of
GBP35m (2015: gain of GBP430m)
All performance commentary which follows excludes the impact of
notable items. Refer to pages 68-71 for a reconciliation of results
excluding notable items.
Core performance
-- The Core business generated a RoTE of 9.4% (2015: 11.2%) on an
average allocated tangible equity base that was GBP4bn higher at
GBP41bn, due to Core earnings generation and capital returned from
the Non-Core
-- Profit before tax increased 4% to GBP6,436m reflecting good performance
in both Barclays UK and Barclays International, with an improvement
in the cost: income ratio to 61% (2015: 62%). This included the
benefit of the appreciation of average USD and EUR against GBP
-- Total income increased 7% to GBP22,035m with Barclays International
income increasing 10% to GBP14,531m, with growth in both Corporate
and Investment Bank, and Consumer, Cards and Payments, while Barclays
UK income was broadly in line at GBP7,366m (2015: GBP7,343m)
-- Credit impairment charges increased 38% to GBP2,251m resulting
in a 13bps increase in the loan loss rate to 58bps, including a
GBP320m charge in Q316 following the management review of the UK
and US cards portfolio impairment modelling, and a number of single
name exposures
-- Total operating expenses increased 6% to GBP13,507m, including
a GBP390m charge in Q416 relating to the 2016 compensation awards,
increased structural reform implementation costs, and a GBP150m
charge in Barclays International in Q316 relating to a reduction
in the real estate footprint
Barclays UK
-- RoTE was 19.3% (2015: 21.1%) as profit before tax decreased 5%
to GBP2,587m driven by an increase in credit impairment charges,
partially offset by a reduction in total operating expenses
-- Total income was broadly in line at GBP7,366m (2015: GBP7,343m),
within which:
- Personal Banking income increased 1% to GBP3,762m, Barclaycard
Consumer UK income decreased 2% to GBP2,022m and Wealth, Entrepreneurs
& Business Banking (WEBB) income increased 1% to GBP1,582m
- Net interest income increased 1% to GBP6,048m, with the net interest
margin increasing 6bps to 3.62% reflecting higher margins on
deposits, partially offset by lower mortgage margins
-- Credit impairment charges increased GBP190m to GBP896m due to a
GBP200m charge in Q316 following the management review of the cards
portfolio impairment modelling. Delinquency trends improved with
the 30 and 90 day arrears rates on the cards portfolio reducing
to 1.9% (2015: 2.3%) and 0.9% (2015: 1.2%) respectively
-- Total operating expenses reduced 1% to GBP3,882m reflecting savings
realised from strategic cost programmes, relating to restructuring
of the branch network and technology improvements, partially offset
by structural reform programme implementation costs. The cost:
income ratio was stable at 53% (2015: 53%)
Barclays International
-- RoTE was 8.0% (2015: 9.5%) as profit before tax decreased 3% to
GBP3,747m including the impact of the appreciation of average USD
and EUR against GBP. This was driven by increased credit impairment
charges and operating expenses, partially offset by strong income
growth in Consumer, Cards and Payments and Corporate and Investment
Bank
-- Total income increased 10% to GBP14,531m, including the appreciation
of average USD and EUR against GBP, within which:
- Consumer, Cards and Payments income increased 21% to GBP3,998m,
driven by continued growth across all key businesses
- Corporate and Investment Bank income increased 6% to GBP10,533m
as Markets income increased 9% to GBP5,279m, within which Credit
increased 44% to GBP1,185m and Macro increased 9% to GBP2,304m,
partially offset by a 6% reduction in Equities to GBP1,790m.
Banking income increased 3% to GBP5,249m driven by strong growth
in Banking fees, which increased 15% to GBP2,397m, partially
offset by a 12% reduction in Corporate lending to GBP1,195m.
Transactional banking was broadly in line at GBP1,657m (2015:
GBP1,663m)
-- Credit impairment charges increased 47% to GBP1,355m, within which
Consumer, Cards and Payments impairment increased 51% to GBP1,095m
driven by growth in receivables, a change in portfolio mix and
a GBP120m charge in Q316 following the management review of the
cards portfolio impairment modelling. Delinquency trends in Barclaycard
US worsened with the 30 and 90 day arrears rates increasing to
2.6% (2015: 2.2%) and 1.3% (2015: 1.1%) respectively. Corporate
and Investment Bank impairment increased 31% to GBP260m primarily
from impairment of a number of single name exposures
-- Total operating expenses increased 11% to GBP9,461m including an
additional charge in Q416 relating to the 2016 compensation awards,
higher structural reform programme implementation costs, a GBP150m
charge in Q316 to reduce the real estate footprint and increased
costs in Consumer, Cards and Payments driven by continued growth.
These increases were partially offset by lower litigation and conduct
costs
Head Office
-- Profit before tax was GBP102m (2015: loss of GBP380m) reflecting
increased net income from treasury operations, structural reform
programme implementation costs included in operating expenses in
2015, now included in the businesses, and increased other net income
primarily due to recycling of the currency translation reserve
to the income statement on completion of the sale of the Southern
European cards business
Non-Core performance
-- Strong performance in the accelerated rundown of Non-Core resulted
in RWAs decreasing GBP22.2bn to GBP32.1bn, despite the impact of
the appreciation of USD and EUR against GBP, driven by a GBP10bn
reduction in Derivatives, a GBP3bn reduction in Securities and
loans, a GBP4bn reduction in Businesses RWAs and a GBP4bn reallocation
to Head Office of operational risk RWAs associated with exited
businesses and assets
-- Loss before tax increased to GBP2,786m (2015: GBP1,715m) driven
by reduced income and increased losses resulting from continued
progress on the rundown of Businesses, Securities and loans, and
Derivatives, partially offset by lower operating expenses and an
increase in other net income from business disposals
-- Total income reduced GBP1,776m to a net expense of GBP1,164m including
fair value losses on the Education, Social Housing, and Local Authority
(ESHLA) portfolio of GBP393m (2015: GBP359m). Excluding these fair
value losses, negative income was GBP771m
- Businesses income reduced GBP654m to GBP485m due to the completion
of the sale of a number of income generating businesses
- Securities and loans income decreased GBP288m to a net expense
of GBP638m primarily driven by the impact of restructuring the
ESHLA Lender Option Borrower Option (LOBO) loan terms in Q216
- Derivatives income reduced GBP834m to a net expense of GBP1,011m
primarily reflecting the costs of running down the portfolio
-- Credit impairment charges improved 9% to GBP122m driven by lower
impairment charges in European businesses
-- Total operating expenses improved 14% to GBP1,831m reflecting cost
savings from ceasing certain investment banking activities in a
number of countries and the completion of the sale of a number
of businesses, partially offset by a c.GBP200m increase in restructuring
charges, which totalled c.GBP400m
-- Other net income of GBP331m (2015: net expense of GBP70m) included
gains on the sale of Barclays Risk Analytics and Index Solutions,
the Asia wealth and investment management business and the Southern
European cards business, partially offset by the loss on sale of
the French retail business of GBP455m
-- The intention is to close Non-Core on 30 June 2017 with approximately
GBP25bn of RWAs
Group capital and leverage
-- The fully loaded CRD IV CET1 ratio increased to 12.4% (December
2015: 11.4%) reflecting an increase in CET1 capital of GBP4.5bn
to GBP45.2bn, despite RWAs increasing by GBP7bn to GBP366bn
- The increase in CET1 capital was largely driven by profits of
GBP2.1bn generated in the period, after absorbing the impact
of notable items. Other favourable movements included the currency
translation reserve as a result of the appreciation of all major
currencies against GBP
- The increase in RWAs was principally due to the appreciation
of ZAR, USD and EUR against GBP and business growth, which together
more than offset RWA reductions in Non-Core
-- The leverage ratio increased to 4.6% (December 2015: 4.5%) driven
by a GBP5.8bn increase in fully loaded Tier 1 capital to GBP52.0bn
partially offset by an increase in leverage exposure of GBP97bn
to GBP1,125bn. Total IFRS assets increased 8% to GBP1,213bn from
December 2015 contributing to the 9% increase in leverage exposure
- The IFRS asset increase was mainly driven by loans and advances
and other assets which increased GBP82bn to GBP707bn. The increase
was primarily due to the appreciation of major currencies against
GBP, an increase in liquidity pool assets, and lending growth
in Barclays UK and Barclays International. This was partially
offset by the rundown and exit of Non-Core assets
- Net derivative leverage exposure remained broadly flat as an
increase in IFRS derivative assets of GBP19bn to GBP347bn was
offset by an increase in IFRS derivative liabilities resulting
in regulatory derivative netting increasing GBP20bn to GBP313bn.
The increase was mainly within foreign exchange derivatives driven
by an increase in trade volumes and appreciation of all major
currencies against GBP
-- Tangible net asset value per share increased to 290p (December
2015: 275p) driven by profit generated in the period and net favourable
reserve movements
Group funding and liquidity
-- The Group continued to maintain surpluses to its internal and regulatory
requirements. The liquidity pool increased to GBP165bn (December
2015: GBP145bn), primarily driven by the appreciation of USD and
EUR against GBP and a net increase in deposits and wholesale funding
to support business growth. The Liquidity Coverage Ratio (LCR)
was 131% (December 2015: 133%), equivalent to a surplus of GBP39bn
(December 2015: GBP37bn)
-- Wholesale funding outstanding excluding repurchase agreements was
GBP158bn (December 2015: GBP142bn). The increase was driven by
the prudent management of the liquidity position, HoldCo issuance
and the appreciation of USD and EUR against GBP. The Group issued
GBP12.1bn equivalent of capital and term senior unsecured debt
from the HoldCo of which GBP8.6bn equivalent and GBP0.7bn equivalent
in public and private senior unsecured debt respectively, and GBP2.8bn
of capital instruments. In the same period GBP7.4bn of Barclays
Bank PLC (OpCo) capital and senior unsecured debt was repurchased
or redeemed
-- On 12 December 2016, Moody's upgraded both the HoldCo's and OpCo's
long term senior unsecured ratings one notch to Baa2 and A1 respectively.
The negative outlooks remained
Other matters
-- The acquisition of Barclays' share of Visa Europe Limited by Visa
Inc. completed on 21 June 2016 resulting in the recognition of
a pre-tax gain on disposal of GBP615m in income in Q216
-- Additional UK customer redress provisions of GBP1,000m (2015: GBP2,772m)
relating to Payment Protection Insurance (PPI) were recognised.
GBP400m was recognised in Q216 reflecting an updated estimate of
costs, primarily relating to ongoing remediation programmes, with
GBP600m recognised in Q316 to reflect the current estimate of the
impact of the revised complaints deadline proposed in Financial
Conduct Authority (FCA) consultation paper 16/20 issued on 2 August
2016. The remaining PPI provision as at December 2016 was GBP1,979m
(December 2015: GBP2,106m)
-- In Q216, Barclays redeemed its $1.15bn 7.75% Series 4 Non-Cumulative
Callable Dollar Preference Shares. In Q316, Barclays redeemed its
$750m 6.625% Series 2 Non-Cumulative Callable Dollar Preference
Shares. These redemptions resulted in a 10bps detriment to the
CET1 ratio, but will result in an ongoing reduction in preference
share dividends payable of $139m per annum
-- On 5 May 2016, Barclays executed the first tranche of the sell
down of the Group's interest in BAGL with the sale of 12.2% of
BAGL's issued share capital. Following completion of this first
tranche, Barclays' holding represents 50.1% of BAGL's issued share
capital. Barclays continues to explore opportunities to reduce
its shareholding to a level that would permit regulatory deconsolidation.
Barclays also continues to work closely with BAGL management on
arrangements for operational separation of the two businesses
-- The terms of the transitional services arrangements and related
separation payments have been agreed with BAGL and submitted to
relevant regulators as part of a request for approval for Barclays
to sell down to below a 50% holding. These proposed separation
terms include contributions totalling GBP765m, of which GBP27.5m
was paid in 2016, with the remainder to be paid over the period
through to completion of any initial sale of Barclays' stake in
BAGL to below 50%. The majority of these funds would be used by
BAGL to separate from the Barclays group, including termination
of the existing Master Services Agreement, making investments in
branding, operations and technology, and covering separation related
expenses. In addition, Barclays will contribute an amount equivalent
to 1.5% of BAGL's market capitalisation to a new Broad-Based Black
Economic Empowerment scheme, equating to approximately GBP130m
at the 31 December 2016 share price and ZAR exchange rate, and
expects to incur some additional operating expenses in respect
of delivering the separation of the businesses under the transitional
services arrangements
-- It is estimated that the selldown of the Group's interest in BAGL
to a level that achieves regulatory deconsolidation will result
in greater than 75bps accretion to the Group's CET1 ratio, based
on the BAGL share price of ZAR168.69 and ZAR exchange rate of 16.78
at 31 December 2016, after taking account of the separation costs
referred to above
-- Certain legal proceedings and investigations relating to legacy
issues remain outstanding, including a civil complaint filed by
the DOJ against Barclays in December 2016 relating to mortgage-backed
securities sold between 2005 and 2007 which Barclays is defending.
Resolving outstanding legacy issues in an appropriate timeframe
will continue to be a priority. Please see note 29 to the financial
statements in the Annual Report for details of relevant matters
Dividends
-- A final dividend for 2016 of 2.0p per share will be paid on 5 April
2017, resulting in a total 3.0p dividend per share for the year
Outlook and Guidance
-- Barclays today announces the intention to close Non-Core early
at 30 June 2017, at which point RWAs are expected to be approximately
GBP25bn. The composition of the assets at that date are expected
to consist primarily of residual derivatives, Italian mortgages
and the ESHLA portfolio. Further information on the allocation
of the residual Non-Core between Barclays UK and Barclays International
will be provided on closure
-- Loss before tax in 2017 generated by Non-Core operations is expected
to be approximately GBP1bn, excluding fair value gains or losses
on the ESHLA portfolio. A greater proportion of this loss is expected
to occur in H117 reflecting continued exit costs
-- The end-state CET1 capital ratio target has been revised to 150-200bps
above the minimum regulatory level, providing 400-450bps buffer
to the Bank of England stress test systemic reference point
Tushar Morzaria, Group Finance Director
Results by Business
Barclays UK Year ended Year ended
31.12.16 31.12.15 YoY
Income statement information(1) GBPm GBPm % Change
======================================= ========== ========== ========
Net interest income 6,048 5,973 1
Net fee, commission and other income 1,469 1,370 7
======================================= ========== ========== ========
Total income 7,517 7,343 2
Credit impairment charges and other
provisions (896) (706) (27)
======================================= ========== ========== ========
Net operating income 6,621 6,637 -
Operating expenses (3,792) (3,464) (9)
UK bank levy (48) (77) 38
Litigation and conduct (1,042) (2,511) 59
======================================= ========== ========== ========
Total operating expenses (4,882) (6,052) 19
Other net expenses (1) -
======================================= ========== ========== ========
Profit before tax 1,738 585
Attributable profit/(loss) 828 (47)
Balance sheet information
======================================= ========== ========== ========
Loans and advances to customers at
amortised cost (GBPbn) 166.4 166.1
Total assets (GBPbn) 209.6 202.5
Customer deposits (GBPbn) 189.0 176.8
Risk weighted assets (GBPbn) 67.5 69.5
Key facts
======================================= ========== ========== ========
Average LTV of mortgage portfolio(2) 48% 49%
Average LTV of new mortgage lending(2) 63% 64%
Number of branches 1,305 1,362
Barclays mobile banking customers 5.7m 4.7m
30 day arrears rate - Barclaycard
Consumer UK 1.9% 2.3%
Performance measures
======================================= ========== ========== ========
Return on average allocated tangible
equity 9.6% (0.3%)
Average allocated tangible equity
(GBPbn) 8.9 9.3
Cost: income ratio 65% 82%
Loan loss rate (bps) 52 42
Loan: deposit ratio 88% 94%
Net interest margin 3.62% 3.56%
Notable items
======================================= ========== ========== ========
Total income
Gain on disposal of Barclays' share
of Visa Europe Limited 151 -
Litigation and conduct
Provisions for UK customer redress (1,000) (2,431)
Operating expenses
Gain on valuation of a component
of the defined retirement benefit
liability - 296
======================================= ========== ========== ========
Total notable items (849) (2,135)
Excluding notable items, the Barclays UK return on average
allocated tangible equity was 19.3% (2015: 21.1%).
1 Refer to the appendix on pages 65-75 for further information, reconciliations
and calculations of non-IFRS performance measures included throughout
this document.
2 Average LTV of mortgage portfolio and new mortgage lending calculated
on the balance weighted basis.
Analysis of Barclays UK Year ended Year ended
31.12.16 31.12.15 YoY
Analysis of total income GBPm GBPm % Change
====================================== ========== ========== ========
Personal Banking 3,891 3,714 5
Barclaycard Consumer UK 2,022 2,065 (2)
Wealth, Entrepreneurs & Business
Banking 1,604 1,564 3
====================================== ========== ========== ========
Total income 7,517 7,343 2
Analysis of credit impairment charges
and other provisions
====================================== ========== ========== ========
Personal Banking (183) (194) 6
Barclaycard Consumer UK (683) (488) (40)
Wealth, Entrepreneurs & Business
Banking (30) (24) (25)
====================================== ========== ========== ========
Total credit impairment charges and
other provisions (896) (706) (27)
Analysis of loans and advances to
customers at amortised cost (GBPbn)
====================================== ========== ========== ========
Personal Banking 135.0 134.0
Barclaycard Consumer UK 16.5 16.2
Wealth, Entrepreneurs & Business
Banking 14.9 15.9
====================================== ========== ========== ========
Total loans and advances to customers
at amortised cost 166.4 166.1
Analysis of customer deposits (GBPbn)
====================================== ========== ========== ========
Personal Banking 139.3 131.0
Barclaycard Consumer UK - -
Wealth, Entrepreneurs & Business
Banking 49.7 45.8
====================================== ========== ========== ========
Total customer deposits 189.0 176.8
2016 compared to 2015
-- Profit before tax increased GBP1,153m to GBP1,738m reflecting lower
provisions for UK customer redress. Profit before tax excluding
notable items(1) decreased 5% to GBP2,587m driven by an increase
in credit impairment charges following the management review of
the cards portfolio impairment modelling, partially offset by a
reduction in total operating expenses
-- Total income, including a gain on disposal of Barclays' share of
Visa Europe Limited recognised in Personal Banking and Wealth,
Entrepreneurs & Business Banking (WEBB) increased 2% to GBP7,517m.
Total income excluding notable items was broadly in line at GBP7,366m
(2015: GBP7,343m), within which:
- Personal Banking income increased 1% to GBP3,762m driven by improved
deposit margins and balance growth, partially offset by lower
mortgage margins
- Barclaycard Consumer UK income decreased 2% to GBP2,022m primarily
as a result of the European Interchange Fee Regulation, which
came into full effect from December 2015, offset by balance growth
and gains from debt sales
- WEBB income increased 1% to GBP1,582m reflecting improved margins
and deposit growth, partially offset by reduced transactional
fee income
- Net interest income increased 1% to GBP6,048m due to balance
growth and deposit pricing initiatives, partially offset by lower
mortgage margins
- Net interest margin increased 6bps to 3.62% reflecting higher
margins on deposits, partially offset by lower mortgage margins
- Net fee, commission and other income decreased 4% to GBP1,318m
due to the impact of the European Interchange Fee Regulation
in Barclaycard Consumer UK, which came into full effect from
December 2015, and reduced fee and commission income in WEBB
-- Credit impairment charges increased 27% to GBP896m due to a GBP200m
charge in Q316 following the management review of the cards portfolio
impairment modelling. The 30 day and 90 day arrears rates on the
cards portfolio improved year-on-year to 1.9% (2015: 2.3%) and
0.9% (2015: 1.2%) respectively
-- Total operating expenses, including provisions for UK customer
redress of GBP1,000m (2015: GBP2,431m), reduced 19% to GBP4,882m.
Total operating expenses excluding notable items reduced 1% to
GBP3,882m reflecting savings realised from strategic cost programmes,
relating to restructuring of the branch network and technology
improvements, offset by structural reform programme implementation
costs
-- The cost: income ratio excluding notable items was 53% (2015: 53%)
and RoTE excluding notable items was 19.3% (2015: 21.1%)
-- Loans and advances to customers were stable at GBP166.4bn (December
2015: GBP166.1bn)
-- Total assets increased GBP7.1bn to GBP209.6bn primarily reflecting
an increase in the allocated liquidity pool
-- Customer deposits increased 7% to GBP189.0bn primarily driven by
higher balances in Personal Banking and WEBB
-- RWAs reduced GBP2.0bn to GBP67.5bn primarily driven by changes
in the mortgages credit risk model
1 Refer to the appendix on pages 65-75 for further information, reconciliations
and calculations of non-IFRS performance measures included throughout
this document.
Barclays International Year ended Year ended
31.12.16 31.12.15 YoY
Income statement information(1) GBPm GBPm % Change
============================================ ========== ========== ========
Net interest income 4,512 4,324 4
Net trading income 4,580 3,782 21
Net fee, commission and other income 5,903 5,641 5
============================================ ========== ========== ========
Total income 14,995 13,747 9
Credit impairment charges and other
provisions (1,355) (922) (47)
============================================ ========== ========== ========
Net operating income 13,640 12,825 6
Operating expenses (9,129) (8,029) (14)
UK bank levy (284) (253) (12)
Litigation and conduct (48) (1,310) 96
============================================ ========== ========== ========
Total operating expenses (9,461) (9,592) 1
Other net income 32 45 (29)
============================================ ========== ========== ========
Profit before tax 4,211 3,278 28
Attributable profit 2,412 1,758 37
Balance sheet information
============================================ ========== ========== ========
Loans and advances to banks and customers
at amortised cost (GBPbn)(2) 211.3 184.1
Trading portfolio assets (GBPbn) 73.2 61.9
Derivative financial instrument assets
(GBPbn) 156.2 111.5
Derivative financial instrument liabilities
(GBPbn) 160.6 119.0
Reverse repurchase agreements and
other similar secured lending (GBPbn) 13.4 24.7
Financial assets designated at fair
value (GBPbn) 62.3 46.8
Total assets (GBPbn) 648.5 532.2
Customer deposits (GBPbn)(3) 216.2 185.6
Risk weighted assets (GBPbn) 212.7 194.8
Performance measures
============================================ ========== ========== ========
Return on average allocated tangible
equity 9.8% 7.2%
Average allocated tangible equity
(GBPbn) 25.5 24.9
Cost: income ratio 63% 70%
Loan loss rate (bps) 63 49
Loan: deposit ratio 86% 88%
Net interest margin(4) 3.98% 3.80%
Notable items
============================================ ========== ========== ========
Total income
Gain on disposal of Barclays' share
of Visa Europe Limited 464 -
Gains on US Lehman acquisition assets - 496
Litigation and conduct
Provisions for UK customer redress - (218)
Provisions for ongoing investigations
and litigation including Foreign
Exchange - (984)
Operating expenses
Gain on valuation of a component
of the defined retirement benefit
liability - 133
-------------------------------------------- ---------- ---------- --------
Total notable items 464 (573)
Excluding notable items, the Barclays International return on
average allocated tangible equity was 8.0% (2015: 9.5%).
