Barclays PLC

Results Announcement

 

31 December 2020

 

Table of Contents

 

Results Announcement		Page
Notes		1
Performance Highlights		2-4
Group Chief Executive Officer's Review		5
Group Finance Director's Review		6-7
Results by Business
·	Barclays UK	8-10
·	Barclays International	11-14
·	Head Office	15
Quarterly Results Summary		16
Quarterly Results by Business		17-22
Performance Management
·	Margins and B alances	23
·	Remuneration	24-25
Risk Management
·	Risk Management and Principal Risks	26
·	Credit Risk	27-40
·	Market Risk	41
·	Treasury and Capital Risk	42-52
Statement of Directors' Responsibilities		53
Condensed Consolidated Financial Statements		54-58
Financial Statement Notes		59-64
Appendix: Non-IFRS Performance Measures		65-74
Shareholder Information		75

 

BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE: +44 (0) 20 7116 1000. COMPANY NO. 48839

 

Notes

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 (as it forms part of Retained EU Law as defined in the European Union (Withdrawal) Act 2018).

 

The terms Barclays or Group refer to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis compares the year ended 31 December 2020 to the corresponding 12 months of 2019 and balance sheet analysis as at 31 December 2020 with comparatives relating to 31 December 2019. The abbreviations '£m' and '£bn' represent millions and thousands of millions of Pounds Sterling respectively; the abbreviations '$m' and '$bn' represent millions and thousands of millions of US Dollars respectively; and the abbreviations '€m' and '€bn' represent millions and thousands of millions of Euros respectively.

 

There are a number of key judgement areas, for example impairment calculations, which are based on models and which are subject to ongoing adjustment and modifications. Reported numbers reflect best estimates and judgements at the given point in time .

 

Relevant terms that are used in this document but are not defined under applicable regulatory guidance or International Financial Reporting Standards (IFRS) are explained in the results glossary that can be accessed at home.barclays/investor-relations/reports-and-events/latest-financial-results .

 

The information in this announcement, which was approved by the Board of Directors on 17 February 2021, does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2020 , which contain an unmodified audit report under Section 495 of the Companies Act 2006 (which did not make any statements under Section 498 of the Companies Act 2006) will be delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.

 

These results will be furnished on Form 6-K with the US Securities and Exchange Commission ( SEC) as soon as practicable following their publication. Once furnished with the SEC, a copy of the Form 6-K will be available from the SEC's website at www.sec.gov .

 

Barclays is a frequent issuer in the debt capital markets and regularly meets with investors via formal road-shows and other ad hoc meetings. Consistent with its usual practice, Barclays expects that from time to time over the coming quarter it will meet with investors globally to discuss these results and other matters relating to the Group.

 

Non-IFRS performance measures

 

Barclays management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses' performance between financial periods and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays management. However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Refer to the appendix on pages 65 to 74 for further information and calculations of non-IFRS performance measures included throughout this document, and the most directly comparable IFRS measures.

 

Forward-looking statements

 

This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as 'may', 'will', 'seek', 'continue', 'aim', 'anticipate', 'target', 'projected', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', 'achieve' or other words of similar meaning. Forward-looking statements can be made in writing but also may be made verbally by members of the management of the Group (including, without limitation, during management presentations to financial analysts) in connection with this document. Examples of forward-looking statements include, among others, statements or guidance regarding or relating to the Group's future financial position, income growth, assets, impairment charges, provisions, business strategy, capital, leverage and other regulatory ratios, capital distributions (including dividend payout ratios and expected payment strategies), projected levels of growth in the banking and financial markets, projected costs or savings, any commitments and targets, estimates of capital expenditures, plans and objectives for future operations, projected employee numbers, IFRS impacts and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. The forward-looking statements speak only as at the date on which they are made. Forward-looking statements may be affected by: changes in legislation; the development of standards and interpretations under IFRS, including evolving practices with regard to the interpretation and application of accounting and regulatory standards; the outcome of current and future legal proceedings and regulatory investigations; future levels of conduct provisions; the policies and actions of governmental and regulatory authorities; the Group's ability along with government and other stakeholders to manage and mitigate the impacts of climate change effectively; geopolitical risks; and the impact of competition. In addition, factors including (but not limited to) the following may have an effect: capital, leverage and other regulatory rules applicable to past, current and future periods; UK, US, Eurozone and global macroeconomic and business conditions; the effects of any volatility in credit markets; market related risks such as changes in interest rates and foreign exchange rates; effects of changes in valuation of credit market exposures; changes in valuation of issued securities; volatility in capital markets; changes in credit ratings of any entity within the Group or any securities issued by such entities; direct and indirect impacts of the coronavirus (COVID-19) pandemic; instability as a result of the UK's exit from the European Union (EU), the effects of the EU-UK Trade and Cooperation Agreement and the disruption that may subsequently result in the UK and globally; the risk of cyber-attacks, information or security breaches or technology failures on the Group's business or operations; and the success of future acquisitions, disposals and other strategic transactions. A number of these influences and factors are beyond the Group's control. As a result, the Group's actual financial position, future results, capital distributions, capital, leverage or other regulatory ratios or other financial and non-financial metrics or performance measures may differ materially from the statements or guidance set forth in the Group's forward-looking statements. Additional risks and factors which may impact the Group's future financial condition and performance are identified in our filings with the SEC (including, without limitation, our Annual Report on Form 20-F for the fiscal year ended 31 December 2020), which are available on the SEC's website at  www.sec.gov .

 

Subject to our obligations under the applicable laws and regulations of any relevant jurisdiction, (including, without limitation, the UK and the US), in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Performance Highlights

 

Helping support the economy during the COVID-19 pandemic

 

COVID-19 support   Continuing to support our customers, clients, communities and colleagues

·

In 2020, provided over 680k payment holidays to customers, c.£27bn of COVID-19 support to UK businesses1 and helped businesses and institutions access global capital markets including underwriting c.£1.5tn of new issuance2. Also waived c.£100m of interest and fees to customers, and committed £100m to a COVID-19 Community Aid Package

 

Barclays' diversified business model delivered a resilient operating performance, allowing capital distributions to shareholders equivalent to 5.0p per share

 

Despite the pandemic, Barclays remained profitable every quarter during 2020 and delivered a full year Group profit before tax of £3.1bn (2019: £4.4bn, including a Payment Protection Insurance (PPI) provision of £1.4bn), attributable profit of £1.5bn (2019: £2.5bn), a return on tangible equity (RoTE) of 3.2% (2019: 5.3%) and earnings per share (EPS) of 8.8p (2019: 14.3p)

 

Income   Diversified income streams with strong CIB income offsetting challenges in Barclays UK and CC&P	Group income of £21.8bn up 1% versus prior year
	·	Barclays International income of £15.9bn, up 8% versus prior year
		-	Corporate and Investment Bank (CIB) income of £12.5bn, up 22% due to strong Markets income reflecting market share gains3 in a buoyant trading environment, as well as strong Banking income, resulting in the best ever year on a comparable basis for both businesses4
		-	Consumer, Cards and Payments (CC&P) income of £3.4bn, down 22% driven by lower credit card balances, margin compression and reduced payments activity
	·	Barclays UK income of £6.3bn, down 14% versus prior year reflecting lower unsecured lending balances and interest rates, and COVID-19 customer support actions, partially offset by mortgages growth
Credit impairment charges   Increased impairment provisioning driving higher coverage ratios across portfolios	Group credit impairment charges increased to £4.8bn (2019: £1.9bn) due to the deterioration in economic outlook driven by the COVID-19 pandemic
	·	Current year charge includes £2.3bn of non-default provision for expected future customer and client stress
	·	Total balance sheet impairment allowance of £9.4bn (2019: £6.6bn), resulting in higher coverage ratios for unsecured consumer lending and wholesale portfolios of 12.3% (2019: 8.1%) and 1.5% (2019: 0.8%) respectively
Costs5 Stable cost: income ratio including structural cost actions	Group operating expenses of £13.7bn up 1% versus prior year
	·	2020 operating expenses reflect £0.4bn of structural cost actions mainly taken in Q420 and additional COVID-19 related costs resulting in a cost: income ratio of 63% (2019: 63%)
Capital   Strong capital position	Common equity tier 1 (CET1) ratio of 15.1% up 130bps versus prior year
	·	The increase reflects profits, regulatory measures and cancellation of the full year 2019 dividend payment, partially offset by the announced 1.0p full year 2020 dividend and an increase in Risk Weighted Assets (RWAs)
Capital distributions Return of capital through dividends and share buybacks	Capital distributions announced of 5.0p per share in aggregate:
	·	1.0p 2020 full year dividend declared
	·	Intend to initiate a share buyback of up to £700m, which would have an effect of 23bps on the CET1 ratio
Q420 performance
Remained profitable in Q420 despite the continuing impact of the pandemic	Q420 Group profit before tax of £0.6bn (Q419: £1.1bn) and attributable profit of £0.2bn (Q419: £0.7bn), resulting in a RoTE of 1.8% (Q419: 5.9%) and EPS of 1.3p (Q419: 3.9p)
	·	Q420 Group income of £4.9bn, down 7% versus prior year
	·	Q420 Barclays International income of £3.5bn, up 1% versus prior year
		-	Q420 CIB income of £2.6bn, up 14% versus prior year driven by a 19% increase in Markets income and 30% increase in Banking fees, partially offset by a 12% decrease in Corporate income
		-	Q420 CC&P income of £0.8bn, down 25% versus prior year and down 3% versus prior quarter, as the impacts of the pandemic continued to result in lower balances, margin compression and reduced payments activity
	·	Q420 Barclays UK income of £1.6bn, down 17% versus prior year but up 5% versus prior quarter, reflecting lower unsecured lending balances and interest rates, partially offset by mortgages growth
	·	Q420 Group credit impairment charge of £0.5bn, down 6% versus prior year and down 19% versus prior quarter
	·	Q420 Group operating expenses of £3.8bn5, up 7% versus prior year and up 11% versus prior quarter, including the UK bank levy of £0.3bn (Q419: £0.2bn) and structural cost actions of £0.3bn
	·	CET1 ratio of 15.1%6, an increase of 50bps in Q420 mainly due to a 30bps benefit from regulatory changes to software assets

