TIDMBARC
RNS Number : 6727G
Barclays PLC
28 July 2021
Barclays PLC
Interim Results Announcement
30 June 2021
Table of Contents
Results Announcement Page
Notes 1
Performance Highlights 2
Group Chief Executive Officer's Review 6
Group Finance Director's Review 7
Results by Business
-- Barclays UK 9
-- Barclays International 11
-- Head Office 16
Quarterly Results Summary 17
Quarterly Results by Business 18
Performance Management
-- Margins and Balances 24
Risk Management
-- Risk Management and Principal Risks 26
-- Credit Risk 28
-- Market Risk 49
-- Treasury and Capital Risk 50
Statement of Directors' Responsibilities 65
Independent Review Report to Barclays PLC 66
Condensed Consolidated Financial Statements 67
Financial Statement Notes 78
Appendix: Non-IFRS Performance Measures 104
Shareholder Information 109
BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED
KINGDOM. TELEPHONE: +44 (0) 20 7116 1000. COMPANY NO. 48839.
Notes
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014 (as it
forms part of Retained EU Law as defined in the European Union
(Withdrawal) Act 2018).
The terms Barclays or Group refer to Barclays PLC together with
its subsidiaries. Unless otherwise stated, the income statement
analysis compares the six months ended 30 June 2021 to the
corresponding six months of 2020 and balance sheet analysis as at
30 June 2021 with comparatives relating to 31 December 2020 and 30
June 2020. 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.
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.
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/investor-relations/reports-and-events/latest-financial-results
.
The information in this announcement, which was approved by the
Board of Directors on 27 July 2021, does not comprise statutory
accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2020, which
contained an unmodified audit report under Section 495 of the
Companies Act 2006 (which did not make any statements under Section
498 of the Companies Act 2006) have been delivered to the Registrar
of Companies in accordance with Section 441 of the Companies Act
2006.
These results will be furnished as a Form 6-K to the US
Securities and Exchange Commission (SEC) as soon as practicable
following their publication. Once furnished with the SEC, a copy of
the Form 6-K will be available 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 businesses'
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 97 to102 for further information 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. Forward-looking statements can be made in writing
but also may be made verbally by members of the management of the
Group (including, without limitation, during management
presentations to financial analysts) in connection with this
document. Examples of forward-looking statements include, among
others, statements or guidance regarding or relating to the Group's
future financial position, income growth, assets, impairment
charges, provisions, business strategy, capital, leverage and other
regulatory ratios, capital distributions (including dividend
pay-out ratios and expected payment strategies), projected levels
of growth in the banking and financial markets, projected costs or
savings, any commitments and targets, estimates of capital
expenditures, plans and objectives for future operations, projected
employee numbers, IFRS impacts 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. The forward-looking statements speak only as at
the date on which they are made. Forward-looking statements may be
affected by changes in legislation, the development of standards
and interpretations under IFRS, including evolving practices with
regard to the interpretation and application of accounting and
regulatory standards, the outcome of current and future legal
proceedings and regulatory investigations, future levels of conduct
provisions, the policies and actions of governmental and regulatory
authorities, the Group's ability along with governments and other
stakeholders to measure, manage and mitigate the impacts of climate
change effectively, 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 applicable to past, current and future periods;
UK, US, Eurozone and global macroeconomic and business conditions;
the effects of any 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 entity within the Group or any
securities issued by such entities; direct and indirect impacts of
the coronavirus (COVID-19) pandemic; instability as a result of the
UK's exit from the European Union ("EU"), the effects of the EU-UK
Trade and Cooperation Agreement and the disruption that may
subsequently result in the UK and globally; the risk of
cyber-attacks, information or security breaches or technology
failures on the Group's reputation, business or operations; 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 financial
position, future results, capital distributions, capital, leverage
or other regulatory ratios or other financial and non-financial
metrics or performance measures may differ materially from the
statements or 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 Barclays PLC's filings with the SEC (including, without
limitation, Barclays PLC's Annual Report on Form 20-F for the
fiscal year ended 31 December 2020 and Interim Results Announcement
for the six months ended 30 June 2021 filed on Form 6-K), which are
available on the SEC's website at www.sec.gov .
Subject to Barclays' obligations under the applicable laws and
regulations of any relevant jurisdiction, (including, without
limitation, the UK and the US), 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
Group return on tangible equity (RoTE) of 16.4% for H121.
Announced increased capital distributions, with half year dividend
of 2.0p per share and intend to initiate a further share buyback of
up to GBP500m
Barclays delivered a strong Group profit before tax in H121 of
GBP5.0bn (H120: GBP1.3bn) and attributable profit of GBP3.8bn
(H120: GBP0.7bn). This delivered a RoTE of 16.4% (H120: 2.9%) and
earnings per share (EPS) of 22.2p (H120: 4.0p)
Income Group income of GBP11.3bn down 3% versus prior year
reflecting currency headwinds
-- Barclays International income of GBP8.2bn, down
5% versus prior year
Resilient income - Corporate and Investment Bank (CIB) income of
as the Group continues GBP6.6bn, down 5% with strong Equities and Investment
to benefit from Banking fees performance, up 38% and 27% respectively,
diversified income whilst FICC was down 37% versus a strong H120
streams
- Consumer, Cards and Payments (CC&P) income of
GBP1.6bn, down 4% primarily reflecting lower
interest earning US cards balances
-- Barclays UK income of GBP3.2bn increased 1% reflecting
strong mortgages performance with record net balance
growth of GBP6.9bn, partially offset by lower
interest earning UK cards balances and the effect
of lower interest rates
-----------------------
-- Excluding the impact of the 10% depreciation of
average USD against GBP, Group income was up versus
prior year
----------------------- ------------------------------------------------------------
Credit impairment Group credit impairment net release of GBP0.7bn (H120:
GBP3.7bn charge)
Improved macroeconomic -- The net release included a reversal of GBP1.1bn
outlook and benign in non-default charges, primarily reflecting the
credit environment improved macroeconomic outlook. Excluding this
reversal, the charge was GBP0.4bn, reflecting
reduced unsecured lending balances and the benign
credit environment
----------------------- ------------------------------------------------------------
Costs Group total operating expenses of GBP7.2bn up 10%
versus prior year, resulting in a cost: income ratio
of 64% (H120: 57%)
Investing for income -- Total operating expenses included structural cost
growth whilst taking actions of GBP321m (H120: GBP78m), primarily related
structural cost to the real estate review in Q221, higher performance
actions costs reflective of improved returns, and continued
investment and business growth, partially offset
by the benefit from the depreciation of average
USD against GBP and efficiency savings
----------------------- ------------------------------------------------------------
Capital / capital Common equity tier 1 (CET1) ratio of 15.1%, in line
distributions with December 2020
Announced increased -- Half year dividend of 2.0p (H120: 0p) per share
capital distributions to be paid on 17 September 2021
-----------------------
-- Completed GBP700m share buyback in April
-----------------------
-- Intend to initiate a further share buyback of
up to GBP500m, which would have an effect of 17bps
on the CET1 ratio
----------------------- ------------------------------------------------------------
Q221 performance
Q221 performance Q221 Group profit before tax of GBP2.6bn (Q220: GBP0.4bn),
RoTE of 18.1% (Q220: 0.7%) and EPS of 12.3p (Q220:
0.5p)
Robust performance,
with profitability
benefiting from
a credit impairment
net release and
the upwards re-measurement
of UK DTAs
-- Q221 Group income of GBP5.4bn, up 1% versus prior
year despite currency headwinds . Barclays International
income of GBP3.8bn was down 5% versus prior year,
reflecting CIB income of GBP3.0bn, down 10% versus
prior year and CC&P income of GBP0.8bn, up 21%
versus prior year driven by a valuation loss in
2020. Barclays UK income of GBP1.6bn was up 11%
versus prior year
-- Q221 Group credit impairment net release of GBP0.8bn
(Q220: GBP1.6bn charge) , reflecting a reversal
of GBP1.0bn in non-default charges, primarily
reflecting the improved macroeconomic outlook.
Excluding this reversal, the charge was GBP0.2bn,
which is broadly aligned with prior quarter
-- Q221 Group total operating expenses of GBP3.7bn,
up GBP0.3bn versus prior year , reflecting structural
cost actions
-- Q221 attributable profit of GBP2.1bn (Q220: GBP0.1bn),
which included an income statement tax benefit
of GBP0.4bn on the upwards re-measurement of UK
deferred tax assets (DTAs)
-- The CET1 ratio as at June 2021 was 15.1%, up
50bps in the quarte r, driven by profits and lower
Risk Weighted Assets (RWAs)
----------------------------------------------------------
Group outlook and targets
Returns
-- Expect to deliver a RoTE above 10% in 2021
Impairment
-- The quarterly impairment run rate is expected
to remain below historical levels in coming quarters
given reduced unsecured lending balances and the
improved macroeconomic outlook, acknowledging
the continuing uncertainty
Costs
-- FY21 costs, excluding structural cost actions
and performance costs, are expected to be broadly
in line with FY20(1)
-- Total full year 2021 costs are expected to be
above 2020, due to higher structural cost actions,
including a real estate charge in Q221, and higher
performance costs, reflecting improved returns
Capital
-- FY21 CET1 ratio is expected to remain above the
target range of 13-14%, given the economic environment
remains uncertain and capital headwinds in 2022,
including the c.40bps impact from the reversal
of software amortisation benefit from 1 January
2022
Capital returns
-- Barclays' capital returns policy incorporates
a progressive ordinary dividend, supplemented
by additional cash returns, including share buybacks
as and when appropriate
Outlook -- Dividends will continue to be paid semi-annually,
Whilst the macroeconomic with the half year dividend expected to represent,
environment has under normal circumstances, around one-third of
improved, the outlook the total dividend for the year
remains uncertain
and subject to change
depending on the
evolution and persistence
of the COVID-19
pandemic
--------------------------------------------------------
Continue to target the following over the medium term:
--------------------------
-- Returns: RoTE of greater than 10%
-- Cost efficiency: Cost: income ratio below 60%
Targets -- Capital adequacy: CET1 ratio in the range of 13-14%
-------------------------- --------------------------------------------------------
1 Group cost outlook is based on an average rate of 1.38 (USD/GBP)
in H221 and subject to foreign currency movements.
Barclays Group results
for the half year ended
30.06.21 30.06.20
GBPm GBPm % Change
Net interest income 3,903 4,223 (8)
Net fee, commission and other income 7,412 7,398
================================================ ============== ============== ==============
Total income 11,315 11,621 (3)
Credit impairment releases/(charges) 742 (3,738)
================================================ ============== ============== ==============
Net operating income 12,057 7,883 53
Operating expenses (7,132) (6,563) (9)
Litigation and conduct (99) (30)
================================================ ============== ============== ==============
Total operating expenses (7,231) (6,593) (10)
Other net income/expenses 153 (18)
================================================ ============== ============== ==============
Profit before tax 4,979 1,272
Tax charge (759) (113)
================================================ ============== ============== ==============
Profit after tax 4,220 1,159
Non-controlling interests (19) (37) 49
Other equity instrument holders (389) (427) 9
================================================ ============== ============== ==============
Attributable profit 3,812 695
Performance measures
================================================ ============== ============== ==============
Return on average tangible shareholders' equity 16.4% 2.9%
Average tangible shareholders' equity (GBPbn) 46.5 48.6
Cost: income ratio 64% 57%
Loan loss rate (bps) - 207
Basic earnings per share 22.2p 4.0p
Dividend per share 2.0p -
Basic weighted average number of shares (m) 17,140 17,294
Period end number of shares (m) 16,998 17,345
Share buyback announced (GBPm) 500 -
Total payout equivalent per share 4.9p -
As at 30.06.21 As at 31.12.20 As at 30.06.20
Balance sheet and capital management(1) GBPbn GBPbn GBPbn
================================================ ============== ============== ==============
Loans and advances at amortised cost 348.5 342.6 354.9
Loans and advances at amortised cost impairment
coverage ratio 1.8% 2.4% 2.5%
Deposits at amortised cost 500.9 481.0 466.9
Tangible net asset value per share 281p 269p 284p
Common equity tier 1 ratio 15.1% 15.1% 14.2%
Common equity tier 1 capital 46.2 46.3 45.4
Risk weighted assets 306.4 306.2 319.0
Average UK leverage ratio 4.8% 5.0% 4.7%
UK leverage ratio 5.0% 5.3% 5.2%
Funding and liquidity
================================================ ============== ============== ==============
Group liquidity pool (GBPbn) 291 266 298
Liquidity coverage ratio 162% 162% 186%
Loan: deposit ratio 70% 71% 76%
1 Refer to pages 54 to 60 for further information on how capital,
RWAs and leverage are calculated.
Group Chief Executive Officer's Review
"This has been a strong first half, clearly demonstrating the
benefits of our resilient and diversified universal bank in
supporting the growth of capital markets, our corporate clients and
retail customers. Barclays UK, and the CIB and CC&P businesses
within Barclays International have all delivered strong
double-digit RoTE. Our investment banking fees and equities
businesses have delivered record income(1) , and we are seeing
encouraging signs of recovery in consumer banking. Our
profitability, strong capital position and balance sheet have
enabled us to increase capital distributions to shareholders.
We are starting to see the resurgence of activity across our
businesses, with Group income up on the same period last year when
excluding the impact of FX movements. Our CIB business is
well-positioned to benefit from continued growth in debt and equity
capital markets, with Global Markets and Investment Banking fees
income up 36% since 2019, and our strong retail businesses are
poised to support and benefit from a consumer recovery.
We are also continuing to build our presence where we see
further opportunities to scale, by organically growing our own
products and service, and by partnering. Whilst we continue to
develop our leading payments services including our new Barclays
Cubed platform, we are also able to partner with major businesses
in our US consumer banking business. In CIB, we are enhancing our
ability to compete for client business with a stronger product and
service set, from transaction banking to our equity franchise,
alongside a build-out of our sectoral expertise in healthcare,
technology and sustainability.
We will continue to invest behind those opportunities we see for
growing income and returns across our businesses, whilst also
driving efficiencies and savings across Barclays. Excluding
performance costs and structural cost actions, costs in 2021 will
be broadly in line with 2020(2) .
Against this backdrop of economic recovery, our robust approach
to risk management means we are making a net impairment release of
GBP0.7bn versus a charge of GBP3.7bn in H120. We also delivered a
CET1 ratio of 15.1%, and increased capital distributions, with the
announcement of a half year dividend of 2 pence per share,
alongside the intention to initiate a share buyback of up to
GBP500m. This is in addition to the GBP700m share buyback completed
in April.
Alongside the role we play in supporting economic growth, we are
firmly focused on our wider societal responsibilities. We continue
to drive hard on our ambition to be a net zero bank, and support
the aims of the Paris Agreement, already having provided nearly
half of our GBP100bn green financing commitment through our capital
markets and lending expertise. We continue to develop our ability
to measure our financed emissions and track them at a portfolio
level through our unique BlueTrack (TM) methodology.
We have also demonstrated our ability, and willingness, to
support customers and clients through the pandemic, and we are
mindful that this support will need to continue as we see the
pandemic subside.
Taken together, we continue to invest behind opportunities for
growth, manage our capital and balance sheet conservatively, and
focus on our role in society. With a first half profit before tax
of GBP5bn, quadruple the same period last year, and a RoTE of
16.4%, this is a good first half performance. It provides a strong
platform on which to build in the second half, and to deliver a
full year RoTE in excess of 10%."
James E Staley, Group Chief Executive Officer
1 Period covering Q114 - Q221. Pre 2014 financials were not restated
following re-segmentation in Q116.
2 Group cost outlook is based on an average rate of 1.38 (USD/GBP)
in H221 and subject to foreign currency movements.
Group Finance Director's Review
Group performance
-- Barclays delivered a profit before tax of GBP4,979m (H120: GBP1,272m),
RoTE of 16.4% (H120: 2.9%), and EPS of 22.2p (H120: 4.0p). Profitability
benefitted from a credit impairment net release and the upwards
re-measurement of UK DTAs. The 10% depreciation of average USD
against GBP adversely impacted income and profits and positively
impacted total operating expenses
-- Total income decreased to GBP11,315m (H120: GBP11,621m). Barclays
UK income increased 1%. Barclays International income decreased
5%, with CIB income down 5% and CC&P income down 4%. Excluding
the impact of the 10% depreciation of average USD against GBP,
total income was up, reflecting the Group's diversified income
streams
-- Credit impairment net release of GBP742m (H120: GBP3,738m charge)
driven by an improved macroeconomic outlook used in the Q221 scenario
refresh, lower unsecured lending balances and a benign credit environment.
Barclays has maintained and refined management judgements in respect
of customers and clients considered to be potentially more vulnerable
as government and other support schemes start to reduce. The reduction
in unsecured lending balances and growth in secured balances, with
the mix impact contributing to a decrease in the Group's loan coverage
ratio to 1.8% (December 2020: 2.4%), with an unsecured loan coverage
ratio at 10.2% (December 2020: 12.3%) and wholesale loan coverage
ratio at 1.1% (December 2020: 1.5%)
-- Total operating expenses increased 10% to GBP7,231m, due to structural
cost actions of GBP321m primarily relating to the real estate review,
higher performance costs that reflect improvement in returns, and
continued investment and business growth, partially offset by efficiency
savings. This resulted in a cost: income ratio of 64% (H120: 57%)
-- The effective tax rate was 15.2% (H120: 8.9%). This reflects the
GBP392m tax benefit recognised for the re-measurement of the Group's
UK DTAs as a result of the UK corporation tax rate increase from
19% to 25% from 1 April 2023
-- Attributable profit was GBP3,812m (H120: GBP695m)
-- As a result of the share buyback completed in April, the period
end number of shares was 16,998m (December 2020: 17,359m)
-- Total assets increased to GBP1,376bn (December 2020: GBP1,350bn)
primarily due to a GBP26bn increase in cash at central banks, a
GBP19bn increase in trading portfolio assets due to increased activity
and a GBP19bn increase in financial assets at fair value due to
an increase in secured lending, partially offset by a GBP46bn decrease
in derivative assets driven by an increase in major interest rate
curves
-- Tangible net asset value (TNAV) per share increased to 281p (December
2020: 269p) primarily reflecting 22.2p of EPS, partially offset
by negative reserve movements
Group capital and leverage
-- The CET1 ratio remained stable at 15.1% (December 2020: 15.1%)
- CET1 capital reduced by GBP0.1bn to GBP46.2bn (December 2020:
GBP46.3bn) as profit before tax of GBP5.0bn was offset by the
removal of temporary regulatory supporting measures introduced
in 2020, dividends paid and foreseen and pensions deficit contribution
payments. The GBP1.1bn release of non-defaulted credit impairment
was more than offset by a reduction in IFRS 9 transitional relief
which also decreased due to impairment migrations from stage
2 to stage 3 and the relief on the pre-2020 impairment charge
reducing from 70% to 50% in 2021
- RWAs remained broadly stable at GBP306.4bn (December 2020: GBP306.2bn)
primarily due to increased client and trading activity within
CIB and growth in mortgages within Barclays UK, partially offset
by lower consumer lending
-- The average UK leverage ratio decreased to 4.8% (December 2020:
5.0%). The average leverage exposure increased by GBP45.1bn to
GBP1,192.0bn (December 2020: GBP1,146.9bn) largely driven by an
increase in securities financing transactions (SFTs), trading portfolio
assets (TPAs) and potential future exposure (PFE) on derivatives
Group funding and liquidity
-- The liquidity pool was GBP291bn (December 2020: GBP266bn) and the
liquidity coverage ratio remained significantly above the 100%
regulatory requirement at 162% (December 2020: 162%), equivalent
to a surplus of GBP108bn (December 2020: GBP99bn). The increase
in the pool is driven by continued deposit growth, further borrowing
from the Bank of England's Term Funding Scheme with additional
incentives for SMEs and a seasonal increase in short-term wholesale
funding, which were partly offset by an increase in business funding
consumption
-- Wholesale funding outstanding, excluding repurchase agreements,
was GBP158.7bn (December 2020: GBP145.0bn). The Group issued GBP5.9bn
equivalent of minimum requirement for own funds and eligible liabilities
(MREL) instruments from Barclays PLC (the Parent company) during
the year. The Group is well advanced in its MREL issuance plans
relative to the estimated 1 January 2022 requirement
Capital distributions
-- Barclays understands the importance of delivering attractive total
cash returns to shareholders. Barclays is therefore committed to
maintaining an appropriate balance between total cash returns to
shareholders, investment in the business and maintaining a strong
capital position. Going forward, Barclays intends to pay a progressive
ordinary dividend, taking into account these objectives and the
earnings outlook of the Group. It is also the Board's intention
to continue to supplement the ordinary dividends with additional
cash returns, including share buybacks, to shareholders as and
when appropriate
-- Barclays will pay a half year dividend per share of 2.0p on 17
September 2021, and intends to initiate a share buyback of up to
GBP500m which is expected to commence in Q321. This is in addition
to the GBP700m share buyback completed in April
-- The Board will assess the appropriate level and form of capital
distributions as the year progresses
-- Dividends will continue to be paid semi-annually, with the half
year dividend expected to represent, under normal circumstances,
around one-third of the total dividend for the year
Tushar Morzaria, Group Finance Director
Results by Business
Barclays UK Half year Half year
ended ended
30.06.21 30.06.20
Income statement information GBPm GBPm % Change
=============================================== ============== ============== ==============
Net interest income 2,586 2,637 (2)
Net fee, commission and other income 613 534 15
=============================================== ============== ============== ==============
Total income 3,199 3,171 1
Credit impairment releases/(charges) 443 (1,064)
=============================================== ============== ============== ==============
Net operating income 3,642 2,107 73
Operating expenses (2,114) (2,041) (4)
Litigation and conduct (22) (11)
=============================================== ============== ============== ==============
Total operating expenses (2,136) (2,052) (4)
Other net income - 13
=============================================== ============== ============== ==============
Profit before tax 1,506 68
Attributable profit 1,019 52
As at 30.06.21 As at 31.12.20 As at 30.06.20
Balance sheet information GBPbn GBPbn GBPbn
=============================================== ============== ============== ==============
Loans and advances to customers at amortised
cost 207.8 205.4 202.0
Total assets 311.2 289.1 287.6
Customer deposits at amortised cost 255.5 240.5 225.7
Loan: deposit ratio 87% 89% 92%
Risk weighted assets 72.2 73.7 77.9
Period end allocated tangible equity 9.9 9.7 10.3
Half year Half year
ended ended
Key facts 30.06.21 30.06.20
=============================================== ============== ============== ==============
Average loan to value of mortgage portfolio(1) 51% 52%
Average loan to value of new mortgage
lending(1) 69% 68%
Number of branches 755 904
Mobile banking active customers 9.4m 8.7m
30 day arrears rate - Barclaycard Consumer
UK 1.4% 2.0%
Performance measures
=============================================== ============== ============== ==============
Return on average allocated tangible equity 20.6% 1.0%
Average allocated tangible equity (GBPbn) 9.9 10.2
Cost: income ratio 67% 65%
Loan loss rate (bps) - 101
Net interest margin 2.54% 2.69%
1 Average loan to value of mortgages is balance weighted and reflects
both residential and buy-to-let (BTL) mortgage portfolios within
the Home Loans portfolio.
Analysis of Barclays UK Half year Half year
ended ended
30.06.21 30.06.20
Analysis of total income GBPm GBPm % Change
================================================= ============== ============== =========
Personal Banking 1,910 1,794 6
Barclaycard Consumer UK 605 803 (25)
Business Banking 684 574 19
================================================= ============== ============== =========
Total income 3,199 3,171 1
Analysis of credit impairment releases/(charges)
================================================= ============== ============== =========
Personal Banking 50 (264)
Barclaycard Consumer UK 398 (697)
Business Banking (5) (103)
================================================= ============== ============== =========
Total credit impairment releases/(charges) 443 (1,064)
As at
As at 30.06.21 As at 31.12.20 30.06.20
Analysis of loans and advances to customers
at amortised cost GBPbn GBPbn GBPbn
================================================= ============== ============== =========
Personal Banking 162.4 157.3 154.9
Barclaycard Consumer UK 8.8 9.9 11.5
Business Banking 36.6 38.2 35.6
================================================= ============== ============== =========
Total loans and advances to customers at
amortised cost 207.8 205.4 202.0
Analysis of customer deposits at amortised
cost
================================================= ============== ============== =========
Personal Banking 191.0 179.7 169.6
Barclaycard Consumer UK 0.1 0.1 0.1
Business Banking 64.4 60.7 56.0
================================================= ============== ============== =========
Total customer deposits at amortised cost 255.5 240.5 225.7
Barclays UK delivered a RoTE of 20.6% including the benefit from
a net impairment release following an improved UK macroeconomic
outlook. Income increased 1% reflecting strong growth in mortgage
balances of GBP6.9bn at improved margins, despite a GBP1.5bn
reduction in unsecured lending balances. Barclays UK grew deposits
by GBP15.0bn, further strengthening the liquidity position
reflected in the loan: deposit ratio of 87%, 2% lower than
FY20.
Income statement - H121 compared to H120
-- Profit before tax increased to GBP1,506m (H120: GBP68m). RoTE was
20.6% (H120: 1.0%) reflecting materially lower credit impairment
charges
-- Total income increased 1% to GBP3,199m. Net interest income reduced
2% to GBP2,586m with a net interest margin (NIM) of 2.54% (H120:
2.69%). Net fee, commission and other income increased 15% to GBP613m
- Personal Banking income increased 6% to GBP1,910m, reflecting
strong growth in mortgages alongside improved margins, balance
growth in deposits and the non-recurrence of COVID-19 customer
support actions, partially offset by deposit margin compression
from lower interest rates and lower unsecured lending balances
- Barclaycard Consumer UK income decreased 25% to GBP605m as reduced
borrowing and continued payments by customers resulted in a lower
level of interest earning lending (IEL) balances
- Business Banking income increased 19% to GBP684m due to lending
and deposit balance growth from GBP12.1bn of government scheme
lending and the non-recurrence of COVID-19 and related customer
support actions, partially offset by deposit margin compression
from lower interest rates
-- Credit impairment net release of GBP443m (H120: GBP1,064m charge)
was driven by an improved macroeconomic outlook used in the Q221
scenario refresh. The primary driver is a reduction in the anticipated
peak of UK unemployment with the majority of this provision release
in UK cards and personal loans. As at 30 June 2021, 30 and 90 day
arrears rates in UK cards were 1.4% (H120: 2.0%) and 0.6% (H120:
1.0%) respectively
-- Total operating expenses increased 4% to GBP2,136m reflecting investment
spend and higher operational and customer service costs, including
ongoing financial assistance, partially offset by efficiency savings
Balance sheet - 30 June 2021 compared to 31 December 2020
-- Loans and advances to customers at amortised cost increased 1%
to GBP207.8bn predominantly from GBP6.9bn of mortgage growth following
continued strong flow of new applications as well as strong customer
retention, offset by a GBP1.8bn decrease in the Education, Social
Housing and Local Authority (ESHLA) portfolio and GBP1.5bn lower
unsecured lending balances, albeit loans and advances in Barclaycard
Consumer UK stabilised in Q221
-- Customer deposits at amortised cost increased 6% to GBP255.5bn
reflecting an increase of GBP11.3bn and GBP3.7bn in Personal Banking
and Business Banking respectively, further strengthening the liquidity
position and contributing to a loan: deposit ratio of 87% (December
2020: 89%)
-- RWAs decreased to GBP72.2bn (December 2020: GBP73.7bn) driven by
a reduction in unsecured lending and ESHLA, partially offset by
growth in mortgages
Barclays International Half year Half year
ended ended
30.06.21 30.06.20
Income statement information GBPm GBPm % Change
============================================ ============== ============== ==============
Net interest income 1,559 1,845 (16)
Net trading income 3,389 4,020 (16)
Net fee, commission and other income 3,270 2,789 17
============================================ ============== ============== ==============
Total income 8,218 8,654 (5)
Credit impairment releases/(charges) 293 (2,619)
============================================ ============== ============== ==============
Net operating income 8,511 6,035 41
Operating expenses (4,606) (4,405) (5)
Litigation and conduct (84) (11)
============================================ ============== ============== ==============
Total operating expenses (4,690) (4,416) (6)
Other net income 22 10
============================================ ============== ============== ==============
Profit before tax 3,843 1,629
Attributable profit 2,698 997
As at 30.06.21 As at 31.12.20 As at 30.06.20
Balance sheet information GBPbn GBPbn GBPbn
============================================ ============== ============== ==============
Loans and advances at amortised cost 121.9 122.7 138.1
Trading portfolio assets 147.1 127.7 109.5
Derivative financial instrument assets 255.4 301.8 306.8
Financial assets at fair value through the
income statement 190.4 170.7 154.3
Cash collateral and settlement balances 108.5 97.5 130.8
Other assets 223.5 221.4 236.3
============================================ ============== -------------- ==============
Total assets 1,046.8 1,041.8 1,075.8
Deposits at amortised cost 245.4 240.5 241.2
Derivative financial instrument liabilities 246.9 300.4 307.6
Loan: deposit ratio 50% 51% 57%
Risk weighted assets 223.2 222.3 231.2
Period end allocated tangible equity 31.8 30.2 31.6
Half year Half year
ended ended
Performance measures 30.06.21 30.06.20
============================================ ============== ============== ==============
Return on average allocated tangible equity 16.7% 6.2%
Average allocated tangible equity (GBPbn) 32.3 32.4
Cost: income ratio 57% 51%
Loan loss rate (bps) - 368
Net interest margin 3.95% 3.67%
Analysis of Barclays International
Corporate and Investment Bank Half year Half year
ended ended
30.06.21 30.06.20
Income statement information GBPm GBPm % Change
============================================ ============== ============== ==============
Net interest income 640 669 (4)
Net trading income 3,411 4,043 (16)
Net fee, commission and other income 2,522 2,221 14
============================================ ============== ============== ==============
Total income 6,573 6,933 (5)
Credit impairment releases/(charges) 272 (1,320)
============================================ ============== ============== ==============
Net operating income 6,845 5,613 22
Operating expenses (3,509) (3,370) (4)
Litigation and conduct (2) (3) 33
============================================ ============== ============== ==============
Total operating expenses (3,511) (3,373) (4)
Other net income 1 3 (67)
============================================ ============== ============== ==============
Profit before tax 3,335 2,243 49
Attributable profit 2,312 1,514 53
As at 30.06.21 As at 31.12.20 As at 30.06.20
Balance sheet information GBPbn GBPbn GBPbn
============================================ ============== ============== ==============
Loans and advances at amortised cost 91.0 92.4 104.9
Trading portfolio assets 147.0 127.5 109.3
Derivative financial instrument assets 255.3 301.7 306.7
Financial assets at fair value through the
income statement 190.3 170.4 153.7
Cash collateral and settlement balances 107.7 96.7 129.7
Other assets 192.5 194.9 205.5
============================================ ============== ============== ==============
Total assets 983.8 983.6 1,009.8
Deposits at amortised cost 178.2 175.2 173.9
Derivative financial instrument liabilities 246.8 300.3 307.6
Risk weighted assets 194.3 192.2 198.3
Half year Half year
ended ended
Performance measures 30.06.21 30.06.20
============================================ ============== ============== ==============
Return on average allocated tangible equity 16.3% 11.0%
Average allocated tangible equity (GBPbn) 28.3 27.7
Cost: income ratio 53% 49%
Analysis of total income GBPm GBPm % Change
============================================ ============== ============== ==============
FICC 2,099 3,326 (37)
Equities 1,709 1,238 38
============================================ ============== ============== ==============
Global Markets (1) 3,808 4,564 (17)
Advisory 381 239 59
Equity capital markets 469 247 90
Debt capital markets 882 881
============================================ ============== ============== ==============
Investment Banking fees(1) 1,732 1,367 27
Corporate lending 244 172 42
Transaction banking 789 830 (5)
============================================ ============== ============== ==============
Corporate 1,033 1,002 3
==============
Total income 6,573 6,933 (5)
1 Previously labelled as "Markets" and "Banking fees".
Analysis of Barclays International
Consumer, Cards and Payments Half year Half year
ended ended
30.06.21 30.06.20
Income statement information GBPm GBPm % Change
============================================== ============== ============== ==============
Net interest income 919 1,176 (22)
Net fee, commission, trading and other income 726 545 33
============================================== ============== ============== ==============
Total income 1,645 1,721 (4)
Credit impairment releases/(charges) 21 (1,299)
============================================== ============== ============== ==============
Net operating income 1,666 422
Operating expenses (1,097) (1,035) (6)
Litigation and conduct (82) (8)
============================================== ============== ============== ==============
Total operating expenses (1,179) (1,043) (13)
Other net income 21 7
============================================== ============== ============== ==============
Profit/(loss) before tax 508 (614)
Attributable profit/(loss) 386 (517)
As at 30.06.21 As at 31.12.20 As at 30.06.20
Balance sheet information GBPbn GBPbn GBPbn
============================================== ============== ============== ==============
Loans and advances at amortised cost 30.9 30.3 33.2
Total assets 63.0 58.2 66.0
Deposits at amortised cost 67.2 65.3 67.3
Risk weighted assets 29.0 30.1 32.9
Half year Half year
ended ended
Key facts 30.06.21 30.06.20
============================================== ============== ============== ==============
30 day arrears rate - Barclaycard US 1.6% 2.4%
US cards customer FICO score distribution
<660 10% 14%
>660 90% 86%
Total number of Barclaycard payments clients c.372,000 c.368,000
Value of payments processed (GBPbn)(1) 160 156
Performance measures
============================================== ============== ============== ==============
Return on average allocated tangible equity 19.1% (21.9)%
Average allocated tangible equity (GBPbn) 4.0 4.7
Cost: income ratio 72% 61%
Loan loss rate (bps) - 714
Half year Half year
ended ended
30.06.21 30.06.20
Analysis of total income GBPm GBPm % Change
====================================== ========= ========= ========
International Cards and Consumer Bank 1,050 1,257 (16)
Private Bank 393 362 9
Unified Payments 202 102 98
====================================== ========= ========= ========
Total income 1,645 1,721 (4)
1 Includes GBP129bn (H120: GBP124bn) of merchant acquiring payments.
Barclays International delivered a RoTE of 16.7% reflecting the
benefits of a diversified business. CIB delivered a RoTE of 16.3%
reflecting a strong performance in Equities and Investment Banking
fees, offset by a decrease in FICC against a very strong H120
comparative. CC&P RoTE improved significantly to 19.1% as a
decline in income, reflecting lower cards balances, was more than
offset by an improvement in impairment.
