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Barclays PLC (BARC)

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Friday 23 October, 2020

Barclays PLC

3rd Quarter Results

RNS Number : 9798C
Barclays PLC
23 October 2020
 

Barclays PLC

Q3 2020 Results Announcement

 

30 September 2020

 

 

Performance Highlights

 

Open for business during the COVID-19 pandemic, helping support the economy

 

COVID-19 support

 

Supporting our customers, clients, communities, and colleagues

·

Provided over 6 40k payment holidays to customers, c.£2 5 bn of COVID-19 support to UK businesses 1 and helped businesses and institutions access global capital markets including un derwriting over £1tn of new issuance 2 in Q220 and Q320 . Also waived c.£100m of interest and fees to customers, and committed to a £ 10 0m COVID-19 Community Aid Package 

 

Diversified business model delivered a resilient operating performance Q320 YTD

 

Despite the pandemic, Barclays delivered a Q320 YTD Group profit before tax of £2.4bn (Q319 YTD: £3.3bn, included a Payment Protection Insurance (PPI) provision of £1.4bn), a return on tangible equity (RoTE) of 3.6% (Q319 YTD: 5.1%), earnings per share (EPS) of 7.6p (Q319 YTD: 10.4p) and a common equity tier 1 (CET1) ratio of 14.6% (December 2019: 13.8%)

 

Income

 

Diversified income streams with strong Q320 YTD CIB income offsetting challenges in Barclays UK and CC&P

Group income of £16.8bn up 3% versus prior year

·

Barclays International income of £12.4bn, up 11% versus prior year

 

-

Corporate and Investment Bank (CIB) income of £9.8bn, up 24% driven by strong Markets income reflecting wider spreads and market share gains3

 

-

Consumer, Cards and Payments (CC&P) income of £2.6bn, down 21% driven by lower balances, margin compression and reduced payments activity

·

Barclays UK income of £4.7bn down 12% versus prior year reflecting lower interest rates and unsecured lending balances, COVID-19 customer support actions and the removal of certain fees

Credit impairment charges

 

Increased impairment provisioning driving higher coverage ratios across portfolios

Group credit impairment charges increased to £4.3bn (Q319 YTD: £1.4bn) reflecting the impact from revised IFRS 9 scenarios and £0.7bn in respect of single name wholesale loan charges

·

Impairment coverage ratio for the unsecured consumer lending and wholesale portfolios increased to 12.2% (FY19: 8.1%) and 1.5% (FY19: 0.8%) respectively

Costs4

 

Improved cost: income ratio

Group operating expenses of £10.0bn down 1% versus prior year

·

Cost efficiencies and cost discipline contributed to positive cost: income jaws of 4% resulting in an improved cost: income ratio of 59% (Q319 YTD: 62%)

Capital, liquidity and TNAV

 

Strong capital and liquidity position

CET1 ratio of 14.6%, a YTD increase of 80bps

·

The increase over the first nine months of the year reflects profits, regulatory measures and cancellation of the full year 2019 dividend payment, partially offset by a YTD increase in Risk Weighted Assets (RWAs)

·

Headroom of 3.3% above Maximum Distributable Amount (MDA) hurdle of 11.3%5

·

The Group liquidity pool was £327bn (December 2019: £211bn) and the liquidity coverage ratio (LCR) was 181% (December 2019: 160%)

·

Tangible net asset value (TNAV) per share increased to 275p (December 2019: 262p)

 

Q320 performance

 

 

Q320 Barclays UK and CC&P income improved from Q220, whilst CIB remains strong year on year

 

Q320 Group profit before tax of £1.1bn (Q319: £0.2bn), resulting in a RoTE of 5.1% (Q319: (2.4%)) and EPS of 3.5p (Q319: (1.7p))

·

Q320 Group income of £5.2bn, down 6% versus prior year

·

Q320 Barclays International income of £3.8bn, up 1% versus prior year

 

-

Q320 CIB income of £2.9bn, up 11% versus prior year driven by a 29% increase in Markets income, but down 12% versus prior quarter

 

-

Q320 CC&P income of £0.9bn, down 23% versus prior year but up 26% versus prior quarter improved from the Q220 low point reflecting recovery in US cards spend, deposit repricing, UK merchant acquiring volumes, and the non-recurrence of a £100m valuation loss in Barclays' preference shares in Visa Inc.

·

Q320 Barclays UK income of £1.6bn, down 16% versus prior year but up 6% versus prior quarter improved from the Q220 low point with Q320 net interest margin (NIM) stable at 2.51% (Q220: 2.48%)

·

Q320 Group credit impairment charge of £0.6bn, up 32% versus prior year but down 63% versus prior quarter

·

Q320 Group operating expenses of £3.4bn4, up 3% versus prior year and 2% versus prior quarter

·

CET1 ratio of 14.6%, an increase of 40bps in Q320 mainly due to lower RWAs

 

1

Total payment holidays granted as at 30 September 2020, business lending and commercial paper issuance data as at 19 October 2020.

2

Across Equity and Debt Capital Markets.

3

Data source: Coalition, H120 Competitor Analysis. Market share represents Barclays share of the total industry Revenue Pool. Analysis is based on Barclays internal business structure and internal revenues.

4

Excluding litigation and conduct.

5

Barclays' MDA hurdle will fluctuate depending on the total RWAs at each reporting period and any future regulatory changes.

 

Group outlook

 

Outlook remains uncertain and subject to change depending on the evolution and persistence of the COVID-19 pandemic and the outcome of Brexit negotiations

Income

·

Certain headwinds to income in Barclays UK are expected to persist in 2021 including the low interest rate environment

·

The drivers of CC&P income are showing signs of recovery but the outlook remains uncertain

·

After a strong Q320 YTD CIB performance driven by Markets, the franchise is well positioned for the future

Impairment

·

Provided macroeconomic assumptions remain consistent with expectations, we expect the H220 impairment charge to be materially below that of H120 and it is likely that the full year 2021 impairment charge will be below that of 2020

Costs

·

The Group expects FY20 costs, excluding litigation and conduct, to be broadly flat versus FY19. However, the Group will be evaluating actions to reduce structural costs, which could result in additional charges, the timing and size of which remain to be determined

Capital

·

The Group remains in a strong capital position and is confident of its capital generation capacity over time, acknowledging likely headwinds to the CET1 ratio from procyclical effects on RWAs and reduced benefit from transitional relief on IFRS 9 impairment

·

The Board recognises the importance of capital returns to shareholders and will provide an update on its policy and dividends at FY20 results

 

Barclays Group results

 

for the nine months ended

30.09.20

30.09.19

 

 

£m

£m

% Change

Total income

16,825

16,331

3

Credit impairment charges

(4,346)

(1,389)

 

Net operating income

12,479

14,942

(16)

Operating expenses

(9,954)

(10,051)

1

Litigation and conduct

(106)

(1,682)

94

Total operating expenses

(10,060)

(11,733)

14

Other net income

-

51

 

Profit before tax

2,419

3,260

(26)

Tax charge

(441)

(814)

46

Profit after tax

1,978

2,446

(19)

Non-controlling interests

(41)

(38)

(8)

Other equity instrument holders

(631)

(628)

-

Attributable profit

1,306

1,780

(27)

 

 

 

 

Performance measures

 

 

 

Return on average tangible shareholders' equity

3.6%

5.1%

 

Average tangible shareholders' equity (£bn)

 48.5

 46.6

 

Cost: income ratio

60%

72%

 

Loan loss rate (bps)

164

53

 

Basic earnings per share

7.6p

10.4p

 

Dividend per share

-

3.0p

 

  

 

 

 

Performance measures excluding litigation and conduct1

 

 

 

Profit before tax

2,525

4,942

(49)

Attributable profit

1,378

3,391

(59)

Return on average tangible shareholders' equity

3.8%

9.7%

 

Cost: income ratio

59%

62%

 

Basic earnings per share

8.0p

19.7p

 

 

 

 

 

 

As at 30.09.20

As at 31.12.19

As at 30.09.19

Balance sheet and capital management2

£bn

£bn

£bn

Loans and advances at amortised cost

344.4

339.1

345.1

Deposits at amortised cost

494.6

415.8

420.6

Tangible net asset value per share

275p

262p

274p

Common equity tier 1 ratio

14.6%

13.8%

13.4%

Common equity tier 1 capital

45.5

40.8

41.9

Risk weighted assets

310.7

295.1

313.3

Average UK leverage ratio

5.1%

4.5%

4.6%

UK leverage ratio

5.2%

5.1%

4.8%

 

 

 

 

Funding and liquidity

 

 

 

Group liquidity pool (£bn)

327

211

226

Liquidity coverage ratio

181%

160%

151%

Loan: deposit ratio

70%

82%

82%

 

1

Refer to pages 40 to 49 for further information and calculations of performance measures excluding litigation and conduct.

2

Refer to pages 29 to 35 for further information on how capital, RWAs and leverage are calculated.

 

Group Chief Executive Officer's Review

 

"In this historically challenging year for our customers and clients we have continued to provide huge support to help people through the social and economic impact of the COVID-19 pandemic. This remains a priority, alongside maintaining the financial integrity of the firm and keeping our colleagues safe.

 

For customers, we have provided over 640,000 payment holidays globally1, and this is in addition to some £100m of income foregone in the form of waived overdraft interest and banking charges for our UK customers and business banking clients.

