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Barclays PLC (BARC)

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Friday 25 October, 2019

Barclays PLC

3rd Quarter Results

RNS Number : 0940R
Barclays PLC
25 October 2019
 

 

Barclays PLC

 

Q3 2019 Results Announcement

 

30 September 2019

 

Performance Highlights

 

 

Resilient performance delivering a year-to-date

Group return on tangible equity of 9.7% (excluding litigation and conduct)

 

·

The Group delivered a Q319 return on average tangible equity (RoTE) of 10.2%, resulting in a Q319 YTD RoTE of 9.7%1

·

The Group continues to target a >9% RoTE for 2019 and >10% for 20201. However, given global macroeconomic uncertainty and the current low interest rate environment, it has become more challenging to achieve these targets, particularly with respect to 2020

·

Continuing to improve returns on a sustainable basis remains a key priority for the Group, whilst also delivering attractive capital returns to shareholders and investing in key business growth initiatives

·

The strengthening of the USD/GBP foreign exchange rate in the third quarter, whilst increasing costs and impairment, provided a greater benefit to income and profits

 

Returns1

 

Group RoTE targets of >9% in 2019 and >10% in 2020

·

Group profit before tax of £4.9bn (Q318 YTD: £5.3bn) and earnings per share (EPS) of 19.7p (Q318 YTD: 21.6p)

·

Group Q319 YTD RoTE of 9.7% (Q318 YTD: 11.1%)

-

Barclays UK RoTE of 17.2% (Q318 YTD: 18.9%)

-

Barclays International RoTE of 10.4% (Q318 YTD: 11.6%), with a Corporate and Investment Bank (CIB) RoTE of 9.3% (Q318 YTD: 9.7%) and Consumer, Cards and Payments (CC&P) RoTE of 15.8% (Q318 YTD: 21.7%)

Cost efficiency

 

Cost: income ratio of <60% over time

·

Group operating expenses were stable at £10.1bn, resulting in a cost: income ratio of 62%1 (Q318 YTD: 62%) and positive jaws, reflecting cost efficiencies offset by continued investment in the business

·

Cost control remains a priority given the challenging income environment experienced in the first three quarters of the year

·

Group cost guidance unchanged; management expects to reduce 2019 costs below £13.6bn2

Capital and dividends

 

CET1 ratio target becomes c.13.5% following

discussions with regulators

on operational risk change

·

Common equity tier 1 (CET1) ratio of 13.4% (December 2018: 13.2%)

·

Following discussions with regulators, the Group has removed the operational risk Risk Weighted Assets (RWAs) floor which it had previously applied, resulting in a £14.2bn reduction in total RWAs. This increased the CET1 ratio by c.60bps. As a result, the target CET1 ratio has been revised to c.13.5%. The total capital requirement for operational risk remains unchanged

·

The Group paid a half year dividend of 3p which is expected to represent, under normal circumstances, around one-third of the total dividend for the year

 

·

Group profit before tax was £3.3bn (Q318 YTD: £3.1bn) and, excluding litigation and conduct, was £4.9bn (Q318 YTD: £5.3bn). The cost: income ratio was 62% (Q318 YTD: 62%), with Barclays International income up 4%. Credit impairment charges increased to £1.4bn (Q318 YTD: £0.8bn), due to the non-recurrence of favourable US macroeconomic scenario updates and single name recoveries in Q318 YTD. Credit metrics remained stable across both secured and unsecured lending

·

Barclays UK profit before tax was £0.4bn (Q318 YTD: £1.6bn). This included an additional provision for Payment Protection Insurance (PPI) of £1.4bn (Q318 YTD: £0.4bn). Excluding litigation and conduct, profit before tax was £1.9bn (Q318 YTD: £2.0bn). Income declined 2%, as ongoing margin pressure was partially offset by continued growth in mortgages and deposits. Operating expenses were stable as cost efficiency savings were offset by planned digital investment and inflation

·

Barclays International profit before tax was £3.5bn (Q318 YTD: £3.6bn) driven by 4% increases in both CIB and CC&P income. Operating expenses increased 1% due to continued investment in the business. Credit impairment charges increased from £0.3bn to £0.8bn, due to the non-recurrence of favourable US macroeconomic scenario updates and single name recoveries in Q318 YTD

·

Tangible net asset value (TNAV) per share was 274p (December 2018: 262p) as 10.4p of statutory EPS (which included the effect of the additional provision for PPI of 8p per share in Q319) and positive net reserve movements, were partially offset by dividend payments totalling 7p per share

 

1

Excluding litigation and conduct, with returns targets based on a Group CET1 ratio of c.13.5%.

2

Excluding litigation and conduct, calculated using a USD/GBP FX rate of 1.27 and subject to foreign currency movements.

 

James E Staley, Group Chief Executive Officer, said:

 

"For the year to September our Group RoTE stands at 9.7%, including a 10.2% return in the third quarter.

 

Profit before tax was just under £5bn, excluding litigation and conduct, and earnings per share were 19.7 pence for the nine months.

 

These represent another set of consistent and resilient results, and they show the benefits of our diversified model - one which allows us to weather today's macro headwinds, and grow our businesses and profitability over time.

 

In Barclays UK, the business has delivered a robust year-to-date RoTE of 17.2%, including 21.2% in the third quarter, through mortgage and deposit balance growth.

 

The CIB has produced an RoTE of 9.3% for the first nine months, including 9.2% in the third quarter. This reflects a strong performance in Markets, with income up in the quarter by 13%, and in Banking, where income rose by 33%.

 

Our CC&P business produced an RoTE of 15.8%, and we are targeting further growth in US cards, with a particular focus on capturing new partnership opportunities, a core strength of the Barclays franchise in the States.

 

As we continue to invest in our digital capabilities across the bank, management's focus on cost control remains a priority. Our cost to income ratio was stable at 62%, and we continue to expect to see positive jaws across the Group over the remainder of the year, and for the full year.

 

These results show we remain on track to achieve our target of a group return of greater than 9% for 2019. We continue to target an RoTE of greater than 10% in 2020, though we acknowledge that the outlook for next year is unquestionably more challenging now than it appeared a year ago, in particular given the uncertainty around the UK economy and the interest rate environment.

 

Despite the impact to profitability of the £1.4bn PPI provision, our CET1 ratio of 13.4% continues to be within our target, which is revised to c.13.5%, now that our operational risk RWAs are accounted for more consistently with UK peers."

 

James E Staley, Group Chief Executive Officer

 

Barclays Group results

 

for the nine months ended

30.09.19

30.09.18

 

 

£m

£m

% Change

Total income

16,331

16,063

2

Credit impairment charges and other provisions

(1,389)

(825)

(68)

Net operating income

14,942

15,238

(2)

Operating expenses

(10,051)

(10,003)

-

Litigation and conduct

(1,682)

(2,147)

22

Total operating expenses

(11,733)

(12,150)

3

Other net income

51

32

59

Profit before tax

3,260

3,120

4

Tax charge1

(814)

(836)

3

Profit after tax

2,446

2,284

7

Non-controlling interests

(38)

(151)

75

Other equity instrument holders

(628)

(522)

(20)

Attributable profit

1,780

1,611

10

 

 

 

 

Performance measures

 

 

 

Return on average tangible shareholders' equity

5.1%

4.9%

 

Average tangible shareholders' equity (£bn)

 46.6

 44.1

 

Cost: income ratio

72%

76%

 

Loan loss rate (bps)

53

33

 

Basic earnings per share

10.4p

9.4p

 

Dividend per share

3.0p

2.5p

 

  

 

 

 

Performance measures excluding litigation and conduct2

 

 

 

Profit before tax

4,942

5,267

(6)

Attributable profit

3,391

3,685

(8)

Return on average tangible shareholders' equity

9.7%

11.1%

 

Cost: income ratio

62%

62%

 

Basic earnings per share

19.7p

21.6p

 

 

 

 

 

 

As at 30.09.19

As at 31.12.18

As at 30.09.18

Balance sheet and capital management3

£bn

£bn

£bn

Tangible net asset value per share

274p

262p

260p

Common equity tier 1 ratio

13.4%

13.2%

13.2%

Common equity tier 1 capital

41.9

41.1

41.7

Risk weighted assets

313.3

311.9

316.2

Average UK leverage ratio

4.6%

4.5%

4.6%

UK leverage ratio

4.8%

5.1%

4.9%

 

 

 

 

Funding and liquidity

 

 

 

Group liquidity pool (£bn)

226

227

213

Liquidity coverage ratio

151%

169%

161%

Loan: deposit ratio

82%

83%

83%

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to Additional Tier 1 (AT1) instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. Comparatives have been restated, reducing the tax charge for Q318 year to date by £141m. This change does not impact EPS or return on average tangible shareholders' equity.

2

Refer to pages 36 to 45 for further information and calculations of performance measures excluding litigation and conduct.

3

Capital, RWAs and leverage measures are calculated applying the transitional arrangements of the Capital Requirements Regulation (CRR) as amended by the Capital Requirements Regulation II (CRR II) applicable as at the reporting date. This includes IFRS 9 transitional arrangements. For more information on the implementation of CRR II see page 25.

4

The fully loaded CET1 ratio was 13.0%, with £40.7bn of CET1 capital and £313.1bn of RWAs, calculated without applying the transitional arrangements of the CRR as amended by CRR II applicable as at the reporting date.

 

Group Finance Director's Review

 

Group performance

 

·

Profit before tax was £3,260m (Q318 YTD: £3,120m), including an additional provision for PPI of £1,400m (Q318 YTD: £400m) in Q319. Excluding litigation and conduct, profit before tax was £4,942m (Q318 YTD: £5,267m), with higher income and stable operating expenses offset by increased credit impairment charges. The 6% appreciation of average USD against GBP positively impacted income and profits and adversely impacted credit impairment charges and operating expenses

·

Total income increased 2% to £16,331m. Barclays UK income decreased 2% as ongoing margin pressure and continued reduced risk appetite in UK cards were partially offset by mortgage and deposit balance growth. Barclays International income was up 4%, across both CIB and CC&P. The higher CIB income was due to positive performance in FICC, Banking fees and Transaction banking, partially offset by reduced client activity in Equities and a reduction in Corporate lending. The higher CC&P income reflected balance growth in US cards and partnership growth in merchant acquiring

·

Credit impairment charges increased to £1,389m (Q318 YTD: £825m). Economic scenarios were updated in Q319, as part of a review which is conducted at least annually. The prior year benefitted from favourable US macroeconomic scenario updates and single name recoveries, whilst Q319 impairment reflects a c.£60m net charge from revised scenarios, impacting primarily the Group's UK and US cards portfolios. Credit metrics remained stable across both secured and unsecured lending, reflecting the continued prudent management of credit risk

·

Operating expenses were stable at £10,051m, as cost efficiencies were offset by continued investment in the business. The cost: income ratio, excluding litigation and conduct, was stable at 62% (Q318 YTD: 62%)

·

The effective tax rate was 25.0%. Excluding litigation and conduct, the underlying effective tax rate was 17.9%

·

Attributable profit was £1,780m (Q318 YTD: £1,611m). Excluding litigation and conduct, attributable profit was £3,391m (Q318 YTD: £3,685m), generating a RoTE of 9.7% (Q318 YTD: 11.1%) and EPS of 19.7p (Q318 YTD: 21.6p)

 

Barclays UK

 

·

Profit before tax, excluding litigation and conduct, decreased 7% to £1,899m. RoTE was robust at 17.2% (Q318 YTD: 18.9%), reflecting the resilience of the Barclays UK business in a challenging income environment. Including litigation and conduct charges of £1,524m (Q318 YTD: £468m), profit before tax was £375m (Q318 YTD: £1,566m)

·

Total income decreased 2% to £5,394m due to a 2% decrease in net interest income to £4,410m

 

-

Personal Banking income decreased 2% to £2,945m, reflecting ongoing mortgage margin pressure, partially offset by mortgage and deposit balance growth and improved liability margins

 

-

Barclaycard Consumer UK income decreased 8% to £1,459m reflecting a continued reduced risk appetite and reduced borrowing by customers, which resulted in a lower level of interest earning lending (IEL) balances

 

-

Business Banking income increased 6% to £990m driven by deposit and lending growth, improved liability margins and the non-recurrence of client remediation in Q318 YTD

 

-

Net interest margin decreased 14bps to 3.10%, reflecting increased refinancing activity by mortgage customers, lower IEL balances in UK cards, and the mix effect from growth in secured lending

·

Credit impairment charges decreased 2% to £522m, primarily reflecting an improved risk profile in UK cards and releases of single name exposures in Business Banking, partially offset by the impact of UK macroeconomic scenario updates of c.£30m, primarily impacting the UK cards portfolio. The 30 and 90 day arrears rates in UK cards decreased to 1.7% (Q318: 1.8%) and 0.8% (Q318: 0.9%) respectively

·

Operating expenses were stable at £2,973m (Q318 YTD: £2,961m) as cost efficiencies were offset by planned digital investment in the business and inflation. The cost: income ratio, excluding litigation and conduct, was 55% (Q318 YTD: 54%)

·

RWAs increased to £76.8bn (December 2018: £75.2bn) including the recognition of property leases following the implementation of IFRS 16, growth in Mortgages and Business Banking and a change in the mix of assets in the liquidity pool

 

Barclays International

 

