Barclays PLC 6-K, filed Apr 29, 2020
Barclays PLC (BCS)
6-K
2020-04-29
For: 2020-03-31
View Original
Added on
April 11, 2026
About this 6-K
Barclays PLC filed this 6-K on April 29, 2020.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
April 29, 2020
Commission File Number: 001-09246
Barclays PLC
(Name of Registrant)
1 Churchill Place
London E14 5HP
England
(Address of Principal Executive Office)
Q1 2020 Results Announcement
Indicate by check mark whether the registrant files or will file annual reports under cover of
Form 20-F or Form 40-F.
Form 20-F
X
Form 40-F
Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
____
Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
____
This report on Form 6-K shall be deemed to be incorporated by reference in the registration statements on Form S-8 (No. 333-
153723, 333-167232, 333-173899, 333-183110, 333-195098, 333-216361, 333-225082, 333-236905 and 333-236904) and Form F-3
(333-223156) of Barclays PLC and to be a part thereof from the date on which this report is furnished, to the extent not superseded
by documents or reports subsequently filed or furnished.
Barclays PLC
1
The Report comprises the following:
equity, indebtedness and contingent liabilities as at 31 March 2020, the most recent reported statement of
position, and updated for any significant or material items since that reporting date.
Barclays PLC
2
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorised.
BARCLAYS PLC
(Registrant)
Date: April 29, 2020
By:
/s/ Garth Wright
Name: Garth Wright
Title: Assistant Secretary
Barclays PLC
1
Exhibit 99.1
Barclays PLC
This exhibit includes portions from the previously published Results Announcement of Barclays PLC relating to the three months
ended 31 March 2020, as amended in part to comply with the requirements of Regulation G and Item 10(e) of Regulation S-K
promulgated by the US Securities and Exchange Commission (SEC), including the reconciliation of certain financial information to
comparable measures prepared in accordance with International Financial Reporting Standards (IFRS). The purpose of this
document is to provide such additional disclosure as required by Regulation G and Regulation S-K item 10(e), to delete certain
information not in compliance with SEC regulations and to include reconciliations of certain non-IFRS figures to the most directly
equivalent IFRS figures for the periods presented. This document does not update or otherwise supplement the information
contained in the previously published Results Announcement. Any reference to a website in this document is made for
informational purposes only, and information found at such websites is not incorporated by reference into this document.
An audit opinion has not been rendered in respect of this document.
Notes
Barclays PLC
2
The terms Barclays or Group refer to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis compares the three
months ended 31 March 2020 to the corresponding three months of 2019 and balance sheet analysis as at 31 March 2020 with comparatives relating to 31
December 2019 and 31 March 2019. The abbreviations ‘£m’ and ‘£bn’ 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 ‘€m’ and ‘€bn’ 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 28 April 2020, does not comprise statutory accounts within the
meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2019, which contain 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) will be delivered to the
Registrar of Companies in accordance with Section 441 of the Companies Act 2006.
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 conc erning 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 35 to 43 for further information and calculations of non-IFRS performance measures included
throughout this document, and the most directly comparable IFRS measures.
Key non-IFRS measures included in this document, and the most directly comparable IFRS measures, are:
– Attributable profit excluding litigation and conduct represents attributable profit excluding litigation and conduct charges. The comparable IFRS measure is
attributable profit. A reconciliation is provided on pages 37 to 42;
– Average allocated equity represents the average shareholders’ equity that is allocated to the businesses. The comparable IFRS measure is average equity. A
reconciliation is provided on pages 37 to 41;
– Average allocated tangible equity is calculated as the average of the previous month’s 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. Period end
allocated tangible equity is calculated as 13.5% (2019: 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. The comparable IFRS measure is average equity. A reconciliation is provided
on pages 37 to 41;
– Average tangible shareholders’ equity is calculated as the average of the previous month’s 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. The comparable IFRS
measure is average equity. A reconciliation is provided on pages 37 to 41;
– Basic earnings per share excluding litigation and conduct is calculated by dividing statutory profit after tax attributable to ordinary shareholders excluding
litigation and conduct charges, by the basic weighted average number of shares. The comparable IFRS measure is basic earnings per share. A reconciliation is
provided on page 37;
– Cost: income ratio excluding litigation and conduct represents operating expenses excluding litigation and conduct charges, divided by total income. The
comparable IFRS measure is cost: income ratio. A reconciliation is provided on pages 37 to 41;
– Operating expenses excluding litigation and conduct represents operating expenses excluding litigation and conduct charges. The comparable IFRS measure
is operating expenses. A reconciliation is provided on pages 37 to 41;
– Profit before tax excluding litigation and conduct represents profit before tax excluding litigation and conduct charges. The comparable IFRS measure is
profit before tax. A reconciliation is provided on pages 37 to 42;
– Return on average allocated equity represents the return on shareholders’ equity that is allocated to the businesses. The comparable IFRS measure is return
on equity. A reconciliation is provided on page 43;
– Return on average allocated tangible equity is calculated as the annualised profit after tax attributable to ordinary equity holders of the parent, as a
proportion of average allocated tangible equity. The comparable IFRS measure is return on equity. A reconciliation is provided on page 43;
– Return on average allocated tangible equity excluding litigation and conduct is calculated as the annualised profit after tax attributable to ordinary equity
holders of the parent excluding litigation and conduct charges, as a proportion of average allocated tangible equity. The comparable IFRS measure is return
on equity. A reconciliation is provided on page 43;
– Return on average tangible shareholders’ equity is calculated as the annualised profit after tax attributable to ordinary equity holders of the parent, as a
proportion of average shareholders’ equity excluding non-controlling interests and other equity instruments adjusted for the deduction of intangible assets
and goodwill. The comparable IFRS measure is return on equity. A reconciliation is provided on page 43; and
– Tangible net asset value per share is calculated by dividing shareholders’ equity, excluding 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 42.
Notes
Barclays PLC
3
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, payment of dividends
(including dividend payout 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 and such 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, 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 exit by the UK from the European Union and the disruption that may subsequently result in the
UK and globally; 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, dividend payments, 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 our filings with the SEC
(including, without limitation, our Annual Report on Form 20-F for the fiscal year ended 31 December 2019 and our Q1 2020 Results Announcement for the
three months ended 31 March 2020 filed on Form 6-K), which are available on the SEC’s website at www.sec.gov.
Subject to our 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
Barclays PLC
4
●
Group return on equity (RoE) was 4.4%. Group return on tangible equity (RoTE) of 5.1% was resilient despite the initial impacts
from the COVID-19 pandemic, reflecting the benefits of the Group’s diversified business model
●
Group statutory profit before tax was £0.9bn (Q119: £1.5bn) and statutory earnings per share (EPS) was 3.5p (Q119: 6.1p)
●
Common equity tier 1 (CET1) ratio was 13.1% (December 2019: 13.8%)
●
Net asset value (NAV) per share was 332p (December 2019: 309p). Tangible net asset value (TNAV) per share increased to 284p
(December 2019: 262p) reflecting 3.5p of statutory EPS and positive reserve movements, including retirement benefit re-
measurements and currency translation reserves
●
We are implementing the government and Bank of England’s business support programmes and have introduced additional
measures to back UK companies ourselves as part of our response to the COVID -19 pandemic. As at 24 April 2020 we have
facilitated significant commercial paper issuance though the Covid Corporate Financing Facility, lent £737m in Coronavirus
Business Interruption Loans, approved over 238,000 mortgage and loan payment holidays, and over 6 million customers and
clients are currently paying no personal overdraft or business banking charges. We have launched a community aid package;
through which we are donating £100m to support those who are being hardest hit by COVID -19
●
Group profit before tax was £0.9bn (Q119: £1.5bn).
Income increased 20%, while operating expenses were stable, resulting in
an improved cost: income ratio of 52% (Q119: 63%). Barclays International delivered positive cost: income jaws of 29%, partially
offset by Barclays UK negative cost: income jaws of 6%. Credit impairment charges increased to £2.1bn (Q119: £0.4bn). This
increase primarily reflects £0.4bn in respect of single name wholesale loan charges in the quarter and £1.2bn net impact from a
revised Baseline scenario (the “COVID-19 scenario”), reflecting forecast deterioration in macroeconomic variables (including
expected peak unemployment levels and troughs in GDP for the UK and US economies), partially offset by the estimated impact
of central bank, government and other support measures
●
Barclays UK profit before tax was £0.2bn (Q119: £0.6bn).
Income decreased 4% reflecting ongoing margin pressure and
reduced fees as a result of the removal of certain fees in overdrafts and UK cards. Operating expenses increased 2% reflecting
higher restructuring spend. Credit impairment charges increased to £0.5bn (Q119: £0.2bn) reflecting impacts from the COVID-
19 scenario
●
Barclays International profit before tax was £0.8bn (Q119: £1.1bn).
performance within the Corporate and Investment Bank (CIB), while operating expenses increased 1%, resulting in positive
cost: income jaws of 29%. Credit impairment charges increased to £1.6bn (Q119: £0.2bn) reflecting single name wholesale loan
charges and impacts from the COVID-19 scenario. Higher credit impairment charges within Consumer, Cards and Payments
(CC&P) resulted in a loss before tax of £0.4bn (Q119: profit before tax £0.3bn)
Performance Highlights
Barclays PLC
5
Barclays Group results
for the three months ended
31.03.20
31.03.19
£m
£m
% Change
Total income
6,283
5,252
20
Credit impairment charges
(2,115)
(448)
Net operating income
4,168
4,804
(13)
Operating expenses
(3,253)
(3,257)
-
Litigation and conduct
(10)
(61)
84
Total operating expenses
(3,263)
(3,318)
2
Other net income/(expenses)
8
(3)
Profit before tax
913
1,483
(38)
Tax charge
(71)
(248)
71
Profit after tax
842
1,235
(32)
Non-controlling interests
(16)
(17)
6
Other equity instrument holders
(221)
(180)
(23)
Attributable profit
605
1,038
(42)
Performance measures
Return on average shareholders' equity
4.4%
7.8%
Return on average tangible shareholders' equity
5.1%
9.2%
Average shareholders' equity (£bn)
Average tangible shareholders' equity (£bn)
Cost: income ratio
52%
63%
Loan loss rate (bps)
223
54
Basic earnings per share
3.5p
6.1p
Performance measures excluding litigation and conduct
1
Profit before tax
923
1,544
(40)
Attributable profit
604
1,084
(44)
Return on average tangible shareholders' equity
5.1%
9.6%
Cost: income ratio
52%
62%
Basic earnings per share
3.5p
6.3p
As at 31.03.20
As at 31.12.19
As at 31.03.19
Balance sheet and capital management
2
£bn
£bn
£bn
Net asset value per share
332p
309p
312p
Tangible net asset value per share
284p
262p
266p
Common equity tier 1 ratio
13.1%
13.8%
13.0%
Common equity tier 1 capital
42.5
40.8
41.4
Risk weighted assets
325.6
295.1
319.7
Average UK leverage ratio
4.5%
4.5%
4.6%
UK leverage ratio
4.5%
5.1%
4.9%
Funding and liquidity
Group liquidity pool (£bn)
237
211
232
Liquidity coverage ratio
155%
160%
160%
Loan: deposit ratio
79%
82%
80%
1
Refer to pages 35 to 42 for further information and calculations of performance measures excluding litigation and conduct.
2
Refer to pages 25 to 30 for further information on how capital, RWAs and leverage are calculated.
Group Finance Director’s Review
Barclays PLC
6
Group performance
●
RoE was 4.4% (Q119: 7.8%). RoTE, excluding litigation and conduct, was resilient at 5.1% (Q119: 9.6%). EPS, excluding litigation
and conduct, was 3.5p (Q119: 6.3p), while statutory EPS was also 3.5p (Q119: 6.1p)
●
Profit before tax was £913m (Q119: £1,483m). Excluding litigation and conduct, profit before tax was £923m (Q119: £1,544m),
as positive operating leverage from a 20% increase in income and stable operating expenses were offset by materially higher
credit impairment charges
●
Total income increased 20% to £6,283m. Barclays UK income decreased 4% due to ongoing margin pressure, including lower
interest earning lending (IEL) balances in UK cards and deposit margin compression, and lower fees due to the removal of
certain fees in overdrafts and UK cards. Barclays International income increased 30%, with CIB income up 44% and CC&P
income down 4%. Within CIB, Markets income increased due to a strong performance in macro, credit, and equity derivatives.
Banking fees income increased despite a decline in the overall fee pool
1
. Transaction banking income also increased, offset by a
reduction in Corporate lending. CC&P income reflected lower balances on co-branded cards and reduced payments activity,
partially offset by the positive impact of appreciation in average USD against GBP
●
Credit impairment charges increased to £2,115m (Q119: £448m). This increase reflects £405m in respect of single name
wholesale loan charges in the quarter and £1.2bn net impact from a revised Baseline scenario (the “COVID-19 scenario”),
reflecting forecast deterioration in macroeconomic variables, partially offset by the estimated impact of central bank,
government and other support measures. The COVID-19 scenario also includes a specific charge of £300m to reflect the
probability of a sustained period of low oil prices. The £150m provision for UK economic uncertainty held at year-end 2019 has
been incorporated within the updated scenario
●
The Group cost: income ratio was 52% (Q119: 63%). Operating expenses were stable at £3,253m (Q119: £3,257m). The Group
delivered positive cost: income jaws of 20%, reflecting positive cost: income jaws in CIB and CC&P of 40% and 6% respectively,
partially offset by negative cost: income jaws in Barclays UK of 6%. This resulted in the Group cost: income ratio, excluding
litigation and conduct, reducing to 52% (Q119: 62%)
●
The statutory effective tax rate was 7.8%, which included a tax benefit recognised for the re-measurement of UK deferred tax
assets as a result of UK corporation tax being maintained at a rate of 19%. The Group’s effective tax rate for the full year is
expected to be around 20%, excluding litigation and conduct
●
Attributable profit was £605m (Q119: £1,038m). Excluding litigation and conduct, attributable profit was £604m (Q119:
£1,084m), generating a RoTE of 5.1% (Q119: 9.6%) and EPS of 3.5p (Q119: 6.3p)
●
Total assets increased to £1,444bn (December 2019: £1,140bn) primarily driven by a £113bn increase in derivative assets, £74bn
increase in cash collateral and settlement balances, and £60bn increase in financial assets at fair value due to decreases in interest
rate forward curves, increased corporate loan drawdowns, the appreciation of period end USD against GBP and increased client
activity. The increases in derivative assets were broadly matched by the increase in derivative liabilities, which increased £110bn
●
NAV per share was 332p (December 2019: 309p). TNAV per share increased to 284p (December 2019: 262p) reflecting 3.5p of
statutory EPS and positive reserve movements, including retirement benefit re-measurements and currency translation reserves
1
Data Source: Dealogic, for the period covering 1 January to 31 March 2020.
Barclays UK
●
Profit before tax was £195m and RoE was 5.0% (Q119: 12.2%). Profit before tax, excluding litigation and conduct, decreased
66% to £200m. RoTE was 6.8% (Q119: 16.4%) reflecting the challenging operating environment
●
Total income decreased 4% to £1,704m. A 4% reduction in net interest income to £1,412m (resulting in a lower net interest
margin (NIM) of 2.91% (Q119: 3.18%)) reflected lower IEL balances in UK cards, reduced overdraft balances and deposit margin
compression, partially offset by liquidity pool investment gains. Net fee, commission and other income decreased 5% to £292m,
reflecting the removal of certain fees in overdrafts and UK cards, and planned lower debt sales
–
Personal Banking income was stable at £968m (Q119: £964m), with deposit margin compression and the removal of
certain fees in overdrafts offset by liquidity pool investment gains and a tax refund
–
Barclaycard Consumer UK income decreased 11% to £436m reflecting reduced borrowing by customers, which
resulted in a lower level of IEL balances, and planned lower debt sales
–
Business Banking income decreased 7% to £300m due to deposit margin compre ssion and market volatility impacting
the Education, Social Housing and Local Authority (ESHLA) fair value loan portfolio
●
Credit impairment charges increased to £481m (Q119: £191m) reflecting forecast deterioration in macroeconomic variables in
the COVID-19 scenario, partially offset by the estimated impact of central bank, government and other support measures. 30
and 90 day arrears rates in UK cards were 1.8% (Q119: 1.9%) and 0.8% (Q119: 0.9%) respectively, with impacts from the
macroeconomic downturn caused by the COVID-19 pandemic yet to be realised as at the quarter end date
●
Operating expenses increased 2% to £1,023m reflecting higher restructuring spend
●
RWAs increased to £77.7bn (December 2019: £74.9bn) driven by growth in mortgages, market volatility impacting the ESHLA
fair value loan portfolio and a change in the mix of assets in the liquidity pool
Group Finance Director’s Review
Barclays PLC
7
Barclays International
●
Profit before tax was £822m. RoE was 6.4% (Q119: 10.0%), CIB RoE was 12.1% (Q119: 9.3%) and CC&P RoE was (20.0)% (Q119:
12.8%). Profit before tax, excluding litigation and conduct, decreased 28% to £822m with a RoTE of 6.5% (Q119: 10.6%),
reflecting returns in the CIB of 12.1% (Q119: 9.5%) and CC&P of (22.6)% (Q119: 15.4%)
●
Total income increased to £4,644m (Q119: £3,570m)
–
CIB income increased 44% to £3,617m
–
Markets income of £2,422m (Q119: £1,369m) was the best ever quarter on a comparable basis
1
. FICC income increased
106% to £1,858m driven by a strong performance in macro and credit reflecting increased client activity and spread
widening. Equities income increased 21% to £564m driven by equity derivatives, which were impacted by high levels of
volatility
–
Banking fees income increased 12% to £635m driven by debt capital markets and advisory despite a decline in the
overall fee pool
2
–
Within Corporate, Transaction banking income increased 8% to £449m with growth in deposit balances. Corporate
lending income decreased by £41m to £111m due to the impact of c.£320m of losses on fair value lending positions
partially offset by c.£275m of gains on related mark-to-market hedges
–
CC&P income decreased 4% to £1,027m as lower balances on co-branded cards and reduced payments activity, impacted
by lower customer and client activity towards the end of the quarter, were partially offset by the positive impact of
appreciation in average USD against GBP
●
Credit impairment charges increased to £1,609m (Q119: £245m) reflecting single name wholesale loan charges and impacts
from the COVID-19 scenario
–
CIB credit impairment charges increased to £724m (Q119: £52m), due to £405m in respect of single name wholesale loan
charges and exposure to the probability of a sustained period of low oil prices
–
CC&P credit impairment charges increased to £885m (Q119: £193m) due to forecast deterioration in macroeconomic
variables in the COVID -19 scenario, partially offset by the estimated impact of central bank, government and other support
measures. 30 and 90 day arrears rates in US cards were 2.7% (Q119: 2.6%) and 1.5% (Q119: 1.4%) respectively, with
impacts from the macroeconomic downturn caused by the COVID-19 pandemic yet to be realised as at the quarter end date
●
Operating expenses increased 1% to £2,219m as a 4% increase in CIB to £1,690m was offset by a 10% decrease in CC&P to
£529m reflecting cost efficiencies and lower marketing spend as Barclays branded US cards presence has been scaled back
●
RWAs increased to £237.9bn (December 2019: £209.2bn) primarily due to an increase in client activity compared to year-end
2019, including drawdowns on facilities within CIB, and higher market volatility as well as the appreciation of USD against GBP
1
Period covering Q114 – Q120. Pre 2014 data was not restated following re-segmentation in Q116.
2
Data Source: Dealogic, for the period covering 1 January to 31 March 2020.