 

We have now delivered some £25bn through the government support measures to UK businesses.1 This includes 296,000 Bounce Back Loans totalling £9.2bn, around £3bn under the CBILS programmes2, and £12.4bn through the Covid Corporate Financing Facility.1 In addition, we have helped businesses and institutions to access global capital markets, including underwriting over £1tn of new issuance in Q220 and Q320.3

 

Our £100m Community Aid Package is making a positive difference for thousands of people via hundreds of charities we have supported which are mitigating the impact of COVID-19, including donations to NHS hospital charities, Age UK and Mind.

 

This support is made partly possible because we have a resilient and diversified business model which means we remain profitable as we weather this crisis, with strong income performance in our CIB more than offsetting headwinds in our consumer businesses.

 

In the first nine months Group income increased 3% to £16.8bn with pre-provision profits4 increasing 9% to £6.9bn.

 

Our impairment charges now total £4.3bn, with an additional £608m taken in Q320, a figure down 63% on the previous quarter. We expect the impairment charge in the second half of the year to be materially lower than the first half.

 

Group profit before tax for the first nine months was £2.4bn, with the Group remaining profitable in each quarter so far.

 

In Barclays International, CIB income increased 24% to £9.8bn with Markets income up 52% mainly reflecting wider spreads and market share gains.5 Profit before tax in the CIB increased 25% to £3.2bn.

 

Our CC&P business returned to profitability in the third quarter with profit before tax of £165m, reducing the year to date loss before tax to £449m, which included impairment charges of £1.5bn.

 

Barclays UK also returned to profitability in the third quarter, with profit before tax of £196m, as economic activity recovered from the spring low point and impairment charges reduced. For the first nine months Barclays UK delivered profit before tax of £264m. Income headwinds in Barclays UK are expected to persist into 2021 including the low interest rate environment.

 

Group costs excluding litigation and conduct are down 1% at £10.0bn, resulting in positive cost to income jaws of 4%, and an improved cost to income ratio of 59%.

 

Group RoTE was 3.6% including 10.5% for the CIB; and 2.2% for Barclays UK. The Group generated EPS of 7.6 pence.

 

In the third quarter Group income was £5.2bn and Group profit before tax increased to £1.1bn due to the non-recurrence of the 2019 PPI provision.

 

Our CET1 ratio increased 40bps in the quarter to 14.6%, more than 300 basis points above our regulatory minimum. The Board recognises the importance of capital returns to shareholders and will provide an update on its policy and dividends at full year results."

 

James E Staley, Group Chief Executive Officer

 

1

Total payment holidays granted as at 30 September 2020, business lending and commercial paper issuance data as at 19 October 2020.

2

The Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Large Business Interruption Loan Scheme programmes (together the CBILS programmes).

3

Across Equity and Debt Capital Markets.

4

Excluding litigation and conduct.

5

Data source: Coalition, H120 Competitor Analysis Market share represents Barclays share of the total industry Revenue Pool. Analysis is based on Barclays internal business structure and internal revenues.

 

Group Finance Director's Review

 

Group performance

 

·

Statutory RoTE was 3.6% (Q319 YTD: 5.1%) and statutory EPS was 7.6p (Q319 YTD: 10.4p)

·

Profit before tax was £2,419m (Q319 YTD: £3,260m). Excluding litigation and conduct, profit before tax was £2,525m (Q319 YTD: £4,942m), as positive operating leverage from a 3% increase in income and 1% reduction in operating expenses was offset by materially higher credit impairment charges

·

Pre-provision profits1 increased 9% to £6,871m, benefitting from the Group's diversified business model, as strong performance in CIB more than offset income headwinds in Barclays UK and CC&P

·

Total income increased 3% to £16,825m. Barclays UK income decreased 12%. Barclays International income increased 11%, with CIB income up 24% and CC&P income down 21%

·

Credit impairment charges increased to £4,346m (Q319 YTD: £1,389m). This increase was primarily driven by the impact from revised IFRS 9 scenarios (the "COVID-19 scenarios") reflecting forecast deterioration in macroeconomic variables (including a prolonged period of heightened UK and US unemployment), partially offset by the estimated impact of central bank, government and other support measures, and £746m in respect of single name wholesale loan charges in CIB

·

Operating expenses decreased 1% to £9,954m reflecting cost efficiencies and continued cost discipline in the current environment. The Group delivered positive cost: income jaws of 4% which resulted in the Group cost: income ratio, excluding litigation and conduct, reducing to 59% (Q319 YTD: 62%)

·

The effective tax rate was 18.2% (Q319 YTD: 25.0%). This reflects the tax benefit recognised for a re-measurement of UK deferred tax assets as a result of the UK corporation tax rate being maintained at 19%. The Group's effective tax rate for the full year is expected to be around 20%, excluding litigation and conduct

·

Attributable profit was £1,306m (Q319 YTD: £1,780m). Excluding litigation and conduct, attributable profit was £1,378m (Q319 YTD: £3,391m), generating a RoTE of 3.8% (Q319 YTD: 9.7%) and EPS of 8.0p (Q319 YTD: 19.7p)

·

Total assets increased to £1,422bn (December 2019: £1,140bn), primarily due to a £91bn increase in cash and balances at central banks, £67bn increase in derivative assets and £50bn increase in financial assets at fair value through the income statement. This is due to the low interest rate environment, increased client activity and the appreciation of period end USD against GBP

·

Loans and advances at amortised cost increased by £5bn to £344bn, which reflects the £9.7bn of lending under the government backed Bounce Back Loan Scheme (BBLS) and the CBILS which Barclays UK has provided to support businesses through the COVID-19 pandemic and £3.2bn of mortgage growth. This was partially offset by lower card balances

·

Deposits at amortised cost increased by £79bn to £495bn, primarily due to CIB clients increasing liquidity, lower consumer spending levels and precautionary balance build

·

TNAV per share increased to 275p (December 2019: 262p) reflecting 7.6p of statutory EPS and positive reserve movements, including retirement benefit re-measurements and currency translation reserves

 

Barclays UK

 

·

Profit before tax, excluding litigation and conduct, was £300m (Q319 YTD: £1,899m). RoTE was 2.5% (Q319 YTD: 17.2%) reflecting a challenging operating environment and materially higher credit impairment charges

·

Total income decreased 12% to £4,721m. Net interest income reduced 11% to £3,917m with a NIM of 2.63% (Q319 YTD: 3.10%). Net fee, commission and other income decreased 18% to £804m

 

-

Personal Banking income decreased 11% to £2,627m, reflecting deposit margin compression, COVID-19 customer support actions, and lower unsecured lending balances, partially offset by deposit balance growth and transfer of Barclays Partner Finance (BPF) from Barclays International in Q220

 

-

Barclaycard Consumer UK income decreased 20% to £1,165m as reduced borrowing and spend levels by customers resulted in a lower level of interest earning lending (IEL) balances, as well as planned lower debt sales

 

-

Business Banking income decreased 6% to £929m due to deposit margin compression, lower transactional fee volumes as a result of COVID-19 and related customer support actions, partially offset by balance growth 

·

Credit impairment charges increased to £1,297m (Q319 YTD: £522m) reflecting forecast deterioration in macroeconomic variables in the COVID-19 scenarios, partially offset by the estimated impact of central bank, government and other support measures. As at 30 September 2020, 30 and 90 day arrears rates in UK cards were 1.7% (Q319: 1.7%) and 0.8% (Q319: 0.8%) respectively

·

Operating expenses increased 5% to £3,136m as efficiency savings were more than offset by higher servicing and financial assistance costs, as well as the transfer of BPF and further investment

·

Loans and advances to customers at amortised cost increased 5% to £203.9bn predominantly through £9.7bn of BBLS and CBILS lending, £3.2bn of mortgage growth and the £2.2bn transfer of BPF, partially offset by £4.0bn lower UK cards balances

·

Customer deposits at amortised cost increased 13% to £232.0bn due to lower customer spending and precautionary balance build

·

RWAs increased to £76.2bn (December 2019: £74.9bn) driven by the transfer of BPF and growth in mortgages, partially offset by a reduction in consumer loans

 

1

Excluding litigation and conduct.