1 Refer to the appendix on pages 65-75 for further information, reconciliations
and calculations of non-IFRS performance measures included throughout
this document.
2 As at 31 December 2016 loans and advances included GBP185.9bn (December
2015: GBP162.6bn) of loans and advances to customers (including
settlement balances of GBP19.5bn (December 2015: GBP18.5bn) and
cash collateral of GBP30.1bn (December 2015: GBP24.8bn)), and GBP25.4bn
(December 2015: GBP21.5bn) of loans and advances to banks (including
settlement balances of GBP1.7bn (December 2015: GBP1.6bn) and cash
collateral of GBP6.3bn (December 2015: GBP5.7bn)). Loans and advances
to banks and customers in respect of Consumer, Cards and Payments
were GBP39.7bn (December 2015: GBP32.1bn).
3 As at 31 December 2016 customer deposits included settlement balances
of GBP16.6bn (December 2015: GBP16.3bn) and cash collateral of
GBP20.8bn (December 2015: GBP15.9bn).
4 Barclays International margins have been restated to include interest
earning lending within the investment banking business.
Analysis of Barclays International
Year ended Year ended
Corporate and Investment Bank 31.12.16 31.12.15 YoY
Income statement information GBPm GBPm % Change
===================================== ========== ========== ========
Analysis of total income
Credit 1,185 824 44
Equities 1,790 1,912 (6)
Macro 2,304 2,108 9
===================================== ========== ========== ========
Markets 5,279 4,844 9
Banking fees 2,397 2,087 15
Corporate lending 1,195 1,361 (12)
Transactional banking 1,657 1,663 -
===================================== ========== ========== ========
Banking 5,249 5,111 3
Other 5 495 (99)
===================================== ========== ========== ========
Total income 10,533 10,450 1
Credit impairment charges and other
provisions (260) (199) (31)
Total operating expenses (7,624) (7,929) 4
Profit before tax 2,650 2,322 14
Balance sheet information
===================================== ========== ========== ========
Risk weighted assets (GBPbn) 178.6 167.3
Performance measures
===================================== ========== ========== ========
Return on average allocated tangible
equity 6.1% 5.4%
Average allocated tangible equity
(GBPbn) 21.9 21.9
Excluding notable items, the CIB return on average allocated
tangible equity was 6.1% (2015: 8.2%).
Consumer, Cards and Payments
Income statement information
========================================== ======== ======== ====
Total income 4,462 3,297 35
Credit impairment charges and other
provisions (1,095) (723) (51)
Total operating expenses (1,837) (1,663) (10)
Profit before tax 1,561 956 63
Balance sheet information
========================================== ======== ======== ====
Loans and advances to banks and customers
at amortised cost (GBPbn) 39.7 32.1
Customer deposits (GBPbn) 50.0 41.8
Risk weighted assets (GBPbn) 34.1 27.5
Key facts
========================================== ======== ======== ====
30 days arrears rate - Barclaycard
US 2.6% 2.2%
Total number of Barclaycard business
clients 355,000 341,000
Value of payments processed GBP296bn GBP271bn
Performance measures
========================================== ======== ======== ====
Return on average allocated tangible
equity 31.4% 20.2%
Average allocated tangible equity
(GBPbn) 3.6 3.0
Excluding notable items, the Consumer, Cards and Payments return
on average allocated tangible equity was 19.1% (2015: 18.9%).
2016 compared to 2015
-- Profit before tax increased 28% to GBP4,211m, including the gain
on disposal of Barclays' share of Visa Europe Limited. Profit before
tax excluding notable items(1) decreased 3% to GBP3,747m driven
by an 11% increase in total operating expenses, and a 47% increase
in impairment, partially offset by a 10% increase in total income
-- Total income excluding notable items increased 10% to GBP14,531m,
including the appreciation of average USD and EUR against GBP,
with Consumer, Cards and Payments income increasing 21% to GBP3,998m
and Corporate and Investment Bank (CIB) income increasing 6% to
GBP10,533m
- Markets income increased 9% to GBP5,279m, within which:
- Credit income increased 44% to GBP1,185m driven by strong performance
in fixed income flow credit which benefitted from increased market
volatility and client demand
- Equities income decreased 6% to GBP1,790m with lower client activity
in Asia and the simplification of the EMEA business, partially
offset by improved performance in cash, derivatives and financing
in H216
- Macro income increased 9% to GBP2,304m driven by increased activity
post the EU referendum decision and US elections
- Banking income increased 3% to GBP5,249m within which:
- Banking fees income increased 15% to GBP2,397m driven by higher
debt underwriting and advisory fees, partially offset by lower
equity underwriting fees
- Corporate lending reduced 12% to GBP1,195m due to losses on fair
value hedges and the non-recurrence of one-off work-out gains
recognised in Q215
- Transactional banking was broadly flat at GBP1,657m (2015: GBP1,663m)
as income from higher deposit balances was offset by margin compression
- Consumer, Cards and Payments income increased 21% to GBP3,998m
driven by growth across all key businesses and the appreciation
of average USD and EUR against GBP
-- Credit impairment charges increased 47% to GBP1,355m including
the appreciation of average USD and EUR against GBP, within which:
- CIB credit impairment charges increased 31% to GBP260m driven by
the impairment of a number of single name exposures
- Consumer, Cards and Payments credit impairment charges increased
51% to GBP1,095m primarily driven by balance growth, a change in
portfolio mix and a GBP120m charge in Q316 following a management
review of the cards portfolio impairment modelling
-- Total operating expenses excluding notable items increased 11%,
within which:
- CIB increased 12% to GBP7,624m. In addition to the appreciation
of average USD against GBP this reflected an additional charge
in Q416 relating to the 2016 compensation awards, higher restructuring
costs, GBP150m of which related to reducing the real estate footprint
in Q316, and higher structural reform programme implementation
costs including those relating to the incorporation of the US Intermediate
Holding Company (IHC) on 1 July 2016. These increases were partially
offset by lower litigation and conduct costs
- Consumer, Cards and Payments increased 7% to GBP1,837m due to continued
business growth and the appreciation of average USD and EUR against
GBP, partially offset by lower restructuring costs
-- The cost: income ratio excluding notable items was 65% (2015: 64%)
and RoTE excluding notable items was 8.0% (2015: 9.5%)
-- Loans and advances to banks and customers at amortised cost increased
GBP27.2bn to GBP211.3bn with CIB increasing GBP19.7bn to GBP171.7bn
due to increased lending and cash collateral and the appreciation
of USD and EUR against GBP. Consumer, Cards and Payments increased
GBP7.6bn to GBP39.7bn driven by appreciation of USD and EUR against
GBP and growth in Barclaycard US, including the acquisition of
the JetBlue credit card portfolio
-- Trading portfolio assets increased GBP11.3bn to GBP73.2bn due to
an increase in client activity and appreciation of major currencies
against GBP
-- Derivative financial instrument assets and liabilities increased
GBP44.7bn to GBP156.2bn and GBP41.6bn to GBP160.6bn respectively,
due to the appreciation of USD and EUR against GBP and decreases
in forward interest rates
-- Financial assets designated at fair value increased GBP15.5bn to
GBP62.3bn and reverse repurchase agreements and other similar lending
decreased GBP11.3bn to GBP13.4bn. Since 2015, new reverse repurchase
agreements in certain businesses have been designated at fair value
to better align to the way the business manages the portfolio's
risk and performance. On a net basis reverse repos have increased
by GBP4.2bn as a result of increased matched book trading
-- Customer deposits increased GBP30.6bn to GBP216.2bn, with CIB increasing
GBP22.6bn to GBP166.3bn primarily driven by increases in deposits
cash collateral and the appreciation of USD and EUR against GBP.
Consumer, Cards and Payments increased GBP8.2bn to GBP50.0bn driven
by balance growth in Barclaycard US and Private Banking, and the
appreciation of USD and EUR against GBP
-- RWAs increased GBP17.9bn to GBP212.7bn, due to the appreciation
of USD against GBP, and business growth, including the acquisition
of the JetBlue credit card portfolio in Consumer, Cards and Payments
1 Refer to the appendix on pages 65-75 for further information, reconciliations
and calculations of non-IFRS performance measures included throughout
this document.
Head Office Year ended Year ended
31.12.16 31.12.15 YoY
Income statement information(1) GBPm GBPm % Change
Net interest income (183) (305) 40
Net fee, commission and other income 286 643 (56)
======================================== ========== ========== ========
Net operating income 103 338 (70)
Operating expenses (135) (272) 50
UK bank levy (2) (8) 75
Litigation and conduct (27) (66) 59
======================================== ========== ========== ========
Total operating expenses (164) (346) 53
Other net income/(expenses) 128 (106)
======================================== ========== ========== ========
Profit/(loss) before tax 67 (114)
Attributable profit 110 11
Balance sheet information
======================================== ========== ========== ========
Total assets (GBPbn)(2) 75.2 59.4
Risk weighted assets (GBPbn)(2) 53.3 39.7
Performance measures
======================================== ========== ========== ========
Average allocated tangible equity
(GBPbn) 6.5 2.6
Notable items
---------------------------------------- ---------- ---------- --------
Total income
Own credit (35) 430
Litigation and conduct
Provisions for ongoing investigations
and litigation including Foreign
Exchange - (52)
Other net expenses
Losses on sale relating to the Spanish,
Portuguese and Italian businesses - (112)
---------------------------------------- ---------- ---------- --------
Total notable items (35) 266
2016 compared to 2015
-- Profit before tax was GBP67m (2015: loss of GBP114m). Profit before
tax excluding notable items(1) improved from a loss of GBP380m
to a profit of GBP102m
-- Net operating income excluding notable items increased to GBP138m
(2015: loss of GBP92m) primarily due to changes in net income from
treasury operations
-- Total operating expenses excluding notable items reduced to GBP164m
(2015: GBP294m) primarily due to a reduction in structural reform
implementation costs now allocated to the businesses
-- Other net income excluding notable items increased to GBP128m (2015:
GBP6m) primarily due to recycling of the currency translation reserve
on the disposal of the Southern European cards business
-- Total assets increased GBP15.8bn to GBP75.2bn primarily driven
by the appreciation of ZAR against GBP
-- RWAs increased GBP13.6bn to GBP53.3bn primarily driven by the appreciation
of ZAR against GBP and the reallocation of operational risk RWAs
from Non-Core associated with exited businesses and assets
1 Refer to the appendix on pages 65-75 for further information, reconciliations
and calculations of non-IFRS performance measures included throughout
this document.
2 Includes Africa Banking assets held for sale of GBP65.1bn (December
2015: GBP47.9bn) and risk weighted assets of GBP 42.3bn (December
2015: GBP31.7bn).
Barclays Non-Core Year ended Year ended
31.12.16 31.12.15 YoY
Income statement information(1) GBPm GBPm % Change
============================================ ========== ========== ========
Net interest income 160 615 (74)
Net trading income (1,703) (706)
Net fee, commission and other income 379 703 (46)
============================================ ========== ========== ========
Total income (1,164) 612
Credit impairment charges and other
provisions (122) (134) 9
============================================ ========== ========== ========
Net operating (expenses)/income (1,286) 478
Operating expenses (1,509) (1,958) 23
UK bank levy (76) (88) 14
Litigation and conduct (246) (500) 51
============================================ ========== ========== ========
Total operating expenses (1,831) (2,546) 28
Other net income/(expenses) 331 (535)
============================================ ========== ========== ========
Loss before tax (2,786) (2,603) (7)
Attributable loss (1,916) (2,418) 21
Balance sheet information
============================================ ========== ========== ========
Loans and advances to banks and customers
at amortised cost (GBPbn)(2) 51.1 51.8
Derivative financial instrument assets
(GBPbn) 188.7 213.7
Derivative financial instrument liabilities
(GBPbn) 178.6 202.1
Reverse repurchase agreements and
other similar secured lending (GBPbn) 0.1 3.1
Financial assets designated at fair
value (GBPbn) 14.5 21.4
Total assets (GBPbn) 279.7 325.8
Customer deposits (GBPbn)(3) 12.5 20.9
Risk weighted assets (GBPbn) 32.1 54.3
Performance measures
============================================ ========== ========== ========
Average allocated tangible equity
(GBPbn) 7.8 10.9
Period end allocated tangible equity
(GBPbn) 5.4 8.5
Loan loss rate (bps) 22 23
Notable items
============================================ ========== ========== ========
Litigation and conduct
Provisions for UK customer redress - (123)
Provisions for ongoing investigations
and litigation including Foreign
Exchange - (201)
Operating expenses
Impairment of goodwill and other
assets relating to businesses being
disposed - (96)
Other net expenses
Losses on sale relating to the Spanish,
Portuguese and Italian businesses - (468)
============================================ ========== ========== ========
Total notable items - (888)
Analysis of total income
============================================ ========== ========== ========
Businesses 485 1,139 (57)
Securities and loans (638) (350) (82)
Derivatives (1,011) (177)
============================================ ========== ========== ========
Total income (1,164) 612
1 Refer to the appendix on pages 65-75 for further information, reconciliations
and calculations of non-IFRS performance measures included throughout
this document.
2 As at 31 December 2016 loans and advances included GBP38.5bn (December
2015: GBP40.4bn) of loans and advances to customers (including
settlement balances of GBP0.1bn (December 2015: GBP0.3bn) and cash
collateral of GBP17.3bn (December 2015: GBP19.0bn)), and GBP12.6bn
(December 2015: GBP11.4bn) of loans and advances to banks (including
settlement balances of GBP0.1bn (December 2015: GBPnil) and cash
collateral of GBP12.1bn (December 2015: GBP10.1bn)).
3 As at 31 December 2016 customer deposits included settlement balances
of GBP0.1bn (December 2015: GBP0.2bn) and cash collateral of GBP11.9bn
(December 2015: GBP12.3bn).
2016 compared to 2015
-- Loss before tax increased to GBP2,786m (2015: GBP2,603m). Loss
before tax excluding notable items(1) increased to GBP2,786m (2015:
GBP1,715m) driven by reduced income and increased losses resulting
from continued progress on the rundown of Derivatives, Businesses
and Securities and loans, partially offset by lower operating expenses
and higher other net income primarily from business and country
exits
-- Total income reduced GBP1,776m to a net expense of GBP1,164m
- Businesses income reduced GBP654m to GBP485m due to the impact
of lower income following the completion of the sale of a number
of income generating businesses and fees paid to Head Office relating
to the termination of internal hedging and funding positions no
longer required
- Securities and loans income decreased GBP288m to a net expense
of GBP638m primarily driven by the impact of restructuring the
ESHLA portfolio, the non-recurrence of a GBP91m provision release
relating to a litigation matter in Q115 and portfolio rundown.
Fair value losses on the ESHLA portfolio were GBP393m (2015: GBP359m)
- Derivatives income reduced GBP834m to a net expense of GBP1,011m
principally reflecting the costs of running down the portfolio
-- Credit impairment charges improved 9% to GBP122m due to lower impairment
charges in European businesses
-- Total operating expenses excluding notable items improved 14% to
GBP1,831m reflecting cost savings from ceasing certain investment
banking activities in a number of countries and the completion
of the sale of a number of businesses, partially offset by a c.GBP200m
increase in restructuring charges, which totalled c.GBP400m
-- Other net income excluding notable items of GBP331m (2015: net
expense of GBP70m) included gains on the sale of Barclays Risk
Analytics and Index Solutions, the Asia wealth and investment management
business and the Southern European cards business, partially offset
by the loss on sale of the French retail business of GBP455m
-- Loans and advances to banks and customers at amortised cost decreased
GBP0.7bn to GBP51.1bn due to the sale of the Asia wealth and investment
management business, and the rundown and exit of historical investment
bank assets, partially offset by the recognition of GBP8bn of ESHLA
loans at amortised cost, following the restructure of LOBO loan
terms
-- Total assets decreased GBP46.1bn to GBP279.7bn due to lower derivative
financial instrument assets which decreased GBP25.0bn to GBP188.7bn
whilst derivative financial instrument liabilities decreased GBP23.5bn
to GBP178.6bn mainly on continued rundown of the derivative back
book
-- Leverage exposure decreased GBP47bn
to GBP101bn due to reduced potential future exposure on derivatives
and trading portfolio assets
-- RWAs reduced GBP22.2bn to GBP32.1bn despite the appreciation of
USD and EUR against GBP, including a GBP10bn reduction in Derivatives,
a GBP3bn reduction in Securities and loans, a GBP4bn reduction
in Businesses RWAs, and a GBP4bn reallocation of operational risk
RWAs to Head Office associated with business disposals and exits
1 Refer to the appendix on pages 65-75 for further information, reconciliations
and calculations of non-IFRS performance measures included throughout
this document.
Discontinued Operation
On 1 March 2016, Barclays announced its intention to sell down
the Group's interest in BAGL. This sell down is intended to be to a
level which will permit deconsolidation from an accounting and
regulatory perspective, subject to shareholder and regulatory
approvals as required. On 5 May 2016 Barclays executed the first
tranche of the sell down of the Group's interest in BAGL with the
sale of 12.2% of BAGL's issued share capital. Following completion
of the sale, Barclays' holding represents 50.1% of BAGL's issued
share capital.
The terms of the transitional services arrangements and related
separation payments have been agreed with BAGL and submitted to
relevant regulators as part of a request for approval for Barclays
to sell down to below a 50% holding. These proposed separation
terms include contributions totalling GBP765m, of which GBP27.5m
was paid in 2016, with the remainder to be paid over the period
through to completion of any initial sale of Barclays' stake in
BAGL to below 50%. The majority of these funds would be used by
BAGL to separate from the Barclays group, including termination of
the existing Master Services Agreement, making investments in
branding, operations and technology, and covering separation
related expenses. In addition, Barclays will contribute an amount
equivalent to 1.5% of BAGL's market capitalisation to a new
Broad-Based Black Economic Empowerment scheme, equating to
approximately GBP130m at the 31 December 2016 share price and ZAR
exchange rate, and expects to incur some additional operating
expenses in respect of delivering the separation of the businesses
under the transitional services arrangements.
These proposed contributions have been taken into account in
assessing whether any impairment of the BAGL disposal group was
required in the Group's balance sheet. No impairment of the BAGL
disposal group was required at 31 December 2016, as the market
value of BAGL less estimated costs to sell at the prevailing share
price and ZAR exchange rate was GBP8.4bn, which was greater than
the carrying asset value of BAGL at that date of GBP7.3bn, plus the
proposed costs of separation referred to above.
The Africa Banking business meets the requirements for
presentation as a discontinued operation. As such, these results
have been presented as two lines on the face of the Group income
statement, representing the profit after tax and non-controlling
interest in respect of the discontinued operation. Were the fair
value of BAGL, based on its quoted share price, less estimated
costs to sell, to fall below the carrying amount of the net assets
of BAGL including goodwill on acquisition, a resulting impairment
to Barclays' stake in BAGL would also be recognised through these
lines.
Africa Banking Year ended Year ended
31.12.16 31.12.15 YoY
Income statement information GBPm GBPm % Change
===================================== ========== ========== ========
Net interest income 2,169 1,950 11
Net fee, commission and other income 1,577 1,464 8
===================================== ========== ========== ========
Total income 3,746 3,414 10
Credit impairment charges and other
provisions (445) (353) (26)
===================================== ========== ========== ========
Net operating income 3,301 3,061 8
Operating expenses (2,345) (2,091) (12)
UK bank levy (65) (50) (30)
===================================== ========== ========== ========
Total operating expenses (2,410) (2,141) (13)
Other net income 6 7 (14)
===================================== ========== ========== ========
Profit before tax 897 927 (3)
Profit after tax 591 626 (6)
Attributable profit 189 302 (37)
Balance sheet information
===================================== ========== ========== ========
Total assets (GBPbn)(1) 65.1 47.9
Risk weighted assets (GBPbn)(1) 42.3 31.7
Key Facts
===================================== ========== ========== ========
Period end - ZAR/GBP 16.78 23.14
Average - ZAR/GBP(2) 20.04 19.57
Barclays Africa Group Limited share
price (ZAR) 168.69 143.49
Barclays Africa Group Limited number
of shares (m) 848 848
1 Africa Banking assets held for sale and RWAs are reported in Head
Office within Core.