 

1	Total payment holidays granted as at 31 December 2020, business lending and commercial paper issuance data as at 12 and 15 February 2021 respectively.
2	Across Equity and Debt Capital Markets in Q220-Q420.
3	Data source: Coalition Greenwich, Preliminary FY20 Competitor Analysis. Market share represents Barclays share of the Global Industry Revenue Pool. Analysis is based on Barclays internal business structure and internal revenues.
4	Period covering Q114-Q420. Pre 2014 financials were not restated following re-segmentation in Q116.
5	Excluding litigation and conduct.
6	On 12 February 2021 the Prudential Regulation Authority (PRA) launched a consultation on certain items within the Basel standards that remain to be implemented in the UK as well as setting out proposed new PRA CRR rules. The proposals include reverting to the previous treatment of 100% CET1 capital deduction for qualifying software assets by the end of 2021, meaning the benefit in the CET1 ratio is likely to be reversed in future periods.

 

Group outlook and targets

 

Outlook Remains uncertain and subject to change depending on the evolution and persistence of the COVID-19 pandemic	Returns
	·	Barclays expects to deliver meaningful year-on-year RoTE improvement in 2021
	Income
	·	Headwinds to income in Barclays UK are expected to persist in 2021 and the medium-term, including the subdued demand for unsecured lending and the low interest rate environment
	·	Within Barclays International, CC&P income outlook remains uncertain and contingent on the evolution of US and UK spending and cards balances; after a strong 2020 CIB performance, driven by Markets and Banking income, the franchise is well positioned for the future
	Impairment
	·	Provided macroeconomic assumptions remain consistent with expectations, the Group expects that the full year 2021 impairment charge will be materially below that of 2020
	Costs
	·	COVID-19 related expenses are likely to remain elevated in 2021. However, the Group will continue to drive efficiencies while investing in its franchise where appropriate
	Capital
	·	Barclays remains in a strong capital position with a year end CET1 ratio of 15.1%
	·	Certain headwinds to capital are likely in 2021, including procyclical effects on RWAs, reversal of regulatory forbearance applied through 2020 and increased pension contributions
	Capital distributions
	·	Barclays understands the importance of delivering attractive total cash returns to shareholders
	·	Announced a total payout equivalent to 5.0p per share, consistent with the temporary guardrails announced by the PRA in December 2020, comprising:
		-	1.0p 2020 full year dividend; and the
		-	Intention to initiate a share buyback of up to £700m, which is expected to commence in Q121

 

Targets	Barclays remains committed to its medium term targets:
	·	Returns: RoTE of greater than 10% over time
	·	Cost efficiency: Cost: income ratio below 60% over time
	·	Capital adequacy: CET1 ratio in the range of 13-14%

 

Barclays Group results
for the year ended	31.12.20	31.12.19
	£m	£m	% Change
Net interest income	8,122	9,407	(14)
Net fee, commission and other income	13,644	12,225	12
Total income	21,766	21,632	1
Credit impairment charges	(4,838)	(1,912)
Net operating income	16,928	19,720	(14)
Operating costs	(13,434)	(13,359)	(1)
UK bank levy	(299)	(226)	(32)
Operating expenses	(13,733)	(13,585)	(1)
Litigation and conduct	(153)	(1,849)	92
Total operating expenses	(13,886)	(15,434)	10
Other net income	23	71	(68)
Profit before tax	3,065	4,357	(30)
Tax charge	(604)	(1,003)	40
Profit after tax	2,461	3,354	(27)
Non-controlling interests	(78)	(80)	3
Other equity instrument holders	(857)	(813)	(5)
Attributable profit	1,526	2,461	(38)
Performance measures
Return on average tangible shareholders' equity	3.2%	5.3%
Average tangible shareholders' equity (£bn)	48.3	46.6
Cost: income ratio	64%	71%
Loan loss rate (bps)	138	55
Basic earnings per share	8.8p	14.3p	(38)
Dividend per share1	1.0p	3.0p
Share buyback announced2	700	-
Total payout equivalent per share	5.0p	3.0p	67
Performance measures excluding litigation and conduct3
Profit before tax	3,218	6,206	(48)
Attributable profit	1,638	4,194	(61)
Return on average tangible shareholders' equity	3.4%	9.0%
Cost: income ratio	63%	63%
Basic earnings per share	9.5p	24.4p	(61)
Balance sheet and capital management4	£bn	£bn
Loans and advances at amortised cost	342.6	339.1	1
Deposits at amortised cost	481.0	415.8	16
Tangible net asset value per share	269p	262p	3
Common equity tier 1 ratio	15.1%	13.8%
Common equity tier 1 capital	46.3	40.8
Risk weighted assets	306.2	295.1
Average UK leverage ratio	5.0%	4.5%
UK leverage ratio	5.3%	5.1%
Funding and liquidity
Group liquidity pool (£bn)	266	211	26
Liquidity coverage ratio	162%	160%
Loan: deposit ratio	71%	82%

 

 

1	In response to a request from the PRA, and to preserve additional capital for use in serving Barclays customers and clients through the extraordinary challenges presented by the COVID-19 pandemic, the Board agreed to cancel the 6.0p per ordinary share full year 2019 dividend.
2	Barclays intends to initiate a share buyback of up to £700m, which is expected to commence in Q121.
3	Refer to pages 65 to 74 for further information and calculations of performance measures excluding litigation and conduct.
4	Refer to pages 45 to 51 for further information on how capital, RWAs and leverage are calculated.

 

Group Chief Executive Officer's Review

 

"In a year in which the COVID-19 pandemic affected people across the globe, 2020 demonstrated our strengths, our values, and our resilience.

 

Throughout the pandemic we have focussed on preserving the financial and operational integrity of the firm so that we can maximise our support for clients and customers, for colleagues, and for the communities in which we live and work.

 

In the past year, we have helped companies to raise around £1.5tn through the global capital markets¹, extended around £27bn to businesses through UK government lending schemes, provided over 680k payment holidays to customers², waived around £100m of interest and fees, and committed £100m to charities through our COVID-19 Community Aid Package.

 

2020 demonstrated the value of our diversified banking model, delivering resilient Group results even in a difficult macroeconomic period, driven by the performance of our CIB.

 

Total income increased to £21.8bn. Within Barclays International, CIB income was up 22%, while CC&P income was down 22%. In Barclays UK, income was down 14%.

 

Pre-provision profits³ were broadly stable at £8.1bn. However, impairment charges, maintaining our cautious view of the impact of the pandemic, totalled £4.8bn. The fourth quarter impairment charge of c.£500m was however down 19% from the previous quarter.

 

Group profit before tax was £3.1bn for the year, and we remained profitable in every quarter, including generating profit before tax of £646m in the fourth quarter.

 

CIB income was £12.5bn, with both Markets and Banking achieving their best ever income performance⁴, up 45% and 8% respectively. Corporate income was down 13%, including the impact of lower interest rates. Overall, profit before tax in the CIB increased 35% to £4bn.

 

Our CC&P business made a loss before tax of £388m for the full year due to impairment charges, despite returning to profit in the third and fourth quarters.

 

Barclays UK profit before tax, excluding litigation and conduct, decreased 78% to £578m, including £278m in the fourth quarter, reflecting the impact of the COVID-19 pandemic driving higher impairment.

 

Group costs, excluding litigation and conduct, rose 1% to £13.7bn which included structural cost actions, leading to a cost to income ratio of 63%.

 

Group RoTE was 3.2%, including 9.5% for the CIB, (7.5%) for CC&P, and 3.2% for Barclays UK. Earnings per share were 8.8p.

 

Our CET1 capital ratio increased 50bps in the quarter, and 130bps in the year to 15.1%, significantly ahead of our minimum requirement.

 

Given the strength of our business, we have decided the time is right to resume capital distributions. We have today announced a total payout equivalent to 5p per share, comprising a 1p 2020 full year dividend and the intention to initiate a share buyback of up to £700m. We expect to comment further on capital distributions when appropriate.

 

Barclays remains well capitalised, well provisioned for impairments, highly liquid, with a strong balance sheet, and competitive market positions across the Group. We expect that our resilient and diversified business model will deliver a meaningful improvement in returns in 2021."

 

James E Staley, Group Chief Executive Officer

 

1	Across Equity and Debt Capital Markets in Q220-Q420.
2	Total payment holidays granted as at 31 December 2020, business lending and commercial paper issuance data as at 12 and 15 February 2021 respectively.
3	Excluding litigation and conduct.
4	Period covering Q114 - Q420. Pre 2014 financials were not restated following re-segmentation in Q116.