·

Profit before tax, excluding litigation and conduct, decreased 4% to £3,508m with a RoTE of 10.4% (Q318 YTD: 11.6%), reflecting returns in the CIB of 9.3% (Q318 YTD: 9.7%) and CC&P of 15.8% (Q318 YTD: 21.7%)

·

The 6% appreciation of average USD against GBP positively impacted income and profits, and adversely impacted credit impairment charges and operating expenses

·

Total income increased to £11,223m (Q318 YTD: £10,805m)

 

-

CIB income increased 4% to £7,917m

 

 

-

Within Markets, FICC income increased 15% to £2,638m reflecting a strong performance in rates and growth in securitised products. Equities income decreased 11% to £1,478m driven by equity derivatives, which were impacted by reduced client activity. Included in Markets was a £126m gain related to the Tradeweb position and a net loss of £40m due to the impact of treasury operations and hedging counterparty risk

 

 

-

Banking fees income increased 3% to £1,955m driven by an increase in advisory fees, partially offset by lower debt underwriting fees reflecting a reduced Banking fee pool1. However, Barclays share of the global Banking fee pool has increased since FY18, to 4.4%1

 

 

-

Within Corporate, Transaction banking income increased 6% to £1,283m reflecting growth in deposits. This was offset by a decrease in Corporate lending income to £563m (Q318 YTD: £635m). Excluding mark-to-market movements on loan hedges, Corporate lending income was broadly stable

 

-

CC&P income increased 4% to £3,306m reflecting balance growth in the US cards business and partnership growth in merchant acquiring

·

Credit impairment charges increased to £844m (Q318 YTD: £304m)

 

-

CIB credit impairment charges increased to £127m (Q318 YTD: release of £185m) due to the non-recurrence of favourable macroeconomic scenario updates and single name recoveries in Q318 YTD

 

-

CC&P credit impairment charges increased to £717m (Q318 YTD: £489m) due to the non-recurrence of favourable US macroeconomic scenario updates in Q318 YTD. Q319 included the impact of macroeconomic scenario updates, predominantly in the US, of c.£30m. Credit metrics decreased, with US cards 30 and 90 day arrears of 2.6% (Q318: 2.7%) and 1.3% (Q318: 1.4%) respectively

·

Operating expenses increased 1% to £6,923m

 

-

CIB operating expenses decreased 1% to £5,191m as cost efficiencies were partially offset by continued investment in the business

 

-

CC&P operating expenses increased 7% to £1,732m driven by continued investment across the businesses

·

RWAs increased to £223.1bn (December 2018: £210.7bn), driven by an increase in CIB activity and appreciation of USD against GBP

 

Head Office

 

·

Loss before tax of £593m (Q318 YTD: £2,006m), included litigation and conduct charges of £128m (Q318 YTD: £1,585m), reflecting the non-recurrence of the Residential Mortgage Backed Securities settlement in Q318 YTD

·

Total income was an expense of £286m (Q318 YTD: £262m) which included legacy capital instrument funding costs, treasury items and hedge accounting expenses, partially offset by the recognition of dividends on Barclays stake in Absa Group Limited. Income expense increased reflecting the non-recurrence of a £155m one-off gain from the settlement of receivables relating to the Lehman Brothers acquisition in Q318 YTD, partially offset by lower net expenses from treasury operations and hedge accounting

·

Operating expenses, excluding litigation and conduct, were £155m (Q318 YTD: £159m)

·

RWAs decreased to £13.4bn (December 2018: £26.0bn) mainly driven by the removal of the Group's operational risk RWAs floor, partially offset by the recognition of property leases following the implementation of IFRS 16

 

1

Data Source: Dealogic, for the period covering 1 January to 30 September 2019.

 

Group capital and leverage

 

·

The Group's CET1 ratio increased to 13.4% (December 2018: 13.2%). The increase was primarily driven by a reduction in the Group's RWAs due to the removal of the operational risk floor effective from 30 September 2019

 

 

-

CET1 capital increased by £0.8bn to £41.9bn. This was driven by underlying profit generation of £4.0bn partially offset by dividends paid and foreseen of £1.8bn, the additional provision for PPI of £1.4bn, pension deficit reduction contribution payments of £0.5bn and a loss on the redemption of Additional Tier 1 (AT1) securities of £0.4bn

 

 

-

RWAs increased by £1.4bn to £313.3bn primarily driven by an increase in CIB, offset by the reduction in the Group's operational risk RWAs

·

The Group previously applied a floor to its Pillar 1 capital requirements for operational risk, which was set by reference to the Group's total operational risk RWAs as at 31 December 2017 of £56.7bn. Following discussions with regulators, the Group has removed this floor with effect from 30 September 2019, thereby reducing RWAs by £14.2bn and increasing the Group's CET1 ratio by c.60bps

·

Following the removal of the Pillar 1 operational risk floor, the Group has received a new Pillar 2A requirement (as per the Prudential Regulation Authority's (PRA's) Individual Capital Requirement) effective from 24 October 2019. This has increased the Pillar 2A CET1 requirement by c.35bps to 3.0% and the Group's overall capital requirement from 11.7% to 12.0%. The total capital requirement for operational risk remains unchanged. As a result, the Group is targeting a CET1 ratio of c.13.5% going forward

·

The average UK leverage ratio increased to 4.6% (December 2018: 4.5%) primarily driven by an increase in Tier 1 (T1) capital, which included the accretion of CET1 capital and a net increase of AT1 capital, partially offset by an increase in exposure to £1,171bn (December 2018: £1,110bn). The UK leverage ratio decreased to 4.8% (December 2018: 5.1%)

 

Group funding and liquidity

 

·

The liquidity pool was stable at £226bn (December 2018: £227bn), reflecting the Group's prudent liquidity management approach. The liquidity coverage ratio (LCR) remained well above the 100% regulatory requirement at 151% (December 2018: 169%), equivalent to a surplus of £77bn (December 2018: £90bn). The LCR and surplus have been managed down through the course of the year, supporting increased business funding requirements while maintaining a conservative liquidity position

·

Wholesale funding outstanding, excluding repurchase agreements, was £162bn (December 2018: £154bn). The Group issued £8.2bn equivalent of minimum requirement for own funds and eligible liabilities (MREL) instruments year-to-date from Barclays PLC (the Parent company). The Group is well advanced in its MREL issuance plans, with a Barclays PLC MREL ratio of 30.4% as at 30 September 2019 relative to an estimated requirement including requisite buffers of 31.2% by 1 January 2022. This increased from 29.9% as at 30 June 2019 due to the revision of the Group's Pillar 2A requirement, following the removal of the Group's operational risk RWAs floor

 

Other matters

 

·

The Group called three AT1 instruments eligible for call on 15 September 2019. The redemptions resulted in a decrease of 13bps to the CET1 ratio due to two of these instruments being held on the balance sheet at historical FX rates

·

The risks associated with the process of the UK withdrawal from the European Union continue to be closely monitored. Impairment stock as at 30 September 2019 includes an adjustment of £150m representing the anticipated impact of economic uncertainty in the UK

 

Payment Protection Insurance

 

·

Following the increase to the provision of £1.4bn and provision utilisation of £350m during the third quarter, the Group held a provision of £1.4bn against the cost of PPI redress and associated processing costs as at 30 September 2019. The Group has recognised £11bn of cumulative provisions to date

 

The provision increase at Q319 is attributable to the exceptional level of claims and information requests from customers and Claims Management Companies (CMCs) ahead of the Financial Conduct Authority (FCA) complaint deadline of 29 August 2019 and enquiries from the Official Receiver on behalf of bankrupt individuals

 

At the end of Q319, there were in excess of 2m claims, enquiries and information requests at various stages of processing. The increase in provision has been calculated by applying a number of assumptions to this population, which are based on limited observations from processing completed to date, historical experience and management judgement. These assumptions include the proportion of claims and information requests expected to be valid. The provision estimate is more sensitive to this assumption given the volumes  

 

The following table outlines key assumptions regarding the proportion of valid claims used in the provision calculation as at 30 September 2019 and a sensitivity analysis illustrating the impact on the provision, if the assumptions prove too high or low

 

 

Historically Observed

 

Current Assumption

 

Sensitivity £m

 

Valid %

 

Valid %

 

+/- 1% valid rate

Claims Received

30% - 40%

 

30%1

 

11

Information Requests Received

5% - 11%

 

8%

 

76

 

·

There is additional uncertainty surrounding the legal position in relation to enquiries received from the Official Receiver. Uphold rates and average claim redress may differ from that experienced more generally, given the particular circumstances of this population

·

The Group expects the level of uncertainty to reduce during Q419 as a greater proportion of claims, enquiries and information requests are processed. Given the degree of sensitivity illustrated above, it is possible that the eventual cumulative provision may differ from the current estimate

 

Outlook and guidance

 

·

The Group continues to target a >9% RoTE for 2019 and >10% for 20202. However, given global macroeconomic uncertainty and the current low interest rate environment, it has become more challenging to achieve these targets, particularly with respect to 2020

·

Continuing to improve returns on a sustainable basis remains a key priority for the Group, whilst also delivering attractive capital returns to shareholders and investing in key business growth initiatives 

·

Group cost guidance is unchanged, with management expecting to reduce 2019 costs below £13.6bn3

·

The Group expects to be at its revised target CET1 ratio of c.13.5% at year-end

 

Tushar Morzaria, Group Finance Director

 

         1

      Based on recently observed data, August and September 2019.

         2

      Excluding litigation and conduct, with returns targets based on a Group CET1 ratio of c.13.5%.

         3

      Excluding litigation and conduct, calculated using a USD/GBP FX rate of 1.27 and subject to foreign currency movements.

 

Results by Business

 

Barclays UK

Nine months ended

Nine months ended

 

30.09.19

30.09.18

 

Income statement information

£m

£m

% Change

Net interest income

4,410

4,515

(2)

Net fee, commission and other income

984

1,005

(2)

Total income

5,394

5,520

(2)

Credit impairment charges and other provisions

(522)

(530)

2

Net operating income

4,872

4,990

(2)

Operating expenses

(2,973)

(2,961)

-

Litigation and conduct

(1,524)

(468)

 

Total operating expenses

(4,497)

(3,429)

(31)

Other net income

-

5

 

Profit before tax

375

1,566

(76)

Attributable (loss)/profit1

(157)

957

 

 

 

 

 

 

As at 30.09.19

As at 31.12.18

As at 30.09.18

Balance sheet information

£bn

£bn

£bn

Loans and advances to customers at amortised cost

193.2

187.6

186.7

Total assets

257.9

249.7

252.0

Customer deposits at amortised cost

203.3

197.3

195.8

Loan: deposit ratio

97%

96%

96%

Risk weighted assets

76.8

75.2

74.8

Period end allocated tangible equity

10.4

10.2

10.1

 

 

 

 

 

Nine months ended

Nine months ended

 

Performance measures

30.09.19

30.09.18

 

Return on average allocated tangible equity

(2.0%)

12.7%

 

Average allocated tangible equity (£bn)

10.4

10.0

 

Cost: income ratio

83%

62%

 

Loan loss rate (bps)

35

37

 

Net interest margin

3.10%

3.24%

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct2

£m

£m

% Change

Profit before tax

1,899

2,034

(7)

Attributable profit

1,332

1,417

(6)

Return on average allocated tangible equity

17.2%

18.9%

 

Cost: income ratio

55%

54%

 

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to AT1 instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. Comparatives have been restated. This change does not impact EPS or return on average tangible shareholders' equity.

2

Refer to pages 36 to 45 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays UK

Nine months ended

Nine months ended

 

30.09.19

30.09.18

 

Analysis of total income

£m

£m

% Change

Personal Banking

2,945

3,008

(2)

Barclaycard Consumer UK

1,459

1,582

(8)

Business Banking

990

930

6

Total income

5,394

5,520

(2)

 

 

 

 

Analysis of credit impairment charges and other provisions

 

 

 

Personal Banking

(124)

(129)

4

Barclaycard Consumer UK

(364)

(340)

(7)

Business Banking

(34)

(61)

44

Total credit impairment charges and other provisions

(522)

(530)

2

 

 

 

 

 

As at 30.09.19

As at 31.12.18

As at 30.09.18

Analysis of loans and advances to customers at amortised cost

£bn

£bn

£bn

Personal Banking

150.1

146.0

145.4

Barclaycard Consumer UK

14.9

15.3

15.3

Business Banking

28.2

26.3

26.0

Total loans and advances to customers at amortised cost

193.2

187.6

186.7

 

 

 

 

Analysis of customer deposits at amortised cost

 

 

 

Personal Banking

157.9

154.0

153.4

Barclaycard Consumer UK

-

-

-

Business Banking

45.4

43.3

42.4

Total customer deposits at amortised cost

203.3

197.3

195.8

 

Barclays International

Nine months ended

Nine months ended

 

30.09.19

30.09.18

 

Income statement information

£m

£m

% Change

Net interest income

2,976

2,831

5

Net trading income

3,270

3,613

(9)

Net fee, commission and other income

4,977

4,361

14

Total income

11,223

10,805

4

Credit impairment charges and other provisions

(844)

(304)

 

Net operating income

10,379

10,501

(1)

Operating expenses

(6,923)

(6,883)

(1)

Litigation and conduct

(30)

(94)

68

Total operating expenses

(6,953)

(6,977)

-

Other net income

52

36

44

Profit before tax

3,478

3,560

(2)

Attributable profit1

2,419

2,620

(8)

 

 

 

 

 

As at 30.09.19

As at 31.12.18

As at 30.09.18

Balance sheet information

£bn

£bn

£bn

Loans and advances at amortised cost

138.1

127.2

132.4

Trading portfolio assets

119.4

104.0

124.6

Derivative financial instrument assets

286.0

222.1

214.8

Financial assets at fair value through the income statement

158.0

144.7

147.8

Cash collateral and settlement balances

112.5

74.3

94.3

Other assets

195.6

189.8

186.3

Total assets

1,009.6

862.1

900.2

Deposits at amortised cost

217.6

197.2

200.3

Derivative financial instrument liabilities

283.3

219.6

213.7

Loan: deposit ratio

63%

65%

66%

Risk weighted assets

223.1

210.7

214.6

Period end allocated tangible equity

31.4

29.9

30.2

 

 

 

 

 

Nine months ended

Nine months ended

 

Performance measures

30.09.19

30.09.18

 

Return on average allocated tangible equity

10.3%

11.3%

 

Average allocated tangible equity (£bn)

31.2

30.9

 

Cost: income ratio

62%

65%

 

Loan loss rate (bps)

80

30

 

Net interest margin

4.00%

4.15%

 

 

 

 

 

Performance measures excluding litigation and conduct2

£m

£m

% Change

Profit before tax

3,508

3,654

(4)

Attributable profit

2,445

2,692

(9)

Return on average allocated tangible equity

10.4%

11.6%

 

Cost: income ratio

62%

64%

 

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to AT1 instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. Comparatives have been restated. This change does not impact EPS or return on average tangible shareholders' equity.

