UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
July
28, 2022
Barclays PLC
(Name
of Registrant)
1 Churchill Place
London E14 5HP
England
(Address
of Principal Executive Office)
Indicate
by check mark whether the registrant files or will file annual
reports
under
cover of Form 20-F or Form 40-F.
Form
20-F x Form 40-F
Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No
x
If
"Yes" is marked, indicate below the file number assigned to the
registrant
in
connection with Rule 12g3-2(b):
This
Report on Form 6-K is filed by Barclays PLC.
This
Report comprises:
Information
given to The London Stock Exchange and furnished pursuant
to
General
Instruction B to the General Instructions to Form 6-K.
EXHIBIT
INDEX
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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BARCLAYS
PLC
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|
(Registrant)
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Date:
July 28, 2022
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By: /s/
Garth Wright
--------------------------------
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|
Garth
Wright
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Assistant
Secretary
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Barclays PLC
Interim Results Announcement
30 June
2022
Table of Contents
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Results Announcement
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Page
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Notes
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1
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Performance Highlights
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3
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Group Finance Director’s Review
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7
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Results by Business
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● Barclays UK
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10
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● Barclays International
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14
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● Head Office
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19
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Quarterly Results Summary
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21
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Quarterly Results by Business
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22
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Performance Management
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● Margins and Balances
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29
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Risk Management
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● Risk Management and Principal
Risks
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31
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● Credit Risk
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33
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● Market Risk
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57
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● Treasury and Capital Risk
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58
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Statement of Directors' Responsibilities
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74
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Independent Review Report to Barclays PLC
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75
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Condensed Consolidated Financial Statements
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77
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Financial Statement Notes
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87
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Appendix: Non-IFRS Performance Measures
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115
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Shareholder Information
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125
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BARCLAYS PLC, 1
CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE: +44
(0) 20 7116 1000. COMPANY NO. 48839.
Notes
This
document contains inside information for the purposes of Article 7
of the Market Abuse Regulation (EU) No. 596/2014 (as it forms part
of domestic law by virtue of the European Union (Withdrawal) Act
2018, as amended).
The
terms Barclays or Group refer to Barclays PLC together with its
subsidiaries. Unless otherwise stated, the income statement
analysis compares the six months ended 30 June 2022 to the
corresponding six months of 2021 and balance sheet analysis as at
30 June 2022 with comparatives relating to 31 December 2021 and 30
June 2021. The historical financial information used for the
purposes of such analysis has been restated. Please refer to Note 1
to the condensed consolidated interim financial statements
contained herein for further information. 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.
The
information in this announcement, which was approved by the Board
of Directors on 27 July 2022, does not comprise statutory accounts
within the meaning of Section 434 of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2021, which
contained an unmodified audit report under Section 495 of the
Companies Act 2006 (which did not make any statements under Section
498 of the Companies Act 2006) have been delivered to the Registrar
of Companies in accordance with Section 441 of the Companies Act
2006.
These
results will be furnished 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 115 to
123 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. 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 levels, assets and
liabilities, impairment charges, provisions, capital, leverage and
other regulatory ratios, capital distributions (including dividend
pay-out ratios and expected payment strategies), projected levels
of growth in banking and financial markets, projected expenditures,
costs or savings, any commitments and targets (including, without
limitation, environmental, social and governance (ESG) commitments
and targets), business strategy, plans and objectives for future
operations, group structure, IFRS impacts and other statements that
are not historical or current facts. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances. Forward-looking
statements speak only as at the date on which they are made.
Forward-looking statements may be affected by a number of factors,
including, without limitation: changes in legislation, regulation
and the interpretation thereof, the development of IFRS and other
accounting standards, evolving practices with regard to the
interpretation and application of accounting standards, emerging
and developing ESG reporting standards, the outcome of current and
future legal proceedings and regulatory investigations and any
related impact on provisions, the policies and actions of
governmental and regulatory authorities, the Group’s ability
along with governments and other stakeholders to measure, manage
and mitigate the impacts of climate change effectively,
environmental, social and geopolitical risks and incidents or
similar events beyond the Group’s control, 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;
volatility in credit and capital markets; market related risks such
as changes in interest rates and foreign exchange rates; changes in
valuation of credit market exposures; changes in valuation of
issued securities; changes in credit ratings of any entity within
the Group or any securities issued by such entities; changes in
counterparty risk; changes in consumer behaviour; the direct and
indirect consequences of the Russia-Ukraine War on European and
global macroeconomic conditions, political stability and financial
markets; direct and indirect impacts of the coronavirus (COVID-19)
pandemic; instability as a result of the UK’s exit from the
European Union (EU), the effects of the EU-UK Trade and Cooperation
Agreement and the disruption that may subsequently result in the UK
and globally; the risk of cyber-attacks, information or security
breaches or technology failures on the Group’s reputation,
business or operations; the Group’s ability to access
funding; and the success of 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
or ability to meet commitments and targets may differ materially
from the statements or guidance set forth in the Group’s
forward-looking statements. Additional risks and factors which may
impact the Group’s future financial condition and performance
are identified in Barclays PLC’s filings with the SEC
(including, without limitation, Barclays PLC’s Annual Report
on Form 20-F, as amended, for the financial year ended 31 December
2021), which are available on the SEC’s website at
www.sec.gov.
Subject
to Barclays’ obligations under the applicable laws and
regulations of any relevant jurisdiction (including, without
limitation, the UK and the US), in relation to disclosure and
ongoing information, we undertake no obligation to update publicly
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
Performance Highlights
Barclays delivered profit before tax of £3.7bn and return on
tangible equity (RoTE) of 10.1%, with a half year dividend of 2.25p
per share and intends to initiate a further share buyback of up to
£500m
C. S. Venkatakrishnan, Group Chief Executive,
commented
“This has been a strong first half with Group income up
17%1
to £13.2bn and a RoTE of 10.1%.
The broad-based income growth that we achieved in the first quarter
continued across all three operating businesses into the second
quarter.
Our performance in the first half shows the resilience and
advantage that diversification at all levels brings, both across
the bank and within our businesses. It also underlines the value of
investment into our three strategic priorities in next generation
consumer finance, sustainable growth across the Corporate and
Investment Bank (CIB), and the transition to a low-carbon
economy.
Profit before tax was £3.7bn, and attributable profit was
£2.5bn, after absorbing charges net of tax of £0.6bn
relating to the Over-issuance of Securities.
We are alert to the pressure that the rising cost of living will
have on our customers and colleagues. We have a range of measures
in place to help and are looking to do more. With our resilient
income growth and balance sheet strength, we can provide that
support while distributing excess capital, having announced a half
year dividend of 2.25p per share and an intention to initiate a
further share buyback of £500m.”
|
Key financial metrics:
|
Income
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Cost: income ratio
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Profit before tax
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Attributable profit
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RoTE
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EPS
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CET1 ratio
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TNAV per share
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Total capital return
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H122
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£13.2bn
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69%
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£3.7bn
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£2.5bn
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10.1%
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14.8p
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13.6%
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297p
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c.5.25p equivalent
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Q222
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£6.7bn
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75%
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£1.5bn
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£1.1bn
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8.7%
|
6.4p
|
|
H122 performance2:
●
Attributable profit was £2.5bn (H121:
£3.8bn) and RoTE was 10.1% (H121: 16.1%) having
reflected a £0.6bn net of tax impact for the Over-issuance of
Securities in the US (Over-issuance of Securities3). Excluding this
impact, RoTE was 12.5%
●
£0.6bn
impact of Over-issuance of Securities is comprised of:
●
£0.4bn post
tax expected net impact of the rescission offer losses, driven by
£1.3bn of costs as a result of market movements and interest,
substantially offset by £0.8bn of income from hedging
arrangements
●
£0.2bn of
costs relating to an estimated monetary penalty from the
SEC
●
Excluding
the impact of Over-issuance of Securities:
●
Group income was £12.4bn, up 10%
year-on-year, driven by strong client activity in Markets,
recovery in both Consumer, Cards and Payments (CC&P) and
Barclays UK more than offsetting the impact of a weak fee pool in
Investment Banking
●
Group costs were £7.7bn (H121:
£7.2bn) including other litigation and conduct charges
of £0.4bn (H121: £0.1bn), with operating costs (excluding
litigation and conduct) up 2% year-on-year
●
On
a statutory basis, including the impacts of Over-issuance of
Securities:
●
Group income was £13.2bn, up 17%
year-on-year, including the £0.8bn of income from
hedging arrangements related to the Over-issuance of
Securities
●
Credit impairment charges were £0.3bn
(H121: £0.7bn net release) with provision levels
broadly retained in light of an uncertain macroeconomic
backdrop
●
Group costs were £9.1bn (H121:
£7.3bn), including litigation and conduct charges of
£1.9bn (H121: £0.2bn), including £1.5bn
estimated impact of rescission offer losses in relation to the
Over-Issuance of Securities and associated estimated monetary
penalty from the SEC
●
Capital: Common Equity Tier 1 (CET1)
ratio of 13.6% (December 2021: 15.1% and March 2022: 13.8%) and
tangible net asset value (TNAV) per share of 297p (December 2021:
291p and March 2022: 294p)
●
Increased capital distributions: total
capital return equivalent of c.5.25p per share, including a half
year dividend of 2.25p per share. Intend to initiate a further
share buyback of up to £0.5bn, which is expected to have a
c.15bps CET1 ratio impact
1
Excluding the Q222 income benefit of £0.8bn from hedging
arrangements related to the Over-issuance of Securities, Group
income was up 10% to £12.4bn.
2
2021 financial and capital metrics have been restated to reflect
the impact of the Over-issuance of Securities. See Basis of
preparation on page 65 and
Restatement of financial statements (Note 1) on page 87 for more information.
3
Denotes the Over-issuance of Securities under Barclays Bank
PLC’s US shelf registration statements on Form F-3 filed with
the SEC in 2018 and 2019.
Outlook:
●
Returns: Barclays continues to target a
RoTE of greater than 10% in 2022
●
Income: Barclays’ diversified
income streams position the Group well for the current economic and
market environment and rising interest rates
●
Costs: given £1.3bn of litigation
and conduct charges in Q222 and the appreciation of average USD
against GBP, Barclays now expects FY22 total operating expenses to
be around £16.7bn1 versus previous
outlook of £15.0bn2
●
Impairment: while acknowledging
macroeconomic uncertainty, the impairment charge is expected to
remain below pre-pandemic levels in coming quarters given reduced
unsecured lending balances and existing coverage
ratios
●
Capital: Barclays continues to target a
CET1 ratio within the range of 13-14%
●
Capital returns: Barclays' capital
distribution policy incorporates a progressive ordinary dividend,
supplemented with buybacks as appropriate. Dividends will continue
to be paid semi-annually, with the half year dividend expected to
represent, under normal circumstances, around one-third of the
total dividend for the year
1
Group cost outlook is based on an average USD/GBP FX rate of 1.23
across H222 and subject to foreign currency movements.
2
Previous FY22 Group cost outlook was based on an average USD/GBP FX
rate of 1.31 throughout 2022.
Barclays Group results
for the half year ended
|
|
|
|
30.06.22
|
Restated1
30.06.21
|
|
|
£m
|
£m
|
% Change
|
Net interest income
|
4,763
|
3,903
|
22
|
Net fee, commission and other income
|
8,441
|
7,412
|
14
|
Total income
|
13,204
|
11,315
|
17
|
Credit impairment (charges)/releases
|
(341)
|
742
|
|
Net operating income
|
12,863
|
12,057
|
7
|
Operating costs
|
(7,270)
|
(7,132)
|
(2)
|
Litigation and conduct
|
(1,857)
|
(176)
|
|
Total operating expenses
|
(9,127)
|
(7,308)
|
(25)
|
Other net (expenses)/ income
|
(3)
|
153
|
|
Profit before tax
|
3,733
|
4,902
|
(24)
|
Tax charge
|
(823)
|
(742)
|
(11)
|
Profit after tax
|
2,910
|
4,160
|
(30)
|
Non-controlling interests
|
(21)
|
(19)
|
(11)
|
Other equity instrument holders
|
(414)
|
(389)
|
(6)
|
Attributable profit
|
2,475
|
3,752
|
(34)
|
|
|
|
|
Performance measures
|
|
|
|
Return on average tangible shareholders' equity
|
10.1%
|
16.1%
|
|
Average tangible shareholders' equity (£bn)
|
48.9
|
46.5
|
|
Cost: income ratio
|
69%
|
65%
|
|
Loan loss rate (bps)
|
17
|
—
|
|
Basic earnings per share
|
14.8p
|
21.9p
|
|
Dividend per share
|
2.25p
|
2.0p
|
|
Share
buyback announced (£m)
|
500
|
500
|
|
Total payout equivalent per share
|
c.5.25p
|
4.9p
|
|
Basic weighted average number of shares (m)
|
16,684
|
17,140
|
(3)
|
Period end number of shares (m)
|
16,531
|
16,998
|
(3)
|
|
|
|
|
|
As at 30.06.2
|
Restated1
As at
31.12.21
|
Restated1
As at
30.06.21
|
Balance sheet and capital management2
|
£bn
|
£bn
|
£bn
|
Loans and advances at amortised cost
|
395.8
|
361.5
|
348.5
|
Loans and advances at amortised cost impairment coverage
ratio
|
1.4%
|
1.6%
|
1.8%
|
Total assets
|
1,589.2
|
1,384.3
|
1,376.3
|
Deposits at amortised cost
|
568.7
|
519.4
|
500.9
|
Tangible net asset value per share
|
297p
|
291p
|
280p
|
Common equity tier 1 ratio
|
13.6%
|
15.1%
|
15.0%
|
Common equity tier 1 capital
|
46.7
|
47.3
|
46.2
|
Risk weighted assets
|
344.5
|
314.1
|
307.4
|
UK leverage ratio
|
5.1%
|
5.2%
|
5.0%
|
UK leverage exposure
|
1,151.2
|
1,137.9
|
1,154.9
|
Average UK leverage ratio
|
4.7%
|
4.9%
|
4.8%
|
Average UK leverage exposure
|
1,233.5
|
1,229.0
|
1,192.7
|
|
|
|
|
Funding and liquidity
|
|
|
|
Group liquidity pool (£bn)
|
343
|
291
|
291
|
Liquidity coverage ratio
|
156%
|
168%
|
162%
|
Loan: deposit ratio
|
70%
|
70%
|
70%
|
1
2021 financial and capital metrics have been restated to reflect
the impact of the Over-issuance of Securities. See Basis of
preparation on page 65 and
Restatement of financial statements (Note 1) on page 87 for more information.
2
Refer to pages 55 to 62 for further information on how capital,
Risk Weighted Assets (RWAs) and leverage are
calculated.
Group Finance Director's Review
Group performance1,
2
●
Barclays' diversified model delivered a profit
before tax of £3,733m (H121: £4,902m), RoTE of
10.1% (H121: 16.1%), and earnings per share (EPS) of 14.8p (H121:
21.9p)
●
Total income increased to £13,204m (H121:
£11,315m). Barclays UK income increased 5%. Barclays
International income increased 21%, with CIB income up 21% and
CC&P income up 20%. Excluding the income benefit of £758m
from hedging arrangements related to the Over-issuance of
Securities, total Group income was £12,446m, up 10%
year-on-year, Barclays International income was £9,182m, up
12% year-on-year and CIB income was £7,213m, up 10%
year-on-year
●
Credit impairment charges were £341m
(H121: £742m net release) reflecting low flows to
delinquency and an improved UK employment outlook, partially offset
by a day one charge relating to the acquisition of the GAP Inc. US
credit card portfolio (the GAP portfolio). Expert judgement
post-model adjustments have been maintained to incorporate customer
affordability and inflationary headwinds
●
Total operating expenses increased to
£9,127m (H121: £7,308m). Operating costs increased
2% to £7,270m, reflecting continued investment and business
growth, the impact of inflation and the appreciation of average USD
against GBP, partially offset by efficiency savings and the
non-recurrence of structural cost actions, primarily relating to
the real estate review in June 2021. Litigation and conduct charges
were £1,857m (H121: £176m) including £1,304m
estimated impact of rescission offer losses in relation to the
Over-Issuance of Securities and £165m associated estimated
monetary penalty from the SEC, £181m of customer remediation
costs relating to a legacy loan portfolio in CC&P and
£165m related to settlements in principle in respect of
industry-wide devices investigations by the SEC and the Commodity
Futures Trading Commission (CFTC)3. This resulted in a
cost: income ratio of 69% (H121: 65%)
●
The effective tax rate (ETR) was 22.0% (H121:
15.1%). The tax charge included a £346m charge
recognised for the re-measurement of the Group’s UK deferred
tax assets (DTAs) due to the enactment of legislation in Q122 which
will result in the UK banking surcharge rate being reduced from 8%
to 3% effective from 1 April 2023. The ETR excluding the impact of
this downward re-measurement of UK DTAs was 12.8% which included a
5.8% benefit relating to adjustments in respect of prior
years
●
Attributable profit was £2,475m (H121:
£3,752m) including the net impact of the Over-issuance
of Securities net of tax, of £581m, of which £341m was in
Q222
●
Total assets increased to £1,589bn
(December 2021: £1,384bn) primarily due to an increase
in client and trading activity, and growth in the liquidity
pool
●
TNAV per share increased to 297p (December
2021: 291p) primarily reflecting 14.8p of EPS, partially
offset by net negative reserve movements driven by higher interest
rates
Group capital and
leverage1
●
The CET1 ratio
decreased by c.150bps to 13.6% (December 2021: 15.1%) as capital
decreased by £0.6bn to £46.7bn and RWAs increased by
£30.4bn to £344.5bn
●
c.80bps reduction
to the CET1 ratio due to the expected impact of regulatory change
on 1 January 2022 as CET1 capital decreased £1.7bn and RWAs
increased £6.6bn
●
c.30bps reduction
due to the £1bn buyback announced with FY21 results, which is
well progressed
●
c.40bps reduction
due to the impact of the Over-issuance of Securities. c.20bps due
to the £0.6bn net of tax impact reducing CET1 capital and
c.20bps due to a £4.5bn temporary increase in RWAs reflecting
the hedging arrangements designed to manage the risk of the
rescission offer. The hedging related RWAs are expected to reverse
after the rescission offer is completed in Q322
●
Excluding the
impacts above, an increase in CET1 capital of £2.7bn was
offset by a £19.3bn increase in RWAs:
●
The £2.7bn
increase in CET1 capital reflects profits and an increase in the
currency translation reserve, offset by an accrual toward a FY22
dividend, equity coupons paid, and a decrease in the fair value
through other comprehensive income reserve
●
The £19.3bn
increase in RWAs was primarily due to the appreciation of USD
against GBP, increased client activity within CIB and higher
CC&P balances mainly driven by the GAP portfolio acquisition.
This was marginally offset by the partial disposal of Barclays'
equity stake in Absa Group Limited (Absa) in April
2022
●
The UK leverage
ratio decreased to 5.1% (December 2021: 5.2%) primarily due to an
increase in the leverage exposure of £13.3bn to
£1,151.2bn
1
2021 financial and capital metrics have been restated to reflect
the impact of the Over-issuance of Securities. See Basis of
preparation on page 65 and
Restatement of financial statements (Note 1) on page 87 for more information.
2
The 6% appreciation of average USD against GBP positively impacted
income and profits and adversely impacted credit impairment charges
and total operating expenses.
3
See 'Other matters' on page 6 for further details.
Group funding and liquidity
●
The liquidity pool
was £343bn (December 2021: £291bn) and the liquidity
coverage ratio (LCR) remained significantly above the 100%
regulatory requirement at 156% (December 2021: 168%), equivalent to
a surplus of £119bn (December 2021: £116bn). The increase
in the liquidity pool was driven by deposit growth and an increase
in wholesale funding, which were partly offset by an increase in
business funding consumption
●
Wholesale funding
outstanding, excluding repurchase agreements, was £181.5bn
(December 2021: £167.5bn). The Group issued £3.5bn
equivalent of minimum requirement for own funds and eligible
liabilities (MREL) instruments from Barclays PLC (the Parent
company) in the year to date. The Group has a strong MREL position
with a ratio of 30.9% of RWAs which is in excess of its regulatory
requirement of 28.5%, excluding the confidential institution
specific PRA buffer. The Group remains above its MREL regulatory
requirement including the PRA buffer
Other matters
●
Over-issuance of Securities: since 31
March 2022, the following developments should be noted with respect
to the Over-issuance of Securities:
●
On 23 May 2022,
Barclays PLC and Barclays Bank PLC filed amendments to their
respective Annual Reports on Form 20-F to, among other matters,
restate the financial statements for the financial year ended 31
December 2021 to reflect certain impacts of the Over-issuance of
Securities
●
On 23 May 2022,
Barclays Bank PLC filed a shelf registration statement on Form F-3
with the SEC, which was automatically effective and under which an
unlimited amount of securities may be registered, on the basis that
Barclays Bank PLC is a “well-known seasoned issuer”
(the “2022 F-3”). Barclays PLC also has an automatic
shelf registration statement on Form F-3 filed with the SEC on 1
March 2021
●
On 1 August 2022,
Barclays Bank PLC intends to launch an offer to rescind the
purchase of securities that were issued in excess of Barclays Bank
PLC’s shelf registration statement on Form F-3 declared
effective by the SEC in 2019 (2019 F-3) and the predecessor US
shelf registration statement filed in 2018 (Predecessor Shelf) by
certain purchasers who purchased such securities in a distribution
from Barclays Bank PLC during certain relevant periods (the
rescission offer)
●
Following the
launch of the rescission offer, Barclays Bank PLC is expected to
resume issuances and sales of series of iPath ETNs that were not
affected by the rescission offer. Barclays Bank PLC further expects
to resume issuances and sales of the remaining series of iPath ETNs
when the rescission offer has been completed and settlement of the
rescission offer with respect to the relevant series has
occurred
●
Barclays has
recognised a H122 attributable profit impact of £581m relating
to this matter net of tax, including a £1,304m charge
recognised in costs, substantially offset by hedging arrangements
which generated income of £758m, as well as an estimated
monetary penalty from the SEC of £165m
●
The total balance
sheet provision as at 30 June 2022 was £1,757m, of which:
£1,592m relates to the estimated rescission offer losses and
£165m relates to an estimated SEC monetary penalty. Barclays
also expects temporary RWAs of £4.5bn, which translates to a
c.20bps reduction in the CET1 ratio, from the hedging arrangements
to reverse after the rescission offer has been completed in
Q322
●
Barclays also
expects the Review (see pages 25-26 for more detail), assisted by
external counsel, of the facts and circumstances related to this
matter to conclude shortly and will continue to engage with
regulators
●
SEC and CFTC devices investigation: in
July 2022, Barclays Bank PLC and Barclays Capital Inc. (BCI)
reached an agreement in principle with the staff of the SEC's
Division of Enforcement and the staff of CFTC in connection with
investigations by the SEC and the CFTC of Barclays Bank PLC, BCI
and other financial institutions as part of a financial industry
sweep regarding compliance with record-keeping obligations in
connection with business-related communications sent over
unapproved electronic messaging platforms (the Devices Settlements
In Principle). The SEC and the CFTC found that Barclays Bank PLC
and BCI failed to comply with their respective record keeping and
supervisory obligations, where such communications were sent or
received by employees over electronic messaging channels that had
not been approved by the bank for business use by employees. The
proposed resolution with the SEC and the CFTC will include Barclays
Bank PLC and BCI paying a combined $125m civil monetary penalty to
the SEC and a $75m civil monetary penalty to the CFTC. Subject to
final agreement of the terms of the settlements and related
documentation, as well as the SEC's and CFTC's approval, the civil
monetary penalties are expected to be paid during the third quarter
of 2022
●
GAP portfolio acquisition: on 21 June
2022, Barclays completed the acquisition of a US credit card
portfolio of $3.3bn of receivables, in partnership with GAP Inc.
The acquisition reduced the Group CET1 ratio by approximately
15bps. The partnership broadens Barclays product offering in the
retail sector and store cards, advancing our strategy and growth
ambitions in the United States
●
Kensington Mortgage Company acquisition:
on 24 June 2022 Barclays PLC announced that Barclays Bank UK PLC
has agreed to acquire UK specialist mortgage lender Kensington
Mortgage Company Limited, thereby broadening Barclays' capabilities
and product offering in the UK mortgage market. The transaction is
subject to regulatory approval and is expected to complete in late
Q422 or early Q123
●
Legacy Loan Portfolio: a customer
remediation provision of £181m was recognised in Q122 in
relation to a legacy timeshare loan portfolio brokered by Azure
Services Limited (ASL). The provision represents the best estimate
as at 30 June 2022. Barclays continues to review complaints
regarding legacy partner finance loans, however it is not currently
possible to predict the outcome of this review
●
Absa sale: on 21 April 2022, Barclays
sold 63m ordinary shares in Absa (7.4% of Absa’s issued share
capital) at a price of ZAR 164.0 per share, raising aggregate gross
sale proceeds of ZAR 10.3bn (£516m1)
●
Pensions: during 2019 and 2020, the UK
Retirement Fund (UKRF), the Group’s main pension scheme,
subscribed for non-transferable listed senior fixed rate notes for
£1.25bn. Following the PRA's statement on 13 April 2022,
Barclays is planning to unwind these transactions, which would
result in a c.30bps reduction to the CET1 ratio, being accelerated
to Q422 from 2023, 2024 and 2025. For more details, see note 16 on
page 103
Capital distributions
●
Barclays is
committed to maintaining an appropriate balance between delivering
attractive total cash returns to shareholders, investment in the
business and maintaining a strong capital position. Barclays pays a
progressive ordinary dividend, taking into account these objectives
and the earnings outlook of the Group. The Board will also continue
to supplement the ordinary dividends as appropriate, including with
share buybacks
●
Announced a half
year dividend of 2.25p per share and intention to initiate a
further share buyback of up to £500m
●
Dividends will
continue to be paid semi-annually, with the half year dividend
expected to represent, under normal circumstances, around one-third
of the total dividend for the year
●
The £1.0bn
buyback programme announced in FY21 results is expected to complete
before the end of September 2022
Group targets
Barclays
continues to target the following over the medium
term:
●
Returns: RoTE of
greater than 10%
●
Cost efficiency:
cost: income ratio below 60%
●
Capital adequacy:
CET1 ratio in the range of 13-14%
Anna Cross, Group Finance Director
1
Exchange rate GBP/ZAR 20.04 as of 21 April 2022.
Results by Business
Barclays UK
|
Half year ended
|
Half year ended
|
|
|
30.06.22
|
30.06.21
|
|
Income statement information
|
£m
|
£m
|
% Change
|
Net interest income
|
2,732
|
2,586
|
6
|
Net fee, commission and other income
|
641
|
613
|
5
|
Total income
|
3,373
|
3,199
|
5
|
Credit impairment (charges)/releases
|
(48)
|
443
|
|
Net operating income
|
3,325
|
3,642
|
(9)
|
Operating costs
|
(2,083)
|
(2,114)
|
1
|
Litigation and conduct
|
(25)
|
(22)
|
(14)
|
Total operating expenses
|
(2,108)
|
(2,136)
|
1
|
Other net income
|
—
|
—
|
|
Profit before tax
|
1,217
|
1,506
|
(19)
|
Attributable profit
|
854
|
1,019
|
(16)
|
|
|
|
|
|
As at 30.06.22
|
As at 31.12.21
|
As at 30.06.21
|
Balance sheet information
|
£bn
|
£bn
|
£bn
|
Loans and advances to customers at amortised cost
|
205.9
|
208.8
|
207.8
|
Total assets
|
318.8
|
321.2
|
311.2
|
Customer deposits at amortised cost
|
261.5
|
260.6
|
255.5
|
Loan: deposit ratio
|
85%
|
85%
|
87%
|
Risk weighted assets
|
72.2
|
72.3
|
72.2
|
Period end allocated tangible equity
|
9.9
|
10.0
|
9.9
|
|
|
|
|
|
Half year ended
|
Half year ended
|
|
Key facts
|
30.06.22
|
30.06.21
|
|
Average
loan to value of mortgage portfolio1
|
51%
|
51%
|
|
Average
loan to value of new mortgage lending1
|
69%
|
69%
|
|
Number of branches
|
593
|
755
|
|
Mobile banking active customers
|
10.1m
|
9.4m
|
|
30 day arrears rate - Barclaycard Consumer UK
|
1.0%
|
1.4%
|
|
|
|
|
|
Performance measures
|
|
|
|
Return on average allocated tangible equity
|
17.0%
|
20.6%
|
|
Average allocated tangible equity (£bn)
|
10.0
|
9.9
|
|
Cost: income ratio
|
62%
|
67%
|
|
Loan loss rate (bps)
|
4
|
—
|
|
Net interest margin
|
2.67%
|
2.54%
|
|
1
Average loan to value of mortgages is balance weighted and reflects
both residential and buy-to-let mortgage portfolios within the Home
Loans portfolio.
Analysis of Barclays UK
|
Half year ended
|
Half year ended
|
|
30.06.22
|
30.06.21
|
|
Analysis of total income
|
£m
|
£m
|
% Change
|
Personal Banking
|
2,099
|
1,910
|
10
|
Barclaycard Consumer UK
|
541
|
605
|
(11)
|
Business Banking
|
733
|
684
|
7
|
Total income
|
3,373
|
3,199
|
5
|
|
|
|
|
Analysis of credit impairment (charges)/releases
|
|
|
|
Personal Banking
|
(21)
|
50
|
|
Barclaycard Consumer UK
|
40
|
398
|
(90)
|
Business Banking
|
(67)
|
(5)
|
|
Total credit impairment (charges)/releases
|
(48)
|
443
|
|
|
|
|
|
|
As at 30.06.22
|
As at 31.12.21
|
As at 30.06.21
|
Analysis of loans and advances to customers at amortised
cost
|
£bn
|
£bn
|
£bn
|
Personal Banking
|
167.1
|
165.4
|
162.4
|
Barclaycard Consumer UK
|
8.8
|
8.7
|
8.8
|
Business Banking
|
30.0
|
34.7
|
36.6
|
Total loans and advances to customers at amortised
cost
|
205.9
|
208.8
|
207.8
|
|
|
|
|
Analysis of customer deposits at amortised cost
|
|
|
|
Personal Banking
|
197.0
|
196.4
|
191.0
|
Barclaycard Consumer UK
|
—
|
—
|
0.1
|
Business Banking
|
64.5
|
64.2
|
64.4
|
Total customer deposits at amortised cost
|
261.5
|
260.6
|
255.5
|
Barclays
UK delivered a RoTE of 17.0% (H121: 20.6%), and a lower cost:
income ratio of 62% (H121: 67%), reflecting improved income
performance across Personal Banking and Business Banking, alongside
reduced total operating expenses, while impairment returned to a
charge following a net release in H121. Barclays UK remains well
positioned, with a strong focus on supporting customers in an
increasingly difficult and uncertain environment.
Income statement - H122 compared to H121
●
Profit before tax
decreased to £1,217m (H121: £1,506m). RoTE was 17.0%
(H121: 20.6%) reflecting the non-recurrence of a prior year credit
impairment release, partially offset by the rising rate environment
in the UK
●
Total income increased 5% to £3,373m. Net interest income
increased 6% to £2,732m with a net interest margin (NIM) of
2.67% (H121: 2.54%) primarily driven by the rising interest rate
environment in the UK. Net fee, commission and other income
increased 5% to £641m
●
Personal Banking
income increased 10% to £2,099m, driven by rising interest
rates and the benefit of strong mortgage origination in 2021,
partially offset by mortgage margin compression
●
Barclaycard
Consumer UK income decreased 11% to £541m as higher
transaction based revenues from improved customer spend volumes
were more than offset by lower interest earning lending (IEL)
balances. Lower IEL balances were impacted by higher customer
repayments and reduced borrowing
●
Business Banking
income increased 7% to £733m driven by rising interest rates
alongside improved transaction based revenues, partially offset by
lower government scheme lending income as repayments
continue
●
Credit impairment
charge of £48m (H121: £443m net release) driven by low
flows to delinquency, improved UK employment data and reduced
uncertainty around the possible effects of COVID-19, offset by
increased concerns around customers' vulnerability to high
inflation. As at 30 June 2022, 30 and 90 day arrears rates in UK
cards were 1.0% (H121: 1.4%) and 0.2% (H121: 0.6%) respectively.
The credit card and consumer loan businesses maintain appropriate
provision levels in light of affordability headwinds, as reflected
in a total coverage ratio of 9.2% (December 2021:
10.9%)
●
Total operating
expenses decreased 1% to £2,108m driven by lower operational
costs and efficiency savings, partially offset by increased
investment spend and the impact of inflation
Balance sheet - 30 June 2022 compared to 31 December
2021
●
Loans and advances
to customers at amortised cost decreased 1% to £205.9bn as
£1.5bn of mortgage growth was more than offset by a
£4.7bn decrease in Business Banking balances due to the
repayment of government scheme lending and the yield curve impact
from rising interest rates on the Education, Social Housing and
Local Authority portfolio carrying value
●
Customer deposits
at amortised cost remained broadly stable at £261.5bn,
maintaining a strong loan: deposit ratio of 85% (December 2021:
85%)
●
RWAs remained
stable at £72.2bn (December 2021: £72.3bn)
Barclays International
|
Half year ended
|
Restated1
Half year ended
|
|
|
30.06.22
|
30.06.21
|
|
Income statement information
|
£m
|
£m
|
% Change
|
Net interest income
|
1,965
|
1,559
|
26
|
Net trading income
|
5,212
|
3,389
|
54
|
Net fee, commission and other income
|
2,763
|
3,270
|
(16)
|
Total income
|
9,940
|
8,218
|
21
|
Credit impairment (charges)/releases
|
(310)
|
293
|
|
Net operating income
|
9,630
|
8,511
|
13
|
Operating costs
|
(5,042)
|
(4,606)
|
(9)
|
Litigation and conduct
|
(1,832)
|
(161)
|
|
Total operating expenses
|
(6,874)
|
(4,767)
|
(44)
|
Other net income
|
13
|
22
|
(41)
|
Profit before tax
|
2,769
|
3,766
|
(26)
|
Attributable profit
|
2,083
|
2,638
|
(21)
|
|
|
|
|
|
As at 30.06.22
|
As at 31.12.21
|
As at 30.06.21
|
Balance sheet information
|
£bn
|
£bn
|
£bn
|
Loans and advances at amortised cost
|
167.3
|
133.8
|
121.9
|
Trading portfolio assets
|
126.9
|
146.9
|
147.1
|
Derivative financial instrument assets
|
343.5
|
261.5
|
255.4
|
Financial assets at fair value through the income
statement
|
209.3
|
188.2
|
190.4
|
Cash collateral and settlement balances
|
128.5
|
88.1
|
108.5
|
Other assets
|
275.1
|
225.6
|
223.5
|
Total assets
|
1,250.6
|
1,044.1
|
1,046.8
|
Deposits at amortised cost
|
307.4
|
258.8
|
245.4
|
Derivative financial instrument liabilities
|
321.2
|
256.4
|
246.9
|
Loan: deposit ratio
|
54%
|
52%
|
50%
|
Risk weighted assets
|
263.8
|
230.9
|
223.2
|
Period end allocated tangible equity
|
38.0
|
33.2
|
31.8
|
|
|
|
|
|
Half year ended
|
Restated1
Half year ended
|
|
Performance measures
|
30.06.22
|
30.06.21
|
|
Return on average allocated tangible equity
|
11.5%
|
16.3%
|
|
Average allocated tangible equity (£bn)
|
36.2
|
32.3
|
|
Cost: income ratio
|
69%
|
58%
|
|
Loan loss rate (bps)
|
37
|
—
|
|
Net interest margin
|
4.34%
|
3.95%
|
|
1
2021 financial and capital metrics have been restated to reflect
the impact of the Over-issuance of Securities. See Basis of
preparation on page 65 and
Restatement of financial statements (Note 1) on page 87 for more information.