 

Group Finance Director's Review

 

Group performance

 

·	Statutory RoTE was 3.2% (2019: 5.3%) and statutory EPS was 8.8p (2019: 14.3p)
·	Profit before tax was £3,065m (2019: £4,357m). Excluding litigation and conduct, profit before tax was £3,218m (2019: £6,206m)
·	Pre-provision profits1 were broadly stable at £8,056m despite the pandemic, benefitting from the Group's diversified business model, which included a strong performance in CIB offset by headwinds in Barclays UK and CC&P
·	Total income increased to £21,766m (2019: £21,632m). Barclays UK income decreased 14%. Barclays International income increased 8%, with CIB income up 22% and CC&P income down 22%
·	Credit impairment charges increased to £4,838m (2019: £1,912m) due to the deterioration in economic outlook driven by the COVID-19 pandemic. The current year charge is broadly driven by £2,323m of non-default provision for expected future customer and client stress and £800m of single name wholesale loan charges. The expected credit loss (ECL) provision remains highly uncertain as the economic impact of the global pandemic continues to evolve
·	Operating expenses increased 1% to £13,733m, including structural cost actions and additional COVID-19 related costs, resulting in a cost: income ratio, excluding litigation and conduct, of 63% (2019: 63%). Excluding structural cost actions of £368m (2019: £150m) and £95m spend to date of Barclays' COVID-19 Community Aid Package, operating expenses would have been £13,270m (2019: £13,435m), reflecting disciplined cost management and efficiencies, resulting in a cost: income ratio of 61% (2019: 62%)
·	Attributable profit was £1,526m (2019: £2,461m). Excluding litigation and conduct, attributable profit was £1,638m (2019: £4,194m), generating a RoTE of 3.4% (2019: 9.0%) and EPS of 9.5p (2019: 24.4p)
·	Total assets increased to £1,350bn (December 2019: £1,140bn) primarily due to a £73bn increase in derivative assets driven by a decrease in major interest rate curves and increased client activity, a £42bn increase in financial assets at fair value due to an increase in reverse repurchase agreements and similar secured lending and £41bn increase in cash and balances at central banks
·	Loans and advances at amortised cost increased by £4bn to £343bn, which reflected £12bn of lending under the government backed loan schemes and £5bn of mortgage growth, partially offset by lower unsecured lending balances
·	Deposits at amortised cost increased by £65bn to £481bn primarily due to CIB clients increasing liquidity, and lower consumer spending levels
·	Tangible net asset value (TNAV) per share increased to 269p (December 2019: 262p) primarily reflecting 8.8p of statutory EPS

 

Group capital and leverage

 

·	The CET1 ratio increased to 15.1% (December 2019: 13.8%) , reflecting headroom of 3.9% above the Maximum Distributable Amount (MDA) hurdle of 11.2%
	-	CET1 capital increased by £5.5bn to £46.3bn reflecting resilient capital generation through £7.9bn of profit before tax, excluding credit impairment charges of £4.8bn, and a £1.0bn increase due to the cancellation of the full year 2019 dividend. These increases were partially offset by £0.9bn of AT1 coupons paid and the announced 1.0p full year 2020 dividend. The CET1 capital increase also reflects regulatory measures for IFRS 9 transitional relief, prudent valuation and qualifying software assets
	-	RWAs increased by £11.1bn to £306.2bn primarily due to higher market volatility, increased client activity and a reduction in credit quality within CIB, partially offset by lower consumer lending
·	The average UK leverage ratio increased to 5.0% (December 2019: 4.5%) primarily driven by the increase in Tier 1 (T1) capital. The average leverage exposure increased to £1,147bn (December 2019: £1,143bn) primarily driven by an increase in securities financing transactions (SFTs) and trading portfolio assets (TPAs) largely driven by an increase in secured lending and client activity within CIB, partially offset by the PRA's early adoption of CRR II settlement netting

 

1	Excluding litigation and conduct.

 

Group funding and liquidity

 

·

The liquidity pool was £266bn (December 2019: £211bn) and the liquidity coverage ratio (LCR) remained significantly above the 100% regulatory requirement at 162% (December 2019: 160%), equivalent to a surplus of £99bn (December 2019: £78bn). The increase in the liquidity pool, LCR and surplus over the year was driven by a 16% growth in deposits, which was largely a consequence of government and central bank policy response to the COVID-19 pandemic. The reduction in Q420 reflects actions taken to manage down surplus liquidity proactively as the prevailing uncertainty from earlier in the year abated

·

Wholesale funding outstanding, excluding repurchase agreements, was £145.0bn (December 2019: £147.1bn). The Group issued £7.9bn equivalent of minimum requirement for own funds and eligible liabilities (MREL) instruments from Barclays PLC (the Parent company) during the year. The Group is well advanced in its MREL issuance plans relative to the estimated 1 January 2022 requirement

 

Other matters

 

·	As at 31 December 2020, the Group held a residual provision of £129m relating to PPI, following a provision release of £55m in Q420 on resolution of the items received up to and including Q319. Observations from resolved complaints support the residual provision level, which is expected to be utilised in 2021
·	Following the UK's exit from the EU on 31 December 2020, Barclays remains well positioned to continue providing services in the EU through Barclays Europe (operating through Barclays Bank Ireland PLC) which was expanded post the EU referendum vote to ensure continuity of services to Barclays International clients in Europe
·	The High Court has indicated that judgment in relation to the civil action brought against Barclays Bank PLC by PCP Capital Partners LLP and PCP International Finance Limited, under which PCP is seeking damages of up to approximately £819m, is imminent. The outcome of the judgement, and any financial impact on the Group, is unknown. Barclays is defending the claim. See Note 26 to the audited financial statements for the year ended 31 December 2020 contained in the Barclays PLC Annual Report 2020 for further details

 

Capital distributions

 

·	Barclays understands the importance of delivering attractive total cash returns to shareholders. Barclays is therefore committed to maintaining an appropriate balance between total cash returns to shareholders, investment in the business and maintaining a strong capital position. Going forward, Barclays intends to pay a progressive ordinary dividend, taking into account these objectives and the earnings outlook of the Group. It is also the Board's intention to continue to supplement the ordinary dividends with additional cash returns, including share buybacks, to shareholders as and when appropriate
·	Announced a total payout equivalent to 5.0p per share, consistent with the temporary guardrails announced by the PRA in December 2020, comprising:
	-	1.0p 2020 full year dividend; and the
	-	Intention to initiate a share buyback of up to £700m which is expected to commence in Q121

 

Tushar Morzaria, Group Finance Director

 

Results by Business

 

Barclays UK	Year ended	Year ended
	31.12.20	31.12.19
Income statement information	£m	£m	% Change
Net interest income	5,234	5,888	(11)
Net fee, commission and other income	1,113	1,465	(24)
Total income	6,347	7,353	(14)
Credit impairment charges	(1,467)	(712)
Net operating income	4,880	6,641	(27)
Operating costs	(4,270)	(3,996)	(7)
UK bank levy	(50)	(41)	(22)
Operating expenses	(4,320)	(4,037)	(7)
Litigation and conduct	(32)	(1,582)	98
Total operating expenses	(4,352)	(5,619)	23
Other net income	18	-
Profit before tax	546	1,022	(47)
Attributable profit	325	281	16
Balance sheet information	£bn	£bn
Loans and advances to customers at amortised cost	205.4	193.7
Total assets	289.1	257.8
Customer deposits at amortised cost	240.5	205.5
Loan: deposit ratio	89%	96%
Risk weighted assets	73.7	74.9
Period end allocated tangible equity	9.7	10.3
Key facts
Average loan to value of mortgage portfolio1	51%	51%
Average loan to value of new mortgage lending1	68%	68%
Number of branches	859	963
Mobile banking active customers	9.2m	8.4m
30 day arrears rate - Barclaycard Consumer UK	1.7%	1.7%
Performance measures
Return on average allocated tangible equity	3.2%	2.7%
Average allocated tangible equity (£bn)	10.1	10.3
Cost: income ratio	69%	76%
Loan loss rate (bps)	68	36
Net interest margin	2.61%	3.09%
Performance measures excluding litigation and conduct2	£m	£m
Profit before tax	578	2,604	(78)
Attributable profit	343	1,813	(81)
Return on average allocated tangible equity	3.4%	17.5%
Cost: income ratio	68%	55%

 

1	Average loan to value of mortgages is balance weighted and reflects both residential and buy-to-let (BTL) mortgage portfolios within the Home Loans portfolio.
2	Refer to pages 65 to 74 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays UK	Year ended	Year ended
	31.12.20	31.12.19
Analysis of total income	£m	£m	% Change
Personal Banking	3,522	4,009	(12)
Barclaycard Consumer UK	1,519	1,992	(24)
Business Banking	1,306	1,352	(3)
Total income	6,347	7,353	(14)
Analysis of credit impairment charges
Personal Banking	(380)	(195)	(95)
Barclaycard Consumer UK	(881)	(472)	(87)
Business Banking	(206)	(45)
Total credit impairment charges	(1,467)	(712)
Analysis of loans and advances to customers at amortised cost	£bn	£bn
Personal Banking	157.3	151.9
Barclaycard Consumer UK	9.9	14.7
Business Banking	38.2	27.1
Total loans and advances to customers at amortised cost	205.4	193.7
Analysis of customer deposits at amortised cost
Personal Banking	179.7	159.2
Barclaycard Consumer UK	0.1	-
Business Banking	60.7	46.3
Total customer deposits at amortised cost	240.5	205.5

 

Barclays UK continued to support customers throughout the challenging operating environment, increasing lending by £11.7bn predominantly through Bounce Back Loan Scheme (BBLS) and Coronavirus Business Interruption Loan Scheme (CBILS) loans to small and medium-sized enterprises (SMEs), as well as delivering strong mortgage growth. Customer deposit growth of £35bn added to a strong liquidity position reflected in the full year loan: deposit ratio of 89%, 7% lower than prior year. Full year RoTE of 3.4%, excluding litigation and conduct, was materially below historical performance, reflecting the impact of the COVID-19 pandemic as well as ongoing investment spend, including structural cost actions to continue to transform the business over time.