 

Barclays International

 

·

Profit before tax, excluding litigation and conduct, decreased 19% to £2,833m with a RoTE of 7.6% (Q319 YTD: 10.4%), reflecting a RoTE of 10.5% (Q319 YTD: 9.3%) in CIB and (9.9)% (Q319 YTD: 15.8%) in CC&P

·

Total income increased to £12,435m (Q319 YTD: £11,223m)

 

-

CIB income increased 24% to £9,838m

 

 

-

Markets income of £6,255m (Q319 YTD: £4,116m) was the best ever Q3 YTD on a comparable basis1 reflecting an increase in market share in the first half of the year2. FICC income increased 64% to £4,326m driven by strong performances in macro and credit, mainly reflecting wider spreads. Equities income increased 31% to £1,929m driven by derivatives and cash due to higher levels of client activity and volatility

 

 

-

Banking fees income increased 1% to £1,977m as a strong performance in equity and debt capital markets, representing the best ever Q3 YTD on a comparable basis for these businesses1, was offset by lower fee income in advisory which was impacted by a reduced fee pool3

 

 

-

Within Corporate, Transaction banking income decreased 6% to £1,202m as deposit balance growth was more than offset by margin compression. Corporate lending income decreased by 28% to £404m reflecting c.£210m of losses on fair value lending positions and on mark-to-market and carry costs on related hedges in Q320 YTD

 

-

CC&P income decreased 21% to £2,597m as the impacts of the COVID-19 pandemic resulted in lower balances on co-branded cards, margin compression and reduced payments activity. Q220 included a c.£100m valuation loss on Barclays' preference shares in Visa Inc. resulting from the Q220 Supreme Court ruling concerning charges paid by merchants

·

Credit impairment charges increased to £2,989m (Q319 YTD: £844m)

 

-

CIB credit impairment charges increased to £1,507m (Q319 YTD: £127m), reflecting £746m in respect of single name wholesale loan charges and the impact from updates to forecast macroeconomic variables, partially offset by the estimated impact of central bank, government and other support measures

 

-

CC&P credit impairment charges increased to £1,482m (Q319 YTD: £717m) reflecting the impact from updates to forecast macroeconomic variables, partially offset by the estimated impact of central bank, government and other support measures. As at 30 September 2020, 30 and 90 day arrears in US cards were 2.3% (Q319: 2.6%) and 1.1% (Q319: 1.3%) respectively

·

Operating expenses decreased 4% to £6,632m

 

-

CIB operating expenses decreased 2% to £5,086m due to cost efficiencies and discipline in the current environment

 

-

CC&P operating expenses decreased 11% to £1,546m reflecting cost efficiencies, lower marketing spend due to the impacts of the COVID-19 pandemic and transfer of BPF to Barclays UK in Q220

·

RWAs increased to £224.7bn (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 - Q320. Pre 2014 financials were not restated following re-segmentation in Q116.

2

Data source: Coalition, H120 Competitor Analysis. Market share represents Barclays share of the total 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 30 September 2020.

 

Head Office

 

·

Loss before tax, excluding litigation and conduct, was £608m (Q319 YTD: £465m)

·

Total income was an expense of £331m (Q319 YTD: £286m), which included treasury items and hedge accounting, mark -to-market losses on legacy investments and funding costs of legacy capital instruments, partially offset by the recognition of dividends on Barclays' stake in Absa Group Limited

·

Credit impairment charges increased to £60m (Q319 YTD: £23m) due to impacts from the COVID-19 scenarios on the Italian home loan portfolio, partially offset by the estimated impact of central bank, government and other support measures

·

Operating expenses were £186m (Q319 YTD: £155m), which included £73m of charitable donations from Barclays' COVID-19 Community Aid Package

·

Other net expenses were £31m (Q319 YTD: £1m), which included a fair value loss on an investment in an associate

·

RWAs decreased to £9.8bn (December 2019: £11.0bn) driven by the reduction in value of Barclays' stake in Absa Group Limited

 

Group capital and leverage

 

·

The CET1 ratio increased to 14.6% (December 2019: 13.8%)

 

-

CET1 capital increased by £4.7bn to £45.5bn reflecting resilient capital generation through £6.3bn of profits after tax, excluding credit impairment charges and a £1.0bn increase due to the cancellation of the full year 2019 dividend. The CET1 capital increase also reflects new regulatory measures implemented in June 2020 for IFRS 9 transitional relief and prudent valuation

 

-

RWAs increased by £15.6bn to £310.7bn primarily due to higher market volatility and client activity within CIB as well as a reduction in credit quality, partially offset by lower consumer lending

·

The average UK leverage ratio increased to 5.1% (December 2019: 4.5%) primarily driven by the increase in CET1 capital. The average leverage exposure decreased by £32bn to £1,111bn (December 2019: £1,143bn) largely driven by the Prudential Regulation Authority's (PRA) early adoption of CRR II settlement netting

 

Group funding and liquidity

 

·

The liquidity pool was £327bn (December 2019: £211bn) and the LCR remained significantly above the 100% regulatory requirement at 181% (December 2019: 160%), equivalent to a surplus of £143bn (December 2019: £78bn). The increase in the liquidity pool, LCR and surplus is driven by a 19% growth in customer deposits and actions to maintain a prudent funding and liquidity position in the current environment

·

Wholesale funding outstanding, excluding repurchase agreements, was £175.3bn (December 2019: £147.1bn). The Group issued £6.6bn equivalent of minimum requirement for own funds and eligible liabilities (MREL) instruments from Barclays PLC (the Parent company) during the year to date. The Group is well advanced in its MREL issuance plans, with a Barclays PLC MREL ratio of 32.8% as at 30 September 2020 (December 2019: 31.2%) relative to an estimated requirement (including requisite buffers) of c.29.9% by 1 January 2022

 

Other matters

 

·

As at 30 September 2020, the Group held a provision of £300m relating to PPI. Since the provision increase to £1.4bn in Q319, 96% of the items outstanding as at 30 September 2019 have been resolved (including invalid items and claims from the Official Receiver with whom we reached an agreement in Q320). Observations from these resolved complaints continue to support the provision level

 

Group outlook and targets

 

Outlook remains uncertain and subject to change depending on the evolution and persistence of the COVID-19 pandemic and the outcome of Brexit negotiations

 

Income

·

Certain headwinds to income in Barclays UK are expected to persist in 2021 including the low interest rate environment

·

The drivers of CC&P income are showing signs of recovery but the outlook remains uncertain

·

After a strong Q320 YTD CIB performance driven by Markets, the franchise is well positioned for the future

Impairment

·

Provided macroeconomic assumptions remain consistent with expectations, we expect the H220 impairment charge to be materially below that of H120 and it is likely that the full year 2021 impairment charge will be below that of 2020

Costs

·

The Group expects FY20 costs, excluding litigation and conduct, to be broadly flat versus FY19. However, the Group will be evaluating actions to reduce structural costs, which could result in additional charges, the timing and size of which remain to be determined

Capital

·

The Group remains in a strong capital position and is confident of its capital generation capacity over time, acknowledging likely headwinds to the CET1 ratio from procyclical effects on RWAs and reduced benefit from transitional relief on IFRS 9 impairment

·

The Board recognises the importance of capital returns to shareholders and will provide an update on its policy and dividends at FY20 results

Targets

·

The Group continues to target a RoTE of >10%1 and cost: income ratio of <60% over time, but targets remain subject to change depending on the evolution and persistence of the COVID-19 pandemic and the outcome of Brexit negotiations

 

Tushar Morzaria , Group Finance Director

 

1

Excluding litigation and conduct.

 

Results by Business

 

Barclays UK

Nine months ended

Nine months ended

 

30.09.20

30.09.19

 

Income statement information

£m

£m

% Change

Net interest income

3,917

4,410

(11)

Net fee, commission and other income

804

984

(18)

Total income

4,721

5,394

(12)

Credit impairment charges

(1,297)

(522)

 

Net operating income

3,424

4,872

(30)

Operating expenses

(3,136)

(2,973)

(5)

Litigation and conduct

(36)

(1,524)

98

Total operating expenses

(3,172)

(4,497)

29

Other net income

12

-

 

Profit before tax

264

375

(30)

Attributable profit/(loss)

165

(157)

 

 

 

 

 

 

As at 30.09.20

As at 31.12.19

As at 30.09.19

Balance sheet information

£bn

£bn

£bn

Loans and advances to customers at amortised cost

203.9

193.7

193.2

Total assets

294.5

257.8

257.9

Customer deposits at amortised cost

232.0

205.5

203.3

Loan: deposit ratio

91%

96%

97%

Risk weighted assets

76.2

74.9

76.8

Period end allocated tangible equity

10.0

10.3

10.4

 

 

 

 

 

Nine months ended

Nine months ended

 

Performance measures

30.09.20

30.09.19

 

Return on average allocated tangible equity

2.2%

(2.0%)

 

Average allocated tangible equity (£bn)

10.2

10.4

 

Cost: income ratio

67%

83%

 

Loan loss rate (bps)

81

35

 

Net interest margin

2.63%

3.10%

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

% Change

Profit before tax

300

1,899

(84)

Attributable profit

190

1,332

(86)

Return on average allocated tangible equity

2.5%

17.2%

 

Cost: income ratio

66%

55%

 

 

1

Refer to pages 40 to 49 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays UK

Nine months ended

Nine months ended

 

30.09.20

30.09.19

 

Analysis of total income

£m

£m

% Change

Personal Banking

2,627

2,945

(11)

Barclaycard Consumer UK

1,165

1,459

(20)

Business Banking

929

990

(6)

Total income

4,721

5,394

(12)

 

 

 

 

Analysis of credit impairment charges

 

 

 

Personal Banking

(312)

(124)

 

Barclaycard Consumer UK

(803)

(364)

 

Business Banking

(182)

(34)

 

Total credit impairment charges

(1,297)

(522)

 

 

 

 

 

 

As at 30.09.20

As at 31.12.19

As at 30.09.19

Analysis of loans and advances to customers at amortised cost

£bn

£bn

£bn

Personal Banking

155.7

151.9

150.1

Barclaycard Consumer UK

10.7

14.7

14.9

Business Banking

37.5

27.1

28.2

Total loans and advances to customers at amortised cost

203.9

193.7

193.2

 

 

 

 

Analysis of customer deposits at amortised cost

 

 

 

Personal Banking

173.2

159.2

157.9

Barclaycard Consumer UK

0.1

-

-

Business Banking

58.7

46.3

45.4

Total customer deposits at amortised cost

232.0

205.5

203.3

 