Analysis of Barclays International
|
|
|
|
Corporate and Investment Bank
|
Half year ended
|
Restated1
Half year ended
|
|
|
30.06.22
|
30.06.21
|
|
Income statement information
|
£m
|
£m
|
% Change
|
Net interest income
|
795
|
640
|
24
|
Net trading income
|
5,188
|
3,411
|
52
|
Net fee, commission and other income
|
1,988
|
2,522
|
(21)
|
Total income
|
7,971
|
6,573
|
21
|
Credit impairment (charges)/releases
|
(32)
|
272
|
|
Net operating income
|
7,939
|
6,845
|
16
|
Operating costs
|
(3,791)
|
(3,509)
|
(8)
|
Litigation and conduct
|
(1,632)
|
(79)
|
|
Total operating expenses
|
(5,423)
|
(3,588)
|
(51)
|
Other net income
|
—
|
1
|
|
Profit before tax
|
2,516
|
3,258
|
(23)
|
Attributable profit
|
1,895
|
2,252
|
(16)
|
|
|
|
|
|
As at 30.06.22
|
As at 31.12.21
|
As at 30.06.21
|
Balance sheet information
|
£bn
|
£bn
|
£bn
|
Loans and advances at amortised cost
|
125.8
|
100.0
|
91.0
|
Trading portfolio assets
|
126.7
|
146.7
|
147.0
|
Derivative financial instrument assets
|
343.4
|
261.5
|
255.3
|
Financial assets at fair value through the income
statement
|
209.2
|
188.1
|
190.3
|
Cash collateral and settlement balances
|
127.7
|
87.2
|
107.7
|
Other assets
|
237.2
|
195.8
|
192.5
|
Total assets
|
1,170.0
|
979.3
|
983.8
|
Deposits at amortised cost
|
229.5
|
189.4
|
178.2
|
Derivative financial instrument liabilities
|
321.2
|
256.4
|
246.8
|
Risk weighted assets
|
227.6
|
200.7
|
194.3
|
|
|
|
|
|
Half year ended
|
Restated1
Half year ended
|
|
Performance measures
|
30.06.22
|
30.06.21
|
|
Return on average allocated tangible equity
|
11.9%
|
15.9%
|
|
Average allocated tangible equity (£bn)
|
31.8
|
28.3
|
|
Cost: income ratio
|
68%
|
55%
|
|
|
|
|
|
|
|
|
|
Analysis of total income
|
£m
|
£m
|
% Change
|
FICC
|
3,173
|
2,099
|
51
|
Equities
|
2,463
|
1,709
|
44
|
Global Markets
|
5,636
|
3,808
|
48
|
Advisory
|
421
|
381
|
10
|
Equity capital markets
|
84
|
469
|
(82)
|
Debt capital markets
|
697
|
882
|
(21)
|
Investment Banking fees
|
1,202
|
1,732
|
(31)
|
Corporate lending
|
78
|
244
|
(68)
|
Transaction banking
|
1,055
|
789
|
34
|
Corporate
|
1,133
|
1,033
|
10
|
Total income
|
7,971
|
6,573
|
21
|
1
2021 financial and capital metrics have been restated to reflect
the impact of the Over-issuance of Securities. See Basis of
preparation on page 65 and
Restatement of financial statements (Note 1) on page 87 for more information.
Analysis of Barclays International
|
|
|
|
Consumer, Cards and Payments
|
Half year ended
|
Half year ended
|
|
|
30.06.22
|
30.06.21
|
|
Income statement information
|
£m
|
£m
|
% Change
|
Net interest income
|
1,170
|
919
|
27
|
Net fee, commission, trading and other income
|
799
|
726
|
10
|
Total income
|
1,969
|
1,645
|
20
|
Credit impairment (charges)/releases
|
(278)
|
21
|
|
Net operating income
|
1,691
|
1,666
|
2
|
Operating costs
|
(1,251)
|
(1,097)
|
(14)
|
Litigation and conduct
|
(200)
|
(82)
|
|
Total operating expenses
|
(1,451)
|
(1,179)
|
(23)
|
Other net income
|
13
|
21
|
(38)
|
Profit before tax
|
253
|
508
|
(50)
|
Attributable profit
|
188
|
386
|
(51)
|
|
|
|
|
|
As at 30.06.22
|
As at 31.12.21
|
As at 30.06.21
|
Balance sheet information
|
£bn
|
£bn
|
£bn
|
Loans and advances at amortised cost
|
41.5
|
33.8
|
30.9
|
Total assets
|
80.6
|
64.8
|
63.0
|
Deposits at amortised cost
|
77.9
|
69.4
|
67.2
|
Risk weighted assets
|
36.2
|
30.2
|
29.0
|
|
|
|
|
|
Half year ended
|
Half year ended
|
|
Key facts
|
30.06.22
|
30.06.21
|
|
30 day arrears rate – Barclaycard US
|
1.4%
|
1.6%
|
|
US cards customer FICO score distribution
|
|
|
|
<660
|
10%
|
10%
|
|
>660
|
90%
|
90%
|
|
Total number of Barclaycard payments clients
|
c.391,000
|
c.372,000
|
|
Value
of payments processed (£bn)1
|
190
|
160
|
|
|
|
|
|
Performance measures
|
|
|
|
Return on average allocated tangible equity
|
8.5%
|
19.1%
|
|
Average allocated tangible equity (£bn)
|
4.4
|
4.0
|
|
Cost: income ratio
|
74%
|
72%
|
|
Loan loss rate (bps)
|
128
|
—
|
|
|
|
|
|
Analysis of total income
|
£m
|
£m
|
% Change
|
International Cards and Consumer Bank
|
1,229
|
1,050
|
17
|
Private Bank
|
459
|
393
|
17
|
Payments
|
281
|
202
|
39
|
Total income
|
1,969
|
1,645
|
20
|
|
|
|
|
|
|
|
|
1
Includes £145bn (H121: £129bn) of merchant acquiring
payments.
Barclays
International delivered a RoTE of 11.5% reflecting the benefits of
being a diversified business. CIB delivered a RoTE of 11.9%
reflecting a strong performance in FICC, partially offset by a
decrease in Investment Banking fees, against a strong prior year
comparative, and provisions for litigation and conduct. CC&P
RoTE decreased to 8.5% as an increase in income was offset by a
provision for higher customer remediation costs relating to a
legacy loan portfolio and continued investment in the
business.
Income statement - H122 compared to
H1211
●
Profit before tax
decreased 26% to £2,769m with a RoTE of 11.5% (H121: 16.3%),
reflecting a RoTE of 11.9% (H121: 15.9%) in CIB and 8.5% (H121:
19.1%) in CC&P
●
The 6% appreciation
of average USD against GBP positively impacted income and profits
and adversely impacted impairment charges and total operating
expenses
●
Total income
increased to £9,940m (H121: £8,218m)
●
CIB income
increased 21% to £7,971m reflecting the benefit of a
diversified business model and impact of hedging
arrangements
●
Global Markets
income increased 48% to £5,636m. FICC income increased 51% to
£3,173m, mainly in macro, reflecting higher levels of activity
as we supported our clients through a period of market volatility.
Equities income increased £754m to £2,463m including
£758m of income related to hedging arrangements in relation to
managing the risks from the rescission offer to be launched by
Barclays Bank PLC in relation to the Over-issuance of
Securities
●
Investment Banking
fees income decreased 31% to £1,202m due to the reduced fee
pool, particularly in Equity capital markets2, and a strong prior
year comparative
●
Within Corporate,
Transaction banking income increased 34% to £1,055m driven by
deposit balance growth, improved margins and higher payments
volumes. Corporate lending income decreased 68% to £78m due to
losses on certain fair value lending positions and higher costs of
hedging and credit protection, partially offset by the
non-recurrence of a prior year fair value loan write-off on a
single name
●
CC&P income
increased 20% to £1,969m
●
International Cards
and Consumer Bank income increased 17% to £1,229m as higher
average cards balances were partially offset by higher customer
acquisition costs
●
Private Bank income
increased 17% to £459m, reflecting client balance growth and
improved margins partially offset by the non-recurrence of a gain
on a property sale in the prior year
●
Payments income
increased 39% to £281m driven by turnover growth following the
easing of lockdown restrictions in the past year
●
Credit impairment
charges were £310m (H121: £293m net release)
●
CIB credit
impairment charge of £32m (H121: £272m net release) was
driven by a net increase in modelled impairment whilst there
continue to be limited material single name wholesale loan charges,
with the prior year including a net release resulting from an
improved macroeconomic outlook scenario refresh
●
CC&P credit
impairment charges increased to £278m (H121: £21m net
release) driven by higher balances in US cards, including the day
one impact of acquiring the GAP portfolio, partially offset by
lower provisions held for uncertainty. As at 30 June 2022, 30 and
90 day arrears in US cards were 1.4% (H121: 1.6%) and 0.7% (H121:
0.9%) respectively. The US cards business continues to maintain
appropriate provision levels in light of affordability
headwinds
●
Total operating
expenses increased 44% to £6,874m
●
CIB total operating
expenses increased 51% to £5,423m. Operating costs increased
8% to £3,791m driven by investment in talent, systems and
technology, and the impact of inflation. Litigation and conduct
charges were £1,632m (H121: £79m) including £1,304m
estimated impact of rescission offer losses in relation to the
Over-Issuance of Securities and £165m associated estimated
monetary penalty from the SEC, and £165m provision relating to
the Devices Settlements in Principle
●
CC&P total
operating expenses increased 23% to £1,451m primarily driven
by £200m of litigation and conduct costs, including a
provision for higher customer remediation costs relating to a
legacy loan portfolio. Operating costs increased 14% driven by
higher investment spend reflecting an increase in marketing and
costs for existing and new partnerships
1
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
2
Data source: Dealogic for the period covering 1 January to 30 June
2022.
Balance sheet - 30 June 2022 compared to 31 December
2021
●
Loans and advances
at amortised cost increased £33.5bn to £167.3bn due to
increased lending across CIB and CC&P, inclusive of the
£2.7bn GAP portfolio acquisition and appreciation of USD
against GBP, and increased investment in debt
securities
●
Trading portfolio
assets decreased £20.0bn to £126.9bn due to a reduction
in equity securities driven by facilitation of client activity,
partially offset by increased trading activity in debt
securities
●
Derivative assets
and liabilities increased £82.0bn and £64.8bn
respectively to £343.5bn and £321.2bn driven by market
volatility and increased activity in FICC and Equities
●
Financial assets at
fair value through the income statement increased £21.1bn to
£209.3bn driven by increased secured lending
●
Deposits at
amortised cost increased £48.6bn to £307.4bn primarily
due to an increase in short-term money market deposits and growth
in Corporate deposits
●
RWAs increased to
£263.8bn (December 2021: £230.9bn) resulting from the
impact of the appreciation of USD against GBP, regulatory changes
that took effect from 1 January 2022, increased client activity
within CIB, an increase in respect of hedging arrangements designed
to manage the risks of the rescission offer relating to the
Over-issuance of Securities and higher CC&P balances driven
mainly by the GAP portfolio acquisition
Head Office
|
Half year ended
|
Half year ended
|
|
|
30.06.22
|
30.06.21
|
|
Income statement information
|
£m
|
£m
|
% Change
|
Net interest income
|
66
|
(242)
|
|
Net fee, commission and other income
|
(175)
|
140
|
|
Total income
|
(109)
|
(102)
|
(7)
|
Credit impairment releases
|
17
|
6
|
|
Net operating income
|
(92)
|
(96)
|
4
|
Operating costs
|
(145)
|
(412)
|
65
|
Litigation and conduct
|
—
|
7
|
|
Total operating expenses
|
(145)
|
(405)
|
64
|
Other net (expenses)/income
|
(16)
|
131
|
|
Loss before tax
|
(253)
|
(370)
|
32
|
Attributable (loss)/profit
|
(462)
|
95
|
|
|
|
|
|
|
As at 30.06.22
|
Restated1
As at 31.12.21
|
Restated1
As at 30.06.21
|
Balance sheet information
|
£bn
|
£bn
|
£bn
|
Total assets
|
19.8
|
19.0
|
18.3
|
Risk weighted assets
|
8.6
|
11.0
|
12.0
|
Period end allocated tangible equity
|
1.1
|
5.5
|
5.9
|
|
|
|
|
|
Half year ended
|
Half year ended
|
|
Performance measures
|
30.06.22
|
30.06.21
|
|
Average allocated tangible equity (£bn)
|
2.7
|
4.3
|
|
Income statement - H122 compared to H121
●
Loss before tax was
£253m (H121: £370m)
●
Total income was an
expense of £109m (H121: £102m expense) which primarily
reflected hedge accounting, funding costs on legacy capital
instruments, treasury items as well as a £42m loss on sale
from the partial disposal of Barclays’ equity stake in Absa
in April 2022. This was partially offset by a one-off gain of
£86m from the sale and leaseback of UK data centres and the
recognition of dividends on Barclays’ equity stake in
Absa
●
Total operating
expenses reduced to £145m (H121: £405m) reflecting the
non-recurrence of the £266m charge related to structural cost
actions taken as part of the real estate review in June
2021
●
Other net income
was an expense of £16m (H121: £131m income) driven by a
fair value loss in Barclays associate investment holding in the
Business Growth Fund
Balance sheet - 30 June 2022 compared to 31 December
2021
●
RWAs reduced to
£8.6bn (December 2021: £11.0bn) reflecting the partial
sale of Barclays' equity stake in Absa in April 2022. The sale
resulted in an increase to Barclays' CET1 ratio of
c.10bps
1
2021 financial and capital metrics have been restated to reflect
the impact of the Over-issuance of Securities. See Basis of
preparation on page 65 and
Restatement of financial statements (Note 1) on page 87 for more information.
Quarterly Results Summary
Barclays Group
|
|
|
|
|
|
|
|
|
|
|
|
Q222
|
Q122
|
|
Q4211
|
Q3211
|
Q2211
|
Q121
|
|
Q420
|
Q320
|
Income statement information
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Net interest income
|
2,422
|
2,341
|
|
2,230
|
1,940
|
2,052
|
1,851
|
|
1,845
|
2,055
|
Net fee, commission and other income
|
4,286
|
4,155
|
|
2,930
|
3,525
|
3,363
|
4,049
|
|
3,096
|
3,149
|
Total income
|
6,708
|
6,496
|
|
5,160
|
5,465
|
5,415
|
5,900
|
|
4,941
|
5,204
|
Credit impairment (charges)/releases
|
(200)
|
(141)
|
|
31
|
(120)
|
797
|
(55)
|
|
(492)
|
(608)
|
Net operating income
|
6,508
|
6,355
|
|
5,191
|
5,345
|
6,212
|
5,845
|
|
4,449
|
4,596
|
Operating costs
|
(3,682)
|
(3,588)
|
|
(3,514)
|
(3,446)
|
(3,587)
|
(3,545)
|
|
(3,480)
|
(3,391)
|
UK bank levy
|
—
|
—
|
|
(170)
|
—
|
—
|
—
|
|
(299)
|
—
|
Litigation and conduct
|
(1,334)
|
(523)
|
|
(92)
|
(129)
|
(143)
|
(33)
|
|
(47)
|
(76)
|
Total operating expenses
|
(5,016)
|
(4,111)
|
|
(3,776)
|
(3,575)
|
(3,730)
|
(3,578)
|
|
(3,826)
|
(3,467)
|
Other net income/(expenses)
|
7
|
(10)
|
|
13
|
94
|
21
|
132
|
|
23
|
18
|
Profit before tax
|
1,499
|
2,234
|
|
1,428
|
1,864
|
2,503
|
2,399
|
|
646
|
1,147
|
Tax charge
|
(209)
|
(614)
|
|
(104)
|
(292)
|
(246)
|
(496)
|
|
(163)
|
(328)
|
Profit after tax
|
1,290
|
1,620
|
|
1,324
|
1,572
|
2,257
|
1,903
|
|
483
|
819
|
Non-controlling interests
|
(20)
|
(1)
|
|
(27)
|
(1)
|
(15)
|
(4)
|
|
(37)
|
(4)
|
Other equity instrument holders
|
(199)
|
(215)
|
|
(218)
|
(197)
|
(194)
|
(195)
|
|
(226)
|
(204)
|
Attributable profit
|
1,071
|
1,404
|
|
1,079
|
1,374
|
2,048
|
1,704
|
|
220
|
611
|
|
|
|
|
|
|
|
|
|
|
|
Performance measures
|
|
|
|
|
|
|
|
|
|
|
Return on average tangible shareholders' equity
|
8.7%
|
11.5%
|
|
9.0%
|
11.4%
|
17.6%
|
14.7%
|
|
1.8%
|
5.1%
|
Average tangible shareholders' equity (£bn)
|
49.0
|
48.8
|
|
48.0
|
48.3
|
46.5
|
46.5
|
|
47.6
|
48.3
|
Cost: income ratio
|
75%
|
63%
|
|
73%
|
65%
|
69%
|
61%
|
|
77%
|
67%
|
Loan loss rate (bps)
|
20
|
15
|
|
—
|
13
|
—
|
6
|
|
56
|
69
|
Basic earnings per share
|
6.4p
|
8.4p
|
|
6.4p
|
8.0p
|
11.9p
|
9.9p
|
|
1.3p
|
3.5p
|
Basic weighted average number of shares (m)
|
16,684
|
16,682
|
|
16,985
|
17,062
|
17,140
|
17,293
|
|
17,300
|
17,298
|
Period end number of shares (m)
|
16,531
|
16,762
|
|
16,752
|
16,851
|
16,998
|
17,223
|
|
17,359
|
17,353
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet and capital management2
|
£bn
|
£bn
|
|
£bn
|
£bn
|
£bn
|
£bn
|
|
£bn
|
£bn
|
Loans and advances at amortised cost
|
395.8
|
371.7
|
|
361.5
|
353.0
|
348.5
|
345.8
|
|
342.6
|
344.4
|
Loans and advances at amortised cost impairment coverage
ratio
|
1.4%
|
1.5%
|
|
1.6%
|
1.7%
|
1.8%
|
2.2%
|
|
2.4%
|
2.5%
|
Total assets
|
1,589.2
|
1,496.1
|
|
1,384.3
|
1,406.5
|
1,376.3
|
1,379.7
|
|
1,349.5
|
1,421.7
|
Deposits at amortised cost
|
568.7
|
546.5
|
|
519.4
|
510.2
|
500.9
|
498.8
|
|
481.0
|
494.6
|
Tangible net asset value per share
|
297p
|
294p
|
|
291p
|
286p
|
280p
|
267p
|
|
269p
|
275p
|
Common equity tier 1 ratio
|
13.6%
|
13.8%
|
|
15.1%
|
15.3%
|
15.0%
|
14.6%
|
|
15.1%
|
14.6%
|
Common equity tier 1 capital
|
46.7
|
45.3
|
|
47.3
|
47.2
|
46.2
|
45.9
|
|
46.3
|
45.5
|
Risk weighted assets
|
344.5
|
328.8
|
|
314.1
|
307.7
|
307.4
|
313.4
|
|
306.2
|
310.7
|
UK leverage ratio
|
5.1%
|
5.0%
|
|
5.2%
|
5.1%
|
5.0%
|
5.0%
|
|
5.3%
|
5.2%
|
UK leverage exposure
|
1,151.2
|
1,123.5
|
|
1,137.9
|
1,162.7
|
1,154.9
|
1,145.4
|
|
1,090.9
|
1,095.1
|
Average UK leverage ratio
|
4.7%
|
4.8%
|
|
4.9%
|
4.9%
|
4.8%
|
4.9%
|
|
5.0%
|
5.1%
|
Average UK leverage exposure
|
1,233.5
|
1,179.4
|
|
1,229.0
|
1,201.1
|
1,192.7
|
1,174.9
|
|
1,146.9
|
1,111.1
|
|
|
|
|
|
|
|
|
|
|
|
Funding and liquidity
|
|
|
|
|
|
|
|
|
|
|
Group liquidity pool (£bn)
|
343
|
320
|
|
291
|
293
|
291
|
290
|
|
266
|
327
|
Liquidity coverage ratio
|
156%
|
159%
|
|
168%
|
161%
|
162%
|
161%
|
|
162%
|
181%
|
Loan: deposit ratio
|
70%
|
68%
|
|
70%
|
69%
|
70%
|
69%
|
|
71%
|
70%
|
1
The comparative capital and financial metrics relating to Q221 -
Q421 have been restated to reflect the impact of the Over-issuance
of Securities. See Basis of preparation on page 65 and Restatement of financial statements
(Note 1) on page 87 for more
information.
2
Refer to pages 55 to 62 for further information on how capital,
RWAs and leverage are calculated.
Quarterly Results by Business
Barclays UK
|
|
|
|
|
|
|
|
|
|
|
|
Q222
|
Q122
|
|
Q421
|
Q321
|
Q221
|
Q121
|
|
Q420
|
Q320
|
Income statement information
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Net interest income
|
1,393
|
1,339
|
|
1,313
|
1,303
|
1,305
|
1,281
|
|
1,317
|
1,280
|
Net fee, commission and other income
|
331
|
310
|
|
386
|
335
|
318
|
295
|
|
309
|
270
|
Total income
|
1,724
|
1,649
|
|
1,699
|
1,638
|
1,623
|
1,576
|
|
1,626
|
1,550
|
Credit impairment (charges)/releases
|
—
|
(48)
|
|
59
|
(137)
|
520
|
(77)
|
|
(170)
|
(233)
|
Net operating income
|
1,724
|
1,601
|
|
1,758
|
1,501
|
2,143
|
1,499
|
|
1,456
|
1,317
|
Operating costs
|
(1,085)
|
(998)
|
|
(1,202)
|
(1,041)
|
(1,078)
|
(1,036)
|
|
(1,134)
|
(1,095)
|
UK bank levy
|
—
|
—
|
|
(36)
|
—
|
—
|
—
|
|
(50)
|
—
|
Litigation and conduct
|
(16)
|
(9)
|
|
(5)
|
(10)
|
(19)
|
(3)
|
|
4
|
(25)
|
Total operating expenses
|
(1,101)
|
(1,007)
|
|
(1,243)
|
(1,051)
|
(1,097)
|
(1,039)
|
|
(1,180)
|
(1,120)
|
Other net (expenses)/income
|
—
|
—
|
|
(1)
|
1
|
—
|
—
|
|
6
|
(1)
|
Profit before tax
|
623
|
594
|
|
514
|
451
|
1,046
|
460
|
|
282
|
196
|
Attributable profit
|
458
|
396
|
|
420
|
317
|
721
|
298
|
|
160
|
113
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet information
|
£bn
|
£bn
|
|
£bn
|
£bn
|
£bn
|
£bn
|
|
£bn
|
£bn
|
Loans and advances to customers at amortised cost
|
205.9
|
207.3
|
|
208.8
|
208.6
|
207.8
|
205.7
|
|
205.4
|
203.9
|
Total assets
|
318.8
|
317.2
|
|
321.2
|
312.1
|
311.2
|
309.1
|
|
289.1
|
294.5
|
Customer deposits at amortised cost
|
261.5
|
260.3
|
|
260.6
|
256.8
|
255.5
|
247.5
|
|
240.5
|
232.0
|
Loan: deposit ratio
|
85%
|
85%
|
|
85%
|
86%
|
87%
|
88%
|
|
89%
|
91%
|
Risk weighted assets
|
72.2
|
72.7
|
|
72.3
|
73.2
|
72.2
|
72.7
|
|
73.7
|
76.2
|
Period end allocated tangible equity
|
9.9
|
10.1
|
|
10.0
|
10.0
|
9.9
|
10.0
|
|
9.7
|
10.0
|
|
|
|
|
|
|
|
|
|
|
|
Performance measures
|
|
|
|
|
|
|
|
|
|
|
Return on average allocated tangible equity
|
18.4%
|
15.6%
|
|
16.8%
|
12.7%
|
29.1%
|
12.0%
|
|
6.5%
|
4.5%
|
Average allocated tangible equity (£bn)
|
10.0
|
10.1
|
|
10.0
|
10.0
|
9.9
|
9.9
|
|
9.8
|
10.1
|
Cost: income ratio
|
64%
|
61%
|
|
73%
|
64%
|
68%
|
66%
|
|
73%
|
72%
|
Loan loss rate (bps)
|
—
|
9
|
|
—
|
24
|
—
|
14
|
|
31
|
43
|
Net interest margin
|
2.71%
|
2.62%
|
|
2.49%
|
2.49%
|
2.55%
|
2.54%
|
|
2.56%
|
2.51%
|
Analysis of Barclays UK
|
Q222
|
Q122
|
|
Q421
|
Q321
|
Q221
|
Q121
|
|
Q420
|
Q320
|
Analysis of total income
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Personal Banking
|
1,077
|
1,022
|
|
983
|
990
|
987
|
923
|
|
895
|
833
|
Barclaycard Consumer UK
|
265
|
276
|
|
352
|
293
|
290
|
315
|
|
354
|
362
|
Business Banking
|
382
|
351
|
|
364
|
355
|
346
|
338
|
|
377
|
355
|
Total income
|
1,724
|
1,649
|
|
1,699
|
1,638
|
1,623
|
1,576
|
|
1,626
|
1,550
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of credit impairment (charges)/releases
|
|
|
|
|
|
|
|
|
|
|
Personal Banking
|
(42)
|
21
|
|
8
|
(30)
|
72
|
(22)
|
|
(68)
|
(48)
|
Barclaycard Consumer UK
|
84
|
(44)
|
|
114
|
(108)
|
434
|
(36)
|
|
(78)
|
(106)
|
Business Banking
|
(42)
|
(25)
|
|
(63)
|
1
|
14
|
(19)
|
|
(24)
|
(79)
|
Total credit impairment (charges)/releases
|
—
|
(48)
|
|
59
|
(137)
|
520
|
(77)
|
|
(170)
|
(233)
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of loans and advances to customers at amortised
cost
|
£bn
|
£bn
|
|
£bn
|
£bn
|
£bn
|
£bn
|
|
£bn
|
£bn
|
Personal Banking
|
167.1
|
166.5
|
|
165.4
|
164.6
|
162.4
|
160.4
|
|
157.3
|
155.7
|
Barclaycard Consumer UK
|
8.8
|
8.4
|
|
8.7
|
8.6
|
8.8
|
8.7
|
|
9.9
|
10.7
|
Business Banking
|
30.0
|
32.4
|
|
34.7
|
35.4
|
36.6
|
36.6
|
|
38.2
|
37.5
|
Total loans and advances to customers at amortised
cost
|
205.9
|
207.3
|
|
208.8
|
208.6
|
207.8
|
205.7
|
|
205.4
|
203.9
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of customer deposits at amortised cost
|
|
|
|
|
|
|
|
|
|
|
Personal Banking
|
197.0
|
196.6
|
|
196.4
|
193.3
|
191.0
|
186.0
|
|
179.7
|
173.2
|
Barclaycard Consumer UK
|
—
|
—
|
|
—
|
—
|
0.1
|
0.1
|
|
0.1
|
0.1
|
Business Banking
|
64.5
|
63.7
|
|
64.2
|
63.5
|
64.4
|
61.4
|
|
60.7
|
58.7
|
Total customer deposits at amortised cost
|
261.5
|
260.3
|
|
260.6
|
256.8
|
255.5
|
247.5
|
|
240.5
|
232.0
|
Barclays International
|
|
|
|
|
|
|
|
|
|
|
|
Q222
|
Q122
|
|
Q4211
|
Q3211
|
Q2211
|
Q121
|
|
Q420
|
Q320
|
Income statement information
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Net interest income
|
1,029
|
936
|
|
955
|
749
|
811
|
748
|
|
614
|
823
|
Net trading income
|
2,766
|
2,446
|
|
789
|
1,515
|
1,455
|
1,934
|
|
1,372
|
1,528
|
Net fee, commission and other income
|
1,321
|
1,442
|
|
1,766
|
1,673
|
1,553
|
1,717
|
|
1,500
|
1,430
|
Total income
|
5,116
|
4,824
|
|
3,510
|
3,937
|
3,819
|
4,399
|
|
3,486
|
3,781
|
Credit impairment (charges)/releases
|
(209)
|
(101)
|
|
(23)
|
18
|
271
|
22
|
|
(291)
|
(370)
|
Net operating income
|
4,907
|
4,723
|
|
3,487
|
3,955
|
4,090
|
4,421
|
|
3,195
|
3,411
|
Operating costs
|
(2,537)
|
(2,505)
|
|
(2,160)
|
(2,310)
|
(2,168)
|
(2,438)
|
|
(2,133)
|
(2,227)
|
UK bank levy
|
—
|
—
|
|
(134)
|
—
|
—
|
—
|
|
(240)
|
—
|
Litigation and conduct
|
(1,319)
|
(513)
|
|
(84)
|
(100)
|
(140)
|
(21)
|
|
(9)
|
(28)
|
Total operating expenses
|
(3,856)
|
(3,018)
|
|
(2,378)
|
(2,410)
|
(2,308)
|
(2,459)
|
|
(2,382)
|
(2,255)
|
Other net income
|
5
|
8
|
|
3
|
15
|
13
|
9
|
|
9
|
9
|
Profit before tax
|
1,056
|
1,713
|
|
1,112
|
1,560
|
1,795
|
1,971
|
|
822
|
1,165
|
Attributable profit
|
783
|
1,300
|
|
818
|
1,191
|
1,207
|
1,431
|
|
441
|
782
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet information
|
£bn
|
£bn
|
|
£bn
|
£bn
|
£bn
|
£bn
|
|
£bn
|
£bn
|
Loans and advances at amortised cost
|
167.3
|
144.8
|
|
133.8
|
125.9
|
121.9
|
123.5
|
|
122.7
|
128.0
|
Trading portfolio assets
|
126.9
|
134.1
|
|
146.9
|
144.8
|
147.1
|
131.1
|
|
127.7
|
122.3
|
Derivative financial instrument assets
|
343.5
|
288.8
|
|
261.5
|
257.0
|
255.4
|
269.4
|
|
301.8
|
295.9
|
Financial assets at fair value through the income
statement
|
209.3
|
203.8
|
|
188.2
|
200.5
|
190.4
|
197.5
|
|
170.7
|
178.2
|
Cash collateral and settlement balances
|
128.5
|
132.0
|
|
88.1
|
115.9
|
108.5
|
109.7
|
|
97.5
|
121.8
|
Other assets
|
275.1
|
255.5
|
|
225.6
|
231.8
|
223.5
|
221.7
|
|
221.4
|
261.7
|
Total assets
|
1,250.6
|
1,159.0
|
|
1,044.1
|
1,075.9
|
1,046.8
|
1,052.9
|
|
1,041.8
|
1,107.9
|
Deposits at amortised cost
|
307.4
|
286.1
|
|
258.8
|
253.3
|
245.4
|
251.2
|
|
240.5
|
262.4
|
Derivative financial instrument liabilities
|
321.2
|
277.2
|
|
256.4
|
252.3
|
246.9
|
260.2
|
|
300.4
|
293.3
|
Loan: deposit ratio
|
54%
|
51%
|
|
52%
|
50%
|
50%
|
49%
|
|
51%
|
49%
|
Risk weighted assets
|
263.8
|
245.1
|
|
230.9
|
222.7
|
223.2
|
230.0
|
|
222.3
|
224.7
|
Period end allocated tangible equity
|
38.0
|
35.6
|
|
33.2
|
31.8
|
31.8
|
32.7
|
|
30.2
|
30.5
|
|
|
|
|
|
|
|
|
|
|
|
Performance measures
|
|
|
|
|
|
|
|
|
|
|
Return on average allocated tangible equity
|
8.4%
|
14.8%
|
|
9.9%
|
14.9%
|
14.9%
|
17.7%
|
|
5.8%
|
10.2%
|
Average allocated tangible equity (£bn)
|
37.3
|
35.1
|
|
32.9
|
31.8
|
32.4
|
32.3
|
|
30.5
|
30.6
|
Cost: income ratio
|
75%
|
63%
|
|
68%
|
61%
|
60%
|
56%
|
|
68%
|
60%
|
Loan loss rate (bps)
|
49
|
28
|
|
7
|
—
|
—
|
(7)
|
|
90
|
112
|
Net interest margin
|
4.52%
|
4.15%
|
|
4.14%
|
4.02%
|
3.96%
|
3.92%
|
|
3.41%
|
3.79%
|
1
The comparative capital and financial metrics relating to Q221 -
Q421 have been restated to reflect the impact of the Over-issuance
of Securities. See Basis of preparation on page 65 and Restatement of financial statements
(Note 1) on page 87 for more
information.