 

2020 compared to 2019

 

Income statement

 

·	Profit before tax, excluding litigation and conduct, decreased 78% to £578m. RoTE was 3.4% (2019: 17.5%) reflecting a challenging operating environment and materially higher credit impairment charges
·	Total income decreased 14% to £6,347m. Net interest income reduced 11% to £5,234m with a net interest margin (NIM) of 2.61% (2019: 3.09%). Net fee, commission and other income decreased 24% to £1,113m
	-	Personal Banking income decreased 12% to £3,522m, reflecting deposit margin compression from lower interest rates, lower unsecured lending balances, and COVID-19 customer support actions, partially offset by balance growth in deposits and mortgages, as well as the transfer of Barclays Partner Finance (BPF) from Barclays International in Q220
	-	Barclaycard Consumer UK income decreased 24% to £1,519m as reduced borrowing and spend levels by customers resulted in a lower level of interest earning lending (IEL) balances, as well as lower debt sales
	-	Business Banking income decreased 3% to £1,306m due to deposit margin compression from lower interest rates, lower transactional fee volumes as a result of COVID-19 and related customer support actions, partially offset by lending and deposit balance growth from continued support for SMEs through £11.0bn of BBLS and CBILS loans
·	Credit impairment charges increased to £1,467m (2019: £712m) due to the deterioration in economic outlook driven by the COVID-19 pandemic. The current year charge is broadly driven by £847m of non-default provision for expected future customer and client stress. As at 31 December 2020, 30 and 90 day arrears rates in UK cards were 1.7% (Q419: 1.7%) and 0.8% (Q419: 0.8%) respectively
·	Operating expenses increased 7% to £4,320m reflecting investment spend including structural cost actions, higher servicing and financial assistance costs, and the transfer of BPF, partially offset by efficiency savings

 

Balance sheet

 

·	Loans and advances to customers at amortised cost increased 6% to £205.4bn predominantly from continued support for SMEs through £11.0bn of BBLS and CBILS lending, £5.1bn of mortgage growth following a strong flow of new applications as well as strong customer retention and the £2.4bn transfer of BPF, partially offset by £6.6bn lower unsecured lending balances
·	Customer deposits at amortised cost increased 17% to £240.5bn reflecting an increase of £20.5bn and £14.4bn in Personal Banking and Business Banking respectively, further strengthening the liquidity position and contributing to a loan: deposit ratio of 89% (2019: 96%)
·	RWAs decreased to £73.7bn (December 2019: £74.9bn) driven by lower unsecured lending balances, partially offset by growth in mortgages and the transfer of BPF

 

Barclays International	Year ended	Year ended
	31.12.20	31.12.19
Income statement information	£m	£m	% Change
Net interest income	3,282	3,941	(17)
Net trading income	6,920	4,199	65
Net fee, commission and other income	5,719	6,535	(12)
Total income	15,921	14,675	8
Credit impairment charges	(3,280)	(1,173)
Net operating income	12,641	13,502	(6)
Operating costs	(8,765)	(9,163)	4
UK bank levy	(240)	(174)	(38)
Operating expenses	(9,005)	(9,337)	4
Litigation and conduct	(48)	(116)	59
Total operating expenses	(9,053)	(9,453)	4
Other net income	28	69	(59)
Profit before tax	3,616	4,118	(12)
Attributable profit	2,220	2,816	(21)
Balance sheet information	£bn	£bn
Loans and advances at amortised cost	122.7	132.8
Trading portfolio assets	127.7	113.3
Derivative financial instrument assets	301.8	228.9
Financial assets at fair value through the income statement	170.7	128.4
Cash collateral and settlement balances	97.5	79.4
Other assets	221.4	178.6
Total assets	1,041.8	861.4
Deposits at amortised cost	240.5	210.0
Derivative financial instrument liabilities	300.4	228.9
Loan: deposit ratio	51%	63%
Risk weighted assets	222.3	209.2
Period end allocated tangible equity	30.2	29.6
Performance measures
Return on average allocated tangible equity	7.1%	9.0%
Average allocated tangible equity (£bn)	31.5	31.2
Cost: income ratio	57%	64%
Loan loss rate (bps)	257	86
Net interest margin	3.64%	4.07%
Performance measures excluding litigation and conduct1	£m	£m
Profit before tax	3,664	4,234	(13)
Attributable profit	2,258	2,906	(22)
Return on average allocated tangible equity	7.2%	9.3%
Cost: income ratio	57%	64%

 

1	Refer to pages 65 to 74 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International
Corporate and Investment Bank	Year ended	Year ended
	31.12.20	31.12.19
Income statement information	£m	£m	% Change
FICC	5,138	3,364	53
Equities	2,471	1,887	31
Markets	7,609	5,251	45
Advisory	561	776	(28)
Equity capital markets	473	329	44
Debt capital markets	1,697	1,430	19
Banking fees	2,731	2,535	8
Corporate lending	590	765	(23)
Transaction banking	1,546	1,680	(8)
Corporate	2,136	2,445	(13)
Total income	12,476	10,231	22
Credit impairment charges	(1,559)	(157)
Net operating income	10,917	10,074	8
Operating costs	(6,689)	(6,882)	3
UK bank levy	(226)	(156)	(45)
Operating expenses	(6,915)	(7,038)	2
Litigation and conduct	(4)	(109)	96
Total operating expenses	(6,919)	(7,147)	3
Other net income	6	28	(79)
Profit before tax	4,004	2,955	35
Attributable profit	2,554	1,980	29
Balance sheet information	£bn	£bn
Loans and advances at amortised cost	92.4	92.0
Trading portfolio assets	127.5	113.3
Derivative financial instrument assets	301.7	228.8
Financial assets at fair value through the income statement	170.4	127.7
Cash collateral and settlement balances	96.7	78.5
Other assets	194.9	155.3
Total assets	983.6	795.6
Deposits at amortised cost	175.2	146.2
Derivative financial instrument liabilities	300.3	228.9
Risk weighted assets	192.2	171.5
Performance measures
Return on average allocated tangible equity	9.5%	7.6%
Average allocated tangible equity (£bn)	27.0	25.9
Cost: income ratio	55%	70%
Performance measures excluding litigation and conduct1	£m	£m
Profit before tax	4,008	3,064	31
Attributable profit	2,556	2,064	24
Return on average allocated tangible equity	9.5%	8.0%
Cost: income ratio	55%	69%

 

1	Refer to pages 65 to 74 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International
Consumer, Cards and Payments	Year ended	Year ended
	31.12.20	31.12.19
Income statement information	£m	£m	% Change
Net interest income	2,198	2,822	(22)
Net fee, commission, trading and other income	1,247	1,622	(23)
Total income	3,445	4,444	(22)
Credit impairment charges	(1,721)	(1,016)	(69)
Net operating income	1,724	3,428	(50)
Operating costs	(2,076)	(2,281)	9
UK bank levy	(14)	(18)	22
Operating expenses	(2,090)	(2,299)	9
Litigation and conduct	(44)	(7)
Total operating expenses	(2,134)	(2,306)	7
Other net income	22	41	(46)
(Loss)/profit before tax	(388)	1,163
Attributable (loss)/profit	(334)	836
Balance sheet information	£bn	£bn
Loans and advances at amortised cost	30.3	40.8
Total assets	58.2	65.8
Deposits at amortised cost	65.3	63.8
Risk weighted assets	30.1	37.7
Key facts
30 day arrears rate - Barclaycard US	2.5%	2.7%
US cards customer FICO score distribution
<660	13%	14%
>660	87%	86%
Total number of Barclaycard payments clients	c.365,000	c.376,000
Value of payments processed (£bn)1	274	354
Performance measures
Return on average allocated tangible equity	(7.5%)	15.8%
Average allocated tangible equity (£bn)	4.5	5.3
Cost: income ratio	62%	52%
Loan loss rate (bps)	517	234
Performance measures excluding litigation and conduct2	£m	£m
(Loss)/profit before tax	(344)	1,170
Attributable (loss)/profit	(298)	842
Return on average allocated tangible equity	(6.7%)	15.9%
Cost: income ratio	61%	52%

 

1	Includes £268bn (2019: £272bn) of merchant acquiring payments.
2	Refer to pages 65 to 74 for further information and calculations of performance measures excluding litigation and conduct.

 

Barclays International continued to support its customers and clients through the COVID-19 pandemic by providing or facilitating lending, through the range of support programmes which have been introduced, as well as enabling the raising of debt and equity financing in the capital markets. Support actions, including payment holidays, were introduced to help customers and clients. Despite the challenging operating environment, Barclays International delivered a RoTE, excluding litigation and conduct, of 7.2%, reflecting the benefits of a diversified business model.