Head Office
●
Loss before tax, excluding litigation and conduct, was £99m (Q119: £181m). Including litigation and conduct charges of £5m
(Q119: £39m), loss before tax was £104m (Q119: £220m)
●
Total income was an expense of £65m (Q119: £95m) which included mark-to-market losses on legacy investments, treasury
items and funding costs of legacy capital instruments, partially offset by hedge accounting gains
●
Operating expenses decreased to £11m (Q119: £52m) driven by a provision release related to the previous sale of a Non-Core
portfolio
●
RWAs decreased to £10.0bn (December 2019: £11.0bn) mainly driven by reduction in the value of Barclays’ stake in Absa Group
Limited
Group capital and leverage
●
The CET1 ratio decreased to 13.1% (December 2019: 13.8%)
–
CET1 capital increased by £1.7bn to £42.5bn driven by £0.9bn of profits, net of credit impairment charges not subject to
IFRS 9 transitional capital relief, an increase in the currency translation reserve of £1.0bn (mainly driven by the appreciation
of period end USD against GBP), and £1.0bn following the cancellation of the full year 2019 dividend. These increases were
partially offset by a decrease of £0.8bn in the fair value through other comprehensive income reserve driven by a decrease
in the Absa Group Limited share price and appreciation of period end GBP against ZAR
–
RWAs increased by £30.5bn to £325.6bn primarily driven by an increase in client activity within CIB (including drawdowns
on facilities) and higher market volatility as well as the appreciation of period end USD against GBP
Group Finance Director’s Review
Barclays PLC
8
●
The average UK leverage ratio remained stable at 4.5% (December 2019: 4.5%) primarily driven by an increase in leverage
exposure to £1,176bn (December 2019: £1,143bn), partially offset by an increase in Tier 1 (T1) capital. The UK leverage ratio
decreased to 4.5% (December 2019: 5.1%). The increase in leverage exposure is primarily driven by an increase in IFRS total
assets including a £60bn increase in financial assets at fair value, a £42bn increase in settlement balances and a £35bn
increase in loans and advances
Group funding and liquidity
●
The liquidity pool was £237bn (December 2019: £211bn) and the liquidity coverage ratio (LCR) remained well above the 100%
regulatory requirement at 155% (December 2019: 160%), equivalent to a surplus of £82bn (December 2019: £78bn). The
change in the liquidity pool, LCR and surplus is driven by deposit growth net of client and business funding requirements, and
reflects actions to maintain a prudent funding and liquidity position in the current environment
●
Wholesale funding outstanding, excluding repurchase agreements, was £155.3bn (December 2019: £147.1bn). The Group
issued £0.2bn equivalent of minimum requirement for own funds and eligible liabilities (MREL) instruments from Barclays PLC
(the Parent company) in the quarter. This does not include an additional €2bn of MREL issuance that settled on 2 April 2020.
The Group is well advanced in its MREL issuance plans, with a Barc lays PLC MREL ratio of 29.3% as at 31 March 2020 (December
2019: 31.2%) relative to an estimated requirement (including requisite buffers) of c.30.6% by 1 January 2022
Other matters
●
As at 31 March 2020, the Group held a provision of £879m relating to Payment Protection Insurance. Since the provision
increase in 2019, 60% of the items outstanding as at 30 September 2019 have been resolved and observations from these
resolved complaints continue to support the provision level
Dividends and capital returns
●
In response to a request from the Prudential Regulation Authority (PRA), and to preserve additional capital for use in serving
Barclays customers and clients through the extraordinary challenges presented by the COVID-19 pandemic, the Board agreed to
cancel the 6.0p per ordinary share full year dividend. The Board also decided that for 2020 Barclays would suspend its current
capital returns policy and accordingly will not undertake any interim ordinary share dividend payments, regulatory accruals of
ordinary share dividends, or share buybacks. The Board will decide on future dividends and its capital returns policy at year-end
2020
Outlook and guidance
●
Due to the lower interest rate environment and macroeconomic downturn caused by the COVID -19 pandemic, BUK and CC&P
income headwinds are expected to continue for the remainder of the year. In BUK in particular, headwinds include (i) c.£250m
from the lower rate environment (ii) reduced IEL balances (iii) c.£150m due to the removal of certain fees and lower overdraft
balances as a result of the High Cost of Credit Review and (iv) c.£100m from COVID-19 customer support actions
●
In our Markets business client flows have continued at healthy levels and while it is too early to guide for the quarter or to
comment on the outlook for the rest of the year, in April so far our revenue run-rate is well above that of the second quarter of
2019
●
Given the uncertainty around the developing economic downturn and low interest rate environment, 2020 is expected to be
challenging. However, the Group believes that a RoTE of greater than 10% remains the right target for the Group over time
●
Cost control remains important and the Group continues to target a cost: income ratio of <60% over time
●
Barclays intends to manage its capital position to enable it to support customers whilst maintaining appropriate headroom over
the MDA hurdle, which is currently 11.5%. Barclays is comfortable operating below its previously stated CET1 target level,
depending on how the stress evolves, and will continue to manage equity capital having regard to the servicing of more senior
securities. Barclays also expects its MDA hurdle (in percentage terms) to reduce as a result of some anticipated movements in
the Pillar 2A ratio requirement
●
Tushar Morzaria, Group Finance Director
1
Excluding litigation and conduct.
Quarterly Results Summary
Barclays PLC
9
Barclays Group
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
2,331
2,344
2,445
2,360
2,258
2,296
2,388
2,190
Net fee, commission and other income
3,952
2,957
3,096
3,178
2,994
2,777
2,741
3,386
Total income
6,283
5,301
5,541
5,538
5,252
5,073
5,129
5,576
Credit impairment charges
(2,115)
(523)
(461)
(480)
(448)
(643)
(254)
(283)
Net operating income
4,168
4,778
5,080
5,058
4,804
4,430
4,875
5,293
Operating costs
(3,253)
(3,308)
(3,293)
(3,501)
(3,257)
(3,624)
(3,329)
(3,310)
UK bank levy
-
(226)
-
-
-
(269)
-
-
Operating expenses
(3,253)
(3,534)
(3,293)
(3,501)
(3,257)
(3,893)
(3,329)
(3,310)
Guaranteed Minimum Pensions (GMP) charge
-
-
-
-
-
(140)
-
-
Litigation and conduct
(10)
(167)
(1,568)
(53)
(61)
(60)
(105)
(81)
Total operating expenses
(3,263)
(3,701)
(4,861)
(3,554)
(3,318)
(4,093)
(3,434)
(3,391)
Other net income/(expenses)
8
20
27
27
(3)
37
20
(7)
Profit before tax
913
1,097
246
1,531
1,483
374
1,461
1,895
Tax charge
(71)
(189)
(269)
(297)
(248)
(75)
(192)
(386)
Profit/(loss) after tax
842
908
(23)
1,234
1,235
299
1,269
1,509
Non-controlling interests
(16)
(42)
(4)
(17)
(17)
(83)
(43)
(55)
Other equity instrument holders
(221)
(185)
(265)
(183)
(180)
(230)
(176)
(175)
Attributable profit/(loss)
605
681
(292)
1,034
1,038
(14)
1,050
1,279
Performance measures
Return on average shareholders' equity
4.4%
5.0%
(2.1%)
7.6%
7.8%
(0.1%)
8.0%
10.0%
Return on average tangible shareholders' equity
5.1%
5.9%
(2.4%)
9.0%
9.2%
(0.1%)
9.4%
11.8%
Average shareholders' equity (£bn)
55.2
54.5
56.4
54.0
53.2
52.2
52.5
51.3
Average tangible shareholders' equity (£bn)
47.0
46.4
48.4
46.2
45.2
44.3
44.6
43.5
Cost: income ratio
52%
70%
88%
64%
63%
81%
67%
61%
Loan loss rate (bps)
223
60
52
56
54
77
30
35
Basic earnings/(loss) per share
3.5p
3.9p
(1.7p)
6.0p
6.1p
(0.1p)
6.1p
7.5p
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
923
1,264
1,814
1,584
1,544
434
1,566
1,976
Attributable profit
604
803
1,233
1,074
1,084
48
1,135
1,338
Return on average tangible shareholders' equity
5.1%
6.9%
10.2%
9.3%
9.6%
0.4%
10.2%
12.3%
Cost: income ratio
52%
67%
59%
63%
62%
79%
65%
59%
Basic earnings per share
3.5p
4.7p
7.2p
6.3p
6.3p
0.3p
6.6p
7.8p
Balance sheet and capital management
2
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Total assets
1,444.3
1,140.2
1,290.4
1,232.8
1,193.5
1,133.3
1,170.8
1,149.6
Net asset value per share
332p
309p
320p
322p
312p
309p
306p
305p
Tangible net asset value per share
284p
262p
274p
275p
266p
262p
260p
259p
Common equity tier 1 ratio
13.1%
13.8%
13.4%
13.4%
13.0%
13.2%
13.2%
13.0%
Common equity tier 1 capital
42.5
40.8
41.9
42.9
41.4
41.1
41.7
41.4
Risk weighted assets
325.6
295.1
313.3
319.1
319.7
311.9
316.2
319.3
Average UK leverage ratio
4.5%
4.5%
4.6%
4.7%
4.6%
4.5%
4.6%
4.6%
Average UK leverage exposure
1,176.2
1,142.8
1,171.2
1,134.6
1,105.5
1,110.0
1,119.0
1,081.8
UK leverage ratio
4.5%
5.1%
4.8%
5.1%
4.9%
5.1%
4.9%
4.9%
UK leverage exposure
1,178.7
1,007.7
1,099.8
1,079.4
1,065.0
998.6
1,063.5
1,030.1
Funding and liquidity
Group liquidity pool (£bn)
237
211
226
238
232
227
213
214
Liquidity coverage ratio
155%
160%
151%
156%
160%
169%
161%
154%
Loan: deposit ratio
79%
82%
82%
82%
80%
83%
83%
83%
1
Refer to pages 35 to 42 for further information and calculations of performance measures excluding litigation and conduct.
2
Refer to pages 25 to 30 for further information on how capital, RWAs and leverage are calculated.
Quarterly Results by Business
Barclays PLC
10
Barclays UK
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
1,412
1,478
1,503
1,438
1,469
1,513
1,529
1,493
Net fee, commission and other income
292
481
343
333
308
350
367
343
Total income
1,704
1,959
1,846
1,771
1,777
1,863
1,896
1,836
Credit impairment charges
(481)
(190)
(101)
(230)
(191)
(296)
(115)
(214)
Net operating income
1,223
1,769
1,745
1,541
1,586
1,567
1,781
1,622
Operating costs
(1,023)
(1,023)
(952)
(1,022)
(999)
(1,114)
(988)
(968)
UK bank levy
-
(41)
-
-
-
(46)
-
-
Operating expenses
(1,023)
(1,064)
(952)
(1,022)
(999)
(1,160)
(988)
(968)
Litigation and conduct
(5)
(58)
(1,480)
(41)
(3)
(15)
(54)
(3)
Total operating expenses
(1,028)
(1,122)
(2,432)
(1,063)
(1,002)
(1,175)
(1,042)
(971)
Other net (expenses)/income
-
-
-
(1)
1
(2)
1
5
Profit/(loss) before tax
195
647
(687)
477
585
390
740
656
Attributable profit/(loss)
175
438
(907)
328
422
241
510
473
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances to customers at amortised
cost
195.7
193.7
193.2
189.1
187.5
187.6
186.7
185.3
Total assets
267.5
257.8
257.9
259.0
253.1
249.7
252.0
245.9
Customer deposits at amortised cost
207.5
205.5
203.3
200.9
197.3
197.3
195.8
194.3
Loan: deposit ratio
96%
96%
97%
97%
96%
96%
96%
96%
Risk weighted assets
77.7
74.9
76.8
76.2
76.6
75.2
74.8
75.0
Performance measures
Return on average allocated equity
5.0%
12.7%
(26.1%)
9.5%
12.2%
7.1%
14.9%
13.9%
Return on average allocated tangible equity
6.7%
17.0%
(34.9%)
12.7%
16.3%
9.6%
20.1%
18.8%
Average allocated equity (£bn)
14.1
13.8
13.9
13.8
13.9
13.6
13.7
13.6
Average allocated tangible equity (£bn)
10.5
10.3
10.4
10.3
10.4
10.1
10.1
10.1
Cost: income ratio
60%
57%
132%
60%
56%
63%
55%
53%
Loan loss rate (bps)
96
38
20
47
40
61
24
45
Net interest margin
2.91%
3.03%
3.10%
3.05%
3.18%
3.20%
3.22%
3.22%
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
200
705
793
518
588
405
794
659
Attributable profit
178
481
550
358
424
253
558
474
Return on average allocated tangible equity
6.8%
18.7%
21.2%
13.9%
16.4%
10.1%
22.0%
18.8%
Cost: income ratio
60%
54%
52%
58%
56%
62%
52%
53%
1
Refer to pages 35 to 42 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results by Business
Barclays PLC
11
Analysis of Barclays UK
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
Analysis of total income
£m
£m
£m
£m
£m
£m
£m
£m
Personal Banking
968
1,064
1,035
946
964
998
1,021
1,015
Barclaycard Consumer UK
436
533
472
497
490
522
551
504
Business Banking
300
362
339
328
323
343
324
317
Total income
1,704
1,959
1,846
1,771
1,777
1,863
1,896
1,836
Analysis of credit impairment (charges)/releases
Personal Banking
(134)
(71)
(36)
(36)
(52)
(44)
(8)
(49)
Barclaycard Consumer UK
(301)
(108)
(49)
(175)
(140)
(250)
(88)
(139)
Business Banking
(46)
(11)
(16)
(19)
1
(2)
(19)
(26)
Total credit impairment charges
(481)
(190)
(101)
(230)
(191)
(296)
(115)
(214)
Analysis of loans and advances to customers at
amortised cost
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Personal Banking
153.4
151.9
150.1
147.3
145.9
146.0
145.4
143.6
Barclaycard Consumer UK
13.6
14.7
14.9
15.1
15.0
15.3
15.3
15.2
Business Banking
28.7
27.1
28.2
26.7
26.6
26.3
26.0
26.5
Total loans and advances to customers at
amortised cost
195.7
193.7
193.2
189.1
187.5
187.6
186.7
185.3
Analysis of customer deposits at amortised cost
Personal Banking
161.4
159.2
157.9
156.3
154.1
154.0
153.4
152.9
Barclaycard Consumer UK
-
-
-
-
-
-
-
-
Business Banking
46.1
46.3
45.4
44.6
43.2
43.3
42.4
41.4
Total customer deposits at amortised cost
207.5
205.5
203.3
200.9
197.3
197.3
195.8
194.3
Quarterly Results by Business
Barclays PLC
12
Barclays International
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
998
965
1,059
1,017
900
984
965
853
Net trading income
2,360
929
1,110
1,016
1,144
837
1,103
1,094
Net fee, commission and other income
1,286
1,558
1,581
1,870
1,526
1,400
1,222
1,760
Total income
4,644
3,452
3,750
3,903
3,570
3,221
3,290
3,707
Credit impairment charges
(1,609)
(329)
(352)
(247)
(245)
(354)
(143)
(68)
Net operating income
3,035
3,123
3,398
3,656
3,325
2,867
3,147
3,639
Operating costs
(2,219)
(2,240)
(2,282)
(2,435)
(2,206)
(2,441)
(2,277)
(2,306)
UK bank levy
-
(174)
-
-
-
(210)
-
-
Operating expenses
(2,219)
(2,414)
(2,282)
(2,435)
(2,206)
(2,651)
(2,277)
(2,306)
Litigation and conduct
-
(86)
-
(11)
(19)
(33)
(32)
(47)
Total operating expenses
(2,219)
(2,500)
(2,282)
(2,446)
(2,225)
(2,684)
(2,309)
(2,353)
Other net income
6
17
21
13
18
32
12
11
Profit before tax
822
640
1,137
1,223
1,118
215
850
1,297
Attributable profit/(loss)
529
397
799
832
788
(21)
687
926
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances at amortised cost
167.0
132.8
138.1
134.8
130.9
127.2
132.4
125.5
Trading portfolio assets
101.6
113.3
119.4
120.0
117.2
104.0
124.6
116.5
Derivative financial instrument assets
341.5
228.9
286.0
243.8
217.3
222.1
214.8
228.2
Financial assets at fair value through the income
statement
188.4
128.4
158.0
154.7
153.5
144.7
147.8
141.2
Cash collateral and settlement balances
153.2
79.4
112.5
101.3
97.8
74.3
94.3
91.5
Other assets
201.5
178.6
195.6
196.8
202.3
189.8
186.3
183.6
Total assets
1,153.2
861.4
1,009.6
951.4
919.0
862.1
900.2
886.5
Deposits at amortised cost
263.3
210.0
217.6
212.0
215.5
197.2
200.3
191.0
Derivative financial instrument liabilities
338.8
228.9
283.3
243.0
213.5
219.6
213.7
224.9
Loan: deposit ratio
63%
63%
63%
64%
61%
65%
66%
66%
Risk weighted assets
237.9
209.2
223.1
214.8
216.1
210.7
214.6
218.0
Performance measures
Return on average allocated equity
6.4%
5.0%
9.6%
10.3%
10.0%
(0.3%)
8.5%
11.3%
Return on average allocated tangible equity
6.5%
5.1%
9.9%
10.7%
10.4%
(0.3%)
8.8%
11.8%
Average allocated equity (£bn)
33.0
31.9
33.3
32.1
31.6
32.4
32.5
32.8
Average allocated tangible equity (£bn)
32.3
30.9
32.2
31.1
30.5
31.3
31.1
31.4
Cost: income ratio
48%
72%
61%
63%
62%
83%
70%
63%
Loan loss rate (bps)
377
96
99
72
73
107
41
22
Net interest margin
3.93%
4.29%
4.10%
3.91%
3.99%
3.98%
3.87%
4.03%
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
822
726
1,137
1,234
1,137
248
882
1,344
Attributable profit
529
461
801
840
804
13
713
960
Return on average allocated tangible equity
6.5%
6.0%
10.0%
10.8%
10.6%
0.2%
9.2%
12.2%
Cost: income ratio
48%
70%
61%
62%
62%
82%
69%
62%
1
Refer to pages 35 to 42 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results by Business
Barclays PLC
13
Analysis of Barclays International
Corporate and Investment Bank
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
FICC
1,858
726
816
920
902
570
688
736
Equities
564
409
494
517
467
375
471
601
Markets
2,422
1,135
1,310
1,437
1,369
945
1,159
1,337
Advisory
155
202
221
221
132
242
151
168
Equity capital markets
62
56
86
104
83
53
55
90
Debt capital markets
418
322
381
373
354
330
313
446
Banking fees
635
580
688
698
569
625
519
704
Corporate lending
111
202
195
216
152
243
197
198
Transaction banking
449
397
424
444
415
412
416
385
Corporate
560
599
619
660
567
655
613
583
Other
-
-
-
-
-
(74)
(56)
(44)
Total income
3,617
2,314
2,617
2,795
2,505
2,151
2,235
2,580
Credit impairment (charges)/releases
(724)
(30)
(31)
(44)
(52)
(35)
3
23
Net operating income
2,893
2,284
2,586
2,751
2,453
2,116
2,238
2,603
Operating costs
(1,690)
(1,691)
(1,712)
(1,860)
(1,619)
(1,835)
(1,712)
(1,773)
UK bank levy
-
(156)
-
-
-
(188)
-
-
Operating expenses
(1,690)
(1,847)
(1,712)
(1,860)
(1,619)
(2,023)
(1,712)
(1,773)
Litigation and conduct
-
(79)
(4)
(7)
(19)
(23)
(32)
-
Total operating expenses
(1,690)
(1,926)
(1,716)
(1,867)
(1,638)
(2,046)
(1,744)
(1,773)
Other net income
-
1
12
3
12
15
4
5
Profit before tax
1,203
359
882
887
827
85
498
835
Attributable profit/(loss)
820
193
609
596
582
(84)
431
600
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances at amortised cost
128.2
92.0
95.8
92.1
90.6
86.4
93.3
87.8
Trading portfolio assets
101.5
113.3
119.3
119.9
117.2
104.0
124.5
116.5
Derivative financial instruments assets
341.4
228.8
286.0
243.7
217.3
222.1
214.8
228.1
Financial assets at fair value through the income
statement
187.8
127.7
157.3
154.1
152.9
144.2
147.3
140.7
Cash collateral and settlement balances
152.2
78.5
111.6
100.4
96.9
73.4
93.3
90.6
Other assets
171.4
155.3
171.5
168.1
163.2
160.4
153.8
151.6
Total assets
1,082.5
795.6
941.5
878.3
838.1
790.5
827.0
815.3
Deposits at amortised cost
198.4
146.2
152.1
145.4
151.4
136.3
137.6
130.3
Derivative financial instrument liabilities
338.7
228.9
283.2
242.9
213.5
219.6
213.7
224.9
Risk weighted assets
201.7
171.5
184.9
175.9
176.6
170.9
175.9
180.4
Performance measures
Return on average allocated equity
12.1%
3.0%
9.1%
9.2%
9.3%
(1.3%)
6.6%
9.0%
Return on average allocated tangible equity
12.1%
3.0%
9.1%
9.2%
9.3%
(1.3%)
6.6%
9.1%
Average allocated equity (£bn)
27.2
25.9
26.9
25.8
25.2
26.0
26.2
26.7
Average allocated tangible equity (£bn)
27.2
25.8
26.9
25.8