2 The average rate is derived from daily spot rates during the year.
Quarterly Results Summary
Barclays Group
Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Net interest income 2,523 2,796 2,530 2,688 2,726 2,692 2,664 2,526
Net fee, commission and
other income 2,469 2,650 3,442 2,353 1,722 2,789 3,797 3,124
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income 4,992 5,446 5,972 5,041 4,448 5,481 6,461 5,650
Credit impairment charges
and other provisions (653) (789) (488) (443) (554) (429) (393) (386)
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 4,339 4,657 5,484 4,598 3,894 5,052 6,068 5,264
Operating expenses (3,812) (3,581) (3,425) (3,747) (3,547) (3,552) (3,557) (3,067)
UK bank levy (410) - - - (426) - - -
Litigation and conduct (97) (741) (447) (78) (1,722) (699) (927) (1,039)
Total operating expenses (4,319) (4,322) (3,872) (3,825) (5,695) (4,251) (4,484) (4,106)
Other net income/(expenses) 310 502 (342) 20 (274) (182) (39) (101)
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Profit/(loss) before tax 330 837 1,270 793 (2,075) 619 1,545 1,057
Tax credit/(charge) 50 (328) (467) (248) (164) (133) (324) (528)
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Profit/(loss) after tax
in respect of continuing
operations 380 509 803 545 (2,239) 486 1,221 529
Profit after tax in respect
of discontinued operation 71 209 145 166 101 167 162 196
Attributable to:
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Ordinary equity holders
of the parent 99 414 677 433 (2,422) 417 1,146 465
Other equity holders 139 110 104 104 107 79 79 80
Non-controlling interests 213 194 167 174 177 157 158 180
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Total assets 1,213.1 1,324.0 1,351.3 1,248.9 1,120.0 1,236.5 1,196.7 1,416.4
Risk weighted assets 365.6 373.4 366.3 363.0 358.4 381.9 376.7 395.9
Leverage exposure 1,125.5 1,185.1 1,155.4 1,082.0 1,027.8 1,140.7 1,139.3 1,254.7
Performance measures
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Return on average tangible
shareholders' equity 1.1% 3.6% 5.8% 3.8% (20.1%) 3.6% 9.8% 4.0%
Average tangible shareholders'
equity (GBPbn) 48.9 49.4 48.3 48.3 47.8 47.6 47.2 48.1
Cost: income ratio 87% 79% 65% 76% 128% 78% 69% 73%
Loan loss rate (bps) 58 66 41 40 53 37 35 32
Basic earnings/(loss) per
share 0.8p 2.6p 4.2p 2.7p (14.4p) 2.6p 7.0p 2.9p
Notable items GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income
Own credit 46 (264) 292 (109) (175) 195 282 128
Gain on disposal of Barclays'
share of Visa Europe Limited - - 615 - - - - -
Gains on US Lehman acquisition
assets - - - - - - 496 -
Litigation and conduct
Provisions for UK customer
redress - (600) (400) - (1,450) (290) (850) (182)
Provisions for ongoing investigations
and litigation including
Foreign Exchange - - - - (167) (270) - (800)
Operating expenses
Gain on valuation of a component
of the defined retirement
benefit liability - - - - - - - 429
Impairment of goodwill and
other assets relating to
businesses being disposed - - - - (96) - - -
Other net expenses
Losses on sale relating
to the Spanish, Portuguese
and Italian businesses - - - - (261) (201) - (118)
-------------------------------------- ------- ------- ------- ------- ------- ------- ------- -------
Total notable items 46 (864) 507 (109) (2,149) (566) (72) (543)
Excluding notable items, the Q416 Group return on average
tangible shareholders' equity was 0.7% (Q415: (1.9%)) and basic
earnings/(loss) per share was 0.5p (Q415: (1.3p)).
Barclays Core
Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Net interest income 2,577 2,718 2,491 2,591 2,555 2,557 2,510 2,371
Net fee, commission and
other income 2,834 2,887 3,825 2,692 1,961 2,708 3,709 3,057
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Total income 5,411 5,605 6,316 5,283 4,516 5,265 6,219 5,428
Credit impairment charges
and other provisions (606) (769) (462) (414) (522) (388) (373) (345)
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 4,805 4,836 5,854 4,869 3,994 4,877 5,846 5,083
Operating expenses (3,471) (3,270) (3,057) (3,258) (2,992) (3,094) (3,061) (2,618)
UK bank levy (334) - - - (338) - - -
Litigation and conduct (46) (639) (420) (12) (1,634) (419) (819) (1,015)
Total operating expenses (3,851) (3,909) (3,477) (3,270) (4,964) (3,513) (3,880) (3,633)
Other net income/(expenses) 164 4 (18) 9 (5) 13 14 (83)
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Profit/(loss) before tax 1,118 931 2,359 1,608 (975) 1,377 1,980 1,367
Tax charge (272) (522) (696) (485) (92) (299) (474) (614)
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Profit/(loss) after tax 846 409 1,663 1,123 (1,067) 1,078 1,506 753
Non-controlling interests (76) (57) (80) (84) (81) (54) (64) (68)
Other equity holders (121) (95) (89) (89) (92) (63) (61) (65)
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Attributable profit/(loss) 649 257 1,494 950 (1,240) 961 1,381 620
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Total assets 933.4 964.3 972.2 883.6 794.2 862.0 830.5 919.4
Risk weighted assets 333.5 329.5 319.6 312.2 304.1 316.3 308.1 318.0
Performance measures
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Return on average allocated
tangible equity 6.4% 2.7% 15.0% 9.9% (12.8%) 10.4% 15.5% 7.1%
Average tangible equity
(GBPbn) 42.4 41.8 40.4 39.3 38.1 37.5 35.9 35.6
Cost: income ratio 71% 70% 55% 62% 110% 67% 62% 67%
Loan loss rate (bps) 61 74 45 42 57 39 38 35
Basic earnings/(loss) per
share 4.0p 1.7p 9.0p 5.8p (7.3p) 5.8p 8.4p 3.8p
Notable items GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Total income
Own credit 46 (264) 292 (109) (175) 195 282 128
Gain on disposal of Barclays'
share of Visa Europe Limited - - 615 - - - - -
Gains on US Lehman acquisition
assets - - - - - - 496 -
Litigation and conduct
Provisions for UK customer
redress - (600) (400) - (1,392) (290) (800) (167)
Provisions for ongoing
investigations and litigation
including Foreign Exchange - - - - (167) (69) - (800)
Operating expenses
Gain on valuation of a
component of the defined
retirement benefit liability - - - - - - - 429
Other net expenses
Losses on sale relating
to the Spanish, Portuguese
and Italian businesses - - - - (15) - - (97)
------------------------------- ------- ------- ------- ------- ------- ------- ------- -------
Total notable items 46 (864) 507 (109) (1,749) (164) (22) (507)
Excluding notable items, the Q416 Core return on average
allocated tangible equity was 5.8% (Q415: 6.3%) and the Core basic
earnings per share was 3.7p (Q415: 3.6p).
Barclays Non-Core
Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================================ ====== ===== ======= ====== ======= ====== ====== ======
Net interest income (54) 78 40 96 171 135 154 155
Net trading income (462) (288) (463) (490) (398) (124) (57) (127)
Net fee, commission and
other income 97 51 79 152 159 204 146 194
================================ ====== ===== ======= ====== ======= ====== ====== ======
Total income (419) (159) (344) (242) (68) 215 243 222
Credit impairment charges
and other provisions (47) (20) (26) (29) (32) (41) (20) (41)
================================ ====== ===== ======= ====== ======= ====== ====== ======
Net operating (expenses)/income (466) (179) (370) (271) (100) 174 223 181
Operating expenses (341) (311) (368) (489) (555) (458) (496) (449)
UK bank levy (76) - - - (88) - - -
Litigation and conduct (51) (102) (27) (66) (89) (279) (108) (24)
================================ ====== ===== ======= ====== ======= ====== ====== ======
Total operating expenses (468) (413) (395) (555) (732) (737) (604) (473)
Other net income/(expenses) 146 498 (324) 11 (268) (195) (54) (18)
================================ ====== ===== ======= ====== ======= ====== ====== ======
Loss before tax (788) (94) (1,089) (815) (1,100) (758) (435) (310)
Tax credit/(charge) 322 194 229 237 (72) 166 150 86
================================ ====== ===== ======= ====== ======= ====== ====== ======
(Loss)/profit after tax (466) 100 (860) (578) (1,172) (592) (285) (224)
Non-controlling interests (14) (13) (12) (10) (19) (21) (21) (20)
Other equity holders (18) (15) (15) (15) (17) (15) (18) (14)
================================ ====== ===== ======= ====== ======= ====== ====== ======
Attributable (loss)/profit (498) 72 (887) (603) (1,208) (628) (324) (258)
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
================================ ====== ===== ======= ====== ======= ====== ====== ======
Loans and advances to banks
and customers at amortised
cost 51.1 58.7 68.5 55.4 51.8 57.1 60.4 73.1
Derivative financial instrument
assets 188.7 253.2 262.8 249.7 213.7 243.3 223.9 305.6
Derivative financial instrument
liabilities 178.6 243.0 253.4 239.1 202.1 235.0 216.7 299.6
Reverse repurchase agreements
and other similar secured
lending 0.1 0.1 0.1 0.7 3.1 8.5 16.7 43.7
Financial assets designated
at fair value 14.5 15.5 15.4 23.4 21.4 22.8 22.1 25.0
Total assets 279.7 359.8 379.1 365.4 325.8 374.5 366.2 497.0
Customer deposits 12.5 16.0 17.4 19.3 20.9 25.8 27.9 29.9
Risk weighted assets 32.1 43.9 46.7 50.9 54.3 65.6 68.6 77.9
Performance measures
================================ ====== ===== ======= ====== ======= ====== ====== ======
Average allocated tangible
equity (GBPbn) 6.5 7.6 7.9 9.0 9.7 10.2 11.3 12.4
Period end allocated tangible
equity (GBPbn) 5.4 7.2 7.8 8.5 8.5 10.2 10.1 11.7
Loan loss rate (bps) 31 13 14 21 25 27 13 17
Basic (loss)/earnings per
share contribution (2.9p) 0.5p (5.2p) (3.6p) (7.2p) (3.7p) (1.9p) (1.5p)
Notable items GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================================ ====== ===== ======= ====== ======= ====== ====== ======
Litigation and conduct
Provisions for UK customer
redress - - - - (58) - (50) (15)
Provisions for ongoing
investigations and litigation
including Foreign Exchange - - - - - (201) - -
Operating expenses
Impairment of goodwill
and other assets relating
to businesses being disposed - - - - (96) - - -
Other net expenses
Losses on sale relating
to the Spanish, Portuguese
and Italian business - - - - (246) (201) - (21)
-------------------------------- ------ ----- ------- ------ ------- ------ ------ ------
Total notable items - - - - (400) (402) (50) (36)
Analysis of total income
================================ ====== ===== ======= ====== ======= ====== ====== ======
Businesses (73) 181 181 196 229 314 292 304
Securities and loans 161 (34) (363) (402) (195) (87) - (68)
Derivatives (507) (306) (162) (36) (102) (12) (49) (14)
================================ ====== ===== ======= ====== ======= ====== ====== ======
Total income (419) (159) (344) (242) (68) 215 243 222
Excluding notable items, the Non-Core basic loss per share was
2.9p (Q415: 5.1p).
Quarterly Core Results by Business
Barclays UK
Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================================= ======= ======= ======= ===== ======= ======= ======= =====
Net interest income 1,502 1,569 1,476 1,501 1,509 1,499 1,479 1,486
Net fee, commission and
other income 326 374 467 302 325 375 325 345
================================= ======= ======= ======= ===== ======= ======= ======= =====
Total income 1,828 1,943 1,943 1,803 1,834 1,874 1,804 1,831
Credit impairment charges
and other provisions (180) (350) (220) (146) (219) (154) (166) (167)
================================= ======= ======= ======= ===== ======= ======= ======= =====
Net operating income 1,648 1,593 1,723 1,657 1,615 1,720 1,638 1,664
Operating expenses (989) (904) (947) (952) (920) (925) (970) (649)
UK bank levy (48) - - - (77) - - -
Litigation and conduct (28) (614) (399) (1) (1,466) (76) (801) (168)
================================= ======= ======= ======= ===== ======= ======= ======= =====
Total operating expenses (1,065) (1,518) (1,346) (953) (2,463) (1,001) (1,771) (817)
Other net (expenses)/income - - (1) - 1 1 1 (3)
================================= ======= ======= ======= ===== ======= ======= ======= =====
Profit/(loss) before tax 583 75 376 704 (847) 720 (132) 844
Attributable profit/(loss) 383 (163) 141 467 (1,078) 541 (174) 664
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
================================= ======= ======= ======= ===== ======= ======= ======= =====
Loans and advances to customers
at amortised cost 166.4 166.6 166.0 166.2 166.1 166.7 166.1 166.0
Total assets 209.6 209.1 204.6 201.7 202.5 204.1 202.2 199.6
Customer deposits 189.0 185.5 181.7 179.1 176.8 173.4 171.6 168.7
Risk weighted assets 67.5 67.4 67.1 69.7 69.5 71.0 71.7 72.3
Net interest margin 3.56% 3.72% 3.56% 3.62% 3.58% 3.54% 3.54% 3.60%
Performance measures
================================= ======= ======= ======= ===== ======= ======= ======= =====
Return on average allocated
tangible equity 18.2% (7.1%) 6.6% 20.5% (46.5%) 23.3% (7.3%) 28.3%
Average allocated tangible
equity (GBPbn) 8.6 8.7 9.0 9.3 9.2 9.3 9.4 9.4
Cost: income ratio 58% 78% 69% 53% 134% 53% 98% 45%
Loan loss rate (bps) 42 82 52 34 51 36 40 40
Notable items GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
================================= ======= ======= ======= ===== ======= ======= ======= =====
Total income
Gain on disposal of Barclays'
share of Visa Europe Limited - - 151 - - - - -
Litigation and conduct
Provisions for UK customer
redress - (600) (400) - (1,391) (73) (800) (167)
Operating expenses
Gain on valuation of a component
of the defined retirement
benefit liability - - - - - - - 296
--------------------------------- ------- ------- ------- ----- ------- ------- ------- -----
Total notable items - (600) (249) - (1,391) (73) (800) 129
Excluding notable items, the Q416 Barclays UK return on average
allocated tangible equity was 17.1% (Q415: 14.8%).
Analysis of Barclays UK
Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115
Analysis of total income GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=============================== ===== ===== ===== ===== ===== ===== ===== =====
Personal Banking 934 970 1,068 919 945 938 905 927
Barclaycard Consumer UK 507 561 463 491 505 552 503 505
Wealth, Entrepreneurs &
Business Banking 387 412 412 393 384 384 396 399
=============================== ===== ===== ===== ===== ===== ===== ===== =====
Total income 1,828 1,943 1,943 1,803 1,834 1,874 1,804 1,831
Analysis of credit impairment
charges and other provisions
=============================== ===== ===== ===== ===== ===== ===== ===== =====
Personal Banking (50) (47) (44) (42) (39) (36) (50) (69)
Barclaycard Consumer UK (118) (291) (169) (105) (176) (111) (106) (95)
Wealth, Entrepreneurs &
Business Banking (12) (12) (7) 1 (4) (7) (10) (3)
=============================== ===== ===== ===== ===== ===== ===== ===== =====
Total credit impairment
charges and other provisions (180) (350) (220) (146) (219) (154) (166) (167)
Analysis of loans and advances
to customers at amortised
cost GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
=============================== ===== ===== ===== ===== ===== ===== ===== =====
Personal Banking 135.0 135.3 134.7 134.7 134.0 134.5 134.4 134.3
Barclaycard Consumer UK 16.5 16.2 16.2 16.0 16.2 15.9 15.8 15.7
Wealth, Entrepreneurs &
Business Banking 14.9 15.1 15.1 15.5 15.9 16.3 15.9 16.0
=============================== ===== ===== ===== ===== ===== ===== ===== =====
Total loans and advances
to customers at amortised
cost 166.4 166.6 166.0 166.2 166.1 166.7 166.1 166.0
Analysis of customer deposits
=============================== ===== ===== ===== ===== ===== ===== ===== =====
Personal Banking 139.3 137.2 134.8 132.9 131.0 128.4 126.7 123.4
Barclaycard Consumer UK - - - - - - - -
Wealth, Entrepreneurs &
Business Banking 49.7 48.3 46.9 46.2 45.8 45.0 44.9 45.3
=============================== ===== ===== ===== ===== ===== ===== ===== =====
Total customer deposits 189.0 185.5 181.7 179.1 176.8 173.4 171.6 168.7
Barclays International
Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Net interest income 1,046 1,355 1,001 1,110 1,121 1,109 1,077 1,018
Net trading income 1,131 1,074 1,130 1,245 593 817 1,299 1,073
Net fee, commission and
other income 1,415 1,422 1,908 1,158 1,254 1,297 1,726 1,363
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income 3,592 3,851 4,039 3,513 2,968 3,223 4,102 3,454
Credit impairment charges
and other provisions (426) (420) (240) (269) (303) (235) (206) (178)
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 3,166 3,431 3,799 3,244 2,665 2,988 3,896 3,276
Operating expenses (2,497) (2,337) (2,074) (2,221) (2,007) (2,059) (2,027) (1,936)
UK bank levy (284) - - - (253) - - -
Litigation and conduct (17) (17) (10) (4) (151) (302) (12) (845)
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (2,798) (2,354) (2,084) (2,225) (2,411) (2,361) (2,039) (2,781)
Other net income 5 8 11 8 8 9 13 15
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Profit before tax 373 1,085 1,726 1,027 262 636 1,870 510
Attributable profit/(loss) 43 623 1,171 575 (24) 422 1,376 (16)
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Loans and advances to banks
and customers at amortised
cost 211.3 233.7 230.6 215.9 184.1 220.3 210.5 224.7
Trading portfolio assets 73.2 73.8 68.1 64.3 61.9 72.8 75.3 92.7
Derivative financial instrument
assets 156.2 155.6 181.4 150.1 111.5 133.7 116.0 172.8
Derivative financial instrument
liabilities 160.6 160.5 187.5 155.4 119.0 142.0 124.8 182.3
Reverse repurchase agreements
and other similar secured
lending 13.4 17.3 19.7 19.1 24.7 68.0 57.4 57.1
Financial assets designated
at fair value 62.3 72.0 68.3 59.6 46.8 5.6 5.6 5.2
Total assets 648.5 681.9 679.9 618.4 532.2 596.1 566.1 656.2
Customer deposits 216.2 224.1 226.5 213.1 185.6 207.0 197.7 206.2
Risk weighted assets 212.7 214.6 209.3 202.2 194.8 204.0 195.4 202.6
Performance measures
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Return on average allocated
tangible equity 1.0% 10.0% 19.2% 9.5% (0.2%) 7.0% 22.5% (0.1%)
Average allocated tangible
equity (GBPbn) 26.6 25.7 24.8 25.1 24.9 24.7 24.7 25.3
Cost: income ratio 78% 61% 52% 63% 81% 73% 50% 81%
Loan loss rate (bps) 78 71 41 50 65 42 38 32
Net interest margin(1) 3.91% 4.21% 3.92% 3.78% 3.79% 3.85% 3.86% 3.66%
Notable items GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
====================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income
Gain on disposal of Barclays'
share of Visa Europe Limited - - 464 - - - - -
Gains on US Lehman acquisition
assets - - - - - - 496 -
Litigation and conduct
Provisions for UK customer
redress - - - - - (218) - -
Provisions for ongoing investigations
and litigation including
Foreign Exchange - - - - (145) (39) - (800)
Operating expenses
Gain on valuation of a component
of the defined retirement
benefit liability - - - - - - - 133
-------------------------------------- ------- ------- ------- ------- ------- ------- ------- -------
Total notable items - - 464 - (145) (257) 496 (667)
Excluding notable items, the Q416 Barclays International return
on average allocated tangible equity was 1.0% (Q415: 3.5%).
1 Barclays International margins have been restated to include interest
earning lending within the investment banking business.
Analysis of Barclays International
Corporate and Investment Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115
Bank
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Analysis of total income
Credit 261 333 269 322 195 191 218 220
Equities 410 461 406 513 319 416 588 589
Macro 505 614 612 573 382 487 582 657
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Markets 1,176 1,408 1,287 1,408 896 1,094 1,388 1,466
Banking fees 650 644 622 481 458 501 580 548
Corporate lending 303 284 312 296 312 377 387 285
Transactional banking 401 458 390 408 415 419 416 413
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Banking 1,354 1,386 1,324 1,185 1,185 1,297 1,383 1,246
Other 1 1 - 3 16 (17) 495 1
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Total income 2,531 2,795 2,611 2,596 2,097 2,374 3,266 2,713
Credit impairment (charges)/
releases and other provisions (90) (38) (37) (95) (83) (75) (42) 1
Total operating expenses (2,287) (1,872) (1,665) (1,800) (1,962) (1,940) (1,605) (2,422)
Profit before tax 155 885 909 701 52 358 1,620 292
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Risk weighted assets 178.6 182.5 178.4 172.6 167.3 177.4 170.0 177.1
Performance measures
=============================== ======= ======= ======= ======= ======= ======= ======= =======
Return on average allocated
tangible equity (1.2%) 9.2% 9.5% 7.3% (2.5%) 4.5% 22.3% (2.5%)
Average allocated tangible
equity (GBPbn) 22.6 21.9 21.3 21.6 21.8 21.7 21.7 22.3
Excluding notable items, the Q416 CIB return on average
allocated tangible equity was (1.2%) (Q415: 1.8%).
Consumer, Cards and Payments
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================= ===== ===== ===== ===== ===== ===== ===== =====
Total income 1,061 1,056 1,428 917 871 849 836 741
Credit impairment charges
and other provisions (336) (382) (203) (174) (219) (160) (165) (179)
Total operating expenses (511) (482) (419) (425) (449) (421) (434) (359)
Profit before tax 218 200 817 326 210 278 250 218
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
============================= ===== ===== ===== ===== ===== ===== ===== =====
Loans and advances to banks
and customers at amortised
cost 39.7 36.8 35.4 32.9 32.1 30.6 29.6 29.8
Customer deposits 50.0 48.3 46.9 44.2 41.8 39.8 38.4 40.1
Risk weighted assets 34.1 32.1 30.9 29.6 27.5 26.6 25.4 25.5
Performance measures
============================= ===== ===== ===== ===== ===== ===== ===== =====
Return on average allocated
tangible equity 13.2% 14.8% 77.9% 23.4% 15.3% 24.7% 23.4% 17.5%
Average allocated tangible
equity (GBPbn) 4.0 3.7 3.5 3.4 3.2 3.1 3.0 3.0
Excluding notable items, the Q416 Consumer, Cards and Payments
return on average allocated tangible equity was 13.2% (Q415:
15.7%).