 

2020 compared to 2019

 

Income statement

 

·	Profit before tax, excluding litigation and conduct, decreased 13% to £3,664m with a RoTE of 7.2% (2019: 9.3%), reflecting a RoTE of 9.5% (2019: 8.0%) in CIB and (6.7)% (2019: 15.9%) in CC&P
·	Total income increased to £15,921m (2019: £14,675m)
	-	CIB income increased 22% to £12,476m driven by Markets and Banking which both had their best ever year on a comparable basis1
		-	Markets income increased 45% to £7,609m reflecting gains in market share as well as an increase in market size2. FICC income increased 53% to £5,138m driven by strong performances in macro and credit, mainly reflecting wider spreads. Equities income increased 31% to £2,471m driven by derivatives and cash due to higher levels of client activity and volatility
		-	Banking fees income increased 8% to £2,731m as a strong performance in equity and debt capital markets, driven by market size, was offset by lower fee income in advisory, which was impacted by a reduced fee pool3
		-	Within Corporate, Transaction banking income decreased 8% to £1,546m as deposit balance growth was more than offset by margin compression. Corporate lending income decreased by 23% to £590m reflecting c.£210m of losses on the mark to market of lending and related hedge positions, and the carry costs of those hedges
	-	CC&P income decreased 22% to £3,445m reflecting lower cards balances, margin compression and reduced payments activity, which were impacted by the COVID-19 pandemic, and the transfer of BPF to Barclays UK in Q220. Q220 included a c.£100m valuation loss on Barclays' preference shares in Visa Inc. resulting from the impact of the Supreme Court ruling concerning charges paid by merchants
·	Credit impairment charges increased to £3,280m (2019: £1,173m)
	-	CIB credit impairment charges increased to £1,559m (2019: £157m) due to the deterioration in economic outlook driven by the COVID-19 pandemic. The current year charge is broadly driven by £711m of non-default provision for future expected customer and client stress and c.£800m of single name wholesale loan charges
	-	CC&P credit impairment charges increased to £1,721m (2019: £1,016m) due to the deterioration in economic outlook driven by the COVID-19 pandemic. The current year charge is broadly driven by £752m of non-default provisions for future expected customer and client stress. As at 31 December 2020, 30 and 90 day arrears in US cards were 2.5% (Q419: 2.7%) and 1.4% (Q419: 1.4%) respectively
·	Operating expenses decreased 4% to £9,005m
	-	CIB operating expenses decreased 2% to £6,915m due to cost efficiencies and discipline in the current environment partially offset by a higher bank levy charge mainly due to the non-recurrence of prior year adjustments
	-	CC&P operating expenses decreased 9% to £2,090m reflecting cost efficiencies, lower marketing spend due to the impacts of the COVID-19 pandemic and transfer of BPF

 

Balance sheet

 

·	Loans and advances at amortised cost decreased £10.1bn to £122.7bn due to lower unsecured lending balances in CC&P
·	Trading portfolio assets increased £14.4bn to £127.7bn due to increased client activity
·	Derivative financial instruments assets increased £72.9bn and liabilities increased £71.5bn to £301.8bn and £300.4bn respectively driven by a decrease in major interest rate curves and increased client activity
·	Financial assets at fair value through the income statement increased £42.3bn to £170.7bn driven by reverse repurchase agreements and similar secured lending
·	Cash collateral and settlements increased £18.1bn to £97.5bn predominantly due to increased activity
·	Other assets increased £42.8bn to £221.4bn due to an increase in cash at central banks and securities within the liquidity pool
·	Deposits at amortised cost increased £30.5bn to £240.5bn due to CIB clients increasing liquidity
·	RWAs increased to £222.3bn (December 2019: £209.2bn) primarily due to increased market volatility, client activity and a reduction in credit quality within CIB, partially offset by lower CC&P balances

 

1	Period covering Q114 - Q420. Pre 2014 financials were not restated following re-segmentation in Q116.
2	Data source: Coalition Greenwich, Preliminary FY20 Competitor Analysis. Market share represents Barclays share of the Global Industry Revenue Pool. Analysis is based on Barclays internal business structure and internal revenues.
3	Data source: Dealogic for the period covering 1 January to 31 December 2020.

 

Head Office	Year ended	Year ended
	31.12.20	31.12.19
Income statement information	£m	£m	% Change
Net interest income	(393)	(422)	7
Net fee, commission and other income	(109)	26
Total income	(502)	(396)	(27)
Credit impairment charges	(91)	(27)
Net operating income	(593)	(423)	(40)
Operating costs	(399)	(200)	(100)
UK bank levy	(9)	(11)	18
Operating expenses	(408)	(211)	(93)
Litigation and conduct	(73)	(151)	52
Total operating expenses	(481)	(362)	(33)
Other net (expenses)/income	(23)	2
Loss before tax	(1,097)	(783)	(40)
Attributable loss	(1,019)	(636)	(60)
Balance sheet information	£bn	£bn
Total assets	18.6	21.0
Risk weighted assets	10.2	11.0
Period end allocated tangible equity	6.8	5.6
Performance measures
Average allocated tangible equity (£bn)	6.7	5.1
Performance measures excluding litigation and conduct1	£m	£m
Loss before tax	(1,024)	(632)	(62)
Attributable loss	(963)	(525)	(83)

 

1	Refer to pages 65 to 74 for further information and calculations of performance measures excluding litigation and conduct.

 

2020 compared to 2019

 

Income statement

 

·	Loss before tax, excluding litigation and conduct, was £1,024m (2019: £632m)
·	Total income was an expense of £502m (2019: £396m), which reflected treasury items and hedge accounting, mark-to-market losses on legacy investments and funding costs on legacy capital instruments, including £85m from repurchases of some of the Barclays Bank PLC 7.625% Contingent Capital Notes. This was partially offset by the recognition of dividends on Barclays' stake in Absa Group Limited
·	Credit impairment increased to £91m (2019: £27m) due to the deterioration in economic outlook driven by the COVID-19 pandemic. The current year charge is broadly driven by provision for future expected customer stress in the Italian home loan portfolio
·	Operating expenses were £408m (2019: £211m), which included c.£150m of cost actions, principally related to the discontinued use of certain software assets and £95m of charitable donations from Barclays' COVID-19 Community Aid Package
·	Other net expenses were £23m (2019: income of £2m), which included a fair value loss on an investment in an associate

 

Balance sheet

 

·	RWAs decreased to £10.2bn (December 2019: £11.0bn) driven by the reduction in value of Barclays' stake in Absa Group Limited

 

Quarterly Results Summary

 

Barclays Group
	Q420	Q320	Q220	Q120		Q419	Q319	Q219	Q119
Income statement information	£m	£m	£m	£m		£m	£m	£m	£m
Net interest income	1,845	2,055	1,892	2,331		2,344	2,445	2,360	2,258
Net fee, commission and other income	3,096	3,149	3,446	3,952		2,957	3,096	3,178	2,994
Total income	4,941	5,204	5,338	6,283		5,301	5,541	5,538	5,252
Credit impairment charges	(492)	(608)	(1,623)	(2,115)		(523)	(461)	(480)	(448)
Net operating income	4,449	4,596	3,715	4,168		4,778	5,080	5,058	4,804
Operating costs	(3,480)	(3,391)	(3,310)	(3,253)		(3,308)	(3,293)	(3,501)	(3,257)
UK bank levy	(299)	-	-	-		(226)	-	-	-
Operating expenses	(3,779)	(3,391)	(3,310)	(3,253)		(3,534)	(3,293)	(3,501)	(3,257)
Litigation and conduct	(47)	(76)	(20)	(10)		(167)	(1,568)	(53)	(61)
Total operating expenses	(3,826)	(3,467)	(3,330)	(3,263)		(3,701)	(4,861)	(3,554)	(3,318)
Other net income/(expenses)	23	18	(26)	8		20	27	27	(3)
Profit before tax	646	1,147	359	913		1,097	246	1,531	1,483
Tax charge	(163)	(328)	(42)	(71)		(189)	(269)	(297)	(248)
Profit/(loss) after tax	483	819	317	842		908	(23)	1,234	1,235
Non-controlling interests	(37)	(4)	(21)	(16)		(42)	(4)	(17)	(17)
Other equity instrument holders	(226)	(204)	(206)	(221)		(185)	(265)	(183)	(180)
Attributable profit/(loss)	220	611	90	605		681	(292)	1,034	1,038
Performance measures
Return on average tangible shareholders' equity	1.8%	5.1%	0.7%	5.1%		5.9%	(2.4%)	9.0%	9.2%
Average tangible shareholders' equity (£bn)	47.6	48.3	50.2	47.0		46.4	48.4	46.2	45.2
Cost: income ratio	77%	67%	62%	52%		70%	88%	64%	63%
Loan loss rate (bps)	56	69	179	223		60	52	56	54
Basic earnings/(loss) per share	1.3p	3.5p	0.5p	3.5p		3.9p	(1.7p)	6.0p	6.1p
Performance measures excluding litigation and conduct1	£m	£m	£m	£m		£m	£m	£m	£m
Profit before tax	693	1,223	379	923		1,264	1,814	1,584	1,544
Attributable profit	260	668	106	604		803	1,233	1,074	1,084
Return on average tangible shareholders' equity	2.2%	5.5%	0.8%	5.1%		6.9%	10.2%	9.3%	9.6%
Cost: income ratio	76%	65%	62%	52%		67%	59%	63%	62%
Basic earnings per share	1.5p	3.9p	0.6p	3.5p		4.7p	7.2p	6.3p	6.3p
Balance sheet and capital management2	£bn	£bn	£bn	£bn		£bn	£bn	£bn	£bn
Loans and advances at amortised cost	342.6	344.4	354.9	374.1		339.1	345.1	339.3	330.7
Total assets	1,349.5	1,421.7	1,385.1	1,444.3		1,140.2	1,290.4	1,232.8	1,193.5
Deposits at amortised cost	481.0	494.6	466.9	470.7		415.8	420.6	413.6	412.7
Tangible net asset value per share	269p	275p	284p	284p		262p	274p	275p	266p
Common equity tier 1 ratio	15.1%	14.6%	14.2%	13.1%		13.8%	13.4%	13.4%	13.0%
Common equity tier 1 capital	46.3	45.5	45.4	42.5		40.8	41.9	42.9	41.4
Risk weighted assets	306.2	310.7	319.0	325.6		295.1	313.3	319.1	319.7
Average UK leverage ratio	5.0%	5.1%	4.7%	4.5%		4.5%	4.6%	4.7%	4.6%
Average UK leverage exposure	1,146.9	1,111.1	1,148.7	1,176.2		1,142.8	1,171.2	1,134.6	1,105.5
UK leverage ratio	5.3%	5.2%	5.2%	4.5%		5.1%	4.8%	5.1%	4.9%
UK leverage exposure	1,090.9	1,095.1	1,071.1	1,178.7		1,007.7	1,099.8	1,079.4	1,065.0
Funding and liquidity
Group liquidity pool (£bn)	266	327	298	237		211	226	238	232
Liquidity coverage ratio	162%	181%	186%	155%		160%	151%	156%	160%
Loan: deposit ratio	71%	70%	76%	79%		82%	82%	82%	80%

 

1	Refer to pages 65 to 74 for further information and calculations of performance measures excluding litigation and conduct.
2	Refer to pages 45 to 51 for further information on how capital, RWAs and leverage are calculated.