Barclays International

Nine months ended

Nine months ended

 

30.09.20

30.09.19

 

Income statement information

£m

£m

% Change

Net interest income

2,668

2,976

(10)

Net trading income

5,548

3,270

70

Net fee, commission and other income

4,219

4,977

(15)

Total income

12,435

11,223

11

Credit impairment charges

(2,989)

(844)

 

Net operating income

9,446

10,379

(9)

Operating expenses

(6,632)

(6,923)

4

Litigation and conduct

(39)

(30)

(30)

Total operating expenses

(6,671)

(6,953)

4

Other net income

19

52

(63)

Profit before tax

2,794

3,478

(20)

Attributable profit

1,779

2,419

(26)

 

 

 

 

 

As at 30.09.20

As at 31.12.19

As at 30.09.19

Balance sheet information

£bn

£bn

£bn

Loans and advances at amortised cost

128.0

132.8

138.1

Trading portfolio assets

122.3

113.3

119.4

Derivative financial instrument assets

295.9

228.9

286.0

Financial assets at fair value through the income statement

178.2

128.4

158.0

Cash collateral and settlement balances

121.8

79.4

112.5

Other assets

261.7

178.6

195.6

Total assets

1,107.9

861.4

1,009.6

Deposits at amortised cost

262.4

210.0

217.6

Derivative financial instrument liabilities

293.3

228.9

283.3

Loan: deposit ratio

49%

63%

63%

Risk weighted assets

224.7

209.2

223.1

Period end allocated tangible equity

30.5

29.6

31.4

 

 

 

 

 

Nine months ended

Nine months ended

 

Performance measures

30.09.20

30.09.19

 

Return on average allocated tangible equity

7.5%

10.3%

 

Average allocated tangible equity (£bn)

31.8

31.2

 

Cost: income ratio

54%

62%

 

Loan loss rate (bps)

300

80

 

Net interest margin

3.71%

4.00%

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

% Change

Profit before tax

2,833

3,508

(19)

Attributable profit

1,808

2,445

(26)

Return on average allocated tangible equity

7.6%

10.4%

 

Cost: income ratio

53%

62%

 

 

1

Refer to pages 40 to 49 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

 

30.09.20

30.09.19

 

Income statement information

£m

£m

% Change

FICC

4,326

2,638

64

Equities

1,929

1,478

31

Markets

6,255

4,116

52

Advisory

329

574

(43)

Equity capital markets

369

273

35

Debt capital markets

1,279

1,108

15

Banking fees

1,977

1,955

1

Corporate lending

404

563

(28)

Transaction banking

1,202

1,283

(6)

Corporate

1,606

1,846

(13)

Total income

9,838

7,917

24

Credit impairment charges

(1,507)

(127)

 

Net operating income

8,331

7,790

7

Operating expenses

(5,086)

(5,191)

2

Litigation and conduct

(6)

(30)

80

Total operating expenses

(5,092)

(5,221)

2

Other net income

4

27

(85)

Profit before tax

3,243

2,596

25

Attributable profit

2,141

1,787

20

 

 

 

 

 

As at 30.09.20

As at 31.12.19

As at 30.09.19

Balance sheet information

£bn

£bn

£bn

Loans and advances at amortised cost

96.8

92.0

95.8

Trading portfolio assets

122.2

113.3

119.3

Derivative financial instrument assets

295.9

228.8

286.0

Financial assets at fair value through the income statement

177.9

127.7

157.3

Cash collateral and settlement balances

121.0

78.5

111.6

Other assets

228.9

155.3

171.5

Total assets

1,042.7

795.6

941.5

Deposits at amortised cost

195.6

146.2

152.1

Derivative financial instrument liabilities

293.2

228.9

283.2

Risk weighted assets

193.3

171.5

184.9

 

 

 

 

 

Nine months ended

Nine months ended

 

Performance measures

30.09.20

30.09.19

 

Return on average allocated tangible equity

10.5%

9.2%

 

Average allocated tangible equity (£bn)

27.2

25.9

 

Cost: income ratio

52%

66%

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

% Change

Profit before tax

3,249

2,626

24

Attributable profit

2,145

1,813

18

Return on average allocated tangible equity

10.5%

9.3%

 

Cost: income ratio

52%

66%

 

 

1

Refer to pages 40 to 49 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International

 

 

 

Consumer, Cards and Payments

Nine months ended

Nine months ended

 

30.09.20

30.09.19

 

Income statement information

£m

£m

% Change

Net interest income

1,694

2,105

(20)

Net fee, commission, trading and other income

903

1,201

(25)

Total income

2,597

3,306

(21)

Credit impairment charges

(1,482)

(717)

 

Net operating income

1,115

2,589

(57)

Operating expenses

(1,546)

(1,732)

11

Litigation and conduct

(33)

-

 

Total operating expenses

(1,579)

(1,732)

9

Other net income

15

25

(40)

(Loss)/profit before tax

(449)

882

 

Attributable (loss)/profit

(362)

632

 

 

 

 

 

 

As at 30.09.20

As at 31.12.19

As at 30.09.19

Balance sheet information

£bn

£bn

£bn

Loans and advances at amortised cost

31.2

40.8

42.3

Total assets

65.2

65.8

68.1

Deposits at amortised cost

66.8

63.8

65.5

Risk weighted assets

31.4

37.7

38.2

 

 

 

 

 

Nine months ended

Nine months ended

 

Performance measures

30.09.20

30.09.19

 

Return on average allocated tangible equity

(10.6%)

15.8%

 

Average allocated tangible equity (£bn)

4.6

5.3

 

Cost: income ratio

61%

52%

 

Loan loss rate (bps)

577

213

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

% Change

(Loss)/profit before tax

(416)

882

 

Attributable (loss)/profit

(337)

632

 

Return on average allocated tangible equity

(9.9%)

15.8%

 

Cost: income ratio

60%

52%

 

 

1

Refer to pages 40 to 49 for further information and calculations of performance measures excluding litigation and conduct.

 

Head Office

Nine months ended

Nine months ended

 

30.09.20

30.09.19

 

Income statement information

£m

£m

% Change

Net interest income

(307)

(323)

5

Net fee, commission and other income

(24)

37

 

Total income

(331)

(286)

(16)

Credit impairment charges

(60)

(23)

 

Net operating income

(391)

(309)

(27)

Operating expenses

(186)

(155)

(20)

Litigation and conduct

(31)

(128)

76

Total operating expenses

(217)

(283)

23

Other net expenses

(31)

(1)

 

Loss before tax

(639)

(593)

(8)

Attributable loss

(638)

(482)

(32)

 

 

 

 

 

As at 30.09.20

As at 31.12.19

As at 30.09.19

Balance sheet information

£bn

£bn

£bn

Total assets

19.3

21.0

22.9

Risk weighted assets

9.8

11.0

13.4

Period end allocated tangible equity

7.1

5.6

5.5

 

 

 

 

 

Nine months ended

Nine months ended

 

Performance measures

30.09.20

30.09.19

 

Average allocated tangible equity (£bn)

6.5

5.0

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

% Change

Loss before tax

(608)

(465)

(31)

Attributable loss

(620)

(386)

(61)

 

1

Refer to pages 40 to 49 for further information and calculations of performance measures excluding litigation and conduct.

 

Quarterly Results Summary

 

Barclays Group

 

 

 

 

 

 

 

 

 

 

 

Q320

Q220

Q120

 

Q419

Q319

Q219

Q119

 

Q418

Income statement information

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Net interest income

2,055

1,892

2,331

 

2,344

2,445

2,360

2,258

 

2,296

Net fee, commission and other income

3,149

3,446

3,952

 

2,957

3,096

3,178

2,994

 

2,777

Total income

5,204

5,338

6,283

 

5,301

5,541

5,538

5,252

 

5,073

Credit impairment charges

(608)

(1,623)

(2,115)

 

(523)

(461)

(480)

(448)

 

(643)

Net operating income

4,596

3,715

4,168

 

4,778

5,080

5,058

4,804

 

4,430

Operating costs

(3,391)

(3,310)

(3,253)

 

(3,308)

(3,293)

(3,501)

(3,257)

 

(3,624)

UK bank levy

-

-

-

 

(226)

-

-

-

 

(269)

Operating expenses

(3,391)

(3,310)

(3,253)

 

(3,534)

(3,293)

(3,501)

(3,257)

 

(3,893)

Guaranteed Minimum Pensions (GMP) charge

-

-

-

 

-

-

-

-

 

(140)

Litigation and conduct

(76)

(20)

(10)

 

(167)

(1,568)

(53)

(61)

 

(60)

Total operating expenses

(3,467)

(3,330)

(3,263)

 

(3,701)

(4,861)

(3,554)

(3,318)

 

(4,093)

Other net income/(expenses)

18

(26)

8

 

20

27

27

(3)

 

37

Profit before tax

1,147

359

913

 

1,097

246

1,531

1,483

 

374

Tax charge

(328)

(42)

(71)

 

(189)

(269)

(297)

(248)

 

(75)

Profit/(loss) after tax

819

317

842

 

908

(23)

1,234

1,235

 

299

Non-controlling interests

(4)

(21)

(16)

 

(42)

(4)

(17)

(17)

 

(83)

Other equity instrument holders

(204)

(206)

(221)

 

(185)

(265)