Head Office
Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
====================================== ===== ===== ===== ===== ===== ===== ===== =====
Net interest income 29 (206) 14 (20) (75) (51) (46) (133)
Net fee, commission and
other income (38) 17 320 (13) (210) 220 358 275
====================================== ===== ===== ===== ===== ===== ===== ===== =====
Total income (9) (189) 334 (33) (285) 169 312 142
Credit impairment releases/(charges)
and other provisions - 1 (2) 1 - 1 (1) -
====================================== ===== ===== ===== ===== ===== ===== ===== =====
Net operating (expenses)/income (9) (188) 332 (32) (285) 170 311 142
Operating expenses 15 (29) (36) (85) (64) (110) (64) (34)
UK bank levy (2) - - - (8) - - -
Litigation and conduct (1) (8) (11) (7) (17) (42) (6) (1)
====================================== ===== ===== ===== ===== ===== ===== ===== =====
Total operating expenses 12 (37) (47) (92) (89) (152) (70) (35)
Other net income/(expenses) 159 (4) (28) 1 (14) 2 1 (95)
====================================== ===== ===== ===== ===== ===== ===== ===== =====
Profit/(loss) before tax 162 (229) 257 (123) (388) 20 242 12
Attributable profit/(loss) 223 (203) 182 (92) (140) (1) 180 (28)
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
====================================== ===== ===== ===== ===== ===== ===== ===== =====
Total assets(1) 75.2 73.3 87.7 63.4 59.4 61.8 62.2 63.6
Risk weighted assets(1) 53.3 47.5 43.2 40.3 39.7 41.3 41.0 43.1
Performance measures
====================================== ===== ===== ===== ===== ===== ===== ===== =====
Average allocated tangible
equity (GBPbn) 7.2 7.4 6.6 5.0 3.9 3.4 1.8 0.9
Notable items GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
====================================== ===== ===== ===== ===== ===== ===== ===== =====
Total income
Own credit 46 (264) 292 (109) (175) 195 282 128
Litigation and conduct
Provisions for ongoing investigations
and litigation including
Foreign Exchange - - - - (23) (29) - -
Other net expenses
Losses on sale relating
to the Spanish, Portuguese
and Italian businesses - - - - (15) - - (97)
-------------------------------------- ----- ----- ----- ----- ----- ----- ----- -----
Total notable items 46 (264) 292 (109) (213) 166 282 31
1 Includes Africa Banking assets held for sale and RWAs.
Quarterly Discontinued Operation Results
Africa Banking
Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================= ===== ===== ===== ===== ===== ===== ===== =====
Net interest income 626 561 502 480 468 471 506 505
Net fee, commission and
other income 441 421 377 338 346 351 364 403
============================= ===== ===== ===== ===== ===== ===== ===== =====
Total income 1,067 982 879 818 814 822 870 908
Credit impairment charges
and other provisions (105) (96) (133) (111) (93) (66) (103) (91)
============================= ===== ===== ===== ===== ===== ===== ===== =====
Net operating income 962 886 746 707 721 756 767 817
Operating expenses (727) (598) (543) (477) (501) (515) (536) (539)
UK bank levy (65) - - - (50) - - -
Total operating expenses (792) (598) (543) (477) (551) (515) (536) (539)
Other net income 2 2 1 1 3 1 1 2
============================= ===== ===== ===== ===== ===== ===== ===== =====
Profit before tax 172 290 204 231 173 242 232 280
Profit after tax 71 209 145 166 101 167 162 196
Attributable (loss)/profit (52) 85 70 86 25 85 88 104
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
=============================
Total assets(1) 65.1 61.1 56.0 52.7 47.9 50.2 52.2 55.9
Risk weighted assets(1) 42.3 39.9 36.1 33.9 31.7 33.8 34.4 37.3
1 Africa Banking assets held for sale and RWAs are reported in Head
Office within Core.
Performance Management
Margins and balances
Year ended 31.12.16 Year ended 31.12.15
Net interest Average Net interest Net interest Average Net interest
income customer margin income customer margin
assets assets
GBPm GBPm % GBPm GBPm %
---------------------------- ------------ --------- ------------ ------------ --------- ------------
Barclays UK 6,048 167,233 3.62 5,973 167,599 3.56
Barclays International(1) 4,275 107,333 3.98 3,841 101,164 3.80
---------------------------- ------------ --------- ------------ ------------ --------- ------------
Total Barclays UK
and Barclays International 10,323 274,566 3.76 9,814 268,763 3.65
Other(2) 214 794
---------------------------- ------------ --------- ------------ ------------ --------- ------------
Total net interest
income 10,537 10,608
1 Barclays International margins have been restated to include interest
earning lending within the investment banking business.
2 Other includes Head Office, Barclays Non-Core and non-lending related
investment banking balances.
-- Total Barclays UK and Barclays International net interest income
increased 6% to GBP10.3bn due to:
- An increase in average customer assets to GBP274.6bn (2015: GBP268.8bn)
with growth in Barclays International, while Barclays UK remained
stable
- Net interest margin increased 11bps to 3.76% primarily due to
growth in interest earning lending within the cards portfolio
of Barclays International and higher margins on deposits in Barclays
UK
-- Group net interest income decreased to GBP10.5bn (2015: GBP10.6bn)
including net structural hedge contributions of GBP1.5bn (2015:
GBP1.4bn)
-- 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 Barclays UK and Three months ended 31.12.16
Barclays International
Net interest Average customer Net interest
income assets margin
GBPm GBPm %
--------------------------------------------- ------------ ---------------- ------------
Barclays UK 1,502 167,935 3.56
Barclays International(1) 1,110 112,936 3.91
--------------------------------------------- ------------ ---------------- ------------
Total Barclays UK and Barclays International 2,612 280,871 3.70
Three months ended 30.09.16
============================================= ============================================
Barclays UK 1,569 167,713 3.72
Barclays International(1) 1,149 108,571 4.21
--------------------------------------------- ------------ ---------------- ------------
Total Barclays UK and Barclays International 2,718 276,284 3.91
Three months ended 30.06.16
============================================= ============================================
Barclays UK 1,476 166,891 3.56
Barclays International(1) 1,021 104,707 3.92
--------------------------------------------- ------------ ---------------- ------------
Total Barclays UK and Barclays International 2,497 271,598 3.70
Three months ended 31.03.16
============================================= ============================================
Barclays UK 1,501 166,727 3.62
Barclays International(1) 995 105,994 3.78
--------------------------------------------- ------------ ---------------- ------------
Total Barclays UK and Barclays International 2,496 272,721 3.68
Three months ended 31.12.15
============================================= ============================================
Barclays UK 1,509 167,405 3.58
Barclays International(1) 991 103,844 3.79
--------------------------------------------- ------------ ---------------- ------------
Total Barclays UK and Barclays International 2,500 271,249 3.66
1 Barclays International margins have been restated to include interest
earning lending within the investment banking business.
Remuneration
Deferred awards are payable only once an employee meets certain
conditions, including a specified period of service. This creates a
timing difference between the communication of the bonus pool and
the charges that are recognised in the income statement which are
reconciled in the table below to show the charge for performance
costs. For 2016 awards, there have been changes in the proportion
of bonuses which are deferred, to harmonise deferral structures
across the Group, and to more closely align the incentive awards
granted with the income statement charge, as illustrated below. The
combined effect of these changes is to accelerate the rate at which
the awards are recognised in the income statement, resulting in an
increase in the charge for 2016 of GBP395m. There is expected to be
a lesser effect in 2017 and 2018 as these changes take full effect.
See page 104 of the Remuneration Report and Note 8 in the Annual
Report for additional information on the changes. The table also
shows the other elements of compensation and staff costs.
Barclays Group
--------------------------------
Year ended Year ended
31.12.16 31.12.15
GBPm GBPm % Change
============================================ ---------- ---------- --------
Incentive awards granted
Current year bonus 1,018 788 (29)
Deferred bonus 441 665 34
Commissions and other incentives(1) 74 91 19
============================================ ========== ---------- --------
Total incentive awards granted 1,533 1,544 1
Reconciliation of incentive awards granted
to income statement charge:
Less: deferred bonuses granted but not
charged in current year (300) (665) 55
Add: current year charges for deferred
bonuses from previous years 690 856 19
Other differences between incentive awards
granted and income statement charge (26) 26
============================================ ========== ---------- --------
Income statement charge for performance
costs 1,897 1,761 (8)
Other income statement charges:
Salaries 4,121 4,183 1
Social security costs 589 587 -
Post retirement benefits(2) 486 494 2
Other compensation costs 352 276 (28)
-------------------------------------------- ========== ---------- --------
Total compensation costs(3) 7,445 7,301 (2)
Other resourcing costs(4) 1,978 1,981 -
Total staff costs 9,423 9,282 (2)
Group compensation as % of income excluding
notable items(5) 35.7 34.6
For further detail on remuneration refer to the Remuneration
Report on pages 99-133 of the Annual Report.
1 Amounts previously included in 2015 as commitments are now included
in current year bonus and deferred bonus for consistency with 2016.
2 2015 post retirement benefits exclude the impact of a GBP429m gain
on valuation of a component of the defined benefit liability. Including
the gain would result in compensation: income ratio of 32.5%.
3 In addition, GBP212m of Group compensation (2015: GBP236m) was
capitalised as internally generated software.
4 Other resourcing costs include outsourcing, redundancy and restructuring
costs and other temporary staff costs.
5 Core compensation as a percentage of income excluding notable items
was 31.2% (2015: 31.3%) and CIB compensation as a percentage of
income excluding notable items was 41.9% (2015: 39.5%), including
the impact of the change in the 2016 compensation awards.
Deferred bonuses have been awarded and are expected to be
charged to the income statement in the years outlined in the table
that follows:
Year in which income statement charge is expected to be taken for deferred
bonuses awarded to date(1)
Actual Expected(2)
====================== ====================
Year ended Year ended Year ended 2018 and
31.12.15 31.12.16 31.12.17 beyond
Barclays Group GBPm GBPm GBPm GBPm
===================================== ========== ========== ========== ========
Deferred bonuses from 2013 and
earlier bonus pools 402 110 14 -
Deferred bonuses from 2014 bonus
pool 454 191 80 12
Deferred bonuses from 2015 bonus
pool 389 175 86
Deferred bonuses from 2016 bonus
pool 141 135 133
===================================== ========== ========== ========== ========
Income statement charge for deferred
bonuses 856 831 404 231
1 The actual amount charged depends upon whether conditions have
been met and will vary compared with the above expectation.
2 Does not include the impact of grants which will be made in 2017
and beyond.
Change in charging of deferred bonus profile
Expected payment Income statement
Grant date date(s)(1) charge profile
===================
Post-2016 Pre-2016
Year awards awards
=========== ==================== ===== ========= ========
March 2017 2016 33% 0%
2017 33% 48%
March 2018 (33.3%) 2018 22% 35%
March 2019 (33.3%) 2019 10% 15%
March 2020 (33.3%) 2020 2% 2%
1 Certain awards may be subject to an additional holding period.
2 The income statement charge is based on the period over which conditions
are met.
Liquidity
Overview
The Group has a comprehensive Key Risk Control Framework for
managing the Group's liquidity risk. The Liquidity Framework meets
the PRA's standards and is designed to ensure the Group maintains
liquidity resources that are sufficient in amount and quality, and
a funding profile that is appropriate to meet the liquidity risk
appetite. The Liquidity Framework is delivered via a combination of
policy formation, review and governance, analysis, stress testing,
limit setting and monitoring.
While 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 and they are reported on a stand-alone
basis. Adjusting for local requirements, BAGL liquidity risk is
managed on a consistent basis to Barclays Group.
Liquidity stress testing
Barclays manages the Group's liquidity position against the
Group's internally defined Liquidity Risk Appetite (LRA) and
regulatory metrics such as CRD IV Liquidity Coverage Ratio (LCR).
As at December 2016, the Group held eligible liquid assets well in
excess of 100% of net stress outflows for both the 30 day
Barclays-specific LRA and the LCR.
Barclays' LRA
(30 day Barclays
Compliance with internal and regulatory specific requirement)(1, CRD IV:
stress tests 2) LCR(2)
GBPbn GBPbn
---------------------------------------------- ------------------------- -------
Eligible liquidity buffer 173 166
Net stress outflows (144) (127)
============================================== ------------------------- -------
Surplus 29 39
Liquidity pool as a percentage of anticipated
net outflows as at 31 December 2016 120% 131%
Liquidity pool as a percentage of anticipated
net outflows as at 31 December 2015 131% 133%
Barclays plans to maintain its surplus at an adequate level to
the internal and regulatory stress requirements, whilst considering
risks to market funding conditions and its liquidity position. The
continuous reassessment of these risks may lead to actions being
taken with respect to sizing of the liquidity pool.
1 Of the three stress scenarios monitored as part of the LRA, the
30 day Barclays specific scenario results in the lowest ratio at
120% (2015 131%). This compares to 134% (2015: 144%) under the
90 day market-wide scenario and 144% (2015: 133%) under the 30
day combined scenario.
2 Includes BAGL.
Liquidity pool of
Liquidity which Liquidity
Liquidity pool pool CRD IV LCR-eligible pool
Level Level
31.12.16 Cash 1 2A 31.12.15
GBPbn GBPbn GBPbn GBPbn GBPbn
---------------------------------------- --------- ------- ------- ------ ---------
Cash and deposits with central banks(1) 103 101 48
Government bonds(2)
AAA to AA- 34 34
A+ to A- 3 3
BBB+ to BBB- 1 1
Other LCR Ineligible Government bonds 1
---------------------------------------- --------- ------- ------- ------ ---------
Total Government bonds 39 38 75
Other
======================================== ========= ======= ======= ====== =========
Government Guaranteed Issuers, PSEs and
GSEs 12 9 3
International Organisations and MDBs 6 7
Covered bonds 1 1
Corporate bonds
Other 4
---------------------------------------- --------- ------- ------- ------ =========
Total other 23 17 3 22
Total as at 31 December 2016 165 101 55 3
Total as at 31 December 2015 145 45 87 8
1 Of which over 98% (2015: over 97%) was placed with the Bank of
England, US Federal Reserve, European Central Bank, Bank of Japan
and Swiss National Bank.
2 Of which over 90% (2015: over 92%) are comprised of UK, US, Japanese,
French, German, Danish, Swiss and Dutch securities.
The Group liquidity pool was GBP165bn at 31 December 2016 (2015:
GBP145bn). During 2016, the month-end liquidity pool ranged from
GBP132bn to GBP175bn (2015: GBP142bn to GBP168bn), and the
month-end average balance was GBP153bn (2015: GBP155bn). The
liquidity pool is held unencumbered and is not used to support
payment or clearing requirements.
Barclays manages the liquidity pool on a centralised basis. As
at 31 December 2016, 91% (2015: 94%) 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 (BCI). The portion
of the liquidity pool outside of Barclays Bank PLC is held against
entity-specific stressed outflows and regulatory requirements.
Deposit funding As at 31.12.16 As at 31.12.15
----------------------------------------- ---------------
Loans and
advances Customer Loan to deposit Loan to deposit
to customers deposits ratio ratio
Funding of loans and advances to customers GBPbn GBPbn % %
------------------------------------------- ------------- --------- --------------- ---------------
Barclays UK 167 189
Barclays International 98 152
Non-Core 19 -
------------------------------------------- ------------- --------- --------------- ---------------
Total Barclays UK, Barclays International
and Non-Core(1) 284 341 83% 86%
Barclays International, Head
Office and Non-Core(2) 109 82
------------------------------------------- ------------- --------- --------------- ---------------
Total 393 423 93% 95%
Total Barclays UK, Barclays International and Non-Core(1) are
largely funded by customer deposits. The loan to deposit ratio for
these businesses was 83% (2015: 86%). The customer deposits in
excess of loans and advances are primarily used to fund liquidity
buffer requirements for these businesses. The loan to deposit ratio
for the Group is 93% (2015: 95%).
As at 31 December 2016, GBP139bn (2015: GBP129bn) of total
customer deposits were insured through the UK Financial Services
Compensation Scheme and other similar schemes. In addition to these
customer deposits, there were GBP4bn (2015: GBP4bn) of other
liabilities insured or guaranteed by governments.
1 Excluding investment banking businesses.
2 Including investment banking businesses.
Wholesale Funding
Composition of wholesale funding(1)
The Group's total wholesale funding outstanding (excluding
repurchase agreements) was GBP158bn (2015: GBP142bn). GBP70bn
(2015: GBP54bn) of wholesale funding matures in less than one year,
of which GBP22bn (2015: GBP14bn) relates to term funding.
Outstanding wholesale funding comprised of GBP26bn (2015:
GBP25bn) of secured funding and GBP132bn (2015: GBP117bn) of
unsecured funding.
Maturity profile of wholesale
funding(2)
<1 1-3 3-6 6-12 <1 1-2 2-3 3-4 4-5
month months months months year years years years years >5 years Total
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
------------------------- ------ ------- ------- ------- ----- ------ ------ ------ ------ -------- -----
Barclays PLC
Senior unsecured
(public benchmark) - - - - - 0.9 1.6 1.1 4.5 7.9 16.0
Senior unsecured
(privately placed) - - - - - 0.1 - - 0.2 0.5 0.8
Subordinated liabilities - - - - - - - 1.1 - 2.7 3.8
------------------------- ------ ------- ------- ------- ----- ------ ------ ------ ------ -------- -----
Barclays Bank PLC
Deposits from banks 9.2 4.3 1.7 1.1 16.3 0.2 - 0.3 - - 16.8
Certificates of deposit
and commercial paper 0.3 5.2 5.6 10.9 22.0 0.7 1.1 0.5 0.5 0.3 25.1
Asset backed commercial
paper 3.7 3.1 0.7 - 7.5 - - - - - 7.5
Senior unsecured
(public benchmark) 1.7 0.6 1.6 - 3.9 - 2.7 0.7 0.7 1.1 9.1
Senior unsecured
(privately placed)(3) 0.6 1.5 3.6 3.5 9.2 7.3 5.5 3.2 1.6 10.0 36.8
Covered bonds - 1.8 1.6 1.5 4.9 1.0 1.8 - 1.0 3.7 12.4
Asset backed securities - 0.6 1.0 0.6 2.2 0.7 1.4 0.4 - 0.7 5.4
Subordinated liabilities - - - 1.3 1.3 3.2 0.1 1.0 5.5 8.5 19.6
Other(4) 1.1 0.2 0.6 1.1 3.0 0.2 0.2 0.3 0.1 0.7 4.5
------------------------- ------ ------- ------- ------- ----- ------ ------ ------ ------ -------- -----
Total as at 31 December
2016 16.6 17.3 16.4 20.0 70.3 14.3 14.4 8.6 14.1 36.1 157.8
Of which secured 3.7 5.6 3.4 2.3 15.0 1.8 3.2 0.4 1.0 4.4 25.8
Of which unsecured 12.9 11.7 13.0 17.7 55.3 12.5 11.2 8.2 13.1 31.7 132.0
------------------------- ------ ------- ------- ------- ----- ------ ------ ------ ------ -------- -----
Total as at 31 December
2015 15.8 15.3 8.6 13.8 53.5 16.5 12.6 13.7 8.3 37.3 141.9
Of which secured 4.2 3.9 1.6 0.3 10.0 5.1 2.4 2.8 0.5 4.5 25.3
Of which unsecured 11.6 11.4 7.0 13.5 43.5 11.4 10.2 10.9 7.8 32.8 116.6
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 and collateral swaps. Included
within deposits from banks are GBP4.5bn of liabilities drawn in
the European Central Bank's facilities.
2 Term funding maturities comprise public benchmark and privately
placed senior unsecured notes, covered bonds/asset-backed securities
(ABS) and subordinated debt where the original maturity of the
instrument was more than 1 year.
3 Includes structured notes of GBP30.8bn, GBP7.7bn of which matures
within one year.
4 Primarily comprised of fair value deposits GBP3bn and secured financing
transactions of physical gold GBP0.5bn.
Term financing
In preparation for a Single Point of Entry resolution model,
Barclays has made good progress on the issuance of debt capital and
term senior unsecured funding from Barclays PLC, the holding
company, replacing maturing debt in Barclays Bank PLC.
The Group issued GBP12.1bn equivalent of capital and senior
unsecured debt from the holding company of which GBP8.6bn
equivalent and GBP0.7bn equivalent in public and private senior
unsecured debt respectively, and GBP2.8bn of capital instruments.
In the same period GBP7.4bn of Barclays Bank PLC capital and senior
unsecured debt was bought back or called.
The Group has GBP21.2bn(1) of term funding maturing in 2017 and
GBP13.2bn in 2018.
The Group expects to continue to issue public wholesale debt in
2017, in order to maintain a stable and diverse funding base by
type, currency and distribution channel.
1 Includes GBP0.2bn bilateral secured funding.
Credit ratings
In addition to monitoring and managing key metrics related to
the financial strength of the Group, Barclays also solicits
independent credit ratings by Standard & Poor's (S&P),
Moody's, Fitch and Rating and Investment Information (R&I).
These ratings assess the creditworthiness of the Group, its
subsidiaries and branches and are based on reviews of a broad range
of business and financial attributes including risk management
processes and procedures, capital strength, earnings, funding,
asset quality, liquidity, accounting and governance.
Standard
As at 31 December 2016 & Poor's Moody's Fitch
====================== ============== =============== ==========
Barclays Bank PLC
Long-term A- (Negative) A1 (Negative) A (Stable)
Short-term A-2 P-1 F1
Stand-alone rating(1) bbb+ baa2 a
---------------------- -------------- --------------- ----------
Barclays PLC
Long-term BBB (Negative) Baa2 (Negative) A (Stable)
Short-term A-2 P-3 F1
1 Refers to Standard & Poor's Stand-Alone Credit Profile (SACP),
Moody's Baseline Credit Assessment (BCA) and Fitch's Viability
Rating (VR).
During the year, Barclays' ratings outlooks for Moody's and
S&P were changed to Negative from Stable following the outcome
of the EU referendum in June 2016. The rating actions were part of
a wider set of actions which saw the two agencies place several UK
banks on negative outlooks whilst affirming the ratings. The
ratings continue to carry a stable outlook with Fitch.