Income statement - H121 compared to H120
-- Profit before tax increased 136% to GBP3,843m with a RoTE of 16.7%
(H120: 6.2%), reflecting a RoTE of 16.3% (H120: 11.0%) in CIB and
19.1% (H120: (21.9)%) in CC&P
-- The 10% depreciation of average USD against GBP adversely impacted
income and profits and positively impacted total operating expenses
-- Total income decreased to GBP8,218m (H120: GBP8,654m)
- CIB income decreased 5% to GBP6,573m
- Global Markets income decreased 17% to GBP3,808m as a strong
performance in Equities, representing the best ever first
half of the year on a comparable basis(1) , was more than
offset by FICC. Equities income increased 38% to GBP1,709m
driven by derivatives, reflecting strong client activity,
and financing through increased client balances. FICC income
decreased 37% to GBP2,099m due to tighter spreads and the
non-recurrence of H120 client activity levels
- Investment Banking fees income, representing the best ever
first half of the year on a comparable basis(1) , increased
27% to GBP1,732m driven by a strong performance in Equity
capital markets and Advisory reflecting an increase in the
fee pool and an increased market share(2)
- Within Corporate, Transaction banking income decreased 5%
to GBP789m as deposit balance growth was more than offset
by margin compression. Corporate lending income increased
by 42% to GBP244m driven by the non-recurrence of losses on
the mark-to-market of lending and related hedge positions
partially offset by a current year write-off on a single name
- CC&P income decreased 4% to GBP1,645m
- International Cards and Consumer Bank income decreased 16%
to GBP1,050m reflecting lower cards balances
- Private Bank income increased 9% to GBP393m, which included
a gain on a property sale
- Unified Payments income increased 98% to GBP202m driven by
the non-recurrence of a c.GBP100m valuation loss on Barclays'
preference shares in Visa Inc. resulting from the Q220 Supreme
Court ruling concerning charges paid by merchants
-- Credit impairment net release of GBP293m (H120: GBP2,619m charge)
was driven by an improved macroeconomic outlook used in the Q221
scenario refresh
- CIB credit impairment net release of GBP272m (H120: GBP1,320m
charge), supported by a benign credit risk environment and limited
single name wholesale loan charges
- CC&P credit impairment net release of GBP21m (H120: GBP1,299m
charge) partially driven by lower delinquencies and customer
repayments. As at 30 June 2021, 30 and 90 day arrears in US cards
were 1.6% (H120: 2.4%) and 0.9% (H120: 1.4%) respectively
-- Total operating expenses increased 6% to GBP4,690m
- CIB total operating expenses increased 4% to GBP3,511m due to
higher performance costs that reflected an improvement in returns
- CC&P total operating expenses increased 13% to GBP1,179m driven
by the impact of higher investment spend, including marketing,
and customer remediation costs related to a legacy portfolio
Balance sheet - 30 June 2021 compared to 31 December 2020
-- Trading portfolio assets increased GBP19.4bn to GBP147.1bn due
to increased activity
-- Derivative financial instruments assets decreased GBP46.4bn and
liabilities decreased GBP53.5bn to GBP255.4bn and GBP246.9bn respectively,
driven by an increase in major interest rate curves
-- Financial assets at fair value through the income statement increased
GBP19.7bn to GBP190.4bn driven by increased secured lending
-- Cash collateral and settlements balances increased GBP11.0bn to
GBP108.5bn due to increased client activity
-- Deposits at amortised cost increased GBP4.9bn to GBP245.4bn due
to clients increasing liquidity
-- RWAs increased to GBP223.2bn (December 2020: GBP222.3bn) primarily
due to increased client and trading activity within CIB, partially
offset by the depreciation of period end EUR and USD against GBP
1 Period covering Q114 - Q221. Pre 2014 financials were not restated
following re-segmentation in Q116.
2 Data source: Dealogic for the period covering 1 January to 30 June
2021.
Head Office Half year Half year
ended ended
30.06.21 30.06.20
Income statement information GBPm GBPm % Change
========================================== ============== ============== =========
Net interest income (242) (259) 7
Net fee, commission and other income 140 55
========================================== ============== ============== =========
Total income (102) (204) 50
Credit impairment releases/(charges) 6 (55)
========================================== ============== ============== =========
Net operating income (96) (259) 63
Operating expenses (412) (117)
Litigation and conduct 7 (8)
========================================== ============== ============== =========
Total operating expenses (405) (125)
Other net income/(expenses) 131 (41)
========================================== ============== ============== =========
Loss before tax (370) (425) 13
Attributable profit/(loss) 95 (354)
As at
As at 30.06.21 As at 31.12.20 30.06.20
Balance sheet information GBPbn GBPbn GBPbn
========================================== ============== ============== =========
Total assets 18.3 18.6 21.7
Risk weighted assets 11.1 10.2 9.9
Period end allocated tangible equity 5.9 6.8 7.4
Half year Half year
ended ended
Performance measures 30.06.21 30.06.20
========================================== ============== ============== =========
Average allocated tangible equity (GBPbn) 4.3 6.0
Income statement - H121 compared to H120
-- Loss before tax was GBP370m (H120: GBP425m)
-- Total income was an expense of GBP102m (H120: GBP204m), which primarily
reflected hedge accounting, funding costs on legacy capital instruments
and treasury items, partially offset by mark-to-market gains on
legacy investments
-- Credit impairment net release of GBP6m (H120: GBP55m charge) was
driven by an improved macroeconomic outlook used in the Q221 scenario
refresh, resulting in a provision release for the Italian home
loan portfolio
-- Total operating expenses were GBP405m (H120: GBP125m), which included
a charge of GBP266m relating to structural cost actions taken as
part of the real estate review
-- Other net income was GBP131m (H120: GBP41m expense) driven by a
fair value gain in Barclays' associate investment holding in the
Business Growth Fund
Balance sheet - 30 June 2021 compared to 31 December 2020
-- RWAs were GBP11.1bn (December 2020: GBP10.2bn)
Quarterly Results Summary
Barclays Group
Q221 Q121 Q420 Q320 Q220 Q120 Q419 Q319
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
======================================== ======= ======= ======= ======= ======= ======= ======= =======
Net interest income 2,052 1,851 1,845 2,055 1,892 2,331 2,344 2,445
Net fee, commission and other
income 3,363 4,049 3,096 3,149 3,446 3,952 2,957 3,096
======================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income 5,415 5,900 4,941 5,204 5,338 6,283 5,301 5,541
Credit impairment releases/(charges) 797 (55) (492) (608) (1,623) (2,115) (523) (461)
======================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 6,212 5,845 4,449 4,596 3,715 4,168 4,778 5,080
Operating costs (3,587) (3,545) (3,480) (3,391) (3,310) (3,253) (3,308) (3,293)
UK bank levy - - (299) - - - (226) -
Litigation and conduct (66) (33) (47) (76) (20) (10) (167) (1,568)
======================================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (3,653) (3,578) (3,826) (3,467) (3,330) (3,263) (3,701) (4,861)
Other net income/(expenses) 21 132 23 18 (26) 8 20 27
======================================== ======= ======= ======= ======= ======= ======= ======= =======
Profit before tax 2,580 2,399 646 1,147 359 913 1,097 246
Tax charge (263) (496) (163) (328) (42) (71) (189) (269)
======================================== ======= ======= ======= ======= ======= ======= ======= =======
Profit/(loss) after tax 2,317 1,903 483 819 317 842 908 (23)
Non-controlling interests (15) (4) (37) (4) (21) (16) (42) (4)
Other equity instrument holders (194) (195) (226) (204) (206) (221) (185) (265)
======================================== ======= ======= ======= ======= ======= ======= ======= =======
Attributable profit/(loss) 2,108 1,704 220 611 90 605 681 (292)
Performance measures
======================================== ======= ======= ======= ======= ======= ======= ======= =======
Return on average tangible
shareholders' equity 18.1% 14.7% 1.8% 5.1% 0.7% 5.1% 5.9% (2.4)%
Average tangible shareholders'
equity (GBPbn) 46.5 46.5 47.6 48.3 50.2 47.0 46.4 48.4
Cost: income ratio 67% 61% 77% 67% 62% 52% 70% 88%
Loan loss rate (bps) - 6 56 69 179 223 60 52
Basic earnings/(loss) per share 12.3p 9.9p 1.3p 3.5p 0.5p 3.5p 3.9p (1.7)p
Basic weighted average number
of shares (m) 17,140 17,293 17,300 17,298 17,294 17,278 17,200 17,192
Period end number of shares
(m) 16,998 17,223 17,359 17,353 17,345 17,332 17,322 17,269
Balance sheet and capital management(1) GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
======================================== ======= ======= ======= ======= ======= ======= ======= =======
Loans and advances at amortised
cost 348.5 345.8 342.6 344.4 354.9 374.1 339.1 345.1
Loans and advances at amortised
cost impairment coverage ratio 1.8% 2.2% 2.4% 2.5% 2.5% 2.1% 1.8% 1.9%
Total assets 1,376.3 1,379.7 1,349.5 1,421.7 1,385.1 1,444.3 1,140.2 1,290.4
Deposits at amortised cost 500.9 498.8 481.0 494.6 466.9 470.7 415.8 420.6
Tangible net asset value per
share 281p 267p 269p 275p 284p 284p 262p 274p
Common equity tier 1 ratio 15.1% 14.6% 15.1% 14.6% 14.2% 13.1% 13.8% 13.4%
Common equity tier 1 capital 46.2 45.9 46.3 45.5 45.4 42.5 40.8 41.9
Risk weighted assets 306.4 313.4 306.2 310.7 319.0 325.6 295.1 313.3
Average UK leverage ratio 4.8% 4.9% 5.0% 5.1% 4.7% 4.5% 4.5% 4.6%
Average UK leverage exposure 1,192.0 1,174.9 1,146.9 1,111.1 1,148.7 1,176.2 1,142.8 1,171.2
UK leverage ratio 5.0% 5.0% 5.3% 5.2% 5.2% 4.5% 5.1% 4.8%
UK leverage exposure 1,153.6 1,145.4 1,090.9 1,095.1 1,071.1 1,178.7 1,007.7 1,099.8
Funding and liquidity
======================================== ======= ======= ======= ======= ======= ======= ======= =======
Group liquidity pool (GBPbn) 291 290 266 327 298 237 211 226
Liquidity coverage ratio 162% 161% 162% 181% 186% 155% 160% 151%
Loan: deposit ratio 70% 69% 71% 70% 76% 79% 82% 82%
1 Refer to pages 54 to 60 for further information on how capital,
RWAs and leverage are calculated.
Quarterly Results by Business
Barclays UK
Q221 Q121 Q420 Q320 Q220 Q120 Q419 Q319
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net interest income 1,305 1,281 1,317 1,280 1,225 1,412 1,478 1,503
Net fee, commission and other
income 318 295 309 270 242 292 481 343
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income 1,623 1,576 1,626 1,550 1,467 1,704 1,959 1,846
Credit impairment releases/(charges) 520 (77) (170) (233) (583) (481) (190) (101)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 2,143 1,499 1,456 1,317 884 1,223 1,769 1,745
Operating costs (1,078) (1,036) (1,134) (1,095) (1,018) (1,023) (1,023) (952)
UK bank levy - - (50) - - - (41) -
Litigation and conduct (19) (3) 4 (25) (6) (5) (58) (1,480)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (1,097) (1,039) (1,180) (1,120) (1,024) (1,028) (1,122) (2,432)
Other net income/(expenses) - - 6 (1) 13 - - -
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Profit/(loss) before tax 1,046 460 282 196 (127) 195 647 (687)
Attributable profit/(loss) 721 298 160 113 (123) 175 438 (907)
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Loans and advances to customers
at amortised cost 207.8 205.7 205.4 203.9 202.0 195.7 193.7 193.2
Total assets 311.2 309.1 289.1 294.5 287.6 267.5 257.8 257.9
Customer deposits at amortised
cost 255.5 247.5 240.5 232.0 225.7 207.5 205.5 203.3
Loan: deposit ratio 87% 88% 89% 91% 92% 96% 96% 97%
Risk weighted assets 72.2 72.7 73.7 76.2 77.9 77.7 74.9 76.8
Period end allocated tangible
equity 9.9 10.0 9.7 10.0 10.3 10.3 10.3 10.4
Performance measures
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Return on average allocated
tangible equity 29.1% 12.0% 6.5% 4.5% (4.8)% 6.9% 17.0% (34.9)%
Average allocated tangible
equity (GBPbn) 9.9 9.9 9.8 10.1 10.3 10.1 10.3 10.4
Cost: income ratio 68% 66% 73% 72% 70% 60% 57% 132%
Loan loss rate (bps) - 14 31 43 111 96 38 20
Net interest margin 2.55% 2.54% 2.56% 2.51% 2.48% 2.91% 3.03% 3.10%
Analysis of Barclays UK Q221 Q121 Q420 Q320 Q220 Q120 Q419 Q319
Analysis of total income GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=========================================== ===== ===== ===== ===== ===== ===== ===== =====
Personal Banking 987 923 895 833 826 968 1,064 1,035
Barclaycard Consumer UK 290 315 354 362 367 436 533 472
Business Banking 346 338 377 355 274 300 362 339
=========================================== ===== ===== ===== ===== ===== ===== ===== =====
Total income 1,623 1,576 1,626 1,550 1,467 1,704 1,959 1,846
Analysis of credit impairment
releases/(charges)
=========================================== ===== ===== ===== ===== ===== ===== ===== =====
Personal Banking 72 (22) (68) (48) (130) (134) (71) (36)
Barclaycard Consumer UK 434 (36) (78) (106) (396) (301) (108) (49)
Business Banking 14 (19) (24) (79) (57) (46) (11) (16)
=========================================== ===== ===== ===== ===== ===== ===== ===== =====
Total credit impairment releases/(charges) 520 (77) (170) (233) (583) (481) (190) (101)
Analysis of loans and advances
to customers at amortised cost GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
=========================================== ===== ===== ===== ===== ===== ===== ===== =====
Personal Banking 162.4 160.4 157.3 155.7 154.9 153.4 151.9 150.1
Barclaycard Consumer UK 8.8 8.7 9.9 10.7 11.5 13.6 14.7 14.9
Business Banking 36.6 36.6 38.2 37.5 35.6 28.7 27.1 28.2
=========================================== ===== ===== ===== ===== ===== ===== ===== =====
Total loans and advances to
customers at amortised cost 207.8 205.7 205.4 203.9 202.0 195.7 193.7 193.2
Analysis of customer deposits
at amortised cost
=========================================== ===== ===== ===== ===== ===== ===== ===== =====
Personal Banking 191.0 186.0 179.7 173.2 169.6 161.4 159.2 157.9
Barclaycard Consumer UK 0.1 0.1 0.1 0.1 0.1 - - -
Business Banking 64.4 61.4 60.7 58.7 56.0 46.1 46.3 45.4
=========================================== ===== ===== ===== ===== ===== ===== ===== =====
Total customer deposits at
amortised cost 255.5 247.5 240.5 232.0 225.7 207.5 205.5 203.3
Barclays International
Q221 Q121 Q420 Q320 Q220 Q120 Q419 Q319
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net interest income 811 748 614 823 847 998 965 1,059
Net trading income 1,455 1,934 1,372 1,528 1,660 2,360 929 1,110
Net fee, commission and other
income 1,553 1,717 1,500 1,430 1,503 1,286 1,558 1,581
------------------------------------- ======= ------- ------- ------- ======= ------- ------- -------
Total income 3,819 4,399 3,486 3,781 4,010 4,644 3,452 3,750
Credit impairment releases/(charges) 271 22 (291) (370) (1,010) (1,609) (329) (352)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 4,090 4,421 3,195 3,411 3,000 3,035 3,123 3,398
Operating costs (2,168) (2,438) (2,133) (2,227) (2,186) (2,219) (2,240) (2,282)
UK bank levy - - (240) - - - (174) -
Litigation and conduct (63) (21) (9) (28) (11) - (86) -
------------------------------------- ======= ------- ------- ------- ======= ------- ------- -------
Total operating expenses (2,231) (2,459) (2,382) (2,255) (2,197) (2,219) (2,500) (2,282)
Other net income 13 9 9 9 4 6 17 21
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Profit before tax 1,872 1,971 822 1,165 807 822 640 1,137
Attributable profit 1,267 1,431 441 782 468 529 397 799
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Loans and advances at amortised
cost 121.9 123.5 122.7 128.0 138.1 167.0 132.8 138.1
Trading portfolio assets 147.1 131.1 127.7 122.3 109.5 101.6 113.3 119.4
Derivative financial instrument
assets 255.4 269.4 301.8 295.9 306.8 341.5 228.9 286.0
Financial assets at fair value
through the income statement 190.4 197.5 170.7 178.2 154.3 188.4 128.4 158.0
Cash collateral and settlement
balances 108.5 109.7 97.5 121.8 130.8 153.2 79.4 112.5
Other assets 223.5 221.7 221.4 261.7 236.3 201.5 178.6 195.6
------------------------------------- ======= ------- ------- ------- ======= ------- ------- -------
Total assets 1,046.8 1,052.9 1,041.8 1,107.9 1,075.8 1,153.2 861.4 1,009.6
Deposits at amortised cost 245.4 251.2 240.5 262.4 241.2 263.3 210.0 217.6
Derivative financial instrument
liabilities 246.9 260.2 300.4 293.3 307.6 338.8 228.9 283.3
Loan: deposit ratio 50% 49% 51% 49% 57% 63% 63% 63%
Risk weighted assets 223.2 230.0 222.3 224.7 231.2 237.9 209.2 223.1
Period end allocated tangible
equity 31.8 32.7 30.2 30.5 31.6 33.1 29.6 31.4
Performance measures
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Return on average allocated
tangible equity 15.6% 17.7% 5.8% 10.2% 5.6% 6.8% 5.1% 9.9%
Average allocated tangible
equity (GBPbn) 32.4 32.3 30.5 30.6 33.5 31.2 30.9 32.2
Cost: income ratio 58% 56% 68% 60% 55% 48% 72% 61%
Loan loss rate (bps) - (7) 90 112 284 377 96 99
Net interest margin 3.96% 3.92% 3.41% 3.79% 3.43% 3.93% 4.29% 4.10%
Analysis of Barclays International
Corporate and Investment Bank Q221 Q121 Q420 Q320 Q220 Q120 Q419 Q319
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net interest income 370 270 110 305 334 335 248 339
Net trading income 1,494 1,917 1,397 1,535 1,812 2,231 951 1,126
Net fee, commission and other
income 1,115 1,407 1,131 1,065 1,170 1,051 1,115 1,152
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total income 2,979 3,594 2,638 2,905 3,316 3,617 2,314 2,617
Credit impairment releases/(charges) 229 43 (52) (187) (596) (724) (30) (31)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Net operating income 3,208 3,637 2,586 2,718 2,720 2,893 2,284 2,586
Operating costs (1,623) (1,886) (1,603) (1,716) (1,680) (1,690) (1,691) (1,712)
UK bank levy - - (226) - - - (156) -
Litigation and conduct (1) (1) 2 (3) (3) - (79) (4)
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total operating expenses (1,624) (1,887) (1,827) (1,719) (1,683) (1,690) (1,926) (1,716)
Other net income - 1 2 1 3 - 1 12
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Profit before tax 1,584 1,751 761 1,000 1,040 1,203 359 882
Attributable profit 1,049 1,263 413 627 694 820 193 609
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Loans and advances at amortised
cost 91.0 94.3 92.4 96.8 104.9 128.2 92.0 95.8
Trading portfolio assets 147.0 130.9 127.5 122.2 109.3 101.5 113.3 119.3
Derivative financial instruments
assets 255.3 269.4 301.7 295.9 306.7 341.4 228.8 286.0
Financial assets at fair value
through the income statement 190.3 197.3 170.4 177.9 153.7 187.8 127.7 157.3
Cash collateral and settlement
balances 107.7 108.8 96.7 121.0 129.7 152.2 78.5 111.6
Other assets 192.5 190.8 194.9 228.9 205.5 171.4 155.3 171.5
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Total assets 983.8 991.5 983.6 1,042.7 1,009.8 1,082.5 795.6 941.5
Deposits at amortised cost 178.2 185.2 175.2 195.6 173.9 198.4 146.2 152.1
Derivative financial instrument
liabilities 246.8 260.2 300.3 293.2 307.6 338.7 228.9 283.2
Risk weighted assets 194.3 201.3 192.2 193.3 198.3 201.7 171.5 184.9
Performance measures
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Return on average allocated
tangible equity 14.8% 17.9% 6.3% 9.5% 9.6% 12.5% 3.0% 9.1%
Average allocated tangible
equity (GBPbn) 28.4 28.2 26.3 26.4 29.0 26.2 25.8 26.9
Cost: income ratio 55% 53% 69% 59% 51% 47% 83% 66%
Analysis of total income GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================================== ======= ======= ======= ======= ======= ======= ======= =======
FICC 895 1,204 812 1,000 1,468 1,858 726 816
Equities 777 932 542 691 674 564 409 494
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Global Markets (1) 1,672 2,136 1,354 1,691 2,142 2,422 1,135 1,310
Advisory 218 163 232 90 84 155 202 221
Equity capital markets 226 243 104 122 185 62 56 86
Debt capital markets 429 453 418 398 463 418 322 381
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Investment Banking fees(1) 873 859 754 610 732 635 580 688
Corporate lending 38 206 186 232 61 111 202 195
Transaction banking 396 393 344 372 381 449 397 424
===================================== ======= ======= ======= ======= ======= ======= ======= =======
Corporate 434 599 530 604 442 560 599 619
=======
Total income 2,979 3,594 2,638 2,905 3,316 3,617 2,314 2,617
1 Previously labelled as "Markets" and "Banking fees".
Analysis of Barclays International
Consumer, Cards and Payments Q221 Q121 Q420 Q320 Q220 Q120 Q419 Q319
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================================== ===== ===== ===== ===== ======= ======= ===== =====
Net interest income 441 478 504 518 513 663 717 720
Net fee, commission, trading
and other income 399 327 344 358 181 364 421 413
===================================== ===== ===== ===== ===== ======= ======= ===== =====
Total income 840 805 848 876 694 1,027 1,138 1,133
Credit impairment releases/(charges) 42 (21) (239) (183) (414) (885) (299) (321)
===================================== ===== ===== ===== ===== ======= ======= ===== =====
Net operating income 882 784 609 693 280 142 839 812
Operating costs (545) (552) (530) (511) (506) (529) (549) (570)
UK bank levy - - (14) - - - (18) -
Litigation and conduct (62) (20) (11) (25) (8) - (7) 4
===================================== ===== ===== ===== ===== ======= ======= ===== =====
Total operating expenses (607) (572) (555) (536) (514) (529) (574) (566)
Other net income 13 8 7 8 1 6 16 9
===================================== ===== ===== ===== ===== ======= ======= ===== =====
Profit/(loss) before tax 288 220 61 165 (233) (381) 281 255
Attributable profit/(loss) 218 168 28 155 (226) (291) 204 190
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
===================================== ===== ===== ===== ===== ======= ======= ===== =====
Loans and advances at amortised
cost 30.9 29.2 30.3 31.2 33.2 38.8 40.8 42.3
Total assets 63.0 61.4 58.2 65.2 66.0 70.7 65.8 68.1
Deposits at amortised cost 67.2 66.0 65.3 66.8 67.3 64.9 63.8 65.5
Risk weighted assets 29.0 28.8 30.1 31.4 32.9 36.2 37.7 38.2
Performance measures
===================================== ===== ===== ===== ===== ======= ======= ===== =====
Return on average allocated
tangible equity 21.8% 16.5% 2.7% 14.7% (20.2)% (23.5)% 15.9% 14.2%
Average allocated tangible
equity (GBPbn) 4.0 4.1 4.2 4.2 4.5 5.0 5.1 5.3
Cost: income ratio 72% 71% 65% 61% 74% 52% 50% 50%
Loan loss rate (bps) - 27 286 211 455 846 273 283
Head Office
Q221 Q121 Q420 Q320 Q220 Q120 Q419 Q319
Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
===================================== ===== ===== ===== ===== ===== ===== ===== =====
Net interest income (64) (178) (86) (48) (180) (79) (99) (117)
Net fee, commission and other
income 37 103 (85) (79) 41 14 (11) 62
===================================== ===== ===== ===== ===== ===== ===== ===== =====
Total income (27) (75) (171) (127) (139) (65) (110) (55)
Credit impairment releases/(charges) 6 - (31) (5) (30) (25) (4) (8)
===================================== ===== ===== ===== ===== ===== ===== ===== =====
Net operating expenses (21) (75) (202) (132) (169) (90) (114) (63)
Operating costs (341) (71) (213) (69) (106) (11) (45) (59)
UK bank levy - - (9) - - - (11) -
Litigation and conduct 16 (9) (42) (23) (3) (5) (23) (88)
===================================== ===== ===== ===== ===== ===== ===== ===== =====
Total operating expenses (325) (80) (264) (92) (109) (16) (79) (147)
Other net income/(expenses) 8 123 8 10 (43) 2 3 6
===================================== ===== ===== ===== ===== ===== ===== ===== =====
Loss before tax (338) (32) (458) (214) (321) (104) (190) (204)
Attributable profit/(loss) 120 (25) (381) (284) (255) (99) (154) (184)
Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
===================================== ===== ===== ===== ===== ===== ===== ===== =====
Total assets 18.3 17.7 18.6 19.3 21.7 23.6 21.0 22.9
Risk weighted assets 11.1 10.7 10.2 9.8 9.9 10.0 11.0 13.4
Period end allocated tangible
equity 5.9 3.3 6.8 7.1 7.4 6.0 5.6 5.5
Performance measures
===================================== ===== ===== ===== ===== ===== ===== ===== =====
Average allocated tangible
equity (GBPbn) 4.2 4.3 7.3 7.6 6.4 5.6 5.2 5.8
Performance Management
Margins and balances
Half year ended 30.06.21 Half year ended 30.06.20
===================================== =====================================
Average Average
Net interest customer Net interest Net interest customer Net interest
income assets margin income assets margin
GBPm GBPm % GBPm GBPm %
=============================== ============ ========= ============ ============ ========= ============
Barclays UK 2,586 204,930 2.54 2,637 197,023 2.69
Barclays International(1,2) 1,518 77,413 3.95 1,848 101,286 3.67
=============================== ============ ========= ============ ============ ========= ============
Total Barclays UK and Barclays
International 4,104 282,343 2.93 4,485 298,309 3.02
Other(3) (201) (262)
=============================== ============ ========= ============ ============ ========= ============
Total Barclays Group 3,903 4,223
1 Barclays International margins include IEL balances within the
investment banking business.
2 Barclays amended the presentation of the premium paid for purchased
financial guarantees which are embedded in notes it issues directly
to the market in Q420 from net investment income to interest expense
within net interest income. Had the equivalent H120 interest expense
been recognised in net interest income, the Barclays International
and Total Barclays UK and Barclays International NIMs would have
been 3.57% and 2.99% respectively.
3 Other includes Head Office and non-lending related investment banking
businesses not included in Barclays International margins.
The Group's combined product and equity structural hedge
notional as at 30 June 2021 was GBP198bn (June 2020: GBP174bn),
with an average duration of close to 3 years (2020: average
duration 2.5 to 3 years). Group net interest income includes gross
structural hedge contributions of GBP689m (H120: GBP866m) and net
structural hedge contributions of GBP592m (H120: GBP555m). Gross
structural hedge contributions represent the absolute level of
interest earned from the fixed receipts on the basket of swaps in
the structural hedge, while the net structural hedge contributions
represent the net interest earned on the difference between the
structural hedge rate and prevailing floating rates.
The Group net interest margin decreased 9bps to 2.93%. Barclays
UK net interest margin decreased 15bps to 2.54% reflecting lower
unsecured lending balances and lower UK rates, partially offset by
strong mortgage retention at improved margins. Average customer
assets increased due to growth from government scheme lending and
strong mortgage growth. Barclays International net interest margin
increased 28bps to 3.95% driven by changes in product mix and lower
average customer assets.
Quarterly analysis for Barclays UK and Barclays Average
International Net interest customer Net interest
income assets margin
Three months ended 30.06.21 GBPm GBPm %
================================================ ============ ========= ============
Barclays UK 1,305 205,168 2.55
Barclays International(1) 763 77,330 3.96
================================================ ============ ========= ============
Total Barclays UK and Barclays International 2,068 282,498 2.94
Three months ended 31.03.21
================================================ ============ ========= ============
Barclays UK 1,281 204,663 2.54
Barclays International(1) 755 78,230 3.92
================================================ ============ ========= ============
Total Barclays UK and Barclays International 2,036 282,893 2.92
Three months ended 31.12.20
================================================ ============ ========= ============
Barclays UK 1,317 204,315 2.56
Barclays International(1,2) 696 81,312 3.41
================================================ ============ ========= ============
Total Barclays UK and Barclays International 2,013 285,627 2.80
Three months ended 30.09.20
================================================ ============ ========= ============
Barclays UK 1,280 203,089 2.51
Barclays International(1,2) 838 88,032 3.79
================================================ ============ ========= ============
Total Barclays UK and Barclays International 2,118 291,121 2.89
Three months ended 30.06.20
================================================ ============ ========= ============
Barclays UK 1,225 199,039 2.48
Barclays International(1,2) 868 101,706 3.43
================================================ ============ ========= ============
Total Barclays UK and Barclays International 2,093 300,745 2.80
1 Barclays International margins include IEL balances within the
investment banking business.
2 The reclassification of expense of the premium paid for purchased
financial guarantees from net investment income to net interest
income was recognised in full in Q420 and resulted in a 0.48% reduction
on the Q420 Barclays International NIM and 0.14% reduction on the
Q420 Total Barclays UK and Barclays International NIM. Had the
equivalent impact been reflected in the respective quarters, the
Barclays International NIM would have been 3.33% in Q220, 3.68%
in Q320 and 3.77% in Q420. Total Barclays UK and Barclays International
NIMs would have been 2.77% in Q220, 2.86% in Q320 and 2.91% in
Q420 respectively.
Risk Management
Risk management and principal risks
The roles and responsibilities of the business groups, Risk and
Compliance, in the management of risk in the Group are defined in
the Enterprise Risk Management Framework. The purpose of the
framework is to identify the principal risks of the Group, the
process by which the Group sets its appetite for these risks in its
business activities, and the consequent limits which it places on
related risk taking.
The framework identifies eight principal risks: credit risk,
market risk, treasury and capital risk, operational risk, model
risk, conduct risk, reputation risk and legal risk. Further detail
on these risks and how they are managed is available in the
Barclays PLC Annual Report 2020 (pages 145 to 166) or online at
home.barclays/annualreport .
Material existing and emerging risks
There have been no significant changes to these principal risks
or previously identified material existing and emerging risks in
the period other than an update to the risk relating to the impact
of benchmark interest rates on the Group as a result of
developments relating to benchmark reform, as set out below.
Impact of benchmark interest rate reforms on the Group
For several years, global regulators and central banks have been
driving international efforts to reform key benchmark interest
rates and indices, such as the London Interbank Offered Rate
(LIBOR), which are used to determine the amounts payable under a
wide range of transactions and make them more reliable and robust.
This has resulted in significant changes to the methodology and
operation of certain benchmarks and indices, the adoption of
alternative 'risk-free' reference rates (RFRs) and the proposed
discontinuation of certain reference rates (including LIBOR), with
further changes anticipated, including UK, EU and US legislative
proposals to deal with 'tough legacy' contracts that cannot convert
into or cannot add fall-back RFRs. The consequences of reform are
unpredictable and may have an adverse impact on any financial
instruments linked to, or referencing, any of these benchmark
interest rates.