25.1
26.0
25.9
26.4
Cost: income ratio
47%
83%
66%
67%
65%
95%
78%
69%
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
1,203
438
886
894
846
108
530
835
Attributable profit/(loss)
820
251
614
601
598
(57)
456
600
Return on average allocated tangible equity
12.1%
3.9%
9.2%
9.3%
9.5%
(0.9%)
7.0%
9.1%
Cost: income ratio
47%
80%
65%
67%
65%
94%
77%
69%
1
Refer to pages 35 to 42 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results by Business
Barclays PLC
14
Analysis of Barclays International
Consumer, Cards and Payments
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
663
717
720
720
665
664
691
699
Net fee, commission, trading and other income
364
421
413
388
400
406
364
428
Total income
1,027
1,138
1,133
1,108
1,065
1,070
1,055
1,127
Credit impairment charges
(885)
(299)
(321)
(203)
(193)
(319)
(146)
(91)
Net operating income
142
839
812
905
872
751
909
1,036
Operating costs
(529)
(549)
(570)
(575)
(587)
(606)
(565)
(533)
UK bank levy
-
(18)
-
-
-
(22)
-
-
Operating expenses
(529)
(567)
(570)
(575)
(587)
(628)
(565)
(533)
Litigation and conduct
-
(7)
4
(4)
-
(10)
-
(47)
Total operating expenses
(529)
(574)
(566)
(579)
(587)
(638)
(565)
(580)
Other net income
6
16
9
10
6
17
8
6
(Loss)/profit before tax
(381)
281
255
336
291
130
352
462
Attributable (loss)/profit
(291)
204
190
236
206
63
256
326
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances at amortised cost
38.8
40.8
42.3
42.7
40.3
40.8
39.1
37.7
Total assets
70.7
65.8
68.1
73.1
80.9
71.6
73.2
71.2
Deposits at amortised cost
64.9
63.8
65.5
66.6
64.1
60.9
62.7
60.7
Risk weighted assets
36.2
37.7
38.2
38.9
39.5
39.8
38.7
37.6
Performance measures
Return on average allocated equity
(20.0%)
13.6%
11.8%
14.9%
12.8%
3.9%
16.3%
21.6%
Return on average allocated tangible equity
(22.6%)
15.9%
14.2%
17.8%
15.4%
4.8%
19.8%
26.2%
Average allocated equity (£bn)
5.8
6.0
6.4
6.3
6.4
6.4
6.3
6.0
Average allocated tangible equity (£bn)
5.1
5.1
5.3
5.3
5.4
5.3
5.2
5.0
Cost: income ratio
52%
50%
50%
52%
55%
60%
54%
51%
Loan loss rate (bps)
846
273
283
180
182
290
138
90
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
(Loss)/profit before tax
(381)
288
251
340
291
140
352
509
Attributable (loss)/profit
(291)
210
187
239
206
70
257
360
Return on average allocated tangible equity
(22.6%)
16.3%
14.0%
18.0%
15.4%
5.4%
19.9%
28.9%
Cost: income ratio
52%
50%
50%
52%
55%
59%
54%
47%
1
Refer to pages 35 to 42 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results by Business
Barclays PLC
15
Head Office
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
(79)
(99)
(117)
(95)
(111)
(201)
(106)
(156)
Net fee, commission and other income
14
(11)
62
(41)
16
190
49
189
Total income
(65)
(110)
(55)
(136)
(95)
(11)
(57)
33
Credit impairment (charges)/releases
(25)
(4)
(8)
(3)
(12)
7
4
(1)
Net operating (expenses)/income
(90)
(114)
(63)
(139)
(107)
(4)
(53)
32
Operating costs
(11)
(45)
(59)
(44)
(52)
(69)
(64)
(36)
UK bank levy
-
(11)
-
-
-
(13)
-
-
Operating expenses
(11)
(56)
(59)
(44)
(52)
(82)
(64)
(36)
GMP charge
-
-
-
-
-
(140)
-
-
Litigation and conduct
(5)
(23)
(88)
(1)
(39)
(12)
(19)
(31)
Total operating expenses
(16)
(79)
(147)
(45)
(91)
(234)
(83)
(67)
Other net income/(expenses)
2
3
6
15
(22)
7
7
(23)
Loss before tax
(104)
(190)
(204)
(169)
(220)
(231)
(129)
(58)
Attributable loss
(99)
(154)
(184)
(126)
(172)
(234)
(147)
(120)
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Total assets
23.6
21.0
22.9
22.4
21.4
21.5
18.6
17.2
Risk weighted assets
10.0
11.0
13.4
28.1
27.0
26.0
26.8
26.3
Performance measures
Average allocated equity (£bn)
8.1
8.8
9.2
8.1
7.7
6.2
6.4
4.9
Average allocated tangible equity (£bn)
4.2
5.2
5.8
4.8
4.3
2.9
3.4
2.0
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Loss before tax
(99)
(167)
(116)
(168)
(181)
(219)
(110)
(27)
Attributable loss
(103)
(139)
(118)
(124)
(144)
(218)
(136)
(96)
1
Refer to pages 35 to 42 for further information and calculations of performance measures excluding litigation and conduct.
Performance Management
Barclays PLC
16
Margins and balances
Three months ended 31.03.20
Three months ended 31.03.19
Net interest
income
Average
customer
assets
Net interest
margin
Net interest
income
Average
customer
assets
Net interest
margin
£m
£m
%
£m
£m
%
Barclays UK
1,412
195,204
1,469
187,570
Barclays International
1
980
100,171
967
98,313
Total Barclays UK and Barclays International
2,392
295,375
2,436
285,883
Other
2
(61)
(178)
Total Barclays Group
2,331
2,258
1
Barclays International margins include interest earning lending balances within the investment banking business.
2
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 31 March 2020 was £174bn, with an average duration of
2.5 to 3 years. Group net interest income includes gross structural hedge contributions of £0.4bn (Q119: £0.4bn) and net structural
hedge contributions of £0.2bn (Q119: £0.2bn). 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.
Quarterly analysis for Barclays UK and Barclays International
Net interest
income
Average
customer
assets
Net interest
margin
Three months ended 31.12.19
£m
£m
%
Barclays UK
1,478
193,610
Barclays International
1
1,036
95,819
Total Barclays UK and Barclays International
2,514
289,429
Three months ended 30.09.19
Barclays UK
1,503
192,262
3.10
Barclays International
1
1,038
100,589
4.10
Total Barclays UK and Barclays International
2,541
292,851
3.44
Three months ended 30.06.19
Barclays UK
1,438
189,172
Barclays International
1
980
100,645
Total Barclays UK and Barclays International
2,418
289,817
1
Barclays International margins include interest earning lending balances within the investment banking business.
Risk Management
Barclays PLC
17
Risk management and principal risks
Detail on the Group’s principal risks and previously identified material existing and emerging risks is available in the Barclays PLC
Annual Report 2019 or online at home.barclays/annualreport. Set out below are details of an additional material risk identified in
Q120 which potentially impacts more than one principal risk.
Risks relating to the impact of COVID-19
The COVID-19 pandemic has had, and continues to have, a material impact on businesses around the world and the economic
environments in which they operate. There are a number of factors associated with the pandemic and its impact on global
economies that could have a material adverse effect on (among other things) the profitability, capital and liquidity of financial
institutions such as Barclays.
The COVID-19 pandemic has caused disruption to the Group’s customers, suppliers and staff globally. A number of jurisdictions in
which the Group operates have implemented severe restrictions on the movement of their respective populations, with a resultant
significant impact on economic activity in those jurisdictions. These restrictions are being determined by the governments of
individual jurisdictions (including through the implementation of emergency powers) and impacts (including the timing of
implementation and any subsequent lifting of restrictions) may vary from jurisdiction to jurisdiction. It remains unclear how this will
evolve through 2020 and the Group continues to monitor the situation closely. However, despite the COVID-19 contingency plans
established by the Group, its ability to conduct business may be adversely affected by disruptions to its infrastructure, business
processes and technology services, resulting from the unavailability of staff due to illness or the failure of third parties to supply
services. This may cause significant customer detriment, costs to reimburse losses incurred by the Group’s customers, and
reputational damage.
In many of the jurisdictions in which the Group operates, schemes have been initiated by central banks and national governments
to provide financial support to parts of the economy most impacted by the COVID-19 pandemic. The details of how these schemes
will operate, the impact on the Group’s customers and therefore the impact on the Group remain uncertain at this stage. However,
certain actions (such as the introduction of mortgage payment holidays or the cancellation of fees associated with certain products)
may negatively impact the effective interest rate earned on certain of the Group’s portfolios and lower fee income being earned on
certain products. Lower interest rates globally will negatively impact net interest income earned on certain of the Group’s
portfolios. Both of these factors may in turn negatively impact the Group’s profitability. Furthermore, the introduction of, and
participation in, central-bank supported loan schemes and other financing schemes introduced as a result of the COVID-19
pandemic may negatively impact the Group’s RWAs, level of impairment and, in turn, capital position.
The actions taken by various governments and central banks, in particular in the United Kingdom and the United States, may
indicate a view on the potential severity of any economic downturn and post recovery environment, which from a commercial,
regulatory and risk perspective could be significantly different to past crises and persist for a prolonged period. An immediate
financial impact in the first half of 2020 will be higher expected credit losses (“ECLs”) driven by a change in the economic scenarios
used to calculate ECLs. The COVID-19 pandemic has led to a weakening in gross domestic product (“GDP”) in many of the
jurisdictions in which the Group operates and higher unemployment in those same jurisdictions. Accordingly, the probability of a
more adverse economic scenario for at least the short term is substantially higher than at 31 December 2019 and GDP and
unemployment are two of the factors that affect the modelling of ECLs by the Group. The economic environment remains uncertain
and future impairment charges may be subject to further volatility (including from changes to macroeconomic variable forecasts)
depending on the longevity of the COVID-19 pandemic and related containment measures, as well as the longer term effectiveness
of central bank, government and other support measures. For further details on macroeconomic variables used in the calculation of
ECLs, refer to page 22. In addition, ECLs may be adverse ly impacted by increased levels of default for single name exposures in
certain sectors directly impacted by the COVID-19 pandemic (such as the oil and gas, retail, airline, and hospitality and leisure
sectors).
Furthermore, the Group relies on models to support a broad range of business and risk management activities, including informing
business decisions and strategies, measuring and limiting risk, valuing exposures (including the calculation of impairment),
conducting stress testing and assessing capital adequacy. Models are, by their nature, imperfect and incomplete representations of
reality because they rely on assumptions and inputs, and so they may be subject to errors affecting the accuracy of their outputs
and/or misused. This may be exacerbated when dealing with unprecedented scenarios, such as the COVID-19 pandemic, due to the
lack of reliable historical reference points and data. For further details on model risk, refer to page 98 of the Barclays PLC Annual
Report 2019 filed on Form 20-F.
Should the COVID-19 pandemic continue to cause disruption to economic activity globally through 2020, there could be adverse
impacts on the Group’s other assets such as goodwill and intangibles, and the value of Barclays PLC’s investment s in subsidiaries.
There could also be further impacts on the Group’s income due to lower lending and transaction volumes due to volatility or
weakness in the capital markets. Other potential risks include credit rating migration which could negatively impact the Group’s
RWAs and capital position, and potential liquidity stress due to (among other things) increased customer drawdowns,
notwithstanding the significant initiatives that governments and central banks have put in place to support funding and liquidity.
Furthermore, a significant increase in the utilisation of credit cards by Barclaycard customers could have a negative impact on the
Group’s RWAs and capital position.
Risk Management
Barclays PLC
18
Central bank, government actions and other support measures taken in response to the COVID-19 pandemic may also create
restrictions in relation to capital. For example, on 31 March 2020 in response to a request from the PRA and to preserve additional
capital for use in serving Barclays’ customers and clients, the Board agreed to cancel the 6.0p per ordinary share full year 2019
dividend that was due for payment on 3 April 2020. In addition, the Board decided that for 2020 Barclays PLC will not undertake
any interim ordinary share dividend payments, accrual of ordinary share dividends, or share buybacks. Government restrictions
may further limit management’s flexibility in managing the business and taking action in relation to capital distributions and capital
allocation.
Any and all such events mentioned above could have a material adverse effect on the Group’s business, financial condition, results
of operations, prospects, liquidity, capital position and credit ratings (including potential credit rating agency changes of outlooks or
ratings), as well as on the Group’s customers, employees and suppliers.
Credit Risk
Barclays PLC
19
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 31 March 2020. 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 31 March 2020.
Impairment allowance under IFRS 9 considers both the drawn and the undrawn counterparty exposure. For reta il 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
Net
exposure
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
As at 31.03.20
£m
£m
£m
£m
£m
£m
£m
£m
£m
Barclays UK
143,325
23,727
2,479
169,531
237
1,455
1,031
2,723
166,808
Barclays International
25,006
4,903
1,834
31,743
431
1,280
1,460
3,171
28,572
Head Office
4,836
514
845
6,195
5
52
321
378
5,817
Total Barclays Group retail
173,167
29,144
5,158
207,469
673
2,787
2,812
6,272
201,197
Barclays UK
28,413
2,223
1,061
31,697
21
58
118
197
31,500
Barclays International
1
127,536
10,276
2,090
139,902
152
497
784
1,433
138,469
Head Office
2,982
38
3,020
37
37
2,983
Total Barclays Group
wholesale
158,931
12,499
3,189
174,619
173
555
939
1,667
172,952
Total loans and advances at
amortised cost
332,098
41,643
8,347
382,088
846
3,342
3,751
7,939
374,149
Off-balance sheet loan
commitments and financial
guarantee contracts
2
311,218
19,335
1,056
331,609
104
234
47
385
331,224
Total
3
643,316
60,978
9,403
713,697
950
3,576
3,798
8,324
705,373
As at 31.03.20
Three months ended 31.03.20
Coverage ratio
Loan impairment charge and loan loss rate
4
Stage 1
Stage 2
Stage 3
Total
Loan impairment
charge
Loan loss rate
%
%
%
%
£m
bps
Barclays UK
0.2
6.1
41.6
1.6
419
99
Barclays International
1.7
26.1
79.6
10.0
892
1,130
Head Office
0.1
10.1
38.0
6.1
25
162
Total Barclays Group retail
0.4
9.6
54.5
3.0
1,336
259
Barclays UK
0.1
2.6
11.1
0.6
44
56
Barclays International
1
0.1
4.8
37.5
1.0
574
165
Head Office
97.4
1.2
Total Barclays Group
wholesale
0.1
4.4
29.4
1.0
618
142
Total loans and advances at
amortised cost
0.3
8.0
44.9
2.1
1,954
206
Off-balance sheet loan
commitments and financial
guarantee contracts
2
-
1.2
4.5
0.1
58
Other financial assets subject
to impairment
3
103
Total
4
0.1
5.9
40.4
1.2
2,115
1
Includes Wealth and Private Banking exposures measured on an individual customer exposure basis.
2
Excludes loan commitments and financial guarantees of £14.2bn 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 £242.0bn and impairment allowance of £127m. This comprises £13m
impairment allowance on £240.9bn stage 1 assets, £3m on £1.0bn stage 2 fair value through other comprehensive income assets, cash collateral and settlement
balances and £111m on £111m stage 3 other assets.
4
Q120 loan impairment charge represents three months of impairment charge, annualised to calculate the loan loss rate. The loan loss rate for Q120 is 223bps after
applying the total impairment charge of £2,115m.
Credit Risk
Barclays PLC
20
Gross exposure
Impairment allowance
Net
exposure
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
As at 31.12.19
£m
£m
£m
£m
£m
£m
£m
£m
£m
Barclays UK
143,097
23,198
2,446
168,741
198
1,277
974
2,449
166,292
Barclays International
27,886
4,026
1,875
33,787
352
774
1,359
2,485
31,302
Head Office
4,803
500
826
6,129
5
36
305
346
5,783
Total Barclays Group retail
175,786
27,724
5,147
208,657
555
2,087
2,638
5,280
203,377
Barclays UK
27,891
2,397
1,124
31,412
16
38
108
162
31,250
Barclays International
1
92,615
8,113
1,615
102,343
136
248
447
831
101,512
Head Office
2,974
37
3,011
35
35
2,976
Total Barclays Group
wholesale
123,480
10,510
2,776
136,766
152
286
590
1,028
135,738
Total loans and advances at
amortised cost
299,266
38,234
7,923
345,423
707
2,373
3,228
6,308
339,115
Off-balance sheet loan
commitments and financial
guarantee contracts
2
321,140
19,185
935
341,260
97
170
55
322
340,938
Total
3
620,406
57,419
8,858
686,683
804
2,543
3,283
6,630
680,053
As at 31.12.19
Year ended 31.12.19
Coverage ratio
Loan impairment charge and loan loss rate
Stage 1
Stage 2
Stage 3
Total
Loan impairment
charge
Loan loss rate
%
%
%
%
£m
bps
Barclays UK
0.1
5.5
39.8
1.5
661
39
Barclays International
1.3
19.2
72.5
7.4
999
296
Head Office
0.1
7.2
36.9
5.6
27
44
Total Barclays Group retail
0.3
7.5
51.3
2.5
1,687
81
Barclays UK
0.1
1.6
9.6
0.5
33
11
Barclays International
1
0.1
3.1
27.7
0.8
113
11
Head Office
94.6
1.2
Total Barclays Group
wholesale
0.1
2.7
21.3
0.8
146
11
Total loans and advances at
amortised cost
0.2
6.2
40.7
1.8
1,833
53
Off-balance sheet loan
commitments and financial
guarantee contracts
2
-
0.9
5.9
0.1
71
Other financial assets subject
to impairment
3
8
Total
4
0.1
4.4
37.1
1.0
1,912
1 Includes Wealth and Private Banking exposures measured on an individual customer exposure basis.
2 Excludes loan commitments and financial guarantees of £17.7bn 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 £149.3bn and impairment allowance of £24m. This comprises £12m ECL on
£148.5bn stage 1 assets, £2m on £0.8bn stage 2 fair value through other comprehensive income assets, cash collateral and settlement balances and £10m on £10m
stage 3 other assets.