Analysis of Barclays International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Investment Bank
|
Q222
|
Q122
|
|
Q4211
|
Q3211
|
Q2211
|
Q121
|
|
Q420
|
Q320
|
Income statement information
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Net interest income
|
410
|
385
|
|
432
|
279
|
370
|
270
|
|
110
|
305
|
Net trading income
|
2,738
|
2,450
|
|
774
|
1,467
|
1,494
|
1,917
|
|
1,397
|
1,535
|
Net fee, commission and other income
|
885
|
1,103
|
|
1,426
|
1,383
|
1,115
|
1,407
|
|
1,131
|
1,065
|
Total income
|
4,033
|
3,938
|
|
2,632
|
3,129
|
2,979
|
3,594
|
|
2,638
|
2,905
|
Credit impairment (charges)/releases
|
(65)
|
33
|
|
73
|
128
|
229
|
43
|
|
(52)
|
(187)
|
Net operating income
|
3,968
|
3,971
|
|
2,705
|
3,257
|
3,208
|
3,637
|
|
2,586
|
2,718
|
Operating costs
|
(1,870)
|
(1,921)
|
|
(1,562)
|
(1,747)
|
(1,623)
|
(1,886)
|
|
(1,603)
|
(1,716)
|
UK bank levy
|
—
|
—
|
|
(128)
|
—
|
—
|
—
|
|
(226)
|
—
|
Litigation and conduct
|
(1,314)
|
(318)
|
|
(59)
|
(99)
|
(78)
|
(1)
|
|
2
|
(3)
|
Total operating expenses
|
(3,184)
|
(2,239)
|
|
(1,749)
|
(1,846)
|
(1,701)
|
(1,887)
|
|
(1,827)
|
(1,719)
|
Other net income
|
—
|
—
|
|
1
|
—
|
—
|
1
|
|
2
|
1
|
Profit before tax
|
784
|
1,732
|
|
957
|
1,411
|
1,507
|
1,751
|
|
761
|
1,000
|
Attributable profit
|
579
|
1,316
|
|
695
|
1,085
|
989
|
1,263
|
|
413
|
627
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet information
|
£bn
|
£bn
|
|
£bn
|
£bn
|
£bn
|
£bn
|
|
£bn
|
£bn
|
Loans and advances at amortised cost
|
125.8
|
109.6
|
|
100.0
|
93.8
|
91.0
|
94.3
|
|
92.4
|
96.8
|
Trading portfolio assets
|
126.7
|
134.0
|
|
146.7
|
144.7
|
147.0
|
130.9
|
|
127.5
|
122.2
|
Derivative financial instruments assets
|
343.4
|
288.7
|
|
261.5
|
256.9
|
255.3
|
269.4
|
|
301.7
|
295.9
|
Financial assets at fair value through the income
statement
|
209.2
|
203.8
|
|
188.1
|
200.4
|
190.3
|
197.3
|
|
170.4
|
177.9
|
Cash collateral and settlement balances
|
127.7
|
131.2
|
|
87.2
|
115.1
|
107.7
|
108.8
|
|
96.7
|
121.0
|
Other assets
|
237.2
|
222.5
|
|
195.8
|
200.4
|
192.5
|
190.8
|
|
194.9
|
228.9
|
Total assets
|
1,170.0
|
1,089.8
|
|
979.3
|
1,011.3
|
983.8
|
991.5
|
|
983.6
|
1,042.7
|
Deposits at amortised cost
|
229.5
|
214.7
|
|
189.4
|
185.8
|
178.2
|
185.2
|
|
175.2
|
195.6
|
Derivative financial instrument liabilities
|
321.2
|
277.1
|
|
256.4
|
252.2
|
246.8
|
260.2
|
|
300.3
|
293.2
|
Risk weighted assets
|
227.6
|
213.5
|
|
200.7
|
192.5
|
194.3
|
201.3
|
|
192.2
|
193.3
|
|
|
|
|
|
|
|
|
|
|
|
Performance measures
|
|
|
|
|
|
|
|
|
|
|
Return on average allocated tangible equity
|
7.1%
|
17.1%
|
|
9.7%
|
15.6%
|
14.0%
|
17.9%
|
|
6.3%
|
9.5%
|
Average allocated tangible equity (£bn)
|
32.7
|
30.8
|
|
28.7
|
27.8
|
28.4
|
28.2
|
|
26.3
|
26.4
|
Cost: income ratio
|
79%
|
57%
|
|
66%
|
59%
|
57%
|
53%
|
|
69%
|
59%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of total income
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
FICC
|
1,529
|
1,644
|
|
546
|
803
|
895
|
1,204
|
|
812
|
1,000
|
Equities
|
1,411
|
1,052
|
|
501
|
757
|
777
|
932
|
|
542
|
691
|
Global Markets
|
2,940
|
2,696
|
|
1,047
|
1,560
|
1,672
|
2,136
|
|
1,354
|
1,691
|
Advisory
|
236
|
185
|
|
287
|
253
|
218
|
163
|
|
232
|
90
|
Equity capital markets
|
37
|
47
|
|
158
|
186
|
226
|
243
|
|
104
|
122
|
Debt capital markets
|
281
|
416
|
|
511
|
532
|
429
|
453
|
|
418
|
398
|
Investment Banking fees
|
554
|
648
|
|
956
|
971
|
873
|
859
|
|
754
|
610
|
Corporate lending
|
(47)
|
125
|
|
176
|
168
|
38
|
206
|
|
186
|
232
|
Transaction banking
|
586
|
469
|
|
453
|
430
|
396
|
393
|
|
344
|
372
|
Corporate
|
539
|
594
|
|
629
|
598
|
434
|
599
|
|
530
|
604
|
Total income
|
4,033
|
3,938
|
|
2,632
|
3,129
|
2,979
|
3,594
|
|
2,638
|
2,905
|
1
The comparative capital and financial metrics relating to Q221 -
Q421 have been restated to reflect the impact of the Over-issuance
of Securities. See Basis of preparation on page 65 and Restatement of financial statements
(Note 1) on page 87 for more
information.
Analysis of Barclays International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer, Cards and Payments
|
Q222
|
Q122
|
|
Q421
|
Q321
|
Q221
|
Q121
|
|
Q420
|
Q320
|
Income statement information
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Net interest income
|
619
|
551
|
|
522
|
471
|
441
|
478
|
|
504
|
518
|
Net fee, commission, trading and other income
|
464
|
335
|
|
356
|
337
|
399
|
327
|
|
344
|
358
|
Total income
|
1,083
|
886
|
|
878
|
808
|
840
|
805
|
|
848
|
876
|
Credit impairment (charges)/releases
|
(144)
|
(134)
|
|
(96)
|
(110)
|
42
|
(21)
|
|
(239)
|
(183)
|
Net operating income
|
939
|
752
|
|
782
|
698
|
882
|
784
|
|
609
|
693
|
Operating costs
|
(667)
|
(584)
|
|
(598)
|
(563)
|
(545)
|
(552)
|
|
(530)
|
(511)
|
UK bank levy
|
—
|
—
|
|
(6)
|
—
|
—
|
—
|
|
(14)
|
—
|
Litigation and conduct
|
(5)
|
(195)
|
|
(25)
|
(1)
|
(62)
|
(20)
|
|
(11)
|
(25)
|
Total operating expenses
|
(672)
|
(779)
|
|
(629)
|
(564)
|
(607)
|
(572)
|
|
(555)
|
(536)
|
Other net income
|
5
|
8
|
|
2
|
15
|
13
|
8
|
|
7
|
8
|
Profit/(loss) before tax
|
272
|
(19)
|
|
155
|
149
|
288
|
220
|
|
61
|
165
|
Attributable profit/(loss)
|
204
|
(16)
|
|
123
|
106
|
218
|
168
|
|
28
|
155
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet information
|
£bn
|
£bn
|
|
£bn
|
£bn
|
£bn
|
£bn
|
|
£bn
|
£bn
|
Loans and advances at amortised cost
|
41.5
|
35.2
|
|
33.8
|
32.1
|
30.9
|
29.2
|
|
30.3
|
31.2
|
Total assets
|
80.6
|
69.2
|
|
64.8
|
64.6
|
63.0
|
61.4
|
|
58.2
|
65.2
|
Deposits at amortised cost
|
77.9
|
71.4
|
|
69.4
|
67.5
|
67.2
|
66.0
|
|
65.3
|
66.8
|
Risk weighted assets
|
36.2
|
31.6
|
|
30.2
|
30.2
|
29.0
|
28.8
|
|
30.1
|
31.4
|
|
|
|
|
|
|
|
|
|
|
|
Performance measures
|
|
|
|
|
|
|
|
|
|
|
Return on average allocated tangible equity
|
17.8%
|
(1.5)%
|
|
11.7%
|
10.5%
|
21.8%
|
16.5%
|
|
2.7%
|
14.7%
|
Average allocated tangible equity (£bn)
|
4.6
|
4.3
|
|
4.2
|
4.0
|
4.0
|
4.1
|
|
4.2
|
4.2
|
Cost: income ratio
|
62%
|
88%
|
|
72%
|
70%
|
72%
|
71%
|
|
65%
|
61%
|
Loan loss rate (bps)
|
132
|
145
|
|
105
|
127
|
—
|
27
|
|
286
|
211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analysis of total income
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
International Cards and Consumer Bank
|
691
|
538
|
|
552
|
490
|
517
|
533
|
|
576
|
600
|
Private Bank
|
245
|
214
|
|
200
|
188
|
214
|
179
|
|
174
|
171
|
Payments
|
147
|
134
|
|
126
|
130
|
109
|
93
|
|
98
|
105
|
Total income
|
1,083
|
886
|
|
878
|
808
|
840
|
805
|
|
848
|
876
|
Head Office
|
|
|
|
|
|
|
|
|
|
|
|
Q222
|
Q122
|
|
Q421
|
Q321
|
Q221
|
Q121
|
|
Q420
|
Q320
|
Income statement information
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Net interest income
|
—
|
66
|
|
(38)
|
(112)
|
(64)
|
(178)
|
|
(86)
|
(48)
|
Net fee, commission and other income
|
(132)
|
(43)
|
|
(11)
|
2
|
37
|
103
|
|
(85)
|
(79)
|
Total income
|
(132)
|
23
|
|
(49)
|
(110)
|
(27)
|
(75)
|
|
(171)
|
(127)
|
Credit impairment releases/(charges)
|
9
|
8
|
|
(5)
|
(1)
|
6
|
—
|
|
(31)
|
(5)
|
Net operating expenses
|
(123)
|
31
|
|
(54)
|
(111)
|
(21)
|
(75)
|
|
(202)
|
(132)
|
Operating costs
|
(60)
|
(85)
|
|
(152)
|
(95)
|
(341)
|
(71)
|
|
(213)
|
(69)
|
UK bank levy
|
—
|
—
|
|
—
|
—
|
—
|
—
|
|
(9)
|
—
|
Litigation and conduct
|
1
|
(1)
|
|
(3)
|
(19)
|
16
|
(9)
|
|
(42)
|
(23)
|
Total operating expenses
|
(59)
|
(86)
|
|
(155)
|
(114)
|
(325)
|
(80)
|
|
(264)
|
(92)
|
Other net income/(expenses)
|
2
|
(18)
|
|
11
|
78
|
8
|
123
|
|
8
|
10
|
Loss before tax
|
(180)
|
(73)
|
|
(198)
|
(147)
|
(338)
|
(32)
|
|
(458)
|
(214)
|
Attributable (loss)/profit
|
(170)
|
(292)
|
|
(159)
|
(134)
|
120
|
(25)
|
|
(381)
|
(284)
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet information
|
£bn
|
£bn
|
|
£bn
|
£bn
|
£bn
|
£bn
|
|
£bn
|
£bn
|
Total assets
|
19.8
|
19.9
|
|
19.0
|
18.5
|
18.3
|
17.7
|
|
18.6
|
19.3
|
Risk
weighted assets1
|
8.6
|
11.0
|
|
11.0
|
11.8
|
12.0
|
10.7
|
|
10.2
|
9.8
|
Period
end allocated tangible equity1
|
1.1
|
3.6
|
|
5.5
|
6.3
|
5.9
|
3.3
|
|
6.8
|
7.1
|
|
|
|
|
|
|
|
|
|
|
|
Performance measures1
|
|
|
|
|
|
|
|
|
|
|
Average allocated tangible equity (£bn)
|
1.7
|
3.6
|
|
5.1
|
6.5
|
4.2
|
4.3
|
|
7.3
|
7.6
|
1
The comparative capital and financial metrics relating to Q221 -
Q421 have been restated to reflect the impact of the Over-issuance
of Securities. See Basis of preparation on page 65 and Restatement of financial statements
(Note 1) on page 87 for more
information.
Performance Management
Margins and balances
|
|
Half year ended 30.06.22
|
Half year ended 30.06.21
|
|
Net interest income
|
Average customer assets
|
Net interest margin
|
Net interest income
|
Average customer assets
|
Net interest margin
|
|
£m
|
£m
|
%
|
£m
|
£m
|
%
|
Barclays UK
|
2,732
|
206,524
|
2.67
|
2,586
|
204,930
|
2.54
|
Barclays
International1
|
1,883
|
88,607
|
4.29
|
1,518
|
77,413
|
3.95
|
Total Barclays UK and Barclays International
|
4,615
|
295,131
|
3.15
|
4,104
|
282,343
|
2.93
|
Other2
|
148
|
|
|
(201)
|
|
|
Total Barclays Group
|
4,763
|
|
|
3,903
|
|
|
1
Barclays International margins include the lending related
investment bank business.
2
Other includes Head Office and the non-lending related investment
bank businesses not included in Barclays International
margins.
The
Group’s combined product and equity structural hedge notional
as at 30 June 2022 was £256bn (30 June 2021:
£198bn), with an average duration of close to 3 years (2021:
average duration close to 3 years). Gross structural hedge
contributions of £879m (H121: £689m) and net structural
hedge contributions of £83m (H121: £592m) are included in
Group net interest income. Gross structural hedge contributions
represent the absolute level of interest earned from the fixed
receipts on 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 30.06.22
|
£m
|
£m
|
%
|
Barclays UK
|
1,393
|
205,834
|
2.71
|
Barclays
International1
|
1,016
|
92,371
|
4.41
|
Total Barclays UK and Barclays International
|
2,409
|
298,205
|
3.24
|
|
|
|
|
Three months ended 31.03.22
|
|
|
|
Barclays UK
|
1,339
|
207,607
|
2.62
|
Barclays
International1
|
867
|
84,838
|
4.15
|
Total Barclays UK and Barclays International
|
2,206
|
292,445
|
3.06
|
|
|
|
|
Three months ended 31.12.21
|
|
|
|
Barclays UK
|
1,313
|
209,064
|
2.49
|
Barclays
International1
|
848
|
81,244
|
4.14
|
Total Barclays UK and Barclays International
|
2,161
|
290,308
|
2.95
|
|
|
|
|
Three months ended 30.09.21
|
|
|
|
Barclays UK
|
1,303
|
207,692
|
2.49
|
Barclays
International1
|
783
|
77,364
|
4.02
|
Total Barclays UK and Barclays International
|
2,086
|
285,056
|
2.90
|
|
|
|
|
Three months ended 30.06.21
|
|
|
|
Barclays UK
|
1,305
|
205,168
|
2.55
|
Barclays
International1
|
763
|
77,330
|
3.96
|
Total Barclays UK and Barclays International
|
2,068
|
282,498
|
2.94
|
1
Barclays International margins include the lending related
investment bank business.
Risk Management
Risk management and principal risks
The
roles and responsibilities of the business groups, Risk and
Compliance in the management of risk in the Group are defined in
the Enterprise Risk Management Framework. The purpose of the
framework is to identify the principal risks of the Group, the
process by which the Group sets its appetite for these risks in its
business activities, and the consequent limits which it places on
related risk taking. The framework identifies nine principal risks:
credit risk, market risk, treasury and capital risk, climate risk,
operational risk, model risk, conduct risk, reputation risk and
legal risk. Further detail on the Group’s principal risks and
previously identified material existing and emerging risks and how
such risks are managed is available in the Barclays PLC Annual
Report 2021 (pages 202 to 223), or online at
home.barclays/annualreport. There have been no significant changes
to these principal risks or previously identified material existing
and emerging risks in the period other than as set out
below.
Material existing and emerging risks
Set out
below are details of two additional material risks identified in
H122 which potentially impact one or more principal
risks.
Internal control over financial reporting and disclosure controls
and procedures
The
Group is subject to requirements under the Sarbanes-Oxley Act of
2002, as amended, to perform system and process evaluation and
testing of its internal control over financial reporting to allow
management to assess the effectiveness of its internal controls. In
connection with the offer and sale of securities by Barclays Bank
PLC in excess of the amounts registered under the 2019 F-3 and
Predecessor Shelf (see “Over-issuance of US securities under
Barclays Bank PLC's US shelf registration statements” below),
management has concluded that the Group had a material weakness in
relation to certain aspects of its internal control environment and
that, as a consequence, its internal control over financial
reporting as at 31 December 2021 was not effective under the
applicable Committee of Sponsoring Organizations Framework and its
disclosure controls and procedures were not effective as at such
date. The material weakness that has been identified relates to a
weakness in controls over the identification of external regulatory
limits related to securities issuance and monitoring against these
limits. As a result of this weakness, Barclays Bank PLC issued
securities in excess of the amounts under the US shelf registration
statements referred to above.
Remediation
efforts have begun and the Group is taking steps to strengthen
internal controls relating to securities issuance to address the
material weakness. However, internal control systems (no matter how
well designed) have inherent limitations and may not prevent or
detect further misstatements or errors (whether of a similar or
different character to the foregoing). If the Group fails to
maintain an effective internal control environment or its
disclosure controls and procedures are not effective, the Group
could suffer material misstatements in its financial statements and
fail to meet its reporting obligations, which could cause investors
to lose confidence in the Group's reported financial information.
This could in turn limit the Group's access to capital markets,
negatively impact its results of operations, and lead to a negative
impact on the trading price of its securities. Additionally,
ineffective internal control over financial reporting could expose
the Group to increased risk of fraud or misuse of corporate assets
and subject it to potential regulatory investigations and civil or
criminal sanctions. Any of the foregoing could have a material
adverse effect on Barclays Bank PLC’s and the Group's
business, financial condition, results of operations and reputation
as a frequent issuer in the securities markets.
Over-issuance of US securities under Barclays
Bank PLC's US shelf registration
statements
The
Group may be subject to claims for rescission or damages and
regulatory enforcement actions in connection with certain sales of
securities issued by Barclays Bank PLC materially in excess of the
amounts set forth in prior registration statements as set out under
“Internal control over financial reporting and disclosure
controls and procedures” above.
The
securities that were issued in excess of these amounts comprise
structured notes and exchange traded notes (ETNs). As such, certain
offers and sales were not made in compliance with the US Securities
Act of 1933, as amended (Securities Act), giving rise to rights of
rescission for certain purchasers of the securities. As a result,
Barclays Bank PLC has elected to make a rescission offer
(Rescission Offer) to eligible purchasers of the relevant affected
securities, which it intends to launch on 1 August
2022.
As
previously disclosed, the Group is conducting a review (the
Review), assisted by external counsel, of the facts and
circumstances relating to the sale of the relevant affected
securities in excess of amounts registered under such US shelf
registration statements and, among other things, the control
environment related to such sales. The Review is at an advanced
stage and reports on its progress have been made to the
Group’s management team, the Group Board, and regulators,
including the SEC Divisions of Enforcement and Corporation Finance.
Such reports have included, among other things: (i) an assessment
that the issuance of securities in excess of the maximum aggregate
offering price for BBPLC’s 2019 US Shelf resulted from a
failure to monitor issuances during the period in which Barclays
Bank PLC’s status changed from a “well-known seasoned
issuer” to an “ineligible issuer” for US
securities law purposes, which required Barclays Bank PLC to
pre-register a set amount of securities to be issued under its US
Shelf with the SEC; (ii) confirmation that the Review has not
identified any evidence of intentional misconduct; and (iii) the
discovery that, while the vast majority of the over-issuance
occurred under the 2019 US Shelf, a small portion of the
over-issuance also occurred under the Predecessor
Shelf.
The
Group is also conducting an internal review involving a five-year
look-back at limits in other issuance programmes. Management has
assessed as remote the risk of material financial impact associated
with issuance limits other than where pre-registration of
securities is required; therefore the focus of the review has been
on programmes with external regulatory limits related to securities
issuance. This review has not identified any other breach of an
external regulatory limit in any issuance programme used by a
member of the Group. Management has identified an instance where a
limit imposed solely for internal governance reasons was exceeded
when taking into account a large security held on the Group's own
balance sheet issued under a non-SEC registered debt issuance
programme which did not have an external limit, although the breach
of the internal limit did not give rise to any rights on the part
of investors and did not constitute a material weakness.
Nevertheless, there can be no assurance that the ongoing internal
or external counsel reviews will not identify additional facts and
information that could be material to an evaluation of this aspect
of the Group's control environment.
Under
Section 12(a)(1) of the Securities Act, certain purchasers of
unregistered securities have a right to recover, upon the tender of
such security, the consideration paid for such security with
interest, less the amount of any income received, or damages if the
purchaser no longer owns the security (Rescission Price). Pursuant
to the Rescission Offer, Barclays Bank PLC will offer to repurchase
the relevant affected securities at the Rescission Price. Although
the Rescission Offer is expected to reduce liability with respect
to potential private civil claims, it will not necessarily prevent
such claims from being asserted against Barclays Bank PLC and/or
its affiliates, including claims under applicable US federal
securities laws.
Further,
the Rescission Offer does not bar the SEC or other authorities from
pursuing enforcement actions against Barclays Bank PLC and its
affiliates, which are expected to result in fines, penalties and/or
other sanctions. The Group is engaged with, and responding to
inquiries and requests for information from, various regulators,
including the SEC. The SEC’s investigation into this matter
is at an advanced stage and the Group has had preliminary
discussions with the staff of the SEC’s Division of
Enforcement about resolving this matter.
As at
30 June 2022, Barclays PLC has recognised a balance sheet provision
of £1,757m (December 2021: £220m) in relation to this
matter, out of which £1,592m (December 2021: £220m)
relates to the over-issuance of structured notes and £165m
(December 2021: nil) relates to liabilities that could be incurred
arising out of ongoing discussions in respect of a potential SEC
resolution. A contingent liability exists in relation to the
over-issuance of ETNs due to evidentiary challenges and the high
level of trading in the securities. A contingent liability also
exists in relation to any potential civil claims or enforcement
actions taken against Barclays Bank PLC and its affiliates but
Barclays Bank PLC is unable to assess the likelihood of liabilities
that may arise out of such claims or actions, there is currently no
indication of the exact timing for resolution and it is not
practicable to provide an estimate of the financial
effects.
The
final cost of the Rescission Offer will be impacted by a number of
factors, including prevailing market conditions. Prior to the
completion of the Rescission Offer, the amount of the provision in
relation to the over-issuance of structured notes will fluctuate,
perhaps materially, due, in part, to the volatility of the market
prices for the structured notes subject to the Rescission Offer.
While Barclays Bank PLC and/or its affiliates have entered into
hedging arrangements designed to minimise the volatility, such
arrangements cannot by their very nature completely hedge the
exposures, which may mean the final impact of the Rescission Offer
may materially differ from the £1,592m provision reflected as
at 30 June 2022. In addition, the hedging arrangements may be
modified, may not prove effective (in existing or modified form),
may expire prior to the end of the Rescission Offer and do not
cover any other losses arising out of potential private civil
claims or enforcement actions. The provision of £165m in
relation to the potential SEC resolution may also be impacted by
the ultimate outcome of the ongoing discussions. Any of the
foregoing could result in material additional losses for the
Group.
Any
liabilities, claims or actions in connection with the over-issuance
of securities under the 2019 F-3 and the Predecessor Shelf could
have a material adverse effect on Barclays Bank PLC's and the
Group's business, financial condition, results of operations and
reputation as a frequent issuer in the securities
markets.
Management
has concluded that, by virtue of the fact that there was a weakness
in controls over the identification of external regulatory limits
related to securities issuance and monitoring against these limits,
the Group had a material weakness in relation to certain aspects of
its internal control environment and, as a consequence, its
internal control over financial reporting and disclosure controls
and procedures as at 31 December 2021 were not effective. Further
details on such material weakness are set out under “Internal
control over financial reporting and disclosure controls and
procedures” above.
Credit Risk
Loans and advances at amortised cost by stage
The
table below presents an analysis of loans and advances at amortised
cost by gross exposure, impairment allowance, impairment charge and
coverage ratio by stage allocation and business segment as at 30
June 2022. Also included are off-balance sheet loan commitments and
financial guarantee contracts by gross exposure, impairment
allowance and coverage ratio by stage allocation as at 30 June
2022.
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 expected credit loss
(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 30.06.22
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
Barclays UK
|
160,110
|
23,805
|
3,012
|
186,927
|
|
218
|
780
|
753
|
1,751
|
185,176
|
Barclays International
|
32,053
|
3,251
|
1,674
|
36,978
|
|
679
|
821
|
826
|
2,326
|
34,652
|
Head Office
|
3,852
|
215
|
688
|
4,755
|
|
2
|
16
|
346
|
364
|
4,391
|
Total Barclays Group retail
|
196,015
|
27,271
|
5,374
|
228,660
|
|
899
|
1,617
|
1,925
|
4,441
|
224,219
|
Barclays UK
|
35,915
|
2,267
|
862
|
39,044
|
|
131
|
49
|
117
|
297
|
38,747
|
Barclays International
|
120,470
|
11,916
|
1,022
|
133,408
|
|
254
|
198
|
287
|
739
|
132,669
|
Head Office
|
186
|
1
|
23
|
210
|
|
—
|
—
|
21
|
21
|
189
|
Total Barclays Group wholesale1
|
156,571
|
14,184
|
1,907
|
172,662
|
|
385
|
247
|
425
|
1,057
|
171,605
|
Total loans and advances at amortised cost
|
352,586
|
41,455
|
7,281
|
401,322
|
|
1,284
|
1,864
|
2,350
|
5,498
|
395,824
|
Off-balance
sheet loan commitments and financial guarantee
contracts2
|
373,544
|
24,429
|
1,146
|
399,119
|
|
275
|
233
|
17
|
525
|
398,594
|
Total3
|
726,130
|
65,884
|
8,427
|
800,441
|
|
1,559
|
2,097
|
2,367
|
6,023
|
794,418
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 30.06.22
|
|
Half year ended 30.06.22
|
|
|
Coverage ratio
|
|
Loan impairment charge/(release) and loan loss rate
|
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
|
Loan impairment charge/(release)
|
Loan loss rate
|
|
|
%
|
%
|
%
|
%
|
|
£m
|
bps
|
|
Barclays UK
|
0.1
|
3.3
|
25.0
|
0.9
|
|
|
14
|
|
2
|
|
Barclays International
|
2.1
|
25.3
|
49.3
|
6.3
|
|
|
253
|
|
138
|
|
Head Office
|
0.1
|
7.4
|
50.3
|
7.7
|
|
|
(18)
|
|
—
|
|
Total Barclays Group retail
|
0.5
|
5.9
|
35.8
|
1.9
|
|
|
249
|
|
22
|
|
Barclays UK
|
0.4
|
2.2
|
13.6
|
0.8
|
|
|
36
|
|
19
|
|
Barclays International
|
0.2
|
1.7
|
28.1
|
0.6
|
|
|
75
|
|
11
|
|
Head Office
|
—
|
—
|
91.3
|
10.0
|
|
|
—
|
|
—
|
|
Total Barclays Group wholesale1
|
0.2
|
1.7
|
22.3
|
0.6
|
|
|
111
|
|
13
|
|
Total loans and advances at amortised cost
|
0.4
|
4.5
|
32.3
|
1.4
|
|
|
360
|
|
18
|
|
Off-balance
sheet loan commitments and financial guarantee
contracts2
|
0.1
|
1.0
|
1.5
|
0.1
|
|
|
(42)
|
|
|
|
Other
financial assets subject to impairment3
|
|
|
|
|
|
|
23
|
|
|
|
Total4
|
0.2
|
3.2
|
28.1
|
0.8
|
|
|
341
|
|
|
|
1
Includes Wealth UK and Private Banking exposures measured on an
individual customer exposure basis, and excludes Business Banking
exposures, including lending under the government backed Bounce
Back Loan Scheme (BBLS) of £8.1bn that are managed on a
collective basis and reported within BUK Retail. The net impact is
a difference in total exposure of £4.3bn of balances reported
as wholesale loans on page 35
in the Loans and advances at amortised cost by product
disclosure.
2
Excludes loan commitments and financial guarantees of £21.1bn
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
£197.3bn and impairment allowance of £149m. This
comprises £11m ECL on £195.0bn Stage 1 assets, £2m
on £2.1bn Stage 2 fair value through other comprehensive
income assets, cash collateral and settlement balances and
£136m on £143m Stage 3 other assets.
4
The loan loss rate is 17bps after applying the total impairment
charge of £341m.
|
Gross exposure
|
|
Impairment allowance
|
Net exposure
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
As at 31.12.21
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
Barclays UK
|
160,695
|
22,779
|
2,915
|
186,389
|
|
261
|
949
|
728
|
1,938
|
184,451
|
Barclays International
|
25,981
|
2,691
|
1,566
|
30,238
|
|
603
|
795
|
858
|
2,256
|
27,982
|
Head Office
|
3,735
|
429
|
705
|
4,869
|
|
2
|
36
|
347
|
385
|
4,484
|
Total Barclays Group retail
|
190,411
|
25,899
|
5,186
|
221,496
|
|
866
|
1,780
|
1,933
|
4,579
|
216,917
|
Barclays UK
|
35,571
|
1,917
|
969
|
38,457
|
|
153
|
43
|
111
|
307
|
38,150
|
Barclays International
|
92,341
|
13,275
|
1,059
|
106,675
|
|
187
|
192
|
458
|
837
|
105,838
|
Head Office
|
542
|
2
|
21
|
565
|
|
—
|
—
|
19
|
19
|
546
|
Total Barclays Group wholesale1
|
128,454
|
15,194
|
2,049
|
145,697
|
|
340
|
235
|
588
|
1,163
|
144,534
|
Total loans and advances at amortised cost
|
318,865
|
41,093
|
7,235
|
367,193
|
|
1,206
|
2,015
|
2,521
|
5,742
|
361,451
|
Off-balance
sheet loan commitments and financial guarantee
contracts2
|
312,142
|
34,815
|
1,298
|
348,255
|
|
217
|
302
|
23
|
542
|
347,713
|
Total3
|
631,007
|
75,908
|
8,533
|
715,448
|
|
1,423
|
2,317
|
2,544
|
6,284
|
709,164
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 31.12.21
|
|
Half year ended 31.12.21
|
|
|
Coverage ratio
|
|
Loan impairment charge/(release) and loan loss rate
|
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
|
Loan impairment charge/(release)
|
Loan loss rate
|
|
|
%
|
%
|
%
|
%
|
|
£m
|
bps
|
|
Barclays UK
|
0.2
|
4.2
|
25.0
|
1.0
|
|
|
(227)
|
|
—
|
|
Barclays International
|
2.3
|
29.5
|
54.8
|
7.5
|
|
|
181
|
|
60
|
|
Head Office
|
0.1
|
8.4
|
49.2
|
7.9
|
|
|
—
|
|
—
|
|
Total Barclays Group retail
|
0.5
|
6.9
|
37.3
|
2.1
|
|
|
(46)
|
|
—
|
|
Barclays UK
|
0.4
|
2.2
|
11.5
|
0.8
|
|
|
122
|
|
32
|
|
Barclays International
|
0.2
|
1.4
|
43.2
|
0.8
|
|
|
(197)
|
|
—
|
|
Head Office
|
—
|
—
|
90.5
|
3.4
|
|
|
—
|
|
—
|
|
Total Barclays Group wholesale1
|
0.3
|
1.5
|
28.7
|
0.8
|
|
|
(75)
|
|
—
|
|
Total loans and advances at amortised cost
|
0.4
|
4.9
|
34.8
|
1.6
|
|
|
(121)
|
|
—
|
|
Off-balance
sheet loan commitments and financial guarantee
contracts2
|
0.1
|
0.9
|
1.8
|
0.2
|
|
|
(514)
|
|
|
|
Other
financial assets subject to impairment3
|
|
|
|
|
|
|
(18)
|
|
|
|
Total
|
0.2
|
3.1
|
29.8
|
0.9
|
|
|
(653)
|
|
|
|
1
Includes Wealth and Private Banking exposures measured on an
individual basis, and excludes Business Banking exposures,
including BBLS of £9.4bn that are managed on a collective
basis and reported within Barclays UK Retail. The net impact is a
difference in total exposure of £6.0bn of balances reported as
wholesale loans on page 35 in
the Loans and advances at amortised cost by product
disclosure.
2
Excludes loan commitments and financial guarantees of £18.8bn
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
£155.2bn and impairment allowance of £114m. This
comprises £6m ECL on £154.9bn Stage 1 assets, £1m on
£157.0bn Stage 2 fair value through other comprehensive income
assets, other assets and cash collateral and settlement balances
and £107m on £110m Stage 3 other assets.
Loans and advances at amortised cost by product
The
table below presents a breakdown of loans and advances at amortised
cost and the impairment allowance with stage allocation by asset
classification.
|
|
Stage 2
|
|
|
As at 30.06.22
|
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
|
150,883
|
16,269
|
1,700
|
765
|
18,734
|
2,110
|
171,727
|
Credit cards, unsecured loans and other retail lending
|
43,628
|
5,918
|
303
|
273
|
6,494
|
2,510
|
52,632
|
Wholesale loans
|
158,075
|
15,814
|
84
|
329
|
16,227
|
2,661
|
176,963
|
Total
|
352,586
|
38,001
|
2,087
|
1,367
|
41,455
|
7,281
|
401,322
|
|
|
|
|
|
|
|
|
Impairment allowance
|
|
|
|
|
|
|
|
Home loans
|
19
|
29
|
6
|
6
|
41
|
398
|
458
|
Credit cards, unsecured loans and other retail lending
|
860
|
1,329
|
100
|
126
|
1,555
|
1,448
|
3,863
|
Wholesale loans
|
405
|
264
|
2
|
2
|
268
|
504
|
1,177
|
Total
|
1,284
|
1,622
|
108
|
134
|
1,864
|
2,350
|
5,498
|
|
|
|
|
|
|
|
|
Net exposure
|
|
|
|
|
|
|
|
Home loans
|
150,864
|
16,240
|
1,694
|
759
|
18,693
|
1,712
|
171,269
|
Credit cards, unsecured loans and other retail lending
|
42,768
|
4,589
|
203
|
147
|
4,939
|
1,062
|
48,769
|
Wholesale loans
|
157,670
|
15,550
|
82
|
327
|
15,959
|
2,157
|
175,786
|
Total
|
351,302
|
36,379
|
1,979
|
1,233
|
39,591
|
4,931
|
395,824
|
|
|
|
|
|
|
|
|
Coverage ratio
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
Home loans
|
—
|
0.2
|
0.4
|
0.8
|
0.2
|
18.9
|
0.3
|
Credit cards, unsecured loans and other retail lending
|
2.0
|
22.5
|
33.0
|
46.2
|
23.9
|
57.7
|
7.3
|
Wholesale loans
|
0.3
|
1.7
|
2.4
|
0.6
|
1.7
|
18.9
|
0.7
|
Total
|
0.4
|
4.3
|
5.2
|
9.8
|
4.5
|
32.3
|
1.4
|
|
|
|
|
|
|
|
|
As at 31.12.21
|
|
|
|
|
|
|
|
Gross exposure
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Home loans
|
148,058
|
17,133
|
1,660
|
707
|
19,500
|
2,122
|
169,680
|
Credit cards, unsecured loans and other retail lending
|
37,840
|
5,102
|
300
|
248
|
5,650
|
2,332
|
45,822
|
Wholesale loans
|
132,967
|
15,246
|
306
|
391
|
15,943
|
2,781
|
151,691
|
Total
|
318,865
|
37,481
|
2,266
|
1,346
|
41,093
|
7,235
|
367,193
|
|
|
|
|
|
|
|
|
Impairment allowance
|
|
|
|
|
|
|
|
Home loans
|
19
|
46
|
6
|
7
|
59
|
397
|
475
|
Credit cards, unsecured loans and other retail lending
|
824
|
1,493
|
85
|
123
|
1,701
|
1,504
|
4,029
|
Wholesale loans
|
363
|
248
|
4
|
3
|
255
|
620
|
1,238
|
Total
|
1,206
|
1,787
|
95
|
133
|
2,015
|
2,521
|
5,742
|
|
|
|
|
|
|
|
|
Net exposure
|
|
|
|
|
|
|
|
Home loans
|
148,039
|
17,087
|
1,654
|
700
|
19,441
|
1,725
|
169,205
|
Credit cards, unsecured loans and other retail lending
|
37,016
|
3,609
|
215
|
125
|
3,949
|
828
|
41,793
|
Wholesale loans
|
132,604
|
14,998
|
302
|
388
|
15,688
|
2,161
|
150,453
|
Total
|
317,659
|
35,694
|
2,171
|
1,213
|
39,078
|
4,714
|
361,451
|
|
|
|
|
|
|
|
|
Coverage ratio
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
Home loans
|
—
|
0.3
|
0.4
|
1.0
|
0.3
|
18.7
|
0.3
|
Credit cards, unsecured loans and other retail lending
|
2.2
|
29.3
|
28.3
|
49.6
|
30.1
|
64.5
|
8.8
|
Wholesale loans
|
0.3
|
1.6
|
1.3
|
0.8
|
1.6
|
22.3
|
0.8
|
Total
|
0.4
|
4.8
|
4.2
|
9.9
|
4.9
|
34.8
|
1.6
|
Loans and advances at amortised cost by selected
sectors
The
table below presents a breakdown of drawn exposure and impairment
allowance for loans and advances at amortised cost with stage
allocation for selected industry sectors within the wholesale loans
portfolio. As the nature of macroeconomic uncertainty has evolved
from the COVID-19 pandemic towards high inflation, supply chain
constraints and consumer demand headwinds, so has the selected
population under management focus.