2

Refer to pages 36 to 45 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International

 

 

 

Corporate and Investment Bank

Nine months ended

Nine months ended

 

30.09.19

30.09.18

 

Income statement information

£m

£m

% Change

FICC

2,638

2,293

15

Equities

1,478

1,662

(11)

Markets

4,116

3,955

4

Banking fees

1,955

1,906

3

Corporate lending

563

635

(11)

Transaction banking

1,283

1,215

6

Corporate

1,846

1,850

-

Other

-

(97)

 

Total income

7,917

7,614

4

Credit impairment (charges)/releases and other provisions

(127)

185

 

Net operating income

7,790

7,799

-

Operating expenses

(5,191)

(5,258)

1

Litigation and conduct

(30)

(45)

33

Total operating expenses

(5,221)

(5,303)

2

Other net income

27

12

 

Profit before tax

2,596

2,508

4

Attributable profit1

1,787

1,865

(4)

 

 

 

 

 

As at 30.09.19

As at 31.12.18

As at 30.09.18

Balance sheet information

£bn

£bn

£bn

Loans and advances at amortised cost

95.8

86.4

93.3

Trading portfolio assets

119.3

104.0

124.5

Derivative financial instrument assets

286.0

222.1

214.8

Financial assets at fair value through the income statement

157.3

144.2

147.3

Cash collateral and settlement balances

111.6

73.4

93.3

Other assets

171.5

160.4

153.8

Total assets

941.5

790.5

827.0

Deposits at amortised cost

152.1

136.3

137.6

Derivative financial instrument liabilities

283.2

219.6

213.7

Risk weighted assets

184.9

170.9

175.9

 

 

 

 

 

Nine months ended

Nine months ended

 

Performance measures

30.09.19

30.09.18

 

Return on average allocated tangible equity

9.2%

9.6%

 

Average allocated tangible equity (£bn)

25.9

26.0

 

Cost: income ratio

66%

70%

 

 

 

 

 

Performance measures excluding litigation and conduct2

£m

£m

% Change

Profit before tax

2,626

2,553

3

Attributable profit

1,813

1,901

(5)

Return on average allocated tangible equity

9.3%

9.7%

 

Cost: income ratio

66%

69%

 

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to AT1 instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. Comparatives have been restated. This change does not impact EPS or return on average tangible shareholders' equity.

2

Refer to pages 36 to 45 for more information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International

 

 

 

Consumer, Cards and Payments

Nine months ended

Nine months ended

 

30.09.19

30.09.18

 

Income statement information

£m

£m

% Change

Total income

3,306

3,191

4

Credit impairment charges and other provisions

(717)

(489)

(47)

Net operating income

2,589

2,702

(4)

Operating expenses

(1,732)

(1,625)

(7)

Litigation and conduct

-

(49)

 

Total operating expenses

(1,732)

(1,674)

(3)

Other net income

25

24

4

Profit before tax

882

1,052

(16)

Attributable profit1

632

755

(16)

 

 

 

 

 

As at 30.09.19

As at 31.12.18

As at 30.09.18

Balance sheet information

£bn

£bn

£bn

Loans and advances at amortised cost

42.3

40.8

39.1

Total assets

68.1

71.6

73.2

Deposits at amortised cost

65.5

60.9

62.7

Risk weighted assets

38.2

39.8

38.7

 

 

 

 

 

Nine months ended

Nine months ended

 

Performance measures

30.09.19

30.09.18

 

Return on average allocated tangible equity

15.8%

20.7%

 

Average allocated tangible equity (£bn)

5.3

4.9

 

Cost: income ratio

52%

52%

 

Loan loss rate (bps)

213

156

 

 

 

 

 

Performance measures excluding litigation and conduct2

£m

£m

% Change

Profit before tax

882

1,101

(20)

Attributable profit

632

791

(20)

Return on average allocated tangible equity

15.8%

21.7%

 

Cost: income ratio

52%

51%

 

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to AT1 instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. Comparatives have been restated. This change does not impact EPS or return on average tangible shareholders' equity.

2

Refer to pages 36 to 45 for more information and calculations of performance measures excluding litigation and conduct.

 

Head Office

Nine months ended

Nine months ended

 

30.09.19

30.09.18

 

Income statement information

£m

£m

% Change

Net interest income

(323)

(580)

44

Net fee, commission and other income

37

318

(88)

Total income

(286)

(262)

(9)

Credit impairment (charges)/releases and other provisions

(23)

9

 

Net operating income

(309)

(253)

(22)

Operating expenses

(155)

(159)

3

Litigation and conduct

(128)

(1,585)

92

Total operating expenses

(283)

(1,744)

84

Other net expenses

(1)

(9)

89

Loss before tax

(593)

(2,006)

70

Attributable loss1

(482)

(1,966)

75

 

 

 

 

 

As at 30.09.19

As at 31.12.18

As at 30.09.18

Balance sheet information

£bn

£bn

£bn

Total assets

22.9

21.5

18.6

Risk weighted assets

13.4

26.0

26.8

Period end allocated tangible equity

5.5

4.9

4.2

 

 

 

 

 

Nine months ended

Nine months ended

 

Performance measures

30.09.19

30.09.18

 

Average allocated tangible equity (£bn)

5.0

3.2

 

 

 

 

 

Performance measures excluding litigation and conduct2

£m

£m

% Change

Loss before tax

(465)

(421)

(10)

Attributable loss

(386)

(424)

9

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to AT1 instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. Comparatives have been restated. This change does not impact EPS or return on average tangible shareholders' equity.

2

Refer to pages 36 to 45 for further information and calculations of performance measures excluding litigation and conduct.

 

Quarterly Results Summary

 

Barclays Group

 

 

 

 

 

 

 

 

 

 

 

Q319

Q219

Q119

 

Q418

Q318

Q218

Q118

 

Q417

Income statement information

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Net interest income

2,445

2,360

2,258

 

2,296

2,388

2,190

2,188

 

2,272

Net fee, commission and other income

3,096

3,178

2,994

 

2,777

2,741

3,386

3,170

 

2,750

Total income

5,541

5,538

5,252

 

5,073

5,129

5,576

5,358

 

5,022

Credit impairment charges and other provisions

(461)

(480)

(448)

 

(643)

(254)

(283)

(288)

 

(573)

Net operating income

5,080

5,058

4,804

 

4,430

4,875

5,293

5,070

 

4,449

Operating costs

(3,293)

(3,501)

(3,257)

 

(3,624)

(3,329)

(3,310)

(3,364)

 

(3,621)

UK bank levy

-

-

-

 

(269)

-

-

-

 

(365)

Operating expenses

(3,293)

(3,501)

(3,257)

 

(3,893)

(3,329)

(3,310)

(3,364)

 

(3,986)

Guaranteed Minimum Pensions (GMP) charge

-

-

-

 

(140)

-

-

-

 

-

Litigation and conduct

(1,568)

(53)

(61)

 

(60)

(105)

(81)

(1,961)

 

(383)

Total operating expenses

(4,861)

(3,554)

(3,318)

 

(4,093)

(3,434)

(3,391)

(5,325)

 

(4,369)

Other net income/(expenses)

27

27

(3)

 

37

20

(7)

19

 

13

Profit/(loss) before tax

246

1,531

1,483

 

374

1,461

1,895

(236)

 

93

Tax charge1

(269)

(297)

(248)

 

(83)

(192)

(386)

(258)

 

(1,089)

(Loss)/profit after tax

(23)

1,234

1,235

 

291

1,269

1,509

(494)

 

(996)

Non-controlling interests

(4)

(17)

(17)

 

(75)

(43)

(55)

(53)

 

(68)

Other equity instrument holders

(265)

(183)

(180)

 

(230)

(176)

(175)

(171)

 

(181)

Attributable (loss)/profit1

(292)

1,034

1,038

 

(14)

1,050

1,279

(718)

 

(1,245)

 

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

 

Return on average tangible shareholders' equity

(2.4%)

9.0%

9.2%

 

(0.1%)

9.4%

11.8%

(6.5%)

 

(10.3%)

Average tangible shareholders' equity (£bn)

48.4

46.2

45.2

 

44.3

44.6

43.5

44.2

 

48.1

Cost: income ratio

88%

64%

63%

 

81%

67%

61%

99%

 

87%

Loan loss rate (bps)2

52

56

54

 

77

30

35

36

 

56

Basic (loss)/earnings per share

(1.7p)

6.0p

6.1p

 

(0.1p)

6.1p

7.5p

(4.2p)

 

(7.3p)

 

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct3

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Profit before tax

1,814

1,584

1,544

 

434

1,566

1,976

1,725

 

476

Attributable profit/(loss)

1,233

1,074

1,084

 

48

1,135

1,338

1,212

 

(894)

Return on average tangible shareholders' equity

10.2%

9.3%

9.6%

 

0.4%

10.2%

12.3%

11.0%

 

(7.4%)

Cost: income ratio

59%

63%

62%

 

79%

65%

59%

63%

 

79%

Basic earnings/(loss) per share

7.2p

6.3p

6.3p

 

0.3p

6.6p

7.8p

7.1p

 

(5.3p)

 

 

 

 

 

 

 

 

 

 

 

Balance sheet and capital management4

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Total assets

1,290.4

1,232.8

1,193.5

 

1,133.3

1,170.8

1,149.6

1,142.2

 

1,133.2

Tangible net asset value per share

274p

275p

266p

 

262p

260p

259p

251p

 

276p

Common equity tier 1 ratio

13.4%

13.4%

13.0%

 

13.2%

13.2%

13.0%

12.7%

 

13.3%

Common equity tier 1 capital

41.9

42.9

41.4

 

41.1

41.7

41.4

40.2

 

41.6

Risk weighted assets

313.3

319.1

319.7

 

311.9

316.2

319.3

317.9

 

313.0

Average UK leverage ratio

4.6%

4.7%

4.6%

 

4.5%

4.6%

4.6%

4.6%

 

4.9%

Average UK leverage exposure

1,171.2

1,134.6

1,105.5

 

1,110.0

1,119.0

1,081.8

1,089.9

 

1,044.6

UK leverage ratio

4.8%

5.1%

4.9%

 

5.1%

4.9%

4.9%

4.8%

 

5.1%

UK leverage exposure

1,099.8

1,079.4

1,065.0

 

998.6

1,063.5

1,030.1

1,030.8

 

984.7

 

 

 

 

 

 

 

 

 

 

 

Funding and liquidity

 

 

 

 

 

 

 

 

 

 

Group liquidity (£bn)

226

238

232

 

227

213

214

207

 

220

Liquidity coverage ratio

151%

156%

160%

 

169%

161%

154%

147%

 

154%

Loan: deposit ratio

82%

82%

80%

 

83%

83%

83%

84%

 

81%

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to AT1 instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. Comparatives have been restated. This change does not impact EPS or return on average tangible shareholders' equity.

2

Prior to Q118 comparatives calculated based on gross loans and advances at amortised cost before the balance sheet presentation change and IAS 39 impairment charge.

3

Refer to pages 36 to 45 for further information and calculations of performance measures excluding litigation and conduct.