 

Quarterly Results by Business

 

Barclays UK
	Q420	Q320	Q220	Q120		Q419	Q319	Q219	Q119
Income statement information	£m	£m	£m	£m		£m	£m	£m	£m
Net interest income	1,317	1,280	1,225	1,412		1,478	1,503	1,438	1,469
Net fee, commission and other income	309	270	242	292		481	343	333	308
Total income	1,626	1,550	1,467	1,704		1,959	1,846	1,771	1,777
Credit impairment charges	(170)	(233)	(583)	(481)		(190)	(101)	(230)	(191)
Net operating income	1,456	1,317	884	1,223		1,769	1,745	1,541	1,586
Operating costs	(1,134)	(1,095)	(1,018)	(1,023)		(1,023)	(952)	(1,022)	(999)
UK bank levy	(50)	-	-	-		(41)	-	-	-
Operating expenses	(1,184)	(1,095)	(1,018)	(1,023)		(1,064)	(952)	(1,022)	(999)
Litigation and conduct	4	(25)	(6)	(5)		(58)	(1,480)	(41)	(3)
Total operating expenses	(1,180)	(1,120)	(1,024)	(1,028)		(1,122)	(2,432)	(1,063)	(1,002)
Other net income/(expenses)	6	(1)	13	-		-	-	(1)	1
Profit/(loss) before tax	282	196	(127)	195		647	(687)	477	585
Attributable profit/(loss)	160	113	(123)	175		438	(907)	328	422
Balance sheet information	£bn	£bn	£bn	£bn		£bn	£bn	£bn	£bn
Loans and advances to customers at amortised cost	205.4	203.9	202.0	195.7		193.7	193.2	189.1	187.5
Total assets	289.1	294.5	287.6	267.5		257.8	257.9	259.0	253.1
Customer deposits at amortised cost	240.5	232.0	225.7	207.5		205.5	203.3	200.9	197.3
Loan: deposit ratio	89%	91%	92%	96%		96%	97%	97%	96%
Risk weighted assets	73.7	76.2	77.9	77.7		74.9	76.8	76.2	76.6
Period end allocated tangible equity	9.7	10.0	10.3	10.3		10.3	10.4	10.3	10.5
Performance measures
Return on average allocated tangible equity	6.5%	4.5%	(4.8%)	6.9%		17.0%	(34.9%)	12.7%	16.3%
Average allocated tangible equity (£bn)	9.8	10.1	10.3	10.1		10.3	10.4	10.3	10.4
Cost: income ratio	73%	72%	70%	60%		57%	132%	60%	56%
Loan loss rate (bps)	31	43	111	96		38	20	47	40
Net interest margin	2.56%	2.51%	2.48%	2.91%		3.03%	3.10%	3.05%	3.18%
Performance measures excluding litigation and conduct1	£m	£m	£m	£m		£m	£m	£m	£m
Profit/(loss) before tax	278	221	(121)	200		705	793	518	588
Attributable profit/(loss)	153	130	(118)	178		481	550	358	424
Return on average allocated tangible equity	6.2%	5.2%	(4.6%)	7.0%		18.7%	21.2%	13.9%	16.4%
Cost: income ratio	73%	71%	69%	60%		54%	52%	58%	56%

 

1	Refer to pages 65 to 74 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays UK	Q420	Q320	Q220	Q120		Q419	Q319	Q219	Q119
Analysis of total income	£m	£m	£m	£m		£m	£m	£m	£m
Personal Banking	895	833	826	968		1,064	1,035	946	964
Barclaycard Consumer UK	354	362	367	436		533	472	497	490
Business Banking	377	355	274	300		362	339	328	323
Total income	1,626	1,550	1,467	1,704		1,959	1,846	1,771	1,777
Analysis of credit impairment (charges)/releases
Personal Banking	(68)	(48)	(130)	(134)		(71)	(36)	(36)	(52)
Barclaycard Consumer UK	(78)	(106)	(396)	(301)		(108)	(49)	(175)	(140)
Business Banking	(24)	(79)	(57)	(46)		(11)	(16)	(19)	1
Total credit impairment charges	(170)	(233)	(583)	(481)		(190)	(101)	(230)	(191)
Analysis of loans and advances to customers at amortised cost	£bn	£bn	£bn	£bn		£bn	£bn	£bn	£bn
Personal Banking	157.3	155.7	154.9	153.4		151.9	150.1	147.3	145.9
Barclaycard Consumer UK	9.9	10.7	11.5	13.6		14.7	14.9	15.1	15.0
Business Banking	38.2	37.5	35.6	28.7		27.1	28.2	26.7	26.6
Total loans and advances to customers at amortised cost	205.4	203.9	202.0	195.7		193.7	193.2	189.1	187.5
Analysis of customer deposits at amortised cost
Personal Banking	179.7	173.2	169.6	161.4		159.2	157.9	156.3	154.1
Barclaycard Consumer UK	0.1	0.1	0.1	-		-	-	-	-
Business Banking	60.7	58.7	56.0	46.1		46.3	45.4	44.6	43.2
Total customer deposits at amortised cost	240.5	232.0	225.7	207.5		205.5	203.3	200.9	197.3

 

Barclays International
	Q420	Q320	Q220	Q120		Q419	Q319	Q219	Q119
Income statement information	£m	£m	£m	£m		£m	£m	£m	£m
Net interest income	614	823	847	998		965	1,059	1,017	900
Net trading income	1,372	1,528	1,660	2,360		929	1,110	1,016	1,144
Net fee, commission and other income	1,500	1,430	1,503	1,286		1,558	1,581	1,870	1,526
Total income	3,486	3,781	4,010	4,644		3,452	3,750	3,903	3,570
Credit impairment charges	(291)	(370)	(1,010)	(1,609)		(329)	(352)	(247)	(245)
Net operating income	3,195	3,411	3,000	3,035		3,123	3,398	3,656	3,325
Operating costs	(2,133)	(2,227)	(2,186)	(2,219)		(2,240)	(2,282)	(2,435)	(2,206)
UK bank levy	(240)	-	-	-		(174)	-	-	-
Operating expenses	(2,373)	(2,227)	(2,186)	(2,219)		(2,414)	(2,282)	(2,435)	(2,206)
Litigation and conduct	(9)	(28)	(11)	-		(86)	-	(11)	(19)
Total operating expenses	(2,382)	(2,255)	(2,197)	(2,219)		(2,500)	(2,282)	(2,446)	(2,225)
Other net income	9	9	4	6		17	21	13	18
Profit before tax	822	1,165	807	822		640	1,137	1,223	1,118
Attributable profit	441	782	468	529		397	799	832	788
Balance sheet information	£bn	£bn	£bn	£bn		£bn	£bn	£bn	£bn
Loans and advances at amortised cost	122.7	128.0	138.1	167.0		132.8	138.1	134.8	130.9
Trading portfolio assets	127.7	122.3	109.5	101.6		113.3	119.4	120.0	117.2
Derivative financial instrument assets	301.8	295.9	306.8	341.5		228.9	286.0	243.8	217.3
Financial assets at fair value through the income statement	170.7	178.2	154.3	188.4		128.4	158.0	154.7	153.5
Cash collateral and settlement balances	97.5	121.8	130.8	153.2		79.4	112.5	101.3	97.8
Other assets	221.4	261.7	236.3	201.5		178.6	195.6	196.8	202.3
Total assets	1,041.8	1,107.9	1,075.8	1,153.2		861.4	1,009.6	951.4	919.0
Deposits at amortised cost	240.5	262.4	241.2	263.3		210.0	217.6	212.0	215.5
Derivative financial instrument liabilities	300.4	293.3	307.6	338.8		228.9	283.3	243.0	213.5
Loan: deposit ratio	51%	49%	57%	63%		63%	63%	64%	61%
Risk weighted assets	222.3	224.7	231.2	237.9		209.2	223.1	214.8	216.1
Period end allocated tangible equity	30.2	30.5	31.6	33.1		29.6	31.4	30.2	30.6
Performance measures
Return on average allocated tangible equity	5.8%	10.2%	5.6%	6.8%		5.1%	9.9%	10.7%	10.4%
Average allocated tangible equity (£bn)	30.5	30.6	33.5	31.2		30.9	32.2	31.1	30.5
Cost: income ratio	68%	60%	55%	48%		72%	61%	63%	62%
Loan loss rate (bps)	90	112	284	377		96	99	72	73
Net interest margin	3.41%	3.79%	3.43%	3.93%		4.29%	4.10%	3.91%	3.99%
Performance measures excluding litigation and conduct1	£m	£m	£m	£m		£m	£m	£m	£m
Profit before tax	831	1,193	818	822		726	1,137	1,234	1,137
Attributable profit	450	803	476	529		461	801	840	804
Return on average allocated tangible equity	5.9%	10.5%	5.7%	6.8%		6.0%	10.0%	10.8%	10.6%
Cost: income ratio	68%	59%	55%	48%		70%	61%	62%	62%