(183)

(180)

 

(230)

Attributable profit/(loss)

611

90

605

 

681

(292)

1,034

1,038

 

(14)

 

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

 

Return on average tangible shareholders' equity

5.1%

0.7%

5.1%

 

5.9%

(2.4%)

9.0%

9.2%

 

(0.1%)

Average tangible shareholders' equity (£bn)

48.3

50.2

47.0

 

46.4

48.4

46.2

45.2

 

44.3

Cost: income ratio

67%

62%

52%

 

70%

88%

64%

63%

 

81%

Loan loss rate (bps)

69

179

223

 

60

52

56

54

 

77

Basic earnings/(loss) per share 

3.5p

0.5p

3.5p

 

3.9p

(1.7p)

6.0p

6.1p

 

(0.1p)

 

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Profit before tax

1,223

379

923

 

1,264

1,814

1,584

1,544

 

434

Attributable profit

668

106

604

 

803

1,233

1,074

1,084

 

48

Return on average tangible shareholders' equity

5.5%

0.8%

5.1%

 

6.9%

10.2%

9.3%

9.6%

 

0.4%

Cost: income ratio

65%

62%

52%

 

67%

59%

63%

62%

 

79%

Basic earnings per share

3.9p

0.6p

3.5p

 

4.7p

7.2p

6.3p

6.3p

 

0.3p

 

 

 

 

 

 

 

 

 

 

 

Balance sheet and capital management2

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Loans and advances at amortised cost

344.4

354.9

374.1

 

339.1

345.1

339.3

330.7

 

326.4

Total assets

1,421.7

1,385.1

1,444.3

 

1,140.2

1,290.4

1,232.8

1,193.5

 

1,133.3

Deposits at amortised cost

494.6

466.9

470.7

 

415.8

420.6

413.6

412.7

 

394.8

Tangible net asset value per share

275p

284p

284p

 

262p

274p

275p

266p

 

262p

Common equity tier 1 ratio

14.6%

14.2%

13.1%

 

13.8%

13.4%

13.4%

13.0%

 

13.2%

Common equity tier 1 capital

45.5

45.4

42.5

 

40.8

41.9

42.9

41.4

 

41.1

Risk weighted assets

310.7

319.0

325.6

 

295.1

313.3

319.1

319.7

 

311.9

Average UK leverage ratio

5.1%

4.7%

4.5%

 

4.5%

4.6%

4.7%

4.6%

 

4.5%

Average UK leverage exposure

1,111.1

1,148.7

1,176.2

 

1,142.8

1,171.2

1,134.6

1,105.5

 

1,110.0

UK leverage ratio

5.2%

5.2%

4.5%

 

5.1%

4.8%

5.1%

4.9%

 

5.1%

UK leverage exposure

1,095.1

1,071.1

1,178.7

 

1,007.7

1,099.8

1,079.4

1,065.0

 

998.6

 

 

 

 

 

 

 

 

 

 

 

Funding and liquidity

 

 

 

 

 

 

 

 

 

 

Group liquidity (£bn)

327

298

237

 

211

226

238

232

 

227

Liquidity coverage ratio

181%

186%

155%

 

160%

151%

156%

160%

 

169%

Loan: deposit ratio

70%

76%

79%

 

82%

82%

82%

80%

 

83%

 

1

Refer to pages 40 to 49 for further information and calculations of performance measures excluding litigation and conduct.

2

Refer to pages 29 to 35 for further information on how capital, RWAs and leverage are calculated.

 

Quarterly Results by Business

 

Barclays UK

 

 

 

 

 

 

 

 

 

 

 

Q320

Q220

Q120

 

Q419

Q319

Q219

Q119

 

Q418

Income statement information

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Net interest income

1,280

1,225

1,412

 

1,478

1,503

1,438

1,469

 

1,513

Net fee, commission and other income

270

242

292

 

481

343

333

308

 

350

Total income

1,550

1,467

1,704

 

1,959

1,846

1,771

1,777

 

1,863

Credit impairment charges

(233)

(583)

(481)

 

(190)

(101)

(230)

(191)

 

(296)

Net operating income

1,317

884

1,223

 

1,769

1,745

1,541

1,586

 

1,567

Operating costs

(1,095)

(1,018)

(1,023)

 

(1,023)

(952)

(1,022)

(999)

 

(1,114)

UK bank levy

-

-

-

 

(41)

-

-

-

 

(46)

Operating expenses

(1,095)

(1,018)

(1,023)

 

(1,064)

(952)

(1,022)

(999)

 

(1,160)

Litigation and conduct

(25)

(6)

(5)

 

(58)

(1,480)

(41)

(3)

 

(15)

Total operating expenses

(1,120)

(1,024)

(1,028)

 

(1,122)

(2,432)

(1,063)

(1,002)

 

(1,175)

Other net (expenses)/income

(1)

13

-

 

-

-

(1)

1

 

(2)

Profit/(loss) before tax 

196

(127)

195

 

647

(687)

477

585

 

390

Attributable profit/loss

113

(123)

175

 

438

(907)

328

422

 

241

 

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Loans and advances to customers at amortised cost

203.9

202.0

195.7

 

193.7

193.2

189.1

187.5

 

187.6

Total assets

294.5

287.6

267.5

 

257.8

257.9

259.0

253.1

 

249.7

Customer deposits at amortised cost

232.0

225.7

207.5

 

205.5

203.3

200.9

197.3

 

197.3

Loan: deposit ratio

91%

92%

96%

 

96%

97%

97%

96%

 

96%

Risk weighted assets

76.2

77.9

77.7

 

74.9

76.8

76.2

76.6

 

75.2

Period end allocated tangible equity

10.0

10.3

10.3

 

10.3

10.4

10.3

10.5

 

10.2

 

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity

4.5%

(4.8%)

6.9%

 

17.0%

(34.9%)

12.7%

16.3%

 

9.6%

Average allocated tangible equity (£bn)

10.1

10.3

10.1

 

10.3

10.4

10.3

10.4

 

10.1

Cost: income ratio

72%

70%

60%

 

57%

132%

60%

56%

 

63%

Loan loss rate (bps)

43

111

96

 

38

20

47

40

 

61

Net interest margin

2.51%

2.48%

2.91%

 

3.03%

3.10%

3.05%

3.18%

 

3.20%

 

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Profit/(loss) before tax

221

(121)

200

 

705

793

518

588

 

405

Attributable profit/(loss)

130

(118)

178

 

481

550

358

424

 

253

Return on average allocated tangible equity

5.2%

(4.6%)

7.0%

 

18.7%

21.2%

13.9%

16.4%

 

10.1%

Cost: income ratio

71%

69%

60%

 

54%

52%

58%

56%

 

62%

 

1

Refer to pages 40 to 49 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays UK

Q320

Q220

Q120

 

Q419

Q319

Q219

Q119

 

Q418

Analysis of total income

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Personal Banking

833

826

968

 

1,064

1,035

946

964

 

998

Barclaycard Consumer UK

362

367

436

 

533

472

497

490

 

522

Business Banking

355

274

300

 

362

339

328

323

 

343

Total income

1,550

1,467

1,704

 

1,959

1,846

1,771

1,777

 

1,863

 

 

 

 

 

 

 

 

 

 

 

Analysis of credit impairment (charges)/releases

 

 

 

 

 

 

 

 

 

 

Personal Banking

(48)

(130)

(134)

 

(71)

(36)

(36)

(52)

 

(44)

Barclaycard Consumer UK

(106)

(396)

(301)

 

(108)

(49)

(175)

(140)

 

(250)

Business Banking

(79)

(57)

(46)

 

(11)

(16)

(19)

1

 

(2)

Total credit impairment charges

(233)

(583)

(481)

 

(190)

(101)

(230)

(191)

 

(296)

 

 

 

 

 

 

 

 

 

 

 

Analysis of loans and advances to customers at amortised cost

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Personal Banking

155.7

154.9

153.4

 

151.9

150.1

147.3

145.9

 

146.0

Barclaycard Consumer UK

10.7

11.5

13.6

 

14.7

14.9

15.1

15.0

 

15.3

Business Banking

37.5

35.6

28.7

 

27.1

28.2

26.7

26.6

 

26.3

Total loans and advances to customers at amortised cost

203.9

202.0

195.7

 

193.7

193.2

189.1

187.5

 

187.6

 

 

 

 

 

 

 

 

 

 

 

Analysis of customer deposits at amortised cost

 

 

 

 

 

 

 

 

 

 

Personal Banking

173.2

169.6

161.4

 

159.2

157.9

156.3

154.1

 

154.0

Barclaycard Consumer UK

0.1

0.1

-

 

-

-

-

-

 

-

Business Banking

58.7

56.0

46.1

 

46.3

45.4

44.6

43.2

 

43.3

Total customer deposits at amortised cost

232.0

225.7

207.5

 

205.5

203.3

200.9

197.3

 

197.3

 

Barclays International

 

 

 

 

 

 

 

 

 

 

 

Q320

Q220

Q120

 

Q419

Q319

Q219

Q119

 

Q418

Income statement information

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Net interest income

823

847

998

 

965

1,059

1,017

900

 

984

Net trading income

1,528

1,660

2,360

 

929

1,110

1,016

1,144

 

837

Net fee, commission and other income

1,430

1,503

1,286

 

1,558

1,581

1,870

1,526

 