4

Capital, RWAs and leverage measures 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. For more information on the implementation of CRR II see page 25

 

Quarterly Results by Business

 

Barclays UK

 

 

 

 

 

 

 

 

 

 

 

Q319

Q219

Q119

 

Q418

Q318

Q218

Q118

 

Q417

Income statement information

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Net interest income

1,503

1,438

1,469

 

1,513

1,529

1,493

1,493

 

1,540

Net fee, commission and other income

343

333

308

 

350

367

343

295

 

330

Total income

1,846

1,771

1,777

 

1,863

1,896

1,836

1,788

 

1,870

Credit impairment charges and other provisions

(101)

(230)

(191)

 

(296)

(115)

(214)

(201)

 

(184)

Net operating income

1,745

1,541

1,586

 

1,567

1,781

1,622

1,587

 

1,686

Operating costs

(952)

(1,022)

(999)

 

(1,114)

(988)

(968)

(1,005)

 

(1,117)

UK bank levy

-

-

-

 

(46)

-

-

-

 

(59)

Litigation and conduct

(1,480)

(41)

(3)

 

(15)

(54)

(3)

(411)

 

(53)

Total operating expenses

(2,432)

(1,063)

(1,002)

 

(1,175)

(1,042)

(971)

(1,416)

 

(1,229)

Other net (expenses)/income

-

(1)

1

 

(2)

1

5

(1)

 

(5)

(Loss)/profit before tax 

(687)

477

585

 

390

740

656

170

 

452

Attributable (loss)/profit1

(907)

328

422

 

241

510

473

(26)

 

258

 

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Loans and advances to customers at amortised cost

193.2

189.1

187.5

 

187.6

186.7

185.3

184.3

 

183.8

Total assets

257.9

259.0

253.1

 

249.7

252.0

245.9

235.2

 

237.4

Customer deposits at amortised cost

203.3

200.9

197.3

 

197.3

195.8

194.3

192.0

 

193.4

Loan: deposit ratio

97%

97%

96%

 

96%

96%

96%

96%

 

95%

Risk weighted assets

76.8

76.2

76.6

 

75.2

74.8

75.0

72.5

 

70.9

Period end allocated tangible equity

10.4

10.3

10.5

 

10.2

10.1

10.2

9.8

 

9.6

 

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity

(34.9%)

12.7%

16.3%

 

9.6%

20.1%

18.8%

(1.1%)

 

10.7%

Average allocated tangible equity (£bn)

10.4

10.3

10.4

 

10.1

10.1

10.1

9.8

 

9.6

Cost: income ratio

132%

60%

56%

 

63%

55%

53%

79%

 

66%

Loan loss rate (bps)2

20

47

40

 

61

24

45

43

 

39

Net interest margin

3.10%

3.05%

3.18%

 

3.20%

3.22%

3.22%

3.27%

 

3.32%

 

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct3

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Profit before tax

793

518

588

 

405

794

659

581

 

505

Attributable profit

550

358

424

 

253

558

474

385

 

295

Return on average allocated tangible equity

21.2%

13.9%

16.4%

 

10.1%

22.0%

18.8%

15.7%

 

12.3%

Cost: income ratio

52%

58%

56%

 

62%

52%

53%

56%

 

63%

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to AT1 instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. Comparatives have been restated. This change does not impact EPS or return on average tangible shareholders' equity.

2.

Prior to Q118 comparatives calculated based on gross loans and advances at amortised cost before the balance sheet presentation change and IAS 39 impairment charge.

3

Refer to pages 36 to 45 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays UK

Q319

Q219

Q119

 

Q418

Q318

Q218

Q118

 

Q417

Analysis of total income

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Personal Banking

1,035

946

964

 

998

1,021

1,015

972

 

1,116

Barclaycard Consumer UK

472

497

490

 

522

551

504

527

 

445

Business Banking

339

328

323

 

343

324

317

289

 

309

Total income

1,846

1,771

1,777

 

1,863

1,896

1,836

1,788

 

1,870

 

 

 

 

 

 

 

 

 

 

 

Analysis of credit impairment (charges)/releases and other provisions

 

 

 

 

 

 

 

 

 

 

Personal Banking

(36)

(36)

(52)

 

(44)

(8)

(49)

(72)

 

(56)

Barclaycard Consumer UK

(49)

(175)

(140)

 

(250)

(88)

(139)

(113)

 

(124)

Business Banking

(16)

(19)

1

 

(2)

(19)

(26)

(16)

 

(4)

Total credit impairment charges and other provisions

(101)

(230)

(191)

 

(296)

(115)

(214)

(201)

 

(184)

 

 

 

 

 

 

 

 

 

 

 

Analysis of loans and advances to customers at amortised cost

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Personal Banking

150.1

147.3

145.9

 

146.0

145.4

143.6

142.1

 

141.3

Barclaycard Consumer UK

14.9

15.1

15.0

 

15.3

15.3

15.2

15.2

 

16.4

Business Banking

28.2

26.7

26.6

 

26.3

26.0

26.5

27.0

 

26.1

Total loans and advances to customers at amortised cost

193.2

189.1

187.5

 

187.6

186.7

185.3

184.3

 

183.8

 

 

 

 

 

 

 

 

 

 

 

Analysis of customer deposits at amortised cost

 

 

 

 

 

 

 

 

 

 

Personal Banking

157.9

156.3

154.1

 

154.0

153.4

152.9

151.9

 

153.1

Barclaycard Consumer UK

-

-

-

 

-

-

-

-

 

-

Business Banking

45.4

44.6

43.2

 

43.3

42.4

41.4

40.1

 

40.3

Total customer deposits at amortised cost

203.3

200.9

197.3

 

197.3

195.8

194.3

192.0

 

193.4

 

Barclays International

 

 

 

 

 

 

 

 

 

 

 

Q319

Q219

Q119

 

Q418

Q318

Q218

Q118

 

Q417

Income statement information

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Net interest income

1,059

1,017

900

 

984

965

853

1,013

 

987

Net trading income

1,110

1,016

1,144

 

837

1,103

1,094

1,416

 

935

Net fee, commission and other income

1,581

1,870

1,526

 

1,400

1,222

1,760

1,379

 

1,397

Total income

3,750

3,903

3,570

 

3,221

3,290

3,707

3,808

 

3,319

Credit impairment charges and other provisions

(352)

(247)

(245)

 

(354)

(143)

(68)

(93)

 

(386)

Net operating income

3,398

3,656

3,325

 

2,867

3,147

3,639

3,715

 

2,933

Operating costs

(2,282)

(2,435)

(2,206)

 

(2,441)

(2,277)

(2,306)

(2,300)

 

(2,428)

UK bank levy

-

-

-

 

(210)

-

-

-

 

(265)

Litigation and conduct

-

(11)

(19)

 

(33)

(32)

(47)

(15)

 

(255)

Total operating expenses

(2,282)

(2,446)

(2,225)

 

(2,684)

(2,309)

(2,353)

(2,315)

 

(2,948)

Other net income

21

13

18

 

32

12

11

13

 

21

Profit before tax

1,137

1,223

1,118

 

215

850

1,297

1,413

 

6

Attributable profit/(loss)1

799

832

788

 

(21)

687

926

1,007

 

(1,134)

 

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Loans and advances at amortised cost

138.1

134.8

130.9

 

127.2

132.4

125.5

117.5

 

126.8

Trading portfolio assets

119.4

120.0

117.2

 

104.0

124.6

116.5

114.9

 

113.0

Derivative financial instrument assets

286.0

243.8

217.3

 

222.1

214.8

228.2

214.1

 

236.2

Financial assets at fair value through the income statement

158.0

154.7

153.5

 

144.7

147.8

141.2

150.6

 

104.1

Cash collateral and settlement balances

112.5

101.3

97.8

 

74.3

94.3

91.5

82.6

 

71.9

Other assets

195.6

196.8

202.3

 

189.8

186.3

183.6

186.9

 

204.1

Total assets

1,009.6

951.4

919.0

 

862.1

900.2

886.5

866.6

 

856.1

Deposits at amortised cost

217.6

212.0

215.5

 

197.2

200.3

191.0

167.2

 

187.3

Derivative financial instrument liabilities

283.3

243.0

213.5

 

219.6

213.7

224.9

210.8

 

237.8

Loan: deposit ratio

63%

64%

61%

 

65%

66%

66%

70%

 

68%

Risk weighted assets

223.1

214.8

216.1

 

210.7

214.6

218.0

214.2

 

210.3

Period end allocated tangible equity

31.4

30.2

30.6

 

29.9

30.2

30.5

30.0

 

27.5

 

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity

9.9%

10.7%

10.4%

 

(0.3%)

8.8%

11.8%

13.4%

 

(15.9%)

Average allocated tangible equity (£bn)

32.2

31.1

30.5

 

31.3

31.1

31.4

30.1

 

28.5

Cost: income ratio

61%

63%

62%

 

83%

70%

63%

61%

 

89%

Loan loss rate (bps)2

99

72

73

 

107

41

22

31

 

76

Net interest margin

4.10%

3.91%

3.99%

 

3.98%

3.87%

4.03%

4.57%

 

4.31%

 

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct3

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Profit before tax

1,137

1,234

1,137

 

248

882

1,344

1,428

 

261

Attributable profit/(loss)

801

840

804

 

13

713

960

1,019

 

(884)

Return on average allocated tangible equity

10.0%

10.8%

10.6%

 

0.2%

9.2%

12.2%

13.6%

 

(12.4%)

Cost: income ratio

61%

62%

62%

 

82%

69%

62%

60%

 

81%

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to AT1 instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. Comparatives have been restated. This change does not impact EPS or return on average tangible shareholders' equity.

2

Prior to Q118 comparatives calculated based on gross loans and advances at amortised cost before the balance sheet presentation change and IAS 39 impairment charge.

3

Refer to pages 36 to 45 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Investment Bank

Q319

Q219

Q119

 

Q418

Q318

Q218

Q118

 

Q417

Income statement information

£m

£m

£m

 

£m

£m

£m

£m

 

£m

FICC

816

920

902

 

570

688

736

869

 

607

Equities

494

517

467

 

375

471

601

590

 

362

Markets

1,310

1,437

1,369

 

945

1,159

1,337

1,459

 

969

Banking fees

688

698

569

 

625

519

704

683

 

605

Corporate lending

195

216

152

 

243

197

198

240

 

269

Transaction banking

424

444

415

 

412

416

385

414

 

408

Corporate

619

660

567

 

655

613

583

654

 

677

Other

-

-

-

 

(74)

(56)

(44)

3

 

1

Total income

2,617

2,795

2,505

 

2,151

2,235

2,580

2,799

 

2,252

Credit impairment (charges)/releases and other  provisions

(31)

(44)

(52)

 

(35)

3

23

159

 

(127)

Net operating income

2,586

2,751

2,453

 

2,116

2,238

2,603

2,958

 

2,125

Operating costs

(1,712)

(1,860)

(1,619)

 

(1,835)

(1,712)

(1,773)

(1,773)

 

(1,885)

UK bank levy

-

-

-

 

(188)

-

-

-

 

(244)

Litigation and conduct

(4)

(7)

(19)

 

(23)

(32)

-

(13)

 

(255)

Total operating expenses

(1,716)

(1,867)

(1,638)

 

(2,046)

(1,744)

(1,773)

(1,786)

 

(2,384)

Other net income

12

3

12

 

15

4

5

3

 

7

Profit/(loss) before tax

882

887

827

 

85

498

835

1,175

 

(252)

Attributable profit/(loss)1

609

596

582

 

(84)

431

600

834

 

(1,227)

 

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Loans and advances at amortised cost

95.8

92.1

90.6

 

86.4

93.3

87.8

81.3

 

88.2

Trading portfolio assets

119.3

119.9

117.2

 

104.0

124.5

116.5

114.9

 

112.9

Derivative financial instruments assets

286.0

243.7

217.3

 

222.1

214.8

228.1

214.2

 

236.1

Financial assets at fair value through the income statement

157.3

154.1

152.9

 

144.2

147.3

140.7

150.2

 

103.8

Cash collateral and settlement balances

111.6

100.4

96.9

 

73.4

93.3

90.6

81.1

 

71.9

Other assets

171.5

168.1

163.2

 

160.4

153.8

151.6

159.8

 

175.8

Total assets

941.5

878.3

838.1

 

790.5

827.0

815.3

801.5

 

788.7

Deposits at amortised cost

152.1

145.4

151.4

 

136.3

137.6

130.3

107.6

 

128.0

Derivative financial instrument liabilities

283.2

242.9

213.5

 

219.6

213.7

224.9

210.9

 

237.7

Risk weighted assets

184.9

175.9

176.6

 

170.9

175.9

180.4

181.3

 

176.2

 

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity

9.1%

9.2%

9.3%

 

(1.3%)

6.6%

9.1%

13.0%

 

(20.2%)

Average allocated tangible equity (£bn)

26.9

25.8

25.1

 

26.0

25.9

26.4

25.6

 

24.3

Cost: income ratio

66%

67%

65%

 

95%

78%

69%

64%

 

106%

 

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct2

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Profit before tax

886

894

846

 

108

530

835

1,188

 

3

Attributable profit/(loss)

614

601

598

 

(57)

456

600

844

 

(977)

Return on average allocated tangible equity

9.2%

9.3%

9.5%

 

(0.9%)

7.0%

9.1%

13.2%

 

(16.1%)

Cost: income ratio

65%

67%

65%

 

94%

77%

69%

63%

 

95%

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to AT1 instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. Comparatives have been restated. This change does not impact EPS or return on average tangible shareholders' equity.