In December 2016 Moody's upgraded senior long term ratings for
both Barclays Bank PLC and Barclays PLC by one notch reflecting the
continued build-up of loss absorbing capacity at Barclays PLC which
would provide additional protection for Barclays Bank PLC's
depositors and senior unsecured creditors, and Barclays PLC's
senior unsecured creditors in a failure scenario. The negative
outlooks assigned in June remained in place as the rating agency's
assessment of Barclays' standalone credit strength was unaffected
by the rating action.
S&P and Fitch affirmed Barclays' ratings in July and
December 2016 respectively as part of their periodic reviews.
Barclays also solicits issuer ratings from R&I for local
issuances purposes in Japan and the ratings of A- for Barclays PLC
and A for Barclays Bank PLC were affirmed in July 2016 with stable
outlooks.
Capital
CRD IV capital
Barclays' current regulatory requirement is to meet a fully
loaded CRD IV CET1 ratio comprising the required 4.5% minimum CET1
ratio and, phased in from 2016, a Combined Buffer Requirement. This
currently comprises a Capital Conservation Buffer (CCB) of 2.5% and
a Globally Systemically Important Institution (G-SII) buffer
determined by the PRA in line with guidance from the Financial
Stability Board (FSB). Both buffers are subject to phased
implementation, the CCB is phased in at 25% per annum with 0.625%
applicable for 2016. The G-SII buffer for 2016 and 2017 has been
set at 2% and is also phased in at 25% per annum with 0.5%
applicable for 2016 and 1% for 2017. On 21 November 2016 the FSB
confirmed that the G-SII buffer for 2018 will be 1.5% with 1.1%
applicable for 2018 and taking full effect from 2019 onwards.
Also forming part of the Combined Buffer Requirement is a
Counter-Cyclical Capital Buffer (CCyB) and a Systemic Risk Buffer
(SRB). On 30 November 2016 the Financial Policy Committee (FPC)
reaffirmed that it expects to maintain a CCyB of 0% on UK exposures
until at least June 2017. Other national authorities also determine
the appropriate CCyBs that should be applied to exposures in their
jurisdiction. During 2016, CCyBs started to apply for Barclays'
exposures to other jurisdictions; however based on current
exposures these are not material. No SRB has been set to date.
In addition, Barclays' Pillar 2A requirement as per the PRA's
Individual Capital Guidance (ICG) for 2016 based on a point in time
assessment was 3.9% of which 56% needs to be met in CET1 form,
equating to approximately 2.2% of RWAs. The Pillar 2A requirement
is subject to at least annual review and for 2017 Barclays' Pillar
2A add-on will be 4.0%, with approximately 2.3% of RWAs needing to
be met in CET1 form. All capital, RWA and leverage calculations
reflect Barclays' interpretation of the current rules.
As at 31 December 2016, Barclays' CET1 ratio was 12.4% which
exceeds the 2016 transitional minimum requirement of 7.8% including
the minimum 4.5% CET1 ratio requirement, 2.2% of Pillar 2A, a
0.625% CCB buffer, a 0.5% G-SII buffer and a 0% CCyB.
As at As at As at
================================================
Capital ratios 31.12.16 30.09.16 31.12.15
================================================ ======== ======== ========
Fully loaded CET1(1,2) 12.4% 11.6% 11.4%
PRA Transitional Tier 1(3,4) 15.6% 14.8% 14.7%
PRA Transitional Total Capital(3,4) 19.6% 18.8% 18.6%
Capital resources GBPm GBPm GBPm
================================================ ======== ======== ========
Shareholders' equity (excluding non-controlling
interests) per the balance sheet 64,873 63,929 59,810
Less: other equity instruments (recognised
as AT1 capital) (6,449) (6,442) (5,305)
Adjustment to retained earnings for
foreseeable dividends (388) (276) (631)
Minority interests (amount allowed
in consolidated CET1) 1,825 1,695 950
Other regulatory adjustments and
deductions:
Additional value adjustments (PVA) (1,571) (1,742) (1,602)
Goodwill and intangible assets (9,054) (8,847) (8,234)
Deferred tax assets that rely on
future profitability excluding temporary
differences (494) (623) (855)
Fair value reserves related to gains
or losses on cash flow hedges (2,104) (2,952) (1,231)
Excess of expected losses over impairment (1,294) (1,272) (1,365)
Gains or losses on liabilities at
fair value resulting from own credit 86 72 127
Defined-benefit pension fund assets (38) (40) (689)
Direct and indirect holdings by an
institution of own CET1 instruments (50) (50) (57)
Deferred tax assets arising from
temporary differences (amount above
10% threshold) (183) (49) -
Other regulatory adjustments 45 (226) (177)
================================================ ======== ======== ========
Fully loaded CET1 capital 45,204 43,177 40,741
Additional Tier 1 (AT1) capital
Capital instruments and related share
premium accounts 6,449 6,442 5,305
Qualifying AT1 capital (including
minority interests) issued by subsidiaries 5,445 5,658 6,718
Other regulatory adjustments and
deductions (130) (130) (130)
================================================ ======== ======== ========
Transitional AT1 capital(5) 11,764 11,970 11,893
================================================ ======== ======== ========
PRA Transitional Tier 1 capital 56,968 55,147 52,634
Tier 2 (T2) capital
Capital instruments and related share
premium accounts 3,769 3,631 1,757
Qualifying T2 capital (including
minority interests) issued by subsidiaries 11,366 11,664 12,389
Other regulatory adjustments and
deductions (257) (254) (253)
================================================ ======== ======== ========
PRA Transitional total regulatory
capital 71,846 70,188 66,527
1 The transitional regulatory adjustments to CET1 capital are no
longer applicable resulting in CET1 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
13.7% based on GBP50bn of transitional CRD IV CET1 capital and
GBP366bn of RWAs.
3 The PRA transitional capital is based on the PRA Rulebook and accompanying
supervisory statements.
4 As at 31 December 2016, Barclays' fully loaded Tier 1 capital was
GBP51,993m, and the fully loaded Tier 1 ratio was 14.2%. Fully
loaded total regulatory capital was GBP67,772m and the fully loaded
total capital ratio was 18.5%. 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.
5 Of the GBP11.8bn transitional AT1 capital, fully loaded AT1 capital
used for the leverage ratio comprises the GBP6.4bn capital instruments
and related share premium accounts, GBP0.5bn qualifying minority
interests and GBP0.1bn capital deductions. It excludes legacy Tier
1 capital instruments issued by subsidiaries that are subject to
grandfathering.
Movement in CET1 capital Three months
ended Year ended
31.12.16 31.12.16
GBPm GBPm
------------------------------------------------------- ------------ ----------
Opening CET1 capital 43,177 40,741
Profit for the period attributable to equity holders 238 2,080
Own credit 14 (41)
Dividends paid and foreseen (212) (843)
------------------------------------------------------- ------------ ----------
Increase in retained regulatory capital generated
from earnings 40 1,196
Net impact of share schemes 330 535
Available for sale reserves (91) (391)
Currency translation reserves 637 3,674
Other reserves 3 (778)
------------------------------------------------------- ------------ ----------
Increase in other qualifying reserves 879 3,040
Retirement benefit reserve 768 (988)
Defined-benefit pension fund asset deduction 2 651
------------------------------------------------------- ------------ ----------
Net impact of pensions 770 (337)
Minority interests 130 875
Additional value adjustments (PVA) 171 31
Goodwill and intangible assets (207) (820)
Deferred tax assets that rely on future profitability
excluding those arising from temporary differences 129 361
Excess of expected loss over impairment (22) 71
Direct and indirect holdings by an institution of
own CET1 instruments - 7
Deferred tax assets arising from temporary differences
(amount above 10% threshold) (134) (183)
Other regulatory adjustments 271 222
------------------------------------------------------- ------------ ----------
Increase in regulatory capital due to adjustments
and deductions 338 564
Closing CET1 capital 45,204 45,204
-- The CET1 ratio improved to 12.4% (December 2015: 11.4%) primarily
driven by an increase in CET1 capital of GBP4.5bn to GBP45.2bn
primarily as a result of profits of GBP2.1bn generated in the year,
after absorbing the impact of notable items. Regulatory capital
generated from earnings after absorbing the impact of own credit
and dividends paid and foreseen increased CET1 capital by GBP1.2bn.
Other significant movements in the year were:
- A GBP3.0bn increase in other qualifying reserves including a
GBP3.7bn increase in the currency translation reserves as USD,
EUR and ZAR strengthened against GBP; partially offset by a GBP0.4bn
decrease as a result of preference share redemptions and a GBP0.4bn
decrease in AFS reserves
- A GBP0.3bn decrease, net of tax, as a result of movements relating
to pensions. There was a GBP1.0bn decrease in the retirement
benefit reserve largely within the UKRF, which is the Groups
main pension scheme, moving from a GBP0.8bn surplus in December
2015 to a GBP27m deficit in December 2016. The decrease in reserves
was partially offset by the removal of a GBP0.7bn capital deduction
for the UKRF asset in December 2015
- A GBP0.9bn increase in minority interests following the sale
of 12.2% of BAGL's issued share capital was partially offset
by GBP0.3bn higher capital deductions
-- Transitional AT1 capital remained largely flat in the period as
redemptions and repurchases of GBP1.3bn of CRD IV end point non-qualifying
preference shares, Tier One Notes and Reserve Capital Instruments
were offset by the issuance of $1.5bn of qualifying AT1 capital
instruments
Risk weighted assets (RWAs) by risk type and business
Counterparty credit Operational Total
Credit risk risk Market risk risk RWAs
=============== ================================== ============== =========== =======
Settlement
Std IRB Std IRB Risk CVA Std IMA
As at 31.12.16 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== =======
Barclays UK 5,592 49,591 47 - - - - - 12,293 67,523
Barclays
International 53,201 82,327 13,515 13,706 30 3,581 9,343 9,460 27,538 212,701
Head Office(1) 9,048 27,122 77 1,157 - 927 482 2,323 12,156 53,292
===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== =======
Barclays Core 67,841 159,040 13,639 14,863 30 4,508 9,825 11,783 51,987 333,516
Barclays Non-Core 4,714 9,945 1,043 6,081 37 2,235 477 2,928 4,673 32,133
===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== =======
Barclays Group 72,555 168,985 14,682 20,944 67 6,743 10,302 14,711 56,660 365,649
As at 30.09.16
===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== =======
Barclays UK 5,886 49,183 9 - - 39 - - 12,293 67,410
Barclays
International 51,498 82,020 14,201 13,945 82 4,931 11,485 8,900 27,538 214,600
Head Office(1) 8,527 25,174 43 1,088 - 844 580 2,560 8,685 47,501
===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== =======
Barclays Core 65,911 156,377 14,253 15,033 82 5,814 12,065 11,460 48,516 329,511
Barclays Non-Core 7,009 11,037 1,740 7,435 2 4,287 695 3,526 8,144 43,875
===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== =======
Barclays Group 72,920 167,414 15,993 22,468 84 10,101 12,760 14,986 56,660 373,386
As at 31.12.15
===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== =======
Barclays UK 6,562 50,763 26 - - - - - 12,174 69,525
Barclays
International 45,892 77,275 10,463 11,055 516 3,406 8,373 10,196 27,657 194,833
Head Office(1) 8,291 20,156 54 538 8 382 399 1,903 8,003 39,734
===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== =======
Barclays Core 60,745 148,194 10,543 11,593 524 3,788 8,772 12,099 47,834 304,092
Barclays Non-Core 8,704 12,797 1,653 9,430 1 7,480 1,714 3,679 8,826 54,284
===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== =======
Barclays Group 69,449 160,991 12,196 21,023 525 11,268 10,486 15,778 56,660 358,376
1 Includes Africa Banking discontinued operation.
Movement analysis of risk weighted assets
Counterparty Operational
Credit risk credit risk Market risk risk Total RWAs
============================== =========== ============ =========== =========== ==========
GBPbn GBPbn GBPbn GBPbn GBPbn
As at 01.01.16 230.4 45.0 26.3 56.7 358.4
Book size 0.8 1.2 (0.6) - 1.4
Acquisitions and disposals (6.4) (0.2) - - (6.6)
Book quality (0.5) (0.4) 0.6 - (0.3)
Model updates (2.9) (2.0) (0.3) - (5.2)
Methodology and policy 1.1 (1.2) (1.0) - (1.1)
Foreign exchange movements(1) 19.0 - - - 19.0
------------------------------ ----------- ------------ ----------- ----------- ----------
As at 31.12.16 241.5 42.4 25.0 56.7 365.6
1 Foreign exchange movement does not include FX for modelled counterparty
risk or modelled market risk.
RWAs increased GBP7.2bn to GBP365.6bn, due to:
-- Book size increased RWAs by GBP1.4bn primarily due to an increase
in trading activity in Barclays International and business growth
in corporate and consumer lending partially offset by securitisation
transactions
-- Acquisitions and disposals decreased RWAs by GBP6.6bn primarily
due to the rundown of Non-Core portfolios, including the sale of
Portuguese and Italian businesses
-- Model updates decreased RWAs by GBP5.2bn primarily driven by changes
in the mortgages credit risk model in Barclays UK
-- Methodology and Policy decreased RWAs by GBP1.1bn primarily driven
by the effect of collateral modelling for mismatched FX collateral
on average CVA and a new treatment for sovereign exposures, partly
offset by modelled wholesale recalibration
-- Foreign exchange movements increased RWAs by GBP19.0bn primarily
driven by the appreciation of ZAR, USD and EUR against GBP
Leverage ratio and exposures
Effective 1 January 2016, Barclays is required to disclose a
leverage ratio and an average leverage ratio applicable to the
Group:
-- The leverage ratio is consistent with the December 2015 method
of calculation and has been included in the table below. The
calculation uses the end point CRR definition of Tier 1 capital
for the numerator and the CRR definition of leverage exposure.
The current expected minimum fully loaded requirement is 3%,
but this could be impacted by the Basel Consultation on the Leverage
Framework
-- The average leverage ratio as outlined by the PRA Supervisory
Statement SS45/15 and the updated PRA rulebook is calculated
as the capital measure divided by the exposure measure, where
the capital and exposure measure is based on the average of the
last day of each month in the quarter. The expected end point
minimum requirement is 3.5% comprising of the 3% minimum requirement,
a fully phased in G-SII additional leverage ratio buffer (G-SII
ALRB) and a countercyclical leverage ratio buffer (CCLB). The
minimum requirement is on a phased basis in line with the CET1
G-SII buffer which results in a minimum requirement of 3.175%
at 31 December 2016
At 31 December 2016, Barclays' leverage ratio was 4.6% (December
2015: 4.5%) and the average leverage ratio was 4.3%, which exceeds
the transitional minimum requirement for Barclays of 3.175% and
expected end point minimum requirement of 3.5%.
In August 2016, the PRA implemented the FPC's recommendation to
allow firms to exclude qualifying central bank claims from the
calculation of the leverage exposure measure, as long as these are
matched by deposits denominated in the same currency, subject to
firms obtaining permission from the PRA. This change in reporting
requirements is effective 1 April 2017 and will result in a
modification to the calculation of the exposure measure for the
purpose of calculating the UK leverage ratio. At 31 December 2016,
Barclays' reported leverage ratio and average leverage ratio
disclosed below is unaffected by this announcement as firms are
required to disclose based on the existing rules. The impact of the
PRA rule modification would have resulted in an average leverage
ratio of 4.5% and a leverage ratio at 31 December 2016 of 5.0%.
As at As at As at
31.12.16 30.09.16 31.12.15
GBPbn GBPbn GBPbn
============================================ ========= ========= =========
Accounting assets
Derivative financial instruments 347 410 328
Cash collateral 67 74 62
Reverse repurchase agreements and
other similar secured lending 13 17 28
Financial assets designated at fair
value(1) 79 94 77
Loans and advances and other assets 707 729 625
============================================ ========= ========= =========
Total IFRS assets 1,213 1,324 1,120
Regulatory consolidation adjustments (6) (8) (10)
Derivatives adjustments
Derivatives netting (313) (373) (293)
Adjustments to cash collateral (50) (59) (46)
Net written credit protection 12 20 15
Potential Future Exposure (PFE) on
derivatives 136 143 129
============================================ ========= ========= =========
Total derivatives adjustments (215) (269) (195)
Securities financing transactions
(SFTs) adjustments 29 36 16
Regulatory deductions and other adjustments (15) (16) (14)
Weighted off-balance sheet commitments 119 118 111
============================================ ========= ========= =========
Total leverage exposure 1,125 1,185 1,028
Fully loaded CET 1 capital 45.2 43.2 40.7
Fully loaded AT1 capital 6.8 6.8 5.4
============================================ ========= ========= =========
Fully loaded Tier 1 capital 52.0 49.9 46.2
Leverage ratio 4.6% 4.2% 4.5%
1 Included within financial assets designated at fair value are reverse
repurchase agreements designated at fair value of GBP63bn (2015:
GBP50bn).
The leverage ratio increased to 4.6% (December 2015: 4.5%)
primarily driven by a GBP5.8bn increase in fully loaded Tier 1
capital to GBP52.0bn (December 2015: GBP46.2bn), partially offset
by an increase in the leverage exposure of GBP97bn to GBP1,125bn
(December 2015: GBP1,028bn):
-- The IFRS asset increase was mainly driven by loans and advances
and other assets which increased GBP82bn to GBP707bn. The increase
was primarily due to the appreciation of major currencies against
GBP, an increase in liquidity pool assets and lending growth in
Barclays UK and Barclays International. This was partially offset
by the rundown and exit of Non-Core assets
-- SFT adjustments increased by GBP13bn to GBP29bn, primarily as a
result of a change in treatment of securities pre-positioned for
use against undrawn central bank lending facilities
-- PFE on derivatives increased by GBP7bn to GBP136bn primarily driven
by the appreciation of major currencies against GBP, partially
offset by compression activity, sale of positions and maturity
of trades
-- Weighted off balance sheet commitments increased by GBP8bn to GBP119bn
primarily driven by the appreciation of major currencies against
GBP
The average leverage exposure measure for Q416 was GBP1,206bn
resulting in an average leverage ratio of 4.3%. The CET1 capital
held against the 0.175% transitional G-SII ALRB was GBP2bn. The
impact of the CCLB is currently nil.
The difference between the average leverage ratio and the
leverage ratio was primarily driven by higher positions in October
and November within trading portfolio assets, reverse repurchase
agreements and settlements balances.
Credit Risk
Analysis of retail and wholesale loans and advances and
impairment
Loans CRLs %
Gross and advances of gross
loans Impairment net of Credit loans Loan impairment Loan loss
and advances allowance impairment Risk Loans and advances charges(1) rates
As at 31.12.16 GBPm GBPm GBPm GBPm % GBPm bps
==================== ============= ========== ============= =========== ============= =============== =========
Barclays UK 155,729 1,519 154,210 2,044 1.3 866 56
Barclays
International 33,485 1,492 31,993 1,249 3.7 1,085 324
Barclays Core 189,214 3,011 186,203 3,293 1.7 1,951 103
Barclays Non-Core 10,319 385 9,934 838 8.1 102 99
==================== ============= ========== ============= =========== ============= =============== =========
Total Group retail 199,533 3,396 196,137 4,131 2.1 2,053 103
Barclays UK 15,204 282 14,922 591 3.9 30 20
Barclays
International 180,102 748 179,354 1,470 0.8 258 14
Head Office 4,410 - 4,410 - - - -
Barclays Core 199,716 1,030 198,686 2,061 1.0 288 14
Barclays Non-Core 41,406 194 41,212 299 0.7 11 3
==================== ============= ========== ============= =========== ============= =============== =========
Total Group
wholesale 241,122 1,224 239,898 2,360 1.0 299 12
Total loans and
advances
at amortised cost 440,655 4,620 436,035 6,491 1.5 2,352 53
Traded loans 2,975 n/a 2,975 n/a
Loans and advances
designated
at fair value 10,519 n/a 10,519 n/a
==================== ============= ========== ============= ===========
Loans and advances
held
at fair value 13,494 n/a 13,494 n/a
Total loans and
advances 454,149 4,620 449,529 6,491
As at 31.12.15
==================== ============= ========== ============= =========== ============= =============== =========
Barclays UK 153,539 1,556 151,983 2,238 1.5 682 44
Barclays
International 26,041 897 25,144 863 3.3 714 274
Barclays Core 179,580 2,453 177,127 3,101 1.7 1,396 78
Barclays Non-Core 12,588 464 12,124 936 7.4 139 110
==================== ============= ========== ============= =========== ============= =============== =========
Total Group retail 192,168 2,917 189,251 4,037 2.1 1,535 80
Barclays UK 16,400 312 16,088 637 3.9 24 15
Barclays
International 159,776 617 159,159 1,330 0.8 201 13
Head Office 5,767 - 5,767 - - - -
==================== ============= ========== ============= =========== ============= =============== =========
Barclays Core 181,943 929 181,014 1,967 1.1 225 12
Barclays Non-Core 39,979 336 39,643 441 1.1 (16) (4)
==================== ============= ========== ============= =========== ============= =============== =========
Total Group
wholesale 221,922 1,265 220,657 2,408 1.1 209 9
Total loans and
advances
at amortised cost 414,090 4,182 409,908 6,445 1.6 1,744 42
BAGL loans and
advances
at amortised cost 31,397 739 30,658 1,372
Traded loans 2,474 n/a 2,474 n/a
Loans and advances
designated
at fair value 17,913 n/a 17,913 n/a
==================== ============= ========== ============= ===========
Loans and advances
held
at fair value 20,387 n/a 20,387 n/a
Total loans and
advances 465,874 4,921 460,953 7,817
1 Excluding impairment charges on available for sale investments
and reverse repurchase agreements.
Total loans and advances decreased by GBP12bn to GBP450bn driven
by a GBP31bn decrease due to the reclassification of BAGL balances
to held for sale and GBP9bn from the exit of other assets in
Non-Core. This was offset by lending of GBP20bn driven by volume
growth and foreign currency movements due to the appreciation of
average USD and EUR against GBP. There was also a net GBP9bn
increase in settlement and cash collateral balances.
Credit risk loans (CRLs) and the ratio of CRLs to gross loans
and advances excluding BAGL balances now held for sale remained
stable at GBP6.5bn (2015: GBP6.4bn) and 1.5% (2015: 1.6%)
respectively.