The
gross loans and advances to selected sectors have remained stable
over the year. The small increase in provisions is informed by the
improved macroeconomic outlook used in the Q222 scenario refresh,
offset by management judgments to reflect the risk of uncertainty
still prevailing within these sectors. The wholesale portfolio also
benefits from a hedge protection programme that enables effective
risk management against credit losses. An additional £0.1bn
(December 2021: £0.1bn) impairment allowance has been applied
to the undrawn exposures not included in the table
below.
|
Gross exposure
|
|
Impairment allowance
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
As at 30.06.22
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
Autos
|
914
|
370
|
2
|
1,286
|
|
10
|
5
|
—
|
15
|
Consumer manufacture
|
3,498
|
1,587
|
215
|
5,300
|
|
45
|
27
|
47
|
119
|
Discretionary retail and wholesale
|
5,811
|
1,311
|
240
|
7,362
|
|
34
|
21
|
45
|
100
|
Hospitality and leisure
|
3,817
|
1,755
|
352
|
5,924
|
|
33
|
35
|
41
|
109
|
Passenger travel
|
807
|
318
|
107
|
1,232
|
|
11
|
5
|
12
|
28
|
Real estate
|
14,001
|
2,509
|
550
|
17,060
|
|
89
|
45
|
107
|
241
|
Steel and aluminium manufacturers
|
610
|
75
|
7
|
692
|
|
6
|
1
|
1
|
8
|
Total
|
29,458
|
7,925
|
1,473
|
38,856
|
|
228
|
139
|
253
|
620
|
Total of wholesale exposures (%)
|
19%
|
49%
|
55%
|
22%
|
|
56%
|
52%
|
50%
|
53%
|
|
|
|
|
|
|
|
|
|
|
|
Gross exposure
|
|
Impairment allowance
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
As at 31.12.21
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
Autos
|
656
|
295
|
2
|
953
|
|
3
|
3
|
—
|
6
|
Consumer manufacture
|
3,904
|
1,304
|
211
|
5,419
|
|
18
|
22
|
43
|
83
|
Discretionary retail and wholesale
|
5,413
|
1,197
|
230
|
6,840
|
|
47
|
20
|
54
|
121
|
Hospitality and leisure
|
4,348
|
1,613
|
384
|
6,345
|
|
28
|
33
|
44
|
105
|
Passenger travel
|
856
|
285
|
143
|
1,284
|
|
30
|
8
|
40
|
78
|
Real estate
|
13,620
|
3,314
|
518
|
17,452
|
|
65
|
53
|
93
|
211
|
Steel and aluminium manufacturers
|
415
|
75
|
6
|
496
|
|
2
|
3
|
1
|
6
|
Total
|
29,212
|
8,083
|
1,494
|
38,789
|
|
193
|
142
|
275
|
610
|
Total of wholesale exposures (%)
|
22%
|
51%
|
54%
|
26%
|
|
53%
|
56%
|
44%
|
49%
|
UK
Commercial real estate exposure continues to remain well
collateralised, however it has been included within the latest
selected sector scoping as the broader real estate sector remains
under pressure due to pricing and affordability concerns, as well
as construction input costs and supply chain issues adding to the
uncertainty, in particular across non-investment grade
exposures.
The
coverage ratio for selected sectors has broadly remained consistent
at 1.6% as at 30 June 2022. Non-default coverage has marginally
increased from 0.9% as at 31 December 2021 to 1.0% as at 30 June
2022.
Movement in gross exposures and impairment allowance including
provisions for loan commitments and financial
guarantees
The
following tables present a reconciliation of the opening to the
closing balance of the exposure and impairment allowance. An
explanation of the methodology used to determine credit impairment
provisions is included in the Barclays PLC Annual Report 2021 (Page
348). Transfers between stages in the table have been reflected as
if they had taken place at the beginning of the year. The movements
are measured over a 6-month period.
Loans and advances at amortised cost
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
|
Gross exposure
|
ECL
|
Gross exposure
|
ECL
|
Gross exposure
|
ECL
|
Gross exposure
|
ECL
|
Home loans
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
As at 1 January 2022
|
148,058
|
19
|
19,500
|
59
|
2,122
|
397
|
169,680
|
475
|
Transfers from Stage 1 to Stage 2
|
(5,725)
|
(1)
|
5,725
|
1
|
—
|
—
|
—
|
—
|
Transfers from Stage 2 to Stage 1
|
5,131
|
18
|
(5,131)
|
(18)
|
—
|
—
|
—
|
—
|
Transfers to Stage 3
|
(197)
|
—
|
(234)
|
(5)
|
431
|
5
|
—
|
—
|
Transfers from Stage 3
|
19
|
1
|
133
|
3
|
(152)
|
(4)
|
—
|
—
|
Business
activity in the period1
|
14,723
|
4
|
339
|
1
|
1
|
—
|
15,063
|
5
|
Refinements to models used for calculation
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
Net drawdowns, repayments, net re-measurement and movement due to
exposure and risk parameter changes
|
(4,151)
|
(22)
|
(506)
|
2
|
(69)
|
16
|
(4,726)
|
(4)
|
Final repayments
|
(6,975)
|
—
|
(1,092)
|
(2)
|
(210)
|
(3)
|
(8,277)
|
(5)
|
Disposals
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
Write-offs2
|
—
|
—
|
—
|
—
|
(13)
|
(13)
|
(13)
|
(13)
|
As at 30 June 20223
|
150,883
|
19
|
18,734
|
41
|
2,110
|
398
|
171,727
|
458
|
|
|
|
|
|
|
|
|
|
Credit cards, unsecured loans and other retail lending
|
As at 1 January 2022
|
37,840
|
824
|
5,650
|
1,701
|
2,332
|
1,504
|
45,822
|
4,029
|
Transfers from Stage 1 to Stage 2
|
(2,572)
|
(67)
|
2,572
|
67
|
—
|
—
|
—
|
—
|
Transfers from Stage 2 to Stage 1
|
1,689
|
422
|
(1,689)
|
(422)
|
—
|
—
|
—
|
—
|
Transfers to Stage 3
|
(444)
|
(11)
|
(516)
|
(222)
|
960
|
233
|
—
|
—
|
Transfers from Stage 3
|
30
|
13
|
49
|
9
|
(79)
|
(22)
|
—
|
—
|
Business
activity in the period1
|
8,231
|
354
|
294
|
32
|
20
|
5
|
8,545
|
391
|
Refinements
to models used for calculation4
|
—
|
43
|
—
|
187
|
—
|
96
|
—
|
326
|
Net
drawdowns, repayments, net re-measurement and movement due to
exposure and risk parameter changes5
|
1,678
|
(691)
|
413
|
240
|
94
|
285
|
2,185
|
(166)
|
Final repayments
|
(2,673)
|
(23)
|
(251)
|
(27)
|
(140)
|
(29)
|
(3,064)
|
(79)
|
Disposals6
|
(151)
|
(4)
|
(28)
|
(10)
|
(122)
|
(69)
|
(301)
|
(83)
|
Write-offs2
|
—
|
—
|
—
|
—
|
(555)
|
(555)
|
(555)
|
(555)
|
As at 30 June 20223
|
43,628
|
860
|
6,494
|
1,555
|
2,510
|
1,448
|
52,632
|
3,863
|
1
Business activity in the period does not include additional
drawdowns on the existing facility which are reported under 'Net
drawdowns, repayments, net re-measurement and movements due to
exposure and risk parameter changes'. Business activity reported
within Credit cards, unsecured loans and other retail lending
portfolio includes GAP portfolio acquisition in US cards of
£2.7bn.
2
In H122, gross write-offs amounted to £768m (H121:
£1,001m) and post write-off recoveries amounted to £36m
(H121: £31m). Net write-offs represent gross write-offs less
post write-off recoveries and amounted to £732m (H121:
£970m).
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
£197.3bn (December 21: £155.2bn) and an impairment
allowance of £149m (December 21: £114m). This comprises
£11m ECL (December 21: £6m) on £195.0bn stage 1
assets (December 21: £154.9bn), £2m (December 21:
£1m) on £2.1bn stage 2 fair value through other
comprehensive income assets, other assets and cash collateral and
settlement balances (December 21: £0.2bn) and £136m
(FY21: £107m) on £143m stage 3 other assets (December 21:
£110m).
4
Refinements to models used for calculation reported within Credit
cards, unsecured loans and other retail lending portfolio include a
£0.3bn movement in US cards. These reflect methodology changes
made during the year. Barclays continually review the output of
models to determine accuracy of the ECL calculation including
review of model monitoring, external benchmarking and experience of
model operation over an extended period of time. This ensures that
the models used continue to reflect the risks inherent across the
businesses.
5
Transfers and risk parameter changes include a £0.2bn
(December 21: £0.3bn) net release in ECL arising from a
reclassification of £1.4bn (December 21: £1.9bn) gross
loans and advances from Stage 2 to Stage 1 in Credit cards,
unsecured loans and other retail lending portfolio. The
reclassification followed a review of back-testing of results which
indicated that accuracy of origination probability of default
characteristics required management adjustments to correct. The
re-classification was first established in Q220.
6
The £0.3bn disposals reported within Credit cards, unsecured
loans and other retail lending portfolio includes £0.2bn sale
of NFL portfolio within US cards and £0.1bn of debt sales
undertaken during the year.
Loans and advances at amortised cost
|
|
|
|
|
|
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
|
Gross exposure
|
ECL
|
Gross exposure
|
ECL
|
Gross exposure
|
ECL
|
Gross exposure
|
ECL
|
Wholesale loans
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
As at 1 January 2022
|
132,967
|
363
|
15,943
|
255
|
2,781
|
620
|
151,691
|
1,238
|
Transfers from Stage 1 to Stage 2
|
(5,129)
|
(29)
|
5,129
|
29
|
—
|
—
|
—
|
—
|
Transfers from Stage 2 to Stage 1
|
5,544
|
41
|
(5,544)
|
(41)
|
—
|
—
|
—
|
—
|
Transfers to Stage 3
|
(676)
|
(3)
|
(405)
|
(6)
|
1,081
|
9
|
—
|
—
|
Transfers from Stage 3
|
114
|
9
|
200
|
17
|
(314)
|
(26)
|
—
|
—
|
Business
activity in the period1
|
28,927
|
40
|
1,670
|
14
|
108
|
14
|
30,705
|
68
|
Refinements
to models used for calculation2
|
—
|
(66)
|
—
|
(42)
|
—
|
(374)
|
—
|
(482)
|
Net
drawdowns, repayments, net re-measurement and movement due to
exposure and risk parameter changes3
|
12,529
|
79
|
1,048
|
70
|
(634)
|
555
|
12,943
|
704
|
Final repayments
|
(16,201)
|
(29)
|
(1,783)
|
(28)
|
(115)
|
(48)
|
(18,099)
|
(105)
|
Disposals4
|
—
|
—
|
(31)
|
—
|
(46)
|
(46)
|
(77)
|
(46)
|
Write-offs5
|
—
|
—
|
—
|
—
|
(200)
|
(200)
|
(200)
|
(200)
|
As at 30 June 20226
|
158,075
|
405
|
16,227
|
268
|
2,661
|
504
|
176,963
|
1,177
|
|
|
|
|
|
|
|
|
|
Reconciliation of ECL movement to impairment charge/(release) for
the period
|
£m
|
Home loans
|
|
|
|
|
|
|
|
(4)
|
Credit cards, unsecured loans and other retail lending
|
|
472
|
Wholesale loans
|
|
185
|
ECL movement excluding assets derecognised due to disposals and
write-offs
|
|
653
|
Recoveries
and reimbursements7
|
|
(47)
|
Exchange
and other adjustments8
|
|
(246)
|
Impairment release on loan commitments and other financial
guarantees
|
|
(42)
|
Impairment
charge on other financial assets6
|
|
23
|
Income statement charge for the period
|
|
341
|
1
Business activity in the period does not include additional
drawdowns on the existing facility which are reported under 'Net
drawdowns, repayments, net re-measurement and movements due to
exposure and risk parameter changes'.
2
Refinements to models used for calculation reported within
Wholesale loans relates to a £0.5bn movement in Business
Banking. This relates to an update in the underlying ECL model that
now fully recognises the 100% government guarantee against Barclays
Bounce Back Loans exposure.
3
"Net drawdowns, repayments, net re-measurement and movements due to
exposure and risk parameter changes" reported within Wholesale
loans also include assets of £0.5bn de-recognised due to
payment received on defaulted loans from government guarantees
issued under government’s Bounce Back Loans
Scheme.
4
The £0.1bn disposals reported within Wholesale loans relates
to debt sales undertaken during the year.
5
In H122, gross write-offs amounted to £768m (H121:
£1,001m) and post write-off recoveries amounted to £36m
(H121: £31m). Net write-offs represent gross write-offs less
post write-off recoveries and amounted to £732m (H121:
£970m).
6
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
£197.3bn (December 21: £155.2bn) and impairment allowance
of £149m (December 21: £114m). This comprises £11m
ECL (December 21: £6m) on £195.0bn stage 1 assets
(December 21: £154.9bn), £2m (December 21: £1m) on
£2.1bn stage 2 fair value through other comprehensive income
assets, other assets and cash collateral and settlement balances
(December 21: £157.0bn) and £136m (December 21:
£107m) on £143m stage 3 other assets (December 21:
£110m).
7
Recoveries and reimbursements includes a net gain in relation to
reimbursements from financial guarantee contracts held with third
parties of £11m (H121 loss: £216m) and post write off
recoveries of £36m (H121: £31m).
8
Exchange and other adjustments includes foreign exchange and
interest and fees in suspense.
Loan commitments and financial guarantees
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
|
Gross
exposure
|
ECL
|
Gross
exposure
|
ECL
|
Gross
exposure
|
ECL
|
Gross
exposure
|
ECL
|
Home loans
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
As at 1 January 2022
|
10,833
|
—
|
532
|
—
|
3
|
—
|
11,368
|
—
|
Net transfers between stages
|
39
|
—
|
(39)
|
—
|
—
|
—
|
—
|
—
|
Business activity in the period
|
8,146
|
—
|
—
|
—
|
—
|
—
|
8,146
|
—
|
Net drawdowns, repayments, net re-measurement and movement due to
exposure and risk parameter changes
|
(6,354)
|
—
|
(12)
|
—
|
—
|
—
|
(6,366)
|
—
|
Limit management and final repayments
|
(172)
|
—
|
(22)
|
—
|
—
|
—
|
(194)
|
—
|
As at 30 June 2022
|
12,492
|
—
|
459
|
—
|
3
|
—
|
12,954
|
—
|
|
|
|
|
|
|
|
|
|
Credit cards, unsecured loans and other retail lending
|
As at 1 January 2022
|
122,819
|
50
|
5,718
|
61
|
218
|
20
|
128,755
|
131
|
Net transfers between stages
|
(1,277)
|
23
|
935
|
(18)
|
342
|
(5)
|
—
|
—
|
Business activity in the period
|
26,892
|
1
|
212
|
—
|
—
|
—
|
27,104
|
1
|
Net drawdowns, repayments, net re-measurement and movement due to
exposure and risk parameter changes
|
9,385
|
3
|
(1,267)
|
20
|
(288)
|
2
|
7,830
|
25
|
Limit management and final repayments
|
(3,740)
|
(1)
|
(209)
|
(3)
|
(36)
|
—
|
(3,985)
|
(4)
|
As at 30 June 2022
|
154,079
|
76
|
5,389
|
60
|
236
|
17
|
159,704
|
153
|
|
|
|
|
|
|
|
|
|
Wholesale loans
|
|
|
|
|
|
|
|
|
As at 1 January 2022
|
178,490
|
167
|
28,565
|
241
|
1,077
|
3
|
208,132
|
411
|
Net transfers between stages
|
9,775
|
36
|
(9,709)
|
(37)
|
(66)
|
1
|
—
|
—
|
Business activity in the period
|
37,358
|
19
|
2,864
|
24
|
1
|
—
|
40,223
|
43
|
Net drawdowns, repayments, net re-measurement and movement due to
exposure and risk parameter changes
|
17,712
|
(9)
|
1,510
|
(22)
|
140
|
(5)
|
19,362
|
(36)
|
Limit management and final repayments
|
(36,362)
|
(14)
|
(4,649)
|
(33)
|
(245)
|
1
|
(41,256)
|
(46)
|
As at 30 June 2022
|
206,973
|
199
|
18,581
|
173
|
907
|
—
|
226,461
|
372
|
Management adjustments to models for impairment
Management
adjustments to impairment models are applied in order to factor in
certain conditions or changes in policy that are not fully
incorporated into the impairment models, or to reflect additional
facts and circumstances at the period end. Management adjustments
are reviewed and incorporated into future model development where
applicable.
Total
management adjustments to impairment allowance are presented by
product below:
Overview of management adjustments to
models for impairment allowance1
|
As at 30.06.22
|
As at 31.12.21
|
|
Management adjustments to impairment allowances
|
Proportion of total impairment allowances
|
Management adjustments to impairment allowances
|
Proportion of total impairment allowances
|
|
£m
|
%
|
£m
|
%
|
Home loans
|
76
|
16.6
|
103
|
21.7
|
Credit cards, unsecured loans and other retail lending
|
785
|
19.6
|
1,362
|
32.7
|
Wholesale
loans2
|
426
|
27.5
|
21
|
1.3
|
Total
|
1,287
|
21.4
|
1,486
|
23.6
|
Management adjustments to models for
impairment allowance1
|
Impairment allowance pre management
adjustments3
|
Economic uncertainty adjustments
|
Other adjustments
|
Total Adjustments
|
Total impairment
allowance4
|
|
|
(a)
|
(b)
|
(a+b)
|
|
As at 30.06.22
|
£m
|
£m
|
£m
|
£m
|
£m
|
Home loans
|
382
|
43
|
33
|
76
|
458
|
Credit cards, unsecured loans and other retail lending
|
3,229
|
578
|
207
|
785
|
4,014
|
Wholesale loans
|
1,125
|
417
|
9
|
426
|
1,551
|
Total
|
4,736
|
1,038
|
249
|
1,287
|
6,023
|
|
|
|
|
|
|
As at 31.12.21
|
|
|
|
|
|
Home loans
|
372
|
72
|
31
|
103
|
475
|
Credit cards, unsecured loans and other retail lending
|
2,798
|
1,217
|
145
|
1,362
|
4,160
|
Wholesale loans
|
1,628
|
403
|
(382)
|
21
|
1,649
|
Total
|
4,798
|
1,692
|
(206)
|
1,486
|
6,284
|
1
Positive values reflect an increase in impairment allowance and
negative values reflect a reduction in the impairment
allowance.
2
Proportion of management adjustments to impairment allowances has
increased in wholesale loans primarily driven by release of
offsetting PMA to recognise BBLS government guarantees of
£0.4bn; now captured through the model. Excluding this,
proportion of management adjustments to impairment allowances
remain materially stable compare to previous year.
3
Includes £4.1bn (December 2021: £4.1bn) of modelled ECL,
£0.4bn (December 2021: £0.5bn) of individually assessed
impairments and £0.2bn (December 2021: £0.2bn) ECL from
non-modelled exposures.
4
Total impairment allowance consists of ECL stock on drawn and
undrawn exposure.
Economic uncertainty adjustments
Throughout
the COVID-19 pandemic in 2020 and 2021, macroeconomic forecasts
anticipated lasting impacts to unemployment levels and customer and
client stress. However, the most recent macroeconomic outlook
suggests the concerns over the spread of COVID-19 in major
economies has receded and normalisation of customer behaviour has
been observed, but uncertainty persists: Russia’s invasion of
Ukraine is affecting global energy markets and food prices;
China’s ‘zero-COVID’ policy is putting pressure
on stretched supply chains; and labour markets continue to generate
inflationary pressures. Credit deterioration could still occur as
emerging supply chain disruption and inflationary pressures
challenge economic stability; and economic consensus may not
capture the range of arising economic uncertainty.
Given
this backdrop, COVID-19 related expert judgements have been
materially replaced by provisions for customers and clients
considered most vulnerable to rising costs and supply chain
disruption. This uncertainty continues to be captured in two
distinct ways. Firstly, customer uncertainty: the identification of
customers and clients who may be more vulnerable to the emerging
economic instability; and secondly, model uncertainty: to capture
the impact from model limitations and sensitivities to specific
macroeconomic parameters which are applied at a portfolio
level.
The
economic uncertainty adjustments of £1.0bn (FY21: £1.7bn)
include customer and client uncertainty provisions of £0.8bn
(FY21: £1.5bn) and model uncertainty provisions of £0.2bn
(FY21: £0.2bn).
Customer and client uncertainty provisions include an
adjustment of £0.8bn (FY21: £1.5bn) which has been
applied to customers and clients considered potentially vulnerable
to the emerging economic instability in light of inflationary and
supply chain concerns. This adjustment is split between credit
cards, unsecured loans and other retail lending £0.5bn (FY21:
£0.8bn) and wholesale loans £0.3bn (FY21: £0.3bn).
The reduction in the credit cards, unsecured loans and other retail
lending-related adjustment is due to unwinding of COVID-19 related
expert judgements partially offset by provisions booked for
customers and clients considered more vulnerable to rising costs
and slowing consumer demand.
Furthermore,
a previously held 2021 adjustment of £0.4bn to amend
probabilities of default (PDs), informed by pre COVID-19 levels, is
no longer required as the normalisation of customer behaviour is
now captured within the modelled output.
Model uncertainty provisions £0.2bn (2021: £0.2bn)
informed by modelled provisions following the updated Q222
scenario.
Other adjustments
Other
adjustments are operational in nature and are expected to remain in
place until they can be corrected in the underlying models. These
adjustments result from data limitations and model performance
related issues identified through established governance processes.
The quantum of adjustments has reduced in response to the
macroeconomic variable refresh in Q222 as well as model
enhancements made during H122. Material adjustments comprise the
following:
Home loans: The low average loan to value (LTV) nature of
the UK Home Loans portfolio means that modelled ECL estimates are
low. An adjustment is made to maintain an appropriate level of ECL
informed by model monitoring.
Credit cards, unsecured loans and other retail lending:
Includes the estimated ECL impact from adoption of the new
definition of default under the Capital Requirements Regulation,
the Day 1 provision for the GAP portfolio acquisition in US cards,
an annual update to the qualitative measures used in high risk
account management (HRAM) and adjustments for model inaccuracies
informed by model monitoring; partially offset by a
reclassification of loans and advances from Stage 2 to Stage 1 in
credit cards. The reclassification followed a review of
back-testing results which indicated that accuracy of origination
probability of default characteristics requires management
adjustments to correct and was first established in Q220. This
adjustment has been reduced, driven by the improved macroeconomic
scenarios in Q222.
Wholesale loans: Management adjustments of £(0.4)bn
within wholesale loans in 2021 principally comprised an adjustment
applied on bounce back loans of £(0.4)bn to reverse out the
modelled charge which did not consider the government guarantee
when calculating the ECL. This adjustment is no longer needed due
to model enhancements.
Measurement uncertainty
Management
has applied economic uncertainty and other adjustments to modelled
ECL outputs. Economic uncertainty adjustments have been applied to
customers and clients considered most vulnerable to rising costs
and supply chain disruption. As a result, ECL is higher than would
be the case if it were based on forecast economic scenarios
alone.
The
measurement of modelled ECL involves complexity and judgement,
including estimation of probabilities of default (PD), loss given
default (LGD), a range of unbiased future economic scenarios,
estimation of expected lives, estimation of exposures at default
(EAD) and assessing significant increases in credit risk. The Group
uses a five-scenario model to calculate ECL. An external consensus
forecast is assembled from key sources, including HM Treasury
(short and medium term forecasts), Bloomberg (based on median of
economic forecasts) and the Urban Land Institute (for US House
Prices), which forms the Baseline scenario. In addition, two
adverse scenarios (Downside 1 and Downside 2) and two favourable
scenarios (Upside 1 and Upside 2) are derived, with associated
probability weightings. The adverse scenarios are calibrated to a
broadly similar severity to Barclays’ internal stress tests
and stress scenarios provided by regulators whilst also considering
IFRS 9 specific sensitivities and non-linearity. The favourable
scenarios are designed to reflect plausible upside risks to the
Baseline scenario which are broadly consistent with the economic
narrative approved by the Senior Scenario Review Committee. All
scenarios are regenerated at a minimum semi-annually. The scenarios
include key economic variables, (including GDP, unemployment, House
Price Index (HPI) and base rates in both the UK and US markets),
and expanded variables using statistical models based on historical
correlations. The upside and downside shocks are designed to evolve
over a five-year stress horizon, with all five scenarios converging
to a steady state after approximately seven years.
Scenarios
used to calculate the Group’s ECL charge were refreshed in
Q222. The current Baseline scenario reflects the latest consensus
economic forecasts. Unemployment rates remain low, close to current
levels. As inflation expectations drift higher, central banks
tighten monetary policy sharply. In 2023, the UK Bank Rate reaches
2.75%, while the US Federal Funds Rate peaks at 3.25%. Rising
borrowing charges and falling real wages subtract from growth
through lower investment and household consumption. In the Downside
2 scenario, with inflation expectations rising, the central banks
have to raise interest rates very sharply. The UK Bank Rate and the
US Federal Funds Rate both reach 5.0% in Q223. Higher borrowing
costs derail the economy and unemployment peaks in Q124 at 9.2% in
the UK and 9.5% in the US. Given already stretched valuations, the
sharp increase in mortgage servicing costs sees house prices
decrease very sharply. In the Upside 2 scenario, supply disruptions
get resolved, while the aggregate demand is supported by a release
of household savings. GDP growth accelerates. Recovering labour
force participation limits domestic inflationary pressures, while
lower energy prices add some downward pressure on prices
globally.
The
methodology for estimating probability weights used in calculating
ECL involves simulating a range of future paths for UK and US GDP
using historical data. The five scenarios are mapped against the
distribution of these future paths, with the median centred around
the Baseline such that scenarios further from the Baseline attract
a lower weighting. A single set of five scenarios is used across
all portfolios and all five weights are normalised to equate to
100%. The same scenarios and weights that are used in the ECL
estimation are also used for Barclays’ internal planning
purposes. The impacts across the portfolios are different because
of the sensitivities of each of the portfolios to specific
macroeconomic variables. For example, mortgages are highly
sensitive to house prices; credit cards and unsecured consumer
loans are highly sensitive to unemployment.
The
decrease in the Upside scenario weightings and increase in the
Baseline weighting were driven by: (i) continued growth in UK/US
GDP which resulted in a narrower fan of future GDP paths; and (ii)
generally less favourable GDP projections across scenarios,
increasing the distance between Upside 2 and Baseline scenario
paths. For further details see page 48.
COVID-19
related expert judgements have been materially replaced by
provisions for customers and clients considered most vulnerable to
rising costs and supply chain disruption. The economic uncertainty
adjustments of £1.0bn (FY21: £1.7bn) have been applied as
overlays to the modelled ECL output. These adjustments consist of a
customer and client uncertainty provision of £0.8bn (FY21:
£1.5bn) and a model uncertainty provision of £0.2bn
(FY21: £0.2bn). For further details, see pages 41 to 35.
The
tables below show the key consensus macroeconomic variables used in
the scenarios (5-year annual paths), the probability weights
applied to each scenario and the macroeconomic variables by
scenario using ‘specific bases’ i.e. the most extreme
position of each variable in the context of the scenario, for
example, the highest unemployment for downside scenarios and the
lowest unemployment for upside scenarios. The 5-year average table
provides additional transparency.
Baseline average macroeconomic variables used in the calculation of
ECL
|
2022
|
2023
|
2024
|
2025
|
2026
|
As at 30.06.22
|
%
|
%
|
%
|
%
|
%
|
UK
GDP1
|
3.9
|
1.7
|
1.6
|
1.6
|
1.6
|
UK
unemployment2
|
4.0
|
4.1
|
3.9
|
3.9
|
3.9
|
UK
HPI3
|
4.3
|
1.0
|
2.2
|
2.5
|
2.8
|
UK bank rate
|
1.5
|
2.7
|
2.4
|
2.1
|
2.0
|
US
GDP1
|
3.3
|
2.2
|
2.1
|
2.1
|
2.1
|
US
unemployment4
|
3.6
|
3.5
|
3.5
|
3.5
|
3.5
|
US
HPI5
|
4.1
|
3.4
|
3.4
|
3.4
|
3.4
|
US federal funds rate
|
1.5
|
3.2
|
2.9
|
2.7
|
2.5
|
|
2021
|
2022
|
2023
|
2024
|
2025
|
As at 31.12.21
|
%
|
%
|
%
|
%
|
%
|
UK
GDP1
|
6.2
|
4.9
|
2.3
|
1.9
|
1.7
|
UK
unemployment2
|
4.8
|
4.7
|
4.5
|
4.3
|
4.2
|
UK
HPI3
|
4.7
|
1.0
|
1.9
|
1.9
|
2.3
|
UK bank rate
|
0.1
|
0.8
|
1.0
|
1.0
|
0.8
|
US
GDP1
|
5.5
|
3.9
|
2.6
|
2.4
|
2.4
|
US
unemployment4
|
5.5
|
4.2
|
3.6
|
3.6
|
3.6
|
US
HPI5
|
11.8
|
4.5
|
5.2
|
4.9
|
5.0
|
US federal funds rate
|
0.2
|
0.3
|
0.9
|
1.2
|
1.3
|
1
Average Real GDP seasonally adjusted change in year.
2
Average UK unemployment rate 16-year+.
3
Change in year end UK HPI = Halifax All Houses, All Buyers index,
relative to prior year end.
4
Average US civilian unemployment rate 16-year+.
5
Change in year end US HPI = FHFA House Price Index, relative to
prior year end.
Downside 2 average economic variables used in the calculation of
ECL
|
|
2022
|
2023
|
2024
|
2025
|
2026
|
As at 30.06.22
|
%
|
%
|
%
|
%
|
%
|
UK
GDP1
|
3.1
|
(4.8)
|
(0.4)
|
4.3
|
3.6
|
UK
unemployment2
|
5.2
|
8.4
|
8.6
|
6.8
|
5.9
|
UK
HPI3
|
0.2
|
(26.2)
|
(3.6)
|
17.9
|
10.2
|
UK bank rate
|
1.8
|
4.7
|
4.3
|
2.6
|
2.3
|
US
GDP1
|
2.4
|
(4.1)
|
(0.2)
|
3.4
|
2.7
|
US
unemployment4
|
4.6
|
8.0
|
9.0
|
7.1
|
5.8
|
US
HPI5
|
(0.2)
|
(11.7)
|
(0.2)
|
5.5
|
3.5
|
US federal funds rate
|
1.8
|
4.8
|
4.6
|
3.6
|
3.0
|
|
2021
|
2022
|
2023
|
2024
|
2025
|
As at 31.12.21
|
%
|
%
|
%
|
%
|
%
|
UK
GDP1
|
6.2
|
0.2
|
(4.0)
|
2.8
|
4.3
|
UK
unemployment2
|
4.8
|
7.2
|
9.0
|
7.6
|
6.3
|
UK
HPI3
|
4.7
|
(14.3)
|
(21.8)
|
11.9
|
15.2
|
UK bank rate
|
0.1
|
2.2
|
3.9
|
3.1
|
2.2
|
US
GDP1
|
5.5
|
(0.8)
|
(3.5)
|
2.5
|
3.2
|
US
unemployment4
|
5.5
|
6.4
|
9.1
|
8.1
|
6.4
|
US
HPI5
|
11.8
|
(6.6)
|
(9.0)
|
5.9
|
6.7
|
US federal funds rate
|
0.2
|
2.1
|
3.4
|
2.6
|
2.0
|
1
Average Real GDP seasonally adjusted change in year.
2
Average UK unemployment rate 16-year+.
3
Change in year end UK HPI = Halifax All Houses, All Buyers index,
relative to prior year end.
4
Average US civilian unemployment rate 16-year+.
5
Change in year end US HPI = FHFA House Price Index, relative to
prior year end.
Downside 1 average economic variables used in the calculation of
ECL
|
|
2022
|
2023
|
2024
|
2025
|
2026
|
As at 30.06.22
|
%
|
%
|
%
|
%
|
%
|
UK
GDP1
|
3.5
|
(1.6)
|
0.6
|
3.0
|
2.6
|
UK
unemployment2
|
4.6
|
6.2
|
6.2
|
5.3
|
4.9
|
UK
HPI3
|
2.3
|
(13.2)
|
(0.8)
|
10.0
|
6.5
|
UK bank rate
|
1.6
|
3.8
|
3.4
|
2.4
|
2.0
|
US
GDP1
|
2.7
|
(1.0)
|
1.1
|
2.9
|
2.5
|
US
unemployment4
|
4.1
|
5.7
|
6.2
|
5.3
|
4.6
|
US
HPI5
|
1.9
|
(4.4)
|
1.6
|
4.4
|
3.4
|
US federal funds rate
|
1.7
|
3.9
|
3.8
|
3.2
|
2.8
|
|
2021
|
2022
|
2023
|
2024
|
2025
|
As at 31.12.21
|
%
|
%
|
%
|
%
|
%
|
UK
GDP1
|
6.2
|
2.8
|
(0.7)
|
2.3
|
2.9
|
UK
unemployment2
|
4.8
|
6.2
|
6.8
|
6.0
|
5.3
|
UK
HPI3
|
4.7
|
(6.8)
|
(10.5)
|
6.9
|
8.6
|
UK bank rate
|
0.1
|
1.6
|
2.7
|
2.3
|
1.6
|
US
GDP1
|
5.5
|
1.6
|
(0.4)
|
2.4
|
2.7
|
US
unemployment4
|
5.5
|
5.4
|
6.6
|
6.1
|
5.2
|
US
HPI5
|
11.8
|
(1.2)
|
(2.1)
|
4.8
|
5.2
|
US federal funds rate
|
0.2
|
1.3
|
2.3
|
2.1
|
1.8
|
1
Average Real GDP seasonally adjusted change in year.
2
Average UK unemployment rate 16-year+.
3
Change in year end UK HPI = Halifax All Houses, All Buyers index,
relative to prior year end.
4
Average US civilian unemployment rate 16-year+.
5
Change in year end US HPI = FHFA House Price Index, relative to
prior year end.