Uncertainty as to the nature of such potential changes, the
availability and/or suitability of alternative RFRs, the
participation of customers and third-party market participants in
the transition process and associated challenges with respect to
required documentation changes, and other reforms may adversely
affect a broad range of transactions (including any securities,
loans and derivatives which use LIBOR to determine the amount of
interest payable that are included in the Group's financial assets
and liabilities) that use these reference rates and indices and
introduce a number of risks for the Group, including, but not
limited to:
-- Conduct risk: in undertaking actions to transition away from using
certain reference rates (such as LIBOR) to new alternative RFRs,
the Group faces conduct risks. These may lead to customer complaints,
regulatory sanctions or reputational impact if the Group is considered
to be (among other things) (i) undertaking market activities that
are manipulative or create a false or misleading impression, (ii)
misusing sensitive information or not identifying or appropriately
managing or mitigating conflicts of interest, (iii) providing customers
with inadequate advice, misleading information, unsuitable products
or unacceptable service, (iv) not taking a consistent approach to
remediation for customers in similar circumstances, (v) unduly delaying
the communication and migration activities in relation to client
exposure, leaving them insufficient time to prepare, or (vi) colluding
or inappropriately sharing information with competitors
-- Litigation risk: members of the Group may face legal proceedings,
regulatory investigations and/or other actions or proceedings regarding
(among other things) (i) the conduct risks identified above, (ii)
the interpretation and enforceability of provisions in LIBOR-based
contracts, and (iii) the Group's preparation and readiness for the
replacement of LIBOR with alternative RFRs
-- Financial risk: the valuation of certain of the Group's financial
assets and liabilities may change. Moreover, transitioning to alternative
RFRs may impact the ability of members of the Group to calculate
and model amounts receivable by them on certain financial assets
and determine the amounts payable on certain financial liabilities
(such as debt securities issued by them) because currently alternative
RFRs (such as the Sterling Overnight Index Average (SONIA) and the
Secured Overnight Financing Rate (SOFR)) are look-back rates whereas
term rates (such as LIBOR) allow borrowers to calculate at the start
of any interest period exactly how much is payable at the end of
such interest period. This may have a material adverse effect on
the Group's cash flows
-- Pricing risk: changes to existing reference rates and indices,
discontinuation of any reference rate or indices and transition
to alternative RFRs may impact the pricing mechanisms used by the
Group on certain transactions
-- Operational risk: changes to existing reference rates and indices,
discontinuation of any reference rate or index and transition to
alternative RFRs may require changes to the Group's IT systems,
trade reporting infrastructure, operational processes, and controls.
In addition, if any reference rate or index (such as LIBOR) is no
longer available to calculate amounts payable, the Group may incur
additional expenses in amending documentation for new and existing
transactions and/or effecting the transition from the original reference
rate or index to a new reference rate or index
-- Accounting risk: an inability to apply hedge accounting in accordance
with IAS 39 could lead to increased volatility in the Group's financial
results and performance
Any of these factors may have a material adverse effect on the
Group's business, results of operations, financial condition and
prospects.
For further details on the impacts of benchmark interest rate
reforms on the Group, see Note 41 to Barclays PLC's audited
financial statements for the year ended 31 December 2020 and Note
23.
Credit Risk
Loans and advances at amortised cost by stage
The table below presents an analysis of loans and advances at
amortised cost by gross exposure, impairment allowance, impairment
charge and coverage ratio by stage allocation and business segment
as at 30 June 2021. Also included are off-balance sheet loan
commitments and financial guarantee contracts by gross exposure,
impairment allowance and coverage ratio by stage allocation as at
30 June 2021.
Impairment allowance under IFRS 9 considers both the drawn and
the undrawn counterparty exposure. For retail portfolios, the total
impairment allowance is allocated to the drawn exposure to the
extent that the allowance does not exceed the exposure, as ECL is
not reported separately. Any excess is reported on the liability
side of the balance sheet as a provision. For wholesale portfolios,
the impairment allowance on the undrawn exposure is reported on the
liability side of the balance sheet as a provision.
Gross exposure Impairment allowance
=============================== ===============================
Stage Stage Stage Stage Stage Stage
1 2 3 Total 1 2 3 Total Net exposure
As at 30.06.21 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
========================== ======= ====== ===== ======= ======== ======= ===== ===== ============
Barclays UK 158,587 23,576 2,715 184,878 313 1,035 944 2,292 182,586
Barclays International 23,286 2,886 1,760 27,932 575 781 1,004 2,360 25,572
Head Office 4,003 502 760 5,265 3 39 358 400 4,865
========================== ======= ====== ===== ======= ======== ======= ===== ===== ============
Total Barclays Group
retail 185,876 26,964 5,235 218,075 891 1,855 2,306 5,052 213,023
========================== ======= ====== ===== ======= ======== ======= ===== ===== ============
Barclays UK 36,069 1,727 1,081 38,877 63 49 89 201 38,676
Barclays International 82,515 13,617 1,425 97,557 231 329 673 1,233 96,324
Head Office 5223 32 557 - - 31 31 526
========================== ======= ===== ===== ======= ======== ======= ===== ===== ============
Total Barclays Group
wholesale(1) 119,106 15,347 2,538 136,991 294 378 793 1,465 135,526
========================== ======= ====== ===== ======= ======== ======= ===== ===== ============
Total loans and advances
at amortised cost 304,982 42,311 7,773 355,066 1,185 2,233 3,099 6,517 348,549
========================== ======= ====== ===== ======= ======== ======= ===== ===== ============
Off-balance sheet
loan commitments
and financial guarantee
contracts(2) 298,150 45,696 664 344,510 228 436 49 713 343,797
========================== ======= ====== ===== ======= ======== ======= ===== ===== ============
Total(3) 603,132 88,007 8,437 699,576 1,413 2,669 3,148 7,230 692,346
As at 30.06.21 Half year ended 30.06.21
=============================== ===============================
Loan impairment release
Coverage ratio and loan loss rate
=============================== ===============================
Stage Stage Stage Loan impairment Loan loss
1 2 3 Total release rate
%% %% GBPm bps
========================== ======= ===== ===== ======
Barclays UK 0.2 4.4 34.8 1.2 (259) -
Barclays International 2.5 27.1 57.0 8.4 (19) -
Head Office 0.1 7.8 47.1 7.6 (6) -
========================== ======= ====== ===== ======= ======== ======= ===== =====
Total Barclays Group
retail 0.5 6.9 44.0 2.3 (284) -
-------------------------- ------- ------ ----- ------- -------- ------- ----- -----
Barclays UK 0.2 2.8 8.2 0.5 (23) -
Barclays International 0.3 2.4 47.2 1.3 (75) -
Head Office -- 96.9 5.6 - -
========================== ======= ===== ===== ======= ======== ======= ===== =====
Total Barclays Group
wholesale (1) 0.2 2.5 31.2 1.1 (98) -
========================== ======= ====== ===== ======= ======== ======= ===== =====
Total loans and advances
at amortised cost 0.4 5.3 39.9 1.8 (382) -
========================== ======= ====== ===== ======= ======== ======= ===== =====
Off-balance sheet
loan commitments
and financial guarantee
contracts(2) 0.1 1.0 7.4 0.2 (343)
Other financial assets
subject to impairment(3) (17)
========================== ======= ====== ===== ======= =======
Total 0.2 3.0 37.3 1.0 (742)
1 Includes Wealth and Private Banking exposures measured on an individual
basis, and excludes Business Banking exposures that are managed
on a collective basis. The net impact is a difference in total
exposure of GBP7,796m of balances reported as wholesale loans on
page 29 in the Loans and advances at amortised cost by product
disclosure.
2 Excludes loan commitments and financial guarantees of GBP21bn carried
at fair value.
3 Other financial assets subject to impairment not included in the
table above include cash collateral and settlement balances, financial
assets at fair value through other comprehensive income and other
assets. These have a total gross exposure of GBP186.0bn and impairment
allowance of GBP114m. This comprises GBP9m ECL on GBP185.8bn Stage
1 assets, GBP3m on GBP58m Stage 2 fair value through other comprehensive
income assets, cash collateral and settlement balances and GBP102m
on GBP109m Stage 3 other assets.
Gross exposure Impairment allowance
================================= ===============================
Stage Stage Stage Stage Stage Stage
1 2 3 Total 1 2 3 Total Net exposure
As at 31.12.20 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
========================== ======= ======= ====== ======= ======== ======= ===== ===== ============
Barclays UK 153,250 23,896 2,732 179,878 332 1,509 1,147 2,988 176,890
Barclays International(1) 21,048 5,500 1,992 28,540 396 1,329 1,205 2,930 25,610
Head Office 4,267 720 844 5,831 4 51 380 435 5,396
========================== ======= ======= ====== ======= ======== ======= ===== ===== ============
Total Barclays Group
retail 178,565 30,116 5,568 214,249 732 2,889 2,732 6,353 207,896
========================== ======= ======= ====== ======= ======== ======= ===== ===== ============
Barclays UK 31,918 4,325 1,126 37,369 13 129 116 258 37,111
Barclays International(1) 79,911 16,565 2,270 98,746 288 546 859 1,693 97,053
Head Office 570- 33 603 - - 31 31 572
========================== ======= ====== ====== ======= ======== ======= ===== ===== ============
Total Barclays Group
wholesale(2) 112,399 20,890 3,429 136,718 301 675 1,006 1,982 134,736
========================== ======= ======= ====== ======= ======== ======= ===== ===== ============
Total loans and advances
at amortised cost 290,964 51,006 8,997 350,967 1,033 3,564 3,738 8,335 342,632
========================== ======= ======= ====== ======= ======== ======= ===== ===== ============
Off-balance sheet
loan commitments
and financial guarantee
contracts(3) 289,939 52,891 2,330 345,160 256 758 50 1,064 344,096
========================== ======= ======= ====== ======= ======== ======= ===== ===== ============
Total(4) 580,903 103,897 11,327 696,127 1,289 4,322 3,788 9,399 686,728
As at 31.12.20 Year ended 31.12.20
================================= ===============================
Loan impairment charge
Coverage ratio and loan loss rate(5)
================================= ===============================
Stage Stage Stage Loan impairment Loan loss
1 2 3 Total charge rate
%% %% GBPm bps
========================== ======= ====== ====== ======
Barclays UK 0.2 6.3 42.0 1.7 1,070 59
Barclays International(1) 1.9 24.2 60.5 10.3 1,680 589
Head Office 0.1 7.1 45.0 7.5 91 156
========================== ======= ======= ====== ======= ======== ======= ===== =====
Total Barclays Group
retail 0.4 9.6 49.1 3.0 2,841 133
========================== ======= ======= ====== ======= ======== ======= ===== =====
Barclays UK - 3.0 10.3 0.7 154 41
Barclays International(1) 0.4 3.3 37.8 1.7 914 93
Head Office -- 93.9 5.1 - -
========================== ======= ====== ====== ======= ======== ======= ===== =====
Total Barclays Group
wholesale(2) 0.3 3.2 29.3 1.4 1,068 78
========================== ======= ======= ====== ======= ======== ======= ===== =====
Total loans and advances
at amortised cost 0.4 7.0 41.5 2.4 3,909 111
========================== ======= ======= ====== ======= ======== ======= ===== =====
Off-balance sheet
loan commitments
and financial guarantee
contracts(3) 0.1 1.4 2.1 0.3 776
Other financial assets
subject to impairment(4) 153
========================== ======= ======= ====== ======= =======
Total(5) 0.2 4.2 33.4 1.4 4,838
1 Private Banking have refined the methodology to classify GBP5bn
of their exposure between Wholesale and Retail during the year.
2 Includes Wealth and Private Banking exposures measured on an individual
basis, and excludes Business Banking exposures that are managed
on a collective basis. The net impact is a difference in total
exposure of GBP7,551m of balances reported as wholesale loans on
page 29 in the Loans and advances at amortised cost by product
disclosure.
3 Excludes loan commitments and financial guarantees of GBP9.5bn
carried at fair value.
4 Other financial assets subject to impairment not included in the
table above include cash collateral and settlement balances, financial
assets at fair value through other comprehensive income and other
assets. These have a total gross exposure of GBP180.3bn and impairment
allowance of GBP165m. This comprises GBP11m ECL on GBP175.7bn Stage
1 assets, GBP9m on GBP4.4bn Stage 2 fair value through other comprehensive
income assets, other assets and cash collateral and settlement
balances and GBP145m on GBP154m Stage 3 other assets.
5 The loan loss rate is 138 bps after applying the total impairment
charge of GBP4,838m.
Loans and advances at amortised cost by product
The table below presents a breakdown of loans and advances at
amortised cost and the impairment allowance with stage allocation
by asset classification.
Stage 2
============================
<=30 >30
Not days days
Stage past past past Stage
As at 30.06.21 1 due due due Total 3 Total
Gross exposure GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================== ======= ====== ===== ===== ====== ===== =======
Home loans 144,103 17,991 1,666 823 20,480 2,235 166,818
Credit cards, unsecured loans
and other retail lending 34,537 5,642 300 209 6,151 2,773 43,461
Wholesale loans 126,342 14,760 529 391 15,680 2,765 144,787
============================== ======= ====== ===== ===== ====== ===== =======
Total 304,982 38,393 2,495 1,423 42,311 7,773 355,066
Impairment allowance
============================== ======= ====== ===== ===== ====== ===== =======
Home loans 15 566 7 69 389 473
Credit cards, unsecured loans
and other retail lending 834 1,547 100 120 1,767 1,852 4,453
Wholesale loans 336 3815 11 397 858 1,591
============================== ======= ====== ==== ===== ====== ===== =======
Total 1,185 1,984 111 138 2,233 3,099 6,517
Net exposure
============================== ======= ====== ===== ===== ====== ===== =======
Home loans 144,088 17,935 1,660 816 20,411 1,846 166,345
Credit cards, unsecured loans
and other retail lending 33,703 4,095 200 89 4,384 921 39,008
Wholesale loans 126,006 14,379 524 380 15,283 1,907 143,196
============================== ======= ====== ===== ===== ====== ===== =======
Total 303,797 36,409 2,384 1,285 40,078 4,674 348,549
Coverage ratio %% %% %% %
============================== ======= ===== ==== ==== ===== ==== ======
Home loans - 0.3 0.4 0.9 0.3 17.4 0.3
Credit cards, unsecured loans
and other retail lending 2.4 27.4 33.3 57.4 28.7 66.8 10.2
Wholesale loans 0.3 2.6 0.9 2.8 2.5 31.0 1.1
============================== ======= ====== ===== ===== ====== ===== =======
Total 0.4 5.2 4.4 9.7 5.3 39.9 1.8
As at 31.12.20
Gross exposure GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================== ======= ====== ===== ===== ====== ===== =======
Home loans 138,639 16,651 1,785 876 19,312 2,234 160,185
Credit cards, unsecured loans
and other retail lending 33,021 9,470 544 306 10,320 3,172 46,513
Wholesale loans 119,304 19,501 1,097 776 21,374 3,591 144,269
============================== ======= ====== ===== ===== ====== ===== =======
Total 290,964 45,622 3,426 1,958 51,006 8,997 350,967
Impairment allowance
============================== ======= ====== ===== ===== ====== ===== =======
Home Loans 33 57 13 14 84 421 538
Credit cards, unsecured loans
and other retail lending 680 2,382 180 207 2,769 2,251 5,700
Wholesale Loans 320 650 50 11 711 1,066 2,097
============================== ======= ====== ===== ===== ====== ===== =======
Total 1,033 3,089 243 232 3,564 3,738 8,335
Net exposure
============================== ======= ====== ===== ===== ====== ===== =======
Home loans 138,606 16,594 1,772 862 19,228 1,813 159,647
Credit cards, unsecured loans
and other retail lending 32,341 7,088 364 99 7,551 921 40,813
Wholesale loans 118,984 18,851 1,047 765 20,663 2,525 142,172
============================== ======= ====== ===== ===== ====== ===== =======
Total 289,931 42,533 3,183 1,726 47,442 5,259 342,632
Coverage ratio %% %% %% %
============================== ======= ===== ==== ==== ===== ==== ======
Home loans - 0.3 0.7 1.6 0.4 18.8 0.3
Credit cards, unsecured loans
and other retail lending 2.1 25.2 33.1 67.6 26.8 71.0 12.3
Wholesale loans 0.3 3.3 4.6 1.4 3.3 29.7 1.5
============================== ======= ====== ===== ===== ====== ===== =======
Total 0.4 6.8 7.1 11.8 7.0 41.5 2.4
Loans and advances at amortised cost by selected sectors
The table below presents a breakdown of loans and advances at
amortised cost and the impairment allowance, with gross exposure
and stage allocation for selected industry sectors within the
wholesale loans portfolio. The industry sectors have been selected
based upon the level of management focus they have received
following the onset of the COVID-19 pandemic.
The gross loans and advances to selected sectors have decreased
over the year driven by repayments and lower drawdowns. The
reduction in provisions is informed by the improved macroeconomic
outlook used in the Q221 scenario refresh, partially offset by
management judgments to reflect the risk of uncertainty still
prevailing within these sectors. The wholesale portfolio also
benefits from a hedge protection programme that enables effective
risk management against systemic losses. An additional GBP0.1bn
(December 2020: GBP0.1bn) impairment allowance has been applied to
the undrawn exposures not included in the table below.
Gross exposure Impairment allowance
============================ ==========================
Stage Stage Stage Total Stage Stage Stage Total
1 2 3 1 2 3
As at 30.06.21 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================= ====== ===== ===== ====== ===== ===== ===== =====
Air travel 305 322 21 648 3 13 18 34
Hospitality and leisure 4,019 1,907 298 6,224 48 68 49 165
Oil and gas 1,877 465 234 2,576 14 12 128 154
Retail 4,089 962 148 5,199 63 30 44 137
Shipping 485 220 12 717 5 35 - 40
Transportation 1,768 161 102 2,031 20 4 37 61
============================= ====== ===== ===== ====== ===== ===== ===== =====
Total 12,543 4,037 815 17,395 153 162 276 591
Total of Wholesale exposures 10% 26% 29% 12% 45% 41% 32% 37%
Gross exposure Impairment allowance
============================ ==========================
Stage Stage Stage Total Stage Stage Stage Total
1 2 3 1 2 3
As at 31.12.20 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================= ====== ===== ===== ====== ===== ===== ===== =====
Air travel 367 525 56 948 9 27 23 59
Hospitality and leisure 4,440 2,387 313 7,140 53 115 61 229
Oil and gas 1,754 854 465 3,073 31 27 140 198
Retail 3,907 1,153 283 5,343 78 51 108 237
Shipping 308 389 12 709 2 30 1 33
Transportation 1,148 253 125 1,526 19 10 57 86
============================= ====== ===== ===== ====== ===== ===== ===== =====
Total 11,924 5,561 1,254 18,739 192 260 390 842
Total of Wholesale exposures 10% 26% 35% 13% 60% 37% 37% 40%
The coverage ratio for selected sectors has decreased from 4.5%
as at 31 December 2020 to 3.4% as at 30 June 2021.
Exposure to UK commercial real estate of GBP9.4bn, excluding
government backed schemes, was in line with 31 December 2020
(GBP10.0bn). Coverage decreased from 0.98% to 0.61% in the
period.
Movement in gross exposures and impairment allowance including
provisions for loan commitments and financial guarantees
The following tables present a reconciliation of the opening to
the closing balance of the exposure and impairment allowance. An
explanation of the terms 12-month ECL, lifetime ECL and
credit-impaired is included in the Barclays PLC Annual Report 2020
on page 296. Transfers between stages in the table have been
reflected as if they had taken place at the beginning of the year.
The movements are measured over a 6-month period.
Loans and advances at amortised cost
Stage 1 Stage 2 Stage 3 Total
Gross Gross Gross Gross
exposure ECL exposure ECL exposure ECL exposure ECL
Home loans GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
=============================== ========= ===== ========= ======= ========= ===== ========= =====
As at 1 January 2021 138,639 33 19,312 84 2,234 421 160,185 538
-----
Transfers from Stage 1
to Stage 2 (6,369) (2) 6,369 2 - - - -
Transfers from Stage 2
to Stage 1 3,615 21 (3,615) (21) - - - -
Transfers to Stage 3 (160) - (337) (7) 497 7 - -
Transfers from Stage 3 21 - 119 3 (140) (3) - -
Business activity in the
year 19,231 2 380 1 - - 19,611 3
Changes to models used
for calculation(1) - - - (4) - 38 - 34
Net drawdowns, repayments,
net re-measurement and
movement due to exposure
and risk parameter changes (4,670) (38) (667) 13 (124) (54) (5,461) (79)
Final repayments (6,204) (1) (1,081) (2) (220) (8) (7,505) (11)
Disposals - - - - - - - -
Write-offs(2) - - - - (12) (12) (12) (12)
=============================== ========= ===== ========= ======= ========= ===== ========= =====
As at 30 June 2021(3) 144,103 15 20,480 69 2,235 389 166,818 473
Credit cards, unsecured loans and other retail lending
=========================================================================================================
As at 1 January 2021 33,021 680 10,320 2,769 3,172 2,251 46,513 5,700
-----
Transfers from Stage 1
to Stage 2 (1,590) (72) 1,590 72 - - - -
Transfers from Stage 2
to Stage 1 4,376 1,080 (4,376) (1,080) - - - -
Transfers to Stage 3 (264) (12) (572) (282) 836 294 - -
Transfers from Stage 3 30 25 38 14 (68) (39) - -
Business activity in the
year 3,855 50 58 14 31 8 3,944 72
Changes to models used
for calculation(1) - (5) - (33) - 14 - (24)
Net drawdowns, repayments,
net re-measurement and
movement due to exposure
and risk parameter changes(4) (3,134) (866) (808) 310 (123) 282 (4,065) (274)
Final repayments (1,757) (46) (99) (17) (140) (50) (1,996) (113)
Disposals(5) - - - - (101) (74) (101) (74)
Write-offs(2) - - - - (834) (834) (834) (834)
=============================== ========= ===== ========= ======= ========= ===== ========= =====
As at 30 June 2021(3) 34,537 834 6,151 1,767 2,773 1,852 43,461 4,453
1 Changes to models used for calculation include a GBP34m movement
in Home loans, GBP24m in Credit cards, unsecured loans and other
retail lending and GBP36m in Wholesale loans. These reflect methodology
changes made during the year. Barclays continually review the output
of models to determine accuracy of the ECL calculation including
review of model monitoring, external benchmarking and experience
of model operation over an extended period of time. This ensures
that the models used continue to reflect the risks inherent across
the businesses.
2 In H121, gross write-offs amounted to GBP1,001m (H120: GBP953m)
and post write-off recoveries amounted to GBP31m (H120: GBP15m).
Net write-offs represent gross write-offs less post write-off recoveries
and amounted to GBP970m (H120: GBP938m).
3 Other financial assets subject to impairment not included in the
table above include cash collateral and settlement balances, financial
assets at fair value through other comprehensive income and other
assets. These have a total gross exposure of GBP186.0bn (December
2020: GBP180.3bn) and impairment allowance of GBP114m (December
2020: GBP165m). This comprises GBP9m ECL (December 2020: GBP11m)
on GBP185.8bn stage 1 assets (December 2020: GBP175.7bn), GBP3m
(December 2020: GBP9m) on GBP58m stage 2 fair value through other
comprehensive income assets, other assets and cash collateral and
settlement balances (December 2020: GBP4.4bn) and GBP102m (December
2020: GBP145m) on GBP109m stage 3 other assets (December 2020:
GBP154m).
4 Transfers and risk parameter changes include a GBP0.3bn net release
in ECL arising from a reclassification of GBP2.2bn gross loans
and advances from Stage 2 to Stage 1 in Credit cards, unsecured
loans and other retail lending. The reclassification followed a
review of back-testing of results which indicated that accuracy
of origination probability of default characteristics require management
adjustments to correct and was first established in Q220.
5 The GBP101m disposals reported within Credit cards, unsecured
loans and other retail lending portfolio relates to debt sales
undertaken during the year. The GBP1.7bn disposal reported within
Wholesale loans includes a sale of GBP0.7bn debt securities as
part of Group Treasury Operations and a GBP1.0bn sale of Barclays
Asset Finance .
Loans and advances at amortised cost
Stage 1 Stage 2 Stage 3 Total
Gross Gross Gross Gross
exposure ECL exposure ECL exposure ECL exposure ECL
Wholesale loans GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================ ========= ===== ========= ===== ========= ===== ========= =====
As at 1 January 2021 119,304 320 21,374 711 3,591 1,066 144,269 2,097
-----
Transfers from Stage 1
to Stage 2 (4,636) (12) 4,636 12 - - - -
Transfers from Stage 2
to Stage 1 8,410 188 (8,410) (188) - - - -
Transfers to Stage 3 (249) (2) (226) (17) 475 19 - -
Transfers from Stage 3 515 14 376 13 (891) (27) - -
Business activity in the
year 23,266 35 1,181 30 191 22 24,638 87
Changes to models used
for calculation(1) - (7) - (29) - - - (36)
Net drawdowns, repayments,
net re-measurement and
movement due to exposure
and risk parameter changes 81 (153) (47) (37) (185) (1) (151) (191)
Final repayments (18,854) (39) (3,042) (95) (203) (33) (22,099) (167)
Disposals(2) (1,495) (8) (162) (3) (58) (33) (1,715) (44)
Write-offs(3) - - - - (155) (155) (155) (155)
============================ ========= ===== ========= ===== ========= ===== ========= =====
As at 30 June 2021(4) 126,342 336 15,680 397 2,765 858 144,787 1,591
Reconciliation of ECL movement to impairment charge/(release)
for the period GBPm
============================================================================================= -----
Home loans (53)
Credit cards, unsecured loans and other retail lending (339)
Wholesale loans (307)
ECL movement excluding assets derecognised due to disposals
and write-offs (699)
Recoveries and reimbursements(5) 185
Exchange and other adjustments(6) 132
Impairment charge on loan commitments and other financial
guarantees (343)
Impairment charge on other financial assets(4) (17)
========= =====
Income statement release
for the period (742)
1 Changes to models used for calculation include a GBP34m movement
in Home Loans, GBP24m in Credit cards, unsecured loans and other
retail lending and GBP36m in Wholesale loans. These reflect methodology
changes made during the year. Barclays continually review the output
of models to determine accuracy of the ECL calculation including
review of model monitoring, external benchmarking and experience
of model operation over an extended period of time. This ensures
that the models used continue to reflect the risks inherent across
the businesses.
2 The GBP101m disposals reported within Credit cards, unsecured
loans and other retail lending portfolio relates to debt sales
undertaken during the year. The GBP1.7bn disposal reported within
Wholesale loans includes a sale of GBP0.7bn debt securities as
part of Group Treasury Operations and a GBP1.0bn sale of Barclays
Asset Finance .
3 In H121, gross write-offs amounted to GBP1,001m (H120: GBP953m)
and post write-off recoveries amounted to GBP31m (H120: GBP15m).
Net write-offs represent gross write-offs less post write-off recoveries
and amounted to GBP970m (H120: GBP938m).
4 Other financial assets subject to impairment not included in the
table above include cash collateral and settlement balances, financial
assets at fair value through other comprehensive income and other
assets. These have a total gross exposure of GBP186.0bn (December
2020: GBP180.3bn) and impairment allowance of GBP114m (December
2020: GBP165m). This comprises GBP9m ECL (December 2020: GBP11m)
on GBP185.8bn stage 1 assets (December 2020: GBP175.7bn), GBP3m
(December 2020: GBP9m) on GBP58m stage 2 fair value through other
comprehensive income assets, other assets and cash collateral and
settlement balances (December 2020: GBP4.4bn) and GBP102m (December
2020: GBP145m) on GBP109m stage 3 other assets (December 2020:
GBP154m).
5 Recoveries and reimbursements includes a net loss in relation to
reimbursements from financial guarantee contracts held with third
parties of GBP216m (H120 gain: GBP279m) and post write off recoveries
of GBP31m (H120: GBP15m).
6 Includes foreign exchange and interest and fees in suspense.
Loan commitments and financial guarantees
Stage 1 Stage 2 Stage 3 Total
Gross Gross Gross Gross
exposure ECL exposure ECL exposure ECL exposure ECL
Home loans GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
============================ ========= ===== ========= ===== ========= ==== ========= =====
As at 1 January 2021 11,861 - 516 - 5 - 12,382 -
Net transfers between
stages (74) - 71 - 3 - - -
Business activity in the
year 6,287 - 1 - - - 6,288 -
Net drawdowns, repayments,
net re-measurement and
movement due to exposure
and risk parameter changes (7,397) - (17) - (2) - (7,416) -
Limit management and final
repayments (238) - (22) - (3) - (263) -
============================ ========= ===== ========= ===== ========= ==== ========= =====
As at 30 June 2021 10,439 - 549 - 3 - 10,991 -
Credit cards, unsecured loans and other retail lending
===================================================================================================
As at 1 January 2021 114,371 55 12,117 305 229 23 126,717 383
Net transfers between
stages 5,784 217 (6,081) (212) 297 (5) - -
Business activity in the
year 3,378 1 32 1 1 1 3,411 3
Net drawdowns, repayments,
net re-measurement and
movement due to exposure
and risk parameter changes (1,005) (215) 114 63 (248) 4 (1,139) (148)
Limit management and final
repayments (4,941) (4) (398) (5) (57) (3) (5,396) (12)
============================ ========= ===== ========= ===== ========= ==== ========= =====
As at 30 June 2021 117,587 54 5,784 152 222 20 123,593 226
Wholesale loans
============================ ========= ===== ========= ===== ========= ==== ========= =====
As at 1 January 2021 163,707 201 40,258 453 2,096 27 206,061 681
Net transfers between
stages 682 116 504 (112) (1,186) (4) - -
Business activity in the
year 37,211 28 2,915 89 12 9 40,138 126
Net drawdowns, repayments,
net re-measurement and
movement due to exposure
and risk parameter changes 1,603 (146) 680 (63) (28) 2 2,255 (207)
Limit management and final
repayments (33,079) (25) (4,994) (83) (455) (5) (38,528) (113)
============================ ========= ===== ========= ===== ========= ==== ========= =====
As at 30 June 2021 170,124 174 39,363 284 439 29 209,926 487
Management adjustments to models for impairment
Management adjustments to impairment models are made in the
ordinary course of business in order to reflect changes in policy
or correct model performance issues identified through model
monitoring. These adjustments remain in place until they are
incorporated into future model development and are then retired. In
addition, they may also be made in response to circumstances or
uncertainty at the period end and this is particularly true of the
ongoing COVID-19 pandemic.
Total management adjustments to impairment allowance are
presented by product below.
Overview of management adjustments to models for impairment
allowance(1)
As at 30.06.21 As at 31.12.20
Management Proportion Management Proportion
adjustments of total adjustments of total
to impairment impairment to impairment impairment
allowances allowances allowances allowances
GBPm % GBPm %
======================================== ============== =========== ============== ===========
Home loans 83 17.5 131 24.3
Credit cards, unsecured loans and other
retail lending 1,145 24.5 1,234 20.3
Wholesale loans 643 30.9 23 0.8
======================================== ============== =========== ============== ===========
Total 1,871 25.9 1,388 14.8
Management adjustments to models for impairment allowance(1)
Impairment
allowance Economic Total
pre management uncertainty Other impairment
adjustments(2) adjustments adjustments allowance
As at 30.06.21 GBPm GBPm GBPm GBPm
======================================== =============== ============ ============ ===========
Home loans 390 41 42 473
Credit cards, unsecured loans and other
retail lending 3,534 1,398 (253) 4,679
Wholesale loans 1,435 651 (8) 2,078
======================================== =============== ============ ============ ===========
Total 5,359 2,090 (219) 7,230
As at 31.12.20
======================================== =============== ============ ============ ===========
Home loans 407 21 110 538
Credit cards, unsecured loans and other
retail lending 4,849 1,625 (391) 6,083
Wholesale loans 2,755 421 (398) 2,778
======================================== =============== ============ ============ ===========
Total 8,011 2,067 (679) 9,399
1 Positive values reflect an increase in impairment allowance.
2 Includes GBP4.3bn (December 2020: GBP6.8bn) of modelled ECL, GBP0.8bn
(December 2020: GBP0.9bn) of individually assessed impairments
and GBP0.3bn (December 2020: GBP0.3bn) ECL from non-modelled exposures.
Economic uncertainty adjustments
The COVID-19 pandemic has impacted the global economy since
early 2020 and macroeconomic forecasts indicate longer-term impacts
that will result in higher unemployment levels and customer and
client stress. However, to date, little real credit deterioration
has occurred, largely as a result of government and other support
measures. Observed 30-day arrears rates have reduced in US cards
1.6% (December 2020: 2.5%; December 2019: 2.7%) and in UK cards
1.4% (December 2020: 1.7%; December 2019: 1.7%) due to payment
holidays granted to customers impacted by COVID-19 which reduced
the delinquency entrance rate and overall flow through delinquency.
However, uncertainty remains as government and other support
measures taper down as to whether these schemes have either averted
or delayed credit losses.
In order to address this uncertainty, adjustments to the
modelled provisions were made in 2020. COVID-19 related economic
uncertainty adjustments of GBP2.1bn (December 2020: GBP2.1bn)
continue to be recognised, specifically to address whether support
measures have averted or delayed credit losses. However, within
this, the approach has been refined and uncertainty is now captured
in two distinct ways: firstly, the identification of specific
customers and clients who may be more vulnerable to the withdrawal
of relief and secondly, macroeconomic and risk parameter
uncertainties which are applied at a portfolio level.
A summary of the adjustments is provided below:
-- A GBP1.2bn adjustment has been applied to customers and clients
considered potentially vulnerable to the withdrawal of government
and other support schemes. In US consumer card portfolios, the
populations identified are those who have higher potential risk
indicators and in the UK we have specifically considered the impact
of furlough schemes ending (equivalent to UK unemployment increasing
to 7.2%). In wholesale portfolios, the populations identified are
specific clients who may exhibit greater cross default risk between
COVID-19 and other financing exposures, including clients with
Bounce Back Loans in Business Banking, and those corporate sectors
deemed more vulnerable to the economic impacts of COVID-19. This
adjustment is split between credit cards and unsecured loans, GBP0.9bn,
and wholesale loans, GBP0.3bn
-- Expert judgement has been used to adjust the probability of default
at portfolio level to pre-COVID-19 levels to reflect the impact
of temporary support measures on underlying customer and client
behaviour. Following a refinement to methodology, this has reduced
to GBP0.5bn from GBP0.7bn in December 2020. A GBP(0.1)bn PMA to
recognise government guarantees remains in place
-- Macroeconomic variables which may be temporarily influenced by
support measures have been adjusted at a portfolio level enabling
the model to consume the economic stress. This is reduced to GBP0.5bn
from GBP1.2bn at December 2020 as management judgements have been
refined towards potentially vulnerable customers and clients as
the pandemic evolves
Other adjustments
Home loans: The low average LTV nature of the UK Home Loans
portfolio means that modelled ECL estimates are low in all but the
most severe economic scenarios. An adjustment is held to maintain
an appropriate level of ECL.