4 The loan loss rate is 55bps after applying the total impairment charge of £1,912m.
Credit Risk
Barclays PLC
21
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
As at 31.03.20
Stage 1
Not past
due
<=30 days
past due
>30 days
past due
Total
Stage 3
Total
Gross exposure
£m
£m
£m
£m
£m
£m
£m
Home loans
137,394
14,986
1,654
732
17,372
2,155
156,921
Credit cards, unsecured loans and other retail lending
41,973
10,877
489
448
11,814
3,402
57,189
Wholesale loans
152,731
11,168
588
701
12,457
2,790
167,978
Total
332,098
37,031
2,731
1,881
41,643
8,347
382,088
Impairment allowance
Home loans
23
50
19
13
82
358
463
Credit cards, unsecured loans and other retail lending
665
2,112
253
309
2,674
2,496
5,835
Wholesale loans
158
555
15
16
586
897
1,641
Total
846
2,717
287
338
3,342
3,751
7,939
Net exposure
Home loans
137,371
14,936
1,635
719
17,290
1,797
156,458
Credit cards, unsecured loans and other retail lending
41,308
8,765
236
139
9,140
906
51,354
Wholesale loans
152,573
10,613
573
685
11,871
1,893
166,337
Total
331,252
34,314
2,444
1,543
38,301
4,596
374,149
Coverage ratio
%
%
%
%
%
%
%
Home loans
-
0.3
1.1
1.8
0.5
16.6
0.3
Credit cards, unsecured loans and other retail lending
1.6
19.4
51.7
69.0
22.6
73.4
10.2
Wholesale loans
0.1
5.0
2.6
2.3
4.7
32.2
1.0
Total
0.3
7.3
10.5
18.0
8.0
44.9
2.1
As at 31.12.19
Gross exposure
£m
£m
£m
£m
£m
£m
£m
Home loans
135,713
14,733
1,585
725
17,043
2,155
154,911
Credit cards, unsecured loans and other retail lending
46,012
9,759
496
504
10,759
3,409
60,180
Wholesale loans
117,541
9,374
374
684
10,432
2,359
130,332
Total
299,266
33,866
2,455
1,913
38,234
7,923
345,423
Impairment allowance
Home loans
22
37
14
13
64
346
432
Credit cards, unsecured loans and other retail lending
542
1,597
159
251
2,007
2,335
4,884
Wholesale loans
143
284
9
9
302
547
992
Total
707
1,918
182
273
2,373
3,228
6,308
Net exposure
Home loans
135,691
14,696
1,571
712
16,979
1,809
154,479
Credit cards, unsecured loans and other retail lending
45,470
8,162
337
253
8,752
1,074
55,296
Wholesale loans
117,398
9,090
365
675
10,130
1,812
129,340
Total
298,559
31,948
2,273
1,640
35,861
4,695
339,115
Coverage ratio
%
%
%
%
%
%
%
Home loans
-
0.3
0.9
1.8
0.4
16.1
0.3
Credit cards, unsecured loans and other retail lending
1.2
16.4
32.1
49.8
18.7
68.5
8.1
Wholesale loans
0.1
3.0
2.4
1.3
2.9
23.2
0.8
Total
0.2
5.7
7.4
14.3
6.2
40.7
1.8
Gross exposures and related impairment allowances from the COVID -19 scenario impairment charge have been allocated across
stages for material portfolios, with the majority of the impact recognised in Stage 2.
Credit Risk
Barclays PLC
22
Measurement uncertainty
Impact on impairment charge from COVID-19
Prior to the COVID-19 pandemic and in line with Barclays established processes, the Group regenerated its Baseline economic
scenario in January 2020 using an external consensus assembled from key sources. In addition, two adverse scenarios (Downside 1
and Downside 2) and two favourable scenarios (Upside 1 and Upside 2) were derived with associated probability weights. This
regeneration was subsequent to the scenarios and weightings used for December 2019 reporting.
In subsequent months, it became clear that the external consensus taken in January would not be an accurate reflection of the
economic circumstances as at 31 March 2020. Furthermore, given the speed at which global forecasts deteriorated during March, it
was also clear that an effective consensus process as at 31 March 2020 would not be achievable given the lagging nature of
consensus submissions. As a result, Barclays has generated a new Baseline scenario (COVID-19 scenario) that reflects the most
recent economic forecasts available in the market (combined with internal assumptions) and the significant support measures
taken by Barclays, central banks and governments across the Group’s key markets. The scenario assumes a strong contraction in
GDP and a sharp rise in unemployment in 2020 across both the UK and US. The change in the Baseline scenario required a
recalibration of probability weights. The economic environment remains uncertain and future impairment charges may be subject
to further volatility (including from changes to macroeconomic variable forecasts) depending on the longevity of the COVID-19
pandemic and related containment measures, as well as the longer term effectiveness of central bank, government and other
support measures.
The tables below show the key macroeconomic variables used in the COVID-19 Baseline scenario and the probability weights
applied to each respective scenario.
Baseline average macroeconomic variables used in the calculation of ECL
2020
2021
Expected Worst Point
As at 31.03.20
UK GDP
1
(8.0)
6.3
(51.5)
UK unemployment
2
6.7
4.5
8.0
UK HPI
3
(3.5)
2.6
(6.5)
UK bank rate
US GDP
1
(6.4)
4.4
(45.0)
US unemployment
4
12.9
7.5
17.0
US HPI
5
-
0.7
(0.3)
US federal funds rate
Scenario probability weighting
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 31.03.20
Scenario probability weighting
5.0
20.8
46.7
21.0
6.5
As at 31.12.19
Scenario probability weighting
10.1
23.1
40.8
22.7
3.3
1
Based on Barclays Global Economic Forecasts; Expected worst point using Seasonally Adjusted Annual Rate, SAAR.
2
Average UK unemployment rate 16-year+.
3
Average QoQ UK HPI = Halifax All Houses, All Buyers Index cumulative growth (drawdown) from Q4 2019.
4
Average US civilian unemployment rate 16-year+.
5
Average QoQ US HPI = FHFA house price index cumulative growth (drawdown) from Q4 2019.
Credit Risk
Barclays PLC
23
The following table provides a breakdown of the key drivers of the Group’s loan impairment charge on a pre and post COVID-19
adjusted basis.
Drivers of loan impairment charge
Three months ended 31.03.20
£m
Impairment charge generated using scenarios before COVID-19
370
Single name wholesale loan charges
405
Loan impairment charge prior to impact of COVID-19 scenario
775
Impact of COVID-19 scenario and weights
1,190
Specific charge for the probability of a sustained period of low oil prices
300
Incorporation of provision for UK economic uncertainty
(150)
Total loan impairment charge
2,115
The impact of the COVID-19 scenario and weighting adjustments has resulted in a £1,190m increase in ECL from the scenario
regenerated in January, primarily driven by the higher probability of default in credit cards, unsecured loans and other retail
lending. These drivers are partially offset by the impact of central bank, government and other support measures which are
assumed to mitigate a material portion of future losses reflecting both the likely take-up and success of these schemes. An
additional specific charge of £300m has been applied to reflect the probability of a sustained period of low oil prices and the impact
this could have on the probability of default of certain wholesale loans, which is not otherwise reflected in the impairment model
outputs. The £150m provision for UK economic uncertainty held at year end has been incorporated within the updated scenario.
Treasury and Capital Risk
Barclays PLC
24
Composition of the Group liquidity pool
As at 31.03.20
As at 31.12.19
Liquidity pool
Liquidity pool of which CRR LCR eligible
3
Liquidity pool
Cash
Level 1
Level 2A
£bn
£bn
£bn
£bn
£bn
Cash and deposits with central banks
1
157
154
-
-
153
Government bonds
2
AAA to AA-
43
-
38
1
31
A+ to A-
14
-
7
6
2
BBB+ to BBB-
4
-
4
-
3
Total government bonds
61
-
49
7
36
Other
Government guaranteed issuers, PSEs and GSEs
8
-
7
1
9
International organisations and MDBs
6
-
6
-
7
Covered bonds
5
-
5
1
6
Total other
19
-
18
2
22
Total as at 31 March 2020
237
154
67
9
211
Total as at 31 December 2019
211
150
50
3
1
Includes cash held at central banks and surplus cash at central banks related to payment schemes. Over 98% (December 2019: 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 82% (December 2019: over 67%) comprised UK, US, French, German, Swiss, Japan 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 £237bn as at 31 March 2020 (December 2019: £211bn) driven by deposit growth net of client
and business funding requirements, and reflects actions to maintain a prudent funding and liquidity position in the current
environment. 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.
The composition of the pool is subject to limits set by the independent Risk function, and is monitored for concentration by issuer,
currency and asset type. Given returns generated by these highly liquidity assets, the risk and reward profile is continuously
managed.
Treasury and Capital Risk
Barclays PLC
25
Capital
The Group’s Overall Capital Requirement for CET1 is 11.5% 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 3.0% Pillar 2A requirement and a 0.0% 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 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 5.3% of which at least 56.25% needs to be met
with CET1 capital, equating to approximately 3.0% of RWAs. Certain elements of the Pillar 2A requirement are a fixed quantum
whilst others are a proportion of RWAs, based on a point in time assessment. The Pillar 2A requirement is subject to at least annual
review.
On 27 June 2019, CRR II came into force amending CRR. As an amending regulation, the existing provisions of CRR apply unless they
are amended by CRR II.
Certain aspects of CRR II are dependent on final technical standards to be issued by the European Banking Authority (EBA) and
adopted by the European Commission as well as UK implementation of the rules. The disclosures in the following section reflect
Barclays’ interpretation of the current rules and guidance.
Treasury and Capital Risk
Barclays PLC
26
Capital ratios
1,2,3
As at
As at
31.03.20
31.12.19
CET1
13.1%
13.8%
Tier 1 (T1)
16.6%
17.7%
Total regulatory capital
20.4%
21.6%
Capital resources
£m
£m
Total equity excluding non-controlling interests per the balance sheet
68,369
64,429
Less: other equity instruments (recognised as AT1 capital)
(10,871)
(10,871)
Adjustment to retained earnings for foreseeable dividends
(49)
(1,096)
Other regulatory adjustments and deductions
Additional value adjustments (PVA)
(1,847)
(1,746)
Goodwill and intangible assets
(8,197)
(8,109)
Deferred tax assets that rely on future profitability excluding temporary differences
(294)
(479)
Fair value reserves related to gains or losses on cash flow hedges
(1,709)
(1,002)
Gains or losses on liabilities at fair value resulting from own credit
(389)
260
Defined benefit pension fund assets
(3,603)
(1,594)
Direct and indirect holdings by an institution of own CET1 instruments
(50)
(50)
Adjustment under IFRS 9 transitional arrangements
1,215
1,126
Other regulatory adjustments
(57)
(55)
CET1 capital
42,518
40,813
AT1 capital
Capital instruments and related share premium accounts
10,871
10,871
Qualifying AT1 capital (including minority interests) issued by subsidiaries
753
687
Other regulatory adjustments and deductions
(130)
(130)
AT1 capital
11,494
11,428
T1 capital
54,012
52,241
T2 capital
Capital instruments and related share premium accounts
8,423
7,650
Qualifying T2 capital (including minority interests) issued by subsidiaries
4,013
3,984
Credit risk adjustments (excess of impairment over expected losses)
196
16
Other regulatory adjustments and deductions
(250)
(250)
Total regulatory capital
66,394
63,641
Total RWAs
325,631
295,131
1
CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR as amended by CRR II applicable as at the reporting date. 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 12.7%, with £41,303m of CET1 capital and
£325,536m of RWAs calculated without applying the transitional arrangements of the CRR as amended by CRR II applicable as at the reporting date.
3
The Barclays PLC CET1 ratio, as is relevant for assessing against the conversion trigger in Barclays Bank PLC T2 Contingent Capital Notes, was 13.1%. For this
calculation CET1 capital and RWAs are calculated applying the transitional arrangements under the CRR, 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.
Treasury and Capital Risk
Barclays PLC
27
Movement in CET1 capital
Three months
ended
31.03.20
£m
Opening CET1 capital
40,813
Profit for the period attributable to equity holders
826
Own credit relating to derivative liabilities
(169)
Dividends paid and foreseen
1
826
Increase in retained regulatory capital generated from earnings
1,483
Net impact of share schemes
(56)
Fair value through other comprehensive income reserve
(777)
Currency translation reserve
997
Other reserves
(6)
Increase in other qualifying reserves
158
Pension remeasurements within reserves
1,990
Defined benefit pension fund asset deduction
(2,009)
Net impact of pensions
(19)
Additional value adjustments (PVA)
(101)
Goodwill and intangible assets
(88)
Deferred tax assets that rely on future profitability excluding those arising from temporary differences
185
Adjustment under IFRS 9 transitional arrangements
89
Other regulatory adjustments
(2)
Increase in regulatory capital due to adjustments and deductions
83
Closing CET1 capital
42,518
1
£1.0bn following the cancellation of the full year 2019 dividend offset by £0.2bn AT1 coupon payments.
Treasury and Capital Risk
Barclays PLC
28
RWAs by risk type and business
Credit risk
Counterparty credit risk
Market risk
Operational
risk
Total
RWAs
Std
IRB
Std
IRB
Settlement
risk
CVA
Std
IMA
As at 31.03.20
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Barclays UK
5,835
59,451
311
28
202
11,851
77,678
Corporate and Investment Bank
30,620
71,993
15,611
19,756
1,022
3,309
14,036
24,010
21,390
201,747
Consumer, Cards and Payments
25,205
3,085
132
31
21
151
7,536
36,161
Barclays International
55,825
75,078
15,743
19,787
1,022
3,330
14,036
24,161
28,926
237,908
Head Office
3,706
6,212
127
10,045
Barclays Group
65,366
140,741
16,054
19,787
1,022
3,358
14,238
24,161
40,904
325,631
As at 31.12.19
Barclays UK
5,189
57,455
235
-
-
23
178
-
11,821
74,901
Corporate and Investment Bank
25,749
62,177
12,051
16,875
276
2,470
12,854
17,626
21,475
171,553
Consumer, Cards and Payments
27,209
2,706
92
37
-
11
-
103
7,532
37,690
Barclays International
52,958
64,883
12,143
16,912
276
2,481
12,854
17,729
29,007
209,243
Head Office
5,104
5,754
-
-
-
-
-
-
129
10,987
Barclays Group
63,251
128,092
12,378
16,912
276
2,504
13,032
17,729
40,957
295,131
Movement analysis of RWAs
Credit risk
Counterparty
credit risk
Market risk
Operational risk
Total RWAs
£m
£m
£m
£m
£m
Opening RWAs (as at 31.12.19)
191,343
32,070
30,761
40,957
295,131
Book size
7,205
8,300
9,977
(53)
25,429
Acquisitions and disposals
(33)
-
-
-
(33)
Book quality
1,511
(404)
-
-
1,107
Model updates
887
-
-
-
887
Methodology and policy
1,166
255
(2,339)
-
(918)
Foreign exchange movements
1
4,028
-
-
-
4,028
Closing RWAs (as at 31.03.20)
206,107
40,221
38,399
40,904
325,631
1
Foreign exchange movements does not include foreign exchange for counterparty credit risk or market risk.
RWAs increased £30.5bn to £325.6bn:
●
Book size increased RWAs £25.4bn primarily due to an increase in client activity compared to year-end 2019, including
drawdowns on facilities and higher market volatility
●
Book quality increased RWAs £1.1bn primarily due to changes in model calibration
●
Foreign exchange movements increased RWAs £4.0bn due to the appreciation of period end USD against GBP
Treasury and Capital Risk
Barclays PLC
29
Leverage ratio and exposures
The Group is subject to a leverage ratio requirement of 3.8% as at 31 March 2020. 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 (CCLB) 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 £6.2bn.
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.
Leverage ratios
1,2
As at
31.03.20
As at
31.12.19
£m
£m
Average UK leverage ratio
4.5%
4.5%
Average T1 capital
3
53,274
51,823
Average UK leverage exposure
1,176,198
1,142,819
UK leverage ratio
4.5%
5.1%
CET1 capital
42,518
40,812
AT1 capital
10,741
10,741
T1 capital
3
53,259
51,553
UK leverage exposure
1,178,708
1,007,721
UK leverage exposure
Accounting assets
Derivative financial instruments
342,120
229,236
Derivative cash collateral
85,321
56,589
Securities financing transactions (SFTs)
185,725
111,307
Loans and advances and other assets
831,130
743,097
Total IFRS assets
1,444,296
1,140,229
Regulatory consolidation adjustments
(4,841)
(1,170)
Derivatives adjustments
Derivatives netting
(309,585)
(207,756)
Adjustments to cash collateral
(70,758)
(48,464)
Net written credit protection
19,994
13,784
Potential future exposure (PFE) on derivatives
126,503
119,118
Total derivatives adjustments
(233,846)
(123,318)
SFTs adjustments
34,271
18,339
Regulatory deductions and other adjustments
(14,615)
(11,984)
Weighted off-balance sheet commitments
102,499
105,289
Qualifying central bank claims
(149,056)
(119,664)
UK leverage exposure
2
1,178,708
1,007,721
1
Fully loaded average UK leverage ratio was 4.4%, with £52.3bn of T1 capital and £1,175bn of leverage exposure. Fully loaded UK leverage ratio was 4.4%, with
£52.0bn of T1 capital and £1,177bn of leverage exposure.
Fully loaded UK leverage ratios are calculated without applying the transitional arrangements of the CRR
as amended by CRR II applicable as at the reporting date.
2
Capital and leverage measures are calculated applying the transitional arrangements of the CRR as amended by CRR II applicable as at the reporting date .
3
T1 capital is calculated in line with the PRA Handbook.
Treasury and Capital Risk
Barclays PLC
30
The average UK leverage ratio remained stable at 4.5% (December 2019: 4.5%). The average UK leverage exposure increased by
£33bn to £1,176bn
primarily driven by SFTs and loans and advances and other assets, partially offset by an increase in T1 capital of
£1.5bn to £53.3bn, mainly driven by the cancellation of the full year 2019 dividend.
The UK leverage ratio decreased to 4.5% (December 2019: 5.1%) driven by an increase in UK leverage exposure of £171bn to
£1,179bn partially offset by an increase in T1 capital. The UK leverage exposure movements included:
●
SFTs increased £90.4bn to £220.0bn primarily due to increased client activity
●
Loans and advances and other assets increased £88.0bn to £831.1bn, including a £42.1bn increase in settlements
balances and £35.0bn increase in loans and advances due to increased lending
The Group also discloses a CRR leverage ratio
1
guidelines on disclosure under Part Eight of the CRR (see Barclays PLC Pillar 3 Report Q1 2020, due to be published on 29 April 2020
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 applicable as at the reporting date.
Treasury and Capital Risk
Barclays PLC
31
MREL
CRR II requirements relating to own funds and eligible liabilities came into effect from 27 June 2019. Eligible liabilities have been
calculated reflecting the Group’s interpretation of the current rules and guidance. Certain aspects of CRR II are dependent on final
technical standards to be issued by the EBA and adopted by the European Commission as well as UK implementation of the rules.
The Group is required to meet the higher of: (i) the MREL set by the Bank of England; and (ii) the requirements in CRR II, both of
which have RWA and leverage based requirements. MREL is subject to phased implementation and will be fully implemented by 1
January 2022, at which time the Group’s indicative MREL is expected to be two times the sum of its Pillar 1 and Pillar 2A
requirements, as set by the Bank of England. In addition, CET1 capital cannot be counted towards both MREL and the capital
buffers, meaning that the buffers will effectively be applied above both the Pillar 1 and Pillar 2A requirements relating to own funds
and eligible liabilities. The Bank of England will review the MREL calibration by the end of 2020, including assessing the proposal for
Pillar 2A recapitalisation, which may drive a different 1 January 2022 MREL than currently proposed.
Own funds and eligible liabilities ratios
1
As at
31.03.20
As at
31.12.19
CET1 capital
13.1%
13.8%
AT1 capital instruments and related share premium accounts
2
3.3%
3.6%
T2 capital instruments and related share premium accounts
2
2.6%
2.5%
Eligible liabilities
10.3%
11.2%
Total Barclays PLC (the Parent company) own funds and eligible liabilities
29.3%
31.2%
Qualifying AT1 capital (including minority interests) issued by subsidiaries
0.2%
0.2%
Qualifying T2 capital (including minority interests) issued by subsidiaries
1.2%
1.3%
Total own funds and eligible liabilities, including eligible Barclays Bank PLC instruments
30.7%
32.8%
Own funds and eligible liabilities
1
£m
£m
CET1 capital
42,518
40,813
AT1 capital instruments and related share premium accounts
2
10,741
10,741
T2 capital instruments and related share premium accounts
2
8,369
7,416
Eligible liabilities
33,674
33,025
Total Barclays PLC (the Parent company) own funds and eligible liabilities
95,302
91,995
Qualifying AT1 capital (including minority interests) issued by subsidiaries
753
687
Qualifying T2 capital (including minority interests) issued by subsidiaries
4,013
3,984
Total own funds and eligible liabilities, including eligible Barclays Bank PLC instruments
100,068
96,666
Total RWAs
1
325,631
295,131
1
CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR as amended by CRR II applicable as at the reporting date. This
includes IFRS 9 transitional arrangements and the grandfathering of CRR and CRR II non-compliant capital instruments.