Upside 2 average economic variables used in the calculation of
ECL
|
|
2022
|
2023
|
2024
|
2025
|
2026
|
As at 30.06.22
|
%
|
%
|
%
|
%
|
%
|
UK
GDP1
|
5.0
|
5.2
|
3.1
|
2.4
|
2.0
|
UK
unemployment2
|
3.8
|
3.7
|
3.6
|
3.6
|
3.6
|
UK
HPI3
|
6.5
|
11.2
|
6.2
|
4.7
|
3.7
|
UK bank rate
|
1.2
|
1.5
|
1.4
|
1.3
|
1.3
|
US
GDP1
|
4.0
|
4.9
|
3.6
|
3.4
|
3.4
|
US
unemployment4
|
3.4
|
3.0
|
3.1
|
3.1
|
3.1
|
US
HPI5
|
5.4
|
5.5
|
4.6
|
4.5
|
4.5
|
US federal funds rate
|
1.1
|
2.2
|
1.9
|
1.7
|
1.5
|
|
2021
|
2022
|
2023
|
2024
|
2025
|
As at 31.12.21
|
%
|
%
|
%
|
%
|
%
|
UK
GDP1
|
6.2
|
7.2
|
4.0
|
2.7
|
2.1
|
UK
unemployment2
|
4.8
|
4.5
|
4.1
|
4.0
|
4.0
|
UK
HPI3
|
4.7
|
8.5
|
9.0
|
5.2
|
4.2
|
UK bank rate
|
0.1
|
0.2
|
0.5
|
0.5
|
0.3
|
US
GDP1
|
5.5
|
5.3
|
4.1
|
3.5
|
3.4
|
US
unemployment4
|
5.5
|
3.9
|
3.4
|
3.3
|
3.3
|
US
HPI5
|
11.8
|
10.6
|
8.5
|
7.2
|
6.6
|
US federal funds rate
|
0.2
|
0.3
|
0.4
|
0.7
|
1.0
|
1
Average Real GDP seasonally adjusted change in year.
2
Average UK unemployment rate 16-year+.
3
Change in year end UK HPI = Halifax All Houses, All Buyers index,
relative to prior year end.
4
Average US civilian unemployment rate 16-year+.
5
Change in year end US HPI = FHFA House Price Index, relative to
prior year end.
Upside 1 average economic variables used in the calculation of
ECL
|
|
2022
|
2023
|
2024
|
2025
|
2026
|
As at 30.06.22
|
%
|
%
|
%
|
%
|
%
|
UK
GDP1
|
4.5
|
3.5
|
2.4
|
2.0
|
1.8
|
UK
unemployment2
|
3.9
|
3.8
|
3.8
|
3.8
|
3.8
|
UK
HPI3
|
5.4
|
6.3
|
4.1
|
3.6
|
3.2
|
UK bank rate
|
1.3
|
2.0
|
1.6
|
1.5
|
1.5
|
US
GDP1
|
3.7
|
3.7
|
3.0
|
2.9
|
2.9
|
US
unemployment4
|
3.5
|
3.2
|
3.3
|
3.3
|
3.3
|
US
HPI5
|
4.7
|
4.4
|
4.0
|
3.9
|
3.9
|
US federal funds rate
|
1.3
|
2.4
|
2.2
|
1.9
|
1.8
|
|
2021
|
2022
|
2023
|
2024
|
2025
|
As at 31.12.21
|
%
|
%
|
%
|
%
|
%
|
UK
GDP1
|
6.2
|
6.0
|
3.1
|
2.3
|
1.9
|
UK
unemployment2
|
4.8
|
4.6
|
4.3
|
4.2
|
4.1
|
UK
HPI3
|
4.7
|
5.0
|
5.0
|
3.9
|
3.3
|
UK bank rate
|
0.1
|
0.6
|
0.8
|
0.8
|
0.5
|
US
GDP1
|
5.5
|
4.6
|
3.4
|
2.9
|
2.9
|
US
unemployment4
|
5.5
|
4.0
|
3.5
|
3.5
|
3.5
|
US
HPI5
|
11.8
|
8.3
|
7.0
|
6.0
|
5.7
|
US federal funds rate
|
0.2
|
0.3
|
0.6
|
1.0
|
1.1
|
1
Average Real GDP seasonally adjusted change in year.
2
Average UK unemployment rate 16-year+.
3
Change in year end UK HPI = Halifax All Houses, All Buyers index,
relative to prior year end.
4
Average US civilian unemployment rate 16-year+.
5
Change in year end US HPI = FHFA House Price Index, relative to
prior year end.
Scenario probability weighting
|
|
Upside 2
|
Upside 1
|
Baseline
|
Downside 1
|
Downside 2
|
|
%
|
%
|
%
|
%
|
%
|
As at 30.06.22
|
|
|
|
|
|
Scenario probability weighting
|
14.0
|
25.6
|
37.8
|
15.2
|
7.4
|
As at 31.12.21
|
|
|
|
|
|
Scenario probability weighting
|
20.9
|
27.2
|
30.1
|
14.8
|
7.0
|
Specific
bases show the most extreme position of each variable in the
context of the scenario, for example, the highest unemployment for
downside scenarios, average unemployment for baseline scenarios and
lowest unemployment for upside scenarios. GDP and HPI downside and
upside scenario data represents the lowest and highest points
relative to the start point in the 20 quarter period.
Macroeconomic variables (specific
bases)1
|
|
Upside 2
|
Upside 1
|
Baseline
|
Downside 1
|
Downside 2
|
As at 30.06.22
|
%
|
%
|
%
|
%
|
%
|
UK
GDP2
|
16.8
|
12.8
|
2.1
|
(1.1)
|
(5.9)
|
UK
unemployment3
|
3.6
|
3.8
|
4.0
|
6.6
|
9.2
|
UK
HPI4
|
36.7
|
24.8
|
2.6
|
(13.6)
|
(30.8)
|
UK bank rate
|
0.8
|
0.8
|
2.1
|
4.0
|
5.0
|
US
GDP2
|
20.2
|
16.1
|
2.4
|
(0.5)
|
(5.0)
|
US
unemployment3
|
3.0
|
3.2
|
3.5
|
6.5
|
9.5
|
US
HPI4
|
27.0
|
22.9
|
3.5
|
(2.6)
|
(13.4)
|
US federal funds rate
|
0.3
|
0.3
|
2.6
|
4.1
|
5.0
|
|
|
|
|
|
|
As at 31.12.21
|
|
|
|
|
|
UK
GDP2
|
21.4
|
18.3
|
3.4
|
(1.6)
|
(1.6)
|
UK
unemployment3
|
4.0
|
4.1
|
4.5
|
7.0
|
9.2
|
UK
HPI4
|
35.7
|
23.8
|
2.4
|
(12.7)
|
(29.9)
|
UK bank rate
|
0.1
|
0.1
|
0.7
|
2.8
|
4.0
|
US
GDP2
|
22.8
|
19.6
|
3.4
|
1.5
|
(1.3)
|
US
unemployment3
|
3.3
|
3.5
|
4.1
|
6.8
|
9.5
|
US
HPI4
|
53.3
|
45.2
|
6.2
|
2.2
|
(5.0)
|
US federal funds rate
|
0.1
|
0.1
|
0.8
|
2.3
|
3.5
|
1
UK GDP = Real GDP growth seasonally adjusted; UK unemployment = UK
unemployment rate 16-year+; UK HI = Halifax All Houses, All Buyers
Index; US GDP = Real GDP growth seasonally adjusted; US
unemployment = US civilian unemployment rate 16-year+; US HPI =
FHFA House Price Index. 20 quarter period starts from Q122 (2021:
Q121).
2
Maximum growth relative to Q421 (2021: Q420), based on 20 quarter
period in Upside scenarios; 5-year yearly average Compound Annual
Growth Rate (CAGR) in Baseline; minimum growth relative to Q421
(2021: Q420), based on 20 quarter period in Downside
scenarios.
3
Lowest quarter in 20 quarter period in Upside scenarios; 5-year
average in Baseline; highest quarter 20 quarter period in Downside
scenarios.
4
Maximum growth relative to Q421 (2021: Q420), based on 20 quarter
period in Upside scenarios; 5-year quarter end CAGR in Baseline;
minimum growth relative to Q421 (2021: Q420), based on 20 quarter
period in Downside scenarios.
Average
basis represents the average quarterly value of variables in the 20
quarter period with GDP and HPI based on yearly average and
quarterly CAGRs respectively.
Macroeconomic variables (5-year
averages)1
|
|
Upside 2
|
Upside 1
|
Baseline
|
Downside 1
|
Downside 2
|
As at 30.06.22
|
%
|
%
|
%
|
%
|
%
|
UK
GDP2
|
3.5
|
2.8
|
2.1
|
1.6
|
1.1
|
UK
unemployment3
|
3.7
|
3.8
|
4.0
|
5.5
|
7.0
|
UK
HPI4
|
6.4
|
4.5
|
2.6
|
0.6
|
(1.5)
|
UK bank rate
|
1.3
|
1.6
|
2.1
|
2.7
|
3.1
|
US
GDP2
|
3.9
|
3.2
|
2.4
|
1.6
|
0.8
|
US
unemployment3
|
3.1
|
3.3
|
3.5
|
5.2
|
6.9
|
US
HPI4
|
4.9
|
4.2
|
3.5
|
1.4
|
(0.8)
|
US federal funds rate
|
1.7
|
1.9
|
2.6
|
3.1
|
3.6
|
|
|
|
|
|
|
As at 31.12.21
|
|
|
|
|
|
UK
GDP2
|
4.4
|
3.9
|
3.4
|
2.7
|
1.8
|
UK
unemployment3
|
4.3
|
4.4
|
4.5
|
5.8
|
7.0
|
UK
HPI4
|
6.3
|
4.4
|
2.4
|
0.3
|
(2.0)
|
UK bank rate
|
0.3
|
0.5
|
0.7
|
1.7
|
2.3
|
US
GDP2
|
4.4
|
3.9
|
3.4
|
2.4
|
1.3
|
US
unemployment3
|
3.9
|
4.0
|
4.1
|
5.7
|
7.1
|
US
HPI4
|
8.9
|
7.7
|
6.2
|
3.6
|
1.4
|
US federal funds rate
|
0.5
|
0.6
|
0.8
|
1.5
|
2.1
|
1
UK GDP = Real GDP growth seasonally adjusted; UK unemployment = UK
unemployment rate 16-year+; UK HPI = Halifax All Houses, All Buyers
Index; US GDP = Real GDP growth seasonally adjusted; US
unemployment = US civilian unemployment rate 16-year+; US HPI =
FHFA House Price Index.
2
5-year yearly average CAGR, starting 2021 (2021:
2020).
3
5-year average. Period based on 20 quarters from Q122 (2021:
Q121).
4
5-year quarter end CAGR, starting Q421 (2021: Q420).
ECL under 100% weighted scenarios for modelled
portfolios
The
table below shows the ECL assuming scenarios have been 100%
weighted. Model exposures are allocated to a stage based on the
individual scenario rather than through a probability-weighted
approach as required for Barclays reported impairment allowances.
As a result, it is not possible to back solve to the final reported
weighted ECL from the individual scenarios as a balance may be
assigned to a different stage dependent on the scenario. Model
exposure uses exposure at default (EAD) values and is not directly
comparable to gross exposure used in prior disclosures. For Credit
cards, unsecured loans and other retail lending, an average EAD
measure is used (12-month or lifetime, depending on stage
allocation in each scenario). Therefore, the model exposure
movement into Stage 2 is higher than the corresponding Stage 1
reduction.
All ECL
using a model is included, with the exception of Treasury assets
(£7.7m of ECL). Non-modelled exposures and management
adjustments are excluded. Management adjustments can be found in
the Management adjustments to models for impairment
section.
Model
exposures allocated to Stage 3 do not change in any of the
scenarios as the transition criteria relies only on observable
evidence of default as at 30 June 2022 and not on
macroeconomic scenarios.
The
Downside 2 scenario represents a severe global recession with
substantial falls in both UK and US GDP. Unemployment in UK markets
rises towards 9.2% and US markets rises towards 9.5% and there are
substantial falls in asset prices including housing. Under the
Downside 2 scenario, model exposure moves between stages as the
economic environment weakens. This can be seen in the movement of
£22.1bn of model exposure into Stage 2 between the Weighted
and Downside 2 scenario. ECL increases in Stage 2 predominantly due
to unsecured portfolios as economic conditions
deteriorate.
|
Scenarios
|
As at 30 June 2022
|
Weighted
|
Upside 2
|
Upside 1
|
Baseline
|
Downside 1
|
Downside 2
|
Stage 1 Model Exposure (£m)
|
|
|
|
|
|
|
Home loans
|
142,668
|
144,569
|
143,881
|
142,882
|
141,536
|
139,553
|
Credit cards, unsecured loans and other retail lending
|
46,225
|
46,906
|
46,692
|
46,446
|
45,324
|
44,057
|
Wholesale loans
|
183,356
|
189,252
|
187,709
|
183,570
|
178,233
|
167,303
|
Stage 1 Model ECL (£m)
|
|
|
|
|
|
|
Home loans
|
3
|
2
|
2
|
2
|
4
|
10
|
Credit cards, unsecured loans and other retail lending
|
341
|
329
|
333
|
338
|
353
|
372
|
Wholesale loans
|
250
|
210
|
224
|
237
|
296
|
329
|
Stage 1 Coverage (%)
|
|
|
|
|
|
|
Home loans
|
—
|
—
|
—
|
—
|
—
|
—
|
Credit cards, unsecured loans and other retail lending
|
0.7
|
0.7
|
0.7
|
0.7
|
0.8
|
0.8
|
Wholesale loans
|
0.1
|
0.1
|
0.1
|
0.1
|
0.2
|
0.2
|
Stage 2 Model Exposure (£m)
|
|
|
|
|
|
|
Home loans
|
18,684
|
16,783
|
17,471
|
18,470
|
19,815
|
21,799
|
Credit cards, unsecured loans and other retail lending
|
8,699
|
7,741
|
8,048
|
8,448
|
9,932
|
11,658
|
Wholesale loans
|
23,702
|
17,806
|
19,349
|
23,489
|
28,825
|
39,755
|
Stage 2 Model ECL (£m)
|
|
|
|
|
|
|
Home loans
|
13
|
8
|
9
|
11
|
20
|
40
|
Credit cards, unsecured loans and other retail lending
|
1,531
|
1,306
|
1,378
|
1,468
|
1,840
|
2,318
|
Wholesale loans
|
463
|
348
|
382
|
438
|
604
|
1,091
|
Stage 2 Coverage (%)
|
|
|
|
|
|
|
Home loans
|
0.1
|
—
|
0.1
|
0.1
|
0.1
|
0.2
|
Credit cards, unsecured loans and other retail lending
|
17.6
|
16.9
|
17.1
|
17.4
|
18.5
|
19.9
|
Wholesale loans
|
2.0
|
2.0
|
2.0
|
1.9
|
2.1
|
2.7
|
Stage 3 Model Exposure (£m)
|
|
|
|
|
|
|
Home loans
|
1,631
|
1,631
|
1,631
|
1,631
|
1,631
|
1,631
|
Credit cards, unsecured loans and other retail lending
|
1,797
|
1,797
|
1,797
|
1,797
|
1,797
|
1,797
|
Wholesale
loans1
|
2,431
|
2,431
|
2,431
|
2,431
|
2,431
|
2,431
|
Stage 3 Model ECL (£m)
|
|
|
|
|
|
|
Home loans
|
313
|
301
|
305
|
309
|
328
|
357
|
Credit cards, unsecured loans and other retail lending
|
1,207
|
1,183
|
1,191
|
1,222
|
1,218
|
1,212
|
Wholesale
loans1
|
61
|
56
|
58
|
60
|
66
|
73
|
Stage 3 Coverage (%)
|
|
|
|
|
|
|
Home loans
|
19.2
|
18.5
|
18.7
|
18.9
|
20.1
|
21.9
|
Credit cards, unsecured loans and other retail lending
|
67.2
|
65.8
|
66.3
|
68.0
|
67.8
|
67.4
|
Wholesale
loans1
|
2.5
|
2.3
|
2.4
|
2.5
|
2.7
|
3.0
|
Total Model ECL (£m)
|
|
|
|
|
|
|
Home loans
|
329
|
311
|
316
|
322
|
352
|
407
|
Credit cards, unsecured loans and other retail lending
|
3,079
|
2,818
|
2,902
|
3,028
|
3,411
|
3,902
|
Wholesale
loans1
|
774
|
614
|
664
|
735
|
966
|
1,493
|
Total Model ECL
|
4,182
|
3,743
|
3,882
|
4,085
|
4,729
|
5,802
|
1
Material wholesale loan defaults are individually assessed across
different recovery strategies. As a result, ECL of £376m is
reported as individually assessed impairments in the table
below.
Reconciliation to total ECL
|
£m
|
Total model ECL
|
4,182
|
ECL from individually assessed impairments
|
376
|
ECL
from non-modelled and other management adjustments1
|
1,465
|
Total ECL
|
6,023
|
1
Includes £1.3bn post-model adjustments of which £0.1bn is
included as part of total model ECL and £0.2bn ECL from
non-modelled exposures.
The
dispersion of results around the Baseline is an indication of
uncertainty around the future projections. The disclosure
highlights the results of the alternative scenarios enabling the
reader to understand the extent of the impact on exposure and ECL
from the upside/downside scenarios. Consequently, the use of five
scenarios with associated weightings results in a total weighted
ECL uplift from the Baseline ECL of 2.4%, largely driven by credit
card losses which have more linear loss profiles than UK home loans
and wholesale loan positions.
Home loans: Total weighted ECL of £329m represents a
2.2% increase over the Baseline ECL (£322m), and coverage
ratios remain steady across the Upside scenarios, Baseline and
Downside 1 scenario. However, total ECL increases in the Downside 2
scenario to £407m, driven by a significant fall in UK HPI
(30.8%) reflecting the non-linearity of the UK
portfolio.
Credit cards, unsecured loans and other retail lending:
Total weighted ECL of £3,079m represents a 1.7% increase over
the Baseline ECL (£3,028m) reflecting the range of economic
scenarios used, mainly impacted by unemployment and other key
retail variables. Total ECL increases to £3,902m under
Downside 2 scenario, mainly driven by Stage 2, where coverage rates
increase to 19.9% from a weighted scenario approach of 17.6% and
circa £3.0bn increase in model exposure that meets the
Significant Increase in Credit Risk criteria and transitions from
Stage 1 to Stage 2.
Wholesale loans: Total weighted ECL of £774m represents
an 5.3% increase over the Baseline ECL (£735m) reflecting the
range of economic scenarios used, with exposures in the Corporate
and Investment Bank particularly sensitive to the Downside 2
scenario.
|
Scenarios
|
As at 31 December 2021
|
Weighted
|
Upside 2
|
Upside 1
|
Baseline
|
Downside 1
|
Downside 2
|
Stage 1 Model Exposure (£m)
|
|
|
|
|
|
|
Home loans
|
137,279
|
139,117
|
138,424
|
137,563
|
135,544
|
133,042
|
Credit cards, unsecured loans and other retail lending
|
45,503
|
46,170
|
45,963
|
45,751
|
43,131
|
38,820
|
Wholesale loans
|
174,249
|
177,453
|
176,774
|
175,451
|
169,814
|
161,998
|
Stage 1 Model ECL (£m)
|
|
|
|
|
|
|
Home loans
|
4
|
2
|
2
|
3
|
6
|
14
|
Credit cards, unsecured loans and other retail lending
|
324
|
266
|
272
|
279
|
350
|
418
|
Wholesale loans
|
290
|
240
|
262
|
286
|
327
|
350
|
Stage 1 Coverage (%)
|
|
|
|
|
|
|
Home loans
|
—
|
—
|
—
|
—
|
—
|
—
|
Credit cards, unsecured loans and other retail lending
|
0.7
|
0.6
|
0.6
|
0.6
|
0.8
|
1.1
|
Wholesale loans
|
0.2
|
0.1
|
0.1
|
0.2
|
0.2
|
0.2
|
Stage 2 Model Exposure (£m)
|
|
|
|
|
|
|
Home loans
|
22,915
|
21,076
|
21,769
|
22,631
|
24,649
|
27,151
|
Credit cards, unsecured loans and other retail lending
|
7,200
|
6,260
|
6,521
|
6,795
|
9,708
|
14,290
|
Wholesale loans
|
32,256
|
29,052
|
29,732
|
31,054
|
36,692
|
44,507
|
Stage 2 Model ECL (£m)
|
|
|
|
|
|
|
Home loans
|
15
|
10
|
11
|
12
|
22
|
47
|
Credit cards, unsecured loans and other retail lending
|
1,114
|
925
|
988
|
1,058
|
1,497
|
3,295
|
Wholesale loans
|
572
|
431
|
467
|
528
|
851
|
1,510
|
Stage 2 Coverage (%)
|
|
|
|
|
|
|
Home loans
|
0.1
|
—
|
0.1
|
0.1
|
0.1
|
0.2
|
Credit cards, unsecured loans and other retail lending
|
15.5
|
14.8
|
15.2
|
15.6
|
15.4
|
23.1
|
Wholesale loans
|
1.8
|
1.5
|
1.6
|
1.7
|
2.3
|
3.4
|
Stage 3 Model Exposure (£m)
|
|
|
|
|
|
|
Home loans
|
1,724
|
1,724
|
1,724
|
1,724
|
1,724
|
1,724
|
Credit cards, unsecured loans and other retail lending
|
1,922
|
1,922
|
1,922
|
1,922
|
1,922
|
1,922
|
Wholesale
loans1
|
1,811
|
1,811
|
1,811
|
1,811
|
1,811
|
1,811
|
Stage 3 Model ECL (£m)
|
|
|
|
|
|
|
Home loans
|
303
|
292
|
295
|
299
|
320
|
346
|
Credit cards, unsecured loans and other retail lending
|
1,255
|
1,236
|
1,245
|
1,255
|
1,277
|
1,297
|
Wholesale
loans1
|
323
|
321
|
322
|
323
|
326
|
332
|
Stage 3 Coverage (%)
|
|
|
|
|
|
|
Home loans
|
17.6
|
16.9
|
17.1
|
17.3
|
18.6
|
20.1
|
Credit cards, unsecured loans and other retail lending
|
65.3
|
64.3
|
64.8
|
65.3
|
66.4
|
67.5
|
Wholesale
loans1
|
17.8
|
17.7
|
17.8
|
17.8
|
18.0
|
18.3
|
Total Model ECL (£m)
|
|
|
|
|
|
|
Home loans
|
322
|
304
|
308
|
314
|
348
|
407
|
Credit cards, unsecured loans and other retail lending
|
2,693
|
2,427
|
2,505
|
2,592
|
3,124
|
5,010
|
Wholesale
loans1
|
1,185
|
992
|
1,051
|
1,137
|
1,504
|
2,192
|
Total Model ECL
|
4,200
|
3,723
|
3,864
|
4,043
|
4,976
|
7,609
|
1
Material wholesale loan defaults are individually assessed across
different recovery strategies. As a result, ECL of £524m is
reported as individually assessed impairments in the table
below.
Reconciliation to total
ECL1
|
£m
|
Total model ECL
|
4,200
|
ECL from individually assessed impairments
|
524
|
ECL from non-modelled and other management adjustments
|
1,560
|
Total ECL
|
6,284
|
1
Includes £1.5bn of post-model adjustments and £0.2bn ECL
from non-modelled exposures.
Analysis of specific portfolios and asset types
Secured home loans
The UK
home loan portfolio primarily comprises first lien mortgages and
accounts for 93% (December 2021: 93%) of the Group’s total
home loans balance.
|
Barclays UK
|
Home loans principal portfolios
|
As at 30.06.22
|
As at 31.12.21
|
Gross loans and advances (£m)
|
159,676
|
158,192
|
90 day arrears rate, excluding recovery book (%)
|
0.1
|
0.1
|
Annualised gross charge-off rates - 180 days past due
(%)
|
0.5
|
0.5
|
Recovery book proportion of outstanding balances (%)
|
0.6
|
0.6
|
Recovery book impairment coverage ratio (%)
|
4.6
|
4.2
|
|
|
|
Average marked to market LTV
|
|
|
Balance weighted %
|
50.8
|
50.7
|
Valuation weighted %
|
37.8
|
37.5
|
|
|
|
New lending
|
Half year ended 30.06.22
|
Half year ended 30.06.21
|
New home loan bookings (£m)
|
14,117
|
19,120
|
New home loan proportion > 90% LTV (%)
|
2.6
|
0.9
|
Average LTV on new home loans: balance weighted (%)
|
68.6
|
68.7
|
Average LTV on new home loans: valuation weighted (%)
|
60.4
|
61.3
|
Home loans principal portfolios
– distribution of balances by LTV1
|
Distribution of balances
|
Distribution of impairment allowance
|
Coverage ratio
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Barclays UK
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
As at 30.06.22
|
|
|
|
|
|
|
|
|
|
|
|
|
<=75%
|
79.2
|
10.9
|
0.6
|
90.7
|
6.7
|
17.3
|
34.5
|
58.5
|
—
|
0.1
|
2.9
|
—
|
>75% and <=90%
|
8.2
|
0.5
|
—
|
8.7
|
4.2
|
10.8
|
12.2
|
27.2
|
—
|
1.2
|
29.1
|
0.2
|
>90% and <=100%
|
0.6
|
—
|
—
|
0.6
|
0.4
|
0.6
|
2.2
|
3.2
|
—
|
2.5
|
72.9
|
0.3
|
>100%
|
—
|
—
|
—
|
—
|
0.1
|
1.5
|
9.5
|
11.1
|
0.4
|
20.7
|
100.0
|
23.1
|
As at 31.12.21
|
|
|
|
|
|
|
|
|
|
|
|
|
<=75%
|
77.2
|
11.3
|
0.7
|
89.2
|
8.3
|
17.7
|
31.9
|
57.9
|
—
|
0.1
|
2.4
|
—
|
>75% and <=90%
|
9.3
|
0.6
|
—
|
9.9
|
4.8
|
10.7
|
11.7
|
27.2
|
—
|
1.0
|
22.6
|
0.1
|
>90% and <=100%
|
0.9
|
—
|
—
|
0.9
|
0.9
|
1.0
|
2.9
|
4.8
|
0.1
|
1.9
|
87.5
|
0.3
|
>100%
|
—
|
—
|
—
|
—
|
0.2
|
1.0
|
8.9
|
10.1
|
0.4
|
6.4
|
100.0
|
14.1
|
1
Portfolio mark to market based on the most updated valuation
including recovery book balances. Updated valuations reflect the
application of the latest HPI available as at 30 June
2022.
New lending reduced to £14.1bn, a level more consistent
with pre-COVID-19 periods, from £19.1bn in H121 when market
dynamics drove high levels of new business due to stamp duty relief
and property ownership led demand. The proportion of new lending
with LTV >85% was 18%, more consistent with levels seen
pre-COVID-19, compared to 7% in H121 when high LTV products were
gradually being reintroduced following COVID-19
restrictions.
Head Office: Italian home loans and advances at amortised
cost reduced to £4.6bn (2021: £4.7bn). The portfolio is
secured on residential property with an average balance weighted
mark to market LTV of 59.0% (2021: 60.4%). 90 day arrears remained
stable at 1.3% (2021: 1.3%), gross charge-off rates increased to
0.4% (2021: 0.3%).
Credit cards, unsecured loans and other retail lending
The
principal portfolios listed below accounted for 83% (December 2021:
82%) of the Group’s total credit cards, unsecured loans and
other retail lending.
Principal portfolios
|
Gross exposure
|
30 day arrears rate, excluding recovery book
|
90 day arrears rate, excluding recovery book
|
Annualised gross write-off rate
|
Annualised net write-off rate
|
As at 30.06.22
|
£m
|
%
|
%
|
%
|
%
|
Barclays UK
|
|
|
|
|
|
UK cards
|
9,901
|
1.0
|
0.2
|
2.4
|
2.3
|
UK personal loans
|
4,188
|
1.3
|
0.6
|
2.0
|
1.6
|
Barclays Partner Finance
|
2,459
|
0.5
|
0.2
|
0.8
|
0.8
|
Barclays International
|
|
|
|
|
|
US cards
|
23,037
|
1.4
|
0.7
|
2.9
|
2.7
|
Germany consumer lending
|
3,993
|
1.5
|
0.7
|
0.7
|
0.7
|
|
|
|
|
|
|
As at 31.12.21
|
|
|
|
|
|
Barclays UK
|
|
|
|
|
|
UK cards
|
9,933
|
1.0
|
0.2
|
4.1
|
4.0
|
UK personal loans
|
4,011
|
1.5
|
0.7
|
3.5
|
3.2
|
Barclays Partner Finance
|
2,471
|
0.4
|
0.2
|
1.4
|
1.4
|
Barclays International
|
|
|
|
|
|
US cards
|
17,779
|
1.6
|
0.8
|
4.3
|
4.2
|
Germany consumer lending
|
3,559
|
1.5
|
0.7
|
0.9
|
0.8
|
UK cards: 30 and 90 day arrears rates remained stable at
1.0% and 0.2%, with balances flat at £9.9bn. Gross and net
write-off rates returned to more stable levels of 2.4% and 2.3%
following the higher rates in 2021 caused by the sharp reductions
in overall balances through COVID-19 and heightened debt sale
activity.
UK personal loans: 30 and 90 day arrears rates reduced by
0.2% and 0.1% to 1.3% and 0.6% respectively. This marginal
reduction was driven by the portfolio growing through new lending
post the COVID-19 reductions, and these newer vintages performing
better than the historical stock. Gross and net write-off rates
returned to more stable levels of 2.0% and 1.6% following the
higher rates in 2021 caused by the sharp reductions in overall
balances through COVID-19 and heightened debt sale
activity.
Barclays Partner Finance: 30 and 90 day arrears rates remain
stable and in line with December 2021.
US cards: Balances increased due to the acquisition of the
GAP portfolio in June 2022, movement in the USD/GBP exchange rate
and core portfolio growth. 30 and 90 day arrears rates improved due
to the GAP portfolio acquisition.
Germany consumer lending: 30 and 90 day arrears rates were
stable. 30 day arrears rates are below pre-COVID
levels.
Government supported loans
Throughout
the COVID-19 pandemic Barclays has supported its customers and
clients by participating in the UK government's Bounce Back Loan
Scheme (BBLS), Coronavirus Business Interruption Loan Scheme
(CBILS), Coronavirus Large Business Interruption Loan Scheme
(CLBILS) and the Recovery Loan Scheme (RLS).
|
Gross exposure
|
Impairment allowance
|
Impairment coverage
|
Government guaranteed exposure
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
Modelled impairment
|
Management adjustment
|
Impairment post- management adjustment
|
Pre- management adjustment
|
Post- management adjustment
|
Total
|
As at 30.06.22
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
%
|
%
|
£m
|
Barclays UK
|
|
|
|
|
|
|
|
|
|
|
BBLS
|
5,231
|
1,982
|
893
|
8,106
|
22
|
—
|
22
|
0.3
|
0.3
|
8,083
|
CBILS
|
606
|
234
|
54
|
894
|
18
|
(4)
|
14
|
2.1
|
1.6
|
715
|
RLS
|
17
|
2
|
1
|
20
|
—
|
—
|
—
|
—
|
—
|
16
|
Barclays International
|
|
|
|
|
|
|
|
|
|
|
CBILS
|
458
|
145
|
7
|
610
|
3
|
—
|
3
|
0.5
|
0.5
|
488
|
CLBILS
|
96
|
79
|
6
|
181
|
1
|
—
|
1
|
0.6
|
0.6
|
145
|
RLS
|
16
|
4
|
1
|
21
|
—
|
—
|
—
|
0.5
|
0.5
|
16
|
Total
|
6,424
|
2,446
|
962
|
9,832
|
44
|
(4)
|
40
|
0.4
|
0.4
|
9,463
|
|
|
|
|
|
|
|
|
|
|
|
As at 31.12.21
|
|
|
|
|
|
|
|
|
Barclays UK
|
|
|
|
|
|
|
|
|
|
|
BBLS
|
7,881
|
797
|
704
|
9,382
|
396
|
(380)
|
16
|
4.2
|
0.2
|
9,366
|
CBILS
|
900
|
110
|
47
|
1,057
|
12
|
(7)
|
5
|
1.1
|
0.5
|
845
|
RLS
|
11
|
—
|
1
|
12
|
—
|
—
|
—
|
2.7
|
2.7
|
10
|
Barclays International
|
|
|
|
|
|
|
|
|
|
|
CBILS
|
619
|
146
|
6
|
771
|
5
|
—
|
5
|
0.6
|
0.6
|
617
|
CLBILS
|
163
|
56
|
2
|
221
|
1
|
—
|
1
|
0.4
|
0.4
|
177
|
RLS
|
1
|
—
|
—
|
1
|
—
|
—
|
—
|
4.7
|
4.7
|
1
|
Total
|
9,575
|
1,109
|
760
|
11,444
|
414
|
(387)
|
27
|
3.6
|
0.2
|
11,016
|
The
BBLS and CBILS schemes were launched to provide financial support
to smaller and medium-sized businesses and CLBILS for larger
businesses in the UK who may experience financial difficulties as a
result of the COVID-19 outbreak. The RLS aims to help UK businesses
access finance as they recover and grow following the COVID-19
pandemic. These loans are guaranteed by the government at 100% for
BBLS and 80% for CBILS, CLBILS and RLS (70% for RLS issued post
January 1, 2022) as at the balance sheet date.
Management
adjustment of £(380)m applied in December 2021 has been
discontinued following an update in the underlying ECL model that
now fully recognises the 100% government guarantee against BBLS
exposure within BUK Business Banking. However, we continue to hold
the £(4)m (December 2021: £7m) adjustment against CBILS
as the 80% government guarantee is not fully recognised in the
models. In instances where Barclays has assessed the BBLS exposure
to have not met strict assessment criteria, no claim has been made
against the government guarantee resulting in an impairment
allowance against these loans of £22m (December 2021:
£16m) as at the balance sheet date.
Additionally,
while the government supported loans are covered by guarantees,
many BBLS customers have other financing arrangements with Barclays
which are not covered by the government guarantee. Noting the
elevated levels of delinquency across the BBLS population, Barclays
has applied an adjustment of £0.1bn to the £2.6bn gross
exposure to BBLS customers outside the scheme.
Market Risk
Analysis of management value at risk (VaR)
The
table below shows the total management VaR on a diversified basis
by asset class. Total management VaR includes all trading positions
in Barclays Bank Group and it is calculated with a one-day holding
period. VaR limits are applied to total management VaR and by asset
class. Additionally, the market risk management function applies
VaR sub-limits to material businesses and trading
desks.
Management VaR (95%) by asset class
|
Half year ended 30.06.22
|
|
Half year ended 31.12.21
|
|
Half year ended 30.06.21
|
|
Average
|
High
|
Low
|
|
Average
|
High
|
Low
|
|
Average
|
High
|
Low
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
Credit risk
|
16
|
24
|
8
|
|
10
|
13
|
7
|
|
18
|
30
|
9
|
Interest rate risk
|
10
|
19
|
4
|
|
5
|
9
|
4
|
|
8
|
15
|
4
|
Equity risk
|
10
|
29
|
4
|
|
8
|
29
|
4
|
|
10
|
15
|
6
|
Basis risk
|
9
|
24
|
4
|
|
4
|
7
|
3
|
|
7
|
10
|
4
|
Spread risk
|
5
|
10
|
3
|
|
4
|
6
|
3
|
|
4
|
6
|
3
|
Foreign exchange risk
|
10
|
25
|
2
|
|
4
|
16
|
1
|
|
3
|
6
|
2
|
Commodity risk
|
—
|
1
|
—
|
|
—
|
1
|
—
|
|
—
|
1
|
—
|
Inflation risk
|
6
|
17
|
3
|
|
3
|
5
|
2
|
|
2
|
3
|
2
|
Diversification
effect1
|
(39)
|
n/a
|
n/a
|
|
(23)
|
n/a
|
n/a
|
|
(30)
|
n/a
|
n/a
|
Total management VaR
|
27
|
43
|
13
|
|
15
|
34
|
6
|
|
22
|
36
|
13
|
1
Diversification effects recognise that forecast losses from
different assets or businesses are unlikely to occur concurrently,
hence the expected aggregate loss is lower than the sum of the
expected losses from each area. Historical correlations between
losses are taken into account in making these assessments. The high
and low VaR figures reported for each category did not necessarily
occur on the same day as the high and low VaR reported as a whole.