Credit cards, unsecured loans and other retail lending: This
materially relates to a net release in ECL due to reclassification
of loans and advances from Stage 2 to Stage 1 in credit cards and
unsecured loans. The reclassification followed a review of
back-testing of results which indicated that the accuracy of
origination probability of default characteristics requires
management adjustments to correct and was first established in
Q220.
Wholesale loans: Represents the net of adjustments for Business
Banking and Investment Bank for model inaccuracies informed by
back-testing. An adjustment to offset modelled ECL output in the
Investment Bank to limit excessive ECL sensitivity to the
macroeconomic variable for Federal Tax Receipts in place at
December 2020 is materially reduced due to the Q221 scenario
refresh.
Measurement uncertainty
The Group uses a five-scenario model to calculate ECL. An
external consensus forecast is assembled from key sources,
including HM Treasury (short and medium-term forecasts), Bloomberg
(based on median of economic forecasts) and the Urban Land
Institute (for US House Prices), which forms the Baseline scenario.
In addition, two adverse scenarios (Downside 1 and Downside 2) and
two favourable scenarios (Upside 1 and Upside 2) are derived, with
associated probability weightings. The adverse scenarios are
calibrated to a broadly similar severity to Barclays' internal
stress tests and stress scenarios provided by regulators whilst
also considering IFRS 9 specific sensitivities and non-linearity.
Downside 2 is benchmarked to the Bank of England's stress scenarios
and to the most severe scenario from Moody's inventory, but is not
designed to be the same. The favourable scenarios are calibrated to
reflect upside risks to the Baseline scenario to the extent that is
broadly consistent with recent favourable benchmark scenarios. All
scenarios are regenerated at a minimum semi-annually. The scenarios
include eight economic variables, (GDP, unemployment, House Price
Index (HPI) and base rates, in both the UK and US markets), and
expanded variables using statistical models based on historical
correlations. The upside and downside shocks are designed to evolve
over a five-year stress horizon, with all five scenarios converging
to a steady state after approximately eight years.
Macroeconomic indicators were refreshed in Q221, with key
drivers for the baseline scenario more optimistic than Q420,
resulting in a net ECL provision release. In the Baseline scenario,
UK GDP returns to the pre-pandemic level by mid-2022 with peak UK
unemployment of just over 6% in Q421. In the Upside 2 scenario,
effective fiscal stimulus measures, including public investments in
infrastructure and skills, provide a boost to demand and
confidence, which in turn leads to economic activity in almost all
advanced economies returning to the pre-COVID-19 pandemic levels by
the end of 2021. Unemployment levels decline back below 5% by H222
in the UK, and below 4% by early 2022 in the US. In the Downside 2
scenario supply and distribution issues slow the vaccination
process and the emergence of new virus variants that are not
susceptible to the existing vaccines fuels the outbreak again
resulting in full national lockdowns in Q321. This leads to
significant falls in GDP in Q321 and UK and US unemployment
reaching c.10% and 12% respectively.
Although the macroeconomic outlook has improved, the Group's
view on uncertainty remains unchanged, believing potential credit
deterioration could be seen once government support is removed,
particularly in vulnerable areas of the portfolio. In response,
economic uncertainty PMAs remained relatively stable at c.GBP2.1bn.
For further details see page 34.
Limited defaults have been observed to date in response to the
COVID-19 pandemic, partly as a result of government and bank
support measures. However, such support measures are scheduled to
taper down from Q321 bringing with it uncertainty. Despite
improvement in macroeconomic variables in the period, unemployment
remains at elevated levels but portfolios are yet to respond, and
may not do so until support measures fall away.
The methodology for estimating probability weights for each of
the scenarios involves a comparison of the distribution of key
historical UK and US macroeconomic variables against the forecast
paths of the 5 scenarios. The range of forecast paths generated in
the calculation of the weights at 30 June 2021 is slightly narrower
than 31 December 2020 due to lower levels of uncertainty. The
Upside 2 and Downside 2 scenarios are therefore nearer the tails of
the distribution than previously resulting in lower weights. See
page 39 for probability weightings used at H121.
The tables below show the key consensus macroeconomic variables
used in the scenarios (3-year annual paths), the probability
weights applied to each scenario and the macroeconomic variables by
scenario using 'specific bases' i.e. the most extreme position of
each variable in the context of the scenario, for example, the
highest unemployment for downside scenarios and the lowest
unemployment for upside scenarios. The 5-year average table
provides additional transparency.
Baseline average macroeconomic variables used in the calculation of
ECL
2021 2022 2023
As at 30.06.21 % % %
========================================== ========== ========= =======
UK GDP(1) 4.9 5.6 2.3
UK unemployment(2) 5.8 5.7 5.1
UK HPI(3) (0.5) 0.3 3.1
UK bank rate 0.1 0.2 0.4
US GDP(1) 5.7 3.9 1.6
US unemployment(4) 5.6 4.5 4.4
US HPI(5) 3.9 3.5 3.5
US federal funds rate 0.3 0.3 0.7
As at 31.12.20
========================================== ========== ========= =======
UK GDP(1) 6.3 3.3 2.6
UK unemployment(2) 6.7 6.4 5.8
UK HPI(3) 2.4 2.3 5.0
UK bank rate - (0.1) -
US GDP(1) 3.9 3.1 2.9
US unemployment(4) 6.9 5.7 5.6
US HPI(5) 2.8 4.7 4.7
US federal funds rate 0.3 0.3 0.3
1 Average Real GDP seasonally adjusted change in year.
2 Average UK unemployment rate 16-year+.
3 Change in average yearly UK HPI = Halifax All Houses, All Buyers
index, relative to prior year end.
4 Average US civilian unemployment rate 16-year+.
5 Change in average yearly US HPI = FHFA House Price Index, relative
to prior year end.
Downside 2 average economic variables used in the calculation of ECL
2021 2022 2023
As at 30.06.21 % % %
======================================= =========== =========== ========
UK GDP(1) (1.7) 2.0 5.2
UK unemployment(2) 7.3 8.2 6.6
UK HPI(3) (5.8) (5.8) 0.2
UK bank rate 0.1 - -
US GDP(1) 1.5 1.4 2.0
US unemployment(4) 8.7 11.0 9.3
US HPI(5) (4.9) (3.0) 1.1
US federal funds rate 0.3 0.3 0.3
As at 31.12.20
======================================= =========== =========== ========
UK GDP(1) (3.9) 6.5 2.6
UK unemployment(2) 8.0 9.3 7.8
UK HPI(3) (13.6) (10.8) 0.5
UK bank rate (0.2) (0.2) (0.1)
US GDP(1) (2.4) 3.6 2.1
US unemployment(4) 13.4 11.9 10.1
US HPI(5) (17.2) (0.7) 0.6
US federal funds rate 0.3 0.3 0.3
1 Average Real GDP seasonally adjusted change in year.
2 Average UK unemployment rate 16-year+.
3 Change in average yearly UK HPI = Halifax All Houses, All Buyers
index, relative to prior year end.
4 Average US civilian unemployment rate 16-year+.
5 Change in average yearly US HPI = FHFA house price index, relative
to prior year end.
Downside 1 average economic variables used in the calculation of ECL
2021 2022 2023
As at 30.06.21 % % %
========================================== ========== ========== =======
UK GDP(1) 0.6 4.4 4.2
UK unemployment(2) 6.4 6.6 5.6
UK HPI(3) (3.1) (2.7) 1.7
UK bank rate 0.1 0.1 0.2
US GDP(1) 3.4 2.5 1.6
US unemployment(4) 7.4 7.9 6.1
US HPI(5) (0.5) 0.2 2.3
US federal funds rate 0.3 0.3 0.3
As at 31.12.20
========================================== ========== ========== =======
UK GDP(1) 0.1 6.6 3.2
UK unemployment(2) 7.3 8.0 6.9
UK HPI(3) (6.7) (3.5) 1.7
UK bank rate (0.1) (0.1) -
US GDP(1) 0.4 3.6 2.3
US unemployment(4) 11.0 8.9 6.9
US HPI(5) (5.9) 1.8 2.6
US federal funds rate 0.3 0.3 0.3
1 Average Real GDP seasonally adjusted change in year.
2 Average UK unemployment rate 16-year+.
3 Change in average yearly UK HPI = Halifax All Houses, All Buyers
index, relative to prior year end.
4 Average US civilian unemployment rate 16-year+.
5 Change in average yearly US HPI = FHFA House Price Index, relative
to prior year end.
Upside 2 average economic variables used in the calculation of ECL
2021 2022 2023
As at 30.06.21 % % %
=========================================== ======== ======== ========
UK GDP(1) 6.8 9.4 4.0
UK unemployment(2) 5.5 4.9 4.4
UK HPI(3) 4.6 9.9 11.3
UK bank rate 0.1 0.4 0.6
US GDP(1) 6.5 8.2 3.4
US unemployment(4) 5.3 3.8 3.8
US HPI(5) 6.5 8.0 7.3
US federal funds rate 0.3 0.3 1.1
As at 31.12.20
=========================================== ======== ======== ========
UK GDP(1) 12.2 5.3 3.9
UK unemployment(2) 6.2 5.5 4.8
UK HPI(3) 6.6 10.4 10.8
UK bank rate 0.1 0.3 0.3
US GDP(1) 7.1 4.6 4.0
US unemployment(4) 5.5 4.3 4.1
US HPI(5) 8.8 9.1 8.9
US federal funds rate 0.3 0.4 0.6
1 Average Real GDP seasonally adjusted change in year.
2 Average UK unemployment rate 16-year+.
3 Change in average yearly UK HPI = Halifax All Houses, All Buyers
index, relative to prior year end.
4 Average US civilian unemployment rate 16-year+.
5 Change in average yearly US HPI = FHFA House Price Index, relative
to prior year end.
Upside 1 average economic variables used in the calculation of ECL
2021 2022 2023
As at 30.06.21 % % %
=========================================== ======== ======== ========
UK GDP(1) 5.9 7.3 3.0
UK unemployment(2) 5.6 5.2 4.7
UK HPI(3) 1.5 4.5 7.4
UK bank rate 0.1 0.2 0.6
US GDP(1) 6.1 5.8 2.4
US unemployment(4) 5.5 4.2 4.2
US HPI(5) 6.2 6.8 5.7
US federal funds rate 0.3 0.3 0.9
As at 31.12.20
=========================================== ======== ======== ========
UK GDP(1) 9.3 3.9 3.4
UK unemployment(2) 6.4 6.0 5.2
UK HPI(3) 4.6 6.1 6.1
UK bank rate 0.1 0.1 0.3
US GDP(1) 5.5 4.0 3.7
US unemployment(4) 6.0 4.8 4.6
US HPI(5) 6.8 6.7 6.3
US federal funds rate 0.3 0.3 0.5
1 Average Real GDP seasonally adjusted change in year.
2 Average UK unemployment rate 16-year+.
3 Change in average yearly UK HPI = Halifax All Houses, All Buyers
index, relative to prior year end.
4 Average US civilian unemployment rate 16-year+.
5 Change in average yearly US HPI = FHFA House Price Index, relative
to prior year end.
Scenario probability weighting
Upside Upside Downside Downside
2 1 Baseline 1 2
% % % % %
=============================== ====== ====== ======== ======== ========
As at 30.06.21
Scenario probability weighting 19.6 24.5 26.4 16.9 12.6
=============================== ====== ====== ======== ======== ========
As at 31.12.20
Scenario probability weighting 20.2 24.2 24.7 15.5 15.4
Specific bases show the most extreme position of each variable
in the context of the scenario, for example, the highest
unemployment for downside scenarios, average unemployment for
baseline scenarios and lowest unemployment for upside scenarios.
GDP and HPI downside and upside scenario data represents the lowest
and highest points relative to the start point in the 20 quarter
period.
Macroeconomic variables (specific
bases)(1)
Upside Upside Baseline Downside Downside
2 1 1 2
As at 30.06.21 % % % % %
================================== ====== ====== ======== ======== ========
UK GDP(2) 25.9 20.2 3.3 (4.2) (8.1)
UK unemployment(3) 4.1 4.3 5.1 7.5 9.8
UK HPI(4) 48.2 25.5 1.6 (5.8) (11.8)
UK bank rate(3) 0.1 0.1 0.4 0.3 0.1
US GDP(2) 23.7 18.3 2.8 (0.2) (3.2)
US unemployment(3) 3.8 4.2 4.7 8.9 12.0
US HPI(4) 41.2 32.6 3.6 (1.3) (7.9)
US federal funds rate(3) 0.3 0.3 0.8 1.5 0.8
As at 31.12.20
================================== ====== ====== ======== ======== ========
UK GDP(2) 14.2 8.8 0.7 (22.1) (22.1)
UK unemployment(3) 4.0 4.0 5.7 8.4 10.1
UK HPI(4) 48.2 30.8 3.6 (4.5) (18.3)
UK bank rate(3) 0.1 0.1 - 0.6 0.6
US GDP(2) 15.7 12.8 1.6 (10.6) (10.6)
US unemployment(3) 3.8 3.8 6.4 13.0 13.7
US HPI(4) 42.2 30.9 3.8 (3.7) (15.9)
US federal funds rate(3) 0.1 0.1 0.3 1.3 1.3
1 UK GDP = Real GDP growth seasonally adjusted; UK unemployment =
UK unemployment rate 16-year+; UK HI = Halifax All Houses, All
Buyers Index; US GDP = Real GDP growth seasonally adjusted; US
unemployment = US civilian unemployment rate 16-year+; US HPI =
FHFA House Price Index. 20 quarter period starts from Q121 (2020:
Q120).
2 Maximum growth relative to Q420 (2020: Q419), based on 20 quarter
period in Upside scenarios; 5-year yearly average Compound Annual
Growth Rate (CAGR) in Baseline; minimum growth relative to Q420
(2020: Q419), based on 20 quarter period in Downside scenarios.
3 Lowest quarter in 20 quarter period in Upside scenarios; 5-year
average in Baseline; highest quarter in 20 quarter period in Downside
scenarios.
4 Maximum growth relative to Q420 (2020: Q419), based on 20 quarter
period in Upside scenarios; 5-year quarter end CAGR in Baseline;
minimum growth relative to Q420 (2020: Q419), based on 20 quarter
period in Downside scenarios.
Average basis represents the average quarterly value of
variables in the 20 quarter period with GDP and HPI based on yearly
average and quarterly CAGRs respectively.
Macroeconomic variables (5 year
averages)(1)
Upside Upside Baseline Downside Downside
2 1 1 2
As at 30.06.21 % % % % %
================================ ====== ====== ======== ======== ========
UK GDP(2) 5.2 4.2 3.3 2.6 1.8
UK unemployment(3) 4.6 4.8 5.1 5.7 6.5
UK HPI(4) 8.2 4.7 1.6 - (1.6)
UK bank rate(3) 0.7 0.6 0.4 0.2 -
US GDP(2) 4.6 3.7 2.8 2.0 1.4
US unemployment(3) 4.1 4.4 4.7 6.3 8.5
US HPI(4) 7.1 5.8 3.6 1.6 (0.4)
US federal funds rate(3) 1.1 0.9 0.8 0.6 0.3
As at 31.12.20
================================ ====== ====== ======== ======== ========
UK GDP(2) 2.5 1.6 0.7 0.1 (0.9)
UK unemployment(3) 5.0 5.3 5.7 6.5 7.2
UK HPI(4) 8.2 5.5 3.6 (0.2) (3.6)
UK bank rate(3) 0.3 0.2 - - (0.1)
US GDP(2) 2.9 2.4 1.6 0.8 0.1
US unemployment(3) 5.3 5.7 6.4 8.3 10.4
US HPI(4) 7.3 5.5 3.8 0.8 (3.0)
US federal funds rate(3) 0.5 0.5 0.3 0.3 0.3
1 UK GDP = Real GDP growth seasonally adjusted; UK unemployment =
UK unemployment rate 16-year+; UK HPI = Halifax All Houses, All
Buyers Index; US GDP = Real GDP growth seasonally adjusted; US
unemployment = US civilian unemployment rate 16-year+; US HPI =
FHFA House Price Index.
2 5-year yearly average CAGR, starting 2020 (2020: 2019).
3 5-year average. Period based on 20 quarters from Q121 (2020: Q120).
4 5-year quarter end CAGR, starting Q420 (2020: Q419).
ECL under 100% weighted scenarios for modelled portfolios
The table below shows the ECL assuming scenarios have been 100%
weighted. Model exposures are allocated to a stage based on the
individual scenario rather than through a probability-weighted
approach as required for Barclays reported impairment allowances.
As a result, it is not possible to back solve to the final reported
weighted ECL from the individual scenarios as a balance may be
assigned to a different stage dependent on the scenario. Model
exposure uses exposure at default (EAD) values and is not directly
comparable to gross exposure used in prior disclosures. For Credit
cards, unsecured loans and other retail lending, an average EAD
measure is used (12-month or lifetime, depending on stage
allocation in each scenario). Therefore, the model exposure
movement into Stage 2 is higher than the corresponding Stage 1
reduction.
All ECL using a model is included, with the exception of
Treasury assets (GBP4m of ECL). Non-modelled exposures and
management adjustments are excluded. Management adjustments can be
found in the Management adjustments to models for impairment
section.
Model exposures allocated to Stage 3 do not change in any of the
scenarios as the transition criteria relies only on observable
evidence of default as at 30 June 2021 and not on macroeconomic
scenarios.
The Downside 2 scenario represents a severe global recession
with substantial falls in both UK and US GDP. Unemployment in UK
markets rises towards 9.8% and US markets rises towards 12% and
there are substantial falls in asset prices including housing.
Under the Downside 2 scenario, model exposure moves between stages
as the economic environment weakens. This can be seen in the
movement of GBP18bn of model exposure into Stage 2 between the
Weighted and Downside 2 scenario. ECL increases in Stage 2
predominantly due to unsecured portfolios as economic conditions
deteriorate.
Scenarios
========================================================
Weighted Upside Upside Baseline Downside Downside
As at 30.06.21 2 1 1 2
============================== ======== ======= ======= ======== ======== ========
Stage 1 Model Exposure (GBPm)
Home loans 131,134 133,584 132,343 130,694 128,711 126,953
Credit cards, unsecured loans
and other retail lending 44,014 45,185 44,809 44,307 42,383 39,252
Wholesale loans 160,174 162,762 162,201 160,564 158,614 152,164
============================== ======== ======= ======= ======== ======== ========
Stage 1 Model ECL (GBPm)
Home loans 4 2 3 4 6 8
Credit cards, unsecured loans
and other retail lending 379 269 288 324 456 486
Wholesale loans 248 187 203 224 306 352
============================== ======== ======= ======= ======== ======== ========
Stage 1 Coverage (%)
Home loans - - - - - -
Credit cards, unsecured loans
and other retail lending 0.9 0.6 0.6 0.7 1.1 1.2
Wholesale loans 0.2 0.1 0.1 0.1 0.2 0.2
============================== ======== ======= ======= ======== ======== ========
Stage 2 Model Exposure (GBPm)
Home loans 24,345 21,895 23,136 24,785 26,769 28,526
Credit cards, unsecured loans
and other retail lending 7,175 5,733 6,205 6,819 9,066 12,625
Wholesale loans 33,666 31,077 31,639 33,276 35,225 41,676
============================== ======== ======= ======= ======== ======== ========
Stage 2 Model ECL (GBPm)
Home loans 20 13 15 18 27 39
Credit cards, unsecured loans
and other retail lending 1,076 733 841 976 1,544 2,517
Wholesale loans 773 594 646 709 939 1,342
============================== ======== ======= ======= ======== ======== ========
Stage 2 Coverage (%)
Home loans 0.1 0.1 0.1 0.1 0.1 0.1
Credit cards, unsecured loans
and other retail lending 15.0 12.8 13.6 14.3 17.0 19.9
Wholesale loans 2.3 1.9 2.0 2.1 2.7 3.2
============================== ======== ======= ======= ======== ======== ========
Stage 3 Model Exposure (GBPm)
Home loans 1,829 1,829 1,829 1,829 1,829 1,829
Credit cards, unsecured loans
and other retail lending 2,374 2,374 2,374 2,374 2,374 2,374
Wholesale loans(1) 1,374 1,374 1,374 1,374 1,374 1,374
============================== ======== ======= ======= ======== ======== ========
Stage 3 Model ECL (GBPm)
Home loans 324 307 315 325 337 352
Credit cards, unsecured loans
and other retail lending 1,878 1,850 1,864 1,875 1,905 1,920
Wholesale loans(1) 67 65 66 67 69 72
============================== ======== ======= ======= ======== ======== ========
Stage 3 Coverage (%)
Home loans 17.7 16.8 17.2 17.8 18.4 19.2
Credit cards, unsecured loans
and other retail lending 79.1 77.9 78.5 79.0 80.2 80.9
Wholesale loans(1) 4.9 4.7 4.8 4.9 5.0 5.2
============================== ======== ======= ======= ======== ======== ========
Total Model ECL (GBPm)
Home loans 348 322 333 347 370 399
Credit cards, unsecured loans
and other retail lending 3,333 2,852 2,993 3,175 3,905 4,923
Wholesale loans(1) 1,088 846 915 1,000 1,314 1,766
============================== ======== ======= ======= ======== ======== ========
Total Model ECL 4,769 4,020 4,241 4,522 5,589 7,088
1 Material wholesale loan defaults are individually assessed across
different recovery strategies. As a result, ECL of GBP783m is reported
as individually assessed impairments in the table below.
Reconciliation to total ECL GBPm
============================================================ =====
Total model ECL 4,769
ECL from individually assessed impairments on stage 3 loans 783
ECL from non-modelled and other management adjustments(1) 1,678
============================================================ =====
Total ECL 7,230
1 Includes GBP1.9bn post-model adjustments of which GBP0.4bn is included
as part of total model ECL and GBP0.2bn ECL from non-modelled exposures.
The dispersion of results around the Baseline is an indication
of uncertainty around the future projections. The disclosure
highlights the results of the alternative scenarios enabling the
reader to understand the extent of the impact on exposure and ECL
from the upside/downside scenarios. Consequently, the use of five
scenarios with associated weightings results in a total weighted
ECL uplift from the Baseline ECL of 5.5%, largely driven by credit
card losses which have more linear loss profiles than UK home loans
and wholesale loan positions.
Home loans: Total weighted ECL of GBP348m represents a 0.3%
increase over the Baseline ECL (GBP347m), and coverage ratios
remain steady across the Upside scenarios, Baseline and Downside 1
scenario. However, total ECL increases in the Downside 2 scenario
to GBP399m, driven by a significant fall in UK HPI (11.8%)
reflecting the non-linearity of the UK portfolio.
Credit cards, unsecured loans and other retail lending: Total
weighted ECL of GBP3,333m represents a 5% increase over the
Baseline ECL (GBP3,175m) reflecting the range of economic scenarios
used, mainly impacted by unemployment and other key retail
variables. Total ECL increases to GBP4,923m under Downside 2
scenario, mainly driven by Stage 2, where coverage rates increase
to 19.9% from a weighted scenario approach of 15% and circa
GBP5.5bn increase in model exposure that meets the Significant
Increase in Credit Risk criteria and transitions from Stage 1 to
Stage 2.
Wholesale loans: Total weighted ECL of GBP1,088m represents an
8.8% increase over the Baseline ECL (GBP1,000m) reflecting the
range of economic scenarios used, with exposures in the Investment
Bank particularly sensitive to the Downside 2 scenario.
Scenarios
========================================================
Weighted Upside Upside Baseline Downside Downside
As at 31.12.20 2 1 1 2
============================== ======== ======= ======= ======== ======== ========
Stage 1 Model Exposure (GBPm)
Home loans 131,422 134,100 133,246 132,414 130,547 128,369
Credit cards, unsecured loans
and other retail lending 51,952 53,271 52,932 51,995 50,168 48,717
Wholesale loans 149,099 155,812 154,578 152,141 144,646 131,415
============================== ======== ======= ======= ======== ======== ========
Stage 1 Model ECL (GBPm)
Home loans 6 4 5 6 14 42
Credit cards, unsecured loans
and other retail lending 392 316 340 372 415 415
Wholesale loans 262 242 258 249 278 290
============================== ======== ======= ======= ======== ======== ========
Stage 1 Coverage (%)
Home loans - - - - - -
Credit cards, unsecured loans
and other retail lending 0.8 0.6 0.6 0.7 0.8 0.9
Wholesale loans 0.2 0.2 0.2 0.2 0.2 0.2
============================== ======== ======= ======= ======== ======== ========
Stage 2 Model Exposure (GBPm)
Home loans 19,180 16,502 17,356 18,188 20,055 22,233
Credit cards, unsecured loans
and other retail lending 13,399 10,572 11,579 13,176 16,477 19,322
Wholesale loans 32,677 25,963 27,198 29,635 37,130 50,361
============================== ======== ======= ======= ======== ======== ========
Stage 2 Model ECL (GBPm)
Home loans 37 31 32 33 42 63
Credit cards, unsecured loans
and other retail lending 2,207 1,618 1,837 2,138 2,865 3,564
Wholesale loans 1,410 952 1,047 1,223 1,771 2,911
============================== ======== ======= ======= ======== ======== ========
Stage 2 Coverage (%)
Home loans 0.2 0.2 0.2 0.2 0.2 0.3
Credit cards, unsecured loans
and other retail lending 16.5 15.3 15.9 16.2 17.4 18.4
Wholesale loans 4.3 3.7 3.8 4.1 4.8 5.8
============================== ======== ======= ======= ======== ======== ========
Stage 3 Model Exposure (GBPm)
Home loans 1,778 1,778 1,778 1,778 1,778 1,778
Credit cards, unsecured loans
and other retail lending 2,585 2,585 2,585 2,585 2,585 2,585
Wholesale loans(1) 2,211 2,211 2,211 2,211 2,211 2,211
============================== ======== ======= ======= ======== ======== ========
Stage 3 Model ECL (GBPm)
Home loans 307 282 286 290 318 386
Credit cards, unsecured loans
and other retail lending 2,003 1,947 1,972 2,001 2,055 2,078
Wholesale loans(1) 146 128 134 141 157 184
============================== ======== ======= ======= ======== ======== ========
Stage 3 Coverage (%)
Home loans 17.3 15.9 16.1 16.3 17.9 21.7
Credit cards, unsecured loans
and other retail lending 77.5 75.3 76.3 77.4 79.5 80.4
Wholesale loans(1) 6.6 5.8 6.1 6.4 7.1 8.3
============================== ======== ======= ======= ======== ======== ========
Total Model ECL (GBPm)
Home loans 350 317 323 329 374 491
Credit cards, unsecured loans
and other retail lending 4,602 3,881 4,149 4,511 5,335 6,057
Wholesale loans(1) 1,818 1,322 1,439 1,613 2,206 3,385
============================== ======== ======= ======= ======== ======== ========
Total Model ECL 6,770 5,520 5,911 6,453 7,915 9,933
1 Material wholesale loan defaults are individually assessed across
different recovery strategies. As a result, ECL of GBP902m is reported
as individually assessed impairments in the table below.
Reconciliation to total ECL(1) GBPm
============================================================ =====
Total model ECL 6,770
ECL from individually assessed impairments on stage 3 loans 902
ECL from non-modelled and other management adjustments 1,727
============================================================ =====
Total ECL 9,399
1 Includes GBP1.4bn of post-model adjustments and GBP0.3bn ECL from
non-modelled exposures .
Analysis of specific portfolios and asset types
Payment holidays
Payment holidays are substantially concluded and due to roll off
by the end of July 2021. The impact of payment holidays on
delinquency performance in the period has been modest and as such
detail has not been included in the commentaries below.
Secured home loans
The UK home loan portfolio primarily comprises first lien
mortgages and accounts for 93% (December 2020: 93%) of the Group's
total home loans balance.
Home loans principal portfolios Barclays UK
====================
As at As at
30.06.21 31.12.20
===================================================== ========= =========
Gross loans and advances (GBPm) 155,247 148,343
90 day arrears rate, excluding recovery book (%) 0.1 0.2
Annualised gross charge-off rates - 180 days past
due (%) 0.6 0.6
Recovery book proportion of outstanding balances (%) 0.6 0.6
Recovery book impairment coverage ratio (%) 3.4 3.2
Average marked to market LTV
===================================================== ========= =========
Balance weighted % 51.3 50.7
Valuation weighted % 38.0 37.6
Half year Half year
ended ended
New lending 30.06.21 30.06.20
===================================================== ========= =========
New home loan bookings (GBPm) 19,120 9,977
New home loan proportion > 90% LTV (%) 0.9 3.7
Average LTV on new home loans: balance weighted (%) 68.7 68.4
Average LTV on new home loans: valuation weighted
(%) 61.3 60.0
Home loans principal portfolios - distribution of balances by LTV(1)
Distribution of impairment
Distribution of balances allowance Coverage ratio
Stage Stage Stage Stage Stage Stage Stage Stage Stage
1 2 3 Total 1 2 3 Total 1 2 3 Total
Barclays UK % % % % % % % % % % % %
================ ====== ====== ====== ====== ======= ======= ====== ====== ===== ===== ===== =====
As at 30.06.21
<=75% 74.4 11.8 0.7 86.9 6.0 16.4 24.4 46.8 - 0.1 1.7 -
>75% and <=90% 11.4 0.9 - 12.3 3.9 20.4 10.8 35.1 - 1.2 14.2 0.1
>90% and <=100% 0.7 - - 0.7 0.4 0.8 3.4 4.6 - 2.0 46.9 0.3
>100% 0.1 - - 0.1 0.2 2.9 10.4 13.5 0.2 8.1 83.5 9.0
================ ====== ====== ====== ====== ======= ======= ====== ====== ===== ===== ===== =====
As at 31.12.20
<=75% 75.7 11.6 0.6 87.9 17.9 15.0 19.0 51.9 - 0.1 1.8 -
>75% and <=90% 10.8 0.8 - 11.6 9.7 14.8 7.6 32.1 0.1 1.2 16.0 0.2
>90% and <=100% 0.4 - - 0.4 0.8 1.5 2.2 4.5 0.1 2.6 35.7 0.7
>100% 0.1 - - 0.1 0.7 3.4 7.4 11.5 0.7 10.3 69.1 8.0
1 Portfolio mark to market based on the most updated valuation including
recovery book balances. Updated valuations reflect the application
of the latest HPI available as at 30 June 2021.
The increased level of new business was driven by elevated
demand in the house purchase market supported by government
intervention including stamp duty relief. Also, with the gradual
roll back of COVID restrictions, high LTV products were
re-introduced in a phased manner during 2021, including the
introduction of a 95% LTV product under the Government's mortgage
guarantee scheme in April 2021. The comparatively lower LTV >
90% new loan proportion is primarily a result of the mortgage
guarantee scheme being live for only 3 months of H121.
Head Office: Italian home loans and advances at amortised cost
reduced to GBP5.1bn (2020: GBP5.7bn). The portfolio is secured on
residential property with an average balance weighted mark to
market LTV of 61% (2020: 62.1%). 90 day arrears decreased to 1.4%
(2020: 1.7%), gross charge-off rates decreased to 0.8% (2020:
1.0%).
Credit cards, unsecured loans and other retail lending
The principal portfolios listed below accounted for 83%
(December 2020: 84%) of the Group's total credit cards, unsecured
loans and other retail lending.
Principal portfolios 30 day 90 day
arrears arrears
rate, rate, Annualised
excluding excluding gross Annualised
Gross recovery recovery write-off net write-off
exposure book book rate rate
As at 30.06.21 GBPm % % % %
========================= ========= ========== ========== ========== ==============
Barclays UK
UK cards 10,202 1.4 0.6 4.9 4.8
UK personal loans 4,075 2.3 1.4 3.9 3.6
Barclays Partner Finance 2,362 0.5 0.2 1.3 1.3
Barclays International
US cards 15,895 1.6 0.9 5.6 5.4
Germany consumer lending 3,398 1.5 0.7 0.9 0.8
As at 31.12.20
========================= ========= ========== ========== ========== ==============
Barclays UK
UK cards 11,911 1.7 0.8 2.9 2.9
UK personal loans 4,591 2.3 1.2 3.4 3.1
Barclays Partner Finance 2,469 0.5 0.3 1.1 1.1
Barclays International
US cards 16,845 2.5 1.4 5.6 5.6
Germany consumer lending 3,458 1.9 0.8 1.2 1.1
UK cards: 30 and 90 day arrears rates reduced by 0.3% and 0.2%
to 1.4% and 0.6% respectively, despite balances reducing by
c.GBP1.7bn. The reduction in arrears was driven by continued COVID
support measures, along with improved book quality reflecting lower
consumer demand, tighter lending criteria and reduced customer
credit limits. Gross and net write-off rates increased
significantly to 4.9% and 4.8% respectively as a result of the
significant reduction in overall balances since the accounts
originally charged off. In addition, fewer debt sales in 2020,
allowed balances to follow the contractual write-off processes,
rather than accelerated write-offs due to debt sales.
UK personal loans : 30 day arrears rate was stable at 2.3%
whilst the 90 day arrears rate increased by 0.2% to 1.4%. The
increase in late cycle arrears was driven by a higher flow in to
delinquency, specifically in Q121, of customers previously granted
a payment holiday, as well as an overall reduction in balances.
Gross and net write-off rates increased as a result of the
reduction in overall balances.
Barclays Partner Finance: 30 and 90 day arrears rates remain
stable and in line with December 2020.