2
Includes other AT1 capital regulatory adjustments and deductions of £130m (December 2019: £130m), and other T2 credit risk adjustments and deductions of £54m
(December 2019: £234m).
Condensed Consolidated Financial Statements
Barclays PLC
32
Condensed consolidated income statement
Three months
ended
Three months
ended
31.03.20
31.03.19
£m
£m
Total income
6,283
5,252
Credit impairment charges
(2,115)
(448)
Net operating income
4,168
4,804
Operating expenses excluding litigation and conduct
(3,253)
(3,257)
Litigation and conduct
(10)
(61)
Operating expenses
(3,263)
(3,318)
Other net income/(expenses)
8
(3)
Profit before tax
913
1,483
Tax charge
(71)
(248)
Profit after tax
842
1,235
Attributable to:
Equity holders of the parent
605
1,038
Other equity instrument holders
221
180
Total equity holders of the parent
826
1,218
Non-controlling interests
16
17
Profit after tax
842
1,235
Earnings per share
p
p
Basic earnings per ordinary share
3.5
6.1
Condensed Consolidated Financial Statements
Barclays PLC
33
Condensed consolidated balance sheet
As at
As at
31.03.20
31.12.19
Assets
£m
£m
Cash and balances at central banks
151,805
150,258
Cash collateral and settlement balances
157,162
83,256
Loans and advances at amortised cost
374,149
339,115
Reverse repurchase agreements and other similar secured lending
15,384
3,379
Trading portfolio assets
102,000
114,195
Financial assets at fair value through the income statement
193,107
133,086
Derivative financial instruments
342,120
229,236
Financial assets at fair value through other comprehensive income
83,367
65,750
Investments in associates and joint ventures
739
721
Goodwill and intangible assets
8,209
8,119
Current tax assets
510
412
Deferred tax assets
2,713
3,290
Other assets
13,031
9,412
Total assets
1,444,296
1,140,229
Liabilities
Deposits at amortised cost
470,698
415,787
Cash collateral and settlement balances
127,052
67,341
Repurchase agreements and other similar secured borrowing
35,958
14,517
Debt securities in issue
87,961
76,369
Subordinated liabilities
19,595
18,156
Trading portfolio liabilities
54,125
36,916
Financial liabilities designated at fair value
227,632
204,326
Derivative financial instruments
338,982
229,204
Current tax liabilities
294
313
Deferred tax liabilities
516
23
Other liabilities
11,883
11,617
Total liabilities
1,374,696
1,074,569
Equity
Called up share capital and share premium
4,607
4,594
Other reserves
6,166
4,760
Retained earnings
46,725
44,204
Shareholders' equity attributable to ordinary shareholders of the parent
57,498
53,558
Other equity instruments
10,871
10,871
Total equity excluding non-controlling interests
68,369
64,429
Non-controlling interests
1,231
1,231
Total equity
69,600
65,660
Total liabilities and equity
1,444,296
1,140,229
Condensed Consolidated Financial Statements
Barclays PLC
34
Condensed consolidated statement of changes in equity
Called up
share
capital and
share
premium
Other equity
instruments
Other
reserves
Retained
earnings
Total
Non-
controlling
interests
Total
equity
Three months ended 31.03.20
£m
£m
£m
£m
£m
£m
£m
Balance as at 1 January 2020
4,594
10,871
4,760
44,204
64,429
1,231
65,660
Profit after tax
-
221
-
605
826
16
842
Retirement benefit remeasurements
-
-
-
1,990
1,990
-
1,990
Other
-
-
1,407
(7)
1,400
-
1,400
Total comprehensive income for the period
-
221
1,407
2,588
4,216
16
4,232
Issue of shares under employee share schemes
13
-
-
252
265
-
265
Other equity instruments coupons paid
-
(221)
-
-
(221)
-
(221)
Vesting of shares under employee share schemes
-
-
(1)
(320)
(321)
-
(321)
Dividends paid
-
-
-
-
-
(16)
(16)
Other movements
-
-
-
1
1
-
1
Balance as at 31 March 2020
4,607
10,871
6,166
46,725
68,369
1,231
69,600
As at
As at
31.03.20
31.12.19
Other reserves
£m
£m
Currency translation reserve
4,341
3,344
Fair value through other comprehensive income reserve
(964)
(187)
Cash flow hedging reserve
1,709
1,002
Own credit reserve
107
(373)
Other reserves and treasury shares
973
974
Total
6,166
4,760
Appendix: Non-IFRS Performance Measures
Barclays PLC
35
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.
Period end allocated
tangible equity
Allocated tangible equity is calculated as 13.5% (2019: 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’ equity
Calculated as the average of the previous month’s 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
tangible equity
Calculated as the average of the previous month’s 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
tangible shareholders’
equity
Annualised profit after tax attributable to ordinary equity holders of the parent, as a proportion of
average shareholders’ equity excluding non-controlling interests and other equity instruments
adjusted for the deduction of intangible assets and goodwill. The components of the calculation have
been included on page 36.
Return on average
allocated tangible equity
Annualised profit after tax attributable to ordinary equity holders of the parent, as a proportion of
average allocated tangible equity. The components of the calculation have been included on page 36.
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 19.
Net interest margin
Annualised net interest income divided by the sum of average customer assets. The components of
the calculation have been included on page 16.
Tangible net asset value
per share
Calculated by dividing shareholders’ equity, excluding 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 42.
Performance measures
excluding litigation and
conduct
Calculated by excluding litigation and conduct charges from performance measures. The components
of the calculations have been included on pages 37 to 42.
Appendix: Non-IFRS Performance Measures
Barclays PLC
36
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% (2019: 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
holders of the
parent
Average
tangible equity
Return on
average
tangible equity
Three months ended 31.03.20
£m
£bn
%
Barclays UK
175
10.5
6.7
820
27.2
12.1
(291)
5.1
(22.6)
Barclays International
529
32.3
6.5
Head Office
(99)
4.2
n/m
Barclays Group
605
47.0
5.1
Three months ended 31.03.19
Barclays UK
422
10.4
16.3
582
25.1
9.3
206
5.4
15.4
Barclays International
788
30.5
10.4
Head Office
(172)
4.3
n/m
Barclays Group
1,038
45.2
9.2
Appendix: Non-IFRS Performance Measures
Barclays PLC
37
Performance measures excluding litigation and conduct
Barclays Group
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
Cost: income ratio
£m
£m
£m
£m
£m
£m
£m
£m
Total operating expenses
(3,263)
(3,701)
(4,861)
(3,554)
(3,318)
(4,093)
(3,434)
(3,391)
Impact of litigation and conduct
10
167
1,568
53
61
60
105
81
Operating expenses
(3,253)
(3,534)
(3,293)
(3,501)
(3,257)
(4,033)
(3,329)
(3,310)
Total income
6,283
5,301
5,541
5,538
5,252
5,073
5,129
5,576
Cost: income ratio excluding litigation and
conduct
52%
67%
59%
63%
62%
79%
65%
59%
Profit before tax
Profit before tax
913
1,097
246
1,531
1,483
374
1,461
1,895
Impact of litigation and conduct
10
167
1,568
53
61
60
105
81
Profit before tax excluding litigation and conduct
923
1,264
1,814
1,584
1,544
434
1,566
1,976
Profit attributable to ordinary equity holders of
the parent
Attributable profit/(loss)
605
681
(292)
1,034
1,038
(14)
1,050
1,279
Post-tax impact of litigation and conduct
(1)
122
1,525
40
46
62
85
59
Profit attributable to ordinary equity holders of
the parent excluding litigation and conduct
604
803
1,233
1,074
1,084
48
1,135
1,338
Return on average tangible shareholders' equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average shareholders' equity
55.2
54.5
56.4
54.0
53.2
52.2
52.5
51.3
Average goodwill and intangibles
(8.2)
(8.1)
(8.0)
(7.8)
(8.0)
(7.9)
(7.9)
(7.8)
Average tangible shareholders' equity
47.0
46.4
48.4
46.2
45.2
44.3
44.6
43.5
Return on average tangible shareholders' equity
excluding litigation and conduct
5.1%
6.9%
10.2%
9.3%
9.6%
0.4%
10.2%
12.3%
Basic earnings per ordinary share
Basic weighted average number of shares (m)
17,278
17,200
17,192
17,178
17,111
17,075
17,074
17,067
Basic earnings per ordinary share excluding
litigation and conduct
3.5p
4.7p
7.2p
6.3p
6.3p
0.3p
6.6p
7.8p
Appendix: Non-IFRS Performance Measures
Barclays PLC
38
Barclays UK
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
Cost: income ratio
£m
£m
£m
£m
£m
£m
£m
£m
Total operating expenses
(1,028)
(1,122)
(2,432)
(1,063)
(1,002)
(1,175)
(1,042)
(971)
Impact of litigation and conduct
5
58
1,480
41
3
15
54
3
Operating expenses
(1,023)
(1,064)
(952)
(1,022)
(999)
(1,160)
(988)
(968)
Total income
1,704
1,959
1,846
1,771
1,777
1,863
1,896
1,836
Cost: income ratio excluding litigation and
conduct
60%
54%
52%
58%
56%
62%
52%
53%
Profit before tax
Profit/(loss) before tax
195
647
(687)
477
585
390
740
656
Impact of litigation and conduct
5
58
1,480
41
3
15
54
3
Profit before tax excluding litigation and conduct
200
705
793
518
588
405
794
659
Profit attributable to ordinary equity holders of
the parent
Attributable profit/(loss)
175
438
(907)
328
422
241
510
473
Post-tax impact of litigation and conduct
3
43
1,457
30
2
12
48
1
Profit attributable to ordinary equity holders of
the parent excluding litigation and conduct
178
481
550
358
424
253
558
474
Return on average allocated tangible equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average allocated equity
14.1
13.8
13.9
13.8
13.9
13.6
13.7
13.6
Average goodwill and intangibles
(3.6)
(3.5)
(3.5)
(3.5)
(3.5)
(3.5)
(3.6)
(3.5)
Average allocated tangible equity
10.5
10.3
10.4
10.3
10.4
10.1
10.1
10.1
Return on average allocated tangible equity
excluding litigation and conduct
6.8%
18.7%
21.2%
13.9%
16.4%
10.1%
22.0%
18.8%
Appendix: Non-IFRS Performance Measures
Barclays PLC
39
Barclays International
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
Cost: income ratio
£m
£m
£m
£m
£m
£m
£m
£m
Total operating expenses
(2,219)
(2,500)
(2,282)
(2,446)
(2,225)
(2,684)
(2,309)
(2,353)
Impact of litigation and conduct
-
86
-
11
19
33
32
47
Operating expenses
(2,219)
(2,414)
(2,282)
(2,435)
(2,206)
(2,651)
(2,277)
(2,306)
Total income
4,644
3,452
3,750
3,903
3,570
3,221
3,290
3,707
Cost: income ratio excluding litigation and
conduct
48%
70%
61%
62%
62%
82%
69%
62%
Profit before tax
Profit before tax
822
640
1,137
1,223
1,118
215
850
1,297
Impact of litigation and conduct
-
86
-
11
19
33
32
47
Profit before tax excluding litigation and conduct
822
726
1,137
1,234
1,137
248
882
1,344
Profit attributable to ordinary equity holders of
the parent
Attributable profit/(loss)
529
397
799
832
788
(21)
687
926
Post-tax impact of litigation and conduct
-
64
2
8
16
34
26
34
Profit attributable to ordinary equity holders of
the parent excluding litigation and conduct
529
461
801
840
804
13
713
960
Return on average allocated tangible equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average allocated equity
33.0
31.9
33.3
32.1
31.6
32.4
32.5
32.8
Average goodwill and intangibles
(0.7)
(1.0)
(1.1)
(1.0)
(1.1)
(1.1)
(1.3)
(1.4)
Average allocated tangible equity
32.3
30.9
32.2
31.1
30.5
31.3
31.1
31.4
Return on average allocated tangible equity
excluding litigation and conduct
6.5%
6.0%
10.0%
10.8%
10.6%
0.2%
9.2%
12.2%
Appendix: Non-IFRS Performance Measures
Barclays PLC
40
Corporate and Investment Bank
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
Cost: income ratio
£m
£m
£m
£m
£m
£m
£m
£m
Total operating expenses
(1,690)
(1,926)
(1,716)
(1,867)
(1,638)
(2,046)
(1,744)
(1,773)
Impact of litigation and conduct
-
79
4
7
19
23
32
-
Operating expenses
(1,690)
(1,847)
(1,712)
(1,860)
(1,619)
(2,023)
(1,712)
(1,773)
Total income
3,617
2,314
2,617
2,795
2,505
2,151
2,235
2,580
Cost: income ratio excluding litigation and
conduct
47%
80%
65%
67%
65%
94%
77%
69%
Profit before tax
Profit before tax
1,203
359
882
887
827
85
498
835
Impact of litigation and conduct
-
79
4
7
19
23
32
-
Profit before tax excluding litigation and conduct
1,203
438
886
894
846
108
530
835
Profit attributable to ordinary equity holders of
the parent
Attributable profit/(loss)
820
193
609
596
582
(84)
431
600
Post-tax impact of litigation and conduct
-
58
5
5
16
27
25
-
Profit/(loss) attributable to ordinary equity
holders of the parent excluding litigation and
conduct
820
251
614
601
598
(57)
456
600
Return on average allocated tangible equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average allocated equity
27.2
25.9
26.9
25.8
25.2
26.0
26.2
26.7
Average goodwill and intangibles
-
(0.1)
-
-
(0.1)
-
(0.2)
(0.3)
Average allocated tangible equity
27.2
25.8
26.9
25.8
25.1
26.0
25.9
26.4
Return on average allocated tangible equity
excluding litigation and conduct
12.1%
3.9%
9.2%
9.3%
9.5%
(0.9%)
7.0%
9.1%
Appendix: Non-IFRS Performance Measures
Barclays PLC
41
Consumer, Cards and Payments
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
Cost: income ratio
£m
£m
£m
£m
£m
£m
£m
£m
Total operating expenses
(529)
(574)
(566)
(579)
(587)
(638)
(565)
(580)
Impact of litigation and conduct
-
7
(4)
4
-
10
-
47
Operating expenses
(529)
(567)
(570)
(575)
(587)
(628)
(565)
(533)
Total income
1,027
1,138
1,133
1,108
1,065
1,070
1,055
1,127
Cost: income ratio excluding litigation and
conduct
52%
50%
50%
52%
55%
59%
54%
47%
Profit before tax
(Loss)/profit before tax
(381)
281
255
336
291
130
352
462
Impact of litigation and conduct
-
7
(4)
4
-
10
-
47
(Loss)/profit before tax excluding litigation and
conduct
(381)
288
251
340
291
140
352
509
Profit attributable to ordinary equity holders of
the parent
Attributable (loss)/profit
(291)
204
190
236
206
63
256
326
Post-tax impact of litigation and conduct
-
6
(3)
3
-
7
1
34
(Loss)/profit attributable to ordinary equity
holders of the parent excluding litigation and
conduct
(291)
210
187
239
206
70
257
360
Return on average allocated tangible equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average allocated equity
5.8
6.0
6.4
6.3
6.4
6.4
6.3
6.0
Average goodwill and intangibles
(0.7)
(0.9)
(1.1)
(1.0)
(1.0)
(1.1)
(1.1)
(1.1)
Average allocated tangible equity
5.1
5.1
5.3
5.3
5.4
5.3
5.2
5.0
Return on average allocated tangible equity
excluding litigation and conduct
(22.6%)
16.3%
14.0%
18.0%
15.4%
5.4%
19.9%
28.9%
Appendix: Non-IFRS Performance Measures
Barclays PLC
42
Head Office
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
Profit before tax
£m
£m
£m
£m
£m
£m
£m
£m
Loss before tax
(104)
(190)
(204)
(169)
(220)
(231)
(129)
(58)
Impact of litigation and conduct
5
23
88
1
39
12
19
31
Loss before tax excluding litigation and conduct
(99)
(167)
(116)
(168)
(181)
(219)
(110)
(27)
Profit attributable to ordinary equity holders of
the parent
Attributable loss
(99)
(154)
(184)
(126)
(172)
(234)
(147)
(120)
Post-tax impact of litigation and conduct
(4)
15
66
2
28
16
11
24
Attributable loss excluding litigation and conduct
(103)
(139)
(118)
(124)
(144)
(218)
(136)
(96)
Tangible net asset value per share
As at
As at
As at
31.03.20
31.12.19
31.03.19
£m
£m
£m
Total equity excluding non-controlling interests
68,369
64,429
64,661
Other equity instruments
(10,871)
(10,871)
(11,119)
Shareholders' equity attributable to ordinary shareholders of the parent
57,498
53,558
53,542
Goodwill and intangibles
(8,209)
(8,119)
(7,921)
Tangible shareholders' equity attributable to ordinary shareholders of the parent
49,289
45,439
45,621
m
m
m
Shares in issue
p
p
p
Net asset value per share
Tangible net asset value per share
Appendix: Non-IFRS Performance Measures
Barclays PLC
43
Profit/(loss) attributable to ordinary equity
holders of the parent
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
£m
£m
£m
£m
£m
£m
£m
£m
Barclays UK
175
438
(907)
328
422
241
510
473
Corporate and Investment Bank
820
193
609
596
582
(84)
431
600
Consumer, Cards and Payments
(291)
204
190
236
206
63
256
326
Barclays International
529
397
799
832
788
(21)
687
926
Head Office
(99)
(154)
(184)
(126)
(172)
(234)
(147)
(120)
Barclays Group
605
681
(292)
1,034
1,038
(14)
1,050
1,279
Average equity
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Barclays UK
14.1
13.8
13.9
13.8
13.9
13.6
13.7
13.6
Corporate and Investment Bank
27.2
25.9
26.9
25.8
25.2
26.0
26.2
26.7
Consumer, Cards and Payments
5.8
6.0
6.4
6.3
6.4
6.4
6.3
6.0
Barclays International
33.0
31.9
33.3
32.1
31.6
32.4
32.5
32.8
Head Office
8.1
8.8
9.2
8.1
7.7
6.2
6.4
4.9
Barclays Group
55.2
54.5
56.4
54.0
53.2
52.2
52.5
51.3
Return on average equity
Q120
Q419
Q319
Q219
Q119
Q418
Q318
Q218
%
%
%
%
%
%
%
%
Barclays UK
5.0%
12.7%
(26.1%)
9.5%
12.2%
7.1%
14.9%
13.9%
Corporate and Investment Bank
12.1%
3.0%
9.1%
9.2%
9.3%
(1.3%)
6.6%
9.0%
Consumer, Cards and Payments
(20.0%)
13.6%
11.8%
14.9%
12.8%
3.9%
16.3%
21.6%
Barclays International
6.4%
5.0%
9.6%
10.3%
10.0%
(0.3%)
8.5%
11.3%
Head Office
n/m
n/m
n/m
n/m
n/m
n/m
n/m
n/m
Barclays Group
4.4%
5.0%
(2.1%)
7.6%
7.8%
(0.1%)
8.0%
10.0%
Shareholder Information
Barclays PLC
44
Results timetable
1
Date
2020 Interim Results Announcement
29 July 2020
% Change
3
Exchange rates
2
31.03.20
31.12.19
31.03.19
31.12.19
31.03.19
Period end - USD/GBP
1.24
1.33
1.30
(7%)
(5%)
3 month average - USD/GBP
1.28
1.29
1.30
(1%)
(2%)
Period end - EUR/GBP
1.13
1.18
1.16
(4%)
(3%)
3 month average - EUR/GBP
1.16
1.16
1.15
-
1%
Share price data
Barclays PLC (p)
94.11
179.64
154.68
Barclays PLC number of shares (m)
17,332
17,322
17,139
For further information please contact
Investor relations
Media relations
Chris Manners +44 (0) 20 7773 2136
Tom Hoskin +44 (0) 20 7116 4755
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 2055
4
American Depositary Receipts (ADRs)
J.P.Morgan Chase Bank, N.A
StockTransfer@equiniti.com
Tel: +1 800 990 1135 (toll free in US and Canada), +1 651 453 2128 (outside the US and Canada) or +1 866 700 1652 (for the hearing
impaired).