2

Refer to pages 36 to 45 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer, Cards and Payments

Q319

Q219

Q119

 

Q418

Q318

Q218

Q118

 

Q417

Income statement information

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Total income

1,133

1,108

1,065

 

1,070

1,055

1,127

1,009

 

1,067

Credit impairment charges and other provisions

(321)

(203)

(193)

 

(319)

(146)

(91)

(252)

 

(259)

Net operating income

812

905

872

 

751

909

1,036

757

 

808

Operating costs

(570)

(575)

(587)

 

(606)

(565)

(533)

(527)

 

(543)

UK bank levy

-

-

-

 

(22)

-

-

-

 

(21)

Litigation and conduct

4

(4)

-

 

(10)

-

(47)

(2)

 

-

Total operating expenses

(566)

(579)

(587)

 

(638)

(565)

(580)

(529)

 

(564)

Other net income

9

10

6

 

17

8

6

10

 

14

Profit before tax

255

336

291

 

130

352

462

238

 

258

Attributable profit1

190

236

206

 

63

256

326

173

 

93

 

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Loans and advances at amortised cost

42.3

42.7

40.3

 

40.8

39.1

37.7

36.2

 

38.6

Total assets

68.1

73.1

80.9

 

71.6

73.2

71.2

65.1

 

67.4

Deposits at amortised cost

65.5

66.6

64.1

 

60.9

62.7

60.7

59.6

 

59.3

Risk weighted assets

38.2

38.9

39.5

 

39.8

38.7

37.6

32.9

 

34.1

 

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity

14.2%

17.8%

15.4%

 

4.8%

19.8%

26.2%

15.6%

 

8.9%

Average allocated tangible equity (£bn)

5.3

5.3

5.4

 

5.3

5.2

5.0

4.5

 

4.2

Cost: income ratio

50%

52%

55%

 

60%

54%

51%

52%

 

53%

Loan loss rate (bps)2

283

180

182

 

290

138

90

263

 

255

 

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct3

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Profit before tax

251

340

291

 

140

352

509

240

 

258

Attributable profit

187

239

206

 

70

257

360

175

 

93

Return on average allocated tangible equity

14.0%

18.0%

15.4%

 

5.4%

19.9%

28.9%

15.7%

 

9.0%

Cost: income ratio

50%

52%

55%

 

59%

54%

47%

52%

 

53%

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to AT1 instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. Comparatives have been restated. This change does not impact EPS or return on average tangible shareholders' equity.

2

Prior to Q118 comparatives calculated based on gross loans and advances at amortised cost before the balance sheet presentation change and IAS 39 impairment charge. 

3

Refer to pages 36 to 45 for further information and calculations of performance measures excluding litigation and conduct.

 

Head Office

 

 

 

 

 

 

 

 

 

 

 

Q319

Q219

Q119

 

Q418

Q318

Q218

Q118

 

Q417

Income statement information

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Net interest income

(117)

(95)

(111)

 

(201)

(106)

(156)

(318)

 

(254)

Net fee, commission and other income

62

(41)

16

 

190

49

189

80

 

87

Total income

(55)

(136)

(95)

 

(11)

(57)

33

(238)

 

(167)

Credit impairment (charges)/releases and other provisions 

(8)

(3)

(12)

 

7

4

(1)

6

 

(3)

Net operating (expenses)/income

(63)

(139)

(107)

 

(4)

(53)

32

(232)

 

(170)

Operating costs

(59)

(44)

(52)

 

(69)

(64)

(36)

(59)

 

(76)

UK bank levy

-

-

-

 

(13)

-

-

-

 

(41)

GMP charge

-

-

-

 

(140)

-

-

-

 

-

Litigation and conduct

(88)

(1)

(39)

 

(12)

(19)

(31)

(1,535)

 

(75)

Total operating expenses

(147)

(45)

(91)

 

(234)

(83)

(67)

(1,594)

 

(192)

Other net income/(expenses)

6

15

(22)

 

7

7

(23)

7

 

(3)

Loss before tax

(204)

(169)

(220)

 

(231)

(129)

(58)

(1,819)

 

(365)

Attributable loss1

(184)

(126)

(172)

 

(234)

(147)

(120)

(1,699)

 

(369)

 

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Total assets

22.9

22.4

21.4

 

21.5

18.6

17.2

40.4

 

39.7

Risk weighted assets

13.4

28.1

27.0

 

26.0

26.8

26.3

31.2

 

31.8

Period end allocated tangible equity

5.5

7.0

4.5

 

4.9

4.2

3.6

3.0

 

10.0

 

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

 

Average allocated tangible equity (£bn)

5.8

4.8

4.3

 

2.9

3.4

2.0

4.3

 

10.0

 

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct2

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Loss before tax

(116)

(168)

(181)

 

(219)

(110)

(27)

(284)

 

(290)

Attributable loss

(118)

(124)

(144)

 

(218)

(136)

(96)

(192)

 

(305)

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to AT1 instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. Comparatives have been restated. This change does not impact EPS or return on average tangible shareholders' equity.

2

Refer to pages 36 to 45 for further information and calculations of performance measures excluding litigation and conduct.

 

Performance Management

 

Margins and balances

 

 

 

 

 

 

 

Nine months ended 30.09.19

Nine months ended 30.09.181

 

Net interest income

Average customer assets

Net interest margin

Net interest income

Average customer assets

Net interest margin

 

£m

£m

%

£m

£m

%

Barclays UK

4,410

189,994

 3.10

4,515

186,474

 3.24

Barclays International2

2,985

99,862

 4.00

2,972

95,693

 4.15

Total Barclays UK and Barclays International

7,395

289,856

 3.41

7,487

282,167

 3.55

Other3

(332)

 

 

(723)

 

 

Total Group4

7,063

 

 

6,764

 

 

 

1

The Group's treasury results are reported directly within Barclays UK and Barclays International from Q218 following ring-fencing, resulting in gains and losses made on certain activities being recognised as Other income, rather than in Net interest income.

2

Barclays International margins include interest earning lending balances within the investment banking business.

3

Other includes Head Office and non-lending related investment banking businesses not included in Barclays International margins.

4

The Group's combined product and equity structural hedge notional as at 30 September 2019 was £173bn, with an average duration of 2.5 to 3 years. Group net interest income includes gross structural hedge contributions of £1.4bn (Q318 YTD: £1.3bn) and net structural hedge contributions of £0.4bn (Q318 YTD: £0.6bn). 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 30.09.19

£m

£m

%

Barclays UK

 1,503

 192,262

 3.10

Barclays International1

 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

 3.05

Barclays International1

 980

 100,645

 3.91

Total Barclays UK and Barclays International

 2,418

 289,817

 3.35

 

 

 

 

Three months ended 31.03.19

 

 

 

Barclays UK

1,469

187,570

3.18

Barclays International1

967

98,313

3.99

Total Barclays UK and Barclays International

2,436

285,883

3.46

 

 

 

 

Three months ended 31.12.18

 

 

 

Barclays UK

1,513

187,813

3.20

Barclays International1

994

99,137

3.98

Total Barclays UK and Barclays International

2,507

286,950

3.47

 

 

 

 

Three months ended 30.09.18

 

 

 

Barclays UK

1,529

188,239

3.22

Barclays International1

945

96,785

3.87

Total Barclays UK and Barclays International

2,474

285,024

3.44

 

1

Barclays International margins include interest earning lending balances within the investment banking business.

 

Credit Risk

 

Loans and advances at amortised cost by stage

 

The table below presents an analysis of loans and advances at amortised cost by gross exposure, impairment allowance, impairment charge and coverage ratio by stage allocation and business segment as at 30 September 2019. Also included are off-balance sheet loan commitments and financial guarantee contracts by gross exposure, impairment allowance and coverage ratio by stage allocation as at 30 September 2019. Barclays does not hold any material purchased or originated credit impaired assets as at period-end.

 

 

Gross exposure

 

Impairment allowance

Net exposure

 

Stage 1

Stage 2

Stage 3

Total

 

Stage 1

Stage 2

Stage 3

Total

As at 30.09.19

£m

£m

£m

£m

 

£m

£m

£m

£m

£m

Barclays UK

142,242

22,362

2,660

167,264

 

189

1,296

1,118

2,603

164,661

Barclays International

28,865

4,223

1,969

35,057

 

360

864

1,420

2,644

32,413

Head Office

5,134

532

874

6,540

 

7

41

314

362

6,178

Total Barclays Group retail

176,241

27,117

5,503

208,861

 

556

2,201

2,852

5,609

203,252

Barclays UK

28,667

3,484

1,201

33,352

 

13

45

114

172

33,180

Barclays International

94,613

10,205

1,691

106,509

 

137

268

439

844

105,665

Head Office

3,025

 -  

40

3,065

 

 -  

 -  

38

38

3,027

Total Barclays Group wholesale

126,305

13,689

2,932

142,926

 

150

313

591

1,054

141,872

Total loans and advances at amortised cost

302,546

40,806

8,435

351,787

 

706

2,514

3,443

6,663

345,124

Off-balance sheet loan commitments and financial guarantee contracts1

335,072

19,774

734

355,580

 

102

171

50

323

355,257

Total2

637,618

60,580

9,169

707,367

 

808

2,685

3,493

6,986

700,381

 

 

 

 

 

 

 

 

 

 

 

 

As at 30.09.19

 

Period ended 30.09.19

 

 

Coverage ratio

 

Loan impairment charge and loan loss rate3

 

 

Stage 1

Stage 2

Stage 3

Total

 

Loan impairment charge

Loan loss rate

 

 

%

%

%

%

 

£m

bps

 

Barclays UK

0.1

5.8

42.0

1.6

 

 

489

 

39

 

Barclays International

1.2

20.5

72.1

7.5

 

 

704

 

268

 

Head Office

0.1

7.7

35.9

5.5

 

 

23

 

47

 

Total Barclays Group retail

0.3

8.1

51.8

2.7

 

 

1,216

 

78

 

Barclays UK

-

1.3

9.5

0.5

 

 

27

 

11

 

Barclays International

0.1

2.6

26.0

0.8

 

 

84

 

11

 

Head Office

 -  

 -  

95.0

1.2

 

 

-

 

-

 

Total Barclays Group wholesale

0.1

2.3

20.2

0.7

 

 

111

 

10

 

Total loans and advances at amortised cost

0.2

6.2

40.8

1.9

 

 

1,327

 

50

 

Off-balance sheet loan commitments and financial guarantee contracts1

-

0.9

6.8

0.1

 

 

57

 

 

 

Other financial assets subject to impairment2

 

 

 

 

 

 

5

 

 

 

Total

0.1

4.4

38.1

1.0

 

 

1,389

 

 

 

 

1

Excludes loan commitments and financial guarantees of £14.6bn carried at fair value.

2

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 £192.1bn and impairment allowance of £21m. This comprises £12m Expected Credit Loss (ECL) on £192.1bn stage 1 assets, £0.2m on £18m stage 2 fair value through other comprehensive income, cash collateral and settlement assets and £9m on £9m stage 3 other assets.

3

Q319 loan impairment charge represents nine months of impairment charge, annualised to calculate the loan loss rate. The loan loss rate for Q319 is 53bps after applying the total impairment charge of £1,389m.

 

 

Gross exposure

 

Impairment allowance

Net exposure

 

Stage 1

Stage 2

Stage 3

Total

 

Stage 1

Stage 2

Stage 3

Total

As at 31.12.18

£m

£m

£m

£m

 

£m

£m

£m

£m

£m

Barclays UK

134,911

25,279

3,040

163,230

 

183

1,389

1,152

2,724

160,506

Barclays International

26,714

4,634

1,830

33,178

 

352

965

1,315

2,632

30,546

Head Office

6,510

636

938

8,084

 

9

47

306

362

7,722

Total Barclays Group retail

168,135

30,549

5,808

204,492

 

544

2,401

2,773

5,718

198,774

Barclays UK

22,824

4,144

1,272

28,240

 

16

70

117

203

28,037

Barclays International

87,344

8,754

1,382

97,480

 

128

244

439

811

96,669

Head Office

2,923

 -  

41

2,964

 

-

-

38

38

2,926

Total Barclays Group wholesale

113,091

12,898

2,695

128,684

 

144

314

594

1,052

127,632

Total loans and advances at amortised cost

281,226

43,447

8,503

333,176

 

688

2,715

3,367

6,770

326,406

Off-balance sheet loan commitments and financial guarantee contracts1

309,989

22,126

684

332,799

 

99

150

22

271

332,528

Total2

591,215

65,573

9,187

665,975

 

787

2,865

3,389

7,041

658,934

 

 

 

 

 

 

 

 

 

 

 

 

As at 31.12.18

 

Year ended 31.12.18

 

 

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

37.9

1.7

 

 

830

 

51

 

Barclays International

1.3

20.8

71.9

7.9

 

 

844

 

254

 

Head Office

0.1

7.4

32.6

4.5

 

 

15

 

19

 

Total Barclays Group retail

0.3

7.9

47.7

2.8

 

 

1,689

 

83

 

Barclays UK

0.1

1.7

9.2

0.7

 

 

74

 

26

 

Barclays International

0.1

2.8

31.8

0.8

 

 

(142)

 

 -

 

Head Office

-

-

92.7

1.3

 

 

(31)

 

 -

 

Total Barclays Group wholesale

0.1

2.4

22.0

0.8

 

 

(99)

 

 -

 

Total loans and advances at amortised cost

0.2

6.2

39.6

2.0

 

 

1,590

 

48

 

Off-balance sheet loan commitments and financial guarantee contracts1

-

0.7

3.2

0.1

 

 

(125)

 

 

 

Other financial assets subject to impairment2

 

 

 

 

 

 

3

 

 

 

Total

0.1

4.4

36.9

1.1

 

 

1,468

 

 

 

 

1

Excludes loan commitments and financial guarantees of £11.7bn carried at fair value.

2

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 £129.9bn and impairment allowance of £12m. This comprises £10m ECL on £129.3bn stage 1 assets and £2m on £0.6bn stage 2 fair value through other comprehensive income assets.