US cards: 30 and 90 day arrears rates improved and remain below
pre-pandemic levels due to government support schemes and industry
payment deferrals that were made available to consumers. These
factors also contributed to the decrease in balances.
Germany consumer lending: 30 and 90 day arrears rates decreased,
reflecting better-than-expected customer resilience, helped by
government support schemes. In addition, improvements in
collections processes and the implementation of tighter
underwriting criteria helped improve the credit quality of the
book.
Market Risk
Analysis of management value at risk (VaR)
The table below shows the total management VaR on a diversified
basis by asset class. Total management VaR includes all trading
positions in CIB and Treasury and it is calculated with a one-day
holding period. VaR limits are applied to total management VaR and
by asset class. Additionally, the market risk management function
applies VaR sub-limits to material businesses and trading
desks.
Management VaR (95%) by asset class
Half year ended Half year ended Half year ended
30.06.21 31.12.20 30.06.20
Average High Low Average High Low Average High Low
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
========================== ======= ==== ==== ======= ==== ==== ======= ==== ====
Credit risk 18 30 9 19 23 15 22 38 10
Interest rate risk 8 15 4 11 17 6 9 17 6
Equity risk 10 15 6 10 16 7 15 35 6
Basis risk 7 10 4 10 12 7 10 16 7
Spread risk 4 6 3 5 7 4 5 9 3
Foreign exchange
risk 3 6 2 5 7 3 5 7 2
Commodity risk - 1 - 1 1 - 1 1 -
Inflation risk 2 3 2 2 3 1 1 2 1
Diversification effect(1) (30) n/a n/a (35) n/a n/a (33) n/a n/a
========================== ======= ==== ==== ======= ==== ==== ======= ==== ====
Total management
VaR 22 36 13 28 35 20 35 57 18
1 Diversification effects recognise that forecast losses from different
assets or businesses are unlikely to occur concurrently, hence
the expected aggregate loss is lower than the sum of the expected
losses from each area. Historical correlations between losses are
taken into account in making these assessments. The high and low
VaR figures reported for each category did not necessarily occur
on the same day as the high and low VaR reported as a whole. Consequently,
a diversification effect balance for the high and low VaR figures
would not be meaningful and is therefore omitted from the above
table.
Average management VaR decreased 21% to GBP22m (H220: GBP28m),
reflecting a reduction of GBP5m due to a methodology update which
changed the historical lookback period of the VaR model from two
years to one year and reduced risk taking in the period. The
methodology change has increased the responsiveness of the model to
changes over time in volatility levels in the lookback period.
Treasury and Capital Risk
The Group has a comprehensive Key Risk Control Framework for
managing its liquidity risk. The liquidity framework meets the PRA
standards and is designed to maintain liquidity resources that are
sufficient in amount and quality, and a funding profile that is
appropriate to meet the Group's Liquidity Risk Appetite (LRA). The
liquidity framework is delivered via a combination of policy
formation, review and governance, analysis, stress testing, limit
setting and monitoring.
Liquidity risk stress testing
The liquidity risk stress assessment measures the potential
contractual and contingent stress outflows under a range of
scenarios, which are then used to determine the size of the
liquidity pool that is immediately available to meet anticipated
outflows if a stress occurs. The short-term scenarios include a 30
day Barclays-specific stress event, a 90 day market-wide stress
event and a 30 day combined scenario consisting of both a Barclays
specific and market-wide stress event. The Group also runs a
long-term liquidity stress test, which measures the anticipated
outflows over a 12 month market-wide scenario.
The CRR (as amended by CRR II) liquidity coverage ratio (LCR)
requirement takes into account the relative stability of different
sources of funding and potential incremental funding requirements
in a stress. The LCR is designed to promote short-term resilience
of a bank's liquidity risk profile by holding sufficient high
quality liquid assets to survive an acute stress scenario lasting
for 30 days.
As at 30 June 2021, the Group held eligible liquid assets in
excess of 100% of net stress outflows to its internal and external
regulatory requirements.
Liquidity coverage ratio
As at As at
30.06.21 31.12.20
GBPbn GBPbn
========================== ========= =========
Eligible liquidity buffer 280 258
Net stress outflows (172) (159)
========================== ========= =========
Surplus 108 99
Liquidity coverage ratio 162% 162%
The Group plans to maintain its surplus to the internal and
regulatory stress requirements at an efficient level, while
considering risks to market funding conditions and its liquidity
position. The continuous reassessment of these risks may lead to
execution of appropriate actions to resize the liquidity pool.
Composition of the Group liquidity pool
As at
As at 30.06.21 31.12.20
============================================ =========
Liquidity pool of
which CRD IV LCR eligible(3)
=================================
Liquidity Level Level Liquidity
pool Cash 1 2A pool
GBPbn GBPbn GBPbn GBPbn GBPbn
======================================== ========= ========== ========== ========= =========
Cash and deposits with central banks(1) 224 217 - - 197
Government bonds(2)
AAA to AA- 39 - 30 1 31
A+ to A- 6 - 1 5 13
BBB+ to BBB- 2 - 2 - 1
Total government bonds 47 - 33 6 45
Other
Government Guaranteed Issuers, PSEs
and GSEs 8 - 5 2 10
International Organisations and MDBs 4 - 4 - 6
Covered bonds 7 - 6 2 8
Other 1 - - - -
======================================== ========= ========== ========== ========= =========
Total other 20 - 15 4 24
Total as at 30 June 2021 291 217 48 10 266
======================================== ========= ========== ========== =========
Total as at 31 December 2020 266 192 55 11
1 Includes cash held at central banks and surplus cash at central
banks related to payment schemes. Over 98% (December 2020: over
98%) was placed with the Bank of England, US Federal Reserve, European
Central Bank, Bank of Japan and Swiss National Bank.
2 Of which over 76% (December 2020: over 78%) comprised UK, US, French,
German, Japanese, Swiss and Dutch securities.
3 The LCR eligible liquidity pool is adjusted for trapped liquidity
and other regulatory deductions. It also incorporates other CRR
(as amended by CRR II) qualifying assets that are not eligible
under Barclays' internal risk appetite.
The Group liquidity pool increased to GBP291bn as at 30 June
2021 (December 2020: GBP266bn) driven by continued deposit growth,
further borrowing from the Bank of England's Term Funding Scheme
with additional incentives for SMEs and a seasonal increase in
short-term wholesale funding, which were partly offset by an
increase in business funding consumption. During H121, the
month-end liquidity pool ranged from GBP290bn to GBP308bn (H220:
GBP266bn to GBP332bn), and the month-end average balance was
GBP296bn (H220: GBP318bn). The liquidity pool is held unencumbered
and is not used to support payment or clearing requirements. Such
requirements are treated as part of our regular business funding.
The liquidity pool is intended to offset stress outflows, and
comprises the above cash and unencumbered assets.
As at 30 June 2021, 60% (December 2020: 64%) of the liquidity
pool was located in Barclays Bank PLC, 27% (December 2020: 23%) in
Barclays Bank UK PLC and 6% (December 2020: 7%) in Barclays Bank
Ireland PLC. The residual portion of the liquidity pool is held
outside of these entities, predominantly in US subsidiaries, to
meet entity-specific stress outflows and local regulatory
requirements. To the extent the use of this residual portion of the
liquidity pool is restricted due to local regulatory requirements,
it is assumed to be unavailable to the rest of the Group in
calculating the LCR.
The composition of the pool is subject to limits set by the
Board and the independent liquidity risk, credit risk and market
risk functions. In addition, the investment of the liquidity pool
is monitored for concentration by issuer, currency and asset type.
Given returns generated by these highly liquid assets, the risk and
reward profile is continuously managed.
Deposit funding
As at 30.06.21 As at 31.12.20
=========================================== ==============
Loans and
advances Deposits
at amortised at amortised Loan: deposit Loan: deposit
cost cost ratio(1) ratio(1)
Funding of loans and advances GBPbn GBPbn % %
============================== ============= ============= ============= ==============
Barclays UK 222 256 87 89
Barclays International 122 245 50 51
Head Office 5
============================== ============= ============= ============= ==============
Barclays Group 349 501 70 71
1 The loan: deposit ratio is calculated as loans and advances at
amortised cost divided by deposits at amortised cost.
Funding structure and funding relationships
The basis for liquidity risk management is a funding structure
that reduces the probability of a liquidity stress leading to an
inability to meet funding obligations as they fall due. The Group's
overall funding strategy is to develop a diversified funding base
(geographically, by type and by counterparty) and maintain access
to a variety of alternative funding sources, to provide protection
against unexpected fluctuations, while minimising the cost of
funding.
Within this, the Group aims to align the sources and uses of
funding. As such, retail and corporate loans and advances are
largely funded by deposits in the relevant entities, with the
surplus primarily funding the liquidity pool. The majority of
reverse repurchase agreements are matched by repurchase agreements.
Derivative liabilities and assets are largely matched. A
substantial proportion of balance sheet derivative positions
qualify for counterparty netting and the remaining portions are
largely offset when netted against cash collateral received and
paid. Wholesale debt and equity is used to fund residual
assets.
These funding relationships as at 30 June 2021 are summarised
below:
As at As at As at As at
30.06.21 31.12.20 30.06.21 31.12.20
Assets GBPbn GBPbn Liabilities and equity GBPbn GBPbn
================================= ========= ========= ========================== ========= =========
Loans and advances at Deposits at amortised
amortised cost(1) 340 335 cost 501 481
<1 Year wholesale
Group liquidity pool 291 266 funding 58 43
>1 Year wholesale
funding 101 102
Repurchase agreements,
Reverse repurchase agreements, trading portfolio
trading portfolio assets, liabilities, cash
cash collateral and settlement collateral and settlement
balances 419 376 balances 362 324
Derivative financial
Derivative financial instruments 257 302 instruments 247 301
Other assets(2) 69 71 Other liabilities 39 32
Equity 68 67
================================= ========= ========= ========================== ========= =========
Total liabilities
Total assets 1,376 1,350 and equity 1,376 1,350
1 Adjusted for liquidity pool debt securities reported at amortised
cost of GBP9bn (December 2020: GBP8bn).
2 Other assets include fair value assets that are not part of reverse
repurchase agreements or trading portfolio assets, and other asset
categories.
Composition of wholesale funding
Wholesale funding outstanding (excluding repurchase agreements)
was GBP158.7bn (December 2020: GBP145bn). In H121, the Group issued
GBP5.9bn of MREL eligible instruments from Barclays PLC (the Parent
company) in a range of tenors and currencies.
Our operating companies also access wholesale funding markets to
maintain their stable and diversified funding bases. Barclays Bank
PLC continued to issue in the shorter-term and medium-term notes
markets. In addition, Barclays Bank UK PLC continued to issue in
the shorter-term markets.
Wholesale funding of GBP57.8bn (December 2020: GBP42.7bn)
matures in less than one year, representing 36% (December 2020:
29%) of total wholesale funding outstanding. This includes
GBP18.8bn (December 2020: GBP20.3bn) related to term funding(2)
.
Maturity profile of wholesale funding(1,2)
<1 1-3 3-6 6-12 <1 1-2 2-3 3-4 4-5 >5
month months months months year years years years years years Total
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
============================= ===== ====== ====== ====== ===== ===== ===== ===== ===== ===== =====
Barclays PLC (the Parent
company)
Senior unsecured (public
benchmark) - 1.2 - 0.8 2.0 4.7 6.8 6.9 5.3 12.1 37.8
Senior unsecured (privately
placed) - - 0.1 - 0.1 - 0.3 - - 0.5 0.9
Subordinated liabilities - - - - - - - 0.9 1.5 6.8 9.2
Barclays Bank PLC (including
subsidiaries)
Certificates of deposit
and commercial paper 3.7 8.0 8.9 8.9 29.5 0.4 0.1 - - - 30.0
Asset backed commercial
paper 2.1 3.2 0.3 0.1 5.7 - - - - - 5.7
Senior unsecured (public
benchmark) - 0.1 - 1.3 1.4 - 1.0 - - 0.5 2.9
Senior unsecured (privately
placed)(3) 0.9 2.6 2.3 5.3 11.1 7.7 7.5 4.9 3.5 21.8 56.5
Covered Bonds - - - - - - - - - - -
Asset backed securities - - 0.5 0.1 0.6 0.6 0.1 0.1 0.3 1.4 3.1
Subordinated liabilities - 0.4 - 1.0 1.4 1.1 0.1 0.1 - 0.9 3.6
Barclays Bank UK PLC
(including subsidiaries)
Certificates of deposit
and commercial paper 1.6 2.0 0.1 0.1 3.8 - - - - - 3.8
Senior unsecured (public
benchmark) - - - - - - - - - 0.2 0.2
Covered Bonds - - - 2.2 2.2 1.7 - - - 1.1 5.0
============================= ===== ====== ====== ====== ===== ===== ===== ===== ===== ===== =====
Total as at 30 June
2021 8.3 17.5 12.2 19.8 57.8 16.2 15.9 12.9 10.6 45.3 158.7
Of which secured 2.1 3.2 0.8 2.4 8.5 2.3 0.1 0.1 0.3 2.5 13.8
Of which unsecured 6.2 14.3 11.4 17.4 49.3 13.9 15.8 12.8 10.3 42.8 144.9
Total as at 31 December
2020 5.7 15.4 9.5 12.1 42.7 15.6 16.7 12.3 10.2 47.5 145.0
Of which secured 2.3 5.0 0.7 0.5 8.5 3.1 2.2 0.5 0.2 2.6 17.1
Of which unsecured 3.4 10.4 8.8 11.6 34.2 12.5 14.5 11.8 10.0 44.9 127.9
1 The composition of wholesale funds comprises the balance sheet
reported financial liabilities at fair value, debt securities in
issue and subordinated liabilities. It does not include participation
in the central bank facilities reported within repurchase agreements
and other similar secured borrowing.
2 Term funding comprises public benchmark and privately placed senior
unsecured notes, covered bonds, asset-backed securities and subordinated
debt where the original maturity of the instrument is more than
1 year.
3 Includes structured notes of GBP47.9bn, of which GBP10.2bn matures
within one year.
Credit ratings
In addition to monitoring and managing key metrics related to
the financial strength of the Group, Barclays also solicits
independent credit ratings from Standard & Poor's Global
(S&P), Moody's, Fitch, and Rating and Investment Information
(R&I). These ratings assess the creditworthiness of the Group,
its subsidiaries and its branches, and are based on reviews of a
broad range of business and financial attributes including capital
strength, profitability, funding, liquidity, asset quality,
strategy and governance.
Standard
Barclays Bank PLC & Poor's Moody's Fitch
==================== ============== ============ ===========
Long-term A / Positive A1 / Stable A+ / Stable
Short-term A-1 P-1 F1
Barclays Bank UK PLC
==================== ============== ============ ===========
Long-term A / Positive A1 / Stable A+ / Stable
Short-term A-1 P-1 F1
Barclays PLC
==================== ============== ============ ===========
Long-term BBB / Positive Baa2 /Stable A / Stable
Short-term A-2 P-2 F1
In June 2021, S&P revised the outlooks of Barclays PLC,
Barclays Bank PLC and Barclays Bank UK PLC to positive from stable,
whilst affirming all ratings. The revisions reflect the view that
Barclays is delivering a stronger, more consistent business profile
and financial performance.
In July 2021, Moody's revised the outlook of Barclays Bank UK
PLC to stable from negative due to their view that asset quality
and profitability have stabilised following a turbulent 2020.
In July 2021, Fitch revised the outlooks of Barclays PLC,
Barclays Bank PLC and Barclays Bank UK PLC to stable from negative,
whilst affirming all ratings. The revisions reflected improved
expectations for economic recovery in Barclays' key markets and the
Group's resilient performance through the pandemic.
Barclays also solicits issuer ratings from R&I, and the
ratings of A- for Barclays PLC and A for Barclays Bank PLC were
affirmed in November 2020 with stable outlooks.
A credit rating downgrade could result in outflows to meet
collateral requirements on existing contracts. Outflows related to
credit rating downgrades are included in the LRA stress scenarios
and a portion of the liquidity pool is held against this risk.
Credit ratings downgrades could also result in reduced funding
capacity and increased funding costs.
The contractual collateral requirement following one- and
two-notch long-term and associated short-term downgrades across all
credit rating agencies, would result in outflows of GBP1bn and
GBP4bn respectively, and are provided for in determining an
appropriate liquidity pool size given the Group's liquidity risk
appetite. These numbers do not assume any management or
restructuring actions that could be taken to reduce posting
requirements. These outflows do not include the potential liquidity
impact from loss of unsecured funding, such as from money market
funds, or loss of secured funding capacity. However, unsecured and
secured funding stresses are included in the LRA stress scenarios
and a portion of the liquidity pool is held against these
risks.
Capital
The Group's Overall Capital Requirement for CET1 is 11.2%
comprising a 4.5% Pillar 1 minimum, a 2.5% Capital Conservation
Buffer (CCB), a 1.5% Global Systemically Important Institution
(G-SII) buffer, a 2.7% Pillar 2A requirement and a 0%
Countercyclical Capital Buffer (CCyB).
The Group's CCyB is based on the buffer rate applicable for each
jurisdiction in which the Group has exposures. On 11 March 2020,
the Financial Policy Committee (FPC) set the CCyB rate for UK
exposures at 0% with immediate effect. The buffer rates set by
other national authorities for non-UK exposures are not currently
material. Overall, this results in a 0.0% CCyB for the Group.
The Group's Pillar 2A requirement as per the PRA's Individual
Capital Requirement is 4.8% of which at least 56.25% needs to be
met with CET1 capital, equating to approximately 2.7% of RWAs. The
Pillar 2A requirement is subject to at least annual review and has
been set as a nominal capital amount. This is based on a point in
time assessment and the requirement (when expressed as a proportion
of RWAs) will change depending on the total RWAs at each reporting
period.
Following the withdrawal of the UK from the EU, any references
to CRR as amended by CRR II mean, unless otherwise specified, CRR
as amended by CRR II, as it forms part of UK law pursuant to the
European Union (Withdrawal) Act 2018 and subject to the temporary
transitional powers (TTP) available to UK regulators to delay or
phase-in on-shoring changes to UK regulatory requirements arising
at the end of the transition period until 31 March 2022, as at the
applicable reporting date. With effect from 26 June 2021, the
Financial Services Act 2021 amended CRR as amended by CRR II in
part. The amendments included an extension to the application of
CRR II settlement netting to the CRR leverage exposure which was
due to expire on 27 June 2021 under CRR II quick fix measures.
Throughout the TTP period, the Bank of England (BoE) and PRA will
continue to review the UK regulatory framework and the Group
disclosures will reflect the amended framework as applicable at the
effective reporting date.
On 26 April 2019, a prudential backstop was implemented for
qualifying exposures originating after 26 April 2019 that have been
non-performing for more than 2 years. Where minimum coverage
requirements for qualifying non-performing exposures are not met,
the difference must be deducted from CET1 capital. Different
conversion factors are applied for secured and unsecured exposures
depending on the length of time the exposures have been
non-performing. For 2021, the conversion factor applied to secured
non-performing exposures is 0% and for unsecured non-performing
exposures is 35% prior to any coverage being applied. For H121 the
impact to CET1 capital is immaterial.
On 9 July 2021, the PRA published their near final policy
statement on the implementation of Basel III standards. The policy
statement confirmed the PRA's intention to revert to the previous
treatment of 100% CET1 capital deduction for qualifying software
assets, meaning the c.40bps benefit in the CET1 ratio will be
reversed from 1 January 2022.
As at As at As at
Capital ratios(1,2,3) 30.06.21 31.03.21 31.12.20
====================================================== ========= ========= =========
CET1 15.1% 14.6% 15.1%
Tier 1 (T1) 18.9% 18.4% 19.0%
Total regulatory capital 22.3% 21.8% 22.1%
Capital resources GBPm GBPm GBPm
====================================================== ========= ========= =========
Total equity excluding non-controlling interests
per the balance sheet 67,052 65,105 65,797
Less: other equity instruments (recognised as
AT1 capital) (11,167) (11,179) (11,172)
Adjustment to retained earnings for foreseeable
ordinary share dividends (510) (303) (174)
Adjustment to retained earnings for foreseeable
repurchase of shares - (439) -
Adjustment to retained earnings for foreseeable
other equity coupons (35) (42) (30)
Other regulatory adjustments and deductions
Additional value adjustments (PVA) (1,447) (1,496) (1,146)
Goodwill and intangible assets (6,814) (6,504) (6,914)
Deferred tax assets that rely on future profitability
excluding temporary differences (664) (629) (595)
Fair value reserves related to gains or losses
on cash flow hedges (665) (850) (1,575)
Gains or losses on liabilities at fair value
resulting from own credit 934 1,202 870
Defined benefit pension fund assets (1,828) (1,192) (1,326)
Direct and indirect holdings by an institution
of own CET1 instruments (50) (50) (50)
Adjustment under IFRS 9 transitional arrangements 1,331 2,285 2,556
Other regulatory adjustments 88 (4) 55
====================================================== ========= ========= =========
CET1 capital 46,225 45,904 46,296
AT1 capital
Capital instruments and related share premium
accounts 11,167 11,179 11,172
Qualifying AT1 capital (including minority interests)
issued by subsidiaries 648 655 646
Other regulatory adjustments and deductions (80) (80) (80)
====================================================== ========= ========= =========
AT1 capital 11,735 11,754 11,738
T1 capital 57,960 57,658 58,034
T2 capital
Capital instruments and related share premium
accounts 8,969 8,951 7,836
Qualifying T2 capital (including minority interests)
issued by subsidiaries 1,401 1,641 1,893
Credit risk adjustments (excess of impairment
over expected losses) 79 95 57
Other regulatory adjustments and deductions (160) (160) (160)
====================================================== ========= ========= =========
Total regulatory capital 68,249 68,185 67,660
Total RWAs 306,424 313,356 306,203
1 CET1, T1 and T2 capital, and RWAs are calculated applying the transitional
arrangements of the CRR as amended by CRR II. This includes IFRS
9 transitional arrangements and the grandfathering of CRR and CRR
II non-compliant capital instruments.
2 The fully loaded CET1 ratio, as is relevant for assessing against
the conversion trigger in Barclays PLC AT1 securities, was 14.7%,
with GBP44.9bn of CET1 capital and GBP306.2bn of RWAs calculated
without applying the transitional arrangements of the CRR as amended
by CRR II.
3 The Group's CET1 ratio, as is relevant for assessing against the
conversion trigger in Barclays Bank PLC 7.625% Contingent Capital
Notes, was 15.1%. For this calculation CET1 capital and RWAs are
calculated applying the transitional arrangements under the CRR
as amended by CRR II, including the IFRS 9 transitional arrangements.
The benefit of the Financial Services Authority (FSA) October 2012
interpretation of the transitional provisions, relating to the
implementation of CRD IV, expired in December 2017.
Movement in CET1 capital Three
months Six months
ended ended
30.06.21 30.06.21
GBPm GBPm
====================================================== ========= ==========
Opening CET1 capital 45,904 46,296
Profit for the period attributable to equity holders 2,302 4,201
Own credit relating to derivative liabilities 3 17
Ordinary share dividends paid and foreseen (380) (509)
Purchased and foreseeable share repurchase - (700)
Other equity coupons paid and foreseen (187) (394)
====================================================== ========= ==========
Increase in retained regulatory capital generated
from earnings 1,738 2,615
Net impact of share schemes 119 (48)
Fair value through other comprehensive income reserve 70 (250)
Currency translation reserve (17) (495)
Other reserves 5 (1)
====================================================== ========= ==========
Increase / (decrease) in other qualifying reserves 177 (794)
Pension remeasurements within reserves 289 103
Defined benefit pension fund asset deduction (636) (502)
====================================================== ========= ==========
Net impact of pensions (347) (399)
Additional value adjustments (PVA) 49 (301)
Goodwill and intangible assets (310) 100
Deferred tax assets that rely on future profitability
excluding those arising from temporary differences (35) (69)
Adjustment under IFRS 9 transitional arrangements (954) (1,225)
Other regulatory adjustments 3 2
====================================================== ========= ==========
Decrease in regulatory capital due to adjustments
and deductions (1,247) (1,493)
Closing CET1 capital 46,225 46,225
CET1 capital decreased GBP0.1bn to GBP46.2bn (December 2020:
GBP46.3bn).
GBP4.2bn of capital generated from profits were partially offset
by GBP1.6bn dividends paid and foreseen including GBP0.7bn for the
share buyback announced with FY20 results, a GBP0.5bn accrual
towards a FY21 dividend and GBP0.4bn of equity coupons paid. Other
significant movements in the period were:
-- A GBP0.3bn reduction in the fair value through other comprehensive
income reserve driven by a decrease in the fair value of bonds
due to increasing bond yields
-- A 0.5bn decrease in the currency translation reserves driven by
the depreciation of period end EUR and USD against GBP
-- A GBP0.4bn decrease as a result of movements relating to pensions,
largely due to deficit contribution payments of GBP0.35bn in April
2021
-- A GBP0.3bn increase in the PVA deduction due to the removal of
temporary regulatory supporting measures applied to certain additional
valuation adjustments
-- A GBP1.2bn decrease in IFRS 9 transitional relief, after tax, primarily
due to a credit impairment net release, impairment migrations from
stage 2 to stage 3 and a decrease to the amount of relief applied
to the pre-2020 impairment charge reducing to 50% in 2021 from
70% in 2020
RWAs by risk type and business
Counterparty credit
Credit risk risk Market Risk
=============== ================================= ==============
Settlement Operational Total
STD IRB STD IRB Risk CVA STD IMA risk RWAs
As at 30.06.21 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
====================== ====== ======= ====== ====== ========== ===== ====== ====== =========== =======
Barclays UK 7,151 52,995 437 - - 163 33 - 11,381 72,160
Corporate and
Investment
Bank 26,406 71,540 15,343 18,973 101 2,668 17,761 18,010 23,453 194,255
Consumer, Cards
and Payments 19,218 2,509 158 40 - 29 - 55 6,948 28,957
====================== ====== ======= ====== ====== ========== ===== ====== ====== =========== =======
Barclays International 45,624 74,049 15,501 19,013 101 2,697 17,761 18,065 30,401 223,212
Head Office 4,591 7,269 - - - - - - (808) 11,052
====================== ====== ======= ====== ====== ========== ===== ====== ====== =========== =======
Barclays Group 57,366 134,313 15,938 19,013 101 2,860 17,794 18,065 40,974 306,424
As at 30.03.21
====================== ====== ======= ====== ====== ========== ===== ====== ====== =========== =======
Barclays UK 7,066 53,512 431 - - 217 64 - 11,381 72,671
Corporate and
Investment
Bank 25,832 75,854 13,781 19,218 102 2,452 16,479 24,083 23,452 201,253
Consumer, Cards
and Payments 18,621 2,875 178 41 - 28 - 59 6,949 28,751
====================== ====== ======= ====== ====== ========== ===== ====== ====== =========== =======
Barclays International 44,453 78,729 13,959 19,259 102 2,480 16,479 24,142 30,401 230,004
Head Office 4,424 7,065 - - - - - - (808) 10,681
====================== ====== ======= ====== ====== ========== ===== ====== ====== =========== =======
Barclays Group 55,943 139,306 14,390 19,259 102 2,697 16,543 24,142 40,974 313,356
As at 31.12.20
====================== ====== ======= ====== ====== ========== ===== ====== ====== =========== =======
Barclays UK 7,360 54,340 394 - - 136 72 - 11,359 73,661
Corporate and
Investment
Bank 24,660 73,792 12,047 20,280 246 2,351 13,123 22,363 23,343 192,205
Consumer, Cards
and Payments 19,754 3,041 177 45 - 31 - 71 6,996 30,115
====================== ====== ======= ====== ====== ========== ===== ====== ====== =========== =======
Barclays International 44,414 76,833 12,224 20,325 246 2,382 13,123 22,434 30,339 222,320
Head Office 4,153 6,869 - - - - - - (800) 10,222
====================== ====== ======= ====== ====== ========== ===== ====== ====== =========== =======
Barclays Group 55,927 138,042 12,618 20,325 246 2,518 13,195 22,434 40,898 306,203
Movement analysis of RWAs
Counterparty
Credit credit Market Operational
risk risk risk risk Total RWAs
GBPm GBPm GBPm GBPm GBPm
Opening RWAs (as at 31.12.20) 193,969 35,707 35,629 40,898 306,203
Book size 378 1,698 1,519 76 3,671
Acquisitions and disposals (874) - - - (874)
Book quality 1,074 277 - - 1,351
Model updates (1,070) (186) - - (1,256)
Methodology and policy (115) 416 (1,289) - (988)
Foreign exchange movements(1) (1,683) - - - (1,683)
Total RWA movements (2,290) 2,205 230 76 221
Closing RWAs (as at 30.06.21) 191,679 37,912 35,859 40,974 306,424
1 Foreign exchange movements does not include foreign exchange for
counterparty credit risk or market risk.
Overall RWAs remained broadly stable at GBP306.4bn (December
2020: GBP306.2bn).
Credit risk RWAs decreased GBP2.3bn:
-- A GBP1.1bn increase in book quality is primarily due to reduction
in credit quality
-- A GBP1.1bn decrease in model updates primarily due to modelled
risk weight recalibrations
-- A GBP1.7bn decrease in FX is due to the depreciation of period
end EUR and USD against GBP
Counterparty Credit risk RWAs increased GBP2.2bn:
-- A GBP1.7bn increase in book size primarily due to an increase in
trading activities across SFTs and derivatives
Market risk RWAs increased GBP0.2bn:
-- A GBP1.5bn increase in book size primarily due to increased client
and trading activities
-- A GBP1.3bn decrease in methodology and policy is driven by a change
in the historical look back period of the VaR model from two years
to one year
Leverage ratio and exposures
The Group is subject to a leverage ratio requirement of 3.8% as
at 30 June 2021. This comprises the 3.25% minimum requirement, a
G-SII additional leverage ratio buffer (G-SII ALRB) of 0.53% and a
countercyclical leverage ratio buffer of 0.0%. Although the
leverage ratio is expressed in terms of T1 capital, 75% of the
minimum requirement, equating to 2.4375%, needs to be met with CET1
capital. In addition, the G-SII ALRB must be covered solely with
CET1 capital. The CET1 capital held against the 0.53% G-SII ALRB
was GBP6.3bn.
The Group is required to disclose an average UK leverage ratio
which is based on capital on the last day of each month in the
quarter and an exposure measure for each day in the quarter. The
Group is also required to disclose a UK leverage ratio based on
capital and exposure on the last day of the quarter. Both
approaches exclude qualifying claims on central banks from the
leverage exposures and include the PRA's adoption of CRR II
settlement netting.
On 29 June 2021, the FPC and PRA issued a consultation paper on
proposed changes to the UK leverage ratio framework. The
consultation states the intention to move to a single UK leverage
ratio requirement meaning that the CRR leverage ratio will no
longer apply for UK banks from 1 January 2022. Whilst largely
upholding the existing framework, some technical changes to the
exposure measure have been proposed that will align to the Basel
III standards. Minimum requirements for the Group remain the same
with minimum requirements also expected to be applied at the
individual level; individual requirements may be replaced with a
sub-consolidated measure, subject to permission from the PRA, from
1 January 2023.
As at As at As at
30.06.21 31.03.21 31.12.20
Leverage ratios(1,2) GBPm GBPm GBPm
Average UK leverage ratio 4.8% 4.9% 5.0%
Average T1 capital(3) 57,280 57,040 57,069
Average UK leverage exposure 1,191,986 1,174,887 1,146,919
UK leverage ratio 5.0% 5.0% 5.3%
CET1 capital 46,225 45,904 46,296
AT1 capital 11,087 11,099 11,092
========= =========
T1 capital(3) 57,312 57,003 57,388
UK leverage exposure 1,153,570 1,145,413 1,090,907
UK leverage exposure
Accounting assets
Derivative financial instruments 256,636 270,717 302,446
Derivative cash collateral 54,063 51,797 64,798
Securities financing transactions (SFTs) 182,820 189,496 164,034
Loans and advances and other assets 882,814 867,646 818,236
========= =========
Total IFRS assets 1,376,333 1,379,656 1,349,514
Regulatory consolidation adjustments (1,406) (1,926) (1,144)
Derivatives adjustments
Derivatives netting (229,123) (242,857) (272,275)
Adjustments to collateral (42,774) (45,464) (57,414)
Net written credit protection 16,730 16,814 14,986
Potential future exposure (PFE) on derivatives 135,162 128,454 117,010
========= =========
Total derivatives adjustments (120,005) (143,053) (197,693)
SFTs adjustments 23,511 22,294 21,114
Regulatory deductions and other adjustments (22,525) (18,111) (17,469)
Weighted off-balance sheet commitments 111,870 118,134 113,704
Qualifying central bank claims (172,465) (167,054) (155,890)
Settlement netting (41,743) (44,527) (21,229)
UK leverage exposure 1,153,570 1,145,413 1,090,907
1 Fully loaded average UK leverage ratio was 4.7%, with GBP55.5bn
of T1 capital and GBP1,190.2bn of leverage exposure. Fully loaded
UK leverage ratio was 4.9%, with GBP56.0bn of T1 capital and GBP1,152.2bn
of leverage exposure. Fully loaded UK leverage ratios are calculated
without applying the transitional arrangements of the CRR as amended
by CRR II.
2 Capital and leverage measures are calculated applying the transitional
arrangements of the CRR as amended by CRR II.
3 T1 capital is calculated in line with the PRA Handbook.
The average UK leverage ratio decreased to 4.8% (December 2020:
5.0%). The average leverage exposure increased by GBP45.1bn to
GBP1,192.0bn (December 2020: GBP1,146.9bn) largely driven by an
increase in SFTs, TPAs and PFE on derivatives.