Loan impairment charges increased GBP0.6bn to GBP2.4bn primarily
due to increased charges following the management review of
impairment modelling for UK and US cards portfolios and the
impairment of a number of single name exposures. Overall, this
resulted in a 11bps increase in the loan loss rate to 53bps.
Analysis of potential credit risk loans (PCRLs), potential problem loans
(PPLs) and coverage ratios
CRLs PPLs PCRLs
====================== ================== ==================
As at As at As at As at As at As at
31.12.16 31.12.15 31.12.16 31.12.15 31.12.16 31.12.15
GBPm GBPm GBPm GBPm GBPm GBPm
=========================== ========== ========== ======== ======== ======== ========
Barclays UK 2,044 2,238 310 382 2,354 2,620
Barclays International 1,249 863 192 117 1,441 980
Barclays Core 3,293 3,101 502 499 3,795 3,600
Barclays Non-Core 838 936 11 26 849 962
=========================== ========== ========== ======== ======== ======== ========
Total retail 4,131 4,037 513 525 4,644 4,562
Barclays UK 591 637 94 127 685 764
Barclays International 1,470 1,330 1,530 877 3,000 2,207
Barclays Core 2,061 1,967 1,624 1,004 3,685 2,971
Barclays Non-Core 299 441 59 122 358 563
=========================== ========== ========== ======== ======== ======== ========
Total wholesale 2,360 2,408 1,683 1,126 4,043 3,534
Total retail and wholesale 6,491 6,445 2,196 1,651 8,687 8,096
BAGL - 1,372 - 399 - 1,771
=========================== ========== ========== ======== ======== ======== ========
Group total 6,491 7,817 2,196 2,050 8,687 9,867
Impairment allowance CRL coverage PCRL coverage
====================== ================== ==================
As at As at As at As at As at As at
31.12.16 31.12.15 31.12.16 31.12.15 31.12.16 31.12.15
GBPm GBPm %% %%
=========================== ========== ========== ======== ======= ======== =======
Barclays UK 1,519 1,556 74.3 69.5 64.5 59.4
Barclays International 1,492 897 119.5 103.9 103.5 91.5
Barclays Core 3,011 2,453 91.4 79.1 79.3 68.1
Barclays Non-Core 385 464 45.9 49.6 45.3 48.2
=========================== ========== ========== ======== ======== ======== ========
Total retail 3,396 2,917 82.2 72.3 73.1 63.9
Barclays UK 282 312 47.7 49.0 41.2 40.8
Barclays International 748 617 50.9 46.4 24.9 28.0
Barclays Core 1,030 929 50.0 47.2 28.0 31.3
Barclays Non-Core 194 336 64.9 76.2 54.2 59.7
=========================== ========== ========== ======== ======== ======== ========
Total wholesale 1,224 1,265 51.9 52.5 30.3 35.8
Total retail and wholesale 4,620 4,182 71.2 64.9 53.2 51.7
BAGL - 739 - 53.9 - 41.7
Group total 4,620 4,921 71.2 63.0 53.2 49.9
-- Excluding BAGL balances, CRLs remained stable at GBP6.5bn (2015:
GBP6.4bn) with the Group's CRL coverage ratio increasing to 71%
(2015: 65%) mainly within retail portfolios
-- The CRL coverage ratio for retail portfolios increased to 82% (2015:
72%) primarily due to increased impairment allowances following
the management review of impairment modelling of the UK and US
cards portfolio
-- PPLs increased to GBP2.2bn (2015: GBP1.7bn) primarily within Barclays
International wholesale portfolios. The increase was driven by
exposures within the Corporate and Investment Bank across a number
of industries
Analysis of specific portfolios and asset types
This section provides an analysis of principal portfolios and
businesses in the retail and wholesale segments. In particular,
home loans, credit cards, overdrafts and unsecured loans are
covered for retail segments. In addition, this section details
exposures to UK commercial real estate.
Secured home loans
The UK home loans portfolio comprises first lien home loans and
accounts for 98%(1) (2015: 98%) of the Group's core home loan
balances and 91% (2015: GBP90%) of the Group's total home loan
balances. Italy home loans accounts for 100% (2015: 91%) of the
Group's Non-Core home loan balances and 7% (2015: 7%) of the
Group's total home loan balances.
Home loans principal portfolios(2)
Barclays UK
--------------------
As at As at
31.12.16 31.12.15
-------------------------------------------------- --------- ---------
Gross loans and advances (GBPm) 129,136 127,750
>90 day arrears, excluding recovery book
(%) 0.2 0.2
Non-performing proportion of outstanding
balances (%) 0.6 0.7
Annualised gross charge-off rates (%) 0.3 0.3
Recovery book proportion of outstanding balances
(%) 0.4 0.4
Recovery book impairment coverage ratio (%) 9.1 10.1
1 Remaining balance includes wealth portfolio.
2 Gross loans and advances include loans and advances to customers
and banks. Risk metrics based on exposures to customers only.
Barclays UK: Portfolio performance remained steady reflecting
the continuing low base rate environment, house price appreciation
and steady economic conditions. Non-performing proportion of
outstanding balances and recovery book impairment coverage reduced
due to a reduction in repossession stock.
Within the UK home loans portfolio:
-- owner-occupied interest-only home loans comprised 31% (2015: 32%)
of total balances. The average balance weighted LTV on these loans
reduced to 41.7% (2015: 44.7%) as house prices have improved across
core regions, and >90 day arrears excluding recovery book remained
steady at 0.2% (2015: 0.2%)
-- buy-to-let home loans comprised 9% (2015: 9% ) of total balances.
The average balance weighted LTV reduced to 52.6% (2015: 54.6%),
and >90 day arrears excluding recovery book reduced to 0.1% (2015:
0.2%)
Credit cards and unsecured loans
The principal portfolios listed below accounted for 94% (2015:
92%) of the Group's total credit cards and unsecured loans.
Credit cards and unsecured loans Principal Portfolios
30 day 90 day
arrears, arrears, Recovery Recovery
excluding excluding Annualised book proportion book impairment
Gross loans recovery recovery gross charge-off of outstanding coverage
and advances(1) book book rates balances ratio
As at 31 December
2016 GBPm % % % % %
--------------------- ---------------- ---------- ---------- ----------------- ---------------- ----------------
Barclays UK
UK cards(2) 17,833 1.9 0.9 5.5 3.0 83.8
UK personal loans 6,076 2.1 0.9 3.1 4.7 77.2
Barclays
International
US cards(2) 23,915 2.6 1.3 4.5 2.4 83.6
Barclays Partner
Finance 4,041 1.5 0.6 2.5 2.6 81.5
Germany cards 1,812 2.6 1.0 3.7 2.7 79.0
As at 31 December
2015
--------------------- ---------------- ---------- ---------- ----------------- ---------------- ----------------
Barclays UK
UK cards(2) 18,502 2.3 1.2 5.2 3.6 82.6
UK personal loans 5,476 1.9 0.8 3.0 7.5 73.9
Barclays
International
US cards(2) 16,699 2.2 1.1 3.9 2.0 84.8
Barclays Partner
Finance(3) 3,986 1.5 0.6 2.4 2.5 82.2
Germany cards 1,419 2.3 1.0 3.8 2.7 81.2
1 Includes loans and advances to customers and banks. Risk metrics
based on exposures to customers.
2 For UK and US cards, outstanding recovery book balances for acquired
portfolios recognised at fair value (which have no related impairment
allowance) have been excluded from the recovery book impairment
coverage ratio. Losses have been recognised where related to additional
spend from acquired accounts in the period post acquisition.
3 2015 recovery book coverage ratio has been restated from 85.2%
to 82.2% to reflect more granular allocation of management adjustments
to the recovery book.
UK cards: Gross loans and advances decreased 4% to GBP17.8bn
primarily due to reduced loans and advances to banks. Annualised
gross charge-off rates increased due to accelerated asset sales in
the latter half of the year and accelerated charge off of informal
arrangement stock. The recovery book impairment coverage ratio
increased, reflecting the impact of increased flow into
charge-off.
UK personal loans: 30 day arrears increased to 2.1% (2015: 1.9%)
and 90 day arrears increased to 0.9% (2015: 0.8%) driven by
portfolio growth and an increased level of operational delinquency
from new customer acquisitions. The recovery book proportion of
outstanding balances reduced to 4.7% (2015: 7.5%) due to an asset
sale that also resulted in an increase in the recovery book
impairment coverage ratio to 77.2% (2015: 73.9%).
US cards: Gross loans and advances increased 43% to GBP23.9bn
due to portfolio growth, new acquisitions and the appreciation of
USD against GBP. Increased arrears and charge-off rates were driven
by a change in portfolio mix, volume growth and the appreciation of
average USD against GBP.
Barclays Partner Finance: Portfolio arrears and charge-off rates
remained broadly steady during 2016.
Germany cards: Loans and advances were 28% higher mainly due to
a combination of the appreciation of EUR against GBP and portfolio
growth. 90 day arrears and charge off rates remained stable, while
the recovery book coverage ratio reduced slightly reflecting
favourable recovery expectations.
Exposure to UK commercial real estate (CRE)
The UK CRE portfolio includes property investment, development,
trading and house builders but excludes social housing and
contractors.
UK CRE summary(1) As at 31.12.16 As at 31.12.15
------------------------------------------ -------------- --------------
UK CRE loans and advances (GBPm) 11,227 10,690
Past due balances (GBPm) 83 152
Balances past due as % of UK CRE balances
(%) 0.7 1.4
Impairment allowances (GBPm) 58 79
Past due coverage ratio (%) 69.9 52.0
Total collateral (GBPm) 23,225 21,858
For the year ended 31.12.16 31.12.15
------------------------------------------ -------------- --------------
Impairment (credit)/charge (GBPm) (2) 3
1 Based on the most recent valuation assessment. 2015 year end numbers
have been restated following closer alignment of industry classifications
between corporate banking and business lending.
Maturity analysis of exposure to UK CRE
Contractual maturity of UK CRE loans and
advances at amortised cost
---------------------------------------------------------------------------------------
Over Over
Over Over two years five
six months one year but not years
but not but not more but not
Not more more more than more Total
Past than than than five than Over loans
due balances six months one year two years years ten years ten years and advances
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------- ------------- ----------- ----------- ---------- ---------- ---------- ---------- -------------
As at 31
December 2016 83 774 668 1,200 6,318 700 1,484 11,227
As at 31
December 2015 152 784 744 929 5,678 852 1,551 10,690
Total exposure to UK commercial real estate rose moderately from
GBP10.7bn to GBP11.2bn primarily in medium term deals. Past due
balances fell to GBP83m from GBP152m due to favourable recovery
activity and selective approach to new deals in this sector.
UK CRE LTV analysis
Balances as
Balances proportion of total
------------------ ----------------------
31.12.16 31.12.15 31.12.16 31.12.15
GBPm GBPm % %
----------------------- -------- -------- ---------- ----------
Group
<=75% 7,884 7,208 70 68
>75% and <=100% 102 244 1 2
>100% and <=125% 15 109 - 1
>125% 60 18 1 -
Unassessed balances(1) 2,286 2,370 20 22
Unsecured balances(2) 880 741 8 7
----------------------- -------- -------- ---------- ----------
Total 11,227 10,690 100 100
1 Corporate banking balances under GBP1m.
2 Unsecured balances primarily relate to working capital facilities
agreed to CRE companies.
Statement of Directors' Responsibilities
Each of the Directors (the names of whom are set out below)
confirm that:
-- to the best of their knowledge, the condensed consolidated financial
statements (set out on pages 51 to 55), which have been prepared
in accordance with the IFRSs as adopted by the European Union,
give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole. The condensed
consolidated financial statements should be read in conjunction
with the annual financial statements as included in the Annual
Report for the year ended 2016; and
-- to the best of their knowledge, the management information (set
out on pages 1 to 49) includes a fair review of the development
and performance of the business and the position of the Company
and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and
uncertainties that they face. This management information should
be read in conjunction with the principal risks and uncertainties
included in the Annual Report for the year ended 2016.
Signed on behalf of the Board by
James E Staley Tushar Morzaria
Group Chief Executive Group Finance Director
Barclays PLC Board of Directors:
Chairman Executive Directors Non-executive Directors
John McFarlane James E Staley (Group Chief Executive) Mike Ashley
Tushar Morzaria (Group Finance Director) Tim Breedon CBE
Mary Francis
Crawford Gillies
Sir Gerry Grimstone
Reuben Jeffery III
Dambisa Moyo
Diane de Saint Victor
Diane Schueneman
Stephen Thieke
Condensed Consolidated Financial Statements
Condensed Consolidated Income Statement (audited)
Year ended Year ended
31.12.16 31.12.15
Continuing operations Notes(1) GBPm GBPm
=================================================== ======== ========== ==========
Net interest income 10,537 10,608
Net fee and commission income 6,768 6,859
Net trading income 2,768 3,426
Net investment income 1,324 1,097
Other income 54 50
=================================================== ======== ---------- ----------
Total income 21,451 22,040
Credit impairment charges and other provisions (2,373) (1,762)
=================================================== ======== ========== ==========
Net operating income 19,078 20,278
Staff costs (9,423) (8,853)
Administration and general expenses (6,915) (9,683)
=================================================== ======== ========== ==========
Operating expenses (16,338) (18,536)
Profit/(loss) on disposal of undertakings and
share of results of associates and joint ventures 490 (596)
=================================================== ======== ========== ==========
Profit before tax 3,230 1,146
Tax 2 (993) (1,149)
=================================================== ======== ========== ==========
Profit/(loss) after tax in respect of continuing
operations 2,237 (3)
Profit after tax in respect of discontinued
operation 591 626
=================================================== ======== ========== ==========
Profit after tax 2,828 623
Attributable to:
=================================================== ======== ========== ==========
Ordinary equity holders of the parent 1,623 (394)
Other equity holders 10 457 345
=================================================== ======== ========== ==========
Total equity holders 2,080 (49)
Profit attributable to non-controlling interests
in respect of continuing operations 3 346 348
Profit attributable to non-controlling interests
in respect of discontinued operation 3 402 324
=================================================== ======== ========== ==========
Profit after tax 2,828 623
Earnings per share
=================================================== ======== ========== ==========
Basic earnings/(loss) per ordinary share(2) 4 10.4 (1.9)
Basic earnings/(loss) per ordinary share in
respect of continuing operations 9.3 (3.7)
Basic earnings per ordinary share in respect
of discontinued operations 1.1 1.8
Diluted earnings/(loss) per ordinary share(2) 10.3 (1.9)
1 For notes to the Financial Statements see pages 56 to 64.
2 The profit after tax attributable to other equity holders of GBP457m
(2015: GBP345m) is offset by a tax credit recorded in reserves
of GBP128m (2015: GBP70m). The net amount of GBP329m (2015: GBP275m),
along with NCI, is deducted from profit after tax in order to calculate
earnings per share.
Condensed consolidated statement of comprehensive
income
Year ended Year ended
31.12.16 31.12.15
Continuing operations Notes(1) GBPm GBPm
====================================================== ======== ========== ==========
Profit after tax 2,828 623
Profit/(loss) after tax in respect of continuing
operations 2,237 (3)
Profit after tax in respect of discontinued operation 591 626
Other comprehensive income/(loss) that may be
recycled to profit or loss:
====================================================== ======== ========== ==========
Currency translation reserve 11 3,024 748
Available for sale reserve 11 (387) (229)
Cash flow hedge reserve 11 798 (493)
Other 13 20
====================================================== ======== ========== ==========
Total comprehensive income that may be recycled
to profit or loss 3,448 46
Other comprehensive (loss)/income not recycled
to profit or loss:
====================================================== ======== ========== ==========
Retirement benefit remeasurements (980) 916
Other comprehensive income for the period 2,468 962
Total comprehensive income for the year, net
of tax from continuing operations 4,705 959
Total comprehensive income/(loss) for the year,
net of tax from discontinued operation 2,111 (722)
====================================================== ======== ========== ==========
Total comprehensive income for the period 6,816 237
Attributable to:
====================================================== ======== ========== ==========
Equity holders of the parent 5,233 45
Non-controlling interests 1,583 192
====================================================== ======== ========== ==========
Total comprehensive income for the period 6,816 237
1 For notes to the Financial Statements see pages 56 to 64.
Condensed consolidated balance sheet (audited)
As at As at
31.12.16 31.12.15
Assets Notes(1) GBPm GBPm
=================================================== ======== ========= =========
Cash and balances at central banks 102,353 49,711
Items in the course of collection from other
banks 1,467 1,011
Trading portfolio assets 80,240 77,348
Financial assets designated at fair value 78,608 76,830
Derivative financial instruments 346,626 327,709
Financial investments 63,317 90,267
Loans and advances to banks 43,251 41,349
Loans and advances to customers 392,784 399,217
Reverse repurchase agreements and other similar
secured lending 13,454 28,187
Current and deferred tax assets 5,430 4,910
Prepayments, accrued income and other assets 2,893 3,010
Investments in associates and joint ventures 684 573
Goodwill and intangible assets 7,726 8,222
Property, plant and equipment 2,825 3,468
Retirement benefit assets 8 14 836
Assets included in disposal groups classified
as held for sale 1 71,454 7,364
=================================================== ======== ========= =========
Total assets 1,213,126 1,120,012
Liabilities
=================================================== ======== ========= =========
Deposits from banks 48,214 47,080
Items in the course of collection due to other
banks 636 1,013
Customer accounts 423,178 418,242
Repurchase agreements and other similar secured
borrowing 19,760 25,035
Trading portfolio liabilities 34,687 33,967
Financial liabilities designated at fair value 96,031 91,745
Derivative financial instruments 340,487 324,252
Debt securities in issue(2) 75,932 69,150
Subordinated liabilities 23,383 21,467
Accruals, deferred income and other liabilities 8,871 10,610
Current and deferred tax liabilities 766 1,025
Provisions 7 4,134 4,142
Retirement benefit liabilities 8 390 423
Liabilities included in disposal groups classified
as held for sale 1 65,292 5,997
=================================================== ======== ========= =========
Total liabilities 1,141,761 1,054,148
Equity
=================================================== ======== ========= =========
Called up share capital and share premium 9 21,842 21,586
Other reserves 11 6,051 1,898
Retained earnings 30,531 31,021
=================================================== ======== ========= =========
Shareholders' equity attributable to ordinary
shareholders of the parent 58,424 54,505
Other equity instruments 10 6,449 5,305
=================================================== ======== ========= =========
Total equity excluding non-controlling interests 64,873 59,810
Non-controlling interests 3 6,492 6,054
=================================================== ======== ========= =========
Total equity 71,365 65,864
1 For notes to the Financial Statements see pages 56 to 64.
2 Debt securities in issue include covered bonds of GBP12.4bn (2015:
GBP12.3bn).
Condensed consolidated statement of changes in equity (audited)
Called
up share
capital Other
and share equity Other Retained Non-controlling Total
premium(1) instruments(1) reserves(1) earnings Total interests(2) equity
Year ended 31.12.16 GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================ =========== =============== ============ ========= ======= =============== =======
Balance as at 1 January
2016 21,586 5,305 1,898 31,021 59,810 6,054 65,864
Profit after tax - 457 - 1,434 1,891 346 2,237
Other comprehensive profit
after tax for the period - - 3,433 (968) 2,465 3 2,468
============================ =========== =============== ============ ========= ======= =============== =======
Total comprehensive income
net of tax from continuing
operations - 457 3,433 466 4,356 349 4,705
Total comprehensive income
net of tax from
discontinued
operation - - 694 183 877 1,234 2,111
============================ =========== =============== ============ ========= ======= =============== =======
Total comprehensive income
for the year - 457 4,127 649 5,233 1,583 6,816
============================ =========== =============== ============ ========= ======= =============== =======
Issue of shares 256 - - 668 924 - 924
Issue and exchange of
equity instruments - 1,132 - - 1,132 - 1,132
Dividends - - - (757) (757) (575) (1,332)
Coupons paid on other
equity instruments - (457) - 128 (329) - (329)
Redemption of preference
shares - - - (417) (417) (1,170) (1,587)
Treasury shares - - 26 (415) (389) - (389)
Net equity impact of partial
BAGL disposal - - - (349) (349) 601 252
Other movements - 12 - 3 15 (1) 14
============================ =========== =============== ============ ========= ======= =============== =======
Balance as at 31 December
2016 21,842 6,449 6,051 30,531 64,873 6,492 71,365
Year ended 31.12.15
============================ =========== =============== ============ ========= ======= =============== =======
Balance as at 1 January
2015 20,809 4,322 2,724 31,712 59,567 6,391 65,958
Profit after tax - 345 - (696) (351) 348 (3)
Other comprehensive profit
after tax for the period - - 25 936 961 1 962
============================ =========== =============== ============ ========= ======= =============== =======
Total comprehensive income
net of tax from continuing
operations - 345 25 240 610 349 959
Total comprehensive income
net of tax from
discontinued
operation - - (867) 302 (565) (157) (722)
============================ =========== =============== ============ ========= ======= =============== =======
Total comprehensive income
for the year - 345 (842) 542 45 192 237
============================ =========== =============== ============ ========= ======= =============== =======
Issue of shares 777 - - 571 1,348 - 1,348
Issue and exchange of
equity instruments - 995 - - 995 - 995
Dividends - - - (1,081) (1,081) (552) (1,633)
Coupons paid on other
equity instruments - (345) - 70 (275) - (275)
Treasury shares - - 16 (755) (739) - (739)
Other movements - (12) - (38) (50) 23 (27)
============================ =========== =============== ============ ========= ======= =============== =======
Balance as at 31 December
2015 21,586 5,305 1,898 31,021 59,810 6,054 65,864
1 Details of share capital, other equity instruments and other reserves
are shown on pages 63 and 64.