 

1	Refer to pages 65 to 74 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International
Corporate and Investment Bank	Q420	Q320	Q220	Q120		Q419	Q319	Q219	Q119
Income statement information	£m	£m	£m	£m		£m	£m	£m	£m
FICC	812	1,000	1,468	1,858		726	816	920	902
Equities	542	691	674	564		409	494	517	467
Markets	1,354	1,691	2,142	2,422		1,135	1,310	1,437	1,369
Advisory	232	90	84	155		202	221	221	132
Equity capital markets	104	122	185	62		56	86	104	83
Debt capital markets	418	398	463	418		322	381	373	354
Banking fees	754	610	732	635		580	688	698	569
Corporate lending	186	232	61	111		202	195	216	152
Transaction banking	344	372	381	449		397	424	444	415
Corporate	530	604	442	560		599	619	660	567
Total income	2,638	2,905	3,316	3,617		2,314	2,617	2,795	2,505
Credit impairment charges	(52)	(187)	(596)	(724)		(30)	(31)	(44)	(52)
Net operating income	2,586	2,718	2,720	2,893		2,284	2,586	2,751	2,453
Operating costs	(1,603)	(1,716)	(1,680)	(1,690)		(1,691)	(1,712)	(1,860)	(1,619)
UK bank levy	(226)	-	-	-		(156)	-	-	-
Operating expenses	(1,829)	(1,716)	(1,680)	(1,690)		(1,847)	(1,712)	(1,860)	(1,619)
Litigation and conduct	2	(3)	(3)	-		(79)	(4)	(7)	(19)
Total operating expenses	(1,827)	(1,719)	(1,683)	(1,690)		(1,926)	(1,716)	(1,867)	(1,638)
Other net income	2	1	3	-		1	12	3	12
Profit before tax	761	1,000	1,040	1,203		359	882	887	827
Attributable profit	413	627	694	820		193	609	596	582
Balance sheet information	£bn	£bn	£bn	£bn		£bn	£bn	£bn	£bn
Loans and advances at amortised cost	92.4	96.8	104.9	128.2		92.0	95.8	92.1	90.6
Trading portfolio assets	127.5	122.2	109.3	101.5		113.3	119.3	119.9	117.2
Derivative financial instruments assets	301.7	295.9	306.7	341.4		228.8	286.0	243.7	217.3
Financial assets at fair value through the income statement	170.4	177.9	153.7	187.8		127.7	157.3	154.1	152.9
Cash collateral and settlement balances	96.7	121.0	129.7	152.2		78.5	111.6	100.4	96.9
Other assets	194.9	228.9	205.5	171.4		155.3	171.5	168.1	163.2
Total assets	983.6	1,042.7	1,009.8	1,082.5		795.6	941.5	878.3	838.1
Deposits at amortised cost	175.2	195.6	173.9	198.4		146.2	152.1	145.4	151.4
Derivative financial instrument liabilities	300.3	293.2	307.6	338.7		228.9	283.2	242.9	213.5
Risk weighted assets	192.2	193.3	198.3	201.7		171.5	184.9	175.9	176.6
Performance measures
Return on average allocated tangible equity	6.3%	9.5%	9.6%	12.5%		3.0%	9.1%	9.2%	9.3%
Average allocated tangible equity (£bn)	26.3	26.4	29.0	26.2		25.8	26.9	25.8	25.1
Cost: income ratio	69%	59%	51%	47%		83%	66%	67%	65%
Performance measures excluding litigation and conduct1	£m	£m	£m	£m		£m	£m	£m	£m
Profit before tax	759	1,003	1,043	1,203		438	886	894	846
Attributable profit	411	629	696	820		251	614	601	598
Return on average allocated tangible equity	6.2%	9.5%	9.6%	12.5%		3.9%	9.2%	9.3%	9.5%
Cost: income ratio	69%	59%	51%	47%		80%	65%	67%	65%

 

1	Refer to pages 65 to 74 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International
Consumer, Cards and Payments	Q420	Q320	Q220	Q120		Q419	Q319	Q219	Q119
Income statement information	£m	£m	£m	£m		£m	£m	£m	£m
Net interest income	504	518	513	663		717	720	720	665
Net fee, commission, trading and other income	344	358	181	364		421	413	388	400
Total income	848	876	694	1,027		1,138	1,133	1,108	1,065
Credit impairment charges	(239)	(183)	(414)	(885)		(299)	(321)	(203)	(193)
Net operating income	609	693	280	142		839	812	905	872
Operating costs	(530)	(511)	(506)	(529)		(549)	(570)	(575)	(587)
UK bank levy	(14)	-	-	-		(18)	-	-	-
Operating expenses	(544)	(511)	(506)	(529)		(567)	(570)	(575)	(587)
Litigation and conduct	(11)	(25)	(8)	-		(7)	4	(4)	-
Total operating expenses	(555)	(536)	(514)	(529)		(574)	(566)	(579)	(587)
Other net income	7	8	1	6		16	9	10	6
Profit/(loss) before tax	61	165	(233)	(381)		281	255	336	291
Attributable profit/(loss)	28	155	(226)	(291)		204	190	236	206
Balance sheet information	£bn	£bn	£bn	£bn		£bn	£bn	£bn	£bn
Loans and advances at amortised cost	30.3	31.2	33.2	38.8		40.8	42.3	42.7	40.3
Total assets	58.2	65.2	66.0	70.7		65.8	68.1	73.1	80.9
Deposits at amortised cost	65.3	66.8	67.3	64.9		63.8	65.5	66.6	64.1
Risk weighted assets	30.1	31.4	32.9	36.2		37.7	38.2	38.9	39.5
Performance measures
Return on average allocated tangible equity	2.7%	14.7%	(20.2%)	(23.5%)		15.9%	14.2%	17.8%	15.4%
Average allocated tangible equity (£bn)	4.2	4.2	4.5	5.0		5.1	5.3	5.3	5.4
Cost: income ratio	65%	61%	74%	52%		50%	50%	52%	55%
Loan loss rate (bps)	286	211	455	846		273	283	180	182
Performance measures excluding litigation and conduct1	£m	£m	£m	£m		£m	£m	£m	£m
Profit/(loss) before tax	72	190	(225)	(381)		288	251	340	291
Attributable profit/(loss)	39	174	(220)	(291)		210	187	239	206
Return on average allocated tangible equity	3.8%	16.5%	(19.6%)	(23.5%)		16.3%	14.0%	18.0%	15.4%
Cost: income ratio	64%	58%	73%	52%		50%	50%	52%	55%

 

1	Refer to pages 65 to 74 for further information and calculations of performance measures excluding litigation and conduct.

 

Head Office
	Q420	Q320	Q220	Q120		Q419	Q319	Q219	Q119
Income statement information	£m	£m	£m	£m		£m	£m	£m	£m
Net interest income	(86)	(48)	(180)	(79)		(99)	(117)	(95)	(111)
Net fee, commission and other income	(85)	(79)	41	14		(11)	62	(41)	16
Total income	(171)	(127)	(139)	(65)		(110)	(55)	(136)	(95)
Credit impairment charges	(31)	(5)	(30)	(25)		(4)	(8)	(3)	(12)
Net operating expenses	(202)	(132)	(169)	(90)		(114)	(63)	(139)	(107)
Operating costs	(213)	(69)	(106)	(11)		(45)	(59)	(44)	(52)
UK bank levy	(9)	-	-	-		(11)	-	-	-
Operating expenses	(222)	(69)	(106)	(11)		(56)	(59)	(44)	(52)
Litigation and conduct	(42)	(23)	(3)	(5)		(23)	(88)	(1)	(39)
Total operating expenses	(264)	(92)	(109)	(16)		(79)	(147)	(45)	(91)
Other net income/(expenses)	8	10	(43)	2		3	6	15	(22)
Loss before tax	(458)	(214)	(321)	(104)		(190)	(204)	(169)	(220)
Attributable loss	(381)	(284)	(255)	(99)		(154)	(184)	(126)	(172)
Balance sheet information	£bn	£bn	£bn	£bn		£bn	£bn	£bn	£bn
Total assets	18.6	19.3	21.7	23.6		21.0	22.9	22.4	21.4
Risk weighted assets	10.2	9.8	9.9	10.0		11.0	13.4	28.1	27.0
Period end allocated tangible equity	6.8	7.1	7.4	6.0		5.6	5.5	7.0	4.5
Performance measures
Average allocated tangible equity (£bn)	7.3	7.6	6.4	5.6		5.2	5.8	4.8	4.3
Performance measures excluding litigation and conduct1	£m	£m	£m	£m		£m	£m	£m	£m
Loss before tax	(416)	(191)	(318)	(99)		(167)	(116)	(168)	(181)
Attributable loss	(343)	(265)	(252)	(103)		(139)	(118)	(124)	(144)

 

1	Refer to pages 65 to 74 for further information and calculations of performance measures excluding litigation and conduct.