The UK leverage ratio decreased to 5.0% (December 2020: 5.3%).
The UK leverage exposure increased by GBP62.7bn to GBP1,153.6bn
(December 2020: GBP1,090.9bn) primarily driven by a GBP19.3bn
increase in TPAs, a GBP18.8bn increase in SFTs and a GBP18.2bn
increase in PFE on derivatives due to increased trading activity in
CIB.
The Group also discloses a CRR leverage ratio (1) within its
additional regulatory disclosures prepared in accordance with EBA
guidelines on disclosure under Part Eight of the CRR (see Barclays
PLC Pillar 3 Report H1 2021, expected to be published on 13 August
2021 and which will be available at
home.barclays/investor-relations/reports-and-events/latest-financial-results
).
1 CRR leverage ratio as amended by CRR II.
MREL
The Group is currently required to meet the higher of: (i) the
requirements set by the BoE based on RWAs and the higher of average
and UK leverage exposures; and (ii) the requirements in CRR as
amended by CRR II based on RWAs and CRR leverage exposures. The
MREL requirements are subject to phased implementation and will be
fully implemented by 1 January 2022. As at 30 June 2021, the
Group's MREL requirement was to meet 6.9% of CRR leverage
exposures.
On 22 July 2021 the BoE published a consultation paper on its
approach to setting MREL. Under the proposed changes to their 2018
Statement of Policy, from 1 January 2022, the Group's expected MREL
requirements will be to meet the higher of: (i) two times the sum
of Pillar 1 and Pillar 2A; and (ii) the higher of two times the
applicable leverage ratio requirement or 6.75% of leverage
exposures. As the FPC and PRA's intention is to move to a single UK
leverage framework, this means that CRR leverage exposure
requirements in relation to MREL may no longer apply from 1 January
2022. Additionally, the proposals clarify that own funds
instruments issued by subsidiaries will no longer be eligible to
count towards the Group's MREL from 1 January 2022.
CET1 capital cannot be counted towards both MREL and the capital
buffers, meaning that the buffers will effectively be applied above
MREL requirements.
Own funds and eligible liabilities As a percentage of As a percentage of
ratios(1,2) RWAs CRR leverage exposure
As at As at As at As at As at As at
30.06.21 31.03.21 31.12.20 30.06.21 31.03.21 31.12.20
Total Barclays PLC (the Parent
company) own funds and eligible
liabilities 33.7% 32.1% 32.7% 7.7% 7.6% 8.0%
Total own funds and eligible
liabilities, including eligible
Barclays Bank PLC instruments 34.4% 32.8% 33.6% 7.9% 7.8% 8.2%
As at As at As at
Own funds and eligible liabilities(1,2) 30.06.21 31.03.21 31.12.20
GBPm GBPm GBPm
CET1 capital 46,225 45,904 46,296
AT1 capital instruments and related share premium
accounts(3) 11,087 11,099 11,092
T2 capital instruments and related
share premium accounts(3) 8,888 8,886 7,733
Eligible liabilities 37,095 34,571 35,086
Total Barclays PLC (the Parent company) own funds
and eligible liabilities 103,295 100,460 100,207
Qualifying AT1 capital (including minority interests)
issued by subsidiaries 648 655 646
Qualifying T2 capital (including minority interests)
issued by subsidiaries 1,401 1,641 1,893
Total own funds and eligible liabilities, including
eligible Barclays Bank PLC instruments 105,344 102,756 102,746
Total RWAs 306,424 313,356 306,203
Total CRR leverage exposure(4) 1,334,929 1,320,628 1,254,157
1 CET1, T1 and T2 capital, and RWAs are calculated applying the transitional
arrangements of the CRR as amended by CRR II. This includes IFRS
9 transitional arrangements and the grandfathering of CRR and CRR
II non-compliant capital instruments.
2 The BoE has set external MREL based on the higher of RWAs and CRR
or UK leverage exposures which could result in the binding measure
changing in future periods. The 30 June 2021 Barclays PLC (the
Parent company) own funds and eligible liabilities ratio as a percentage
of the UK leverage exposure was 9.0% and as a percentage of the
average UK leverage exposure was 8.7%.
3 Includes other AT1 capital regulatory adjustments and deductions
of GBP80m (December 2020: GBP80m), and other T2 credit risk adjustments
and deductions of GBP81m (December 2020: GBP103m).
4 Fully loaded CRR leverage exposure is calculated without applying
the transitional arrangements of the CRR as amended by CRR II.
Statement of Directors' Responsibilities
The Directors (the names of whom are set out below) are required
to prepare the financial statements on a going concern basis unless
it is not appropriate to do so. In making this assessment, the
directors have considered information relating to present and
future conditions. Each of the Directors confirm that to the best
of their knowledge, the condensed consolidated interim financial
statements set out on pages 64 to 69 have been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the UK, and that the interim
management report herein includes a fair review of the information
required by Disclosure and Transparency Rules 4.2.7R and 4.2.8R
namely:
-- an indication of important events that have occurred during the
six months ended 30 June 2021 and their impact on the condensed
consolidated interim financial statements, and a description of
the principal risks and uncertainties for the remaining six months
of the financial year
-- any related party transactions in the six months ended 30 June
2021 that have materially affected the financial position or performance
of Barclays during that period and any changes in the related party
transactions described in the last Annual Report that could have
a material effect on the financial position or performance of Barclays
in the six months ended 30 June 2021
Signed on 27 July 2021 on behalf of the Board by
James E Staley Tushar Morzaria
Group Chief Group Finance
Executive Director
Barclays PLC Board of Directors:
Chairman Executive Directors Non-Executive Directors
Nigel Higgins James E Staley Mike Ashley
Tushar Morzaria Tim Breedon CBE
Mohamed A. El-Erian
Dawn Fitzpatrick
Mary Francis CBE
Crawford Gillies
Brian Gilvary
Diane Schueneman
Julia Wilson
Independent Review Report to Barclays PLC
Conclusion
We have been engaged by the company to review the condensed set
of financial statements in the Interim Results Announcement for the
six months ended 30 June 2021 which comprises:
-- the condensed consolidated income statement and condensed consolidated
statement of comprehensive income for the period then ended;
-- the condensed consolidated balance sheet as at 30 June 2021;
-- the condensed consolidated statement of changes in equity for the
period then ended;
-- the condensed consolidated cash flow statement for the period then
ended; and
-- the related explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the Interim Results Announcement for the six months ended 30
June 2021 is not prepared, in all material respects, in accordance
with IAS 34 Interim Financial Reporting as adopted for use in the
UK and the Disclosure Guidance and Transparency Rules ("the DTR")
of the UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. We read the other information contained in the Interim
Results Announcement and consider whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Directors' responsibilities
The Interim Results Announcement is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the Interim Results Announcement in accordance with
the DTR of the UK FCA.
As disclosed in Note 1, the Basis of preparation, the latest
annual financial statements of the Barclays Group are prepared in
accordance with International Financial Reporting Standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union and in accordance with international accounting
standards in conformity with the requirements of the Companies Act
2006 and the next annual financial statements will be prepared in
accordance with UK-adopted international accounting standards. The
directors are responsible for preparing the condensed set of
financial statements included in the Interim Results Announcement
in accordance with IAS 34 as adopted for use in the UK.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the Interim Results
Announcement based on our review.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the company those matters we
are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company for our
review work, for this report, or for the conclusions we have
reached.
Michelle Hinchliffe
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London, E14 5GL
27 July 2021
Condensed Consolidated Financial Statements
Condensed consolidated income statement (unaudited)
Half year Half year
ended ended
30.06.21 30.06.20
Notes(1) GBPm GBPm
========= =========
Interest and similar income 5,279 6,437
Interest and similar expense (1,376) (2,214)
========
Net interest income 3,903 4,223
Fee and commission income 3 4,682 4,399
Fee and commission expense 3 (976) (1,090)
========
Net fee and commission income 3 3,706 3,309
Net trading income 3,482 4,198
Net investment income 152 (136)
Other income 72 27
========
Total income 11,315 11,621
Credit impairment releases/(charges) 742 (3,738)
========
Net operating income 12,057 7,883
Staff costs 4 (4,334) (4,053)
Infrastructure, administration and general expenses 5 (2,798) (2,510)
Litigation and conduct (99) (30)
========
Operating expenses (7,231) (6,593)
Share of post-tax results of associates and joint
ventures 154 (31)
Profit on disposal of subsidiaries, associates
and joint ventures (1) 13
========
Profit before tax 4,979 1,272
Tax charge 6 (759) (113)
========
Profit after tax 4,220 1,159
Attributable to:
======== ========= =========
Equity holders of the parent 3,812 695
Other equity instrument holders 389 427
========
Total equity holders of the parent 4,201 1,122
Non-controlling interests 7 19 37
========
Profit after tax 4,220 1,159
Earnings per share p p
========= =========
Basic earnings per ordinary share 8 22.2 4.0
Diluted earnings per ordinary share 8 21.7 3.9
1 For notes to the Financial Statements see pages 70 to 96.
Condensed consolidated statement of comprehensive income (unaudited)
Half year Half year
ended ended
30.06.21 30.06.20
Notes(1) GBPm GBPm
Profit after tax 4,220 1,159
Other comprehensive income/(loss) that may be recycled
to profit or loss:(2)
=========
Currency translation reserve 19 (495) 1,220
Fair value through other comprehensive income
reserve 19 (365) 137
Cash flow hedging reserve 19 (911) 912
Other 19 - (6)
========= =========
Other comprehensive income that may be recycled
to profit (1,771) 2,263
Other comprehensive income/(loss) not recycled to profit
or loss:(2)
=========
Retirement benefit remeasurements 16 103 645
Fair value through other comprehensive income
reserve 19 115 (515)
Own credit 19 (47) 496
========= =========
Other comprehensive income not recycled to profit 171 626
Other comprehensive income for the period (1,600) 2,889
Total comprehensive income for the period 2,620 4,048
Attributable to:
=========
Equity holders of the parent 2,601 4,011
Non-controlling interests 19 37
========= =========
Total comprehensive income for the period 2,620 4,048
1 For notes to the Financial Statements see pages 70 to 96.
2 Reported net of tax.
Condensed consolidated balance sheet (unaudited)
As at As at
30.06.21 31.12.20
Assets Notes(1) GBPm GBPm
Cash and balances at central banks 216,963 191,127
Cash collateral and settlement balances 111,921 101,367
Loans and advances at amortised cost 12 348,549 342,632
Reverse repurchase agreements and other similar
secured lending 4,459 9,031
Trading portfolio assets 147,239 127,950
Financial assets at fair value through the income
statement 194,421 175,151
Derivative financial instruments 10 256,636 302,446
Financial assets at fair value through other
comprehensive income 73,260 78,688
Investments in associates and joint ventures 907 781
Goodwill and intangible assets 13 8,196 7,948
Property, plant and equipment 3,581 4,036
Current tax assets 228 477
Deferred tax assets 6 3,771 3,444
Retirement benefit assets 16 2,701 1,814
Other assets 3,501 2,622
========= =========
Total assets 1,376,333 1,349,514
Liabilities
=========
Deposits at amortised cost 12 500,895 481,036
Cash collateral and settlement balances 101,923 85,423
Repurchase agreements and other similar secured
borrowing 20,005 14,174
Debt securities in issue 90,733 75,796
Subordinated Liabilities 14 12,839 16,341
Trading portfolio liabilities 56,986 47,405
Financial liabilities designated at fair value 264,164 249,765
Derivative financial instruments 10 247,034 300,775
Current tax liabilities 592 645
Deferred tax liabilities 6 8 15
Retirement benefit liabilities 16 338 291
Other liabilities 10,928 8,662
Provisions 15 1,772 2,304
========= =========
Total liabilities 1,308,217 1,282,632
Equity
=========
Called up share capital and share premium 17 4,568 4,637
Other reserves 19 2,856 4,461
Retained earnings 48,461 45,527
========= =========
Shareholders' equity attributable to ordinary
shareholders of the parent 55,885 54,625
Other equity instruments 18 11,167 11,172
========= =========
Total equity excluding non-controlling interests 67,052 65,797
Non-controlling interests 7 1,064 1,085
========= =========
Total equity 68,116 66,882
Total equity and liabilities 1,376,333 1,349,514
1 For notes to the Financial Statements see pages 70 to 96.
Condensed consolidated statement of changes in equity (unaudited)
Called
up share
capital Other
and share equity Other Retained Non-controlling Total
premium(1) instruments(1) reserves(1) earnings Total interests(2) equity
Half year ended 30.06.21 GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Balance as at 1 January
2021 4,637 11,172 4,461 45,527 65,797 1,085 66,882
Profit after tax - 389 - 3,812 4,201 19 4,220
Currency translation
movements - - (495) - (495) - (495)
Fair value through other
comprehensive income
reserve - - (250) - (250) - (250)
Cash flow hedges - - (911) - (911) - (911)
Retirement benefit
remeasurements - - - 103 103 - 103
Own credit - - (47) - (47) - (47)
Total comprehensive income
for the period - 389 (1,703) 3,915 2,601 19 2,620
Equity settled share schemes 25 - - 289 314 - 314
Other equity instruments
coupon paid - (389) - - (389) - (389)
Vesting of employee share
schemes - - 4 (397) (393) - (393)
Dividends paid - - - (173) (173) (16) (189)
Repurchase of shares (94) - 94 (700) (700) - (700)
Other movements - (5) - - (5) (24) (29)
Balance as at 30 June 2021 4,568 11,167 2,856 48,461 67,052 1,064 68,116
Half year ended 31.12.20
===============
Balance as at 1 July 2020 4,620 10,871 6,996 45,817 68,304 1,237 69,541
Profit after tax - 430 - 831 1,261 41 1,302
Currency translation
movements - - (1,693) - (1,693) - (1,693)
Fair value through other
comprehensive income
reserve - - 570 - 570 - 570
Cash flow hedges - - (339) - (339) - (339)
Retirement benefit
remeasurements - - - (756) (756) - (756)
Own credit - - (1,077) - (1,077) - (1,077)
Other - - - 11 11 - 11
Total comprehensive income
for the period - 430 (2,539) 86 (2,023) 41 (1,982)
Equity settled share schemes 17 - - (300) (283) - (283)
Issue and exchange of other
equity instruments - 311 - (55) 256 (158) 98
Other equity instruments
coupon paid - (430) - - (430) - (430)
Vesting of employee share
schemes - - 4 (20) (16) - (16)
Dividends paid - - - - - (42) (42)
Other movements - (10) - (1) (11) 7 (4)
Balance as at 31 December
2020 4,637 11,172 4,461 45,527 65,797 1,085 66,882
1 Details of share capital, other equity instruments and other reserves
are shown on pages 85 to 86.
2 Details of non-controlling interests are shown on page 74.
Condensed consolidated statement of changes in equity (unaudited)
Called
up share
capital
and share Other equity Other Retained Non-controlling Total
premium(1) instruments(1) reserves(1) earnings Total interests(2) equity
Half year ended 30.06.20 GBPm GBPm GBPm GBPm GBPm GBPm GBPm
====== =======
Balance as at 1 January
2020 4,594 10,871 4,760 44,204 64,429 1,231 65,660
Profit after tax - 427 - 695 1,122 37 1,159
Currency translation
movements - - 1,220 - 1,220 - 1,220
Fair value through
other comprehensive
income reserve - - (378) - (378) - (378)
Cash flow hedges - - 912 - 912 - 912
Retirement benefit
remeasurements - - - 645 645 - 645
Own credit - - 496 - 496 - 496
Other - - - (6) (6) - (6)
====== =======
Total comprehensive
income for the period - 427 2,250 1,334 4,011 37 4,048
Equity settled share
schemes 26 - - 603 629 - 629
Other equity instruments
coupon paid - (427) - - (427) - (427)
Vesting of employee
share schemes - - (14) (327) (341) - (341)
Dividends paid - - - - - (37) (37)
Other movements - - - 3 3 6 9
====== =======
Balance as at 30 June
2020 4,620 10,871 6,996 45,817 68,304 1,237 69,541
1 Details of share capital, other equity instruments and other reserves
are shown on pages 85 to 86.
2 Details of non-controlling interests are shown on page 74.
Condensed consolidated cash flow statement (unaudited)
Half year Half year
ended ended
30.06.21 30.06.20(1)
GBPm GBPm
========= ============
Profit before tax 4,979 1,272
Adjustment for non-cash items(2) 6,900 (1,431)
Net increase in loans and advances at amortised cost(2) 432 (12,868)
Net increase in deposits at amortised cost 19,859 51,126
Net increase in debt securities in issue 13,041 24,183
Changes in other operating assets and liabilities(3) (5,559) (6,770)
Corporate income tax paid (712) (351)
Net cash from operating activities 38,940 55,161
Net cash from investing activities(2) (3,389) (17,844)
Net cash from financing activities (2,562) 3,133
Effect of exchange rates on cash and cash equivalents (5,535) 7,814
Net increase/(decrease) in cash and cash equivalents 27,454 48,264
Cash and cash equivalents at beginning of the period(3) 210,142 166,613
Cash and cash equivalents at end of the period(3) 237,596 214,877
1 H120 comparative figures have been restated to make the condensed
cash flow statement more relevant following a review of the disclosure
and the accounting policies applied that was undertaken in H220.
Amendments, which were first applied in the Barclays PLC Annual
Report 2020, have been made to the classification of cash collateral
reported within cash and cash equivalents and to the presentation
of items within net cash flows from operating and investing activities.
Footnotes 2 and 3 below quantify the impact of the changes to the
respective cash flow categories in H120 and provide further detail.
2 Movements in cash and cash equivalents relating to debt securities
at amortised cost were previously shown within loans and advances
at amortised cost in operating activities. These debt securities
holdings are now considered to be part of the investing activity
performed by the Group following a change in accounting policy
and have been presented within investing activities in H121. Comparatives
have been restated. The effect of this change was to reclassify
GBP6,245m of net cash outflows from operating activities to investing
activities in H120.
3 Cash and cash equivalents have been restated to exclude cash collateral
and settlement balances, with the exception of balances that the
Group holds at central banks related to payment schemes. The effect
of this change decreased cash and cash equivalents by GBP28,301m
as at 30 June 2020 and GBP16,774m as at 31 December 2019. As a
result, net cash from operating activities decreased by GBP11,527m
in H120, representing the net increase in the cash collateral and
settlement balances line item in this period.
Financial Statement Notes
1. Basis of preparation
These condensed consolidated interim financial statements for
the six months ended 30 June 2021 have been prepared in accordance
with the Disclosure and Transparency Rules (DTR) of the UK's
Financial Conduct Authority (FCA) and IAS 34, Interim Financial
Reporting, as published by the International Accounting Standards
Board (IASB) and adopted by the UK. The condensed consolidated
interim financial statements should be read in conjunction with the
annual financial statements for the year ended 31 December 2020.
The annual financial statements for the year ended 31 December 2020
were prepared in accordance with international accounting standards
in conformity with the requirements of the Companies Act 2006 and
in accordance with International Financial Reporting Standards
(IFRS) and interpretations (IFRICs) as issued by the IASB and
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in
the European Union as well as adopted by the UK. UK adopted IFRS
and EU adopted IFRS are currently the same and were the same as at
31 December 2020.
The accounting policies and methods of computation used in these
condensed consolidated interim financial statements are the same as
those used in the Barclays PLC Annual Report 2020.
1. Going concern
The financial statements are prepared on a going concern basis,
as the Directors are satisfied that the Group and parent company
have the resources to continue in business for a period of at least
12 months from approval of the interim financial statements. In
making this assessment, the Directors have considered a wide range
of information relating to present and future conditions and
includes a review of a working capital report (WCR). The WCR is
used by the Directors to assess the future performance of the
business and that it has the resources in place that are required
to meet its ongoing regulatory requirements. The WCR also includes
an assessment of the impact of internally generated stress testing
scenarios on the liquidity and capital requirement forecasts. The
stress tests used were based upon an assessment of reasonably
possible downside economic scenarios that the Group could
experience.
The WCR indicated that the Group had sufficient capital in place
to support its future business requirements and remained above its
regulatory minimum requirements in the internal stress
scenarios.
2. Other disclosures
The Credit risk disclosures on pages 27 to 45 form part of these
interim financial statements.
2. Segmental reporting
Analysis of results by business
Barclays Barclays Head Barclays
UK International Office Group
Half year ended 30.06.21 GBPm GBPm GBPm GBPm
======== ============== ======= ========
Total income 3,199 8,218 (102) 11,315
Credit impairment releases 443 293 6 742
======== ============== ======= ========
Net operating income/(expenses) 3,642 8,511 (96) 12,057
Operating expenses (2,114) (4,606) (412) (7,132)
Litigation and conduct (22) (84) 7 (99)
======== ============== ======= ========
Total operating expenses (2,136) (4,690) (405) (7,231)
Other net income(1) - 22 131 153
======== ============== ======= ========
Profit/(loss) before tax 1,506 3,843 (370) 4,979
As at 30.06.21 GBPbn GBPbn GBPbn GBPbn
======== ============== ======= ========
Total assets 311.2 1,046.8 18.3 1,376.3
Barclays Barclays Head Barclays
UK International Office Group
Half year ended 30.06.20 GBPm GBPm GBPm GBPm
Total income 3,171 8,654 (204) 11,621
Credit impairment charges (1,064) (2,619) (55) (3,738)
Net operating income/(expenses) 2,107 6,035 (259) 7,883
Operating expenses (2,041) (4,405) (117) (6,563)
Litigation and conduct (11) (11) (8) (30)
Total operating expenses (2,052) (4,416) (125) (6,593)
Other net income/(expenses)(1) 13 10 (41) (18)
Profit/(loss) before tax 68 1,629 (425) 1,272
As at 31.12.20 GBPbn GBPbn GBPbn GBPbn
Total assets 289.1 1,041.8 18.6 1,349.5
1 Other net income/(expenses) represents the share of post-tax results
of associates and joint ventures, profit (or loss) on disposal
of subsidiaries, associates and joint ventures and gains on acquisitions.
Split of income by geographic region(1)
Half year Half year
ended ended
30.06.21 30.06.20
GBPm GBPm
United Kingdom 5,895 5,989
Europe 1,222 1,199
Americas 3,608 3,776
Africa and Middle East 20 20
Asia 570 637
Total 11,315 11,621
1 The geographical analysis is based on the location of the office
where the transactions are recorded.
3. Net fee and commission income
Fee and commission income is disaggregated below and includes a
total for fees in scope of IFRS 15, Revenue from Contracts with
Customers:
Barclays Barclays
UK International Head Office Total
Half year ended 30.06.21 GBPm GBPm GBPm GBPm
Fee type
Transactional 408 1,181 - 1,589
Advisory 83 459 1 543
Brokerage and execution 109 553 - 662
Underwriting and syndication - 1,715 - 1,715
Other 35 73 3 111
Total revenue from contracts with customers 635 3,981 4 4,620
Other non-contract fee income - 62 - 62
Fee and commission income 635 4,043 4 4,682
Fee and commission expense (108) (861) (7) (976)
Net fee and commission income 527 3,182 (3) 3,706
Barclays Barclays
UK International Head Office Total
Half year ended 30.06.20 GBPm GBPm GBPm GBPm
Fee type
Transactional 386 1,157 - 1,543
Advisory 79 306 1 386
Brokerage and execution 102 685 - 787
Underwriting and syndication - 1,468 - 1,468
Other 38 115 2 155
Total revenue from contracts with customers 605 3,731 3 4,339
Other non-contract fee income - 60 - 60
Fee and commission income 605 3,791 3 4,399
Fee and commission expense (148) (940) (2) (1,090)
Net fee and commission income 457 2,851 1 3,309
Transactional fees are service charges on deposit accounts, cash
management services and transactional processing fees. These
include interchange and merchant fee income generated from credit
and bank card usage.
Advisory fees are generated from wealth management services and
investment banking advisory services related to mergers,
acquisitions and financial restructurings.
Brokerage and execution fees are earned for executing client
transactions with various exchanges and over-the-counter markets
and assisting clients in clearing transactions.
Underwriting and syndication fees are earned for the
distribution of client equity or debt securities and the
arrangement and administration of a loan syndication. These include
commitment fees to provide loan financing.
4. Staff costs
Half year Half year
ended ended
30.06.21 30.06.20
Compensation costs GBPm GBPm
Upfront bonus charge 824 476
Deferred bonus charge 262 269
Other incentives 6 4
Performance costs 1,092 749
Salaries 2,117 2,153
Social security costs 336 317
Post-retirement benefits 275 268
Other compensation costs 223 254
Total compensation costs 4,043 3,741
Other resourcing costs
Outsourcing 171 175
Redundancy and restructuring 23 39
Temporary staff costs 55 58
Other 42 40
Total other resourcing costs 291 312
Total staff costs 4,334 4,053
Barclays Group compensation costs as a % of total
income 35.7 32.2
No material awards have yet been granted in relation to the 2021
bonus pool as decisions regarding incentive awards are not taken by
the Remuneration Committee until the performance for the full year
can be assessed. The current year bonus charge for the first six
months represents an accrual for estimated costs in accordance with
accounting requirements. One of the primary considerations when
evaluating the accrual is Group and business level returns,
aligning colleague and shareholder interests.
The Group has entered into physically settled forward contracts
to hedge the settlement of certain share-based payment schemes. The
present value of the fixed forward price to be paid under these
outstanding contracts is GBP158m and has been recorded in retained
earnings.
5. Infrastructure, administration and general expenses
Half year Half year
ended ended
30.06.21 30.06.20
Infrastructure costs GBPm GBPm
Property and equipment 709 757
Depreciation and amortisation 832 751
Lease payments 20 26
Impairment of property, equipment and intangible assets 304 32
Total infrastructure costs 1,865 1,566
Administration and general expenses
========= =========
Consultancy, legal and professional fees 262 270
Marketing and advertising 163 158
Other administration and general expenses 508 516
Total administration and general expenses 933 944
Total infrastructure, administration and general expenses 2,798 2,510
6. Tax
The tax charge for H121 was GBP759m (H120: GBP113m),
representing an effective tax rate of 15.2% (H120: 8.9%). The
effective tax rate for H121 includes a benefit recognised as a
result of the increase in the UK corporation tax rate and absent
this benefit the tax charge would have been GBP1,151m and the
effective tax rate would have been 23.1%. The H120 effective tax
rate included a benefit recognised for re-measurement of the
Group's UK deferred tax assets as a result of UK corporation tax
previously being maintained at a rate of 19%. Included in the H121
tax charge is a credit of GBP104m (H120: GBP112m) in respect of
payments made on AT1 instruments that are classified as equity for
accounting purposes.
In its Budget held in March 2021, the UK Government announced
that the UK rate of corporation tax will increase from 19% to 25%
from 1 April 2023. This legislative change has been enacted,
resulting in the Group's UK deferred tax assets increasing by
GBP223m with a tax benefit in the income statement of GBP392m and a
tax charge within other comprehensive income of GBP169m.
The UK Government also announced that it will undertake a review
of the additional 8% banking surcharge during 2021. The Budget
Report issued on 3 March 2021 outlines that "the government will
set out how it intends to ensure that the combined rate of tax on
banks' profits does not increase substantially from its current
level". Any subsequent reduction in the banking surcharge arising
from the Government's review would result in a tax charge in the
income statement and tax credit within the other comprehensive
income upon enactment as the Group's UK deferred tax assets are
again re-measured and decreased, the timing of which is uncertain
but is expected to occur in H122.
In the USA, the Biden administration published in April 2021 The
Made In America Tax Plan, which proposes an increase in the US
federal corporate income tax rate. This would result in a
re-measurement to increase the Group's US deferred tax assets upon
enactment, the timing of which is uncertain. In addition, revisions
to international elements of the US tax regime are being considered
that could affect the Group's US tax position in future.
The G7 finance ministers published a communiqué on 5 June 2021
which sets out high level political agreement on global tax reform,
including the implementation of a global minimum tax rate. The
Group will continue to monitor developments and assess the
potential impact of associated future legislative changes.
As at As at
30.06.21 31.12.20
Deferred tax assets and liabilities GBPm GBPm
USA 1,908 2,049
UK 1,380 886
Other territories 483 509
Deferred tax assets 3,771 3,444
Deferred tax liabilities (8) (15)
Analysis of deferred tax assets
Temporary differences 2,972 2,709
Tax losses 799 735
Deferred tax assets 3,771 3,444
7. Non-controlling interests
Profit attributable Equity attributable
to to
non-controlling non-controlling
interests interests
Half year Half year
ended ended As at As at
30.06.21 30.06.20 30.06.21 31.12.20
GBPm GBPm GBPm GBPm
========== ========= ========== =========
Barclays Bank PLC issued:
- Preference shares 13 28 529 529
- Upper T2 instruments 3 9 533 533
Other non-controlling interests 3 - 2 23
========== ========= ========== =========
Total 19 37 1,064 1,085
8. Earnings per share
Half year Half year
ended ended
30.06.21 30.06.20
GBPm GBPm
========= =========
Profit attributable to ordinary equity holders of
the parent 3,812 695
m m
========= =========
Basic weighted average number of shares in issue 17,140 17,294
Number of potential ordinary shares 467 319
========= =========
Diluted weighted average number of shares 17,607 17,613
p p
========= =========
Basic earnings per ordinary share 22.2 4.0
Diluted earnings per ordinary share 21.7 3.9
9. Dividends on ordinary shares
A half year dividend for 2021 of 2.0p (H120: 0p) per ordinary
share will be paid on 17 September 2021 to shareholders on the
register on 13 August 2021.
Half year ended Half year ended
30.06.21 30.06.20
Per share Total Per share Total
Dividends paid during the period p GBPm p GBPm
Full year dividend paid during period 1.0 173 - -
For qualifying US and Canadian resident ADR holders, the half
year dividend of 2.0p per ordinary share becomes 8.0p per ADS
(representing 4 shares). The ADR depositary will post the half year
dividend on 17 September 2021 to ADR holders on the record at close
of business on 13 August 2021.
The Directors have confirmed their intention to initiate a share
buyback of up to GBP500m after the balance sheet date. The share
buyback is expected to commence in the third quarter of 2021. The
financial statements for the six months ended 30 June 2021 do not
reflect the impact of the proposed share buyback, which will be
accounted for as and when shares are repurchased by the
Company.
10. Derivative financial instruments
Fair value
Contract
notional
amount Assets Liabilities
As at 30.06.21 GBPm GBPm GBPm
========== ======= ===========
Foreign exchange derivatives 5,654,026 66,963 (64,194)
Interest rate derivatives 37,888,009 134,734 (123,436)
Credit derivatives 920,030 5,469 (5,960)
Equity and stock index and commodity derivatives 1,541,007 48,530 (52,444)
========== ======= ===========
Derivative assets/(liabilities) held for trading 46,003,072 255,696 (246,034)
Derivatives in hedge accounting relationships
Derivatives designated as cash flow hedges 91,278 806 -
Derivatives designated as fair value hedges 107,879 128 (993)
Derivatives designated as hedges of net investments 1,595 6 (7)
========== ======= ===========
Derivative assets/(liabilities) designated
in hedge accounting relationships 200,752 940 (1,000)
Total recognised derivative assets/(liabilities) 46,203,824 256,636 (247,034)
As at 31.12.20
Foreign exchange derivatives 5,554,037 84,739 (84,381)
Interest rate derivatives 35,257,371 172,144 (162,402)
Credit derivatives 847,845 4,605 (5,004)
Equity and stock index and commodity derivatives 1,510,718 40,392 (48,008)
========== ======= ===========
Derivative assets/(liabilities) held for trading 43,169,971 301,880 (299,795)
Derivatives in hedge accounting relationships
Derivatives designated as cash flow hedges 74,437 386 -
Derivatives designated as fair value hedges 114,556 155 (980)
Derivatives designated as hedges of net investments 791 25 -
========== ======= ===========
Derivative assets/(liabilities) designated
in hedge accounting relationships 189,784 566 (980)
Total recognised derivative assets/(liabilities) 43,359,755 302,446 (300,775)
The IFRS netting posted against derivative assets was GBP33bn
including GBP4bn of cash collateral netted (December 2020: GBP44bn
including GBP5bn cash collateral netted) and GBP31bn for
liabilities including GBP5bn of cash collateral netted (December
2020: GBP42bn including GBP7bn of cash collateral netted).
Derivative asset exposures would be GBP230bn (December 2020:
GBP276bn) lower than reported under IFRS if netting were permitted
for assets and liabilities with the same counterparty or for which
the Group holds cash collateral of GBP36bn (December 2020:
GBP43bn). Similarly, derivative liabilities would be GBP225bn
(December 2020: GBP276bn) lower reflecting counterparty netting and
cash collateral placed of GBP31bn (December 2020: GBP43bn). In
addition, non-cash collateral of GBP5bn (December 2020: GBP5bn) was
held in respect of derivative assets and GBP3bn (December 2020:
GBP4bn) was placed in respect of derivative liabilities. Collateral
amounts are limited to net on balance sheet exposure so as to not
include over-collateralisation.
11. Fair value of financial instruments
This section should be read in conjunction with Note 17, Fair
value of financial instruments of the Barclays PLC Annual Report
2020 which provides more detail about accounting policies adopted,
valuation methodologies used in calculating fair value and the
valuation control framework which governs oversight of valuations.
There have been no changes in the accounting policies adopted or
the valuation methodologies used.