 

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 30.09.19

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

135,373

13,687

1,695

733

16,115

2,272

153,760

Credit cards, unsecured loans and other retail lending

48,442

9,937

502

514

10,953

3,574

62,969

Corporate loans

118,731

12,103

435

1,200

13,738

2,589

135,058

Total

302,546

35,727

2,632

2,447

40,806

8,435

351,787

 

 

 

 

 

 

 

 

Impairment allowance

 

 

 

 

 

 

 

Home loans

28

50

15

14

79

351

458

Credit cards, unsecured loans and other retail lending

550

1,692

158

255

2,105

2,551

5,206

Corporate loans

128

310

14

6

330

541

999

Total

706

2,052

187

275

2,514

3,443

6,663

 

 

 

 

 

 

 

 

Net exposure

 

 

 

 

 

 

 

Home loans

135,345

13,637

1,680

719

16,036

1,921

153,302

Credit cards, unsecured loans and other retail lending

47,892

8,245

344

259

8,848

1,023

57,763

Corporate loans

118,603

11,793

421

1,194

13,408

2,048

134,059

Total

301,840

33,675

2,445

2,172

38,292

4,992

345,124

 

 

 

 

 

 

 

 

Coverage ratio

%

%

%

%

%

%

%

Home loans

-

0.4

0.9

1.9

0.5

15.4

0.3

Credit cards, unsecured loans and other retail lending

1.1

17.0

31.5

49.6

19.2

71.4

8.3

Corporate loans

0.1

2.6

3.2

0.5

2.4

20.9

0.7

Total

0.2

5.7

7.1

11.2

6.2

40.8

1.9

 

 

 

 

 

 

 

 

As at 31.12.18

 

 

 

 

 

 

 

Gross exposure

£m

£m

£m

£m

£m

£m

£m

Home loans

130,066

15,672

1,672

862

18,206

2,476

150,748

Credit cards, unsecured loans and other retail lending

45,785

11,262

530

437

12,229

3,760

61,774

Corporate loans

105,375

12,177

360

475

13,012

2,267

120,654

Total

281,226

39,111

2,562

1,774

43,447

8,503

333,176

 

 

 

 

 

 

 

 

Impairment allowance

 

 

 

 

 

 

 

Home loans

31

56

13

13

82

351

464

Credit cards, unsecured loans and other retail lending

528

1,895

169

240

2,304

2,511

5,343

Corporate loans

129

300

16

13

329

505

963

Total

688

2,251

198

266

2,715

3,367

6,770

 

 

 

 

 

 

 

 

Net exposure

 

 

 

 

 

 

 

Home loans

130,035

15,616

1,659

849

18,124

2,125

150,284

Credit cards, unsecured loans and other retail lending

45,257

9,367

361

197

9,925

1,249

56,431

Corporate loans

105,246

11,877

344

462

12,683

1,762

119,691

Total

280,538

36,860

2,364

1,508

40,732

5,136

326,406

 

 

 

 

 

 

 

 

Coverage ratio

%

%

%

%

%

%

%

Home loans

-

0.4

0.8

1.5

0.5

14.2

0.3

Credit cards, unsecured loans and other retail lending

1.2

16.8

31.9

54.9

18.8

66.8

8.6

Corporate loans

0.1

2.5

4.4

2.7

2.5

22.3

0.8

Total

0.2

5.8

7.7

15.0

6.2

39.6

2.0

 

Treasury and Capital Risk

 

Capital

 

The Group's CET1 overall capital requirement is 12.0% 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 applicable from 24 October 2019 and a 0.5% Countercyclical Capital Buffer (CCyB).

 

The Group's CCyB is based on the buffer rate applicable for each jurisdiction in which the Group have exposures. On 28 November 2018, the Financial Policy Committee set the CCyB rate for UK exposures at 1%. The buffer rates set by other national authorities for our non-UK exposures are not currently material. Overall, this results in a 0.5% CCyB for the Group for Q319.

 

The Group's Pillar 2A requirement as per the PRA's Individual Capital Requirement applicable from 24 October 2019 has been revised to 5.3% (September 2019: 4.7%), of which at least 56.25% needs to be met with CET1 capital, equating to approximately 3.0% of RWAs (September 2019: 2.6%). The increase follows the removal of the operational risk RWA floor from Pillar 1, and also reflects the new requirement that is calibrated at least annually. Certain elements of the Pillar 2A requirement are a fixed quantum whilst others are a proportion of RWAs and are based on a point in time assessment.

 

On 27 June 2019, as part of the EU Risk Reduction Measure package, CRR II entered into force amending CRR.  As an amending regulation, the existing provisions of CRR apply unless they are amended by CRR II. The amendments largely take effect and are phased in from 28 June 2021 with a number of exceptions which were implemented with immediate effect.

 

These exceptions primarily relate to MREL. Amendments within this section include changes to qualifying criteria for CET1, AT1 and Tier 2 instruments, the inclusion of additional holdings eligible for deduction, an amendment to the treatment of deferred tax assets and the introduction of requirements for MREL. Grandfathering and transitional provisions relating to MREL have also been introduced. 

 

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.

 

Capital ratios1,2,3

As at

As at

As at

30.09.19

30.06.19

31.12.18

CET1

13.4%

13.4%

13.2%

Tier 1 (T1)

17.0%

17.4%

17.0%

Total regulatory capital

21.1%

21.4%

20.7%

  

 

 

 

Capital resources

£bn

£bn

£bn

Total equity excluding non-controlling interests per the balance sheet

66.2

67.6

62.6

Less: other equity instruments (recognised as AT1 capital)

(10.9)

(12.1)

(9.6)

Adjustment to retained earnings for foreseeable dividends

(0.7)

(0.8)

(0.7)

 

 

 

 

Other regulatory adjustments and deductions

 

 

 

Additional value adjustments (PVA)

(1.9)

(1.8)

(1.7)

Goodwill and intangible assets

(8.1)

(8.0)

(8.0)

Deferred tax assets that rely on future profitability excluding temporary differences

(0.3)

(0.4)

(0.5)

Fair value reserves related to gains or losses on cash flow hedges

(1.5)

(1.2)

(0.7)

Gains or losses on liabilities at fair value resulting from own credit

-

(0.1)

(0.1)

Defined benefit pension fund assets

(2.0)

(1.4)

(1.3)

Direct and indirect holdings by an institution of own CET1 instruments

(0.1)

(0.1)

(0.1)

Adjustment under IFRS 9 transitional arrangements

1.1

1.2

1.3

Other regulatory adjustments

(0.1)

-

-

CET1 capital

41.9

42.9

41.1

  

 

 

 

AT1 capital

 

 

 

Capital instruments and related share premium accounts

10.9

12.1

9.6

Qualifying AT1 capital (including minority interests) issued by subsidiaries

0.8

0.7

2.4

Other regulatory adjustments and deductions

(0.1)

(0.1)

(0.1)

AT1 capital

11.5

12.7

11.9

 

 

 

 

T1 capital

53.4

55.6

53.0

  

 

 

 

T2 capital

 

 

 

Capital instruments and related share premium accounts

8.3

8.0

6.6

Qualifying T2 capital (including minority interests) issued by subsidiaries

4.7

5.0

5.3

Other regulatory adjustments and deductions

(0.3)

(0.3)

(0.3)

Total regulatory capital

66.1

68.3

64.6

 

 

 

 

Total RWAs

313.3

319.1

311.9

 

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 13.0%, with £40.7bn of CET1 capital and £313.1bn of RWAs calculated without applying the transitional arrangements of the CRR as amended by CRR II applicable as at the reporting date.

3

The Group's CET1 ratio, as is relevant for assessing against the conversion trigger in Barclays Bank PLC T2 Contingent Capital Notes, was 13.4%. 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.

 

Movement in CET1 capital

Three months

Nine months

ended

ended

30.09.19

30.09.19

£bn

£bn

Opening CET1 capital

42.9

41.1

 

 

 

Profit for the period attributable to equity holders

-

2.4

Dividends paid and foreseen

(0.6)

(1.8)

(Decrease)/increase in retained regulatory capital generated from earnings

(0.7)

0.6

 

 

 

Net impact of share schemes

0.1

0.2

Fair value through other comprehensive income reserve

(0.2)

0.3

Currency translation reserve

0.5

0.7

Other reserves

(0.4)

(0.4)

Increase in other qualifying reserves

-

0.7

 

 

 

Pension remeasurements within reserves

0.4

0.3

Defined benefit pension fund asset deduction

(0.6)

(0.7)

Net impact of pensions

(0.2)

(0.4)

 

 

 

Additional value adjustments (PVA)

(0.1)

(0.1)

Goodwill and intangible assets

(0.1)

(0.1)

Deferred tax assets that rely on future profitability excluding those arising from temporary differences

0.1

0.2

Adjustment under IFRS 9 transitional arrangements

(0.1)

(0.2)

Decrease in regulatory capital due to adjustments and deductions

(0.2)

(0.2)

 

 

 

Closing CET1 capital

41.9

41.9

 

 

 

 

Risk weighted assets 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 30.09.19

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

£bn

 

£bn

£bn

Barclays UK

4.1

60.4

 

0.3

-

-

-

 

0.2

-

 

11.8

76.8

Corporate and Investment Bank

27.4

69.3

 

12.9

17.4

0.1

4.0

 

15.6

16.6

 

21.6

184.9

Consumer, Cards and Payments

28.3

2.4

 

0.1

-

-

-

 

-

0.1

 

7.3

38.2

Barclays International

55.7

71.7

 

13.0

17.4

0.1

4.0

 

15.6

16.7

 

28.9

223.1

Head Office

5.3

6.3

 

-

-

-

-

 

-

-

 

1.8

13.4

Barclays Group

65.1

138.4

 

13.3

17.4

0.1

4.0

 

15.8

16.7

 

42.5

313.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at 30.06.19

 

 

 

 

 

 

 

 

 

 

 

 

 

Barclays UK

3.8

60.2

 

0.3

-

-

 

0.1

-

 

11.8

76.2

Corporate and Investment Bank

24.6

68.2

 

12.4

16.4

0.2

3.4

 

15.4

13.7

 

21.6

175.9

Consumer, Cards and Payments

29.3

2.1

 

0.1

 

0.1

 

7.3

38.9

Barclays International

53.9

70.3

 

12.5

16.4

0.2

3.4

 

15.4

13.8

 

28.9

214.8

Head Office

5.7

6.4

 

-  

-  

 

 

16.0

28.1

Barclays Group

63.4

136.9

 

12.8

16.4

0.2

3.4

 

15.5

13.8

 

56.7

319.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at 31.12.18

 

 

 

 

 

 

 

 

 

 

 

 

 

Barclays UK

3.3

59.7

 

0.2

-

-

0.1

 

0.1

-

 

11.8

75.2

Corporate and Investment Bank

26.1

64.8

 

9.8

14.9

0.2

3.3

 

13.9

16.2

 

21.7

170.9

Consumer, Cards and Payments

29.5

2.2

 

0.1

0.1

-

-

 

-

0.6

 

7.3

39.8

Barclays International

55.6

67.0

 

9.9

15.0

0.2

3.3

 

13.9

16.8

 

29.0

210.7

Head Office

4.3

5.8

 

-

-

-

-

 

-

-

 

15.9

26.0

Barclays Group

63.2

132.5

 

10.1

15.0

0.2

3.4

 

14.0

16.8

 

56.7

311.9

 

Movement analysis of RWAs

 

Credit risk

Counterparty credit risk

Market risk

Operational risk

Total RWAs

 

£bn

£bn

£bn

£bn

£bn

Opening RWAs (as at 31.12.18)

195.6

28.8

30.8

56.7

311.9

Book size

4.2

6.1

(0.3)

-

10.0

Acquisitions and disposals

(0.2)

-

-

-

(0.2)

Book quality

(1.2)

(0.2)

-

-

(1.4)

Model updates

0.8

0.5

-

-

1.3

Methodology and policy

2.1

(0.4)

2.0

(14.2)

(10.5)

Foreign exchange movements1

2.2

-

-

-

2.2

Closing RWAs (as at 30.09.19)

203.5

34.8

32.5

42.5

313.3

 

1

Foreign exchange movements does not include foreign exchange for counterparty credit risk or market risk.

 

RWAs increased £1.4bn to £313.3bn:

 

 

·

'Book size' increased RWAs by £10.0bn primarily driven by increased CIB activity

 

·

'Book quality' decreased RWAs by £1.4bn primarily due to changes in risk profile within Barclays International

 

·

'Model updates' increased £1.3bn primarily due to the recalibration of modelled wholesale RWAs

 

·

'Methodology and policy' decreased RWAs by £10.5bn primarily due to removal of the operational risk floor

 

·

'Foreign exchange movements' increased RWAs by £2.2bn primarily due to the appreciation of period end USD against GBP.

 

Leverage ratio and exposures

 

The Group is subject to a leverage ratio requirement of 4.0% as at 30 September 2019. 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 0.2%. 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 and CCLB must be covered solely with CET1 capital. The CET1 capital held against the 0.53% G-SII ALRB was £6.1bn and against the 0.2%, CCLB was £2.3bn.

 

The Group is required to disclose an average UK leverage ratio which is based on capital on the last day of each month in the quarter and an exposure measure for each day in the quarter. The Group is also required to disclose a UK leverage ratio based on capital and exposure on the last day of the quarter. Both approaches exclude qualifying claims on central banks from the leverage exposures.