2 Details of non-controlling interests are shown on page 59.
Condensed consolidated cash flow statement (audited)
Year ended Year ended
31.12.16 31.12.15
GBPm GBPm
====================================================== ========== ==========
Profit before tax 3,230 1,146
Adjustment for non-cash items (15,355) 7,060
Changes in operating assets and liabilities 24,191 8,798
Corporate income tax paid (780) (1,670)
======================================================= ========== ==========
Net cash from operating activities 11,286 15,334
Net cash from investing activities 36,707 (6,551)
Net cash from financing activities (1,317) (574)
Net cash from discontinued operations 405 (1,821)
Effect of exchange rates on cash and cash equivalents 10,473 1,689
======================================================= ========== ==========
Net increase in cash and cash equivalents 57,554 8,077
Cash and cash equivalents at beginning of the period 86,556 78,479
======================================================= ========== ==========
Cash and cash equivalents at end of the period 144,110 86,556
Financial Statement Notes
1. Assets included in disposal groups classified as held for
sale and associated liabilities
On 1 March 2016, Barclays announced its intention to reduce the
Group's 62.3% interest in BAGL. This reduction is intended to be to
a level which will permit deconsolidation from an accounting and
regulatory perspective, for which approval was granted by
shareholders at the Group's general meeting held on 28 April 2016.
On 5 May 2016 Barclays sold 12.2% of the Group's interest in BAGL
resulting in a transfer to non-controlling interests of GBP601m.
Following this sale, Barclays' interest represents 50.1% of BAGL's
share capital. The BAGL disposal group includes all assets and
liabilities of BAGL and its subsidiaries as well as Group balances
associated with BAGL and expected contributions that will form part
of the sale.
No impairment for BAGL has been recognised under IFRS 5 as at 31
December 2016. Impairment under IFRS 5 is calculated as the
difference between fair value less disposal costs and the carrying
value of the disposal group. The fair value is determined by
reference to the quoted market price for BAGL and the foreign
exchange rate for ZAR/GBP as at 31 December 2016, less the expected
contributions on page 57. The fair value less disposal costs and
expected contributions exceeds the net asset value at 31 December
2016.
Barclays continues to explore potential options for further
disposal of its shares in BAGL during the course of 2017.
Assets included in disposal groups classified as
held for sale
BAGL Other Total Total
2016 2016 2016 2015
GBPm GBPm GBPm GBPm
====== ===== ====== =====
Cash and balances at central
banks 2,689 241 2,930 21
Items in the course of collection
from other banks 549 21 570 24
Trading portfolio assets 3,044 40 3,084 -
Financial assets designated at
fair value 5,546 1,438 6,984 696
Derivative financial instruments 1,992 - 1,992 -
Financial investments 4,995 2,742 7,737 1,230
Loans and advances to banks 1,184 482 1,666 74
Loans and advances to customers 41,793 1,711 43,504 5,513
Prepayments, accrued income and
other assets 637 59 696 47
Investments in associates and
joint ventures 63 24 87 10
Property, plant and equipment 902 52 954 128
Goodwill 965 32 997 -
Intangible assets 554 16 570 43
Current and deferred tax assets 124 25 149 22
Retirement benefit assets 33 - 33 -
======================================== =====
Total 65,070 6,883 71,953 7,808
Balance of impairment unallocated
under IFRS 5 (499) (499) (444)
======================================== =====
Total assets classified as held
for sale 65,070 6,384 71,454 7,364
Liabilities included in disposal groups classified
as held for sale
BAGL Other Total Total
2016 2016 2016 2015
GBPm GBPm GBPm GBPm
====== ===== ====== =====
Deposits from banks 2,113 36 2,149 -
Items in the course of collection
due to banks 350 23 373 74
Customer accounts 39,331 3,100 42,431 4,000
Repurchase agreements and other
similar secured borrowing 597 - 597 -
Trading portfolio liabilities 388 - 388 -
Financial liabilities designated
at fair value 3,748 3,577 7,325 346
Derivative financial instruments 1,610 1 1,611 3
Debt securities in issue 7,997 - 7,997 1,474
Subordinated liabilities 934 - 934 -
Accruals, deferred income and
other liabilities 1,061 119 1,180 39
Provisions 52 51 103 34
Current and deferred tax liabilities 154 8 162 (6)
Retirement benefit liabilities 26 16 42 33
======================================== =====
Total liabilities classified
as held for sale 58,361 6,931 65,292 5,997
Net assets/(liabilities) classified
as held for sale(1) 6,709 (547) 6,162 1,367
Expected contributions to BAGL(2,3) 866 - 866 -
====== ===== =====
Disposal group post contribution 7,575 (547) 7,028 1,367
1 The carrying value of the disposal group is stated after the elimination
of internal balances between Barclays and BAGL of GBP595m. Internal
balances have been considered in determining the carrying value
of BAGL (of GBP7.3bn before the planned contributions in respect
of BAGL) for the purposes of measuring the disposal group at the
lower of carrying amount and fair value less costs to sell.
2 In December 2016, Barclays finalised proposals regarding planned
contributions to the BAGL group relating to the reimbursement of
certain expenses as well as contributions for investment to support
separation activities. The cash and cash equivalents to make these
planned contributions is included within the perimeter of the disposal
group, also for the purposes of measuring the disposal group at
the lower of carrying amount and fair value less costs to sell.
The planned contributions are reported within Cash and balances
at central banks in the Group's consolidated balance sheet.
3 In December 2016, Barclays reimbursed BAGL for expenses incurred
for an amount of GBP28m. This amount is excluded from the proposed
overall potential reimbursement and contribution figure of GBP866m.
The BAGL disposal group meets the requirements for presentation
as a discontinued operation. As such, the results, which have been
presented as the profit after tax and non-controlling interest in
respect of the discontinued operation on the face of the Group
income statement, are analysed in the income statement below.
BAGL group income statement
As at As at
31.12.16 31.12.15
For the year ended 31 December GBPm GBPm
========= =========
Net interest income 2,169 1,950
Net fee and commission income 1,072 1,033
Net trading income 281 197
Net investment income 45 41
Other income 179 193
=========
Total income 3,746 3,414
Credit impairment charges and other provisions (445) (353)
=========
Net operating income 3,301 3,061
Staff costs (1,186) (1,107)
Administration and general expenses (653) (545)
Depreciation of property, plant and equipment (513) (442)
Amortisation of intangible assets (58) (47)
=========
Operating expenses (2,410) (2,141)
Share of post-tax results of associates and joint
ventures 6 7
Profit before tax 897 927
Taxation (306) (301)
=========
Profit after tax 591 626
Attributable to:
Equity holders of the parent 189 302
Non-controlling interests 402 324
=========
Profit after tax 591 626
Other comprehensive income relating to discontinued
operations is as follows:
2016 2015
For the year ended 31 December GBPm GBPm
===== =======
Available for sale assets (9) (22)
Currency translation reserves 1,451 (1,223)
Cash flow hedge reserves 89 (101)
=======
Other comprehensive income, net of tax from discontinued
operations 1,531 (1,346)
The cash flows attributed to the discontinued operations
are as follows:
2016 2015
For the year ended 31 December GBPm GBPm
Net cash flows from operating activities 1,164 794
Net cash flows from investing activities (691) (1,883)
Net cash flows from financing activities (105) 133
Effect of exchange rates on cash and cash equivalents 37 (865)
=======
Net increase/(decrease) in cash and cash equivalents 405 (1,821)
2. Tax
The 2016 tax charge of GBP993m (2015: GBP1,149m), represented an
effective tax rate of 30.7% (2015: 100.3%). The effective tax rate
is higher than the UK statutory rate of 20% (2015: 20.25%)
primarily due to profits earned outside the UK being taxed at
higher local statutory tax rates. In addition the effective tax
rate is affected by provisions for UK customer redress being
non-deductible for tax purposes, non-creditable taxes and
non-deductible expenses including UK bank levy. These factors,
which have each increased the effective tax rate, are partially
offset by the impact of non-taxable gains and income, including
those arising from divestments, and adjustments in respect of prior
years.
The deferred tax asset of GBP4,869m (2015: GBP4,495m) mainly
relates to amounts in the US.
Assets Liabilities
As at 31.12.16 As at 31.12.15 As at 31.12.16 As at 31.12.15
Current and deferred tax assets GBPm GBPm GBPm GBPm
and liabilities
Current tax 561 415 (737) (903)
Deferred tax 4,869 4,495 (29) (122)
Total 5,430 4,910 (766) (1,025)
As at 31.12.16 As at 31.12.15
Deferred tax assets and liabilities GBPm GBPm
Intermediate Holding Company (IHC) - US tax group 2,207 2,049
Barclays Bank PLC (US branch) - US tax group 1,766 1,569
Barclays PLC - UK tax group 575 411
Other 321 466
Deferred tax asset 4,869 4,495
Deferred tax liability (29) (122)
Net deferred tax 4,840 4,373
Analysis of net deferred tax
Temporary differences 4,337 3,471
Tax losses 503 902
Net deferred tax 4,840 4,373
3. Non-controlling interests
Profit attributable Equity attributable
to non-controlling to non-controlling
interest interest
Year ended Year ended Year ended Year ended
31.12.16 31.12.15 31.12.16 31.12.15
GBPm GBPm GBPm GBPm
Barclays Bank PLC Issued:
- Preference shares 340 343 2,698 3,654
- Upper Tier 2 instruments 3 2 272 486
Barclays Africa Group Limited 402 324 3,507 1,902
Other non-controlling interests 3 3 15 12
Total 748 672 6,492 6,054
Equity attributable to non-controlling interests increased by
GBP438m to GBP6,492m in December 2016 driven by the sale of 12.2%
of the Group's stake in BAGL increasing the non-controlling
interest from 37.6% to 49.9% and the appreciation of ZAR against
GBP. These increases were partially offset by the redemption of
preference shares issued by Barclays Bank PLC.
4. Earnings per share
As at As at
31.12.16 31.12.15
GBPm GBPm
======== ========
Profit/(loss) attributable to ordinary equity holders
of the parent from continuing and discontinued operations 1,623 (394)
Tax credit on profit after tax attributable to other
equity holders 128 70
Total profit/(loss) attributable to ordinary equity
holders of the parent from continuing and discontinued
operations 1,751 (324)
Continuing operations
Profit/(loss) attributable to ordinary equity holders
of the parent from continuing operations 1,434 (696)
Tax credit on profit after tax attributable to other
equity holders 128 70
Profit/(loss) attributable to equity holders of
the parent from continuing operations 1,562 (626)
Discontinued operation
Profit attributable to ordinary equity holders of
the parent from discontinued operation 189 302
Dilutive impact of convertible options from discontinued
operation (1) -
Profit attributable to equity holders of the parent
from discontinued operations including dilutive
impact on convertible options 188 302
Profit/(loss) attributable to equity holders of
the parent from continuing and discontinued operations
including dilutive impact on convertible options 1,750 (324)
As at As at
31.12.16 31.12.15
GBPm GBPm
======== ========
Basic weighted average number of shares in issue 16,860 16,687
Number of potential ordinary shares 184 367
Diluted weighted average number of shares 17,044 17,054
p p
Basic earnings per ordinary share(1) 10.4 (1.9)
Basic earnings per ordinary share from continuing
operations(1) 9.3 (3.7)
Basic earnings per ordinary share from discontinued
operation 1.1 1.8
Diluted earnings per ordinary share(1) 10.3 (1.9)
Diluted earnings per ordinary share from continuing
operations(1) 9.2 (3.7)
Diluted earnings per ordinary share from discontinued
operation 1.1 1.8
1 The profit after tax attributable to other equity holders of GBP457m
(2015: GBP345m) is offset by a tax credit recorded in reserves
of GBP128m (2015: GBP70m). The net amount of GBP329m (2015: GBP275m),
along with NCI, is deducted from profit after tax in order to calculate
earnings per share.
5. Dividends on Ordinary Shares
It is Barclays' policy to declare and pay dividends on a
semi-annual basis. A final dividend in respect of 2016 of 2.0p per
ordinary share will be paid on 5 April 2017 to shareholders on the
Share Register on 3 March 2017 and accounted for as a distribution
of retained earnings in the year ending 31 December 2017. The
financial statements for 2016 include the following dividends paid
during the year:
Year ended 31.12.16 Year ended 31.12.15
Per share Total Per share Total
Dividends paid during the period p GBPm p GBPm
Final dividend paid during period 3.5 588 3.5 578
Interim dividends paid during
period 1.0 169 3.0 503
Total 4.5 757 6.5 1,081
6. Fair value of assets and liabilities
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:
Assets and liabilities held at
fair value Valuation technique using
Significant
Quoted market Observable unobservable
prices (Level inputs (Level inputs (Level
1) 2) 3) Total
GBPm GBPm GBPm GBPm
As at 31 December 2016
Trading portfolio assets 41,550 36,625 2,065 80,240
Financial assets designated at
fair value 4,031 64,630 9,947 78,608
Derivative financial assets 5,261 332,819 8,546 346,626
Available for sale investments 21,218 36,551 372 58,141
Investment property - - 81 81
Assets included in disposal groups
classified as held for sale(1) 6,754 8,511 6,009 21,274
Total assets 78,814 479,136 27,020 584,970
Trading portfolio liabilities (20,205) (14,475) (7) (34,687)
Financial liabilities designated
at fair value (70) (95,121) (840) (96,031)
Derivative financial liabilities (5,051) (328,265) (7,171) (340,487)
Liabilities included in disposal
groups classified as held for
sale(1) (397) (5,224) (6,201) (11,822)
Total liabilities (25,723) (443,085) (14,219) (483,027)
As at 31 December 2015
Trading portfolio assets 36,676 35,725 4,947 77,348
Financial assets designated at
fair value 6,163 52,909 17,758 76,830
Derivative financial assets 6,342 315,949 5,418 327,709
Available for sale investments 42,552 46,693 1,022 90,267
Investment property - - 140 140
Assets included in disposal groups
classified as held for sale(1) 26 8 7,330 7,364
Total assets 91,759 451,284 36,615 579,658
Trading portfolio liabilities (23,978) (9,989) - (33,967)
Financial liabilities designated
at fair value (240) (90,203) (1,302) (91,745)
Derivative financial liabilities (5,450) (314,033) (4,769) (324,252)
Liabilities included in disposal
groups classified as held for
sale(1) (1,024) (802) (4,171) (5,997)
Total liabilities (30,692) (415,027) (10,242) (455,961)
1 Disposal groups held for sale and measured at fair value less cost
to sell are non-recurring fair value instruments and therefore
included in the fair value table. For disposal groups that are
measured at the carrying amount, only items measured at fair value
are included in the table above.
7. Provisions
As at As at
31.12.16 31.12.15
GBPm GBPm
UK customer redress:
Payment Protection Insurance redress 1,979 2,106
Other customer redress 712 896
Legal, competition & regulatory matters 455 489
Redundancy and restructuring 206 186
Undrawn contractually committed facilities and guarantees 67 60
Onerous contracts 385 141
Sundry provisions 330 264
Total 4,134 4,142
Payment Protection Insurance Redress
As at 31 December 2016, Barclays had recognised cumulative
provisions totalling GBP8.44bn (31 December 2015: GBP7.44bn)
against the cost of Payment Protection Insurance (PPI) redress and
associated processing costs with utilisation of GBP6.46bn (31
December 2015: GBP5.33bn), leaving a residual provision of
GBP1.98bn (31 December 2015: GBP2.11bn).
Through to 31 December 2016, 1.8m (31 December 2015: 1.6m)
customer initiated claims(1) had been received and processed. The
volume of claims received during 2016 decreased 8%(2) from 2015.
This rate of decline was slower than previously recorded but in
line with expectations.
The current provision reflects the estimate of costs of PPI
redress primarily relating to customer initiated complaints and
on-going remediation programmes. This also includes liabilities
managed by third parties arising from portfolios previously sold
where Barclays remains liable.
As at 31 December 2016, the provision of GBP1.98bn represents
Barclays' best estimate of expected PPI redress reflecting the
revised complaints deadline proposed in Financial Conduct Authority
(FCA) consultation paper 16/20 issued on 2 August 2016. However, it
is possible the eventual outcome may differ from the current
estimate. We will continue to review the adequacy of provision
level in respect of the on-going level of complaints.
The PPI 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 plus an estimate of future claims initiated by customers
where the volume is anticipated to cease after H119
-- Average claim redress - the expected average payment to customers
for upheld claims based on the type and age of the policy/policies
-- Processing cost per claim - the cost to Barclays of assessing and
processing each valid claim
These assumptions remain subjective, in particular due to the
uncertainty associated with future claims levels, which include
complaints driven by Claims Management Company (CMC) activity.
The current provision represents Barclays' revised best estimate
of all future expected costs of PPI redress based on information
available at year end.
The following table details actual data through to 31 December
2016, key 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.
1 Total claims received directly by Barclays to date, including those
received via CMCs but excluding those for which no PPI policy exists
and excluding responses to proactive mailing.
2 Gross volumes received including no PPI.
Sensitivity
Cumulative analysis increase/
actual decrease
Assumption to 31.12.16 Future expected in provision
Customer initiated claims received
and processed(1) 1,840k 650k 50k = GBP100m
Average uphold rate per claim(2) 87% 83% 1% = GBP15m
Average redress per valid claim(3) GBP2,137 GBP1,950 GBP100 = GBP74m
Processing cost per claim(4) GBP410 GBP350 50k = GBP17m
1 Total claims received directly by Barclays to date, including those
received via CMCs but excluding those for which no PPI policy exists
and excluding responses to proactive mailing.
2 Average uphold rate per customer initiated claims received directly
by Barclays and proactive mailings, excluding those for which no
PPI policy exists.
3 Average redress stated on a per policy basis for future customer
initiated complaints received directly by Barclays and proactive
mailings.
4 Processing cost per claim on an upheld complaints basis, includes
direct staff costs and associated overheads.
8. Retirement Benefits
As at 31 December 2016, the Group's IAS 19 (Revised) pension
deficit across all schemes was GBP0.4bn (2015: GBP0.4bn surplus).
The UK Retirement Fund (UKRF), which is the Group's main scheme,
had a deficit of GBP0.03bn (2015: GBP0.8bn surplus).
The movement for the UKRF is mainly due to a decrease in
discount rate to 2.62% (2015: 3.82%), and an increase in inflation
rate to 3.35% (2015: 3.05%) partially offset by deficit
contributions, updated mortality assumptions based on scheme
experience, and higher than assumed returns on plan assets.
The triennial funding valuation of the UKRF is currently
underway with an effective date of 30 September 2016. Contribution
requirements, including any deficit recovery plans, are expected to
be agreed between the Bank and Trustee by the end of 2017. In these
discussions, the Bank and the Trustee are taking into account the
impact of the Structural Reform Programme.
The 2013 valuation was completed in 2014 with an effective date
of 30 September 2013. The funding deficit at that date was
calculated to be GBP3.6bn. Under the agreed recovery plan, deficit
contributions of GBP300m were paid in 2016, with further deficit
contributions of GBP740m payable each year between 2017 and 2021.
Up to GBP500m of the 2021 deficit contributions is payable in 2017
if the funding deficit remains over GBP2.6bn. 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 annual
update of the funding position. The latest annual update was
carried out as at 30 September 2015 and showed a deficit of
GBP6.0bn.
9. Called Up Share Capital
Called up share capital comprises 16,963m (2015: 16,805m)
ordinary shares of 25p each. The increase was due to the issuance
of 116m (2015: 253m) shares under employee share schemes and a
further 42m (2015: 54m) issued as part of the Barclays PLC Scrip
Dividend Programme.
10. Other Equity Instruments
Other Equity Instruments of GBP6,449m (2015: GBP5,305m) include
AT1 securities issued by Barclays PLC. In 2016 there was one
issuance of CRD IV end point qualifying AT1 capital instruments,
with a principal amount of GBP1.1bn (2015: GBP1.0bn)
The AT1 securities are perpetual securities with no fixed
maturity and are structured to qualify as AT1 instruments under CRD
IV. All AT1 securities will be converted into ordinary shares of
Barclays PLC, at a pre-determined price, should the fully loaded
CET1 ratio of Barclays PLC fall below 7.0%.
11. Other Reserves
As at As at
31.12.16 31.12.15
GBPm GBPm
Currency translation reserves 3,051 (623)
Available for sale reserves (74) 317
Cash flow hedges reserves 2,105 1,261
Other 969 943
Total other reserves 6,051 1,898
Currency Translation Reserve
As at 31 December 2016 there was a credit balance of GBP3,051m
(2015: GBP623m debit) in the currency translation reserve. The
increase in the credit balance of GBP3,674m (2015: GBP41m debit)
principally reflected the strengthening of all major currencies
against GBP. The currency translation reserve movement associated
with non-controlling interests was a GBP801m credit (2015: GBP435m
debit) reflecting the strengthening of ZAR against GBP.
During the year a GBP101m net gain (2015: GBP65m net loss) from
recycling of the currency translation reserve was recognised in the
income statement.
Available for Sale Reserve
As at 31 December 2016 there was a debit balance of GBP74m
(2015: GBP317m credit) in the available for sale reserve. The
decrease of GBP391m (2015: GBP245m decrease) was primarily due to a
GBP2,192m gain from changes in fair value of Government Bonds,
predominantly held in the liquidity pool. This was more than offset
by GBP1,677m of losses from related hedging and GBP912m of net
gains transferred to net profit, mainly due to GBP615m sale of Visa
Europe Limited by Visa Inc. A tax charge of GBP28m was recognised
in the period relating to these items.
Cash Flow Hedging Reserve
As at 31 December 2016, there was a credit balance of GBP2,105m
(2015: GBP1,261m credit) in the cash flow hedging reserve. The
increase of GBP844m (2015: GBP556m decrease) principally reflected
a GBP1,595m increase in the fair value of interest rate swaps held
for hedging purposes as interest rate forward curves decreased,
partially offset by GBP450m gains recycled to the income statement
in line with when the hedged item affects profit or loss and tax
charge of GBP326m. This tax charge reflects the introduction of the
new surcharge of 8% that applies to bank's UK profits with effect
from January 2016, in addition to the standard UK corporation tax
of 20%.
Other Reserves and Treasury Shares
As at 31 December 2016 there was a credit balance of GBP969m
(2015: GBP943m credit) in other reserves and treasury shares. The
increase principally reflected GBP166m (2015: GBP618m) transferred
from treasury shares reflecting the vesting of deferred share based
payments, partially offset by GBP140m (2015: GBP602m) net purchases
of treasury shares held for the purposes of employee share
schemes.