J.P.Morgan Chase Bank N.A., Shareowner Services, PO Box 64504, St Paul, MN 55164-0504, USA.
Delivery of ADR certificates and overnight mail
J.P.Morgan Chase Bank N.A., Shareowner Services, 1110 Centre Pointe Curve, Suite 101, Mendota Heights, MN 55120, USA.
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.
Glossary of Terms
Barclays PLC
45
‘A-IRB’ / ‘Advanced -Internal Ratings Based’
‘Acceptances and endorsements’
Barclays Group expects most acceptances to be presented, but reimbursement by the customer is normally immediate.
Endorsements are residual liabilities of the Barclays Group in respect of bills of exchange which have been paid and subsequently
rediscounted.
‘Additional Tier 1 (AT1) capital’
premium.
‘Additional Tier 1 (AT1) securities’
‘Advanced Measurement Approach (AMA)’
required capital for operational risk. Banks can only use this approach subject to approval from their local regulators.
‘Agencies’
‘Agency Mortgage -Backed Securities’
‘All price risk (APR)’
An estimate of all the material market risks, including rating migration and default for the correlation trading
portfolio.
‘American Depository Receipts (ADR)’
A negotiable certificate that represents the ownership of shares in a non-US company (for
example Barclays) trading in US financial markets.
‘Americas’
‘Annual Earnings at Risk (AEaR)’
A measure of the potential change in Net Interest Income (NII) due to an interest rate movement
over a one-year period.
‘Annualised cumulative weighted average lifetime PD’
The probability of default over the remaining life of the asset, expressed as
an annual rate, reflecting a range of possible economic scenarios.
‘Application scorecards’
Algorithm based decision tools used to aid business decisions and manage credit risk based on available
customer data at the point of application for a product.
‘Arrears’
loan is unpaid or overdue. Such customers are also said to be in a state of delinquency. When a customer is in arrears, their entire
outstanding balance is said to be delinquent, meaning that delinquent balances are the total outstanding loans on which payments
are overdue.
‘Asia’
‘Asset Backed Commercial Paper’
entities for funding purposes.
‘Asset Backed Securities (ABS)’
can comprise any assets which attract a set of associated cash flows but are commonly pools of residential or commercial
mortgages and, in the case of Collateralised Debt Obligations (CDOs), the referenced pool may be ABS or other classes of assets.
‘Attributable profit’
capital securities classified as equity.
‘Average allocated tangible equity’
Calculated as the average of the previous month’s 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.
‘Average tangible shareholders’ equity’
Calculated as the average of the previous month’s 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 UK leverage ratio’
As per the PRA rulebook, is calculated as the average capital measure based on the last day of each
month in the quarter divided by the average exposure measure for the quarter, where the average exposure is based on each day
in the quarter.
‘Back testing’
Includes a number of techniques that assess the continued statistical validity of a model by simulating how the model
would have predicted recent experience.
‘Barclays Africa’ or ‘Absa’
Barclays Africa Group Limited (now Absa Group Limited), which was previously a subsidiary of the
Barclays Group. Following a sell down of shares resulting in a loss of control, the Barclays Group’s shareholding in Absa Group
Limited is now classified as a financial asset at fair value through other comprehensive income.
Glossary of Terms
Barclays PLC
46
‘Balance weighted Loan to Value (LTV) ratio’
calculating marked to market LTVs derived by calculating individual LTVs at account level and weighting it by the balances to arrive
at the average position. Balance weighted loan to value is calculated using the following formula: LTV = ((loan balance 1 x MTM
LTV% for loan 1) + (loan balance 2 x MTM LTV% for loan 2) + ...) / total outstandings in portfolio.
‘Barclaycard’
consumer lending, merchant acquiring, commercial cards and point of sale finance. Barclaycard has scaled operations in the UK, US,
Germany and Scandinavia.
‘Barclaycard Consumer UK’
‘Barclays’ or ’Barclays Group’
‘Barclays Bank Group’
‘Barclays Bank UK Group’
‘Barclays Operating businesses’
The core Barclays businesses operated by Barclays UK (which include the UK Personal banking; UK
business banking and the Barclaycard consumer UK businesses) and Barclays International (the large UK Corporate business; the
international Corporate and Private Bank businesses; the Investment Bank; the international Barclaycard business; and payment s).
‘Barclays Execution Services’ or ‘BX’ or ‘BSerL’ or ‘Group Service Company’
Barclays Execution Services Limited, the Group services
company set up to provide services to Barclays UK and Barclays International to deliver operational continuity.
‘Barclays International’
The segment of Barclays held by Barclays Bank PLC. The division includes the large UK Corporate business;
the international Corporate and Private Bank businesses; the Investment Bank; the international Barclaycard business; and
payments.
‘Barclays UK’
The segment of Barclays held by Barclays Bank UK PLC. The division includes the UK Personal banking; UK business
banking and the Barclaycard consumer UK businesses.
‘Basel 3’
Basel 3 is a set of measures developed by the Basel Committee on Banking Supervision aiming to strengthen the regulation,
supervision and risk management of banks.
‘Basel Committee of Banking Supervision (BCBS or The Basel Committee)’
matters which develops global supervisory standards for the banking industry. Its 45 members are officials from central banks or
prudential supervisors from 28 jurisdictions.
‘Basic Indicator Approach (BIA)’
Under the BIA, banks are required to hold regulatory capital for operational risk equal to 15% of the
annual average, calculated over a rolling three-year period, of the relevant income indicator for the bank as whole.
‘Basis point(s)’ / ‘bp(s)’
interest rates, yields on securities and for other purposes.
‘Basis risk’
imperfectly correlated, especially under stressed market conditions.
‘Behavioural scorecards’
Algorithm based decision tools used to aid business decisions and manage credit risk based on existing
customer data derived from account usage.
‘Book quality’
In the context of the Capital Risk section, changes in RWAs caused by factors such as underlying customer behaviour
or demographics leading to changes in risk profile.
‘Book size’
In the context of the Capital Risk section
,
repayments.
‘Business Banking’
Offers specialist advice, products and services to small and medium enterprises in the UK.
‘Business Lending’
Business Lending in Barclays UK that primarily relates to small and medium enterprises typically with a turnover
up to £16m.
‘Business scenario stresses’
exposures of the Investment Bank.
‘Buy to let mortgage’
A mortgage where the intention of the customer (investor) was to let the property at origination.
‘Capital Conservation Buffer (CCB)’
A capital buffer of 2.5% of a bank’s total exposures that needs to be met with an additional
amount of Common Equity Tier 1 capital above the 4.5% minimum requirement for Common Equity Tier 1 set out in CRR. Its
objective is to conserve a bank’s capital by ensuring that banks build up surplus capital outside periods of stress which can be
drawn down if losses are incurred.
‘Capital ratios’
Glossary of Terms
Barclays PLC
47
‘Capital Requirements Directive (CRD)’
Directive 2013/36/EU, a component of the CRD IV package which accompanies the Capital
Requirements Regulation and sets out macroprudential standards including the countercyclical capital buffer and capital buffers for
systemically important institutions. Directive (EU) 2019/878, published as part of the EU Risk Reduction Measure package amends
CRD. These amendments enter into force from 27 June 2019, with EU member states required to adopt the measures within the
Directive by 28 December 2020.
‘Capital Requirements Regulation (CRR)’
Regulation (EU) No 575/2013, a component of the CRD IV package which accompanies the
Capital Requirements Directive and sets out detailed rules for capital eligibility, the calculation of RWAs, the measurement of
leverage, the management of large exposures and minimum standards for liquidity. Between 27 June 2019 and 28 June 2023, this
regulation will be amended in line with the requirements of amending Regulation (EU) 2019/876 (CRR II).
‘Capital Requirements Regulation II (CRR II)’
Regulation (EU) 2019/876, amending Regulation (EU) No 575/2013 (CRR). This is a
component of the EU Risk Reduction Measure package. The requirements set out in CRR II will be introduced between 27 June
2019 and 28 June 2023.
‘Capital requirements on the underlying exposures (KIRB)’
An approach available to banks when calculating RWAs for securitisation
exposures. This is based upon the RWA amounts that would be calculated under the IRB approach for the underlying pool of
securitised exposures in the program, had such exposures not been securitised.
‘Capital resources’
CRD. Referred to as ‘own funds’ within EU regulatory texts.
‘Capital risk’
activities and to meet its regulatory capital requirements under normal operating environments or stressed conditions (both actual
and as defined for internal planning or regulatory testing purposes). This includes the risk from the Barclays Group’s pension plans.
‘Central Counterparty’ / ‘Central Clearing Counterparties (CCPs)’
financial transaction, such as a derivative contract or repurchase agreement (repo). Where a central counterparty is used, a single
bi-lateral contract between the buyer and seller is replaced with two contracts, one between the buyer and the CCP and one
between the CCP and the seller. The use of CCPs allows for greater oversight and improved credit risk mitigation in over-the-
counter (OTC) markets.
‘Charge-off’
the recovery of the full balance. This is normally when six payments are in arrears.
‘Client Assets’
Assets managed or administered by Barclays Group on behalf of clients including assets under management (AUM),
custody assets, assets under administration and client deposits.
‘CLOs and Other insured assets’
assets wrapped with Credit Support Annex (CSA) protection.
‘Collateralised Debt Obligation (CDO)’
above) and/or certain other related assets purchased by the issuer. CDOs may feature exposure to sub-prime mortgage assets
through the underlying assets.
‘Collateralised Loan Obligation (CLO)’
made to different classes of owners (in tranches).
‘Collateralised Mortgage Obligation (CMO)’
the mortgages and passes them on to investors of the security.
‘Combined Buffer Requirement’
In the context of the CRD capital obligations, the combined requirements of the Capital
Conservation Buffer, the GSII Buffer, the OSII buffer, the Systemic Risk buffer and an institution specific counter -cyclical buffer.
‘Commercial paper (CP)’
‘Commercial real estate (CRE)’
Commercial real estate includes office buildings, industrial property, medical centres, hotels, retail
stores, shopping centres, farm land, multifamily housing buildings, warehouses, garages, and industrial properties and other similar
properties. Commercial real estate loans are loans backed by a package of commercial real estate. Note: for the purposes of the
Credit Risk section, the UK CRE portfolio includes property investment, development, trading and housebuilders but excludes social
housing contractors.
‘Commissions and other incentives’
awards.
‘Committee of Sponsoring Organisations of the Treadway Commission Framework (COSO)’
A joint initiative of five private sector
organisations dedicated to the development of frameworks and providing guidance on enterprise risk management, internal
control and fraud deterrence.
‘Commodity derivatives’
precious metals, oil and oil related, power and natural gas).
Glossary of Terms
Barclays PLC
48
‘Commodity risk’
commodities (e.g. Brent vs. WTI crude prices).
‘Common Equity Tier 1 (CET1) capital’
issued and related share premium, retained earnings and other reserves, less specified regulatory adjustments.
‘Common Equity Tier 1 (CET1) ratio’
‘Compensation: income ratio’
The ratio of compensation expense over total income. Compensation represents total staff costs less
non-compensation items consisting of outsourcing, staff training, redundancy costs and retirement costs.
‘
Comprehensive Capital Analysis and Review (CCAR)’
An annual exercise, required by and evaluated by the Federal Reserve,
through which the largest bank holding companies operating in the US assess whether they have sufficient capital to continue
operations through periods of economic and financial stress and have robust capital-planning processes that account for their
unique risks.
‘Comprehensive Risk Measure (CRM)’
An estimate of all the material market risks, including rating migration and default for the
correlation trading portfolio. Also referred to as All Price Risk (APR) and Comprehensive Risk Capital Charge (CRCC).
‘Conduct risk’
of financial services, including instances of wilful or negligent misconduct.
‘Constant Currency Basis’
Excluding the impact of foreign currency conversion to GBP when comparing financial results in two
different financial periods.
‘Consumer, Cards and Payments’
Barclays US Consumer Bank, Barclaycard Germany, Barclays Partner Finance, Barclaycard
Commercial Payments, Barclaycard Payment Solutions (including merchant acquiring) and the international Wealth business.
‘Contingent capital notes (CCNs)’
permanently written off or converted into an equity instrument from the issuer's perspective in the event of the Common Equity
Tier 1 (CET1) ratio of the relevant Barclays Group entity falling below a specific level, or at the direction of regulators.
‘Conversion Trigger’
Used in the context of Contingent Capital Notes and AT1 securities. A capital adequacy trigger event occurs
when the CET1 ratio of the bank falls below a certain level (the trigger) as defined in the Terms & Conditions of the instruments
issued. See ‘Contingent capital notes’.
‘Correlation risk’
changes over time.
‘Corporate and Investment Bank (CIB)’
Barclays Corporate and Investment Bank businesses which form part of Barclays
International.
‘Cost: income ratio’
‘Cost of Equity’
‘Cost to income jaws’
‘Countercyclical Capital Buffer (CCyB)’
An additional buffer introduced as part of the CRD IV package that requires banks to have an
additional cushion of CET 1 capital with which to absorb potential losses, enhancing their resilience and contributing to a stable
financial system.
‘Countercyclical leverage ratio buffer (CCLB)’
A macroprudential buffer that has applied to specific PRA regulated institutions since
2018 and is calculated at 35% of any risk weighted countercyclical capital buffer set by the Financial Policy Committee (FPC). The
CCLB applies in addition to the minimum of 3.25% and any G-SII additional Leverage Ratio Buffer that applies.
‘Counterparty credit risk’
the context of RWAs, a component of RWAs that represents the risk of loss in derivatives, repurchase agreements and similar
transactions resulting from the default of the counterparty.
‘Coverage ratio’
‘Covered bonds’
benefit of the holders of the covered bonds.
‘CRD IV’
The Fourth Capital Requirements Directive, an EU Directive and an accompanying Regulation (CRR) that together prescribe
EU capital adequacy and liquidity requirements and implements Basel 3 in the European Union.
‘CRD V’
The Fifth Capital Requirements Directive, comprising an EU amending Directive and an accompanying amending Regulation
(CRR II) that together prescribe EU capital adequacy and liquidity requirements and implements enhanced Basel 3 proposals in the
European Union.
‘Credit conversion factor (CCF)’
Factor used to estimate the risk from off-balance sheet commitments for the purpose of calculating
the total Exposure at Default (EAD) used to calculate RWAs.
Glossary of Terms
Barclays PLC
49
‘Credit default swaps (CDS)’
for contracting to make payments to the protection buyer in the event of a defined credit event. Credit events normally include
bankruptcy, payment default on a reference asset or assets, or downgrades by a rating agency.
‘Credit derivatives (CDs)’
the seller of the protection.
‘Credit impairment charges’
and impairment charges on fair value through other comprehensive income assets and reverse repurchase agreements.
‘Credit market exposures’
have been significantly impacted by the deterioration in the global credit markets. The exposures include positions subject to fair
value movements in the Income Statement, positions that are classified as loans and advances and available for sale and other
assets.
‘Credit quality step’
maps the credit assessments of a recognised credit rating agency or export credit agency to credit quality steps that determine the
risk weight to be applied to an exposure.
‘Credit Rating’
An evaluation of the creditworthiness of an entity seeking to enter into a credit agreement.
‘Credit risk’
their obligations to Barclays, including the whole and timely payment of principal, interest, collateral and other receivables. In the
context of RWAs, it is the component of RWAs that represents the risk of loss in loans and advances and similar transactions
resulting from the default of the counterparty.
‘Credit risk mitigation’
be broadly divided into three types; collateral, netting and set-off, and risk transfer.
‘Credit spread’
‘Credit Valuation Adjustment (CVA)’
takes into account the counterparty’s risk of default. The CVA therefore represents an estimate of the adjustment to fair value that
a market participant would make to incorporate the credit risk of the counterparty due to any failure to perform on contractual
agreements.
‘CRR leverage exposure’
‘CRR leverage ratio’
Is calculated using the CRR definition of Tier 1 capital for the numerator and the CRR definition of leverage
exposure as the denominator.
‘Customer assets’
the year to date divided by number of days in the year to date.
‘Customer deposits’
credit institutions. Such funds are recorded as liabilities in the Barclays Group’s balance sheet under deposits at amortised cost.
‘Customer liabilities’
conditions, if the current positions were to be held unchanged for one business day, measured to a specified confidence level.
‘DBRS’
‘Debit Valuation Adjustment (DVA)’
value of a portfolio of trades and the market value which takes into account the Barclays Group’s risk of default. The DVA,
therefore, represents an estimate of the adjustment to fair value that a market participant would make to incorporate the credit
risk of the Barclays Group due to any failure to perform on contractual obligations. The DVA decreases the value of a liability to
take into account a reduction in the remaining balance that would be settled should the Barclays Group default or not perform any
contractual obligations.
‘Debt buybacks’
de-recognition from the balance sheet.
‘Debt securities in issue’
Group and include certificates of deposit and commercial paper.
‘Default grades’
distinguish differences in the probability of default risk.
‘Default fund contributions’
required to contribute to this fund in advance of using a CCP. The default fund can be used by the CCP to cover losses incurred by
the CCP where losses are greater than the margins provided by that member.
Glossary of Terms
Barclays PLC
50
‘Derivatives netting’
enforceable bilateral netting agreements and eligible cash collateral received in derivative transactions that meet the requirements
of BCBS 270.
‘Diversification effect’
It is measured as the sum of the individual asset class DVaR estimates less the total DVaR.
‘Dodd-Frank Act (DFA)’
‘Economic Value of Equity (EVE)’
interest rate movement, based on existing balance sheet run-off profile.
'Effective Expected Positive Exposure (EEPE)'
The weighted average over time of effective expected exposure. The weights are the
proportion that an individual exposure represents of the entire exposure horizon time interval.
‘Eligible liabilities’
Liabilities and capital instruments that are eligible to meet MREL that do not already qualify as own funds.
‘Encumbrance’
The use of assets to secure liabilities, such as by way of a lien or charge.
‘Enterprise Risk Management Framework (ERMF)’
Risk Management Framework, which describes how Barclays identifies and manages risk. The framework identifies the principal
risks faced by the Barclays Group; sets out risk appetite requirements; sets out roles and responsibilities for risk management; and
sets out risk committee structure.
‘Equities’
‘Equity and stock index derivatives’
stock index swaps and options (including warrants, which are equity options listed on an exchange). The Barclays Group also enters
into fund-linked derivatives, being swaps and options whose underlyings include mutual funds, hedge funds, indices and multi-
asset portfolios. An equity swap is an agreement between two parties to exchange periodic payments, based upon a notional
principal amount, with one side paying fixed or floating interest and the other side paying based on the actual return of the stock or
stock index. An equity option provides the buyer with the right, but not the obligation, either to purchase or sell a specified stock,
basket of stocks or stock index at a specified price or level on or before a specified date.
‘Equity risk’
‘Equity structural hedge’
investment and to smoothen the income over a medium/long term.
‘EU Risk Reduction Measure package’
A collection of amending Regulations and Directives that update core EU regulatory texts and
which came into force on 27 June 2019.
‘Euro Interbank Offered Rate (EURIBOR)’
European interbank market.
‘Europe’
and Eastern Europe.