 

Leverage ratios1,2

As at

30.09.19

As at

30.06.19

As at

31.12.18

£bn

£bn

£bn

Average UK leverage ratio

4.6%

4.7%

4.5%

Average T1 capital3

53.8

 53.8

 50.5

Average UK leverage exposure

1,171

 1,135

 1,110

 

 

 

 

UK leverage ratio

4.8%

5.1%

5.1%

 

 

 

 

CET1 capital

41.9

 42.9

 41.1

AT1 capital

10.7

 12.0

 9.5

T1 capital3

52.6

 54.9

 50.6

 

 

 

 

UK leverage exposure

1,100

1,079

999

 

 

 

 

UK leverage exposure

 

 

 

Accounting assets

 

 

 

Derivative financial instruments

286

244

223

Derivative cash collateral

69

59

48

Securities financing transactions (SFTs)4

142

144

130

Loans and advances and other assets4

793

786

732

Total IFRS assets

1,290

1,233

1,133

 

 

 

 

Regulatory consolidation adjustments

1

(1)

(2)

 

 

 

 

Derivatives adjustments

 

 

 

Derivatives netting

(263)

(223)

(202)

Adjustments to cash collateral

(61)

(51)

(42)

Net written credit protection

16

15

19

Potential future exposure (PFE) on derivatives

134

127

123

Total derivatives adjustments

(174)

(132)

(102)

 

 

 

 

SFTs adjustments

18

17

17

 

 

 

 

Regulatory deductions and other adjustments

(13)

(12)

(11)

 

 

 

 

Weighted off-balance sheet commitments

114

110

108

 

 

 

 

Qualifying central bank claims

(136)

(136)

(144)

 

 

 

 

UK leverage exposure2

1,100

1,079

999

 

1

Fully loaded average UK leverage ratio was 4.5%, with £1,170bn of leverage exposure. Fully loaded UK leverage ratio was 4.7%, with £51.5bn of T1 capital and £1,099bn 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.

4

Comparative numbers have been revised to reflect the allocation of margin lending from Loans and advances and other assets to SFTs.

 

The average UK leverage ratio increased to 4.6% (December 2018: 4.5%). T1 capital increased £3.3bn to £53.8bn, which included the accretion of CET1 capital and a net increase in AT1 capital, partially offset by an increase in exposure of £61bn to £1,171bn primarily driven by SFTs trading activity.

 

The UK leverage ratio decreased to 4.8% (December 2018: 5.1%). T1 capital increased £2.0bn to £52.6bn, which included the accretion of CET1 capital and a net increase in AT1 capital. The UK leverage exposure increased £101bn to £1,100bn primarily driven Loans and advances and other assets and SFTs.

 

The Group also discloses a CRR leverage ratio1 within its additional regulatory disclosures prepared in accordance with EBA guidelines on disclosure under Part Eight of the CRR (see Barclays PLC Pillar 3 Report Q3 2019, due to be published on 25 October 2019 and which is 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.

 

Minimum requirement for own funds and eligible liabilities

 

The CRR II requirements relating to own funds and eligible liabilities came into effect from 27 June 2019. Eligible liabilities have been calculated reflecting our 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; or (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.

 

Following the revision of the Pillar 2A requirement, the Group's indicative MREL is currently expected to be 31.2% of RWAs from 1 January 2022 comprising:

 

·

Loss absorption and recapitalisation amounts consisting of two times the 8% Pillar 1 and 5.3% Pillar 2A requirement

 

·

Capital buffers including a 1.5% G-SII buffer, 2.5% CCB and 0.5% CCyB

 

Own funds and eligible liabilities ratios1

As at

30.09.19

As at

30.06.19

As at

31.12.183

CET1 capital

13.4%

13.4%

13.2%

AT1 capital instruments and related share premium accounts2

3.4%

3.8%

3.1%

T2 capital instruments and related share premium accounts2

2.6%

2.4%

2.1%

Eligible liabilities

11.0%

10.6%

9.7%

Total Barclays PLC (the Parent company) own funds and eligible liabilities

30.4%

30.2%

28.1%

Qualifying AT1 capital (including minority interests) issued by subsidiaries

0.2%

0.2%

0.7%

Qualifying T2 capital (including minority interests) issued by subsidiaries

1.5%

1.6%

1.6%

Total own funds and eligible liabilities, including eligible Barclays Bank PLC instruments

32.1%

32.0%

30.5%

 

 

 

 

Own funds and eligible liabilities1

£bn

£bn

£bn3

CET1 capital

41.9

42.9

41.1

AT1 capital instruments and related share premium accounts2

10.7

12.0

9.6

T2 capital instruments and related share premium accounts2

8.1

7.8

6.6

Eligible liabilities

34.5

33.7

30.4

Total Barclays PLC (the Parent company) own funds and eligible liabilities

95.2

96.4

87.7

Qualifying AT1 capital (including minority interests) issued by subsidiaries

0.8

0.7

2.3

Qualifying T2 capital (including minority interests) issued by subsidiaries

4.7

5.0

5.1

Total own funds and eligible liabilities, including eligible Barclays Bank PLC instruments

100.6

102.0

95.1

 

 

 

 

Total RWAs1

313.3

319.1

311.9

 

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 £0.1bn (included in AT1 issued by subsidiaries in December 2018: £0.1bn), and other T2 credit risk adjustments and deductions of £0.2bn (included in T2 issued by subsidiaries in December 2018: £0.3bn).

3

The comparatives are based on the Bank of England's statement of policy on MREL.

 

Condensed Consolidated Financial Statements

 

Condensed consolidated income statement

 

 

Nine months ended

Nine months ended

 

 

30.09.19

30.09.18

 

 

£m

£m

Total income

 

16,331

16,063

Credit impairment charges and other provisions

 

(1,389)

(825)

Net operating income

 

14,942

15,238

Operating expenses excluding litigation and conduct

 

(10,051)

(10,003)

Litigation and conduct

 

(1,682)

(2,147)

Operating expenses

 

(11,733)

(12,150)

Other net income

 

51

32

Profit before tax

 

3,260

3,120

Tax charge1

 

(814)

(836)

Profit after tax

 

2,446

2,284

 

 

 

 

Attributable to:

 

 

 

Equity holders of the parent1

 

1,780

1,611

Other equity instrument holders

 

628

522

Total equity holders of the parent

 

2,408

2,133

Non-controlling interests

 

38

151

Profit after tax

 

2,446

2,284

 

 

 

 

Earnings per share

 

p

p

Basic earnings per ordinary share

 

10.4

9.4

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to AT1 instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. Comparatives have been restated, reducing the tax charge for Q318 YTD by £141m. This change does not impact EPS or return on average tangible shareholders' equity.

 

Condensed consolidated balance sheet

 

 

As at

As at

 

 

30.09.191

31.12.18

Assets

 

£m

£m

Cash and balances at central banks

 

156,668

177,069

Cash collateral and settlement balances

 

116,699

77,222

Loans and advances at amortised cost

 

345,124

326,406

Reverse repurchase agreements and other similar secured lending

 

2,653

2,308

Trading portfolio assets

 

120,491

104,187

Financial assets at fair value through the income statement

 

162,882

149,648

Derivative financial instruments

 

286,403

222,538

Financial assets at fair value through other comprehensive income

 

74,844

52,816

Investments in associates and joint ventures

 

761

762

Goodwill and intangible assets

 

8,068

7,973

Current tax assets

 

603

798

Deferred tax assets

 

2,879

3,828

Other assets

 

12,276

7,728

Total assets

 

1,290,351

1,133,283

 

 

 

 

Liabilities

 

 

 

Deposits at amortised cost

 

420,638

394,838

Cash collateral and settlement balances

 

103,980

67,522

Repurchase agreements and other similar secured borrowing

 

18,460

18,578

Debt securities in issue

 

86,588

82,286

Subordinated liabilities

 

19,435

20,559

Trading portfolio liabilities

 

43,048

37,882

Financial liabilities designated at fair value

 

233,734

216,834

Derivative financial instruments

 

283,529

219,643

Current tax liabilities

 

722

628

Deferred tax liabilities

 

-

51

Other liabilities

 

12,799

10,683

Total liabilities

 

1,222,933

1,069,504

 

 

 

 

Equity

 

 

 

Called up share capital and share premium

 

4,527

4,311

Other reserves

 

6,943

5,153

Retained earnings

 

43,867

43,460

Shareholders' equity attributable to ordinary shareholders of the parent

 

55,337

52,924

Other equity instruments

 

10,860

9,632

Total equity excluding non-controlling interests

 

66,197

62,556

Non-controlling interests

 

1,221

1,223

Total equity

 

67,418

63,779

 

 

 

 

Total liabilities and equity

 

1,290,351

1,133,283

 

1

Barclays adopted the accounting standard IFRS 16 on 1 January 2019. The impact on adoption was an increase in property, plant and equipment of £1.6bn, an increase in other liabilities of £1.6bn, with no material impact on retained earnings.

 

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

Nine months ended 30.09.19

£m

£m

£m

£m

£m

£m

£m

Balance as at 1 January 2019

4,311

9,632

5,153

43,460

62,556

1,223

63,779

Profit after tax

-

628

-

1,780

2,408

38

2,446

Other comprehensive profit after tax for the period

-

-

1,793

283

2,076

-

2,076

Total comprehensive income for the period

-

628

1,793

2,063

4,484

38

4,522

Issue of new ordinary shares

181

-

-

-

181

-

181

Issue of shares under employee share schemes

35

-

-

359

394

-

394

Issue and exchange of other equity instruments

-

1,238

-

(406)

832

-

832

Other equity instruments coupons paid1

-

(628)

-

-

(628)

-

(628)

Vesting of shares under employee share schemes

-

-

(3)

(389)

(392)

-

(392)

Dividends paid

-

-

-

(1,201)

(1,201)

(38)

(1,239)

Other movements

-

(10)

-

(19)

(29)

(2)

(31)

Balance as at 30 September 2019

4,527

10,860

6,943

43,867

66,197

1,221

67,418

 

 

 

 

 

 

 

 

Three months ended 30.09.19

 

 

 

 

 

 

 

Balance as at 1 July 2019

4,494

12,123

6,403

44,556

67,576

1,221

68,797

Profit after tax

-

265

-

(292)

(27)

4

(23)

Other comprehensive profit after tax for the period

-

-

539

423

962

-

962

Total comprehensive income for the period

-

265

539

131

935

4

939

Issue of new ordinary shares

22

-

-

-

22

-

22

Issue of shares under employee share schemes

11

-

-

118

129

-

129

Issue and exchange of other equity instruments

-

(1,266)

-

(406)

(1,672)

-

(1,672)

Other equity instruments coupons paid1

-

(265)

-

-

(265)

-

(265)

Vesting of shares under employee share schemes

-

-

1

(5)

(4)

-

(4)

Dividends paid

-

-

-

(517)

(517)

(4)

(521)

Other movements

-

3

-

(10)

(7)

-

(7)

Balance as at 30 September 2019

4,527

10,860

6,943

43,867

66,197

1,221

67,418

 

 

As at

As at

 

30.09.19

31.12.18

Other reserves

£m

£m

Currency translation reserve

4,605

3,888

Fair value through other comprehensive income reserve

8

(258)

Cash flow hedging reserve

1,516

660

Own credit reserve

(167)

(121)

Other reserves and treasury shares

981

984

Total

6,943

5,153

 

1

From 2019, due to an IAS 12 update, the tax relief on payments in relation to AT1 instruments has been recognised in the tax charge of the income statement, whereas it was previously recorded in retained earnings. This change does not impact EPS or return on average tangible shareholders' equity.

 

Barclays PLC Parent Company

 

Summary balance sheet

 

 

As at

As at

 

30.09.19

31.12.18

Assets

£m

£m

Investment in subsidiaries

59,689

57,374

Loans and advances to subsidiaries

30,758

29,374

Financial assets at fair value through the income statement

11,207

6,945

Derivative financial instruments

98

168

Other assets

68

115

Total assets

101,820

93,976

 

 

 

Liabilities

 

 

Deposits at amortised cost

537

576

Debt securities in issue

33,090

32,373

Subordinated liabilities

8,191

6,775

Financial liabilities designated at fair value

3,650

-

Other liabilities

121

72

Total liabilities

45,589

39,796

 

 

 

Equity

 

 

Called up share capital

4,317

4,283

Share premium account

210

28

Other equity instruments

10,865

9,633

Other reserves

394

394

Retained earnings

40,445

39,842

Total equity

56,231

54,180

 

Total liabilities and equity

101,820

93,976

 

Investment in subsidiaries

 

The investment in subsidiaries of £59,689m (December 2018: £57,374m) predominantly relates to investments in Barclays Bank PLC and Barclays Bank UK PLC, as well as holdings of their AT1 securities of £10,986m (December 2018: £9,666m). The increase during the period was driven by capital contributions into Barclays Bank PLC of £995m and additional AT1 holdings of $2,000m, £1,000m and £1,000m, partially offset by the redemption of AT1 holdings with principal amounts totalling $1,211m, €1,077m and £698m.

 

Financial assets and liabilities designated at fair value

 

Financial liabilities designated at fair value of £3,650m (December 2018: £nil) comprises issuances during the period totalling $2,750m Fixed-to-Floating Rate Senior Notes, £600m Fixed Rate Senior Notes, AUD940m Fixed and Floating Rate Senior Notes and ¥20,000m Fixed-to-Floating Rate Bonds. The proceeds raised through these transactions were used to invest in subsidiaries of Barclays PLC and are included within the financial assets designated at fair value through the income statement balance of £11,207m (December 2018: £6,945m).