1,400

Total income

3,781

4,010

4,644

 

3,452

3,750

3,903

3,570

 

3,221

Credit impairment charges

(370)

(1,010)

(1,609)

 

(329)

(352)

(247)

(245)

 

(354)

Net operating income

3,411

3,000

3,035

 

3,123

3,398

3,656

3,325

 

2,867

Operating costs

(2,227)

(2,186)

(2,219)

 

(2,240)

(2,282)

(2,435)

(2,206)

 

(2,441)

UK bank levy

-

-

-

 

(174)

-

-

-

 

(210)

Operating expenses

(2,227)

(2,186)

(2,219)

 

(2,414)

(2,282)

(2,435)

(2,206)

 

(2,651)

Litigation and conduct

(28)

(11)

-

 

(86)

-

(11)

(19)

 

(33)

Total operating expenses

(2,255)

(2,197)

(2,219)

 

(2,500)

(2,282)

(2,446)

(2,225)

 

(2,684)

Other net income

9

4

6

 

17

21

13

18

 

32

Profit before tax

1,165

807

822

 

640

1,137

1,223

1,118

 

215

Attributable profit/(loss)

782

468

529

 

397

799

832

788

 

(21)

 

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Loans and advances at amortised cost

128.0

138.1

167.0

 

132.8

138.1

134.8

130.9

 

127.2

Trading portfolio assets

122.3

109.5

101.6

 

113.3

119.4

120.0

117.2

 

104.0

Derivative financial instrument assets

295.9

306.8

341.5

 

228.9

286.0

243.8

217.3

 

222.1

Financial assets at fair value through the income statement

178.2

154.3

188.4

 

128.4

158.0

154.7

153.5

 

144.7

Cash collateral and settlement balances

121.8

130.8

153.2

 

79.4

112.5

101.3

97.8

 

74.3

Other assets

261.7

236.3

201.5

 

178.6

195.6

196.8

202.3

 

189.8

Total assets

1,107.9

1,075.8

1,153.2

 

861.4

1,009.6

951.4

919.0

 

862.1

Deposits at amortised cost

262.4

241.2

263.3

 

210.0

217.6

212.0

215.5

 

197.2

Derivative financial instrument liabilities

293.3

307.6

338.8

 

228.9

283.3

243.0

213.5

 

219.6

Loan: deposit ratio

49%

57%

63%

 

63%

63%

64%

61%

 

65%

Risk weighted assets

224.7

231.2

237.9

 

209.2

223.1

214.8

216.1

 

210.7

Period end allocated tangible equity

30.5

31.6

33.1

 

29.6

31.4

30.2

30.6

 

29.9

 

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity

10.2%

5.6%

6.8%

 

5.1%

9.9%

10.7%

10.4%

 

(0.3%)

Average allocated tangible equity (£bn)

30.6

33.5

31.2

 

30.9

32.2

31.1

30.5

 

31.3

Cost: income ratio

60%

55%

48%

 

72%

61%

63%

62%

 

83%

Loan loss rate (bps)

112

284

377

 

96

99

72

73

 

107

Net interest margin

3.79%

3.43%

3.93%

 

4.29%

4.10%

3.91%

3.99%

 

3.98%

 

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Profit before tax

1,193

818

822

 

726

1,137

1,234

1,137

 

248

Attributable profit

803

476

529

 

461

801

840

804

 

13

Return on average allocated tangible equity

10.5%

5.7%

6.8%

 

6.0%

10.0%

10.8%

10.6%

 

0.2%

Cost: income ratio

59%

55%

48%

 

70%

61%

62%

62%

 

82%

 

1

Refer to pages 40 to 49 for further information and calculations of performance measures excluding litigation and conduct.

 

 

 

 

 

Analysis of Barclays International

 

 

 

 

 

 

 

 

 

 

 

Corporate and Investment Bank

Q320

Q220

Q120

 

Q419

Q319

Q219

Q119

 

Q418

Income statement information

£m

£m

£m

 

£m

£m

£m

£m

 

£m

FICC

1,000

1,468

1,858

 

726

816

920

902

 

570

Equities

691

674

564

 

409

494

517

467

 

375

Markets

1,691

2,142

2,422

 

1,135

1,310

1,437

1,369

 

945

Advisory

90

84

155

 

202

221

221

132

 

242

Equity capital markets

122

185

62

 

56

86

104

83

 

53

Debt capital markets

398

463

418

 

322

381

373

354

 

330

Banking fees

610

732

635

 

580

688

698

569

 

625

Corporate lending

232

61

111

 

202

195

216

152

 

243

Transaction banking

372

381

449

 

397

424

444

415

 

412

Corporate

604

442

560

 

599

619

660

567

 

655

Other

-

-

-

 

-

-

-

-

 

(74)

Total income

2,905

3,316

3,617

 

2,314

2,617

2,795

2,505

 

2,151

Credit impairment charges

(187)

(596)

(724)

 

(30)

(31)

(44)

(52)

 

(35)

Net operating income

2,718

2,720

2,893

 

2,284

2,586

2,751

2,453

 

2,116

Operating costs

(1,716)

(1,680)

(1,690)

 

(1,691)

(1,712)

(1,860)

(1,619)

 

(1,835)

UK bank levy

-

-

-

 

(156)

-

-

-

 

(188)

Operating expenses

(1,716)

(1,680)

(1,690)

 

(1,847)

(1,712)

(1,860)

(1,619)

 

(2,023)

Litigation and conduct

(3)

(3)

-

 

(79)

(4)

(7)

(19)

 

(23)

Total operating expenses

(1,719)

(1,683)

(1,690)

 

(1,926)

(1,716)

(1,867)

(1,638)

 

(2,046)

Other net income

1

3

-

 

1

12

3

12

 

15

Profit before tax

1,000

1,040

1,203

 

359

882

887

827

 

85

Attributable profit/(loss)

627

694

820

 

193

609

596

582

 

(84)

 

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Loans and advances at amortised cost

96.8

104.9

128.2

 

92.0

95.8

92.1

90.6

 

86.4

Trading portfolio assets

122.2

109.3

101.5

 

113.3

119.3

119.9

117.2

 

104.0

Derivative financial instruments assets

295.9

306.7

341.4

 

228.8

286.0

243.7

217.3

 

222.1

Financial assets at fair value through the income statement

177.9

153.7

187.8

 

127.7

157.3

154.1

152.9

 

144.2

Cash collateral and settlement balances

121.0

129.7

152.2

 

78.5

111.6

100.4

96.9

 

73.4

Other assets

228.9

205.5

171.4

 

155.3

171.5

168.1

163.2

 

160.4

Total assets

1,042.7

1,009.8

1,082.5

 

795.6

941.5

878.3

838.1

 

790.5

Deposits at amortised cost

195.6

173.9

198.4

 

146.2

152.1

145.4

151.4

 

136.3

Derivative financial instrument liabilities

293.2

307.6

338.7

 

228.9

283.2

242.9

213.5

 

219.6

Risk weighted assets

193.3

198.3

201.7

 

171.5

184.9

175.9

176.6

 

170.9

 

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity

9.5%

9.6%

12.5%

 

3.0%

9.1%

9.2%

9.3%

 

(1.3%)

Average allocated tangible equity (£bn)

26.4

29.0

26.2

 

25.8

26.9

25.8

25.1

 

26.0

Cost: income ratio

59%

51%

47%

 

83%

66%

67%

65%

 

95%

 

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Profit before tax

1,003

1,043

1,203

 

438

886

894

846

 

108

Attributable profit/(loss)

629

696

820

 

251

614

601

598

 

(57)

Return on average allocated tangible equity

9.5%

9.6%

12.5%

 

3.9%

9.2%

9.3%

9.5%

 

(0.9%)

Cost: income ratio

59%

51%

47%

 

80%

65%

67%

65%

 

94%

 

1

Refer to pages 40 to 49 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International

 

 

 

 

 

 

 

 

 

 

 

Consumer, Cards and Payments

Q320

Q220

Q120

 

Q419

Q319

Q219

Q119

 

Q418

Income statement information

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Net interest income

518

513

663

 

717

720

720

665

 

664

Net fee, commission, trading and other income

358

181

364

 

421

413

388

400

 

406

Total income

876

694

1,027

 

1,138

1,133

1,108

1,065

 

1,070

Credit impairment charges

(183)

(414)

(885)

 

(299)

(321)

(203)

(193)

 

(319)

Net operating income

693

280

142

 

839

812

905

872

 

751

Operating costs

(511)

(506)

(529)

 

(549)

(570)

(575)

(587)

 

(606)

UK bank levy

-

-

-

 

(18)

-

-

-

 

(22)

Operating expenses

(511)

(506)

(529)

 

(567)

(570)

(575)

(587)

 

(628)

Litigation and conduct

(25)

(8)

-

 

(7)

4

(4)

-

 

(10)

Total operating expenses

(536)

(514)

(529)

 

(574)

(566)

(579)

(587)

 

(638)

Other net income

8

1

6

 

16

9

10

6

 

17

Profit/(loss) before tax

165

(233)

(381)

 

281

255

336

291

 

130

Attributable profit/(loss)

155

(226)

(291)

 

204

190

236

206

 

63

 

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Loans and advances at amortised cost

31.2

33.2

38.8

 

40.8

42.3

42.7

40.3

 

40.8

Total assets

65.2

66.0

70.7

 

65.8

68.1

73.1

80.9

 

71.6

Deposits at amortised cost

66.8

67.3

64.9

 

63.8

65.5

66.6

64.1

 

60.9

Risk weighted assets

31.4

32.9

36.2

 

37.7

38.2

38.9

39.5

 

39.8

 

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity

14.7%

(20.2%)

(23.5%)

 

15.9%

14.2%

17.8%

15.4%

 

4.8%

Average allocated tangible equity (£bn)

4.2

4.5

5.0

 

5.1

5.3

5.3

5.4

 

5.3

Cost: income ratio

61%

74%

52%

 

50%

50%

52%

55%

 

60%

Loan loss rate (bps)

211

455

846

 

273

283

180

182

 

290

 

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Profit/(loss) before tax

190

(225)

(381)

 

288

251

340

291

 

140

Attributable profit/(loss)

174

(220)

(291)

 

210

187

239

206

 

70

Return on average allocated tangible equity

16.5%

(19.6%)

(23.5%)

 

16.3%

14.0%

18.0%

15.4%

 

5.4%

Cost: income ratio

58%

73%

52%

 

50%

50%

52%

55%

 

59%

 

1

Refer to pages 40 to 49 for further information and calculations of performance measures excluding litigation and conduct.