‘European Banking Authority (EBA)’
The European Banking Authority (EBA) is an independent EU Authority which works to ensure
effective and consistent prudential regulation and supervision across the European banking sector. Its overall objectives are to
maintain financial stability in the EU and to safeguard the integrity, efficiency and orderly functioning of the banking sector.
‘European Securities and Markets Authority (ESMA)’
An independent European Supervisory Authority with the remit of enhancing
the protection of investors and reinforcing stable and well-functioning financial markets in the European Union.
‘Eurozone’
Represents the 19 European Union countries that have adopted the euro as their common currency. The 19 countries
are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta,
Netherlands, Portugal, Slovakia, Slovenia and Spain.
‘Expected Credit Losses (ECL)’
during a specified period of time. ECLs must reflect the present value of cash shortfalls, and must reflect the unbiased and
probability weighted assessment of a range of outcomes.
‘Expected Losses’
approach for capital adequacy calculations. It is measured as the Barclays Group's modelled view of anticipated losses based on
Probability of Default (PD), Loss Given Default (LGD) and Exposure at Default (EAD), with a one-year time horizon.
’Expert lender models’
particular counterparty, but where there is insufficient data to support the construction of a statistical model. These models utilise
the knowledge of credit experts that have in depth experience of the specific customer type being modelled.
‘Exposure’
Generally refers to positions or actions taken by the bank, or consequences thereof, that may put a certain amount of a
bank’s resources at risk.
Glossary of Terms
Barclays PLC
51
‘Exposure at Default (EAD)’
the event of, and at the time of, that counterparty’s default. At default, the customer may not have drawn the loan fully or may
already have repaid some of the principal, so that exposure may be less than the approved loan limit.
‘External Credit Assessment Institutions (ECAI)’
Institutions whose credit assessments may be used by credit institutions for the
determination of risk weight exposures according to CRR.
‘Federal Reserve Board (FRB)’
Is the governing board of the Federal Reserve System of the US, in charge of making the
country's monetary policy.
'FICC'
Represents Macro (including rates and currency), Credit and Securitised products.
'Financial Policy Committee (FPC)'
remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system. The FPC also has
a secondary objective to support the economic policy of the UK Government.
‘F-IRB’/ 'Foundation-Internal Ratings Based’
‘Financial Conduct Authority (FCA)’
authorised firms. The FCA also has responsibility for the prudential regulation of firms that do not fall within the PRA’s scope.
‘Financial Services Compensation Scheme (FSCS)’
unable to pay claims.
‘Financial collateral comprehensive method (FCCM)’
A counterparty credit risk exposure calculation approach which applies
volatility adjustments to the market value of exposure and collateral when calculating RWA values.
‘Financial Stability Board (FSB)’
An international body that monitors and makes recommendations about the global financial
system. It promotes international financial stability by coordinating national financial authorities and international standard-setting
bodies as they work toward developing strong regulatory, supervisory and other financial sector policies. It fosters a level playing
field by encouraging coherent implementation of these policies across sectors and jurisdictions.
‘Fitch’
‘Forbearance Programmes’
than contractual amounts due where financial distress would otherwise prevent satisfactory repayment within the original terms
and conditions of the contr act. These agreements may be initiated by the customer, Barclays or a third party and include approved
debt counselling plans, minimum due reductions, interest rate concessions and switches from capital and interest repayments to
interest-only payments.
The process by which the bank initiates legal action against a customer with the intention of terminating
a loan agreement whereby the bank may repossess the property subject to local law and recover amounts it is owed.
‘Foreign exchange derivatives’
contracts, currency swaps and currency options. Forward foreign exchange contracts are agreements to buy or sell a specified
quantity of forei gn currency, usually on a specified future date at an agreed rate. Currency swaps generally involves the exchange,
or notional exchange, of equivalent amounts of two currencies and a commitment to exchange interest periodically until the
principal amounts are re -exchanged on a future date. Currency options provide the buyer with the right, but not the obligation,
either to purchase or sell a fixed amount of a currency at a specified exchange rate on or before a future date. As compensation for
assuming the option risk, the option writer generally receives a premium at the start of the option period.
‘Foreign exchange risk’
Full time equivalent units are the on-job hours paid for employee services divided by the number of ordinary-
time hours normally paid for a full-time staff member when on the job (or contract employees where applicable).
‘Fully loaded’
When a measure is presented or described as being on a fully loaded basis, it is calculated without applying the
transitional provisions set out in Part Ten of CRR.
‘Funded credit protection’
institution derives from the right of that institution, in the event of the default of the counterparty or on the occurrence of other
specified credit events relating to the counterparty, to liquidate, or to obtain transfer or appropriation of, or to retain certain assets
or amounts, or to reduce the amount of the exposure to, or to replace it with, the amount of the difference between the amount of
the exposure and the amount of a claim on the institution.
‘Gains on acquisitions’
contingent liabilities, recognised in a business combination, exceeds the cost of the combination.
‘General Data Protection Regulation (GDPR)’
GDPR (Regulation (EU) 2016/679) is a regulation by which the European Parliament,
the Council of the European Union and the European Commission intend to strengthen and unify data protection for all individuals
within the European Union.
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‘General market risk’
broad equity market movement unrelated to any specific attributes of individual securities.
‘Global-Systemically Important Banks (G-SIBs or G-SIIs)’
interconnectedness, mean that their distress or failure would cause significant disruption to the wider financial system and
economic activity. The Financial Stability Board and the Basel Committee on Banking Supervision publish a list of globally
systemically important banks.
‘G-SII additional leverage ratio buffer (G-SII ALRB)’
A macroprudential buffer that applies to globally systemically important banks
(G-SIBs) and other major domestic UK banks and building societies, including banks that are subject to ring-fencing requirements.
The G-SII ALRB will be calibrated as 35% (on a phased basis) of the combined systemic risk buffers that applies to the bank.
‘GSII Buffer’
Common Equity Tier 1 capital required to be held under CRD to ensure that G-SIBs build up surplus capital to
compensate for the systemic risk that such institutions represent to the financial system.
’Grandfathering’
and CRR II non-compliant capital instruments to be included in regulatory capital subject to certain thresholds which decrease over
the transitional period.
‘Gross charge-off rates’
average outstanding balances excluding balances in recoveries. Charge-off to recoveries generally occurs when the collections focus
switches from the collection of arrears to the recovery of the entire outstanding balance, and represents a fundamental change in
the relationship between the bank and the customer. This is a measure of the proportion of customer s that have gone into default
during the period.
‘Gross write-off rates’
and advances held at amortised cost at the balance sheet date.
‘Gross new lending’
‘Guarantee’
of credit substitution.
‘Head Office’
Compliance, Risk, Treasury and Tax and other operations.
‘High-Net-Worth’
worth customers.
‘High Risk’
In retail banking, ‘High Risk’ is defined as the subset of up-to -date customers who, either through an event or observed
behaviour exhibit potential financial difficulty. Where appropriate, these customers are proactively contacted to assess whether
assistance is required.
‘Home loan’
The borrower gives the lender a lien against the property and the lender can foreclose on the property if the borrower does not
repay the loan per the agreed terms. Also known as a residential mortgage.
‘IHC’ or ‘US IHC’
Barclays US LLC, the intermediate holding company established by Barclays in July 2016, which holds most of
Barclays’ subsidiaries and assets in the US.
‘IMA’ / 'Internal Model Approach’
In the context of RWAs, RWAs for which the exposure amount has been derived via the use of a
PRA approved internal market risk model.
‘IMM’ / 'Internal Model Method’
In the context of RWAs, RWAs for which the exposure amount has been derived via the use of a
PRA approved internal counterparty credit risk model.
‘Identified Impairment (II)’
‘IFRS 9 transitional arrangements’
Following the application of IFRS 9 as of 1 January 2018, Article 473a of CRR permits institutions
to phase-in the impact on capital and leverage ratios of the impairment requirements under the new accounting standard.
‘Impairment Allowances’
losses in the lending book. An impairment allowance may either be identified or unidentified and individual or collective.
‘Income’
‘Incremental Risk Charge (IRC)’
An estimate of the incremental risk arising from rating migrations and defaults for traded debt
instruments beyond what is already captured in specific market risk VaR for the non-correlation trading portfolio.
‘Independent Validation Unit (IVU)’
The function within the bank responsible for independent review, challenge and approval of all
models.
‘Individual liquidity guidance (ILG)’
that the PRA has asked the bank to maintain.
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‘Inflation risk’
‘Insurance Risk’
The risk of the Barclays Group’s aggregate insurance premiums received from policyholders under a portfolio of
insurance contracts being inadequate to cover the claims arising from those policies.
‘Interchange’
‘Interest-only home loans’
Under the terms of these loans, the customer makes payments of interest only for the entire term of the
mortgage, although customers may make early repayments of the principal within the terms of their agreement. The customer is
responsible for repaying the entire outstanding principal on maturity, which may require the sale of the mortgaged property.
‘Interest rate derivatives’
swaptions. An interest rate swap is an agreement between two parties to exchange fixed rate and floating rate interest by means of
periodic payments based upon a notional principal amount and the interest rates defined in the contract. Certain agreements
combine interest rate and foreign currency swap transactions, which may or may not include the exchange of principal amounts. A
basis swap is a form of interest rate swap, in which both parties exchange interest payments based on floating rates, where the
floating rates are based upon different underlying reference indices. In a forward rate agreement, two parties agree a future
settlement of the difference between an agreed rate and a future interest rate, applied to a notional principal amount. The
settlement, which generally occurs at the start of the contract period, is the discounted present value of the payment that would
otherwise be made at the end of that period.
‘Interest rate risk’
the calculation of market risk DVaR, measures the impact of changes in interest (swap) rates and volatilities on cash instruments
and derivatives.
‘Interest rate risk in the banking book (IRRBB)’
The risk that the Barclays Group is exposed to capital or income volatility because of
a mismatch between the interest rate exposures of its (non-traded) assets and liabilities.
‘Internal Assessment Approach (IAA)’
One of three types of calculation that a bank with permission to use the Internal Ratings
Based (IRB) approach may apply to securitisation exposures. It consists of mapping a bank's internal rating methodology for credit
exposures to those of an External Credit Assessment Institution (ECAI) to determine the appropriate risk weight based on the
ratings based approach. Its applicability is limited to ABCP programmes related to liquidity facilities and credit enhancement.
‘Internal Capital Adequacy Assessment Process (ICAAP)’
Companies are required to perform a formal Internal Capital Adequacy
Assessment Process (ICAAP) as part of the Pillar 2 requirements (BIPRU) and to provide this document to the PRA on a yearly basis.
The ICAAP document summarises the Barclays Group’s risk management framework, including approach to managing all risks (i.e.
Pillar 1 and non-Pillar 1 risks); and, the Barclays Group’s risk appetite, economic capital and stress testing frameworks.
‘Internal Ratings Based (IRB)’
weights. The IRB approach is divided into two alternative applications, Advanced and Foundation:
–
Advanced IRB (A-IRB): the bank uses its own estimates of probability of default (PD), loss given default (LGD) and credit
conversion factor to model a given risk exposure.
–
Foundation IRB: the bank applies its own PD as for Advanced, but it uses standard parameters for the LGD and the credit
conversion factor. The Foundation IRB approach is specifically designed for wholesale credit exposures. Hence retail,
equity, securitisation positions and non-credit obligations asset exposures are treated under standardised or A-IRB.
‘Investment Bank’
The Barclays Group’s investment bank which
consists of origination led and returns focused markets and banking
business which forms part of the Corporate and Investment Bank segment of Barclays International.
‘Investment Banking Fees’
businesses – including financial advisory, debt and equity underwriting.
‘Investment grade’
credit rating agencies.
‘ISDA Master Agreement’
framework of documents, designed to enable OTC derivatives to be documented fully and flexibly. The framework consists of a
master agreement, a schedule, confirmations, definition booklets, and a credit support annex. The ISDA master agreement is
published by the International Swaps and Derivatives Association (ISDA).
‘Key Risk Scenarios (KRS)’
Key Risk Scenarios are a summary of the extreme potential risk exposure for each Key Risk in each
business and function, including an assessment of the potential frequency of risk events, the average size of losses and three
extreme scenarios. The Key Risk Scenario assessments are a key input to the Advanced Measurement Approach calculation of
regulatory and economic capital requirements.
‘Large exposure’
A large exposure is defined as the total exposure of a bank to a counterparty or group of connected clients,
whether in the banking book or trading book or both, which in aggregate equals or exceeds 10% of the bank's eligible capital.
‘Legal risk’
obligations including regulatory or contractual requirements.
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‘Lending’
In the context of Investment Bank Analysis of Total Income, lending income includes net interest income, gains or losses
on loan sale activity, and risk management activity relating to the loan portfolio.
‘Letters of credit’
will be made on time and in full. In the event that the debtor is unable to make payment, the bank will be required to cover the full
or remaining amount of the purchase.
‘Level 1 assets’
High quality liquid assets under the Basel Committee’s Liquidity Coverage Ratio (LCR), including cash, central bank
reserves and higher quality government securities.
‘Level 2 assets’
Level 2 assets, with the latter comprised of Level 2A and Level 2B assets. Level 2A assets include, for example, lower quality
government securities, covered bonds and corporate debt securities. Level 2B assets include, for example, lower rated corporate
bonds, residential mortgage backed securities and equities that meet certain conditions.
‘Lifetime expected credit losses’
an exposure, reflecting the present value of cash shortfalls over the remaining expected life of the asset.
‘Lifetime Probability’
‘Liquidity Coverage Ratio (LCR)’
days. High-quality liquid assets should be unencumbered, liquid in markets during a time of stress and, ideally, be central bank
eligible. These include, for example, cash and claims on central governments and central banks.
‘Liquidity Pool’
Barclays Group as a contingency to enable the bank to meet cash outflows in the event of stressed market conditions.
‘Liquidity Risk’
The risk that the Barclays Group is unable to meet its contractual or contingent obligations or that is does not have
the appropriate amount, tenor and composition of funding and liquidity to support its assets.
‘Liquidity risk appetite (LRA)’
and in meeting its regulatory obligations.
‘Liquidity Risk Management Framework (the Liquidity Framework)’
The Liquidity Risk Management Framework (the Liquidity
Framework), which is sanctioned by the Board Risk Committee (BRC) and which incorporates liquidity policies, systems and controls
that the Barclays Group has implemented to manage liquidity risk within tolerances approved by the Board and regulatory
agencies.
‘Litigation and conduct charges’ or ‘Litigation and conduct’
Litigation and conduct charges include regulatory fines, litigation
settlements and conduct related customer redress.
‘Loan loss rate’
held at amortised cost at the balance sheet date.
‘Loan to deposit ratio’
‘Loan to value (LTV) ratio’
of the asset. The ratios are used in determining the appropriate level of risk for the loan and are generally reported as an average
for new mortgages or an entire portfolio. Also see ‘Marked to market (MTM) LTV ratio.’
‘London Interbank Offered Rate (LIBOR)’
London interbank market.
‘Loss Given Default (LGD)’
default. LGD comprises the actual loss (the part that is not expected to be recovered), together with the economic costs associated
with the recovery process.
‘Management VaR’
level, if current positions were to be held unchanged for predefined period. Corporate and Investment Bank uses Management VaR
with a two-year equally weighted historical period, at a 95% confidence level, with a one day holding period.
‘Mandatory break clause’
In the context of counterparty credit risk, a contract clause that means a trade will be ended on a
particular date.
‘Marked to market approach’
value of derivative positions as well as a potential future exposure add-on to calculate an exposure to which a risk weight can be
applied. This is also known as the Current Exposure Method.
‘Marked to market (MTM) LTV ratio’
Also see ‘Balance weighted Loan to Value (LTV) ratio’ and ‘Valuation weighted Loan to Value (LTV) ratio.’
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‘Market risk’
fluctuation in market variables including, but not limited to, interest rates, foreign exchange, equity prices, commodity prices,
credit spreads, implied volatilities and asset correlations.
‘Master netting agreements’
covered by the agreement in the event of the counterparty’s default or bankruptcy or insolvency, resulting in a reduced exposure.
‘Master trust securitisation programmes’
receivables. The trust issues multiple series of securities backed by these receivables.
‘Material Risk Takers (MRTs)’
Categories of staff whose professional activities have or are deemed to have a material impact on
Barclays’ risk profile, as determined in accordance with the European Banking Authority regulatory technical standard on the
identification of such staff.
‘Medium-Term Notes’
Investors can choose from differing maturities, ranging from nine months to 30 years. They can be issued on a fixed or floating
coupon basis or with an exotic coupon; with a fixed maturity date (non-callable) or with embedded call or put options or early
repayment triggers. MTNs are most generally issued as senior, unsecured debt.
‘Methodology and policy’
In the context of the Capital Risk section, the effect on RWAs of methodology changes driven by
regulatory policy changes.
‘MiFID II’
The Markets in Financial Instruments Directive 2004/39/EC (known as "MiFID" I) as subsequently amended to MiFID II is a
European Union law that provides harmonised regulation for investment services across the 31 member states of the European
Economic Area.
‘Minimum requirement for own funds and eligible liabilities (MREL)’
A European Union wide requirement under the Bank Recovery
and Resolution Directive for all European banks and investment banks to hold a minimum level of equity and/or loss absorbing
eligible liabilities to ensure the operation of the bail-in tool to absorb losses and recapitalise an institution in resolution. An
institution’s MREL requirement is set by its resolution authority. Amendments in the EU Risk Reduction Measure package are
designed to align MREL and TLAC for EU G-SIBs.
‘Model risk’
The risk of the potential adverse consequences from financial assessments or decisions based on incorrect or misused
model outputs and reports.
‘Model updates’
In the context of the Capital Risk section, changes in RWAs caused by model implementation, changes in model
scope or any changes required to address model malfunctions.
‘Model validation’
Process through which models are independently challenged, tested and verified to prove that they have been
built, implemented and used correctly, and that they continue to be fit-for-purpose.
‘Modelled—VaR’
the PRA.
‘Money market funds’
‘Monoline derivatives’
‘Moody’s’
‘Mortgage Servicing Rights (MSR)’
A contractual agreement in which the right to service an existing mortgage is sold by the original
lender to another party that specialises in the various functions involved with servicing mortgages.
‘Multilateral development banks’
national boundaries.
‘National discretion’
certain CRD rules in its jurisdiction.
‘Net asset value per share’
instruments, by the number of issued ordinary shares.
‘Net interest income (NII)’
‘Net interest margin (NIM)’
‘Net investment income’
result on disposal of available for sale assets.
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‘Net Stable Funding Ratio (NSFR)’
assuming a stressed scenario. The ratio is required to be over 100%. Available stable funding would include such items as equity
capital, preferred stock with a maturity of over 1 year, or liabilities with a maturity of over 1 year. The required amount of stable
funding is calculated as the sum of the value of the assets held and funded by the institution, multiplied by a specific required
stable funding (RSF) factor assigned to each particular asset type, added to the amount of potential liquidity exposure multiplied by
its associated RSF factor.
‘Net trading income’
and customer business, together with interest, dividends and funding costs relating to trading activities.
‘Net write-off rate’
recoveries divided by gross loans and advances held at amortised cost at the balance sheet date.
‘Net written credit protection’
credit derivatives protection bought.
‘New bookings’
The total of the original balance on accounts opened in the reporting period, including any applicable fees and
charges included in the loan amount.
‘Non-asset backed debt instruments’
corporate bonds; commercial paper; certificates of deposit; co nvertible bonds; corporate bonds and issued notes.
‘Non-model method (NMM)’
through the use of CRR norms, as opposed to an internal model.
‘Non-Traded Market Risk’
The risk that the current or future exposure in the banking book (i.e. non-traded book) will impact bank's
capital and/or earnings due to adverse movements in Interest or foreign exchange rates.
‘Non-Traded VaR’
Reflects the volatility in the value of the fair value through other comprehensive income (FVOCI) investments in
the liquidity pool which flow directly through capital via the FVOCI reserve. The underlying methodology to calculate non-traded
VaR is similar to Traded Management VaR, but the two measures are not directly comparable. The Non-Traded VaR represents the
volatility to capital driven by the FVOCI exposures. These exposures are in the banking book and do not meet the criteria for trading
book treatment.