Appendix: Non-IFRS performance measures
The Barclays management believes that the non-IFRS performance
measures included in this document provide valuable information to
the readers of the financial statements as they enable the reader
to identify a more consistent basis for comparing the business'
performance between financial periods, and provide more detail
concerning the elements of performance which the managers of these
businesses are most directly able to influence or are relevant for
an assessment of Barclays PLC and its subsidiaries (the Group).
They also reflect an important aspect of the way in which operating
targets are defined and performance is monitored by Barclays'
management.
Non-IFRS and IFRS performance measures may also be presented on
an excluding notable items basis. Notable items are considered to
be significant items impacting comparability of performance.
Any non-IFRS performance measures in this document are not a
substitute for IFRS measures and readers should consider the IFRS
measures as well.
Non-IFRS performance measures glossary
Measure Definition
Barclays Core Barclays Core includes Barclays UK, Barclays International
and Head Office. A reconciliation of Core statutory
results and results excluding notable items is included
on page 67.
Return on average Statutory profit after tax attributable to ordinary
tangible shareholders' shareholders, including an adjustment for the tax credit
equity in reserves in respect of other equity instruments,
as a proportion of average shareholders' equity excluding
non-controlling interests and other equity instruments
adjusted for the deduction of intangible assets and
goodwill. The components of the calculation have been
included on pages 72 and 73.
Return on average Statutory profit after tax attributable to ordinary
allocated tangible shareholders, including an adjustment for the tax credit
shareholders' in reserves in respect of other equity instruments,
equity as a proportion of average allocated tangible equity.
The components of the calculation have been included
on pages 72 and 73.
Period end allocated Allocated tangible equity is calculated as 11.5% of
tangible equity CRD IV fully loaded risk weighted assets for each business,
adjusted for CRD IV fully loaded capital deductions,
excluding goodwill and intangible assets, reflecting
the assumptions the Group uses for capital planning
purposes. Head Office tangible equity represents the
difference between the Group's tangible equity and
the amounts allocated to businesses.
Average tangible Calculated as the average of the monthly period end
shareholders' tangible shareholders' equity during the period.
equity
Average allocated Calculated as the average of the monthly period end
tangible shareholders' allocated tangible shareholders' equity during the
equity period.
Cost: income Total operating expenses divided by total income.
ratio
Basic earnings/(loss) The calculation is consistent with the IFRS measure
per share contribution and applied to the Barclays Core and Non-Core: statutory
(Barclays Core profit after tax attributable to ordinary shareholders,
and Non-Core) including an adjustment for the tax credit in reserves
in respect of other equity instruments, divided by
the Group basic weighted average number of shares.
The components of the calculation have been included
on page 74.
Non-IFRS performance measures glossary (continued)
Measure Definition
Loan loss rate Is quoted in basis points and represents total loan
impairment divided by gross loans and advances to customers
and banks held at amortised cost at the balance sheet
date.
Loan: deposit Loans and advances divided by customer accounts calculated
ratio for Barclays UK, Barclays International and Non-Core,
excluding investment banking businesses. This excludes
particular liabilities issued by the retail businesses
that have characteristics comparable to retail deposits
(for example structured Certificates of Deposit and
retail bonds), which are included within debt securities
in issue.
Notable items Notable items are considered to be significant items
impacting comparability of performance and are shown
for each of the business segments. A reconciliation
between statutory results and results excluding notable
items is included on pages 68 to 71 including relevant
performance measures.
Net interest Net interest income divided by the sum of average customer
margin assets. The components of the calculation have been
included on page 31.
Tangible net Calculated by dividing shareholders equity, excluding
asset value per non-controlling interests and other equity instruments,
share less goodwill and intangible assets, by the number
of issued ordinary shares. The components of the calculation
have been included on page 75.
Barclays Core reconciliation
for the year ended 31.12.16 31.12.15
Barclays Barclays Head Barclays Barclays Barclays Head Barclays
UK International Office Core UK International Office Core
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Total income 7,517 14,995 103 22,615 7,343 13,747 338 21,428
Credit impairment charges
and other provisions (896) (1,355) - (2,251) (706) (922) - (1,628)
Net operating income 6,621 13,640 103 20,364 6,637 12,825 338 19,800
Operating expenses (3,792) (9,129) (135) (13,056) (3,464) (8,029) (272) (11,765)
UK bank levy (48) (284) (2) (334) (77) (253) (8) (338)
Litigation and conduct (1,042) (48) (27) (1,117) (2,511) (1,310) (66) (3,887)
Total operating expenses (4,882) (9,461) (164) (14,507) (6,052) (9,592) (346) (15,990)
Other net (expenses)/income (1) 32 128 159 - 45 (106) (61)
Profit/(loss) before
tax 1,738 4,211 67 6,016 585 3,278 (114) 3,749
Attributable profit/(loss) 828 2,412 110 3,350 (47) 1,758 11 1,722
Average allocated tangible
equity (GBPbn) 8.9 25.5 6.5 41.0 9.3 24.9 2.6 36.8
Risk weighted assets
(GBPbn) 67.5 212.7 53.3 333.5 69.5 194.8 39.7 304.1
Notable items
Total income
Own credit - - (35) (35) - - 430 430
Gain on disposal of
Barclays'
share of Visa Europe
Limited 151 464 - 615 - - - -
Gains on US Lehman
acquisition
assets - - - - - 496 - 496
Litigation and conduct
Provisions for UK customer
redress (1,000) - - (1,000) (2,431) (218) - (2,649)
Provisions for ongoing
investigations and
litigation
including Foreign Exchange - - - - - (984) (52) (1,036)
Operating expenses
Gain on valuation of
a component of the defined
retirement benefit
liability - - - - 296 133 - 429
Other net expenses
Losses on sale relating
to the Spanish, Portuguese
and Italian businesses - - - - - - (112) (112)
Total notable items (849) 464 (35) (420) (2,135) (573) 266 (2,442)
Results excluding notable items
Total income 7,366 14,531 138 22,035 7,343 13,251 (92) 20,502
Credit impairment charges
and other provisions (896) (1,355) - (2,251) (706) (922) - (1,628)
Net operating income/
(expenses) 6,470 13,176 138 19,784 6,637 12,329 (92) 18,874
Operating expenses (3,792) (9,129) (135) (13,056) (3,760) (8,162) (272) (12,194)
UK bank levy (48) (284) (2) (334) (77) (253) (8) (338)
Litigation and conduct (42) (48) (27) (117) (80) (108) (14) (202)
Total operating expenses (3,882) (9,461) (164) (13,507) (3,917) (8,523) (294) (12,734)
Other net (expenses)/income (1) 32 128 159 - 45 6 51
Profit/(loss) before
tax 2,587 3,747 102 6,436 2,720 3,851 (380) 6,191
Attributable profit/(loss) 1,685 1,961 135 3,781 1,961 2,320 (176) 4,105
Results excluding notable items
Results Results Results
excluding excluding excluding
Statutory Notable notable Statutory Notable notable notable
Barclays Core results items(1) items results items(1) items items
for the year ended 31.12.16 31.12.15
Income statement information YoY
GBPm GBPm GBPm GBPm GBPm GBPm % Change
Net interest income 10,377 - 10,377 9,993 - 9,993 4
Net fee, commission and
other income 12,238 580 11,658 11,435 926 10,509 11
Total income 22,615 580 22,035 21,428 926 20,502 7
Credit impairment charges
and other provisions (2,251) - (2,251) (1,628) - (1,628) (38)
Net operating income 20,364 580 19,784 19,800 926 18,874 5
Operating expenses (13,056) - (13,056) (11,765) 429 (12,194) (7)
UK bank levy (334) - (334) (338) - (338) 1
Total operating expenses
excluding litigation and
conduct (13,390) - (13,390) (12,103) 429 (12,532) (7)
Litigation and conduct (1,117) (1,000) (117) (3,887) (3,685) (202) 42
Total operating expenses (14,507) (1,000) (13,507) (15,990) (3,256) (12,734) (6)
Other net income/(expenses) 159 - 159 (61) (112) 51
Profit before tax 6,016 (420) 6,436 3,749 (2,442) 6,191 4
Attributable profit/(loss) 3,350 (431) 3,781 1,722 (2,383) 4,105 (8)
Performance measures
Return on average allocated
tangible equity 8.4% 9.4% 4.8% 11.2%
Cost: income ratio 64% 61% 75% 62%
Barclays Non-Core
Income statement information
Net interest income 160 - 160 615 - 615 (74)
Net trading income (1,703) - (1,703) (706) - (706)
Net fee, commission and
other income 379 - 379 703 - 703 (46)
Total income (1,164) - (1,164) 612 - 612
Credit impairment charges
and other provisions (122) - (122) (134) - (134) 9
Net operating (expenses)/income (1,286) - (1,286) 478 - 478
Operating expenses (1,509) - (1,509) (1,958) (99) (1,859) 19
UK bank levy (76) - (76) (88) - (88) 14
Litigation and conduct (246) - (246) (500) (324) (176) (40)
Total operating expenses (1,831) - (1,831) (2,546) (423) (2,123) 14
Other net income/(expenses) 331 - 331 (535) (465) (70)
Loss before tax (2,786) - (2,786) (2,603) (888) (1,715) (62)
Attributable loss (1,916) - (1,916) (2,418) (707) (1,711) (12)
1 Refer to page 5 for a breakdown of notable items.
Results excluding notable items
Results Results Results
excluding excluding excluding
Statutory Notable notable Statutory Notable notable notable
Barclays UK results items(1) items results items(1) items items
YoY
for the year ended 31.12.16 31.12.15 % Change
Income statement GBPm GBPm GBPm GBPm GBPm GBPm
information
Net interest income 6,048 - 6,048 5,973 - 5,973 1
Net fee, commission
and
other income 1,469 151 1,318 1,370 - 1,370 (4)
Total income 7,517 151 7,366 7,343 - 7,343 -
Credit impairment
charges
and other provisions (896) - (896) (706) - (706) (27)
Net operating income 6,621 151 6,470 6,637 - 6,637 (3)
Operating expenses (3,792) - (3,792) (3,464) 296 (3,760) (1)
UK bank levy (48) - (48) (77) - (77) 38
Litigation and conduct (1,042) (1,000) (42) (2,511) (2,431) (80) 48
Total operating
expenses (4,882) (1,000) (3,882) (6,052) (2,135) (3,917) 1
Other net expenses (1) - (1) - - - -
Profit before tax 1,738 (849) 2,587 585 (2,135) 2,720 (5)
Attributable profit 828 (857) 1,685 (47) (2,008) 1,961 (14)
Performance measures
Return on average
allocated
tangible equity 9.6% 19.3% (0.3%) 21.1%
Cost: income ratio 65% 53% 82% 53%
Analysis of total
income
Personal Banking 3,891 129 3,762 3,714 - 3,714 1
Barclaycard Consumer
UK 2,022 - 2,022 2,065 - 2,065 (2)
Wealth, Entrepreneurs
&
Business Banking 1,604 22 1,582 1,564 - 1,564 1
Total income 7,517 151 7,366 7,343 - 7,343 -
1 Refer to page 12 for a breakdown of notable items.
Results excluding notable items
Results Results Results
excluding excluding excluding
Statutory Notable notable Statutory Notable notable notable
Barclays International results items(1) items results items(1) items items
YoY
for the year ended 31.12.16 31.12.15 % Change
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm
Net interest income 4,512 - 4,512 4,324 - 4,324 4
Net trading income 4,580 - 4,580 3,782 - 3,782 21
Net fee, commission and
other income 5,903 464 5,439 5,641 496 5,145 6
Total income 14,995 464 14,531 13,747 496 13,251 10
Credit impairment charges
and other provisions (1,355) - (1,355) (922) - (922) (47)
Net operating income 13,640 464 13,176 12,825 496 12,329 7
Operating expenses (9,129) - (9,129) (8,029) 133 (8,162) (12)
UK bank levy (284) - (284) (253) - (253) (12)
Litigation and conduct (48) - (48) (1,310) (1,202) (108) 56
Total operating expenses (9,461) - (9,461) (9,592) (1,069) (8,523) (11)
Other net income 32 - 32 45 - 45 (29)
Profit before tax 4,211 464 3,747 3,278 (573) 3,851 (3)
Attributable profit 2,412 451 1,961 1,758 (562) 2,320 (15)
Performance measures
Return on average allocated
tangible equity 9.8% 8.0% 7.2% 9.5%
Cost: income ratio 63% 65% 70% 64%
Analysis of Barclays
International
Corporate and Investment
Bank
Income statement information
Total income 10,533 - 10,533 10,450 496 9,954 6
Credit impairment charges
and other provisions (260) - (260) (199) - (199) (31)
Total operating expenses (7,624) - (7,624) (7,929) (1,124) (6,805) (12)
Profit before tax 2,650 - 2,650 2,322 (628) 2,950 (10)
Performance measures
Return on average allocated
tangible equity 6.1% 6.1% 5.4% 8.2%
Consumer, Cards and Payments
Income statement information
Total income 4,462 464 3,998 3,297 - 3,297 21
Credit impairment charges
and other provisions (1,095) - (1,095) (723) - (723) (51)
Total operating expenses (1,837) - (1,837) (1,663) 55 (1,718) (7)
Profit before tax 1,561 464 1,097 956 55 901 22
Performance measures
Return on average allocated
tangible equity 31.4% 19.1% 20.2% 18.9%
1 Refer to page 15 for a breakdown of notable items.
Results excluding notable items
Results Results Results
excluding excluding excluding
Statutory Notable notable Statutory Notable notable notable
Head Office results items(1) items results items(1) items items
YoY
for the year ended 31.12.16 31.12.15 % Change
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm
Net interest income (183) - (183) (305) - (305) 40
Net fee, commission and
other income 286 (35) 321 643 430 213 51
Net operating income 103 (35) 138 338 430 (92)
Operating expenses (135) - (135) (272) - (272) 50
UK bank levy (2) - (2) (8) - (8) 75
Litigation and conduct (27) - (27) (66) (52) (14) (93)
Total operating expenses (164) - (164) (346) (52) (294) 44
Other net income/(expenses) 128 - 128 (106) (112) 6
Profit/(loss) before tax 67 (35) 102 (114) 266 (380)
Attributable profit/(loss) 110 (25) 135 11 187 (176)
1 Refer to page 18 for a breakdown of notable items.
Returns
Return on average allocated tangible equity is 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 tangible equity for the period as appropriate,
excluding non-controlling and other equity interests for
businesses. Allocated tangible equity has been calculated as 11.5%
of CRD IV fully loaded risk weighted assets for each business,
adjusted for CRD IV fully loaded capital deductions, excluding
goodwill and intangible assets, reflecting the assumptions the
Group uses for capital planning purposes. Head Office average
tangible equity represents the difference between the Group's
average tangible equity and the amounts allocated to
businesses.
Year ended Year ended
31.12.16 31.12.15
Attributable profit GBPm GBPm
---------------------------- ----------
Barclays UK 828 (47)
Barclays International 2,412 1,758
Head Office 110 11
----------
Barclays Core 3,350 1,722
Barclays Non-Core (1,916) (2,418)
Africa Banking discontinued operation 189 302
----------
Barclays Group 1,623 (394)
Tax credit in respect of interest payments on other
equity instruments
---------------------------- ----------
Barclays UK 29 14
Barclays International 83 42
Head Office (1)-
---------
Barclays Core 111 56
Barclays Non-Core 17 14
Africa Banking discontinued operation --
---------
Barclays Group 128 70
Profit/(loss) attributable to ordinary equity holders
of the parent
Barclays UK 857 (33)
Barclays International 2,495 1,800
Head Office 109 11
----------
Barclays Core 3,461 1,778
Barclays Non-Core (1,899) (2,405)
Africa Banking discontinued operation 189 302
Barclays Group 1,751 (324)
Average allocated tangible equity GBPbn GBPbn
Barclays UK 8.9 9.3
Barclays International 25.5 24.9
Head Office(1) 6.5 2.6
----------
Barclays Core 41.0 36.8
Barclays Non-Core 7.8 10.9
----------
Barclays Group 48.7 47.7
Return on average allocated tangible equity %%
Barclays UK 9.6% (0.3%)
Barclays International 9.8% 7.2%
----------
Barclays Core 8.4% 4.8%
Barclays Group 3.6% (0.7%)
1 Includes the Africa Banking discontinued operation.
Returns excluding notable items
Year ended Year ended
31.12.16 31.12.15
Attributable profit excluding notable GBPm GBPm
items
Barclays UK 1,685 1,961
Barclays International 1,961 2,320
Head Office 135 (176)
Barclays Core 3,781 4,105
Barclays Non-Core (1,916) (1,711)
Africa Banking discontinued operation 189 302
Barclays Group 2,054 2,696
Tax credit in respect of interest payments
on other
equity instruments
------------------------------------ ------------------------------------
Barclays UK 29 14
Barclays International 83 42
Head Office (1)-
-----------------------------------
Barclays Core 111 56
Barclays Non-Core 17 14
Africa Banking discontinued operation --
-----------------------------------
Barclays Group 128 70
Profit/(loss) attributable to ordinary
equity holders
of the parent excluding notable items
Barclays UK 1,714 1,975
Barclays International 2,044 2,362
Head Office 133 (176)
------------------------------------
Barclays Core 3,891 4,161
Barclays Non-Core (1,899) (1,697)
Africa Banking discontinued operation 189 302
------------------------------------
Barclays Group 2,182 2,766
Average allocated tangible equity
excluding notable
items GBPbn GBPbn
Barclays UK 8.9 9.3
Barclays International 25.5 24.9
Head Office(1,2) 6.8 2.9
------------------------------------
Barclays Core 41.3 37.2
Barclays Non-Core 7.8 10.9
------------------------------------
Barclays Group 49.0 48.1
Return on average allocated tangible
equity excluding
notable items %%
Barclays UK 19.3% 21.1%
Barclays International 8.0% 9.5%
------------------------------------
Barclays Core 9.4% 11.2%
Barclays Group 4.4% 5.8%
1 Includes the Africa Banking discontinued operation.
2 Excludes the cumulative post-tax impact of own credit.
Earnings per share
Year ended Year ended
31.12.16 31.12.15
Profit/(loss) attributable to ordinary equity holders
of the parent(1) GBPm GBPm
Barclays Core 3,461 1,778
Barclays Non-Core (1,899) (2,405)
Africa Banking discontinued operation 189 302
------------------------------------
Barclays Group(2) 1,751 (324)
m m
Basic weighted average number of shares 16,860 16,683
Basic earnings per ordinary share p p
Barclays Core contribution 20.5 10.7
Barclays Non-Core contribution (11.3) (14.4)
Barclays Group 10.4 (1.9)
Earnings per share excluding notable items
Profit/(loss) attributable to ordinary
equity holders
of the parent excluding notable items(1) GBPm GBPm
Barclays Core 3,891 4,161
Barclays Non-Core (1,899) (1,697)
Africa Banking discontinued operation 189 302
------------------------------------
Barclays Group(2) 2,182 2,766
Basic earnings per ordinary share
excluding notable
items p p
Barclays Core contribution 23.1 24.9
Barclays Non-Core contribution (11.3) (10.2)
Barclays Group 12.9 16.6
1 Profit for the period attributable to ordinary equity holders of
the parent includes the tax credit recorded in reserves in respect
of interest payments on other equity instruments. The tax credit
of GBP128m (2015: GBP70m) is allocated to businesses in proportion
to the allocation of the payments in relation to the other equity
instruments.
2 Includes the Africa Banking discontinued operation.
Tangible net asset value
Year ended Year ended
31.12.16 31.12.15
GBPm GBPm
Total equity excluding non-controlling interests 64,873 59,810
Other equity instruments (6,449) (5,305)
Goodwill and intangibles(1) (9,245) (8,222)
Tangible shareholders' equity attributable to ordinary
shareholders of the parent 49,179 46,283
m m
Shares in issue 16,963 16,805
p p
Tangible net asset value per share 290 275
1 2016 includes goodwill and intangibles in relation to Africa Banking.
Shareholder Information
Results timetable(1) Date
Ex-dividend date 2 March 2017
Dividend Record date 3 March 2017
Scrip reference share price set and made available to
shareholders 9 March 2017
Cut off time of 4.30 pm (London time) for the receipt
of Mandate Forms or Revocation Forms (as applicable) 17 March 2017
Dividend Payment date /first day of dealing in New Shares 5 April 2017
Q1 2017 Results 28 April 2017
For qualifying US and Canadian resident ADR holders, the final dividend
of 2.0p per ordinary share becomes 8.0p per ADS (representing four
shares). The ex-dividend, dividend record and dividend payment dates
for ADR holders are as shown above.
Year ended Year ended % Change(3)
Exchange rates(2) 31.12.16 31.12.15 31.12.15
======================================== ========== ========== ===========
Period end - USD/GBP 1.23 1.48 (17%)
Average - USD/GBP 1.36 1.53 (11%)
3 Month Average - USD/GBP 1.24 1.52 (18%)
Period end - EUR/GBP 1.17 1.36 (14%)
Average - EUR/GBP 1.23 1.38 (11%)
3 Month Average - EUR/GBP 1.15 1.39 (17%)
Period end - ZAR/GBP 16.78 23.14 (27%)
Average - ZAR/GBP 20.04 19.57 2%
3 Month Average - ZAR/GBP 17.29 21.56 (20%)
Share price data 31.12.16 31.12.15
======================================== ========== ========== -----------
Barclays PLC (p) 223.45 218.90
Barclays PLC number of shares (m) 16,963 16,805
Barclays Africa Group Limited (formerly
Absa Group Limited) (ZAR) 168.69 143.49
Barclays Africa Group Limited (formerly
Absa Group Limited) number of shares
(m) 848 848
For further information please contact
Investor relations Media relations
===================================================================== ======================================
Kathryn McLeland +44 (0) 20 7116 Thomas Hoskin +44 (0) 20 7116 4755
4943
More information on Barclays can be found on our website:
www.home.barclays
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: 0371 384 2055(4) from the UK
or +44 121 415 7004 from overseas.
1 Note that these dates are provisional and subject to change. Any
changes to the Scrip Dividend Programme dates will be made available
at www.home.barclays/dividends.
2 The average rates shown above are derived from daily spot rates
during the year.
3 The change is the impact to GBP reported information.
4 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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