 

 

 

Head Office

 

 

 

 

 

 

 

 

 

 

 

Q320

Q220

Q120

 

Q419

Q319

Q219

Q119

 

Q418

Income statement information

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Net interest income

(48)

(180)

(79)

 

(99)

(117)

(95)

(111)

 

(201)

Net fee, commission and other income

(79)

41

14

 

(11)

62

(41)

16

 

190

Total income

(127)

(139)

(65)

 

(110)

(55)

(136)

(95)

 

(11)

Credit impairment (charges)/releases

(5)

(30)

(25)

 

(4)

(8)

(3)

(12)

 

7

Net operating expenses

(132)

(169)

(90)

 

(114)

(63)

(139)

(107)

 

(4)

Operating costs

(69)

(106)

(11)

 

(45)

(59)

(44)

(52)

 

(69)

UK bank levy

-

-

-

 

(11)

-

-

-

 

(13)

Operating expenses

(69)

(106)

(11)

 

(56)

(59)

(44)

(52)

 

(82)

GMP charge

-

-

-

 

-

-

-

-

 

(140)

Litigation and conduct

(23)

(3)

(5)

 

(23)

(88)

(1)

(39)

 

(12)

Total operating expenses

(92)

(109)

(16)

 

(79)

(147)

(45)

(91)

 

(234)

Other net income/(expenses)

10

(43)

2

 

3

6

15

(22)

 

7

Loss before tax

(214)

(321)

(104)

 

(190)

(204)

(169)

(220)

 

(231)

Attributable loss

(284)

(255)

(99)

 

(154)

(184)

(126)

(172)

 

(234)

 

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

 

£bn

Total assets

19.3

21.7

23.6

 

21.0

22.9

22.4

21.4

 

21.5

Risk weighted assets

9.8

9.9

10.0

 

11.0

13.4

28.1

27.0

 

26.0

Period end allocated tangible equity

7.1

7.4

6.0

 

5.6

5.5

7.0

4.5

 

4.9

 

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

 

Average allocated tangible equity (£bn)

7.6

6.4

5.6

 

5.2

5.8

4.8

4.3

 

2.9

 

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

£m

 

£m

£m

£m

£m

 

£m

Loss before tax

(191)

(318)

(99)

 

(167)

(116)

(168)

(181)

 

(219)

Attributable loss

(265)

(252)

(103)

 

(139)

(118)

(124)

(144)

 

(218)

 

1

Refer to pages 40 to 49 for further information and calculations of performance measures excluding litigation and conduct.

 

Performance Management

 

Margins and balances

 

 

 

 

 

 

 

Nine months ended 30.09.20

Nine months ended 30.09.19

 

Net interest income

Average customer assets

Net interest margin

Net interest income

Average customer assets

Net interest margin

 

£m

£m

%

£m

£m

%

Barclays UK

3,917

199,048

 2.63

4,410

189,994

 3.10

Barclays International1

2,686

96,799

 3.71

2,985

99,862

 4.00

Total Barclays UK and Barclays International

6,603

295,847

 2.98

7,395

289,856

 3.41

Other2

(325)

 

 

(332)

 

 

Total Barclays Group

6,278

 

 

7,063

 

 

 

1

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

2

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

 

The Group's combined product and equity structural hedge notional as at 30 September 2020 was £181bn, with an average duration of 2.5 to 3 years. Group net interest income includes gross structural hedge contributions of £1.3bn (Q319 YTD: £1.4bn) and net structural hedge contributions of £0.9bn (Q319 YTD: £0.4bn). 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 30.09.20

£m

£m

%

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

 

 

 

 

Three months ended 30.09.19

 

 

 

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

 

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 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 30 September 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 30 September 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 30.09.20

£m

£m

£m

£m

 

£m

£m

£m

£m

£m

Barclays UK

149,393

25,846

2,704

177,943

 

329

1,563

1,150

3,042

174,901

Barclays International

16,866

5,366

1,691

23,923

 

412

1,296

1,275

2,983

20,940

Head Office

4,519

668

871

6,058

 

8

53

352

413

5,645

Total Barclays Group retail

170,778

31,880

5,266

207,924

 

749

2,912

2,777

6,438

201,486

Barclays UK

30,540

3,887

1,138

35,565

 

58

98

143

299

35,266

Barclays International

74,789

31,775

2,422

108,986

 

129

793

1,002

1,924

107,062

Head Office

595

 -

34

629

 

 - 

 - 

33

33

596

Total Barclays Group wholesale1

105,924

35,662

3,594

145,180

 

187

891

1,178

2,256

142,924

Total loans and advances at amortised cost

276,702

67,542

8,860

353,104

 

936

3,803

3,955

8,694

344,410

Off-balance sheet loan commitments and financial guarantee contracts2

282,551

65,407

1,500

349,458

 

138

751

46

935

348,523

Total3

559,253

132,949

10,360

702,562

 

1,074

4,554

4,001

9,629

692,933

 

 

 

 

 

 

 

 

 

 

 

 

As at 30.09.20

 

Period ended 30.09.20

 

 

Coverage ratio

 

Loan impairment charge and loan loss rate4

 

 

Stage 1

Stage 2

Stage 3

Total

 

Loan impairment charge

Loan loss rate

 

 

%

%

%

%

 

£m

bps

 

Barclays UK

0.2

6.0

42.5

1.7

 

 

966

 

73

 

Barclays International

2.4

24.2

75.4

12.5

 

 

1,423

 

795

 

Head Office

0.2

7.9

40.4

6.8

 

 

60

 

132

 

Total Barclays Group retail

0.4

9.1

52.7

3.1

 

 

2,449

 

157

 

Barclays UK

0.2

2.5

12.6

0.8

 

 

174

 

65

 

Barclays International

0.2

2.5

41.4

1.8

 

 

954

 

117

 

Head Office

-

-

97.1

5.2

 

 

 - 

 

 - 

 

Total Barclays Group wholesale1

0.2

2.5

32.8

1.6

 

 

1,128

 

104

 

Total loans and advances at amortised cost

0.3

5.6

44.6

2.5

 

 

3,577

 

135

 

Off-balance sheet loan commitments and financial guarantee contracts2

-

1.1

3.1

0.3

 

 

627

 

 

 

Other financial assets subject to impairment3

 

 

 

 

 

 

142

 

 

 

Total4

0.2

3.4

38.6

1.4

 

 

4,346

 

 

 

 

1

Includes Wealth and Private Banking exposures measured on an individual basis, and excludes Business Banking exposures that are managed on a collective basis. The net impact is a difference in total exposure of £701m of balances reported as wholesale loans on page 25 in the Loans and advances at amortised cost by product disclosure.

2

Excludes loan commitments and financial guarantees of £8.6bn carried at fair value.

3

Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £197.8bn and impairment allowance of £161m. This comprises £13m ECL on £192.1bn stage 1 assets, £38m on £5.6bn stage 2 fair value through other comprehensive income assets, other assets, cash collateral and settlement balances and £110m on £112m stage 3 other assets.

4

Q320 YTD loan impairment charge represents nine months of impairment charge, annualised to calculate the loan loss rate. The loan loss rate for Q320 YTD is 164bps after applying the total impairment charge of £4,346m.