‘Notch’
‘Notional amount’
The nominal or face amount of a financial instrument, such as a loan or a derivative, that is used to calculate
payments made on that instrument.
‘Open Banking’
The Payment Services Directive (PSD2) and the Open API standards and data sharing remedy imposed by the UK
Competition and Markets Authority following its Retail Banking Market Investigation Order.
‘Operating leverage’
‘Operational risk’
events (for example, fraud) where the root cause is not due to credit or market risks.
‘Operational Riskdata eXchange (ORX)’
dedicated to advancing the measurement and management of operation al risk in the global financial services industry. Barclays is a
member of ORX.
‘Origination led’
‘OSII’
Other systemically important institutions are institutions that are deemed to create risk to financial stability due to their
systemic importance.
‘Over-the-counter (OTC) derivatives’
They offer flexibility because, unlike standardised exchange-traded products, they can be tailored to fit specific needs.
‘Overall capital requirement’
The overall capital requirement is the sum of capital required to meet the total of a Pillar 1
requirement, a Pillar 2A requirement, a Global Systemically Important Institution (G-SII) buffer, a Capital Conservation Buffer (CCB)
and a Countercyclical Capital Buffer (CCyB).
‘Own credit’
‘Owner occupied mortgage’
A mortgage where the intention of the customer was to occupy the property at origination.
‘Own funds’
The sum of Tier 1 and Tier 2 capital.
‘Past due items’
Refers to loans where the borrower has failed to make a payment when due under the terms of the loan contract.
‘Payment Protection Insurance (PPI) redress’
costs.
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‘Pension Risk’
The risk of the Barclays Group’s earnings and capital being adversely impacted by the Barclays Group’s defined
benefit obligations increasing or the value of the assets backing these defined benefit obligations decreasing due to changes in both
the level and volatility of prices.
‘Performance costs’
term incentives, the accounting charge is spread over the relevant periods in which the employee delivers service.
‘Personal Banking’
Offers retail advice, products and services to community and premier customers in the UK.
‘Period end allocated tangible equity’
adjusted for capital deductions, excluding goodwill and intangible assets, reflecting assumptions the Barclays Group uses for capital
planning purposes. Head Office allocated tangible equity represents the difference between the Barclays Group’s tangible
shareholders’ equity and the amounts allocated to businesses.
‘Pillar 1 requirements’
The minimum regulatory capital requirements to meet the sum of credit (including counterparty credit),
market and operational risk.
‘Pillar 2A requirements’
The additional regulatory capital requirement to meet risks not captured under Pillar 1 requirements. This
requirement is the outcome of the bank’s Internal Capital Adequacy Assessment Process (ICAAP) and the complementary
supervisory review and evaluation carried out by the PRA.
‘Post-model adjustment (PMA)’
portfolio level to account for model input data deficiencies, inadequate model performance or changes to regulatory definitions
(e.g. definition of default) to ensure the model output is accurate, complete and appropriate.
‘Potential Future Exposure (PFE) on Derivatives’
exposure on both exchange traded and OTC derivative contracts, calculated by assigning a standardised percentage (based on the
underlying risk category and residual trade maturity) to the gross notional value of each contract.
‘PRA waivers’
specific to an organisation and require applications being submitted to and approved by the PRA.
‘Primary securitisations’
The issuance of securities (bonds and commercial papers) for fund-raising.
‘Primary Stress Tests’
losses that might arise from extreme market moves or scenarios. Primary Stress Tests apply stress moves to key liquid risk factors
for each of the major trading asset classes.
‘Prime Services’
business also provides brokerage facilitation services for hedge fund clients offering execution and clearance facilities for a variety
of asset classes.
‘Principal’
interest).
‘Principal Investments’
‘Principal Risks’
Report.
‘Private equity investments’
in private equity often involves the investment of capital in private companies or the acquisition of a public company that results in
the delisting of public equity. Capital for private equity investment is raised by retail or institutional investors and used to fund
investment strategies such as leveraged buyouts, venture capital, growth capital, distressed investments and mezzanine capital.
‘Probability of Default (PD)’
The likelihood that a loan will not be repaid and will fall into default. PD may be calculated for each
client who has a loan (normally applicable to wholesale customers/clients) or for a portfolio of clients with similar attributes
(normally applicable to retail customers). To calculate PD, Barclays assesses the credit quality of borrowers and other
counterparties and assigns them an internal risk rating. Multiple rating methodologies may be used to inform the rating decision on
individual large credits, such as internal and external models, rating agency ratings, and for wholesale assets market information
such as credit spreads. For smaller credits, a single source may suffice such as the result from an internal rating model.
‘Product structural hedge’
(such as non-interest bearing current accounts and managed rate deposits) and to smoothen the income over a medium/long term.
‘Properties in Possession held as ’Loans and Advances to Customers’’
Properties in the UK and Italy where the customer continues
to retain legal title but where the bank has enforced the possession order as part of the foreclosure process to allow for the
disposal of the asset or the court has ordered the auction of the property.
‘Properties in Possession held as ‘Other Real Estate Owned’’
Properties in South Africa, where the bank has taken legal ownership
of the title as a result of purchase at an auction or similar and treated as ‘Other Real Estate Owned’ within other assets on the
bank’s balance sheet.
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‘Proprietary trading’
behalf of customers, so as to make a profit for itself.
‘Prudential Regulation Authority (PRA)’
insurers and a small number of significant investment banks in the UK. The PRA is a subsidiary of the Bank of England.
‘Prudential valuation adjustment (PVA)’
value to comply with regulatory valuation standards, which place greater emphasis on the inherent uncertainty around the value at
which a trading book position could be exited.
‘Public benchmark’
‘Qualifying central bank claims’
An amount calculated in line with the PRA policy statement allowing banks to exclude claims on the
central bank from the calculation of the leverage exposure measure, as long as these are matched by deposits denominated in the
same currency and of identical or longer maturity.
‘Qualifying Revolving Retail Exposure (QRRE)’
In the context of the IRB approach to credit risk RWA calculations, an exposure
meeting the criteria set out in BIPRU 4.6.42 R (2). It includes most types of credit card exposure.
‘Rates’
derivatives.
‘Re-aging’
The returning of a delinquent account to up-to-date status without collecting the full arrears (principal, interest and
fees).
‘Real Estate Mortgage Investment Conduits (REMICs)’
An entity that holds a fixed pool of mortgages and that is
separated into
multiple classes of interests for issuance to investors.
‘Recovery book’
strategies to recover the Group’s exposure.
‘Recovery book Impairment Coverage Ratio’
balance in recoveries.
‘Recovery book proportion of outstanding balances’
all accounts that have charged-off) as at the period end compared to total outstanding balances. The size of the recoveries book
would ultimately have an impact on the overall impairment requirement on the portfolio. Balances in recoveries will decrease if:
assets are written-off; amounts are collected; or assets are sold to a third party (i.e. debt sale).
‘Regulatory capital’
‘Renegotiated loans’
adverse change in the circumstances of the borrower. In the latter case renegotiation can result in an extension of the due date of
payment or repayment plans under which the Barclays Group offers a concessionary rate of interest to genuinely distressed
borrowers. This will result in the asset continuing to be overdue and will be individually impaired where the renegotiated payments
of interest and principal will not recover the original carrying amount of the asset. In other cases, renegotiation will lead to a new
agreement, which is treated as a new loan.
‘Repurchase agreement (Repo)’ / ‘Reverse repurchase agreement (Reverse repo)’
financial securities as collateral for an interest bearing cash loan. The borrower agrees to sell a security to the lender subject to a
commitment to repurchase the asset at a specified price on a given date. For the party selling the security (and agreeing to
repurchase it in the future) it is a Repurchase agreement or Repo; for the counterparty to the transaction (buying the security and
agreeing to sell in the future) it is a Reverse repurchase agreement or Reverse repo.
‘Reputation risk’
competence by clients, counterparties, investors, regulators, employees or the public.
‘Re-securitisations’
positions where the underlying assets are also predominantly securitisation positions.
‘Reserve Capital Instruments (RCIs)’
terms.
‘Residential Mortgage-Backed Securities (RMBS)’
these securities have the right to cash received from future mortgage payments (interest and/or principal).
‘Residual maturity’
The remaining contractual term of a credit obligation associated with a credit exposure.
‘Restructured loans’
has been granted to the debtor that would not otherwise be considered. Where the concession results in the expected cash flows
discounted at the original effective interest rate being less than the loan’s carrying value, an impairment allowance will be raised.
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‘Retail Loans’
It includes both secured and unsecured loans such as mortgages and credit card balances, as well as loans to certain smaller
business customers, typically with exposures up to £3m or with a turnover up to £5m.
‘Return on average Risk Weighted Assets’
‘Return on average tangible shareholders’ equity’ (RoTE) Annualised
profit after tax attributable to ordinary equity holders of the
parent, as a proportion of average shareholders’ equity excluding non-controlling interests and other equity instruments adjusted
for the deduction of intangible assets and goodwill.
‘Return on average allocated tangible equity’ Annualised
profit after tax attributable to ordinary equity holders of the parent, as a
proportion of average allocated tangible equity.
‘Risk appetite’
possible outcomes as business plans are implemented.
‘Risk weighted assets (RWAs)’
accordance with the Basel rules as implemented by CRR and local regulators.
‘Risks not in VaR (RNIVS)’
framework.
‘Sarbanes-Oxley requirements’
against corporate governance scandals such as Enron, WorldCom and Tyco. All US-listed companies must comply with SOX.
‘Second Lien’
compensation for this debt will only be received after the first lien has been repaid and thus represents a riskier investment than
the first lien.
‘Secondary Stress Tests’
be hedged or reduced within the time period covered in Primary Stress Tests.
‘Secured Overnight Financing Rate (SOFR)’
A broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury
securities in the repurchase agreement (repo) market.
‘Securities Financing Transactions (SFT)’
securities or commodities lending or borrowing transaction, or a margin lending transaction whereby cash collateral is received or
paid in respect of the transfer of a related asset.
‘Securities financing transactions adjustments’
collateral, taking into account master netting agreements.
‘Securities lending arrangements’
to return them at a future date. The counterparty generally provides collateral against non performance in the form of cash or
other assets.
‘Securitisation’
pool, which is used to back new securities. A company sells assets to a special purpose vehicle (SPV) which then issues securities
backed by the assets. This allows the credit quality of the assets to be separated from the credit rating of the original borrower and
transfers risk to external investors.
‘Set-off clauses’
In the context of Counterparty credit risk, contract clauses that allow Barclays to set off amounts owed to us by a
counterparty against amounts owed by us to the counterparty.
‘Settlement balances’
bond) is sold, purchased or otherwise closed out, and the date the asset is delivered by or to the entity (the settlement date) and
cash is received or paid.
‘Settlement risk’
one or more settlement obligations.
‘Significant Increase in Credit Risk (SICR)’
quantitative and qualitative assessments.
‘Slotting’
assessment of factors such as the financial strength of the counterparty. The requirements for the application of the Slotting
approach are detailed in BIPRU 4.5.
‘Sovereign exposure(s)’
‘Specific market risk’
change in an investment due to factors related to the issuer or, in the case of a derivative, the issuer of the underlying investment.
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‘Spread risk’
yields.
‘SRB ALRB’
The systemic risk buffer (SRB) additional leverage ratio buffer (ALRB) is firm specific requirement set by the PRA using its
powers under section 55M of the Financial Services and Markets Act (2000). Barclays is required to hold an amount of CET1 capital
that is equal to or greater than its ALRB.
‘Stage 1’
initial recognition. Stage 1 financial instruments are required to recognise a 12 month expected credit loss allowance.
‘Stage 2’
initial recognition. Stage 2 financial instruments are required to recognise a lifetime expected credit loss allowance.
‘Stage 3’
are required to recognise a lifetime expected credit loss allowance.
‘Standard & Poor’s’
‘Standby facilities, credit lines and other commitments’
conditions. Such commitments are either made for a fixed period, or have no specific maturity but are cancellable by the lender
subject to notice requirements.
‘Statutory’
the UK Companies Act 2006 and the requirements of International Financial Reporting Standards (IFRS).
‘Statutory return on average shareholders’ equity’
average shareholders’ equity.
‘STD’ / ‘Standardised Approach’
risk weights based on counterparty type and a credit rating provided by an External Credit Assessment Institute.
‘Sterling Over Night Index Average (SONIA)’
unsecured market administrated and calculated by the Bank of England.
‘Stress Testing’
have unfavourable effects on the Barclays Group (either financial or non-financial), assessing the Barclays Group’s ability to
withstand such changes, and identifying management actions to mitigate the impact.
‘Stressed Value at Risk (SVaR)’
An estimate of the potential loss arising from a 12-month period of significant financial stress
calibrated to 99% confidence level over a 10-day holding period.
‘Structured entity’
generally created to achieve a narrow and well defined objective with restrictions around their ongoing activities.
‘Structural hedge’ / ‘hedging’
medium/long term on positions that exist within the balance sheet and do not re-price in line with market rates. See also ‘Equity
structural hedge’ and ‘Product structural hedge’.
‘Structural model of default’
A model based on the assumption that an obligor will default when its assets are insufficient to cover
its liabilities.
‘Structured credit’
structured credit vehicles.
‘Structured finance/notes’
or index and sometimes offers capital protection if the value declines. Structured notes can be linked to equities, interest rates,
funds, commodities and foreign currency.
‘Sub-prime’
delinquencies and potentially more severe problems such as court judgments and bankruptcies. They may also display reduced
repayment capacity as measured by credit scores, high debt-to-income ratios, or other criteria indicating heightened risk of default.
‘Subordinated liabilities’
depositors and other creditors of the issuer.
‘Supranational bonds’
Bonds issued by an international organisation, where membership transcends national boundaries (e.g. the
European Union or World Trade Organisation).
‘Synthetic Securitisation Transactions’
Securitisation transactions effected through the use of derivatives.
‘Systemic Risk Buffer’
CET1 capital that may be required to be held as part of the Combined Buffer Requirement increasing the
capacity of UK banks to absorb stress and limiting the damage to the economy as a result of restricted lending.
Glossary of Terms
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‘Tangible net asset value’
and goodwill.
‘Tangible net asset value per share (TNAV)’
other equity instruments, less goodwill and intangible assets, by the number of issued ordinary shares.
‘Tangible shareholders’ equity’
the deduction of intangible assets and goodwill.
‘Term premium’
‘The Fundamental Review of the Trading Book (FRTB)’
on Banking Supervision as part of Basel III applicable to banks’ wholesale trading activities.
‘The Standardised Approach (TSA)’
Under the TSA, banks are required to hold regulatory capital for operational risk equal to the
annual average, calculated over a rolling three-year period, of the relevant income indicator (across all business lines), multiplied by
a supervisory defined percentage factor by business lines.
‘The three lines of defence’
The three lines of defence operating model enables Barclays to separate risk management activities
between those client facing areas of the Barclays Group and associated support functions responsible for identifying risk, operating
within applicable limits and escalating risk events (first line); colleagues in Risk and Compliance who establish the limits, rules and
constraints under which the first line operates and monitors their performance against those limits and constraints (second line);
and, colleagues in Internal Audit who provide assurance to the Board and Executive Management over the effectiveness of
governance, risk management and control over risks (third line). The Legal function does not sit in any of the three lines, but
supports them all. The Legal function is, however, subject to oversight from Risk and Compliance with respect to operational and
conduct risks.
‘Tier 1 capital’
‘Tier 1 capital ratio’
‘Tier 2 (T2) capita
l’
share premium accounts where qualifying conditions have been met.
‘Tier 2 (T2) securities’
‘Total capital ratio’
Total Regulatory capital as a percentage of RWAs.
‘Total Loss Absorbing Capacity (TLAC)’
A standard published by the FSB which is applicable to G-SIBs and requires a G-SIB to hold a
prescriptive minimum level of instruments and liabilities that should be readily available for bail-in within resolution to absorb
losses and recapitalise the institution.
‘Total outstanding balance’
In retail banking, total outstanding balance is defined as the gross month-end customer balances on all
accounts including accounts charged off to recoveries.
‘Total return swap’
and change in the capital value of the asset. The buyer of the protection in return receives a predetermined amount.
‘Total balances on forbearance programmes coverage ratio’
a percentage of balance in forbearance.
‘Traded Market Risk’
The risk of a reduction to earnings or capital due to volatility of trading book positions.
‘Trading book’
All positions in financial instruments and commodities held by an institution either with trading intent, or in order to
hedge positions held with trading intent.
‘Traditional Securitisation Transactions’
Securitisation transactions in which an underlying pool of assets generates cash flows to
service payments to investors.
‘Transitional’
transitional provisions set out in Part Ten of CRR.
‘Treasury and Capital Risk’
‘Twelve month expected credit losses’
date (or shorter period if the expected life is less than 12 months), weighted by the probability of said default occurring.
‘Twelve month PD’
‘Unencumbered’
‘United Kingdom (UK)’
‘UK Bank levy’
on a percentage of the chargeable equity and liabilities of the bank on its balance sheet date.
Glossary of Terms
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‘UK leverage exposure’
Is calculated as per the PRA rulebook, where the exposure calculation also includes the FPC’s
recommendation to allow banks to exclude claims on the central bank from the calculation of the leverage exposure measure, as
long as these are matched by deposits denominated in the same currency and of identical or longer maturity.
‘UK leverage ratio’
As per the PRA rulebook, means a bank’s tier 1 capital divided by its total exposure measure, with this ratio
expressed as a percentage.
‘Unfunded credit protection’
institution derives from the obligation of a third party to pay an amount in the event of the default of the borrower or the
occurrence of other specified credit events.
‘US Partner Portfolio’
retail and financial sectors.
‘US Residential Mortgages’
‘Valuation weighted Loan to Value (LTV) Ratio’
calculating marked to market LTVs derived by comparing total outstanding balance and the value of total collateral we hold against
these balances. Valuation weighted loan to value is calculated using the following formula: LTV = total outstandings in
portfolio/total property values of total outstandings in portfolio.
‘Value at Risk (VaR)’
level and within a specific timeframe.
‘Weighted off balance sheet commitments’
factors used in the Standardised Approach to credit risk.
‘Wholesale loans’ / ‘lending’
‘Write-off (gross)’
to try to recover the asset or it is deemed immaterial or full and final settlement is reached and the shortfall written off. In the
event of write-off, the customer balance is removed from the balance sheet and the impairment allowance held against the asset is
released. Net write-offs represent gross write-offs less post write-off recoveries.
‘Wrong-way risk’
Arises, in a trading exposure, when there is significant correlation between the underlying asset and the
counterparty, which in the event of default would lead to a significant mark to market loss. When assessing the credit exposure of a
wrong-way trade, analysts take into account the correlation between the counterparty and the underlying asset as part of the
sanctioning process.
Exhibit 99.2 – Capitalisation and Indebtedness
Barclays PLC
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The following table sets out the Group’s capitalisation, indebtedness and contingent liabilities on a consolidated basis, in
accordance with IFRS, as at 31 March 2020.
As at
31.03.20
m
Share Capital of Barclays PLC
Ordinary shares - issued and fully paid shares of £0.25 each
17,332
£m
Group equity
Called up share capital and share premium
4,607
Other equity instruments
10,871
Other reserves
6,166
Retained earnings
46,725
Total equity excluding non-controlling interests
68,369
Non-controlling interests
1,231
Total equity
69,600
Group indebtedness
Subordinated liabilities
19,595
Debt securities in issue
87,961
Total indebtedness
107,556
Total capitalisation and indebtedness
177,156
Group contingent liabilities and commitments
Guarantees and letters of credit pledged as collateral security
17,316
Performance guarantees, acceptances and endorsements
6,739
Total contingent liabilities
24,055
Documentary credits and other short-term trade related transactions
1,332
Standby facilities, credit lines and other commitments
320,471
Total commitments
321,803