 

Subordinated liabilities

 

During the period, Barclays PLC issued $1,500m of Fixed-to-Floating Rate Subordinated Notes, which are included within the subordinated liabilities balance of £8,191m (December 2018: £6,775m).

 

Other equity instruments

 

Other equity instruments comprises AT1 securities issued by Barclays PLC. There have been three issuances during the period, with principal amounts totalling $2,000m, £1,000m and £1,000m, whilst there were redemptions in Q319 with principal amounts totalling $1,211m, €1,077m and £698m.

 

Management of internal investments, loans and advances

 

Barclays PLC retains the discretion to manage the nature of its internal investments in subsidiaries according to their regulatory and business needs. Barclays PLC may invest capital and funding into Barclays Bank PLC, Barclays Bank UK PLC and other Group subsidiaries such as the Group Service Company and the US Intermediate Holding Company (IHC).

 

Appendix: Non-IFRS Performance Measures

 

The Group's management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses' performance between financial periods, and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by management.

 

However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well.

 

Non-IFRS performance measures glossary

 

Measure

Definition

Loan: deposit ratio

Loans and advances at amortised cost divided by deposits at amortised cost.

Period end allocated tangible equity

Allocated tangible equity is calculated as 13.0% (2018: 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 37.

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 37.

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 22.

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 21.

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 45.

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 38 to 45.

 

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 13.0% (2018: 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.

 

 

(Loss)/profit attributable to ordinary equity holders of the parent

 

Average tangible equity

 

Return on average tangible equity

Nine months ended 30.09.19

£m

 

£bn

 

%

Barclays UK

(157)

 

10.4

 

(2.0)

    Corporate and Investment Bank

1,787

 

25.9

 

9.2

    Consumer, Cards and Payments

632

 

5.3

 

15.8

Barclays International

2,419

 

31.2

 

10.3

Head Office

(482)

 

5.0

 

n/m

Barclays Group

1,780

 

46.6

 

5.1

 

 

 

 

 

 

Nine months ended 30.09.18

 

 

 

 

 

Barclays UK

957

 

10.0

 

12.7

    Corporate and Investment Bank

1,865

 

26.0

 

9.6

    Consumer, Cards and Payments

755

 

4.9

 

20.7

Barclays International

2,620

 

30.9

 

11.3

Head Office

(1,966)

 

3.2

 

n/m

Barclays Group

1,611

 

44.1

 

4.9

 

Performance measures excluding litigation and conduct

 

 

 

 

 

 

 

 

Nine months ended 30.09.19

 

Barclays UK

Corporate and Investment Bank

Consumer, Cards and Payments

Barclays International

Head Office

Barclays Group

Cost: income ratio

£m

£m

£m

£m

£m

£m

Total operating expenses

(4,497)

(5,221)

(1,732)

(6,953)

(283)

(11,733)

Impact of litigation and conduct

1,524

30

-

30

128

1,682

Operating expenses

(2,973)

(5,191)

(1,732)

(6,923)

(155)

(10,051)

 

 

 

 

 

 

 

Total income

5,394

7,917

3,306

11,223

(286)

16,331

 

 

 

 

 

 

 

Cost: income ratio excluding litigation and conduct

55%

66%

52%

62%

n/m

62%

 

 

 

 

 

 

 

Profit before tax

 

 

 

 

 

 

Profit/(loss) before tax

375

2,596

882

3,478

(593)

3,260

Impact of litigation and conduct

1,524

30

-

30

128

1,682

Profit/(loss) before tax excluding litigation and conduct

1,899

2,626

882

3,508

(465)

4,942

 

 

 

 

 

 

 

Profit attributable to ordinary equity holders of the parent

 

 

 

 

 

 

Attributable (loss)/profit

(157)

1,787

632

2,419

(482)

1,780

Post-tax impact of litigation and conduct

1,489

26

-

26

96

1,611

Profit/(loss) attributable to ordinary equity holders of the parent excluding litigation and conduct

1,332

1,813

632

2,445

(386)

3,391

 

 

 

 

 

 

 

Return on average tangible shareholders' equity

£bn

£bn

£bn

£bn

£bn

£bn

Average shareholders' equity

13.9

25.9

6.4

32.3

8.4

54.6

Average goodwill and intangibles

(3.5)

-

(1.1)

(1.1)

(3.4)

(8.0)

Average tangible shareholders' equity

10.4

25.9

5.3

31.2

5.0

46.6

 

 

 

 

 

 

 

Return on average tangible shareholders' equity excluding litigation and conduct

17.2%

9.3%

15.8%

10.4%

n/m

9.7%

 

 

 

 

 

 

 

Basic earnings per ordinary share

 

 

 

 

 

 

Basic weighted average number of shares (m)

 

 

 

 

 

17,192

 

 

 

 

 

 

 

Basic earnings per ordinary share excluding litigation and conduct

 

 

 

 

 

19.7p

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended 30.09.18

 

Barclays UK

Corporate and Investment Bank

Consumer, Cards and Payments

Barclays International

Head Office

Barclays Group

Cost: income ratio

£m

£m

£m

£m

£m

£m

Total operating expenses

(3,429)

(5,303)

(1,674)

(6,977)

(1,744)

(12,150)

Impact of litigation and conduct

468

45

49

94

1,585

2,147

Operating expenses

(2,961)

(5,258)

(1,625)

(6,883)

(159)

(10,003)

 

 

 

 

 

 

 

Total income

5,520

7,614

3,191

10,805

(262)

16,063

 

 

 

 

 

 

 

Cost: income ratio excluding litigation and conduct

54%

69%

51%

64%

n/m

62%

 

 

 

 

 

 

 

Profit before tax

 

 

 

 

 

 

Profit/(loss) before tax

1,566

2,508

1,052

3,560

(2,006)

3,120

Impact of litigation and conduct

468

45

49

94

1,585

2,147

Profit/(loss) before tax excluding litigation and conduct

2,034

2,553

1,101

3,654

(421)

5,267

 

 

 

 

 

 

 

Profit attributable to ordinary equity holders of the parent

 

 

 

 

 

 

Attributable profit/(loss)

957

1,865

755

2,620

(1,966)

1,611

Post-tax impact of litigation and conduct

460

36

36

72

1,542

2,074

Profit/(loss) attributable to ordinary equity holders of the parent excluding litigation and conduct

1,417

1,901

791

2,692

(424)

3,685

 

 

 

 

 

 

 

Return on average tangible shareholders' equity

£bn

£bn

£bn

£bn

£bn

£bn

Average shareholders' equity

13.5

26.3

5.9

32.2

6.2

51.9

Average goodwill and intangibles

(3.5)

(0.3)

(1.1)

(1.4)

(2.9)

(7.8)

Average tangible shareholders' equity

10.0

26.0

4.9

30.9

3.2

44.1

 

 

 

 

 

 

 

Return on average tangible shareholders' equity excluding litigation and conduct

18.9%

9.7%

21.7%

11.6%

n/m

11.1%

 

 

 

 

 

 

 

Basic earnings per ordinary share

 

 

 

 

 

 

Basic weighted average number of shares (m)

 

 

 

 

 

17,074

 

 

 

 

 

 

 

Basic earnings per ordinary share excluding litigation and conduct

 

 

 

 

 

21.6p

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Barclays Group

 

 

 

 

 

 

 

 

 

 

 

Q319

Q219

Q119

 

Q418

Q318

Q218

Q118

 

Q417

Cost: income ratio

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Total operating expenses

(4,861)

(3,554)

(3,318)

 

(4,093)

(3,434)

(3,391)

(5,325)

 

(4,369)

Impact of litigation and conduct

1,568

53

61

 

60

105

81

1,961

 

383

Operating expenses

(3,293)

(3,501)

(3,257)

 

(4,033)

(3,329)

(3,310)

(3,364)

 

(3,986)

 

 

 

 

 

 

 

 

 

 

 

Total income

5,541

5,538

5,252

 

5,073

5,129

5,576

5,358

 

5,022

 

 

 

 

 

 

 

 

 

 

 

Cost: income ratio excluding litigation and conduct

59%

63%

62%

 

79%

65%

59%

63%

 

79%

 

 

 

 

 

 

 

 

 

 

 

Profit before tax

 

 

 

 

 

 

 

 

 

 

Profit/(loss) before tax

246

1,531

1,483

 

374

1,461

1,895

(236)

 

93

Impact of litigation and conduct

1,568

53

61

 

60

105

81

1,961

 

383

Profit before tax excluding litigation and conduct

1,814

1,584

1,544

 

434

1,566

1,976

1,725

 

476

 

 

 

 

 

 

 

 

 

 

 

Profit attributable to ordinary equity holders of the parent

 

 

 

 

 

 

 

 

 

 

Attributable (loss)/profit

(292)

1,034

1,038

 

(14)

1,050

1,279

(718)

 

(1,245)

Post-tax impact of litigation and conduct

1,525

40

46

 

62

85

59

1,930

 

351

Profit/(loss) attributable to ordinary equity holders of the parent excluding litigation and conduct

1,233

1,074

1,084

 

48

1,135

1,338

1,212

 

(894)

 

 

 

 

 

 

 

 

 

 

 

Return on average tangible shareholders' equity

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Average shareholders' equity

56.4

54.0

53.2

 

52.2

52.5

51.3

52.0

 

55.9

Average goodwill and intangibles

(8.0)

(7.8)

(8.0)

 

(7.9)

(7.9)

(7.8)

(7.8)

 

(7.8)

Average tangible shareholders' equity

48.4

46.2

45.2

 

44.3

44.6

43.5

44.2

 

48.1

 

 

 

 

 

 

 

 

 

 

 

Return on average tangible shareholders' equity excluding litigation and conduct

10.2%

9.3%

9.6%

 

0.4%

10.2%

12.3%

11.0%

 

(7.4%)

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per ordinary share

 

 

 

 

 

 

 

 

 

 

Basic weighted average number of shares (m)

17,192

17,178

17,111

 

17,075

17,074

17,067

17,037

 

16,996

 

 

 

 

 

 

 

 

 

 

 

Basic earnings/(loss) per ordinary share excluding litigation and conduct

7.2p

6.3p

6.3p

 

0.3p

6.6p

7.8p

7.1p

 

(5.3p)

 

 

 

 

 

 

 

 

 

 

 

 

Barclays UK

 

 

 

 

 

 

 

 

 

 

 

Q319

Q219

Q119

 

Q418

Q318

Q218

Q118

 

Q417

Cost: income ratio

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Total operating expenses

(2,432)

(1,063)

(1,002)

 

(1,175)

(1,042)

(971)

(1,416)

 

(1,229)

Impact of litigation and conduct

1,480

41

3

 

15

54

3

411

 

53

Operating expenses

(952)

(1,022)

(999)

 

(1,160)

(988)

(968)

(1,005)

 

(1,176)

 

 

 

 

 

 

 

 

 

 

 

Total income

1,846

1,771

1,777

 

1,863

1,896

1,836

1,788

 

1,870

 

 

 

 

 

 

 

 

 

 

 

Cost: income ratio excluding litigation and conduct

52%

58%

56%

 

62%

52%

53%

56%

 

63%

 

 

 

 

 

 

 

 

 

 

 

Profit before tax

 

 

 

 

 

 

 

 

 

 

(Loss)/profit before tax

(687)

477

585

 

390

740

656

170

 

452

Impact of litigation and conduct

1,480

41

3

 

15

54

3

411

 

53

Profit before tax excluding litigation and conduct

793

518

588

 

405

794

659

581

 

505

 

 

 

 

 

 

 

 

 

 

 

Profit attributable to ordinary equity holders of the parent

 

 

 

 

 

 

 

 

 

 

Attributable (loss)/profit

(907)

328

422

 

241

510

473

(26)

 

258

Post-tax impact of litigation and conduct

1,457

30

2

 

12

48

1

411

 

37

Profit attributable to ordinary equity holders of the parent excluding litigation and conduct

550

358

424

 

253

558

474

385

 

295

 

 

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Average allocated equity

13.9

13.8

13.9

 

13.6

13.7

13.6

13.4

 

13.1

Average goodwill and intangibles

(3.5)

(3.5)

(3.5)

 

(3.5)

(3.6)

(3.5)

(3.5)

 

(3.5)

Average allocated tangible equity

10.4

10.3

10.4

 

10.1

10.1

10.1

9.8

 

9.6

 

 

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity excluding litigation and conduct

21.2%

13.9%

16.4%

 

10.1%

22.0%

18.8%

15.7%

 

12.3%

 

Barclays International

 

 

 

 

 

 

 

 

 

 

 

Q319

Q219

Q119

 

Q418

Q318

Q218

Q118

 

Q417

Cost: income ratio

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Total operating expenses

(2,282)

(2,225)

 

(2,684)

(2,309)

(2,353)

(2,315)

 

(2,948)

Impact of litigation and conduct

-

11

19

 

33

32

47

15

 

255

Operating expenses

(2,282)

(2,435)

(2,206)

 

(2,651)

(2,277)

(2,306)

(2,300)

 

(2,693)

 

 

 

 

 

 

 

 

 

 

 

Total income

3,750

3,570

 

3,221

3,290

3,707

3,808

 

3,319

 

 

 

 

 

 

 

 

 

 

 

Cost: income ratio excluding litigation and conduct

61%

62%