 

 

Gross exposure

 

Impairment allowance

Net exposure

 

Stage 1

Stage 2

Stage 3

Total

 

Stage 1

Stage 2

Stage 3

Total

As at 31.12.19

£m

£m

£m

£m

 

£m

£m

£m

£m

£m

Barclays UK

143,097

23,198

2,446

168,741

 

198

1,277

974

2,449

166,292

Barclays International

27,886

4,026

1,875

33,787

 

352

774

1,359

2,485

31,302

Head Office

4,803

500

826

6,129

 

5

36

305

346

5,783

Total Barclays Group retail

175,786

27,724

5,147

208,657

 

555

2,087

2,638

5,280

203,377

Barclays UK

27,891

2,397

1,124

31,412

 

16

38

108

162

31,250

Barclays International

92,615

8,113

1,615

102,343

 

136

248

447

831

101,512

Head Office

2,974

-

37

3,011

 

-

-

35

35

2,976

Total Barclays Group wholesale1

123,480

10,510

2,776

136,766

 

152

286

590

1,028

135,738

Total loans and advances at amortised cost

299,266

38,234

7,923

345,423

 

707

2,373

3,228

6,308

339,115

Off-balance sheet loan commitments and financial guarantee contracts2

321,140

19,185

935

341,260

 

97

170

55

322

340,938

Total3

620,406

57,419

8,858

686,683

 

804

2,543

3,283

6,630

680,053

 

 

 

 

 

 

 

 

 

 

 

 

As at 31.12.19

 

Year ended 31.12.19

 

 

Coverage ratio

 

Loan impairment charge and loan loss rate4

 

 

Stage 1

Stage 2

Stage 3

Total

 

Loan impairment charge

Loan loss rate

 

 

%

%

%

%

 

£m

 

bps

 

Barclays UK

0.1

5.5

39.8

1.5

 

 

661

 

39

 

Barclays International

1.3

19.2

72.5

7.4

 

 

999

 

296

 

Head Office

0.1

7.2

36.9

5.6

 

 

27

 

44

 

Total Barclays Group retail

0.3

7.5

51.3

2.5

 

 

1,687

 

81

 

Barclays UK

0.1

1.6

9.6

0.5

 

 

33

 

11

 

Barclays International

0.1

3.1

27.7

0.8

 

 

113

 

11

 

Head Office

-

-

94.6

1.2

 

 

-

 

-

 

Total Barclays Group wholesale1

0.1

2.7

21.3

0.8

 

 

146

 

11

 

Total loans and advances at amortised cost

0.2

6.2

40.7

1.8

 

 

1,833

 

53

 

Off-balance sheet loan commitments and financial guarantee contracts2

-

0.9

5.9

0.1

 

 

71

 

 

 

Other financial assets subject to impairment3

 

 

 

 

 

 

8

 

 

 

Total4

0.1

4.4

37.1

1.0

 

 

1,912

 

 

 

 

1

Includes Wealth and Private Banking exposures measured on an individual basis, and excludes Business Banking exposures that are managed on a collective basis. The net impact is a difference in total exposure of £6,434m of balances reported as wholesale loans on page 25 in the Loans and advances at amortised cost by product disclosure.

2

Excludes loan commitments and financial guarantees of £17.7bn carried at fair value.

3

Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £149.3bn and impairment allowance of £24m. This comprises £12m ECL on £148.5bn stage 1 assets, £2m on £0.8bn stage 2 fair value through other comprehensive income assets, cash collateral and settlement balances and £10m on £10m stage 3 other assets.

4

The loan loss rate is 55bps after applying the total impairment charge of £1,912m.

 

Loans and advances at amortised cost by product

 

The table below p resents a breakdown of loans and advances at amortised cost and the impairment allowance with stage allocation by asset classification.

 

 

 

Stage 2

 

 

As at 30.09.20

Stage 1

Not past due

<=30 days past due

>30 days past due

Total

Stage 3

Total

Gross exposure

£m

£m

£m

£m

£m

£m

£m

Home loans

135,995

17,262

1,843

969

20,074

2,234

158,303

Credit cards, unsecured loans and other retail lending

33,815

11,005

483

273

11,761

3,344

48,920

Wholesale loans

106,892

31,887

3,275

545

35,707

3,282

145,881

Total

276,702

60,154

5,601

1,787

67,542

8,860

353,104

 

 

 

 

 

 

 

 

Impairment allowance

 

 

 

 

 

 

 

Home loans

20

62

11

12

85

392

497

Credit cards, unsecured loans and other retail lending

754

2,461

164

173

2,798

2,423

5,975

Wholesale loans

162

821

92

7

920

1,140

2,222

Total

936

3,344

267

192

3,803

3,955

8,694

 

 

 

 

 

 

 

 

Net exposure

 

 

 

 

 

 

 

Home loans

135,975

17,200

1,832

957

19,989

1,842

157,806

Credit cards, unsecured loans and other retail lending

33,061

8,544

319

100

8,963

921

42,945

Wholesale loans

106,730

31,066

3,183

538

34,787

2,142

143,659

Total

275,766

56,810

5,334

1,595

63,739

4,905

344,410

 

 

 

 

 

 

 

 

Coverage ratio

%

%

%

%

%

%

%

Home loans

-

0.4

0.6

1.2

0.4

17.5

0.3

Credit cards, unsecured loans and other retail lending

2.2

22.4

34.0

63.4

23.8

72.5

12.2

Wholesale loans

0.2

2.6

2.8

1.3

2.6

34.7

1.5

Total

0.3

5.6

4.8

10.7

5.6

44.6

2.5

 

 

 

 

 

 

 

 

As at 31.12.19

 

 

 

 

 

 

 

Gross exposure

£m

£m

£m

£m

£m

£m

£m

Home loans

135,713

14,733

1,585

725

17,043

2,155

154,911

Credit cards, unsecured loans and other retail lending

46,012

9,759

496

504

10,759

3,409

60,180

Wholesale loans

117,541

9,374

374

684

10,432

2,359

130,332

Total

299,266

33,866

2,455

1,913

38,234

7,923

345,423

 

 

 

 

 

 

 

 

Impairment allowance

 

 

 

 

 

 

 

Home loans

22

37

14

13

64

346

432

Credit cards, unsecured loans and other retail lending

542

1,597

159

251

2,007

2,335

4,884

Wholesale loans

143

284

9

9

302

547

992

Total

707

1,918

182

273

2,373

3,228

6,308

 

 

 

 

 

 

 

 

Net exposure

 

 

 

 

 

 

 

Home loans

135,691

14,696

1,571

712

16,979

1,809

154,479

Credit cards, unsecured loans and other retail lending

45,470

8,162

337

253

8,752

1,074

55,296

Wholesale loans

117,398

9,090

365

675

10,130

1,812

129,340

Total

298,559

31,948

2,273

1,640

35,861

4,695

339,115

 

 

 

 

 

 

 

 

Coverage ratio

%

%

%

%

%

%

%

Home loans

-

0.3

0.9

1.8

0.4

16.1

0.3

Credit cards, unsecured loans and other retail lending

1.2

16.4

32.1

49.8

18.7

68.5

8.1

Wholesale loans

0.1

3.0

2.4

1.3

2.9

23.2

0.8

Total

0.2

5.7

7.4

14.3

6.2

40.7

1.8

 

The number of customers who remain on payment holidays granted in response to the pandemic continues to fall. Across the Group's material portfolios as at 30 September 2020, c.£4.4bn of UK mortgage, c.£0.1bn of UK credit card and c.£0.1bn of US credit card lending remained on payment holidays.

 

Measurement uncertainty

 

Scenarios used to calculate the Group's ECL charge were reviewed and updated in September 2020 with the Baseline scenario reflecting the latest consensus economic forecasts. Changes in the consensus Baseline forecasts since June 2020 include a more prolonged period of high unemployment in the UK but faster reduction in US unemployment levels in the short term. Economic growth in the UK and the US begins to recover in 2021 in the downside scenarios. In the upside scenarios, the strong rebound in UK and US GDP continues into the end of 2020, following the bounce-back in growth in Q320 and, subsequently, the projections stay above the year on year growth rates seen in the Baseline for a prolonged period of time before finally reverting to the long term run rate. This reflects the assumption of a potential vaccine being available in the first half of 2021 and pent up savings being deployed into a more certain consumer environment to drive significant growth. Scenario weights have been updated to reflect the latest economics.

 

As a result of government and Barclays support measures put in place to support customers and clients, significant credit deterioration has not yet occurred. This support is causing a timing difference between economic drivers such as GDP and unemployment rates, and the resultant impairment defaults. This is expected to delay the effects of distress and therefore increases uncertainty on the timing of the stress and the realisation of defaults. The Q320 review did not identify any new information to substantiate a change in the level of expected credit losses on non-defaulted positions from that recognised at H120. This has led to the maintenance of coverage levels and staging mix whilst recognising the associated ECL charge on defaults that have arisen in the quarter.

 

The economic environment remains uncertain and future impairment charges may be subject to further volatility (including from changes to macroeconomic variable forecasts) depending on the longevity of the COVID-19 pandemic and related containment measures, as well as the longer term effectiveness of central bank, government and other support measures.

 

The tables below show the key consensus macroeconomic variables used in the Q320 Baseline scenario and the probability weights applied to each scenario.

 

Baseline average macroeconomic variables used in the calculation of ECL

 

2020

2021

2022

Expected Worst Point

As at 30.09.20

 %

 %

%

 %

UK GDP1

(10.3)

6.2

3.3

(59.8)

UK unemployment2

5.5

6.9

6.2

8.1

UK HPI3

0.4

1.5

1.4

(0.9)

UK bank rate

0.2

(0.1)

(0.1)

(0.1)

US GDP1

(4.4)

3.8

3.0

(32.9)

US unemployment4

8.4

6.9

5.6

13.0

US HPI5

1.8

1.8

2.9

0.7

US federal funds rate

0.5

0.3

0.3

0.1

 

 

 

 

 

As at 30.06.20

 

 

 

 

UK GDP1

(8.7)

6.1

2.9

(51.4)

UK unemployment2

6.6

6.5

4.4

8.0

UK HPI3

0.6

2.0

-

(1.5)

UK bank rate

0.2

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