Valuation
The following table shows the Group's assets and liabilities
that are held at fair value disaggregated by valuation technique
(fair value hierarchy) and balance sheet classification:
Valuation technique using
Quoted Significant
market Observable unobservable
prices inputs inputs
(Level (Level (Level
1) 2) 3) Total
As at 30.06.21 GBPm GBPm GBPm GBPm
Trading portfolio assets 73,405 71,282 2,552 147,239
Financial assets at fair value through
the income statement 1,229 185,415 7,777 194,421
Derivative financial instruments 11,643 241,336 3,657 256,636
Financial assets at fair value through
other comprehensive income 21,375 51,837 48 73,260
Investment property - - 8 8
Total assets 107,652 549,870 14,042 671,564
Trading portfolio liabilities (30,911) (26,058) (17) (56,986)
Financial liabilities designated at
fair value (142) (263,710) (312) (264,164)
Derivative financial instruments (11,227) (230,207) (5,600) (247,034)
Total liabilities (42,280) (519,975) (5,929) (568,184)
As at 31.12.20
Trading portfolio assets 60,671 65,416 1,863 127,950
Financial assets at fair value through
the income statement 4,503 162,142 8,506 175,151
Derivative financial instruments 9,155 288,822 4,469 302,446
Financial assets at fair value through
other comprehensive income 19,792 58,743 153 78,688
Investment property - - 10 10
Total assets 94,121 575,123 15,001 684,245
Trading portfolio liabilities (24,391) (22,986) (28) (47,405)
Financial liabilities designated at
fair value (159) (249,251) (355) (249,765)
Derivative financial instruments (8,762) (285,774) (6,239) (300,775)
Total liabilities (33,312) (558,011) (6,622) (597,945)
The following table shows the Group's Level 3 assets and
liabilities that are held at fair value disaggregated by product
type:
As at 30.06.21 As at 31.12.20
Assets Liabilities Assets Liabilities
GBPm GBPm GBPm GBPm
Interest rate derivatives 916 (1,269) 1,613 (1,615)
Foreign exchange derivatives 151 (129) 144 (143)
Credit derivatives 100 (364) 196 (351)
Equity derivatives 2,490 (3,838) 2,498 (4,112)
Commodity derivatives - - 18 (18)
Corporate debt 981 (38) 698 (3)
Reverse repurchase and repurchase agreements - (161) - (174)
Non-asset backed loans 6,338 - 6,394 -
Asset backed securities 562 - 767 (24)
Equity cash products 402 - 542 -
Private equity investments 979 (16) 873 (14)
Other(1) 1,123 (114) 1,258 (168)
Total 14,042 (5,929) 15,001 (6,622)
1 Other includes commercial real estate loans, funds and fund-linked
products, asset backed loans, issued debt, commercial paper, government
sponsored debt and investment property.
Assets and liabilities reclassified between Level 1 and Level
2
During the period, there were no material transfers between
Level 1 and Level 2 (period ended 31 December 2020: no material
transfers between Level 1 and Level 2).
Level 3 movement analysis
The following table summarises the movements in the balances of
Level 3 assets and liabilities during the period. The table shows
gains and losses and includes amounts for all financial assets and
liabilities that are held at fair value transferred to and from
Level 3 during the period. Transfers have been reflected as if they
had taken place at the beginning of the period.
Asset and liability moves between Level 2 and Level 3 are
primarily due to i) an increase or decrease in observable market
activity related to an input or ii) a change in the significance of
the unobservable input, with assets and liabilities classified as
Level 3 if an unobservable input is deemed significant.
Level 3 movement analysis
Total gains
and losses
in the period
recognised
in the income
statement Transfers
Total
gains
or
losses
recognised
As at Settle- Trading Other in As at
01.01.21 Purchases Sales Issues ments income income OCI In Out 30.06.21
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Corporate debt 151 305 (87) - - 25 - - 40 (11) 423
Non-asset
backed
loans 709 620 (131) - (84) 13 - - 124 (106) 1,145
Asset backed
securities 686 112 (294) - - (10) - - 43 (48) 489
Equity cash
products 214 13 (17) - - 32 - - 29 (9) 262
Other 103 21 - - (51) (1) - - 162 (1) 233
Trading
portfolio
assets 1,863 1,071 (529) - (135) 59 - - 398 (175) 2,552
Non-asset
backed
loans 5,580 698 (299) - (687) (119) - - 69 (48) 5,194
Equity cash
products 326 160 (194) - - (171) 18 - 1 - 140
Private equity
investments 874 106 (9) - (8) (5) 92 - - (71) 979
Other 1,726 2,291 (2,389) - (162) (19) 1 - 16 - 1,464
Financial
assets
at fair value
through
the income
statement 8,506 3,255 (2,891) - (857) (314) 111 - 86 (119) 7,777
Non-asset
backed
loans 106 - - - - - - - - (106) -
Asset backed
securities 47 4 - - (5) - - 2 - - 48
Assets at fair
value through
other
comprehensive
income 153 4 - - (5) - - 2 - (106) 48
Investment
property 10 - (2) - - - - - - - 8
Trading
portfolio
liabilities (28) (3) 14 - - (7) - - - 7 (17)
Financial
liabilities
designated at
fair
value (355) - - - 98 7 (2) - (78) 18 (312)
Interest rate
derivatives (2) 9 - - 33 (121) 4 - 21 (297) (353)
Foreign
exchange
derivatives 1 - - - 58 (6) - - 3 (34) 22
Credit
derivatives (155) (117) 2 - (5) 12 (1) - 1 (1) (264)
Equity
derivatives (1,614) (315) (1) - (32) (221) (1) - 28 808 (1,348)
Net derivative
financial
instruments(1) (1,770) (423) 1 - 54 (336) 2 - 53 476 (1,943)
Total 8,379 3,904 (3,407) - (845) (591) 111 2 459 101 8,113
1 Derivative financial instruments are represented on a net basis.
On a gross basis, derivative financial assets were GBP3,657m and
derivative financial liabilities were GBP5,600m.
Level 3 movement analysis
Total gains
and losses
in the period
recognised
in the income
statement Transfers
Total
gains
or
losses
recognised
As at Settle- Trading Other in As at
01.01.20 Purchases Sales Issues ments income income OCI In Out 30.06.20
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Corporate debt 120 25 - - - (26) - - 4 (17) 106
Non-asset
backed
loans 974 1,926 (740) - (4) (111) - - 97 (320) 1,822
Asset backed
securities 656 249 (224) - (76) (12) - - 41 (11) 623
Equity cash
products 392 2 (4) - - (67) - - 28 (4) 347
Other 122 48 - - - 2 - - 8 - 180
========= =========
Trading
portfolio
assets 2,264 2,250 (968) - (80) (214) - - 178 (352) 3,078
Non-asset
backed
loans 5,494 1,050 (270) - (410) 381 - - - (58) 6,187
Equity cash
products 835 14 - - - (22) (28) - - - 799
Private equity
investments 900 19 (6) - (2) 2 (44) - 23 (12) 880
Other 1,271 1,870 (2,017) - (18) (8) 64 - 24 - 1,186
========= =========
Financial
assets
at fair value
through
the income
statement 8,500 2,953 (2,293) - (430) 353 (8) - 47 (70) 9,052
Non-asset
backed
loans 343 79 - - (157) - - (3) - - 262
Asset backed
securities 86 - (1) - - 1 - (1) - - 85
========= =========
Assets at fair
value through
other
comprehensive
income 429 79 (1) - (157) 1 - (4) - - 347
Investment
property 13 - (1) - - - (2) - 2 (2) 10
Trading - - - - - - - - - - -
portfolio
liabilities
Financial
liabilities
designated at
fair
value (362) - 1 (3) - (10) 2 - (22) 25 (369)
Interest rate
derivatives (206) 18 - - 10 268 1 - 300 (10) 381
Foreign
exchange
derivatives (7) - - - (12) 89 - - 5 (8) 67
Credit
derivatives 198 (258) 11 - (376) 151 1 - 2 8 (263)
Equity
derivatives (819) (448) (1) - 17 (90) - - (5) (23) (1,369)
========= =========
Net derivative
financial
instruments(1) (834) (688) 10 - (361) 418 2 - 302 (33) (1,184)
Total 10,010 4,594 (3,252) (3) (1,028) 548 (6) (4) 507 (432) 10,934
1 Derivative financial instruments are represented on a net basis.
On a gross basis, derivative financial assets were GBP7,748m and
derivative financial liabilities were GBP8,932m.
Unrealised gains and losses on Level 3 financial assets and
liabilities
The following table discloses the unrealised gains and losses
recognised in the period arising on Level 3 financial assets and
liabilities held at the period end.
Half year ended 30.06.21 Half year ended 30.06.20
Income statement Income statement
Other Other
compre compre
Trading Other hensive Trading Other hensive
income income income Total income income income Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Trading portfolio assets 35 - - 35 (177) - - (177)
Financial assets at fair
value through the income
statement (201) 114 - (87) 397 (53) - 344
Financial assets at fair
value through other comprehensive
income - - - - - - (2) (2)
Investment properties - - - - - (2) - (2)
Trading portfolio liabilities (6) - - (6) - - - -
Financial liabilities designated
at fair value 7 - - 7 (16) (1) - (17)
Net derivative financial
instruments (367) - - (367) 248 - - 248
Non-current assets/liabilities
held for sale - - - -
Total (532) 114 - (418) 452 (56) (2) 394
Valuation techniques and sensitivity analysis
Sensitivity analysis is performed on products with significant
unobservable inputs (Level 3) to generate a range of reasonably
possible alternative valuations. The sensitivity methodologies
applied take account of the nature of valuation techniques used, as
well as the availability and reliability of observable proxy and
historical data and the impact of using alternative models.
Current year valuation and sensitivity methodologies are
consistent with those described within Note 17, Fair value of
financial instruments in the Barclays PLC Annual Report 2020.
Sensitivity analysis of valuations using unobservable inputs
As at 30.06.21 As at 31.12.20
Favourable Unfavourable Favourable Unfavourable
changes changes changes changes
Income Income Income Income
statement Equity statement Equity statement Equity statement Equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Interest rate derivatives 52 - (83) - 82 - (123) -
Foreign exchange derivatives 6 - (10) - 6 - (11) -
Credit derivatives 53 - (44) - 55 - (44) -
Equity derivatives 185 - (193) - 174 - (179) -
Commodity derivatives 2 - (2) - 2 - (2) -
Corporate debt 22 - (16) - 16 - (14) -
Non-asset backed loans 202 - (310) - 190 3 (409) (3)
Equity cash products 130 - (119) - 158 - (141) -
Private equity investments 223 - (198) - 199 - (227) -
Other(1) 18 - (18) - 21 - (21) -
Total 893 - (993) - 903 3 (1,171) (3)
1 Other includes commercial real estate loans, funds and fund-linked
products, asset backed loans, issued debt, commercial paper, government
sponsored debt and investment property.
The effect of stressing unobservable inputs to a range of
reasonably possible alternatives, alongside considering the impact
of using alternative models, would be to increase fair values by up
to GBP893m (December 2020: GBP906m) or to decrease fair values by
up to GBP993m (December 2020: GBP1,174m) with substantially all the
potential effect impacting profit and loss rather than
reserves.
Significant unobservable inputs
The valuation techniques and significant unobservable inputs for
assets and liabilities recognised at fair value and classified as
Level 3 are consistent with Note 17, Fair value of financial
instruments in the Barclays PLC Annual Report 2020.
Fair value adjustments
Key balance sheet valuation adjustments are quantified
below:
As at As at
30.06.21 31.12.20
GBPm GBPm
Exit price adjustments derived from market bid-offer
spreads (500) (493)
Uncollateralised derivative funding (80) (115)
Derivative credit valuation adjustments (210) (268)
Derivative debit valuation adjustments 91 113
-- Exit price adjustments derived from market bid-offer spreads increased
by GBP7m to GBP500m
-- Uncollateralised derivative funding decreased by GBP35m to GBP80m
as a result of tightening input funding spreads
-- Derivative credit valuation adjustments decreased by GBP58m to
GBP210m as a result of tightening input counterparty credit spreads
-- Derivative debit valuation adjustments decreased by GBP22m to GBP91m
as a result of tightening input Barclays Bank PLC credit spreads
Portfolio exemption
The Group uses the portfolio exemption in IFRS 13, Fair Value
Measurement to measure the fair value of groups of financial assets
and liabilities. Instruments are measured using the price that
would be received to sell a net long position (i.e. an asset) for a
particular risk exposure or to transfer a net short position (i.e.
a liability) for a particular risk exposure in an orderly
transaction between market participants at the balance sheet date
under current market conditions. Accordingly, the Group measures
the fair value of the group of financial assets and liabilities
consistently with how market participants would price the net risk
exposure at the measurement date.
Unrecognised gains as a result of the use of valuation models
using unobservable inputs
The amount that has yet to be recognised in income that relates
to the difference between the transaction price (the fair value at
initial recognition) and the amount that would have arisen had
valuation models using unobservable inputs been used on initial
recognition, less amounts subsequently recognised, is GBP126m
(December 2020: GBP116m) for financial instruments measured at fair
value and GBP240m (December 2020: GBP247m) for financial
instruments carried at amortised cost. There are additions of
GBP32m (December 2020: GBP27m) and amortisation and releases of
GBP22m (December 2020: GBP24m) for financial instruments measured
at fair value and additions of GBPnil (December 2020: GBP6m) and
amortisation and releases of GBP7m (December 2020: GBP14m) for
financial instruments carried at amortised cost.
Third party credit enhancements
Structured and brokered certificates of deposit issued by the
Group are insured up to $250,000 per depositor by the Federal
Deposit Insurance Corporation (FDIC) in the United States. The FDIC
is funded by premiums that Barclays and other banks pay for deposit
insurance coverage. The carrying value of these issued certificates
of deposit that are designated under the IFRS 9 fair value option
includes this third party credit enhancement. The on balance sheet
value of these brokered certificates of deposit amounted to
GBP1,241m (December 2020: GBP1,494m).
Comparison of carrying amounts and fair values for assets and
liabilities not held at fair value
Valuation methodologies employed in calculating the fair value
of financial assets and liabilities measured at amortised cost are
consistent with those described within Note 17, Fair value of
financial instruments in the Barclays PLC Annual Report 2020.
The following table summarises the fair value of financial
assets and liabilities measured at amortised cost on the Group's
balance sheet.
As at 30.06.21 As at 31.12.20
=====================
Carrying Carrying
amount Fair value amount Fair value
Financial assets GBPm GBPm GBPm GBPm
Loans and advances at amortised cost 348,549 347,733 342,632 340,516
Reverse repurchase agreements and other
similar secured lending 4,459 4,459 9,031 9,031
Financial liabilities
Deposits at amortised cost (500,895) (500,933) (481,036) (481,106)
Repurchase agreements and other similar
secured borrowing (20,005) (20,005) (14,174) (14,174)
Debt securities in issue (90,733) (92,746) (75,796) (77,813)
Subordinated liabilities (12,839) (13,434) (16,341) (16,918)
12. Loans and advances and deposits at amortised cost
As at As at
30.06.21 31.12.20
GBPm GBPm
Loans and advances at amortised cost to banks 11,032 8,900
Loans and advances at amortised cost to customers 309,194 309,927
Debt securities at amortised cost 28,323 23,805
Total loans and advances at amortised cost 348,549 342,632
Deposits at amortised cost from banks 17,165 17,343
Deposits at amortised cost from customers 483,730 463,693
Total deposits at amortised cost 500,895 481,036
13. Goodwill and intangible assets
Goodwill and intangible assets are allocated to business
operations according to business segments as follows:
As at 30.06.21 As at 31.12.20
Goodwill Intangibles Total Goodwill Intangibles Total
GBPm GBPm GBPm GBPm GBPm GBPm
Barclays UK 3,560 1,570 5,130 3,560 1,618 5,178
Barclays International 286 2,735 3,021 289 2,435 2,724
Head Office 42 3 45 42 4 46
Total 3,888 4,308 8,196 3,891 4,057 7,948
The Group performed an impairment review to assess the
recoverability of its goodwill and intangible asset balances as at
31 December 2020. The outcome of this review is disclosed on pages
332-335 of the Barclays PLC Annual Report 2020. The review
highlighted that there had been a significant reduction in the
value in use of the Personal Banking and Business Banking cash
generating units within Barclays UK. No impairment was recognised
as a result of the review as value in use exceeded carrying amount.
Since the 2020 impairment review, management have observed
improvements in the UK macroeconomic environment and interest rate
outlook. The Group's goodwill and intangible assets have been
reviewed for indicators of impairment in the period, with no
indicators being identified.
14. Subordinated liabilities
Half year
ended Year ended
30.06.21 31.12.20
GBPm GBPm
Opening balance as at 1 January 16,341 18,156
Issuances 1,734 1,438
Redemptions (4,534) (3,464)
Other (702) 211
Closing balance 12,839 16,341
Issuances of GBP1,734m comprise GBP855m EUR 1.125% Fixed Rate
Resetting Subordinated Callable Notes and GBP724m USD 3.811% Fixed
Rate Resetting Subordinated Callable Notes, both issued externally
by Barclays PLC and GBP82m ZAR Floating Rate Notes and GBP73m USD
Floating Rate Notes issued externally by Barclays subsidiaries.
Redemptions of GBP4,534m comprise GBP1,961m GBP 10% Fixed Rate
Subordinated Notes, GBP1,339m EUR 6% Fixed Rate Subordinated Notes,
GBP1,075m USD 10.179% Fixed Rate Subordinated Notes and GBP86m EUR
Subordinated Floating Rate Notes, issued externally by Barclays
Bank PLC and GBP73m USD Floating Rate Notes issued externally by a
Barclays subsidiary.
Other movements predominantly comprise foreign exchange
movements and fair value hedge adjustments.
15. Provisions
As at As at
30.06.21 31.12.20
GBPm GBPm
Customer redress 449 497
Legal, competition and regulatory matters 223 268
Redundancy and restructuring 88 158
Undrawn contractually committed facilities and guarantees 713 1,064
Onerous contracts 14 28
Sundry provisions 285 289
=========
Total 1,772 2,304
16. Retirement benefits
As at 30 June 2021, the Group's IAS 19 pension surplus across
all schemes was GBP2.4bn (December 2020: GBP1.5bn). The UK
Retirement Fund (UKRF), which is the Group's main scheme, had an
IAS 19 pension surplus of GBP2.6bn (December 2020: GBP1.8bn). The
movement for the UKRF was driven by payment of deficit reduction
contributions, and an increase in the discount rate, partially
offset by higher than expected long-term price inflation.
UKRF funding valuations
The latest annual update as at 30 September 2020 showed the
funding deficit had improved to GBP0.9bn from the GBP2.3bn shown at
the 30 September 2019 triennial valuation. The improvement was
mainly due to GBP1.0bn of deficit reduction contributions paid over
the year. The deficit recovery plan agreed at the last triennial
valuation requires deficit reduction contributions from Barclays
Bank PLC of GBP700m in 2021, GBP294m in 2022 and GBP286m in 2023.
The deficit reduction contributions are in addition to the regular
contributions to meet the Group's share of the cost of benefits
accruing over each year. GBP350m of the 2021 deficit reduction
contributions were paid in April 2021, with the remaining GBP350m
for 2021 due in September 2021. The next triennial actuarial
valuation of the UKRF is due to be completed in 2023 with an
effective date of 30 September 2022.
17. Called up share capital
Total
share
Ordinary capital
share Share and share
capital premium premium
Half year ended 30.06.21 GBPm GBPm GBPm
Opening balance as at 1 January 4,340 297 4,637
Issue of shares under employee share schemes 3 22 25
Repurchase of shares (94) - (94)
==========
Closing balance 4,249 319 4,568
Called up share capital comprised 16,998m (December 2020:
17,359m) ordinary shares of 25p each. The decrease is mainly due to
the repurchase of 377m shares as part of the GBP0.7bn share
buyback, partially offset by an increase due to the issuance of
shares under employee share schemes.
18. Other equity instruments
Half year
ended Year ended
30.06.21 31.12.20
GBPm GBPm
Opening balance as at 1 January 11,172 10,871
Issuances - 1,142
Redemptions - (831)
Securities held by the Group (5) (10)
================================ ========= ==========
Closing balance 11,167 11,172
Other equity instruments of GBP11,167m (December 2020:
GBP11,172m) include AT1 securities issued by Barclays PLC. There
have been no issuances or redemptions in the period.
The AT1 securities are perpetual securities with no fixed
maturity and are structured to qualify as AT1 instruments under
prevailing capital rules applicable as at the relevant issue date.
AT1 securities are undated and are redeemable, at the option of
Barclays PLC, in whole on (i) the initial call date, or on any
fifth anniversary after the initial call date or (ii) any day
falling in a named period ending on the initial reset date, or on
any fifth anniversary after the initial reset date. In addition,
the AT1 securities are redeemable, at the option of Barclays PLC,
in whole in the event of certain changes in the tax or regulatory
treatment of the securities. Any redemptions require the prior
consent of the PRA.
All Barclays PLC AT1 securities will be converted into ordinary
shares of Barclays PLC, at a pre-determined price, should the fully
loaded CET1 ratio of the Group fall below 7%.
19. Other reserves
As at As at
30.06.21 31.12.20
GBPm GBPm
========= =========
Currency translation reserve 2,376 2,871
Fair value through other comprehensive income reserve (245) 5
Cash flow hedging reserve 664 1,575
Own credit reserve (1,001) (954)
Other reserves and treasury shares 1,062 964
====================================================== ========= =========
Total 2,856 4,461
Currency translation reserve
The currency translation reserve represents the cumulative gains
and losses on the retranslation of the Group's net investment in
foreign operations, net of the effects of hedging.
As at 30 June 2021, there was a credit balance of GBP2,376m
(December 2020: GBP2,871m credit) in the currency translation
reserve. The GBP495m debit movement principally reflects the
strengthening of GBP against USD and EUR during the period.
Fair value through other comprehensive income reserve
The fair value through other comprehensive income reserve
represents the unrealised change in the fair value through other
comprehensive income investments since initial recognition.
As at 30 June 2021, there was a debit balance of GBP245m
(December 2020: GBP5m credit) in the fair value through other
comprehensive income reserve. The loss of GBP250m is principally
driven by a loss of GBP325m from the decrease in fair value of
bonds due to increasing bond yields and GBP199m of net gains
transferred to the income statement. This is partially offset by a
gain of GBP114m due to an increase in the Absa Group Limited share
price and a tax credit of GBP168m. GBP8m release in impairment was
also noted during the period.
Cash flow hedging reserve
The cash flow hedging reserve represents the cumulative gains
and losses on effective cash flow hedging instruments that will be
recycled to the income statement when the hedged transactions
affect profit or loss.
As at 30 June 2021, there was a credit balance of GBP664m
(December 2020: GBP1,575m credit) in the cash flow hedging reserve.
The decrease of GBP911m principally reflects a GBP902m decrease in
the fair value of interest rate swaps held for hedging purposes as
major interest rate forward curves increased and GBP287m of gains
transferred to the income statement. This is partially offset by a
tax credit of GBP282m.
Own credit reserve
The own credit reserve reflects the cumulative own credit gains
and losses on financial liabilities at fair value. Amounts in the
own credit reserve are not recycled to profit or loss in future
periods.
As at 30 June 2021, there was a debit balance of GBP1,001m
(December 2020: GBP954m debit) in the own credit reserve. The
movement of GBP47m principally reflects a GBP266m loss from the
tightening of Barclays' funding spreads. This is partially offset
by other activity of GBP100m and a tax credit of GBP115m.
Other reserves and treasury shares
Other reserves relate to redeemed ordinary and preference shares
issued by the Group. Treasury shares relate to Barclays PLC shares
held principally in relation to the Group's various share
schemes.
As at 30 June 2021, there was a credit balance of GBP1,062m
(December 2020: GBP964m credit) in other reserves and treasury
shares. This is driven by an increase of GBP94m due to the
repurchase of 377m shares as part of the GBP0.7bn share buyback and
a GBP4m increase due to a reduction in treasury shares held in
relation to employee share schemes.
20. Contingent liabilities and commitments
As at As at
30.06.21 31.12.20
Contingent liabilities GBPm GBPm
======================================================= ========= =========
Guarantees and letters of credit pledged as collateral
security 13,519 15,665
Performance guarantees, acceptances and endorsements 5,679 5,944
Total 19,198 21,609
Commitments
=========
Documentary credits and other short-term trade related
transactions 1,017 1,086
Standby facilities, credit lines and other commitments 345,281 331,963
Total 346,298 333,049
In addition to the above, Note 21, Legal, competition and
regulatory matters details out further contingent liabilities where
it is not practicable to disclose an estimate of the potential
financial effect on Barclays.
21. Legal, competition and regulatory matters
The Group faces legal, competition and regulatory challenges,
many of which are beyond our control. The extent of the impact of
these matters cannot always be predicted but may materially impact
our operations, financial results, condition and prospects. Matters
arising from a set of similar circumstances can give rise to either
a contingent liability or a provision, or both, depending on the
relevant facts and circumstances.
The recognition of provisions in relation to such matters
involves critical accounting estimates and judgments in accordance
with the relevant accounting policies applicable to Note 15,
Provisions. We have not disclosed an estimate of the potential
financial impact or effect on the Group of contingent liabilities
where it is not currently practicable to do so. Various matters
detailed in this note seek damages of an unspecified amount. While
certain matters specify the damages claimed, such claimed amounts
do not necessarily reflect the Group's potential financial exposure
in respect of those matters.
Matters are ordered under headings corresponding to the
financial statements in which they are disclosed.
1. Barclays PLC and Barclays Bank PLC
Investigations into certain advisory services agreements and
related civil action
FCA proceedings
In 2008, Barclays Bank PLC and Qatar Holdings LLC entered into
two advisory service agreements (the Agreements). The Financial
Conduct Authority (FCA) conducted an investigation into whether the
Agreements may have related to Barclays PLC's capital raisings in
June and November 2008 (the Capital Raisings) and therefore should
have been disclosed in the announcements or public documents
relating to the Capital Raisings. In 2013, the FCA issued warning
notices (the Notices) finding that Barclays PLC and Barclays Bank
PLC acted recklessly and in breach of certain disclosure-related
listing rules, and that Barclays PLC was also in breach of Listing
Principle 3. The financial penalty provided in the Notices is
GBP50m. Barclays PLC and Barclays Bank PLC continue to contest the
findings. Following the conclusion of the Serious Fraud Office
(SFO) proceedings against certain former Barclays executives
resulting in their acquittals, the FCA proceedings, which were
stayed, have resumed.
Civil action
In 2021, the High Court of Justice (High Court) dismissed a
claim brought by PCP Capital Partners LLP and PCP International
Finance Limited (PCP) against Barclays Bank PLC for fraudulent
misrepresentation and deceit, arising from certain statements made
by Barclays Bank PLC to PCP relating to the November 2008 capital
raising. PCP's application to appeal the High Court's decision has
also been refused which concludes these proceedings.
Investigations into LIBOR and other benchmarks and related civil
actions
Regulators and law enforcement agencies, including certain
competition authorities, from a number of governments have
conducted investigations relating to Barclays Bank PLC's
involvement in allegedly manipulating certain financial benchmarks,
such as LIBOR. The SFO closed its investigation with no action to
be taken against the Group. Various individuals and corporates in a
range of jurisdictions have threatened or brought civil actions
against the Group and other banks in relation to the alleged
manipulation of LIBOR and/or other benchmarks.
USD LIBOR civil actions
The majority of the USD LIBOR cases, which have been filed in
various US jurisdictions, have been consolidated for pre-trial
purposes in the US District Court in the Southern District of New
York (SDNY). The complaints are substantially similar and allege,
among other things, that Barclays PLC, Barclays Bank PLC, Barclays
Capital Inc. (BCI) and other financial institutions individually
and collectively violated provisions of the US Sherman Antitrust
Act (Antitrust Act), the US Commodity Exchange Act (CEA), the US
Racketeer Influenced and Corrupt Organizations Act (RICO), the
Securities Exchange Act of 1934 and various state laws by
manipulating USD LIBOR rates.
Putative class actions and individual actions seek unspecified
damages with the exception of three lawsuits, in which the
plaintiffs are seeking a combined total of approximately $100m in
actual damages and additional punitive damages against all
defendants, including Barclays Bank PLC. Some of the lawsuits also
seek trebling of damages under the Antitrust Act and RICO. Barclays
Bank PLC has previously settled certain claims. Two class action
settlements where Barclays Bank PLC has respectively paid $7.1m and
$20m, have received final court approval. Barclays Bank PLC also
settled a further matter for $7.5m, paid in June 2021.
Sterling LIBOR civil actions
In 2016, two putative class actions filed in the SDNY against
Barclays Bank PLC, BCI and other Sterling LIBOR panel banks
alleging, among other things, that the defendants manipulated the
Sterling LIBOR rate in violation of the Antitrust Act, CEA and
RICO, were consolidated. The defendants' motion to dismiss the
claims was granted in 2018. The plaintiffs have appealed the
dismissal.
Japanese Yen LIBOR civil actions
In 2012, a putative class action was filed in the SDNY against
Barclays Bank PLC and other Japanese Yen LIBOR panel banks by a
lead plaintiff involved in exchange-traded derivatives and members
of the Japanese Bankers Association's Euroyen Tokyo Interbank
Offered Rate (Euroyen TIBOR) panel. The complaint alleges, among
other things, manipulation of the Euroyen TIBOR and Yen LIBOR rates
and breaches of the CEA and the Antitrust Act. In 2014, the court
dismissed the plaintiff's antitrust claims, and, in 2020, the court
dismissed the plaintiff's remaining CEA claims. The plaintiff has
appealed the lower court's dismissal of such claims.
In 2015, a second putative class action, making similar
allegations to the above class action, was filed in the SDNY
against Barclays PLC, Barclays Bank PLC and BCI. The plaintiffs
filed an amended complaint in 2020, and the defendants have filed a
motion to dismiss.
SIBOR/SOR civil action
In 2016, a putative class action was filed in the SDNY against
Barclays PLC, Barclays Bank PLC, BCI and other defendants, alleging
manipulation of the Singapore Interbank Offered Rate (SIBOR) and
Singapore Swap Offer Rate (SOR). In 2018, the court dismissed all
claims against Barclays PLC, Barclays Bank PLC and BCI. The
plaintiffs' appeal of the dismissal of their claims was granted in
March 2021 and the matter has been remanded to the lower court for
further proceedings.
ICE LIBOR civil actions
In 2019, several putative class actions were filed in the SDNY
against a panel of banks, including Barclays PLC, Barclays Bank
PLC, BCI, other financial institution defendants and
Intercontinental Exchange Inc. and certain of its affiliates (ICE),
asserting antitrust claims that defendants manipulated USD LIBOR
through defendants' submissions to ICE. These actions have been
consolidated. The defendants' motion to dismiss was granted in
2020. The plaintiffs have appealed the dismissal.
In August 2020, an ICE LIBOR-related action was filed by a group
of individual plaintiffs in the US District Court for the Northern
District of California on behalf of individual borrowers and
consumers of loans and credit cards with variable interest rates
linked to USD ICE LIBOR. Plaintiffs have filed motions seeking,
among other things, preliminary and permanent injunctions to enjoin
the defendants from continuing to set LIBOR or enforce any
financial instrument that relies in whole or in part on USD
LIBOR.
Non-US benchmarks civil actions
Legal proceedings (which include the claims referred to below in
'Local authority civil actions concerning LIBOR') have been brought
or threatened against Barclays Bank PLC (and, in certain cases,
Barclays Bank UK PLC) in the UK in connection with alleged
manipulation of LIBOR, EURIBOR and other benchmarks. Proceedings
have also been brought in a number of other jurisdictions in Europe
and Israel. Additional proceedings in other jurisdictions may be
brought in the future.
Credit Default Swap civil action
In July 2021, the New Mexico Attorney General, on behalf of the
New Mexico State Investment Council, filed an antitrust class
action in the US District Court for the District of New Mexico
against Barclays PLC, Barclays Bank PLC, BCI and other financial
institutions. The plaintiff alleges that the defendants conspired
to manipulate the benchmark price used to value Credit Default Swap
(CDS) contracts at settlement (i.e. the CDS final auction price).
The plaintiff alleges violations of the Antitrust Act and the CEA,
and unjust enrichment under state law.
Foreign Exchange investigations and related civil actions
In 2015, the Group reached settlements totalling approximately
$2.38bn with various US federal and state authorities and the FCA
in relation to investigations into certain sales and trading
practices in the Foreign Exchange market. The Group continues to
provide relevant information to certain authorities.
The European Commission is one of a number of authorities still
conducting an investigation into certain trading practices in
Foreign Exchange markets. The European Commission announced two
settlements in May 2019 and the Group paid penalties totalling
approximately EUR210m. In June 2019, the Swiss Competition
Commission announced two settlements and the Group paid penalties
totalling approximately CHF 27m. The financial impact of the
ongoing matters is not expected to be material to the Group's
operating results, cash flows or financial position.
Various individuals and corporates in a range of jurisdictions
have threatened or brought civil actions against the Group and
other banks in relation to alleged manipulation of Foreign Exchange
markets.
FX opt out civil action
In 2018, Barclays Bank PLC and BCI settled a consolidated action
filed in the SDNY, alleging manipulation of Foreign Exchange
markets (Consolidated FX Action), for a total amount of $384m. Also
in 2018, a group of plaintiffs who opted out of the Consolidated FX
Action filed a complaint in the SDNY against Barclays PLC, Barclays
Bank PLC, BCI and other defendants. Some of the plaintiff's claims
were dismissed in 2020.
Retail basis civil action
In 2015, a putative class action was filed against several
international banks, including Barclays PLC and BCI, on behalf of a
proposed class of individuals who exchanged currencies on a retail
basis at bank branches (Retail Basis Claims). The SDNY has ruled
that the Retail Basis Claims are not covered by the settlement
agreement in the Consolidated FX Action. The Court subsequently
dismissed all Retail Basis Claims against the Group and all other
defendants. The plaintiffs have filed an amended complaint.