Consequently, a diversification effect balance for the high and low
VaR figures would not be meaningful and is therefore omitted from
the above table.
Average
management VaR increased 80% to £27m (H221: £15m) driven
by elevated market volatility and defensive risk positioning. Risk
taking during the period remained within risk
appetite.
Treasury and Capital Risk
The
Group has a comprehensive Key Risk Control Framework for managing
its liquidity risk. The liquidity framework meets the PRA standards
and is designed to maintain liquidity resources that are sufficient
in amount and quality, and a funding profile that is appropriate to
meet the Group’s Liquidity Risk Appetite (LRA). The liquidity
framework is delivered via a combination of policy formation,
review and governance, analysis, stress testing, limit setting and
monitoring.
Liquidity risk stress testing
The
liquidity risk stress assessment measures the potential contractual
and contingent stress outflows under a range of scenarios, which
are then used to determine the size of the liquidity pool that is
immediately available to meet anticipated outflows if a stress
occurs. The short-term scenarios include a 30 day Barclays-specific
stress event, a 90 day market-wide stress event and a 30 day
combined scenario consisting of both a Barclays specific and
market-wide stress event. The Group also runs a long-term liquidity
stress test, which measures the anticipated outflows over a 12
month market-wide scenario.
The LCR
requirement takes into account the relative stability of different
sources of funding and potential incremental funding requirements
in a stress. The LCR is designed to promote short-term resilience
of a bank’s liquidity risk profile by holding sufficient high
quality liquid assets to survive an acute stress scenario lasting
for 30 days.
As at
30 June 2022, the Group held eligible liquid assets in excess of
100% of net stress outflows to its internal and external regulatory
requirements.
Liquidity coverage ratio
|
|
|
|
As at 30.06.22
|
As at 31.12.21
|
|
£bn
|
£bn
|
Eligible liquidity buffer
|
331
|
285
|
Net stress outflows
|
(212)
|
(169)
|
Surplus
|
119
|
116
|
|
|
|
Liquidity coverage ratio
|
156%
|
168%
|
The
Group plans to maintain its surplus to the internal and regulatory
stress requirements at an efficient level, while considering risks
to market funding conditions and its liquidity position. The
continuous reassessment of these risks may lead to execution of
appropriate actions to resize the liquidity pool.
Composition of the Group liquidity pool
|
|
|
|
|
As at 30.06.22
|
As at 31.12.21
|
|
Liquidity pool
|
Liquidity pool of which LCR
eligible1
|
Liquidity pool
|
|
Cash
|
Level 1
|
Level 2A
|
|
£bn
|
£bn
|
£bn
|
£bn
|
£bn
|
Cash and deposits with central banks2
|
288
|
284
|
—
|
—
|
245
|
|
|
|
|
|
|
Government bonds3
|
|
|
|
|
|
AAA to AA-
|
33
|
—
|
24
|
1
|
26
|
A+ to A-
|
5
|
—
|
—
|
5
|
2
|
BBB+ to BBB-
|
—
|
—
|
—
|
—
|
—
|
Total government bonds
|
38
|
—
|
24
|
6
|
28
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
Government Guaranteed Issuers, PSEs and GSEs
|
8
|
—
|
6
|
1
|
6
|
International Organisations and MDBs
|
3
|
—
|
4
|
—
|
5
|
Covered bonds
|
4
|
—
|
2
|
2
|
6
|
Other
|
2
|
—
|
—
|
—
|
1
|
Total other
|
17
|
—
|
12
|
3
|
18
|
|
|
|
|
|
|
Total as at 30 June 2022
|
343
|
284
|
36
|
9
|
291
|
Total as at 31 December 2021
|
291
|
243
|
37
|
5
|
|
1
The LCR eligible liquidity pool is adjusted for trapped liquidity
and other regulatory deductions. It also incorporates other CRR as
amended by CRR II qualifying assets that are not eligible under
Barclays’ internal risk appetite.
2
Includes cash held at central banks and surplus cash at central
banks related to payment schemes. 99% (December 2021: over 99%) was
placed with the Bank of England, US Federal Reserve, European
Central Bank, Bank of Japan and Swiss National Bank.
3
Of which over 81% (December 2021: over 82%) comprised UK, US,
French, German, Japanese, Swiss and Dutch securities.
The
Group liquidity pool increased to £343bn as at 30 June 2022
(December 2021: £291bn) driven by continued deposit growth and
an increase in wholesale funding, which were partly offset by an
increase in business funding consumption. During H122, the
month-end liquidity pool ranged from £309bn to £343bn
(H221: £290bn to £308bn), and the month-end average
balance was £324bn (H221: £296bn). The liquidity pool is
held unencumbered and is not used to support payment or clearing
requirements. Such requirements are treated as part of our regular
business funding. The liquidity pool is intended to offset stress
outflows, and comprises the above cash and unencumbered
assets.
As at
30 June 2022, 64% (December 2021: 58%) of the liquidity pool was
located in Barclays Bank PLC, 25% (December 2021: 30%) in Barclays
Bank UK PLC and 6% (December 2021: 7%) in Barclays Bank Ireland
PLC. The residual portion of the liquidity pool is held outside of
these entities, predominantly in US subsidiaries, to meet
entity-specific stress outflows and local regulatory requirements.
To the extent the use of this residual portion of the liquidity
pool is restricted due to local regulatory requirements, it is
assumed to be unavailable to the rest of the Group in calculating
the LCR.
The
composition of the pool is subject to limits and controls set by
the respective entity Boards and independent liquidity risk, credit
risk and market risk functions. In addition, the investment of the
liquidity pool is monitored for concentration by issuer, currency
and asset type. Given returns generated by these highly liquid
assets, the risk and reward profile is continuously
managed.
Deposit funding
|
As at 30.06.22
|
|
As at 31.12.21
|
|
Loans and advances at amortised cost
|
Deposits at amortised cost
|
Loan: deposit ratio1
|
|
Loan: deposit ratio1
|
Funding of loans and advances
|
£bn
|
£bn
|
%
|
|
%
|
Barclays UK
|
224
|
262
|
85
|
|
85
|
Barclays International
|
167
|
307
|
54
|
|
52
|
Head Office
|
5
|
—
|
|
|
|
Barclays Group
|
396
|
569
|
70
|
|
70
|
1
The loan: deposit ratio is calculated as loans and advances at
amortised cost divided by deposits at amortised cost.
Funding structure and funding relationships
The
basis for liquidity risk management is a funding structure that
reduces the probability of a liquidity stress leading to an
inability to meet funding obligations as they fall due. The
Group’s overall funding strategy is to develop a diversified
funding base (geographically, by type and by counterparty) and
maintain access to a variety of alternative funding sources, to
provide protection against unexpected fluctuations, while
minimising the cost of funding.
Within
this, the Group aims to align the sources and uses of funding. As
such, retail and corporate loans and advances are largely funded by
deposits in the relevant entities, with the surplus primarily
funding the liquidity pool. The majority of reverse repurchase
agreements are matched by repurchase agreements. Derivative
liabilities and assets are largely matched. A substantial
proportion of balance sheet derivative positions qualify for
counterparty netting and the remaining portions are largely offset
when netted against cash collateral received and paid. Wholesale
debt and equity is used to fund residual assets.
These
funding relationships as at 30 June 2022 are summarised
below:
|
|
|
|
|
|
Restated1
|
|
As at 30.06.22
|
As at 31.12.21
|
|
|
As at 30.06.22
|
As at 31.12.21
|
Assets
|
£bn
|
£bn
|
|
Liabilities and equity
|
£bn
|
£bn
|
Loans
and advances at amortised cost2
|
381
|
358
|
|
Deposits at amortised cost
|
569
|
519
|
Group liquidity pool
|
343
|
291
|
|
<1 Year wholesale funding
|
84
|
67
|
|
|
|
|
>1 Year wholesale funding
|
97
|
101
|
Reverse repurchase agreements, trading portfolio assets, cash
collateral and settlement balances
|
426
|
388
|
|
Repurchase agreements, trading portfolio liabilities, cash
collateral and settlement balances
|
387
|
330
|
Derivative financial instruments
|
345
|
263
|
|
Derivative financial instruments
|
321
|
257
|
Other
assets3
|
94
|
84
|
|
Other liabilities
|
60
|
40
|
|
|
|
|
Equity
|
71
|
70
|
Total assets
|
1,589
|
1,384
|
|
Total liabilities and equity
|
1,589
|
1,384
|
1
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information. The contractual maturity profile of Senior
unsecured (privately placed) has been restated to reflect the
impact of the Over-issuance of Securities.
2
Adjusted for liquidity pool debt securities reported at amortised
cost of £15bn (December 2021: £3bn).
3
Other assets include fair value assets that are not part of reverse
repurchase agreements or trading portfolio assets, and other asset
categories.
Composition of wholesale funding
Wholesale
funding outstanding (excluding repurchase agreements) was
£181.5bn (December 2021: £167.5bn). In H122, the Group
issued £3.5bn of MREL eligible instruments from Barclays PLC
(the Parent company) in a range of tenors and
currencies.
Our
operating companies also access wholesale funding markets to
maintain their stable and diversified funding bases. Barclays Bank
PLC continued to issue in the shorter-term and medium-term notes
markets. In addition, Barclays Bank UK PLC continued to issue in
the shorter-term markets.
Wholesale
funding of £84.2bn (December 2021: £66.7bn1) matures in less
than one year, representing 46% (December 2021: 40%1) of total wholesale
funding outstanding. This includes £19.4bn (December 2021:
£24.9bn1) related to term
funding2.
Maturity profile of wholesale
funding2,3
|
<1
|
1-3
|
3-6
|
6-12
|
<1
|
1-2
|
2-3
|
3-4
|
4-5
|
>5
|
|
|
month
|
months
|
months
|
months
|
year
|
years
|
years
|
years
|
years
|
years
|
Total
|
|
£bn
|
£bn
|
£bn
|
£bn
|
£bn
|
£bn
|
£bn
|
£bn
|
£bn
|
£bn
|
£bn
|
Barclays PLC (the Parent company)
|
|
|
|
|
|
|
|
|
|
|
|
Senior unsecured (public benchmark)
|
—
|
—
|
—
|
0.2
|
0.2
|
6.9
|
7.7
|
5.5
|
3.5
|
14.0
|
37.8
|
Senior unsecured (privately placed)
|
—
|
—
|
—
|
—
|
—
|
0.2
|
—
|
—
|
—
|
1.2
|
1.4
|
Subordinated liabilities
|
—
|
—
|
—
|
—
|
—
|
—
|
1.0
|
1.7
|
—
|
7.4
|
10.1
|
Barclays Bank PLC (including subsidiaries)
|
|
|
|
|
|
|
|
|
|
|
|
Certificates of deposit and commercial paper
|
9.7
|
11.4
|
18.1
|
10.8
|
50.0
|
0.1
|
2.1
|
—
|
—
|
—
|
52.2
|
Asset backed commercial paper
|
3.7
|
4.5
|
0.2
|
0.2
|
8.6
|
—
|
—
|
—
|
—
|
—
|
8.6
|
Senior unsecured (public benchmark)
|
—
|
—
|
—
|
—
|
—
|
0.6
|
—
|
—
|
—
|
—
|
0.6
|
Senior
unsecured (privately placed)4
|
7.6
|
1.8
|
1.9
|
3.9
|
15.2
|
6.3
|
7.5
|
2.1
|
3.2
|
20.3
|
54.6
|
Asset backed securities
|
0.6
|
—
|
—
|
0.1
|
0.7
|
0.4
|
2.3
|
0.4
|
0.2
|
1.4
|
5.4
|
Subordinated liabilities
|
—
|
0.1
|
1.2
|
0.2
|
1.5
|
0.1
|
0.1
|
—
|
0.1
|
—
|
1.8
|
Barclays Bank UK PLC (including subsidiaries)
|
|
|
|
|
|
|
|
|
|
|
|
Certificates of deposit and commercial paper
|
6.1
|
0.1
|
—
|
—
|
6.2
|
—
|
—
|
—
|
—
|
—
|
6.2
|
Senior unsecured (public benchmark)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
0.1
|
0.1
|
Covered Bonds
|
—
|
—
|
—
|
1.8
|
1.8
|
—
|
—
|
—
|
—
|
0.9
|
2.7
|
Total as at 30 June 2022
|
27.7
|
17.9
|
21.4
|
17.2
|
84.2
|
14.6
|
20.7
|
9.7
|
7.0
|
45.3
|
181.5
|
Of which secured
|
4.3
|
4.5
|
0.2
|
2.1
|
11.1
|
0.4
|
2.3
|
0.4
|
0.2
|
2.3
|
16.7
|
Of which unsecured
|
23.4
|
13.4
|
21.2
|
15.1
|
73.1
|
14.2
|
18.4
|
9.3
|
6.8
|
43.0
|
164.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Total as at 31 December 20211
|
14.1
|
21.7
|
15.5
|
15.4
|
66.7
|
15.4
|
15.1
|
9.9
|
11.4
|
49.0
|
167.5
|
Of which secured
|
2.4
|
6.4
|
0.6
|
0.5
|
9.9
|
1.9
|
2.0
|
0.1
|
0.3
|
2.4
|
16.6
|
Of which unsecured
|
11.7
|
15.3
|
14.9
|
14.9
|
56.8
|
13.5
|
13.1
|
9.8
|
11.1
|
46.6
|
150.9
|
1
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information. The contractual maturity profile of financial
liabilities designated at fair value has been restated to reflect
the impact of the Over-issuance of Securities. Securities issued by
BBPLC in excess of the maximum aggregate offering price registered
under Barclays Bank PLC's 2019 F-3 and Predecessor Shelf with a
value of £6,997m have been classified as "on
demand".
2
The composition of wholesale funds comprises the balance sheet
reported financial liabilities at fair value, debt securities in
issue and subordinated liabilities. It does not include
participation in the central bank facilities reported within
repurchase agreements and other similar secured
borrowing.
3
Term funding comprises public benchmark and privately placed senior
unsecured notes, covered bonds, asset-backed securities and
subordinated debt where the original maturity of the instrument is
more than 1 year.
4
Includes structured notes of £45.9bn, of which £8.5bn
matures within one year.
Credit ratings
In
addition to monitoring and managing key metrics related to the
financial strength of the Group, Barclays also solicits independent
credit ratings from Standard & Poor’s Global (S&P),
Moody’s, Fitch, and Rating and Investment Information
(R&I). These ratings assess the creditworthiness of the Group,
its subsidiaries and its branches, and are based on reviews of a
broad range of business and financial attributes including capital
strength, profitability, funding, liquidity, asset quality,
strategy and governance.
Barclays Bank PLC
|
Standard & Poor's
|
Moody's
|
Fitch
|
Long-term
|
A / Positive
|
A1 / Stable
|
A+ /
Stable
|
Short-term
|
A-1
|
P-1
|
F1
|
|
|
|
|
Barclays Bank UK PLC
|
|
|
|
Long-term
|
A / Positive
|
A1 / Stable
|
A+ / Stable
|
Short-term
|
A-1
|
P-1
|
F1
|
|
|
|
|
Barclays PLC
|
|
|
|
Long-term
|
BBB / Positive
|
Baa2 /Positive
|
A /
Stable
|
Short-term
|
A-2
|
P-2
|
F1
|
As at
30 June 2022, all solicited ratings and outlooks with all agencies
remained unchanged since 31 December 2021.
In June
2021, S&P revised the outlooks of Barclays PLC, Barclays Bank
PLC and Barclays Bank UK PLC to positive from stable, whilst
affirming all ratings. The revisions reflect the view that Barclays
is delivering a stronger, more consistent business profile and
financial performance.
In
November 2021, Moody’s revised the outlook of Barclays PLC to
positive from stable, whilst affirming all ratings. The revisions
reflect Moody’s view that the level and stability of the
Group’s earnings could further improve once global
macroeconomic conditions normalise, recognising the balanced
earnings streams and stable operating costs.
In July
2021, Fitch revised the outlooks of Barclays PLC, Barclays Bank PLC
and Barclays Bank UK PLC to stable from negative, whilst affirming
all ratings. The revisions reflected improved expectations for
economic recovery in Barclays’ key markets and the
Group’s resilient performance through the
pandemic.
Barclays
also solicits issuer ratings from R&I. In November 2021,
R&I upgraded the issuer ratings of Barclays PLC and Barclays
Bank PLC by one notch to A and A+ respectively.
A
credit rating downgrade could result in outflows to meet collateral
requirements on existing contracts. Outflows related to credit
rating downgrades are included in the LRA stress scenarios and a
portion of the liquidity pool is held against this risk. Credit
ratings downgrades could also result in reduced funding capacity
and increased funding costs.
The
contractual collateral requirement following one- and two-notch
long-term and associated short-term downgrades across all credit
rating agencies, would result in outflows of £1bn and
£3bn respectively, and are provided for in determining an
appropriate liquidity pool size given the Group’s liquidity
risk appetite. These numbers do not assume any management or
restructuring actions that could be taken to reduce posting
requirements. These outflows do not include the potential liquidity
impact from loss of unsecured funding, such as from money market
funds, or loss of secured funding capacity. However, unsecured and
secured funding stresses are included in the LRA stress scenarios
and a portion of the liquidity pool is held against these
risks.
Regulatory minimum requirements
Capital
The
Group’s Overall Capital Requirement for CET1 is 10.9%
comprising a 4.5% Pillar 1 minimum, a 2.5% Capital Conservation
Buffer (CCB), a 1.5% Global Systemically Important Institution
(G-SII) buffer, a 2.4% Pillar 2A requirement and a 0%
Countercyclical Capital Buffer (CCyB).
The
Group’s CCyB is based on the buffer rate applicable for each
jurisdiction in which the Group has exposures. On 11 March 2020,
the Financial Policy Committee (FPC) set the CCyB rate for UK
exposures at 0% with immediate effect. The buffer rates set by
other national authorities for non-UK exposures are not currently
material. Overall, this results in a 0.0% CCyB for the Group. On 13
December 2021, the FPC announced that a CCyB rate of 1% for UK
exposures has been re-introduced and will be applicable from 13
December 2022. On 5 July 2022, the FPC announced that the UK CCyB
rate will be increased from 1% to 2% and will be applicable from 5
July 2023.
The
Group’s Pillar 2A requirement as per the PRA’s
Individual Capital Requirement was set as a nominal amount. When
expressed as a percentage of RWAs this was 4.2% of which at least
56.25% needed to be met with CET1 capital, equating to
approximately 2.4% of RWAs. The Pillar 2A requirement is subject to
at least annual review and is based on a point in time
assessment.
The
Group’s CET1 target ratio of 13-14% takes into account
headroom above requirements which includes a confidential
institution-specific PRA buffer. The Group remains above its
minimum capital regulatory requirements including the PRA
buffer.
Leverage
The
Group is subject to a UK leverage ratio requirement of 3.8%. This
comprises the 3.25% minimum requirement, a G-SII additional
leverage ratio buffer (G-SII ALRB) of 0.53% and a countercyclical
leverage ratio buffer of 0.0%. Although the leverage ratio is
expressed in terms of Tier 1 (T1) capital, 75% of the minimum
requirement, equating to 2.4375%, needs to be met with CET1
capital. In addition, the G-SII ALRB must be covered solely with
CET1 capital. The CET1 capital held against the 0.53% G-SII ALRB
was £6.0bn.
The
Group is also required to disclose an average UK leverage ratio
which is based on capital on the last day of each month in the
quarter and an exposure measure for each day in the
quarter.
MREL
The
Group is required to meet the higher of: (i) two times the sum of
8% Pillar 1 and 4.2% Pillar 2A; and (ii) 6.75% of leverage
exposures plus capital buffers, including the above mentioned
confidential institution-specific PRA buffer. CET1 capital cannot
be counted towards both MREL and the capital buffers, meaning that
the buffers will effectively be applied above MREL
requirements.
Significant regulatory updates in the period
Capital and RWAs
On 1
January 2022 the PRA’s implementation of Basel III standards
took effect including the re-introduction of the 100% CET1 capital
deduction for qualifying software intangible assets and the
introduction of the Standardised Approach for Counterparty Credit
Risk (SA-CCR) which replaces the Current Exposure Method (CEM) for
Standardised derivative exposures as a more risk sensitive
approach. In addition, the PRA also implemented IRB roadmap changes
which includes revisions to the criteria for definition of default,
probability of default (PD) and loss given default (LGD) estimation
to ensure supervisory consistency and increase transparency of IRB
models.
Leverage
From 1
January 2022, UK banks became subject to a single UK leverage ratio
requirement meaning that the CRR leverage ratio no longer applies.
Central bank claims can be excluded from the UK leverage ratio
measure as long as they are matched by qualifying liabilities
(rather than deposits).
References
to CRR, as amended by CRR II mean, unless otherwise specified, CRR
as amended by CRR II, as it forms part of UK law pursuant to the
European Union (Withdrawal) Act 2018. On 31 March 2022, the
temporary transitional powers (TTP) available to UK regulators to
delay or phase in on-shoring of European Union legislation into UK
law ended with full compliance of the on-shored regulations
required from 1 April 2022.
Impact of Over-issuance of Securities
Basis of preparation
In
March 2022, the Group became aware that Barclays Bank PLC had
issued securities in excess of the amount it had registered with
the SEC under Barclays Bank PLC’s 2019 F-3 and subsequently
became aware that securities had also been issued in excess of the
amount it had registered with the SEC under the Predecessor Shelf.
The securities issued in excess of the registered amount comprised
structured products and exchange traded notes. As these securities
were not issued in compliance with the Securities Act, a right of
rescission has arisen for certain purchasers of the securities. A
proportion of these costs associated with the right of rescission
are attributable to the financial statements for the year ended 31
December 2021, resulting in the restatement of the 2021 figures in
the disclosures below.
Prior
to the restatement, litigation and conduct charges in the income
statement in relation to 2021 were under reported by £220m
(pre-tax). This resulted in a CET1 capital decrease of £170m
from £47,497m to £47,327m. Both the transitional and
fully loaded CET1 ratios remained unchanged at 15.1% and 14.7%
respectively. The T1 ratio moved from 19.2% to 19.1% and the total
capital ratio moved from 22.3% to 22.2%.
The
leverage exposure increased £1.9bn to recognise on a
regulatory basis, the potential commitment relating to the
rescission offer (see 'Other matters' on page 6). This resulted in
the UK leverage ratio moving from 5.3% to 5.2% whilst the average
UK leverage ratio remained unchanged at 4.9%.
Total
own funds and eligible liabilities decreased £0.2bn to
£108bn, which was in excess of a restated requirement to hold
£94bn of own funds and eligible liabilities.
|
|
|
Restated1
|
Capital ratios2,3,4
|
As at 30.06.22
|
As at 31.03.22
|
As at 31.12.21
|
CET1
|
13.6%
|
13.8%
|
15.1%
|
T1
|
17.1%
|
17.1%
|
19.1%
|
Total regulatory capital
|
19.9%
|
20.1%
|
22.2%
|
|
|
|
|
Capital resources
|
£m
|
£m
|
£m
|
Total equity excluding non-controlling interests per the balance
sheet
|
69,627
|
68,465
|
69,052
|
Less: other equity instruments (recognised as AT1
capital)
|
(12,357)
|
(11,119)
|
(12,259)
|
Adjustment to retained earnings for foreseeable ordinary share
dividends
|
(595)
|
(968)
|
(666)
|
Adjustment to retained earnings for foreseeable repurchase of
shares
|
(568)
|
(1,000)
|
—
|
Adjustment to retained earnings for foreseeable other equity
coupons
|
(32)
|
(39)
|
(32)
|
|
|
|
|
Other regulatory adjustments and deductions
|
|
|
|
Additional value adjustments (PVA)
|
(1,810)
|
(1,864)
|
(1,585)
|
Goodwill and intangible assets
|
(8,232)
|
(8,035)
|
(6,804)
|
Deferred tax assets that rely on future profitability excluding
temporary differences
|
(1,010)
|
(938)
|
(1,028)
|
Fair value reserves related to gains or losses on cash flow
hedges
|
4,673
|
3,343
|
852
|
Gains or losses on liabilities at fair value resulting from own
credit
|
(62)
|
4
|
892
|
Defined benefit pension fund assets
|
(3,785)
|
(3,225)
|
(2,619)
|
Direct and indirect holdings by an institution of own CET1
instruments
|
(20)
|
(20)
|
(50)
|
Adjustment under IFRS 9 transitional arrangements
|
642
|
601
|
1,229
|
Other regulatory adjustments
|
220
|
64
|
345
|
CET1 capital
|
46,691
|
45,269
|
47,327
|
|
|
|
|
AT1 capital
|
|
|
|
Capital instruments and related share premium accounts
|
12,357
|
11,119
|
12,259
|
Qualifying AT1 capital (including minority interests) issued by
subsidiaries
|
—
|
—
|
637
|
Other regulatory adjustments and deductions
|
(60)
|
(60)
|
(80)
|
AT1 capital
|
12,297
|
11,059
|
12,816
|
|
|
|
|
T1 capital
|
58,988
|
56,328
|
60,143
|
|
|
|
|
T2 capital
|
|
|
|
Capital instruments and related share premium accounts
|
8,442
|
8,334
|
8,713
|
Qualifying T2 capital (including minority interests) issued by
subsidiaries
|
1,277
|
1,540
|
1,113
|
Credit risk adjustments (excess of impairment over expected
losses)
|
73
|
98
|
73
|
Other regulatory adjustments and deductions
|
(160)
|
(160)
|
(160)
|
Total regulatory capital
|
68,620
|
66,140
|
69,882
|
|
|
|
|
Total RWAs
|
344,516
|
328,830
|
314,136
|
1
Capital metrics as at 31 December 2021 have been restated to
reflect the impact of the Over-issuance of Securities. See Basis of
preparation on page 65 for more
information. The transitional CET1 ratio remains unchanged at
15.1%.
2
CET1, T1 and T2 capital, and RWAs are calculated applying the
transitional arrangements of the CRR as amended by CRR II. This
includes IFRS 9 transitional arrangements and the grandfathering of
CRR II non-compliant capital instruments. December 2021
comparatives include the grandfathering of CRR non-compliant
capital instruments.
3
The fully loaded CET1 ratio, as is relevant for assessing against
the conversion trigger in Barclays PLC AT1 securities, was 13.4%,
with £46.0bn of CET1 capital and £344.3bn of RWAs
calculated without applying the transitional arrangements of the
CRR as amended by CRR II.
4
The Group’s CET1 ratio, as is relevant for assessing against
the conversion trigger in Barclays Bank PLC 7.625% Contingent
Capital Notes, was 13.6%. For this calculation CET1 capital and
RWAs are calculated applying the transitional arrangements under
the CRR as amended by CRR II, including the IFRS 9 transitional
arrangements. The benefit of the Financial Services Authority (FSA)
October 2012 interpretation of the transitional provisions,
relating to the implementation of CRD IV, expired in December
2017.
Movement in CET1 capital
|
Three months ended 30.06.22
|
Six months ended 30.06.22
|
|
£m
|
£m
|
Opening CET1 capital1
|
45,269
|
47,327
|
|
|
|
Profit for the period attributable to equity holders
|
1,270
|
2,889
|
Own credit relating to derivative liabilities
|
(76)
|
(97)
|
Ordinary share dividends paid and foreseen
|
(291)
|
(593)
|
Purchased and foreseeable share repurchase
|
—
|
(1,000)
|
Other equity coupons paid and foreseen
|
(192)
|
(414)
|
Increase in retained regulatory capital generated from
earnings
|
711
|
785
|
|
|
|
Net impact of share schemes
|
132
|
(136)
|
Fair value through other comprehensive income reserve
|
(550)
|
(759)
|
Currency translation reserve
|
1,333
|
1,703
|
Other reserves
|
11
|
35
|
Increase in other qualifying reserves
|
926
|
843
|
|
|
|
Pension remeasurements within reserves
|
423
|
1,090
|
Defined benefit pension fund asset deduction
|
(560)
|
(1,166)
|
Net impact of pensions
|
(137)
|
(76)
|
|
|
|
Additional value adjustments (PVA)
|
54
|
(225)
|
Goodwill and intangible assets
|
(197)
|
(1,428)
|
Deferred tax assets that rely on future profitability excluding
those arising from temporary differences
|
(72)
|
18
|
Direct and indirect holdings by an institution of own CET1
instruments
|
—
|
30
|
Adjustment under IFRS 9 transitional arrangements
|
41
|
(587)
|
Other regulatory adjustments
|
96
|
4
|
Decrease in regulatory capital due to adjustments and
deductions
|
(78)
|
(2,188)
|
|
|
|
Closing CET1 capital
|
46,691
|
46,691
|
1
Opening balance as at 31 December 2021 has been restated to reflect
the impact of the Over-issuance of Securities. See Basis of
preparation on page 65 for
further details.
CET1
capital decreased £0.6bn to £46.7bn (December 2021:
£47.3bn).
CET1
capital decreased by £1.7bn as a result of regulatory changes
that took effect from 1 January 2022 including the re-introduction
of the 100% CET1 capital deduction for qualifying software
intangible assets and a reduction in IFRS9 transitional relief due
to the relief applied to the pre-2020 impairment charge reducing to
25% in 2022 from 50% in 2021 and the relief applied to the
post-2020 impairment charge reducing to 75% in 2022 from 100% in
2021.
£2.9bn
of capital generated from profits, after absorbing the £0.6bn
net of tax impact of the Over-issuance of Securities, was partially
offset by distributions of £2bn comprising:
●
£1bn for share
buybacks announced with FY21 results
●
£0.6bn accrual
towards a FY22 dividend
●
£0.4bn of
equity coupons paid
Other
significant movements in the period were:
●
£0.8bn
decrease in the fair value through other comprehensive income
reserve primarily due to losses on bonds as a result of an increase
in yields
●
£1.7bn
increase in the currency translation reserves driven by the
appreciation of period end USD against GBP
RWAs by risk type and business
|
|
Credit risk
|
|
Counterparty credit risk
|
|
Market Risk
|
|
Operational risk
|
Total RWAs
|
|
STD
|
IRB
|
|
STD
|
IRB
|
Settlement Risk
|
CVA
|
|
STD
|
IMA
|
|
|
|
As at 30.06.22
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
|
£m
|
£m
|
Barclays UK
|
6,613
|
53,958
|
|
253
|
—
|
—
|
76
|
|
236
|
—
|
|
11,047
|
72,183
|
Corporate and Investment Bank
|
40,055
|
71,737
|
|
18,739
|
22,099
|
440
|
3,357
|
|
17,466
|
28,423
|
|
25,296
|
227,612
|
Consumer, Cards and Payments
|
25,516
|
3,643
|
|
256
|
34
|
—
|
64
|
|
28
|
195
|
|
6,424
|
36,160
|
Barclays International
|
65,571
|
75,380
|
|
18,995
|
22,133
|
440
|
3,421
|
|
17,494
|
28,618
|
|
31,720
|
263,772
|
Head Office
|
3,488
|
6,069
|
|
—
|
—
|
—
|
—
|
|
—
|
—
|
|
(996)
|
8,561
|
Barclays Group
|
75,672
|
135,407
|
|
19,248
|
22,133
|
440
|
3,497
|
|
17,730
|
28,618
|
|
41,771
|
344,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 31.03.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barclays UK
|
6,989
|
54,241
|
|
229
|
—
|
—
|
57
|
|
155
|
—
|
|
11,047
|
72,718
|
Corporate and Investment Bank
|
35,325
|
70,831
|
|
16,422
|
21,047
|
268
|
3,675
|
|
17,068
|
23,551
|
|
25,296
|
213,483
|
Consumer, Cards and Payments
|
21,289
|
3,459
|
|
242
|
12
|
—
|
37
|
|
110
|
34
|
|
6,424
|
31,607
|
Barclays International
|
56,614
|
74,290
|
|
16,664
|
21,059
|
268
|
3,712
|
|
17,178
|
23,585
|
|
31,720
|
245,090
|
Head Office
|
5,532
|
6,486
|
|
—
|
—
|
—
|
—
|
|
—
|
—
|
|
(996)
|
11,022
|
Barclays Group
|
69,135
|
135,017
|
|
16,893
|
21,059
|
268
|
3,769
|
|
17,333
|
23,585
|
|
41,771
|
328,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 31.12.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barclays UK
|
7,195
|
53,408
|
|
426
|
—
|
—
|
138
|
|
100
|
—
|
|
11,022
|
72,289
|
Corporate and Investment Bank
|
29,420
|
64,416
|
|
15,223
|
19,238
|
105
|
2,289
|
|
17,306
|
27,308
|
|
25,359
|
200,664
|
Consumer, Cards and Payments
|
20,770
|
2,749
|
|
215
|
18
|
—
|
21
|
|
—
|
57
|
|
6,391
|
30,221
|
Barclays International
|
50,190
|
67,165
|
|
15,438
|
19,256
|
105
|
2,310
|
|
17,306
|
27,365
|
|
31,750
|
230,885
|
Head Office
|
4,733
|
7,254
|
|
—
|
—
|
—
|
—
|
|
—
|
—
|
|
(1,025)
|
10,962
|
Barclays Group
|
62,118
|
127,827
|
|
15,864
|
19,256
|
105
|
2,448
|
|
17,406
|
27,365
|
|
41,747
|
314,136
|
Movement analysis of RWAs
|
Credit risk
|
Counterparty credit risk
|
Market risk
|
Operational risk
|
Total RWAs
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
Opening RWAs (as at 31.12.21)
|
189,945
|
37,673
|
44,771
|
41,747
|
314,136
|
Book size
|
12,781
|
1,611
|
60
|
24
|
14,476
|
Acquisitions and disposals
|
(209)
|
—
|
—
|
—
|
(209)
|
Book quality
|
(3,101)
|
117
|
—
|
—
|
(2,984)
|
Model updates
|
—
|
—
|
—
|
—
|
—
|
Methodology and policy
|
3,458
|
3,352
|
—
|
—
|
6,810
|
Foreign
exchange movements1
|
8,205
|
2,565
|
1,517
|
—
|
12,287
|
Total RWA movements
|
21,134
|
7,645
|
1,577
|
24
|
30,380
|
Closing RWAs (as at 30.06.22)
|
211,079
|
45,318
|
46,348
|
41,771
|
344,516
|
1
Foreign exchange movements does not include foreign exchange for
modelled market risk or operational risk.