 

Performance Management

 

Margins and balances
	Year ended 31.12.20			Year ended 31.12.19
	Net interest income	Average customer assets	Net interest margin	Net interest income	Average customer assets	Net interest margin
	£m	£m	%	£m	£m	%
Barclays UK	5,234	200,317	2.61	5,888	190,849	3.09
Barclays International1,2	3,382	92,909	3.64	4,021	98,824	4.07
Total Barclays UK and Barclays International	8,616	293,226	2.94	9,909	289,673	3.42
Other3	(494)			(502)
Total Barclays Group	8,122			9,407

 

1	Barclays International margins include IEL balances within the investment banking business.
2	Barclays has amended the presentation of the premium paid for purchased financial guarantees which are embedded in notes it issues directly to the market. From Q420 onwards, the full note coupon is presented as interest expense within net interest income. The financial guarantee element of the coupon, for these notes, had previously been recognised in net investment income. The reclassification of £99m in Q4 included £74m related to Q320 YTD. This has caused a reduction in the 2020 Barclays International and Total Barclays UK and Barclays International NIMs of 0.11% and 0.03% respectively. Had the equivalent 2019 interest expense been recognised in net interest income, the Barclays International and Total Barclays UK and Barclays International NIMs would have been 4.04% and 3.41% respectively.
3	Other includes Head Office and non-lending related investment banking businesses not included in Barclays International margins.

 

The Group NIM decreased 48bps to 2.94%. Barclays UK NIM decreased 48bps to 2.61% reflecting the impact of lower UK interest rates, COVID-19 customer support actions, as well as the mix impact of strong mortgage growth and lower unsecured lending balances. Barclays International NIM decreased 43bps to 3.64% mainly reflecting lower cards balances.

 

The Group's combined product and equity structural hedge notional as at 31 December 2020 was £188bn, with an average duration of 2.5 to 3 years. Group net interest income includes gross structural hedge contributions of £1.7bn (2019: £1.8bn) and net structural hedge contributions of £1.2bn (2019: £0.5bn). Gross structural hedge contributions represent the absolute level of interest earned from the fixed receipts on the basket of swaps in the structural hedge, while the net structural hedge contributions represent the net interest earned on the difference between the structural hedge rate and prevailing floating rates.

 

Quarterly analysis for Barclays UK and Barclays International	Net interest income	Average customer assets	Net interest margin
Three months ended 31.12.20	£m	£m	%
Barclays UK	1,317	204,315	2.56
Barclays International1,2	696	81,312	3.41
Total Barclays UK and Barclays International	2,013	285,627	2.80
Three months ended 30.09.20
Barclays UK	1,280	203,089	2.51
Barclays International1	838	88,032	3.79
Total Barclays UK and Barclays International	2,118	291,121	2.89
Three months ended 30.06.20
Barclays UK	1,225	199,039	2.48
Barclays International1	868	101,706	3.43
Total Barclays UK and Barclays International	2,093	300,745	2.80
Three months ended 31.03.20
Barclays UK	1,412	195,204	2.91
Barclays International1	980	100,171	3.93
Total Barclays UK and Barclays International	2,392	295,375	3.26
Three months ended 31.12.19
Barclays UK	1,478	193,610	3.03
Barclays International1	1,036	95,819	4.29
Total Barclays UK and Barclays International	2,514	289,429	3.45

 

1	Barclays International margins include interest earning lending balances within the investment banking business.
2	The aforementioned reclassification of expense from net investment income to net interest income has resulted in 0.48% reduction on the Q420 Barclays International NIM and 0.14% reduction on the Q420 Total Barclays UK and Barclays International NIM.

 

Remuneration

 

Deferred bonuses are payable only once an employee meets certain conditions, including a specified period of service. This creates a timing difference between the communication of the bonus pool and the charges that are recognised in the income statement which are reconciled in the table below to show the charge for performance costs. Refer to the Remuneration Report on pages 108-142 of the Barclays PLC Annual Report 2020 for further detail on remuneration. The table below includes the other elements of compensation and staff costs.

 

	Year ended	Year ended
	31.12.20	31.12.19
	£m	£m	% Change
Incentive awards granted:
Current year bonus	1,090	1,058	(3)
Deferred bonus	490	432	(13)
Total incentive awards granted	1,580	1,490	(6)
Reconciliation of incentive awards granted to income statement charge:
Less: deferred bonuses granted but not charged in current year	(335)	(293)	(14)
Add: current year charges for deferred bonuses from previous years	293	308	5
Other differences between incentive awards granted and income statement charge	(34)	(48)	29
Income statement charge for performance costs	1,504	1,457	(3)
Other income statement charges:
Salaries	4,322	4,332	-
Social security costs	613	573	(7)
Post-retirement benefits1	519	501	(4)
Other compensation costs	479	480	-
Total compensation costs2	7,437	7,343	(1)
Other resourcing costs:
Outsourcing	342	433	21
Redundancy and restructuring	102	132	23
Temporary staff costs	102	256	60
Other	114	151	25
Total other resourcing costs	660	972	32
Total staff costs	8,097	8,315	3
Group compensation costs as a % of total income	34.2	33.9
Group staff costs as a % of total income	37.2	38.4

 

1	Post-retirement benefits charge includes £279m (2019: £270m) in respect of defined contribution schemes and £240m (2019: £231m) in respect of defined benefit schemes.
2	£451m (2019: £439m) of Group compensation was capitalised as internally generated software.

 

Deferred bonuses have been awarded and are expected to be charged to the income statement in the years outlined in the table that follows:

 

Year in which income statement charge is expected to be taken for deferred bonuses awarded to date1
	Actual			Expected1,2
	Year ended	Year ended		Year ended	2022 and
	31.12.19	31.12.20		31.12.21	beyond
	£m	£m		£m	£m
Deferred bonuses from 2017 and earlier bonus pools	141	49		6	1
Deferred bonuses from 2018 bonus pool	169	109		48	9
Deferred bonuses from 2019 bonus pool	137	135		82	51
Deferred bonuses from 2020 bonus pool	-	155		148	136
Income statement charge for deferred bonuses	447	448		284	197

 

1	The actual amount charged depends upon whether conditions have been met and may vary compared with the above expectation.
2	Does not include the impact of grants which will be made in 2021 and beyond.

 

Charging of deferred bonus profile1
Grant date	Expected payment date(s)2	Year	Income statement charge profile of 2020 awards3,4
March 2021		2020	35%
		2021	34%
	March 2022 (33.3%)	2022	21%
	March 2023 (33.3%)	2023	9%
	March 2024 (33.3%)	2024	1%

 

1	Represents a typical vesting schedule for deferred awards. Certain awards may be subject to 5- or 7-year deferral in line with regulatory requirements.
2	Share awards may be subject to an additional holding period.
3	The income statement charge is based on the period over which conditions are met.
4	Income statement charge profile % disclosed as a percentage of the award excluding lapse.

 

Risk Management

 

Risk m anagement and p rincipal r isks

 

The roles and responsibilities of the business groups, Risk and Compliance, in the management of risk in the Group are identified in the Enterprise Risk Management Framework. The purpose of the framework is to identify the principal risks of the Group, the process by which the Group sets its appetite for these risks in its business activities, and the consequent limits which it places on related risk taking. The framework identifies eight principal risks: credit risk; market risk; treasury and capital risk; operational risk; conduct risk; reputation risk; model risk; and legal risk. Further detail on these risks and how they are managed is available in the Barclays PLC Annual Report 2020 or online at home.barclays/annualreport .

 

The following section gives an overview of credit risk, market risk, and treasury and capital risk for the period.

 

Credit risk overview

 

The impact of the COVID-19 pandemic has increased the level of judgement that management has been required to exercise over the course of 2020. Customer and client default rates have remained relatively stable despite the impact of the pandemic and volatile macroeconomic environment. In retail cards, credit profiles improved or were stable versus pre-pandemic levels as a result of government support measures and customer deleveraging. In wholesale, furlough and liquidity funding schemes are supporting businesses through the pandemic, with limited credit deterioration. This lack of deterioration, combined in some cases with improving economics, is leading to large scale credit loss stock releases on a modelled basis in pockets of the portfolio. Given this backdrop, management has applied COVID-19 specific adjustments to modelled outputs to ensure the full potential impacts of stress are provided for. These adjustments address the temporary nature of ongoing government support, the uncertainty in relation to the timing of stress and the degree to which economic consensus has yet captured the range of economic uncertainty, particularly in the UK.

 

Credit Risk

 

Loans and advances at amortised cost by stage

 

The table below p resents an analysis of loans and advances at amortised cost by gross exposure, impairment allowance, impairment charge and coverage ratio by stage allocation and business segment as at 31 December 2020. Also included are off-balance sheet loan commitments and financial guarantee contracts by gross exposure, impairment allowance and coverage ratio by stage allocation as at 31 December 2020.

 

Impairment allowance under IFRS 9 considers both the drawn and the undrawn counterparty exposure. For retail portfolios, the total impairment allowance is allocated to the drawn exposure to the extent that the allowance does not exceed the exposure, as ECL is not reported separately. Any excess is reported on the liability side of the balance sheet as a provision. For wholesale portfolios, the impairment allowance on the undrawn exposure is reported on the liability side of the balance sheet as a provision.

 

	Gross exposure					Impairment allowance				Net exposure
	Stage 1	Stage 2	Stage 3	Total		Stage 1	Stage 2	Stage 3	Total
As at 31.12.20	£m	£m	£m	£m		£m	£m	£m	£m	£m
Barclays UK	153,250	23,896	2,732	179,878		332	1,509	1,147	2,988	176,890
Barclays International1	21,048	5,500	1,992	28,540		396	1,329	1,205	2,930	25,610
Head Office	4,267	720	844	5,831		4	51	380	435	5,396
Total Barclays Group retail	178,565	30,116	5,568	214,249		732	2,889	2,732	6,353