Non-US FX civil actions
Legal proceedings have been brought or are threatened against
Barclays PLC, Barclays Bank PLC, BCI and Barclays Execution
Services Limited (BX) in connection with alleged manipulation of
Foreign Exchange in the UK, a number of other jurisdictions in
Europe, Israel and Australia and additional proceedings may be
brought in the future.
These include two purported class actions filed against Barclays
PLC, Barclays Bank PLC, BX, BCI and other financial institutions in
the UK Competition Appeal Tribunal in 2019 following the
settlements with the European Commission described above. Also in
2019, a separate claim was filed in the UK in the High Court by
various banks and asset management firms against Barclays Bank PLC
and other financial institutions alleging breaches of European and
UK competition laws related to FX trading.
Metals investigations and related civil actions
Barclays Bank PLC previously provided information to the US
Department of Justice (DoJ), the US Commodity Futures Trading
Commission and other authorities in connection with investigations
into metals and metals-based financial instruments.
A number of US civil complaints, each on behalf of a proposed
class of plaintiffs, have been consolidated and transferred to the
SDNY. The complaints allege that Barclays Bank PLC and other
members of The London Gold Market Fixing Ltd. manipulated the
prices of gold and gold derivative contracts in violation of the
Antitrust Act and other federal laws. This consolidated putative
class action remains pending. A separate US civil complaint by a
proposed class of plaintiffs against a number of banks, including
Barclays Bank PLC, BCI and BX, alleging manipulation of the price
of silver in violation of the CEA, the Antitrust Act and state
antitrust and consumer protection laws, has been dismissed as
against the Barclays entities. The plaintiffs have the option to
seek the court's permission to appeal.
Civil actions have also been filed in Canadian courts against
Barclays PLC, Barclays Bank PLC, Barclays Capital Canada Inc. and
BCI on behalf of proposed classes of plaintiffs alleging
manipulation of gold and silver prices.
US residential mortgage related civil actions
There are various pending civil actions relating to US
Residential Mortgage-Backed Securities (RMBS), including four
actions arising from unresolved repurchase requests submitted by
Trustees for certain RMBS, alleging breaches of various loan-level
representations and warranties (R&Ws) made by Barclays Bank PLC
and/or a subsidiary acquired in 2007. The unresolved repurchase
requests had an original principal balance of approximately $2.1bn.
The Trustees have also alleged that the relevant R&Ws may have
been breached with respect to a greater (but unspecified) amount of
loans than previously stated in the unresolved repurchase
requests.
These repurchase actions are ongoing. In one repurchase action,
the New York Court of Appeals held that claims related to certain
R&Ws are time-barred. Barclays Bank PLC has reached a
settlement to resolve two of the repurchase actions, which is
subject to final court approval. The financial impact of the
settlement is not expected to be material to the Group's operating
results, cash flows or financial position. The remaining two
repurchase actions are pending.
In 2020, a civil litigation claim was filed in the New Mexico
First Judicial District Court by the State of New Mexico against
six banks, including BCI, on behalf of two New Mexico state pension
funds and the New Mexico State Investment Council relating to
legacy RMBS purchases. As to BCI, the complaint alleges that the
funds purchased approximately $22m in RMBS underwritten by BCI. The
plaintiffs have asserted claims under New Mexico state law, which
provides for the ability to claim treble damages and civil
penalties.
Government and agency securities civil actions and related
matters
Certain governmental authorities have conducted investigations
into activities relating to the trading of certain government and
agency securities in various markets. The Group provided
information in cooperation with such investigations.
Civil actions have also been filed on the basis of similar
allegations, as described below.
Treasury auction securities civil actions
Consolidated putative class action complaints filed in US
federal court against Barclays Bank PLC, BCI and other financial
institutions under the Antitrust Act and state common law allege
that the defendants (i) conspired to manipulate the US Treasury
securities market and/or (ii) conspired to prevent the creation of
certain platforms by boycotting or threatening to boycott such
trading platforms. The court dismissed the consolidated action in
March 2021. The plaintiffs have filed an amended complaint, which
the defendants have moved to dismiss.
In addition, certain plaintiffs have filed a related, direct
action against BCI and certain other financial institutions,
alleging that defendants conspired to fix and manipulate the US
Treasury securities market in violation of the Antitrust Act, the
CEA and state common law.
Supranational, Sovereign and Agency bonds civil actions
Civil antitrust actions have been filed in the SDNY and Federal
Court of Canada in Toronto against Barclays Bank PLC, BCI, BX,
Barclays Capital Securities Limited and, with respect to the civil
action filed in Canada only, Barclays Capital Canada, Inc. and
other financial institutions alleging that the defendants conspired
to fix prices and restrain competition in the market for US
dollar-denominated Supranational, Sovereign and Agency bonds.
In one of the actions filed in the SDNY, the court granted the
defendants' motions to dismiss the plaintiffs' complaint. The
dismissal was affirmed on appeal. The plaintiffs have voluntarily
dismissed the other SDNY action. In the Federal Court of Canada
action, the plaintiffs reached settlements with a small number of
banks in 2020 (not including Barclays Capital Canada, Inc.), but
the plaintiffs have not commenced the class certification process
and the action remains at an early stage.
Variable Rate Demand Obligations civil actions
Civil actions have been filed against Barclays Bank PLC and BCI
and other financial institutions alleging the defendants conspired
or colluded to artificially inflate interest rates set for Variable
Rate Demand Obligations (VRDOs). VRDOs are municipal bonds with
interest rates that reset on a periodic basis, most commonly
weekly. Two actions in state court have been filed by private
plaintiffs on behalf of the states of Illinois and California.
Three putative class action complaints, two of which have been
consolidated, have been filed in the SDNY (the third complaint was
filed in June 2021). In the consolidated SDNY class action, certain
of the plaintiff's claims were dismissed in November 2020. In the
California action, the plaintiffs' claims were dismissed in June
2021. The plaintiffs may appeal.
Government bond civil actions
In a putative class action filed in the SDNY in 2019, plaintiffs
alleged that BCI and certain other bond dealers conspired to fix
the prices of US Government sponsored entity bonds in violation of
US antitrust law. BCI agreed to a settlement of $87m, which
received final court approval in 2020. Separately, various entities
in Louisiana, including the Louisiana Attorney General and the City
of Baton Rouge, have commenced litigation against Barclays Bank PLC
and other financial institutions making similar allegations as the
SDNY class action plaintiffs. The parties have reached a settlement
to resolve these matters. The financial impact of the settlement is
not expected to be material to the Group's operating results, cash
flows or financial position.
In 2018, a separate putative class action against various
financial institutions including Barclays PLC, Barclays Bank PLC,
BCI, Barclays Bank Mexico, S.A., and certain other subsidiaries of
the Group was consolidated in the SDNY. The plaintiffs asserted
antitrust and state law claims arising out of an alleged conspiracy
to fix the prices of Mexican Government bonds. Barclays PLC has
settled the claim for $5.7m, which is subject to final court
approval.
Odd-lot corporate bonds antitrust class action
In 2020, BCI, together with other financial institutions, were
named as defendants in a putative class action. The complaint
alleges a conspiracy to boycott developing electronic trading
platforms for odd-lots and price fixing. Plaintiffs demand
unspecified money damages. The defendants have filed a motion to
dismiss.
Interest rate swap and credit default swap US civil actions
Barclays PLC, Barclays Bank PLC and BCI, together with other
financial institutions that act as market makers for interest rate
swaps (IRS) are named as defendants in several antitrust class
actions which were consolidated in the SDNY in 2016. The complaints
allege the defendants conspired to prevent the development of
exchanges for IRS and demand unspecified money damages.
In 2018, trueEX LLC filed an antitrust class action in the SDNY
against a number of financial institutions including Barclays PLC,
Barclays Bank PLC and BCI based on similar allegations with respect
to trueEX LLC's development of an IRS platform. In 2017, Tera Group
Inc. filed a separate civil antitrust action in the SDNY claiming
that certain conduct alleged in the IRS cases also caused the
plaintiff to suffer harm with respect to the Credit Default Swaps
market. In 2018 and 2019, respectively, the court dismissed certain
claims in both cases for unjust enrichment and tortious
interference but denied motions to dismiss the federal and state
antitrust claims, which remain pending.
BDC Finance L.L.C.
In 2008, BDC Finance L.L.C. (BDC) filed a complaint in the
Supreme Court of the State of New York (NY Supreme Court),
demanding damages of $298m, alleging that Barclays Bank PLC had
breached a contract in connection with a portfolio of total return
swaps governed by an ISDA Master Agreement (the Agreement).
Following a trial, the court ruled in 2018 that Barclays Bank PLC
was not a defaulting party, which was affirmed on appeal. In April
2021, the trial court entered judgement in favour of Barclays Bank
PLC for $3.3m and as yet to be determined legal fees and costs, BDC
has appealed.
In 2011, BDC's investment advisor, BDCM Fund Adviser, L.L.C. and
its parent company, Black Diamond Capital Holdings, L.L.C. also
sued Barclays Bank PLC and BCI in Connecticut State Court for
unspecified damages allegedly resulting from Barclays Bank PLC's
conduct relating to the Agreement, asserting claims for violation
of the Connecticut Unfair Trade Practices Act and tortious
interference with business and prospective business relations. This
case is currently stayed.
Civil actions in respect of the US Anti-Terrorism Act
There are a number of civil actions, on behalf of more than
4,000 plaintiffs, filed in US federal courts in the US District
Court in the Eastern District of New York (EDNY) and SDNY against
Barclays Bank PLC and a number of other banks. The complaints
generally allege that Barclays Bank PLC and those banks engaged in
a conspiracy to facilitate US dollar-denominated transactions for
the Iranian Government and various Iranian banks, which in turn
funded acts of terrorism that injured or killed plaintiffs or
plaintiffs' family members. The plaintiffs seek to recover damages
for pain, suffering and mental anguish under the provisions of the
US Anti-Terrorism Act, which allow for the trebling of any proven
damages.
The court granted the defendants' motions to dismiss three out
of the six actions in the EDNY. Plaintiffs have appealed in one
action. The remaining actions are stayed pending decisions on the
appeal. Out of the two actions in the SDNY, the court also granted
the defendants' motion to dismiss one action. The remaining action
is stayed pending any appeal in the former case.
Shareholder derivative action
In November 2020, a purported Barclays shareholder filed a
putative derivative action in New York state court against BCI and
a number of current and former members of the Board of Directors of
Barclays PLC and senior executives or employees of the Group. The
shareholder filed the claim on behalf of nominal defendant Barclays
PLC, alleging that the individual defendants harmed the company
through breaches of their duties, including under the Companies Act
2006. The plaintiff seeks damages on behalf of Barclays PLC for the
losses that Barclays PLC allegedly suffered as a result of these
alleged breaches. An amended complaint was filed in April 2021,
which BCI and certain other defendants have moved to dismiss.
Derivative transactions civil action
In July 2021, Vestia (a Dutch housing association) issued a
claim against Barclays Bank PLC in the UK in the High Court in
relation to a series of derivative transactions entered into with
Barclays Bank PLC between 2008 and 2012. The claim has not been
served on Barclays.
Skilled person review and associated matters
In August 2020, the FCA granted an application by Clydesdale
Financial Services Limited (CFS), which trades as Barclays Partner
Finance and houses Barclays' point-of-sale finance business, for a
validation order with respect to certain loans to customers
brokered by Azure Services Limited (ASL), a timeshare operator,
which did not, at the point of sale, hold the necessary broker
licence. As a condition to the validation order, the FCA required
CFS to undertake a skilled person review of the assessment of
affordability processes for the loans brokered by ASL (ASL Loans)
as well as CFS' policies and procedures for assessing affordability
and oversight of brokers more generally, and dictated a remediation
methodology in the event that ASL Loans did not pass the
affordability test. CFS has voluntarily agreed to remediate the ASL
Loans, which is expected to amount to GBP37m, in accordance with
the FCA's methodology. The remaining scope of the skilled person
review is ongoing and the skilled person is expected to report in
the fourth quarter of 2021.
It is not currently possible to predict the outcome of the
skilled person review and/or whether remediation activity will be
undertaken or required in relation to other parts of CFS' loan
portfolio and the scope of, and methodology for, any such
remediation.
2. Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC
Investigation into UK cards' affordability
The FCA is investigating certain aspects of the affordability
assessment processes used by Barclays Bank UK PLC and Barclays Bank
PLC for credit card applications made to Barclays' UK credit card
business. Barclays is providing information in cooperation with the
investigation.
HM Revenue & Customs (HMRC) assessments concerning UK Value
Added Tax
In 2018, HMRC issued notices that have the effect of removing
certain overseas subsidiaries that have operations in the UK from
Barclays' UK VAT group, in which group supplies between members are
generally free from VAT. The notices have retrospective effect and
correspond to assessments of GBP181m (inclusive of interest), of
which Barclays would expect to attribute an amount of approximately
GBP128m to Barclays Bank UK PLC and GBP53m to Barclays Bank PLC.
HMRC's decision has been appealed to the First Tier Tribunal (Tax
Chamber).
Local authority civil actions concerning LIBOR
Following settlement by Barclays Bank PLC of various
governmental investigations concerning certain benchmark interest
rate submissions referred to above in 'Investigations into LIBOR
and other benchmarks and related civil actions', in the UK, certain
local authorities have brought claims against Barclays Bank PLC and
Barclays Bank UK PLC asserting that they entered into loans in
reliance on misrepresentations made by Barclays Bank PLC in respect
of its conduct in relation to LIBOR. Barclays Bank PLC and Barclays
Bank UK PLC were successful in their applications to strike out the
claims. One local authority has obtained permission to pursue an
appeal against this decision, while the claims brought by the other
local authorities have been settled on terms such that the parties
have agreed not to pursue these claims and to bear their own
costs.
3. Barclays PLC
Alternative trading systems
Barclays PLC has been named as a defendant in a claim brought in
the UK in the High Court by various shareholders regarding Barclays
PLC's share price based on the allegations contained within a
complaint by the New York State Attorney General (NYAG) in 2014.
The NYAG complaint was filed against Barclays PLC and BCI in the NY
Supreme Court alleging, among other things, that Barclays PLC and
BCI engaged in fraud and deceptive practices in connection with LX,
BCI's SEC-registered alternative trading system. Such claim was
settled in 2016, as previously disclosed. This new shareholder
claim is seeking unquantified damages.
General
The Group is engaged in various other legal, competition and
regulatory matters in the UK, the US and a number of other overseas
jurisdictions. It is subject to legal proceedings brought by and
against the Group which arise in the ordinary course of business
from time to time, including (but not limited to) disputes in
relation to contracts, securities, debt collection, consumer
credit, fraud, trusts, client assets, competition, data management
and protection, intellectual property, money laundering, financial
crime, employment, environmental and other statutory and common law
issues.
The Group is also subject to enquiries and examinations,
requests for information, audits, investigations and legal and
other proceedings by regulators, governmental and other public
bodies in connection with (but not limited to) consumer protection
measures, compliance with legislation and regulation, wholesale
trading activity and other areas of banking and business activities
in which the Group is or has been engaged. The Group is cooperating
with the relevant authorities and keeping all relevant agencies
briefed as appropriate in relation to these matters and others
described in this note on an ongoing basis.
At the present time, Barclays PLC does not expect the ultimate
resolution of any of these other matters to have a material adverse
effect on the Group's financial position. However, in light of the
uncertainties involved in such matters and the matters specifically
described in this note, there can be no assurance that the outcome
of a particular matter or matters (including formerly active
matters or those matters arising after the date of this note) will
not be material to Barclays PLC's results, operations or cash flow
for a particular period, depending on, among other things, the
amount of the loss resulting from the matter(s) and the amount of
profit otherwise reported for the reporting period.
22. Related party transactions
Related party transactions in the half year ended 30 June 2021
were similar in nature to those disclosed in the Barclays PLC
Annual Report 2020. No related party transactions that have taken
place in the half year ended 30 June 2021 have materially affected
the financial position or the performance of the Group during this
period.
23. Interest rate benchmark reform
Following the financial crisis, the reform and replacement of
benchmark interest rates such as LIBOR has become a priority for
global regulators. The FCA and other global regulators have
instructed market participants to prepare for the cessation of
LIBOR after the end of 2021, and to adopt RFRs. While it is
expected that most reforms affecting the Group will be completed by
the end of 2021, consultations and regulatory changes are in
progress and as certain US Dollar tenors will continue to be
published up to mid-2023, significant remediation efforts will
continue beyond the end of 2021.
How the Group is managing the transition to alternative
benchmark rates
Barclays has established a Group-wide LIBOR Transition
Programme, further detail on the transition programme is available
in the Barclays PLC Annual Report 2020 (page 367).
In March 2021, the FCA announced the dates that panel bank
submissions for all LIBOR settings will cease, after which
representative LIBOR rates will no longer be available, these are:
immediately after 31 December 2021, in the case of all sterling,
euro, Swiss franc and Japanese yen settings, and the 1-week and
2-month US dollar settings; and immediately after 30 June 2023, in
the case of the remaining US dollar settings. Throughout 2021, the
FCA will consult with market participants to require continued
publication on a 'synthetic' basis for some sterling LIBOR settings
and, for 1 additional year, some Japanese yen LIBOR settings.
Approaches to transition exposure expiring post the expected end
dates for LIBOR vary by product and nature of counterparty. The
transition we are undertaking is at the request of the regulators,
in line with their expectations and according to the regulatory
endorsed timetable. The rates to which clients and customers are
being transitioned are endorsed by the regulators. We are making
disclosures as part of the transition to clarify the rate to be
applied and the potential risks inherent in the transition.
Barclays is actively engaging with counterparties to transition or
include appropriate fallback provisions and transition mechanisms
in its floating rate assets and liabilities with maturities after
2021, when most IBORs are expected to cease to be published, or
will be published on a non-representative basis for a limited
time.
Barclays is working with central clearing counterparties where
the transition of cleared derivative contracts will follow a
market-wide, standardised approach to reform. Barclays is working
to the UK Risk Free Rate Working Group (RFRWG) target of completion
of active conversion of, and/or addition of robust fallbacks to
legacy GBP LIBOR contracts, where viable by the end of Q321.
Additionally, plans are in place to address non-GBP and other
official sector industry milestones and targets.
Progress made during H121
Building on the progress made in 2020, the Group has delivered
further alternative RFR product capabilities and alternatives to
LIBOR across loans, bonds and derivatives. Client outreach is
progressing to plan and we have continued to engage actively with
customers and counterparties to transition or include the
appropriate fallback provisions. The Group has in place detailed
plans, processes and procedures to support the transition of the
remainder during 2021. Barclays has adhered to the ISDA IBOR
Fallbacks Protocol for its major derivative dealing entities and we
continue to track progress and engage with clients on their own
adherence. Following the progress made during 2020, the Group
continues to deliver technology and business process changes in
preparation for LIBOR cessation and transitions to RFRs that will
be necessary during 2021 and beyond in line with official sector
expectations and milestones.
The Group met the Q121 UK RFRWG milestone to cease initiation of
GBP LIBOR linked loans, securitisations or linear derivatives and
the Q221 milestones to cease initiation of new non-linear
derivatives, exchange traded futures and Bank Of Japan milestone to
cease issuance of JPY LIBOR linked loans and bonds. The Group has
put in place controls so that any exceptions or exemptions are
approved, and is taking a similar approach to forthcoming cessation
milestones.
24. Barclays PLC parent company balance sheet
As at As at
30.06.21 31.12.20
Assets GBPm GBPm
Investment in subsidiaries 58,828 58,886
Loans and advances to subsidiaries 23,295 24,710
Financial assets at fair value through the income
statement 21,046 17,521
Derivative financial instruments 2 7
Other assets 19 65
Total assets 103,190 101,189
Liabilities
Deposits at amortised cost 476 482
Cash collateral and settlement balances - -
Debt securities in issue 26,663 28,428
Subordinated liabilities 9,170 7,724
Financial liabilities designated at fair value 12,130 9,507
Other liabilities 135 176
Total liabilities 48,574 46,317
Equity
Called up share capital 4,249 4,340
Share premium account 319 297
Other equity instruments 11,169 11,169
Other reserves 488 394
Retained earnings 38,391 38,672
Total equity 54,616 54,872
Total liabilities and equity 103,190 101,189
Investment in subsidiaries
The investment in subsidiaries of GBP58,828m (December 2020:
GBP58,886m) predominantly relates to investments in Barclays Bank
PLC and Barclays Bank UK PLC, as well as holdings of their AT1
securities of GBP10,995m (December 2020: GBP10,995m). Barclays PLC
considers the carrying value of its investment in subsidiaries to
be fully recoverable.
Financial assets and liabilities designated at fair value
Financial liabilities designated at fair value of GBP12,130m
(December 2020: GBP9,507m) comprises material issuances during the
period of EUR750m Floating Notes, $1,000m Fixed Rate Resetting
Senior Callable Notes, 600m AUD Fixed-to-Floating and Floating Rate
Debt Instruments, and 77,000m JPY Fixed Rate Resetting Senior
Callable Notes. The proceeds raised through these transactions were
used to invest in subsidiaries of Barclays PLC which are included
within the financial assets designated at fair value through the
income statement balance of GBP21,046m (December 2020:
GBP17,521m).
Loans and advances to subsidiaries
During the period, loans and advances to subsidiaries decreased
by GBP1,415m to GBP23,295m (December 2020: GBP24,710m). The
decrease was driven by the maturity of GBP2,200m senior loans to
Barclays Bank PLC and a foreign exchange impact of GBP500m due to
appreciation of GBP against major currencies (although the negative
FX impact is offset across the balance sheet liabilities). There
was also a GBP700m decrease in relation to the share buyback which
took place in Q1 2020. This decrease was partially offset by
GBP1,600m of new issuances of dated subordinated notes by Barclays
Bank PLC to Barclays PLC and GBP776m dividend receipts from
Barclays Bank PLC and Barclays Execution Services Limited.
Subordinated liabilities and debt securities in issue
During H121, Barclays PLC issued EUR1,000m and $1,000m of Fixed
Rate Resetting Subordinated Callable Notes, which is included
within the subordinated liabilities balance of GBP9,170m (December
2020: GBP7,724m). Debt securities in issue of GBP26,663m (December
2020: GBP28,428m) have reduced in the year due to the GBP2,200m
maturity of senior issuances, offset in part by new issuances of
EUR1,250m.
Other equity instruments
Other equity instruments comprises AT1 securities issued by
Barclays PLC. There have been no new issuances or redemptions
during the period.
Other reserves
As at 30 June 2021, there was a balance of GBP488m (December
2020: GBP394m) in other reserves. The increase is due to the
repurchase of shares as part of the share buyback.
Management of internal investments, loans and advances
Barclays PLC retains the discretion to manage the nature of its
internal investments in subsidiaries according to their regulatory
and business needs. Barclays PLC may invest capital and funding
into Barclays Bank PLC, Barclays Bank UK PLC and other Group
subsidiaries such as Barclays Execution Services Limited and the US
Intermediate Holding Company (IHC).
Appendix: Non-IFRS Performance Measures
The Group's 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 businesses'
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 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.
Non-IFRS performance measures glossary
Measure Definition
Loan: deposit ratio Loans and advances at amortised cost divided by
deposits at amortised cost. The components of the
calculation have been included on page 50.
Period end allocated Allocated tangible equity is calculated as 13.5%
tangible equity (2020: 13.0%) of RWAs for each business, adjusted
for capital deductions, excluding goodwill and
intangible assets, reflecting the assumptions the
Group uses for capital planning purposes. Head
Office allocated tangible equity represents the
difference between the Group's tangible shareholders'
equity and the amounts allocated to businesses.
Average tangible shareholders' Calculated as the average of the previous month's
equity period end tangible equity and the current month's
period end tangible equity. The average tangible
shareholders' equity for the period is the average
of the monthly averages within that period.
Average allocated Calculated as the average of the previous month's
tangible equity period end allocated tangible equity and the current
month's period end allocated tangible equity. The
average allocated tangible equity for the period
is the average of the monthly averages within that
period.
Return on average Annualised profit after tax attributable to ordinary
tangible shareholders' equity holders of the parent, as a proportion of
equity 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 page 98 to 100.
Return on average Annualised profit after tax attributable to ordinary
allocated tangible equity holders of the parent, as a proportion of
equity average allocated tangible equity. The components
of the calculation have been included on page 98
to 101.
Cost: income ratio Total operating expenses divided by total income.
Loan loss rate Quoted in basis points and represents total annualised
impairment charges divided by gross loans and advances
held at amortised cost at the balance sheet date.
The components of the calculation have been included
on page 27. Quoted as zero across the current reporting
period due to credit impairment net release.
Net interest margin Annualised net interest income divided by the sum
of average customer assets. The components of the
calculation have been included on pages 23 to 24.
Tangible net asset Calculated by dividing shareholders' equity, excluding
value per share non-controlling interests and other equity instruments,
less goodwill and intangible assets, by the number
of issued ordinary shares. The components of the
calculation have been included on page 102.
Returns
Return on average tangible equity is calculated as profit after
tax attributable to ordinary equity holders of the parent as a
proportion of average tangible equity, excluding non-controlling
and other equity interests for businesses. Allocated tangible
equity has been calculated as 13.5% (2020: 13.0%) of RWAs for each
business, adjusted for capital deductions, excluding goodwill and
intangible assets, reflecting the assumptions the Group uses for
capital planning purposes. Head Office average allocated tangible
equity represents the difference between the Group's average
tangible shareholders' equity and the amounts allocated to
businesses.
Profit/(loss)
attributable
to ordinary
equity Return
holders Average on average
of the tangible tangible
parent equity equity
Half year ended 30.06.21 GBPm GBPbn %
============= =========
Barclays UK 1,019 9.9 20.6
Corporate and Investment Bank 2,312 28.3 16.3
Consumer, Cards and Payments 386 4.0 19.1
=========
Barclays International 2,698 32.3 16.7
Head Office 95 4.3 n/m
=========
Barclays Group 3,812 46.5 16.4
Half year ended 30.06.20
Barclays UK 52 10.2 1.0
Corporate and Investment Bank 1,514 27.7 11.0
Consumer, Cards and Payments (517) 4.7 (21.9)
============= ========= ===========
Barclays International 997 32.4 6.2
Head Office (354) 6.0 n/m
===========
Barclays Group 695 48.6 2.9
Half year ended 30.06.21
Corporate Consumer,
Barclays and Investment Cards Barclays Barclays
UK Bank and Payments International Head Office Group
Return on average tangible
shareholders' equity GBPm GBPm GBPm GBPm GBPm GBPm
Attributable profit 1,019 2,312 386 2,698 95 3,812
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
Average shareholders'
equity 13.5 28.3 4.6 32.9 8.0 54.4
Average goodwill and
intangibles (3.6) - (0.6) (0.6) (3.7) (7.9)
======== ===============
Average tangible shareholders'
equity 9.9 28.3 4.0 32.3 4.3 46.5
Return on average tangible
shareholders' equity 20.6% 16.3% 19.1% 16.7% n/m 16.4%
Half year ended 30.06.20
Corporate Consumer,
Barclays and Investment Cards Barclays Barclays
UK Bank and Payments International Head Office Group
Return on average tangible
shareholders' equity GBPm GBPm GBPm GBPm GBPm GBPm
Attributable profit/(loss) 52 1,514 (517) 997 (354) 695
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
======== ===============
Average shareholders'
equity 13.8 27.7 5.4 33.1 9.9 56.8
Average goodwill and
intangibles (3.6) - (0.7) (0.7) (3.9) (8.2)
======== ===============
Average tangible shareholders'
equity 10.2 27.7 4.7 32.4 6.0 48.6
Return on average tangible
shareholders' equity 1.0% 11.0% (21.9)% 6.2% n/m 2.9%
Barclays Group
Q221 Q121 Q420 Q320 Q220 Q120 Q419 Q319
Return on average tangible
shareholders' equity GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Attributable profit/(loss) 2,108 1,704 220 611 90 605 681 (292)
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
Average shareholders'
equity 54.4 54.4 55.7 56.4 58.4 55.2 54.5 56.4
Average goodwill and intangibles (7.9) (7.9) (8.1) (8.1) (8.2) (8.2) (8.1) (8.0)
=====
Average tangible shareholders'
equity 46.5 46.5 47.6 48.3 50.2 47.0 46.4 48.4
Return on average tangible
shareholders' equity 18.1% 14.7% 1.8% 5.1% 0.7% 5.1% 5.9% (2.4)%
Barclays UK
Q221 Q121 Q420 Q320 Q220 Q120 Q419 Q319
Return on average allocated
tangible equity GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Attributable profit/(loss) 721 298 160 113 (123) 175 438 (907)
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
Average allocated equity 13.5 13.5 13.4 13.7 13.9 13.7 13.8 13.9
Average goodwill and intangibles (3.6) (3.6) (3.6) (3.6) (3.6) (3.6) (3.5) (3.5)
Average allocated tangible
equity 9.9 9.9 9.8 10.1 10.3 10.1 10.3 10.4
Return on average allocated
tangible equity 29.1% 12.0% 6.5% 4.5% (4.8)% 6.9% 17.0% (34.9)%
Barclays International
Q221 Q121 Q420 Q320 Q220 Q120 Q419 Q319
Return on average allocated
tangible equity GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Attributable profit 1,267 1,431 441 782 468 529 397 799
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
Average allocated equity 33.0 32.8 31.1 31.2 34.2 31.9 31.9 33.3
Average goodwill and intangibles (0.6) (0.5) (0.6) (0.6) (0.7) (0.7) (1.0) (1.1)
Average allocated tangible
equity 32.4 32.3 30.5 30.6 33.5 31.2 30.9 32.2
Return on average allocated
tangible equity 15.6% 17.7% 5.8% 10.2% 5.6% 6.8% 5.1% 9.9%
Corporate and Investment Bank
Q221 Q121 Q420 Q320 Q220 Q120 Q419 Q319
Return on average allocated
tangible equity GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Attributable profit 1,049 1,263 413 627 694 820 193 609
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
Average allocated equity 28.4 28.2 26.3 26.4 29.1 26.2 25.9 26.9
Average goodwill and intangibles - - - - (0.1) - (0.1) -
Average allocated tangible
equity 28.4 28.2 26.3 26.4 29.0 26.2 25.8 26.9
Return on average allocated
tangible equity 14.8% 17.9% 6.3% 9.5% 9.6% 12.5% 3.0% 9.1%
Consumer, Cards and Payments
Q221 Q121 Q420 Q320 Q220 Q120 Q419 Q319
Return on average allocated
tangible equity GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Attributable profit/(loss) 218 168 28 155 (226) (291) 204 190
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
Average allocated equity 4.6 4.6 4.8 4.8 5.1 5.7 6.0 6.4
Average goodwill and intangibles (0.6) (0.5) (0.6) (0.6) (0.6) (0.7) (0.9) (1.1)
Average allocated tangible
equity 4.0 4.1 4.2 4.2 4.5 5.0 5.1 5.3
Return on average allocated
tangible equity 21.8% 16.5% 2.7% 14.7% (20.2)% (23.5)% 15.9% 14.2%
Tangible net asset value per share As at 30.06.21 As at 31.12.20 As at 30.06.20
GBPm GBPm GBPm
Total equity excluding non-controlling interests 67,052 65,797 68,304
Other equity instruments (11,167) (11,172) (10,871)
Goodwill and intangibles (8,196) (7,948) (8,163)
Tangible shareholders' equity attributable to
ordinary shareholders of the parent 47,689 46,677 49,270
m m m
Shares in issue 16,998 17,359 17,345
p p p
Tangible net asset value per share 281 269 284
Shareholder Information
Results timetable(1) Date
========= ========= ======== ======== ========
Ex-dividend date 12 August 2021
Dividend record date 13 August 2021
Cut off time of 5:00pm (UK 27 August 2021
time) for the receipt of Dividend
Re-investment Programme (DRIP)
Application Form
Dividend payment date 17 September 2021
Q321 Results Announcement 21 October 2021
For qualifying US and Canadian resident ADR holders, the half year
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.
% Change(3)
Exchange rates(2) 30.06.21 31.12.20 30.06.20 31.12.20 30.06.20
========= ========= ======== ======== ========
Period end - USD/GBP 1.38 1.37 1.24 1% 11%
6 month average - USD/GBP 1.39 1.31 1.26 6% 10%
3 month average - USD/GBP 1.40 1.32 1.24 6% 13%
Period end - EUR/GBP 1.17 1.12 1.10 4% 6%
6 month average - EUR/GBP 1.15 1.11 1.14 4% 1%
3 month average - EUR/GBP 1.16 1.11 1.13 5% 3%
Share price data
========= ========= ======== ======== ========
Barclays PLC (p) 171.12 146.68 114.42
Barclays PLC number of shares
(m) 16,998 17,359 17,345
For further information please
contact
Investor relations Media relations
Chris Manners +44 (0) 20 7773 Tom Hoskin +44 (0) 20 7116 4755
2136
More information on Barclays can be found on our website: 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 20554 from the UK or +44 121 415 7004 from overseas.
American Depositary Receipts
(ADRs)
Shareowner Services
StockTransfer@equiniti.com
Tel: +1 800 990 1135 (toll free in US and Canada), +1 651 453 2128
(outside the US and Canada)
Shareowner Services, PO Box 64504, St Paul, MN 55164-0504, USA.
Delivery of ADR certificates
and overnight mail
Shareowner Services, 1110 Centre Pointe Curve, Suite 101, Mendota Heights,
MN 55120, USA.
Qualifying US and Canadian resident ADR holders should contact Shareowner
Services for further details regarding the DRIP
1 Note that these dates are provisional and subject to change.
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 in England and Wales.
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IR PPUQGMUPGGRM
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