Overall
RWAs increased £30.4bn to £344.5bn (December 2021:
£314.1bn)
Credit
risk RWAs increased £21.1bn:
●
A £12.8bn
increase in book size primarily driven by a £7.8bn increase in
lending activities mainly within CIB and a £4.5bn temporary
increase in RWAs reflecting the hedging arrangements designed to
manage the risk of the rescission offer relating to the
Over-issuance of Securities, which are expected to reverse after
the rescission offer has been completed in Q322
●
A £0.2bn
decrease in acquisitions and disposals primarily driven by partial
disposal of Barclays' equity stake in Absa in April 2022, offset by
GAP portfolio acquisition
●
A £3.1bn
decrease in book quality primarily driven by the benefit in
mortgages from an increase in the House Price Index
(HPI)
●
A £3.5bn
increase in methodology and policy as a result of regulatory
changes that took effect from 1 January 2022, relating to
implementation of IRB roadmap changes partially offset by the
reversal of the software intangibles benefit
●
A £8.2bn
increase in FX primarily due to appreciation of period end USD
against GBP
Counterparty
Credit risk RWAs increased £7.6bn:
●
A £1.6bn
increase in book size primarily due to an increase in trading
activities within SFTs and derivatives
●
A £3.4bn
increase in methodology and policy as a result of regulatory
changes that took effect from 1 January 2022, relating to the
introduction of SA-CCR
●
A £2.6bn
increase in FX primarily due to appreciation of period end USD
against GBP
Market
risk RWAs increased £1.6bn:
●
A £0.1bn
increase in book size primarily driven by a £8.4bn increase
due to client and trading activities, offset by a £6.9bn
decrease in Stressed Value at Risk (SVaR) model adjustment as a
result of changes in portfolio composition and a £1.4bn
reduction in Structural FX
●
A £1.5bn
increase in FX primarily due to appreciation of period end USD
against GBP
|
|
|
Restated1
|
Leverage ratios2,3
|
As at 30.06.22
|
As at 31.03.22
|
As at 31.12.21
|
£m
|
£m
|
£m
|
Average UK leverage ratio
|
4.7%
|
4.8%
|
4.9%
|
Average T1 capital
|
57,689
|
56,701
|
59,739
|
Average UK leverage exposure
|
1,233,537
|
1,179,381
|
1,229,041
|
|
|
|
|
UK leverage ratio
|
5.1%
|
5.0%
|
5.2%
|
|
|
|
|
CET1 capital
|
46,691
|
45,269
|
47,327
|
AT1 capital
|
12,297
|
11,059
|
12,179
|
T1 capital
|
58,988
|
56,328
|
59,506
|
|
|
|
|
UK leverage exposure
|
1,151,214
|
1,123,531
|
1,137,904
|
|
|
|
|
UK leverage exposure
|
|
|
|
Accounting assets
|
|
|
|
Derivative financial instruments
|
344,855
|
289,822
|
262,572
|
Derivative cash collateral
|
66,909
|
64,836
|
58,177
|
Securities financing transactions (SFTs)
|
193,682
|
186,417
|
170,853
|
Loans and advances and other assets
|
983,784
|
955,020
|
892,683
|
Total IFRS assets
|
1,589,230
|
1,496,095
|
1,384,285
|
|
|
|
|
Regulatory consolidation adjustments
|
(3,546)
|
(3,605)
|
(3,665)
|
|
|
|
|
Derivatives adjustments
|
|
|
|
Derivatives netting
|
(288,727)
|
(235,071)
|
(236,881)
|
Adjustments to collateral
|
(53,328)
|
(52,181)
|
(50,929)
|
Net written credit protection
|
28,102
|
19,729
|
15,509
|
Potential future exposure (PFE) on derivatives
|
85,469
|
85,619
|
137,291
|
Total derivatives adjustments
|
(228,484)
|
(181,904)
|
(135,010)
|
|
|
|
|
SFTs adjustments
|
29,784
|
29,095
|
24,544
|
|
|
|
|
Regulatory deductions and other adjustments
|
(22,758)
|
(22,332)
|
(20,219)
|
|
|
|
|
Weighted off-balance sheet commitments
|
127,400
|
119,933
|
115,047
|
|
|
|
|
Qualifying central bank claims
|
(294,477)
|
(260,196)
|
(210,134)
|
|
|
|
|
Settlement netting
|
(45,935)
|
(53,555)
|
(16,944)
|
|
|
|
|
UK leverage exposure
|
1,151,214
|
1,123,531
|
1,137,904
|
1
Capital and leverage metrics as at 31 December 2021 have been
restated to reflect the impact of the Over-issuance of Securities.
See Basis of preparation on page 65 for further details.
2
Capital and leverage measures are calculated applying the
transitional arrangements of the CRR as amended by CRR
II.
3
Fully loaded average UK leverage ratio was 4.6%, with £57.0bn
of T1 capital and £1,232.9bn of leverage exposure. Fully
loaded UK leverage ratio was 5.1%, with £58.3bn of T1 capital
and £1,150.6bn of leverage exposure. Fully loaded UK leverage
ratios are calculated without applying the transitional
arrangements of the CRR as amended by CRR II.
The
UK leverage ratio decreased
to 5.1% (December 2021: 5.2%) primarily due to a £13.3bn
increase in the leverage exposure. The UK leverage
exposure increased to £1,151.2bn (December 2021:
£1,137.9bn), due to the following significant
movements:
●
£36.8bn
increase in derivative financial instruments post additional
regulatory netting and adjustments for cash collateral primarily
driven by client and trading activity in CIB and the application of
a 1.4 multiplier introduced under SA-CCR
●
£34.4bn
increase in loans and advances at amortised cost primarily driven
by increased lending
●
£28.1bn
increase in SFTs primarily driven by client activity in
CIB
●
£12.6bn
increase in net written credit protection primarily driven by the
inclusion of credit default swap options from 1 January
2022
●
£51.8bn
decrease in PFE on derivatives primarily driven by increased
netting eligibility due to the introduction of SA-CCR
●
£39.8bn
decrease due to an £84.3bn increase in the qualifying central
bank claims exemption primarily due to the matching of allowable
liabilities rather than deposits introduced under the UK leverage
framework review, partially offset by a £44.6bn increase in
cash
●
£20.0bn
decrease in trading portfolio assets primarily due to decreases in
Equities
The
average UK Leverage Ratio decreased to 4.7% (December 2021: 4.9%)
primarily due to a £2.1bn decrease in average T1 capital
largely as a result of regulatory changes effective from 1 January
2022 and the redemption of AT1 instruments in Q122.
MREL
|
|
|
|
|
|
|
|
MREL requirements including
buffers1,2,3,4
|
Total requirement (£m) based on
|
|
Requirement as a percentage of:
|
|
|
|
Restated1
|
|
|
|
Restated1
|
|
As at 30.06.22
|
As at 31.03.22
|
As at 31.12.21
|
|
As at 30.06.22
|
As at 31.03.22
|
As at 31.12.21
|
Requirement based on RWAs (minimum requirement)
|
98,096
|
94,947
|
77,302
|
|
28.5%
|
28.9%
|
24.6%
|
Requirement
based on UK leverage exposure3
|
91,532
|
89,025
|
93,975
|
|
8.0%
|
7.9%
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restated1
|
Own funds and eligible
liabilities1,3
|
|
|
|
|
As at 30.06.22
|
As at 31.03.22
|
As at 31.12.21
|
|
|
|
|
|
£m
|
£m
|
£m
|
CET1 capital
|
|
|
|
|
46,691
|
45,269
|
47,327
|
AT1
capital instruments and related share premium accounts5
|
|
|
|
|
12,297
|
11,059
|
12,179
|
T2
capital instruments and related share premium accounts5
|
|
|
|
|
8,355
|
8,272
|
8,626
|
Eligible liabilities
|
|
|
|
|
39,137
|
37,886
|
39,889
|
Total Barclays PLC (the Parent company) own funds and eligible
liabilities
|
|
|
106,480
|
102,486
|
108,021
|
|
|
|
|
|
|
|
|
Total RWAs
|
|
|
|
|
344,516
|
328,830
|
314,136
|
Total UK leverage exposure4
|
|
|
|
|
1,151,214
|
1,123,531
|
1,356,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restated1
|
Own funds and eligible liabilities
ratios as a percentage of:1
|
|
|
|
|
As at 30.06.22
|
As at 31.03.22
|
As at 31.12.21
|
Total RWAs
|
|
|
|
|
30.9%
|
31.2%
|
34.4%
|
Total
UK leverage exposure4
|
|
|
|
|
9.2%
|
9.1%
|
8.0%
|
As at
30 June 2022, Barclays PLC (the Parent company) held £106.5bn
of own funds and eligible liabilities equating to 30.9% of RWAs.
This was in excess of the Group's MREL requirement, excluding the
PRA buffer, to hold £98.1bn of own funds and eligible
liabilities equating to 28.5% of RWAs. The Group remains above its
MREL regulatory requirement including the PRA buffer.
1
Capital and leverage metrics as at 31 December 2021 have been
restated to reflect the impact of the Over-issuance of Securities.
See Basis of preparation on page 65 for further details.
2
Minimum requirement excludes the confidential institution-specific
PRA buffer.
3
CET1, T1 and T2 capital, and RWAs are calculated applying IFRS 9
transitional arrangements.
4
As at 31 December 2021, MREL requirements were on a CRR leverage
basis which, from 1 January 2022, was no longer applicable for UK
banks.
5
Includes other AT1 capital regulatory adjustments and deductions of
£60m (December 2021: £80m), and other T2 credit risk
adjustments and deductions of £87m (December 2021:
£87m).
Statement of Directors' Responsibilities
The
Directors (the names of whom are set out below) are required to
prepare the financial statements on a going concern basis unless it
is not appropriate to do so. In making this assessment, the
directors have considered information relating to present and
future conditions. Each of the Directors confirm that to the best
of their knowledge, the condensed consolidated interim financial
statements set out on pages 77
to 86 have been prepared in
accordance with International Accounting Standard 34,
‘Interim Financial Reporting’, as adopted by the UK,
and that the interim management report herein includes a fair
review of the information required by Disclosure Guidance and
Transparency Rules 4.2.7R and 4.2.8R namely:
●
an indication of
important events that have occurred during the six months ended 30
June 2022 and their impact on the condensed consolidated interim
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial
year
●
any related party
transactions in the six months ended 30 June 2022 that have
materially affected the financial position or performance of
Barclays during that period and any changes in the related party
transactions described in the last Annual Report that could have a
material effect on the financial position or performance of
Barclays in the six months ended 30 June 2022
Signed
on 27 July 2022 on behalf of the Board by
C.S. Venkatakrishnan
|
Anna Cross
|
Group Chief Executive
|
Group Finance Director
|
Barclays
PLC Board of Directors
Chairman
|
Executive Directors
|
Non-Executive Directors
|
Nigel Higgins
|
C.S. Venkatakrishnan
|
Mike Ashley
|
|
Anna Cross
|
Robert Berry
|
|
|
Tim Breedon CBE
|
|
|
Mohamed A. El-Erian
|
|
|
Dawn Fitzpatrick
|
|
|
Mary Francis CBE
|
|
|
Crawford Gillies
|
|
|
Brian Gilvary
|
|
|
Diane Schueneman
|
|
|
Julia Wilson
|
Independent Review Report to Barclays PLC
Conclusion
We have
been engaged by Barclays PLC ("the company" or "the group") to
review the condensed set of financial statements in the Interim
Results Announcement for the six months ended 30 June 2022 which
comprises:
●
the condensed
consolidated income statement and condensed consolidated statement
of comprehensive income for the period then ended;
●
the condensed
consolidated balance sheet as at 30 June 2022;
●
the condensed
consolidated statement of changes in equity for the period then
ended;
●
the condensed
consolidated cash flow statement for the period then ended;
and
●
the related
explanatory notes.
Based
on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the
Interim Results Announcement for the six months ended 30 June 2022
is not prepared, in all material respects, in accordance with IAS
34 Interim Financial Reporting as adopted for use in the UK and the
Disclosure Guidance and Transparency Rules (“the DTR”)
of the UK’s Financial Conduct Authority (“the UK
FCA”).
Basis for conclusion
We
conducted our review in accordance with International Standard on
Review Engagements (UK) 2410 Review of Interim Financial
Information Performed by the Independent Auditor of the Entity
(“ISRE (UK) 2410”) issued for use in the UK. A review
of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. We
read the other information contained in the Interim Results
Announcement and consider whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
A
review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit
opinion.
Conclusions relating to going concern
Based
on our review procedures, which are less extensive than those
performed in an audit as described in the Basis for conclusion
section of this report, nothing has come to our attention that
causes us to believe that the directors have inappropriately
adopted the going concern basis of accounting, or that the
directors have identified material uncertainties relating to going
concern that have not been appropriately disclosed.
This
conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410. However, future events or
conditions may cause the group to cease to continue as a going
concern, and the above conclusions are not a guarantee that the
group will continue in operation.
Directors’ responsibilities
The
Interim Results Announcement is the responsibility of, and has been
approved by, the directors. The directors are responsible for
preparing the half-yearly financial report in accordance with the
DTR of the UK FCA.
As
disclosed in note 1, the Basis of preparation, the annual financial
statements of the Barclays Group are prepared in accordance with
UK-adopted international accounting standards.
The
directors are responsible for preparing the condensed set of
financial statements included in the Interim Results Announcement
in accordance with IAS 34 as adopted for use in the
UK.
In
preparing the condensed set of financial statements, the directors
are responsible for assessing the group’s ability to continue
as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do
so.
Our responsibility
Our
responsibility is to express to the company a conclusion on the
condensed set of financial statements in the Interim Results
Announcement based on our review. Our conclusion, including our
conclusions relating to going concern, are based on procedures that
are less extensive than audit procedures, as described in the Basis
for conclusion section of this report.
The purpose of our review work and to whom we owe our
responsibilities
This
report is made solely to the company in accordance with the terms
of our engagement to assist the company in meeting the requirements
of the DTR of the UK FCA. Our review has been undertaken so that we
might state to the company those matters we are required to state
to it in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Stuart Crisp
for and on behalf of KPMG LLP
Chartered Accountants
15
Canada Square
London,
E14 5GL
27 July
2022
Condensed Consolidated Financial Statements
Condensed consolidated income statement (unaudited)
|
|
|
|
Restated2
|
|
Notes1
|
Half year ended 30.06.22
|
Half year ended 30.06.21
|
|
|
£m
|
£m
|
Interest and similar income
|
|
7,134
|
5,279
|
Interest and similar expense
|
|
(2,371)
|
(1,376)
|
Net interest income
|
|
4,763
|
3,903
|
Fee and commission income
|
3
|
4,726
|
4,682
|
Fee and commission expense
|
3
|
(1,302)
|
(976)
|
Net fee and commission income
|
3
|
3,424
|
3,706
|
Net trading income
|
|
5,013
|
3,482
|
Net investment income
|
|
(116)
|
152
|
Other income
|
|
120
|
72
|
Total income
|
|
13,204
|
11,315
|
Credit impairment (charges)/releases
|
|
(341)
|
742
|
Net operating income
|
|
12,863
|
12,057
|
|
|
|
|
Staff costs
|
4
|
(4,583)
|
(4,334)
|
Infrastructure, administration and general expenses
|
5
|
(2,687)
|
(2,798)
|
Litigation and conduct
|
15
|
(1,857)
|
(176)
|
Operating expenses
|
|
(9,127)
|
(7,308)
|
|
|
|
|
Share of post-tax results of associates and joint
ventures
|
|
(3)
|
154
|
Profit on disposal of subsidiaries, associates and joint
ventures
|
|
—
|
(1)
|
Profit before tax
|
|
3,733
|
4,902
|
Tax charge
|
6
|
(823)
|
(742)
|
Profit after tax
|
|
2,910
|
4,160
|
|
|
|
|
Attributable to:
|
|
|
|
Equity holders of the parent
|
|
2,475
|
3,752
|
Other equity instrument holders
|
|
414
|
389
|
Total equity holders of the parent
|
|
2,889
|
4,141
|
Non-controlling interests
|
7
|
21
|
19
|
Profit after tax
|
|
2,910
|
4,160
|
|
|
|
|
Earnings per share
|
|
p
|
p
|
Basic earnings per ordinary share
|
8
|
14.8
|
21.9
|
Diluted earnings per ordinary share
|
8
|
14.5
|
21.3
|
1
For Notes to the Financial Statements see pages 87 to 114.
2
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
Condensed consolidated statement of comprehensive income
(unaudited)
|
|
|
|
Restated2
|
|
|
Half year ended 30.06.22
|
Half year ended 30.06.21
|
|
Notes1
|
£m
|
£m
|
Profit after tax
|
|
2,910
|
4,160
|
|
|
|
|
Other comprehensive income/(loss) that may be recycled to profit or
loss:3
|
|
|
Currency translation reserve
|
19
|
1,703
|
(495)
|
Fair value through other comprehensive income reserve
|
19
|
(913)
|
(365)
|
Cash flow hedging reserve
|
19
|
(3,818)
|
(911)
|
Other comprehensive loss that may be recycled to
profit
|
|
(3,028)
|
(1,771)
|
|
|
|
|
Other comprehensive income/(loss) not recycled to profit or
loss:3
|
|
|
Retirement benefit remeasurements
|
16
|
1,090
|
103
|
Fair value through other comprehensive income reserve
|
19
|
154
|
115
|
Own credit
|
19
|
855
|
(47)
|
Other comprehensive income not recycled to profit
|
|
2,099
|
171
|
|
|
|
|
Other comprehensive loss for the period
|
|
(929)
|
(1,600)
|
|
|
|
|
Total comprehensive income for the period
|
|
1,981
|
2,560
|
|
|
|
|
Attributable to:
|
|
|
|
Equity holders of the parent
|
|
1,960
|
2,541
|
Non-controlling interests
|
|
21
|
19
|
Total comprehensive income for the period
|
|
1,981
|
2,560
|
1
For Notes to the Financial Statements see pages 87 to 114.
2
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
Condensed consolidated balance sheet (unaudited)
|
|
|
|
Restated2
|
|
|
As at 30.06.22
|
As at 31.12.21
|
Assets
|
Notes1
|
£m
|
£m
|
Cash and balances at central banks
|
|
283,136
|
238,574
|
Cash collateral and settlement balances
|
|
132,623
|
92,542
|
Loans and advances at amortised cost
|
12
|
395,824
|
361,451
|
Reverse repurchase agreements and other similar secured
lending
|
|
1,639
|
3,227
|
Trading portfolio assets
|
|
127,004
|
147,035
|
Financial assets at fair value through the income
statement
|
|
212,723
|
191,972
|
Derivative financial instruments
|
10
|
344,855
|
262,572
|
Financial assets at fair value through other comprehensive
income
|
|
63,194
|
61,753
|
Investments in associates and joint ventures
|
|
911
|
999
|
Goodwill and intangible assets
|
13
|
8,245
|
8,061
|
Property, plant and equipment
|
|
3,582
|
3,555
|
Current tax assets
|
|
551
|
261
|
Deferred tax assets
|
6
|
5,044
|
4,619
|
Retirement benefit assets
|
16
|
5,233
|
3,879
|
Other assets
|
|
4,666
|
3,785
|
Total assets
|
|
1,589,230
|
1,384,285
|
|
|
|
|
Liabilities
|
|
|
|
Deposits at amortised cost
|
12
|
568,670
|
519,433
|
Cash collateral and settlement balances
|
|
124,724
|
79,371
|
Repurchase agreements and other similar secured
borrowing
|
|
28,566
|
28,352
|
Debt securities in issue
|
|
115,906
|
98,867
|
Subordinated Liabilities
|
14
|
11,871
|
12,759
|
Trading portfolio liabilities
|
|
76,638
|
54,169
|
Financial liabilities designated at fair value
|
|
255,136
|
250,960
|
Derivative financial instruments
|
10
|
321,396
|
256,883
|
Current tax liabilities
|
|
449
|
689
|
Deferred tax liabilities
|
6
|
5
|
37
|
Retirement benefit liabilities
|
16
|
309
|
311
|
Other liabilities
|
|
11,538
|
10,505
|
Provisions
|
15
|
3,426
|
1,908
|
Total liabilities
|
|
1,518,634
|
1,314,244
|
|
|
|
|
Equity
|
|
|
|
Called up share capital and share premium
|
17
|
4,508
|
4,536
|
Other reserves
|
19
|
(218)
|
1,770
|
Retained earnings
|
|
52,980
|
50,487
|
Shareholders' equity attributable to ordinary shareholders of the
parent
|
|
57,270
|
56,793
|
Other equity instruments
|
18
|
12,357
|
12,259
|
Total equity excluding non-controlling interests
|
|
69,627
|
69,052
|
Non-controlling interests
|
7
|
969
|
989
|
Total equity
|
|
70,596
|
70,041
|
|
|
|
|
Total liabilities and equity
|
|
1,589,230
|
1,384,285
|
1
For Notes to the Financial Statements see pages 87 to 114.
2
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
Condensed consolidated statement of changes in equity
(unaudited)
|
|
|
|
|
Restated1
|
Restated1
|
|
Restated1
|
|
Called up share capital and share
premium2
|
Other equity
instruments2
|
Other reserves2
|
Retained earnings
|
Total
|
Non-controlling
interests3
|
Total equity
|
Half year ended 30.06.22
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Balance as at 1 January 2022
|
4,536
|
12,259
|
1,770
|
50,487
|
69,052
|
989
|
70,041
|
Profit after tax
|
—
|
414
|
—
|
2,475
|
2,889
|
21
|
2,910
|
Currency translation movements
|
—
|
—
|
1,703
|
—
|
1,703
|
—
|
1,703
|
Fair value through other comprehensive income reserve
|
—
|
—
|
(759)
|
—
|
(759)
|
—
|
(759)
|
Cash flow hedges
|
—
|
—
|
(3,818)
|
—
|
(3,818)
|
—
|
(3,818)
|
Retirement benefit remeasurements
|
—
|
—
|
—
|
1,090
|
1,090
|
—
|
1,090
|
Own credit
|
—
|
—
|
855
|
—
|
855
|
—
|
855
|
Total comprehensive income for the period
|
—
|
414
|
(2,019)
|
3,565
|
1,960
|
21
|
1,981
|
Employee share schemes and hedging thereof
|
33
|
—
|
—
|
417
|
450
|
—
|
450
|
Issue and redemption of other equity instruments
|
—
|
115
|
—
|
25
|
140
|
(20)
|
120
|
Other equity instruments coupon paid
|
—
|
(414)
|
—
|
—
|
(414)
|
—
|
(414)
|
Partial disposal of ABSA holding
|
—
|
—
|
(39)
|
39
|
—
|
—
|
—
|
Vesting of employee share schemes
|
—
|
—
|
7
|
(464)
|
(457)
|
—
|
(457)
|
Dividends paid
|
—
|
—
|
—
|
(664)
|
(664)
|
(21)
|
(685)
|
Repurchase of shares
|
(61)
|
—
|
61
|
(432)
|
(432)
|
—
|
(432)
|
Other movements
|
—
|
(17)
|
2
|
7
|
(8)
|
—
|
(8)
|
Balance as at 30 June 2022
|
4,508
|
12,357
|
(218)
|
52,980
|
69,627
|
969
|
70,596
|
Half year ended 31.12.2021
|
|
|
|
|
|
|
|
Balance as at 1 July 2021
|
4,568
|
11,167
|
2,856
|
48,401
|
66,992
|
1,064
|
68,056
|
Profit after tax
|
—
|
415
|
—
|
2,453
|
2,868
|
28
|
2,896
|
Currency translation movements
|
—
|
—
|
364
|
—
|
364
|
—
|
364
|
Fair value through other comprehensive income reserve
|
—
|
—
|
(38)
|
—
|
(38)
|
—
|
(38)
|
Cash flow hedges
|
—
|
—
|
(1,517)
|
—
|
(1,517)
|
—
|
(1,517)
|
Retirement benefit remeasurements
|
—
|
—
|
—
|
540
|
540
|
—
|
540
|
Own credit
|
—
|
—
|
33
|
—
|
33
|
—
|
33
|
Total comprehensive income for the period
|
—
|
415
|
(1,158)
|
2,993
|
2,250
|
28
|
2,278
|
Employee share schemes and hedging thereof
|
35
|
—
|
—
|
(54)
|
(19)
|
—
|
(19)
|
Issue and redemption of other equity instruments
|
—
|
1,078
|
—
|
6
|
1,084
|
(75)
|
1,009
|
Other equity instruments coupon paid
|
—
|
(415)
|
—
|
—
|
(415)
|
—
|
(415)
|
Vesting of employee share schemes
|
—
|
—
|
(3)
|
(13)
|
(16)
|
—
|
(16)
|
Dividends paid
|
—
|
—
|
—
|
(339)
|
(339)
|
(28)
|
(367)
|
Repurchase of shares
|
(67)
|
—
|
67
|
(500)
|
(500)
|
—
|
(500)
|
Other movements
|
—
|
14
|
8
|
(7)
|
15
|
—
|
15
|
Balance as at 31 December 2021
|
4,536
|
12,259
|
1,770
|
50,487
|
69,052
|
989
|
70,041
|
1
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
2
Details of share capital, other equity instruments and other
reserves are shown on pages 103
to 104.
3
Details of non-controlling interests are shown on page 92.
Condensed consolidated statement of changes in equity
(unaudited)
|
|
|
|
|
Restated1
|
Restated1
|
|
Restated1
|
|
Called up share capital and share
premium2
|
Other equity
instruments2
|
Other reserves2
|
Retained earnings
|
Total
|
Non-controlling
interests3
|
Total equity
|
Half year ended 30.06.2021
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Balance as at 1 January 2021
|
4,637
|
11,172
|
4,461
|
45,527
|
65,797
|
1,085
|
66,882
|
Profit after tax
|
—
|
389
|
—
|
3,752
|
4,141
|
19
|
4,160
|
Currency translation movements
|
—
|
—
|
(495)
|
—
|
(495)
|
—
|
(495)
|
Fair value through other comprehensive income reserve
|
—
|
—
|
(250)
|
—
|
(250)
|
—
|
(250)
|
Cash flow hedges
|
—
|
—
|
(911)
|
—
|
(911)
|
—
|
(911)
|
Retirement benefit remeasurements
|
—
|
—
|
—
|
103
|
103
|
—
|
103
|
Own credit
|
—
|
—
|
(47)
|
—
|
(47)
|
—
|
(47)
|
Total comprehensive income for the period
|
—
|
389
|
(1,703)
|
3,855
|
2,541
|
19
|
2,560
|
Employee share schemes and hedging thereof
|
25
|
—
|
—
|
289
|
314
|
—
|
314
|
Other equity instruments coupon paid
|
—
|
(389)
|
—
|
—
|
(389)
|
—
|
(389)
|
Vesting of employee share schemes
|
—
|
—
|
4
|
(397)
|
(393)
|
—
|
(393)
|
Dividends paid
|
—
|
—
|
—
|
(173)
|
(173)
|
(16)
|
(189)
|
Repurchase of shares
|
(94)
|
—
|
94
|
(700)
|
(700)
|
—
|
(700)
|
Other movements
|
—
|
(5)
|
—
|
—
|
(5)
|
(24)
|
(29)
|
Balance as at 30 June 2021
|
4,568
|
11,167
|
2,856
|
48,401
|
66,992
|
1,064
|
68,056
|
|
|
|
|
|
|
|
|
1.
2021
financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87 for more information.
2.
Details of share capital, other equity instruments and other
reserves are shown on pages 103 to 104.
3.
Details of non-controlling interests are shown on page 92.
Condensed consolidated cash flow statement (unaudited)
|
|
|
Restated1
|
|
Half year ended 30.06.22
|
Half year ended 30.06.21
|
|
£m
|
£m
|
Profit before tax
|
3,733
|
4,902
|
Adjustment for non-cash items
|
(7,115)
|
6,977
|
Net (increase)/decrease in loans and advances at amortised
cost
|
(17,667)
|
432
|
Net increase in deposits at amortised cost
|
49,237
|
19,859
|
Net increase in debt securities in issue
|
19,748
|
13,041
|
Changes in other operating assets and liabilities
|
14,719
|
(5,559)
|
Corporate income tax paid
|
(401)
|
(712)
|
Net cash from operating activities
|
62,254
|
38,940
|
Net cash from investing activities
|
(14,939)
|
(3,389)
|
Net cash from financing activities
|
(5,500)
|
(2,562)
|
Effect of exchange rates on cash and cash equivalents
|
7,047
|
(5,535)
|
Net increase in cash and cash equivalents
|
48,862
|
27,454
|
Cash and cash equivalents at beginning of the period
|
259,206
|
210,142
|
Cash and cash equivalents at end of the period
|
308,068
|
237,596
|
1
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
Financial Statement Notes
These
condensed consolidated interim financial statements ("the financial
statements") for the six months ended 30 June 2022 have been
prepared in accordance with the Disclosure Guidance and
Transparency Rules (DTR) of the UK’s Financial Conduct
Authority (FCA) and IAS 34, Interim Financial Reporting, as
published by the International Accounting Standards Board (IASB)
and adopted by the UK.
The
condensed consolidated interim financial statements should be read
in conjunction with the annual financial statements for the year
ended 31 December 2021. The annual financial statements for the
year ended 31 December 2021 were prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and in accordance with
International Financial Reporting Standards (IFRS) and
interpretations (IFRICs) as issued by the IASB and adopted by the
UK.
The
accounting policies and methods of computation used in these
condensed consolidated interim financial statements are the same as
those used in the Barclays PLC Annual Report 2021.
The
financial statements are prepared on a going concern basis, as the
Directors are satisfied that the Group and parent company have the
resources to continue in business for a period of at least 12
months from approval of the interim financial statements. In making
this assessment, the Directors have considered a wide range of
information relating to present and future conditions and includes
a review of a working capital report (WCR). The WCR is used by the
Directors to assess the future performance of the business and that
it has the resources in place that are required to meet its ongoing
regulatory requirements. The WCR also includes an assessment of the
impact of internally generated stress testing scenarios on the
liquidity and capital requirement forecasts. The stress tests used
were based upon an assessment of reasonably possible downside
economic scenarios that the Group could experience.
The WCR
indicated that the Group had sufficient capital in place to support
its future business requirements and remained above its regulatory
minimum requirements in the internal stress scenarios.
The
Credit risk disclosures on pages 33 to 56 form part of these interim financial
statements.
Restatement of financial statements
The
comparatives in these condensed consolidated interim financial
statements for the six months ended 30 June 2022 (the financial
statements) have been restated to reflect both a provision and
contingent liability disclosure in respect of the impact of an
over-issuance of securities (the Over-issuance of Securities) in
excess of the maximum aggregate offering price registered under
Barclays Bank PLC’s shelf registration statement on Form F-3,
as declared effective by the SEC in August 2019 (2019 F-3) and
Barclays Bank PLC’s predecessor shelf registration statement
on Form F-3 filed in 2018 (Predecessor Shelf).
Due to
a historic SEC settlement order, at the time the 2019 F-3 was filed
and the Predecessor Shelf was amended, Barclays Bank PLC had ceased
to be a “well-known seasoned issuer” (or WKSI) and had
become an “ineligible issuer”, as defined in Rule 405
under the Securities Act of 1933, as amended (Securities Act), thus
being required to register upfront a certain amount of securities
with the SEC.
In
March 2022, Barclays Bank PLC became aware that it had issued
securities in the US materially in excess of the amount it had
registered with the SEC under the 2019 F-3 and subsequently became
aware that securities had also been issued in excess of the amount
it had registered with the SEC under the Predecessor Shelf. The
securities that were issued in this period comprise structured
notes and exchange traded notes (ETNs). As such, certain offers and
sales of these securities were not made in compliance with the
Securities Act, giving rise to rights of rescission for certain
purchasers of the securities. Under Section 12(a)(1) of the
Securities Act, certain purchasers of unregistered securities have
a right to recover, upon the tender of such security, the
consideration paid for such security with interest, less the amount
of any income received, or damages if the purchaser no longer owns
the security (the Rescission Price). As a result, Barclays Bank PLC
has elected to make a rescission offer to eligible purchasers of
the relevant affected securities at the Rescission Price (the
Rescission Offer).
A
proportion of the expected costs associated with the rights of
rescission of certain investors are attributable to Barclays
PLC’s financial statements for the year ended 31 December
2021. Accordingly, the comparatives in these financial statements
have been restated. The restatement impacts the consolidated income
statement, the consolidated statement of comprehensive income, the
consolidated balance sheet, the consolidated statement of changes
in equity, and the consolidated cash flow statement for the year
ended 31 December 2021, as well as quarterly and half yearly
financial information that is presented within this document. There
was no material effect on Barclays PLC’s previously reported
financial statements for the year ended 31 December 2020 and
2019.
The
table below reflects each of the consolidated financial statement
line items that were affected by the restatement:
Impact on the consolidated income statement
|
As reported
|
|
Restatement
|
|
As restated
|
Half year ended 30.06.21
|
£m
|
|
£m
|
|
£m
|
Litigation and conduct
|
(99)
|
|
(77)
|
|
(176)
|
Operating expenses
|
(7,231)
|
|
(77)
|
|
(7,308)
|
Profit before tax
|
4,979
|
|
(77)
|
|
4,902
|
Taxation
|
(759)
|
|
17
|
|
(742)
|
Profit after tax
|
4,220
|
|
(60)
|
|
4,160
|
|
|
|
|
|
|
Year ended 31.12.21
|
£m
|
|
£m
|
|
£m
|
Litigation and conduct
|
(177)
|
|
(220)
|
|
(397)
|
Operating expenses
|
(14,439)
|
|
(220)
|
|
(14,659)
|
Profit before tax
|
8,414
|
|
(220)
|
|
8,194
|
Taxation
|
(1,188)
|
|
50
|
|
(1,138)
|
Profit after tax
|
7,226
|
|
(170)
|
|
7,056
|
|
|
|
|
|
|
Impact on the consolidated statement of comprehensive
income
|
|
|
|
|
|
Half year ended 30.06.21
|
£m
|
|
£m
|
|
£m
|
Profit after tax
|
4,220
|
|
(60)
|
|
4,160
|
Total comprehensive income for the period
|
2,620
|
|
(60)
|
|
2,560
|
|
|
|
|
|
|
Year ended 31.12.21
|
£m
|
|
£m
|
|
£m
|
Profit after tax
|
7,226
|
|
(170)
|
|
7,056
|
Total comprehensive income for the period
|
5,008
|
|
(170)
|
|
4,838
|
|
|
|
|
|
|
Impact on the cash flow statement
|
|
|
|
|
|
Half year ended 30.06.21
|
£m
|
|
£m
|
|
£m
|
Profit before tax
|
4,979
|
|
(77)
|
|
4,902
|
Adjustment for non-cash items
|
6,900
|
|
77
|
|
6,977
|
|
|
|
|
|
|
Impact on the consolidated balance sheet
|
|
|
|
|
|
As at 31.12.21
|
£m
|
|
£m
|
|
£m
|
Current tax liabilities
|
739
|
|
(50)
|
|
689
|
Provisions
|
1,688
|
|
220
|
|
1,908
|
Total liabilities
|
1,314,074
|
|
170
|
|
1,314,244
|
|
|
|
|
|
|
Retained earnings
|
50,657
|
|
(170)
|
|
50,487
|
Total equity
|
70,211
|
|
(170)
|
|
70,041
|
Analysis of results by business
|
|
|
|
|
|
Barclays
UK
|
Barclays
International
|
Head
Office
|
Barclays
Group
|
Half year ended 30.06.22
|
£m
|
£m
|
£m
|
£m
|
Total income
|
3,373
|
9,940
|
(109)
|
13,204
|
Credit impairment (charges)/releases
|
(48)
|
(310)
|
17
|
(341)
|
Net operating income/(expenses)
|
3,325
|
9,630
|
(92)
|
12,863
|
Operating costs
|
(2,083)
|
(5,042)
|
(145)
|
(7,270)
|
Litigation and conduct
|
(25)
|
(1,832)
|
—
|
(1,857)
|
Total operating expenses
|
(2,108)
|
(6,874)
|
(145)
|
(9,127)
|
Other
net income/(expenses)1
|
—
|
13
|
(16)
|
(3)
|
Profit/(loss) before tax
|
1,217
|
2,769
|
(253)
|
3,733
|
|
|
|
|
|
As at 30.06.22
|
£bn
|
£bn
|
£bn
|
£bn
|
Total assets
|
318.8
|
1,250.6
|
19.8
|
1,589.2
|
|
|
Restated2
|
|
Restated2
|
|
Barclays
UK
|
Barclays
International
|
Head
Office
|
Barclays
Group
|
Half year ended 30.06.21
|
£m
|
£m
|
£m
|
£m
|
Total income
|
3,199
|
8,218
|
(102)
|
11,315
|
Credit impairment releases
|
443
|
293
|
6
|
742
|
Net operating income/(expenses)
|
3,642
|
8,511
|
(96)
|
12,057
|
Operating costs
|
(2,114)
|
(4,606)
|
(412)
|
(7,132)
|
Litigation and conduct
|
(22)
|
(161)
|
7
|
(176)
|
Total operating expenses
|
(2,136)
|
(4,767)
|
(405)
|
(7,308)
|
Other
net income1
|
—
|
22
|
131
|
153
|
Profit/(loss) before tax
|
1,506
|
3,766
|
(370)
|
4,902
|
|
|
|
|
|
As at 31.12.21
|
£bn
|
£bn
|
£bn
|
£bn
|
Total assets
|
321.2
|
1,044.1
|
19.0
|
1,384.3
|
1
Other net income/(expenses) represents the share of post-tax
results of associates and joint ventures, profit (or loss) on
disposal of subsidiaries, associates and joint ventures and gains
on acquisitions.
2
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
Split of income by geographic
region1
|
|
|
|
Half year ended 30.06.22
|
Half year ended 30.06.21
|
|
£m
|
£m
|
United Kingdom
|
7,972
|
5,895
|
Europe
|
1,311
|
1,222
|
Americas
|
3,200
|
3,608
|
Africa and Middle East
|
31
|
20
|
Asia
|
690
|
570
|
Total
|
13,204
|
11,315
|
1
The geographical analysis is based on the location of the office
where the transactions are recorded.
3.
Net fee and commission income
Fee and
commission income is disaggregated below and includes a total for
fees in scope of IFRS 15, Revenue from Contracts with
Customers:
|
Barclays UK
|
Barclays International
|
Head Office
|
Total
|
Half year ended 30.06.22
|
£m
|
£m
|
£m
|
£m
|
Fee type
|
|
|
|
|
Transactional1
|
515
|
1,448
|
—
|
1,963
|
Advisory
|
83
|
511
|
—
|
594
|
Brokerage and execution
|
125
|
762
|
—
|
887
|
Underwriting and syndication
|
—
|
1,102
|
—
|
1,102
|
Other
|
29
|
80
|
2
|
111
|
Total revenue from contracts with customers
|
752
|
3,903
|
2
|
4,657
|
Other non-contract fee income
|
—
|
69
|
—
|
69
|
Fee and commission income1
|
752
|
3,972
|
2
|
4,726
|
Fee and commission expense
|
(147)
|
(1,153)
|
(2)
|
(1,302)
|
Net fee and commission income
|
605
|
2,819
|
—
|
3,424
|
|
Barclays UK
|
Barclays International
|
Head Office
|
Total
|
Half year ended 30.06.21
|
£m
|
£m
|
£m
|
£m
|
Fee type
|
|
|
|
|
Transactional
|
408
|
1,181
|
—
|
1,589
|
Advisory
|
83
|
459
|
1
|
543
|
Brokerage and execution
|
109
|
553
|
—
|
662
|
Underwriting and syndication
|
—
|
1,715
|
—
|
1,715
|
Other
|
35
|
73
|
3
|
111
|
Total revenue from contracts with customers
|
635
|
3,981
|
4
|
4,620
|
Other non-contract fee income
|
—
|
62
|
—
|
62
|
Fee and commission income
|
635
|
4,043
|
4
|
4,682
|
Fee and
commission expense1
|
(108)
|
(861)
|
(7)
|
(976)
|
Net fee and commission income
|
527
|
3,182
|
(3)
|
3,706
|
1
Barclays has corrected the presentation of the scheme fees incurred
when Barclays acts as an “acquirer” as part of the
payment transaction cycle. From 2022 onwards, the scheme fees
reported under "Barclays International" are presented within fees
and commission income under "Transactional" fee type, which had
previously been recognised in fees and commission expense. The
reclassification into Fee and Commission income is a reduction of
£103m for H122. The comparatives have not been restated as the
effect is not considered material although the effect would have
been a reduction of H121: £88m with no impact on Net fee and
commission income. There is no impact on Net assets or Cash flows
reported.
Transactional
fees are service charges on deposit accounts, cash management
services and transactional processing fees. These include
interchange and merchant fee income generated from credit and bank
card usage.
Advisory
fees are generated from wealth management services and investment
banking advisory services related to mergers, acquisitions and
financial restructurings.
Brokerage
and execution fees are earned for executing client transactions
with various exchanges and over-the-counter markets and assisting
clients in clearing transactions.
Underwriting
and syndication fees are earned for the distribution of client
equity or debt securities and the arrangement and administration of
a loan syndication. These include commitment fees to provide loan
financing.
|
Half year ended 30.06.22
|
Half year ended 30.06.21
|
Compensation costs
|
£m
|
£m
|
Upfront bonus charge
|
705
|
824
|
Deferred bonus charge
|
280
|
262
|
Other incentives
|
44
|
6
|
Performance costs
|
1,029
|
1,092
|
Salaries
|
2,278
|
2,117
|
Social security costs
|
377
|
336
|
Post-retirement benefits
|
282
|
275
|
Other compensation costs
|
241
|
223
|
Total compensation costs
|
4,207
|
4,043
|
|
|
|
Other resourcing costs
|
|
|
Outsourcing
|
268
|
171
|
Redundancy and restructuring
|
(15)
|
23
|
Temporary staff costs
|
53
|
55
|
Other
|
70
|
42
|
Total other resourcing costs
|
376
|
291
|
|
|
|
Total staff costs
|
4,583
|
4,334
|
|
|
|
Barclays Group compensation costs as a % of total
income
|
31.9%
|
35.7%
|
No
material awards have yet been granted in relation to the 2022 bonus
pool as decisions regarding incentive awards are not taken by the
Remuneration Committee until the performance for the full year can
be assessed. The current year bonus charge for the first six months
represents an accrual for estimated costs in accordance with
accounting requirements. One of the primary considerations when
evaluating the accrual is Group and business level returns,
aligning colleague and shareholder interests.
The
Group has entered into physically settled forward contracts to
hedge the settlement of certain share-based payment schemes. The
present value of the fixed forward price to be paid under these
outstanding contracts is £287m and has been recorded in
retained earnings.
5.
Infrastructure, administration and general expenses
|
Half year ended 30.06.22
|
Half year ended 30.06.21
|
Infrastructure costs
|
£m
|
£m
|
Property and equipment
|
744
|
709
|
Depreciation and amortisation
|
863
|
832
|
Lease payments
|
14
|
20
|
Impairment of property, equipment and intangible
assets
|
21
|
304
|
Total infrastructure costs
|
1,642
|
1,865
|
|
|
|
Administration and general expenses
|
|
|
Consultancy, legal and professional fees
|
288
|
262
|
Marketing and advertising
|
206
|
163
|
Other administration and general expenses
|
551
|
508
|
Total administration and general expenses
|
1,045
|
933
|
|
|
|
Total infrastructure, administration and general
expenses
|
2,687
|
2,798
|
The tax
charge for H122 was £823m (restated1 H121: £742m),
representing an effective tax rate (ETR) of 22.0%
(restated1
H121: 15.1%). The ETR for H122 includes a charge recognised for the
re-measurement of the Group’s UK deferred tax assets (DTAs)
due to the enactment of legislation in Q122 which will result in
the UK banking surcharge rate being reduced from 8% to 3% effective
from 1 April 2023. The ETR excluding the impact of this downward
re-measurement of UK DTAs was 12.8%, which includes a 5.8% benefit
relating to adjustments in respect of prior years. Included in the
H122 tax charge is a credit of £110m (H121: £104m) in
respect of payments made on AT1 instruments that are classified as
equity for accounting purposes. The H121 ETR included a benefit
recognised for the re-measurement of the Group’s UK DTAs as a
result of the enactment of legislation to increase the UK
corporation tax rate to 25% effective from 1 April
2023.
The
re-measurement of UK DTAs has resulted in the Group's DTAs
decreasing by £318m with a tax charge in the income statement
of £346m and a tax credit within other comprehensive income of
£28m.
In
October 2021, the OECD and G20 Inclusive Framework on Base Erosion
and Profit Shifting announced plans to introduce a global minimum
tax rate of 15%. The model rules were released by the OECD in
December 2021 with further guidance published in March 2022. Draft
legislation published by the UK government on 20 July 2022 to
implement the global minimum tax regime is expected to apply for
accounting periods beginning on or after 31 December 2023. The
Group is reviewing the published OECD model rules and guidance and
will review further guidance as well as new legislation to be
released by governments implementing this new tax regime as it is
published to assess the potential impact of new
legislation.
In the
USA, the proposed Build Back Better Act was passed by the House of
Representatives in 2021 but it was not passed by the Senate and it
is uncertain whether various proposals contained in the Act will
progress further. The Act included proposals to implement material
changes to international tax provisions, including amendments to
the Base Erosion and Anti-Abuse Tax and the imposition of an
alternative minimum tax based on accounting profits. It is unclear
at this time whether any of these proposals could have a
significant impact on the Group if enacted. The Group will continue
to monitor developments and assess the potential impact of any
future legislative changes ultimately enacted.
1
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
|
As at 30.06.22
|
As at 31.12.21
|
Deferred tax assets and liabilities
|
£m
|
£m
|
UK
|
3,046
|
2,183
|
USA
|
1,530
|
2,006
|
Other territories
|
468
|
430
|
Deferred tax assets
|
5,044
|
4,619
|
Deferred tax liabilities
|
(5)
|
(37)
|
|
|
|
Analysis of deferred tax assets
|
|
|
Temporary differences
|
3,871
|
3,399
|
Tax losses
|
1,173
|
1,220
|
Deferred tax assets
|
5,044
|
4,619
|
7.
Non-controlling interests
|
Profit attributable to
non-controlling interests
|
|
Equity attributable to
non-controlling interests
|
|
Half year ended 30.06.22
|
Half year ended 30.06.21
|
|
As at 30.06.22
|
As at 31.12.21
|
|
£m
|
£m
|
|
£m
|
£m
|
Barclays Bank PLC issued:
|
|
|
|
|
|
- Preference shares
|
15
|
13
|
|
529
|
529
|
- Upper T2 instruments
|
6
|
3
|
|
438
|
458
|
Other non-controlling interests
|
—
|
3
|
|
2
|
2
|
Total
|
21
|
19
|
|
969
|
989
|
|
|
Restated1
|
|
Half year ended 30.06.22
|
Half year ended 30.06.21
|
|
£m
|
£m
|
Profit attributable to ordinary equity holders of the
parent
|
2,475
|
3,752
|
|
|
|
|
m
|
m
|
Basic weighted average number of shares in issue
|
16,684
|
17,140
|
Number of potential ordinary shares
|
428
|
467
|
Diluted weighted average number of shares
|
17,112
|
17,607
|
|
|
|
|
p
|
p
|
Basic earnings per ordinary share
|
14.8
|
21.9
|
Diluted earnings per ordinary share
|
14.5
|
21.3
|
1
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
9.
Dividends on ordinary shares
A half
year dividend for 2022 of 2.25p (H121: 2p) per ordinary share will
be paid on 16 September 2022 to shareholders on the register on 12
August 2022.
|
Half year ended 30.06.22
|
Half year ended 30.06.21
|
|
Per share
|
Total
|
Per share
|
Total
|
Dividends paid during the period
|
p
|
£m
|
p
|
£m
|
Full year dividend paid during period
|
4.0
|
664
|
1.0
|
173
|
For
qualifying American Depositary Receipt (ADR) holders, the half year
dividend of 2.25p per ordinary share becomes 9.0p per American
Depositary Share (representing 4 shares). The depositary bank will
post the half year dividend on 16 September 2022 to ADR holders on
the record at close of business on 12 August 2022.
The
Directors have confirmed their intention to initiate a share
buyback of up to £500m after the balance sheet date. The share
buyback is expected to commence in the third quarter of 2022. The
financial statements for the six months ended 30 June 2022 do not
reflect the impact of the proposed share buyback, which will be
accounted for as and when shares are repurchased by the
Company.
10.
Derivative financial instruments
|
Contract notional amount
|
|
Fair value
|
|
|
Assets
|
Liabilities
|
As at 30.06.22
|
£m
|
|
£m
|
£m
|
Foreign exchange derivatives
|
6,732,093
|
|
135,207
|
(123,662)
|
Interest rate derivatives
|
44,275,712
|
|
130,628
|
(116,541)
|
Credit derivatives
|
1,640,043
|
|
8,128
|
(8,228)
|
Equity and stock index and commodity derivatives
|
2,510,981
|
|
70,066
|
(71,830)
|
Derivative assets/(liabilities) held for trading
|
55,158,829
|
|
344,029
|
(320,261)
|
|
|
|
|
|
Derivatives in hedge accounting relationships
|
|
|
|
|
Derivatives designated as cash flow hedges
|
139,040
|
|
701
|
(21)
|
Derivatives designated as fair value hedges
|
107,809
|
|
106
|
(1,054)
|
Derivatives designated as hedges of net investments
|
4,097
|
|
19
|
(60)
|
Derivative assets/(liabilities) designated in hedge accounting
relationships
|
250,946
|
|
826
|
(1,135)
|
|
|
|
|
|
Total recognised derivative assets/(liabilities)
|
55,409,775
|
|
344,855
|
(321,396)
|
|
|
|
|
|
As at 31.12.21
|
|
|
|
|
Foreign exchange derivatives
|
5,824,856
|
|
76,140
|
(74,437)
|
Interest rate derivatives
|
38,816,432
|
|
125,846
|
(114,803)
|
Credit derivatives
|
1,272,104
|
|
5,682
|
(6,561)
|
Equity and stock index and commodity derivatives
|
1,899,382
|
|
54,010
|
(59,946)
|
Derivative assets/(liabilities) held for trading
|
47,812,774
|
|
261,678
|
(255,747)
|
|
|
|
|
|
Derivatives in hedge accounting relationships
|
|
|
|
|
Derivatives designated as cash flow hedges
|
114,313
|
|
798
|
(3)
|
Derivatives designated as fair value hedges
|
102,815
|
|
59
|
(1,129)
|
Derivatives designated as hedges of net investments
|
2,423
|
|
37
|
(4)
|
Derivative assets/(liabilities) designated in hedge accounting
relationships
|
219,551
|
|
894
|
(1,136)
|
|
|
|
|
|
Total recognised derivative assets/(liabilities)
|
48,032,325
|
|
262,572
|
(256,883)
|
The
IFRS netting posted against derivative assets was £55bn
including £12bn of cash collateral netted (December 2021:
£24bn including £4bn cash collateral netted) and
£55bn for liabilities including £12bn of cash collateral
netted (December 2021: £24bn including £4bn of cash
collateral netted). Derivative asset exposures would be £306bn
(December 2021: £237bn) lower than reported under IFRS if
netting were permitted for assets and liabilities with the same
counterparty or for which the Group holds cash collateral of
£40bn (December 2021: £35bn). Similarly, derivative
liabilities would be £293bn (December 2021: £235bn) lower
reflecting counterparty netting and cash collateral placed of
£26bn (December 2021: £32bn). In addition, non-cash
collateral of £13bn (December 2021: £6bn) was held in
respect of derivative assets and £3bn (December 2021:
£2bn) was placed in respect of derivative liabilities.
Collateral amounts are limited to net on balance sheet exposure so
as to not include over-collateralisation.
11.
Fair value of financial instruments
This
section should be read in conjunction with Note 17, Fair value of
financial instruments of the Barclays PLC Annual Report 2021 which
provides more detail about accounting policies adopted, valuation
methodologies used in calculating fair value and the valuation
control framework which governs oversight of valuations. There have
been no changes in the accounting policies adopted or the valuation
methodologies used.
Valuation
The
following table shows the Group’s assets and liabilities that
are held at fair value disaggregated by valuation technique (fair
value hierarchy) and balance sheet classification:
|
Valuation technique using
|
|
|
Quoted market prices
|
Observable inputs
|
Significant unobservable inputs
|
|
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
As at 30.06.22
|
£m
|
£m
|
£m
|
£m
|
Trading portfolio assets
|
58,419
|
64,329
|
4,256
|
127,004
|
Financial assets at fair value through the income
statement
|
1,115
|
202,026
|
9,582
|
212,723
|
Derivative financial instruments
|
11,653
|
329,329
|
3,873
|
344,855
|
Financial assets at fair value through other comprehensive
income
|
22,455
|
40,696
|
43
|
63,194
|
Investment property
|
—
|
—
|
5
|
5
|
Total assets
|
93,642
|
636,380
|
17,759
|
747,781
|
|
|
|
|
|
Trading portfolio liabilities
|
(47,870)
|
(28,686)
|
(82)
|
(76,638)
|
Financial liabilities designated at fair value
|
(193)
|
(254,496)
|
(447)
|
(255,136)
|
Derivative financial instruments
|
(12,674)
|
(304,343)
|
(4,379)
|
(321,396)
|
Total liabilities
|
(60,737)
|
(587,525)
|
(4,908)
|
(653,170)
|
|
|
|
|
|
As at 31.12.21
|
|
|
|
|
Trading portfolio assets
|
80,926
|
63,828
|
2,281
|
147,035
|
Financial assets at fair value through the income
statement
|
5,093
|
177,167
|
9,712
|
191,972
|
Derivative financial instruments
|
6,150
|
252,412
|
4,010
|
262,572
|
Financial assets at fair value through other comprehensive
income
|
22,009
|
39,706
|
38
|
61,753
|
Investment property
|
—
|
—
|
7
|
7
|
Total assets
|
114,178
|
533,113
|
16,048
|
663,339
|
|
|
|
|
|
Trading portfolio liabilities
|
(27,529)
|
(26,613)
|
(27)
|
(54,169)
|
Financial liabilities designated at fair value
|
(174)
|
(250,376)
|
(410)
|
(250,960)
|
Derivative financial instruments
|
(6,571)
|
(244,253)
|
(6,059)
|
(256,883)
|
Total liabilities
|
(34,274)
|
(521,242)
|
(6,496)
|
(562,012)
|
The
following table shows the Group’s Level 3 assets and
liabilities that are held at fair value disaggregated by product
type:
|
As at 30.06.22
|
As at 31.12.21
|
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
|
£m
|
£m
|
£m
|
£m
|
Interest rate derivatives
|
1,573
|
(1,849)
|
1,091
|
(1,351)
|
Foreign exchange derivatives
|
786
|
(560)
|
376
|
(374)
|
Credit derivatives
|
234
|
(615)
|
323
|
(709)
|
Equity derivatives
|
1,280
|
(1,355)
|
2,220
|
(3,625)
|
Corporate debt
|
1,171
|
(13)
|
1,205
|
(21)
|
Reverse repurchase and repurchase agreements
|
178
|
(188)
|
13
|
(172)
|
Non-asset backed loans
|
8,660
|
—
|
6,405
|
—
|
Asset backed securities
|
291
|
—
|
558
|
—
|
Equity cash products
|
422
|
(3)
|
393
|
—
|
Private equity investments
|
1,297
|
(8)
|
1,095
|
(6)
|
Other1
|
1,867
|
(317)
|
2,369
|
(238)
|
Total
|
17,759
|
(4,908)
|
16,048
|
(6,496)
|
1
Other includes commercial real estate loans, funds and fund-linked
products, asset backed loans, issued debt, commercial paper,
government sponsored debt and investment property.
Assets and liabilities reclassified between Level 1 and Level
2
During
the period, there were no material transfers between Level 1 and
Level 2 (period ended 31 December 2021: no material transfers
between Level 1 and Level 2).
Level 3 movement analysis
The
following table summarises the movements in the balances of Level 3
assets and liabilities during the period. The table shows gains and
losses and includes amounts for all financial assets and
liabilities that are held at fair value transferred to and from
Level 3 during the period. Transfers have been reflected as if they
had taken place at the beginning of the period.
Asset
and liability moves between Level 2 and Level 3 are primarily due
to i) an increase or decrease in observable market activity related
to an input or ii) a change in the significance of the unobservable
input, with assets and liabilities classified as Level 3 if an
unobservable input is deemed significant.
Level 3 movement analysis
|
|
|
|
|
|
|
Total gains and (losses) in the period recognised in the income
statement
|
Total gains or (losses) recognised in OCI
|
Transfers
|
|
|
As at 01.01.22
|
Purchases
|
Sales
|
Issues
|
Settle-ments
|
Trading income
|
Other income
|
In
|
Out
|
As at 30.06.22
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Corporate debt
|
389
|
90
|
(144)
|
—
|
(17)
|
54
|
—
|
—
|
43
|
(11)
|
404
|
Non-asset backed loans
|
758
|
2,448
|
(459)
|
—
|
—
|
11
|
—
|
—
|
50
|
(113)
|
2,695
|
Asset backed securities
|
454
|
72
|
(80)
|
—
|
(297)
|
(20)
|
—
|
—
|
100
|
(66)
|
163
|
Equity cash products
|
303
|
21
|
(56)
|
—
|
—
|
24
|
—
|
—
|
52
|
(17)
|
327
|
Other
|
377
|
326
|
(42)
|
—
|
(5)
|
56
|
—
|
—
|
39
|
(84)
|
667
|
Trading portfolio assets
|
2,281
|
2,957
|
(781)
|
—
|
(319)
|
125
|
—
|
—
|
284
|
(291)
|
4,256
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-asset backed loans
|
5,647
|
1,847
|
(757)
|
—
|
(484)
|
(334)
|
—
|
—
|
52
|
(9)
|
5,962
|
Equity cash products
|
90
|
—
|
—
|
—
|
—
|
3
|
2
|
—
|
—
|
—
|
95
|
Private equity investments
|
1,095
|
99
|
(16)
|
—
|
(1)
|
84
|
(26)
|
—
|
59
|
(4)
|
1,290
|
Other
|
2,880
|
4,817
|
(5,579)
|
—
|
(156)
|
11
|
182
|
—
|
99
|
(19)
|
2,235
|
Financial assets at fair value through the income
statement
|
9,712
|
6,763
|
(6,352)
|
—
|
(641)
|
(236)
|
158
|
—
|
210
|
(32)
|
9,582
|
|
|
|
|
|
|
|
|
|
|
|
|
Private equity investments
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
1
|
6
|
—
|
7
|
Asset backed securities
|
38
|
—
|
—
|
—
|
—
|
—
|
—
|
(2)
|
—
|
—
|
36
|
Assets at fair value through other comprehensive
income
|
38
|
—
|
—
|
—
|
—
|
—
|
—
|
(1)
|
6
|
—
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment property
|
7
|
—
|
(1)
|
—
|
—
|
—
|
(1)
|
—
|
—
|
—
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading portfolio liabilities
|
(27)
|
(35)
|
3
|
—
|
—
|
(29)
|
—
|
—
|
—
|
6
|
(82)
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities designated at fair value
|
(410)
|
(5)
|
—
|
(13)
|
47
|
(22)
|
—
|
—
|
(81)
|
37
|
(447)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate derivatives
|
(260)
|
25
|
—
|
—
|
(4)
|
(305)
|
(9)
|
—
|
271
|
6
|
(276)
|
Foreign exchange derivatives
|
2
|
—
|
—
|
—
|
(9)
|
273
|
—
|
—
|
(65)
|
25
|
226
|
Credit derivatives
|
(386)
|
(36)
|
5
|
—
|
60
|
(99)
|
—
|
—
|
20
|
55
|
(381)
|
Equity derivatives
|
(1,405)
|
(83)
|
—
|
—
|
171
|
980
|
(1)
|
—
|
(9)
|
272
|
(75)
|
Net derivative financial instruments1
|
(2,049)
|
(94)
|
5
|
—
|
218
|
849
|
(10)
|
—
|
217
|
358
|
(506)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
9,552
|
9,586
|
(7,126)
|
(13)
|
(695)
|
687
|
147
|
(1)
|
636
|
78
|
12,851
|
1
Derivative financial instruments are represented on a net basis. On
a gross basis, derivative financial assets were £3,873m and
derivative financial liabilities were £4,379m.
Level 3 movement analysis
|
|
As at 01.01.21
|
Purchases
|
Sales
|
Issues
|
Settle-
ments
|
Total gains and (losses) in the period recognised in the income
statement
|
Total gains or (losses) recognised in OCI
|
Transfers
|
As at 30.06.21
|
|
Trading income
|
Other income
|
In
|
Out
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Corporate debt
|
151
|
305
|
(87)
|
—
|
—
|
25
|
—
|
—
|
40
|
(11)
|
423
|
Non-asset backed loans
|
709
|
620
|
(131)
|
—
|
(84)
|
13
|
—
|
—
|
124
|
(106)
|
1,145
|
Asset backed securities
|
686
|
112
|
(294)
|
—
|
—
|
(10)
|
—
|
—
|
43
|
(48)
|
489
|
Equity cash products
|
214
|
13
|
(17)
|
—
|
—
|
32
|
—
|
—
|
29
|
(9)
|
262
|
Other
|
103
|
21
|
—
|
—
|
(51)
|
(1)
|
—
|
—
|
162
|
(1)
|
233
|
Trading portfolio assets
|
1,863
|
1,071
|
(529)
|
—
|
(135)
|
59
|
—
|
—
|
398
|
(175)
|
2,552
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-asset backed loans
|
5,580
|
698
|
(299)
|
—
|
(687)
|
(119)
|
—
|
—
|
69
|
(48)
|
5,194
|
Equity cash products
|
326
|
160
|
(194)
|
—
|
—
|
(171)
|
18
|
—
|
1
|
—
|
140
|
Private equity investments
|
874
|
106
|
(9)
|
—
|
(8)
|
(5)
|
92
|
—
|
—
|
(71)
|
979
|
Other
|
1,726
|
2,291
|
(2,389)
|
—
|
(162)
|
(19)
|
1
|
—
|
16
|
—
|
1,464
|
Financial assets at fair value through the income
statement
|
8,506
|
3,255
|
(2,891)
|
—
|
(857)
|
(314)
|
111
|
—
|
86
|
(119)
|
7,777
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-asset backed loans
|
106
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(106)
|
—
|
Asset backed securities
|
47
|
4
|
—
|
—
|
(5)
|
—
|
—
|
2
|
—
|
—
|
48
|
Assets at fair value through other comprehensive
income
|
153
|
4
|
—
|
—
|
(5)
|
—
|
—
|
2
|
—
|
(106)
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment property
|
10
|
—
|
(2)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading portfolio liabilities
|
(28)
|
(3)
|
14
|
—
|
—
|
(7)
|
—
|
—
|
—
|
7
|
(17)
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities designated at fair value
|
(355)
|
—
|
—
|
—
|
98
|
7
|
(2)
|
—
|
(78)
|
18
|
(312)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate derivatives
|
(2)
|
9
|
—
|
—
|
33
|
(121)
|
4
|
—
|
21
|
(297)
|
(353)
|
Foreign exchange derivatives
|
1
|
—
|
—
|
—
|
58
|
(6)
|
—
|
—
|
3
|
(34)
|
22
|
Credit derivatives
|
(155)
|
(117)
|
2
|
—
|
(5)
|
12
|
(1)
|
—
|
1
|
(1)
|
(264)
|
Equity derivatives
|
(1,614)
|
(315)
|
(1)
|
—
|
(32)
|
(221)
|
(1)
|
—
|
28
|
808
|
(1,348)
|
Net derivative financial instruments1
|
(1,770)
|
(423)
|
1
|
—
|
54
|
(336)
|
2
|
—
|
53
|
476
|
(1,943)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
8,379
|
3,904
|
(3,407)
|
—
|
(845)
|
(591)
|
111
|
2
|
459
|
101
|
8,113
|
1
Derivative financial instruments are represented on a net basis. On
a gross basis, derivative financial assets were £3,657m and
derivative financial liabilities were £5,600m.
Unrealised gains and losses on Level 3 financial assets and
liabilities
The
following table discloses the unrealised gains and losses
recognised in the period arising on Level 3 financial assets and
liabilities held at the period end.
|
Half year ended 30.06.22
|
Half year ended 30.06.21
|
|
Income statement
|
Other compre hensive income
|
Total
|
Income statement
|
Other compre hensive income
|
Total
|
|
Trading income
|
Other income
|
Trading income
|
Other income
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Trading portfolio assets
|
121
|
—
|
—
|
121
|
35
|
—
|
—
|
35
|
Financial assets at fair value through the income
statement
|
(165)
|
(22)
|
—
|
(187)
|
(201)
|
114
|
—
|
(87)
|
Financial assets at fair value through other comprehensive
income
|
—
|
—
|
(1)
|
(1)
|
—
|
—
|
—
|
—
|
Investment properties
|
—
|
(1)
|
—
|
(1)
|
—
|
—
|
—
|
—
|
Trading portfolio liabilities
|
(35)
|
—
|
—
|
(35)
|
(6)
|
—
|
—
|
(6)
|
Financial liabilities designated at fair value
|
(14)
|
—
|
—
|
(14)
|
7
|
—
|
—
|
7
|
Net derivative financial instruments
|
862
|
(1)
|
—
|
861
|
(367)
|
—
|
—
|
(367)
|
Total
|
769
|
(24)
|
(1)
|
744
|
(532)
|
114
|
—
|
(418)
|
Valuation techniques and sensitivity analysis
Sensitivity
analysis is performed on products with significant unobservable
inputs (Level 3) to generate a range of reasonably possible
alternative valuations. The sensitivity methodologies applied take
account of the nature of valuation techniques used, as well as the
availability and reliability of observable proxy and historical
data and the impact of using alternative models.
Current
year valuation and sensitivity methodologies are consistent with
those described within Note 17, Fair value of financial instruments
in the Barclays PLC Annual Report 2021.
Sensitivity analysis of valuations using unobservable
inputs
|
|
|
|
|
|
|
|
|
|
|
As at 30.06.22
|
As at 31.12.21
|
|
Favourable changes
|
Unfavourable changes
|
Favourable changes
|
Unfavourable changes
|
|
Income statement
|
Equity
|
Income statement
|
Equity
|
Income statement
|
Equity
|
Income statement
|
Equity
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Interest rate derivatives
|
75
|
—
|
(108)
|
—
|
51
|
—
|
(79)
|
—
|
Foreign exchange derivatives
|
15
|
—
|
(22)
|
—
|
20
|
—
|
(28)
|
—
|
Credit derivatives
|
111
|
—
|
(115)
|
—
|
111
|
—
|
(103)
|
—
|
Equity derivatives
|
107
|
—
|
(112)
|
—
|
187
|
—
|
(195)
|
—
|
Corporate debt
|
36
|
—
|
(35)
|
—
|
38
|
—
|
(28)
|
—
|
Non-asset backed loans
|
298
|
—
|
(334)
|
—
|
165
|
—
|
(256)
|
—
|
Equity cash products
|
73
|
—
|
(129)
|
—
|
42
|
—
|
(61)
|
—
|
Private equity investments
|
272
|
1
|
(286)
|
(1)
|
246
|
—
|
(236)
|
—
|
Other1
|
27
|
—
|
(36)
|
—
|
20
|
—
|
(19)
|
—
|
Total
|
1,014
|
1
|
(1,177)
|
(1)
|
880
|
—
|
(1,005)
|
—
|
1
Other includes commercial real estate loans, funds and fund-linked
products, asset backed loans, issued debt, commercial paper,
government sponsored debt and investment property.
The
effect of stressing unobservable inputs to a range of reasonably
possible alternatives, alongside considering the impact of using
alternative models, would be to increase fair values by up to
£1,015m (December 2021: £880m) or to decrease fair values
by up to £1,178m (December 2021: £1,005m) with
substantially all the potential effect impacting profit and loss
rather than reserves.
Significant unobservable inputs
The
valuation techniques and significant unobservable inputs for assets
and liabilities recognised at fair value and classified as Level 3
are consistent with Note 17, Fair value of financial instruments in
the Barclays PLC Annual Report 2021.
Fair value adjustments
Key
balance sheet valuation adjustments are quantified
below:
|
As at 30.06.22
|
As at 31.12.21
|
|
£m
|
£m
|
Exit price adjustments derived from market bid-offer
spreads
|
(539)
|
(506)
|
Uncollateralised derivative funding
|
(82)
|
(127)
|
Derivative credit valuation adjustments
|
(388)
|
(212)
|
Derivative debit valuation adjustments
|
208
|
91
|
●
Exit price
adjustments derived from market bid-offer spreads increased by
£33m to £539m as a result of movements in market bid
offer spreads.
●
Uncollateralised
derivative funding decreased by £45m to £82m as a result
of reduction in uncollateralised funding exposure due to increases
in interest rates which offset impact of wider funding
spreads.
●
Derivative credit
valuation adjustments increased by £176m to £388m as a
result of widening input counterparty credit spreads
●
Derivative debit
valuation adjustments increased by £117m to £208m as a
result of widening input own credit spreads
Portfolio exemption
The
Group uses the portfolio exemption in IFRS 13, Fair Value
Measurement to measure the fair value of groups of financial assets
and liabilities. Instruments are measured using the price that
would be received to sell a net long position (i.e. an asset) for a
particular risk exposure or to transfer a net short position (i.e.
a liability) for a particular risk exposure in an orderly
transaction between market participants at the balance sheet date
under current market conditions. Accordingly, the Group measures
the fair value of the group of financial assets and liabilities
consistently with how market participants would price the net risk
exposure at the measurement date.
Unrecognised gains as a result of the use of valuation models using
unobservable inputs
The
amount that has yet to be recognised in income that relates to the
difference between the transaction price (the fair value at initial
recognition) and the amount that would have arisen had valuation
models using unobservable inputs been used on initial recognition,
less amounts subsequently recognised, is £117m (December 2021:
£133m) for financial instruments measured at fair value and
£221m (December 2021: £230m) for financial instruments
carried at amortised cost. There are additions and FX gains of
£19m (December 2021: £59m) and amortisation and releases
of £35m (December 2021: £42m) for financial instruments
measured at fair value and additions of £nil (December 2021:
£nil) and amortisation and releases of £9m (December
2021: £17m) for financial instruments carried at amortised
cost.
Third party credit enhancements
Structured
and brokered certificates of deposit issued by the Group are
insured up to $250,000 per depositor by the Federal Deposit
Insurance Corporation (FDIC) in the United States. The FDIC is
funded by premiums that Barclays and other banks pay for deposit
insurance coverage. The carrying value of these issued certificates
of deposit that are designated under the IFRS 9 fair value option
includes this third party credit enhancement. The on balance sheet
value of these brokered certificates of deposit amounted to
£3,065m (December 2021: £790m).
Comparison of carrying amounts and fair values for assets and
liabilities not held at fair value
Valuation
methodologies employed in calculating the fair value of financial
assets and liabilities measured at amortised cost are consistent
with those described within Note 17, Fair value of financial
instruments in the Barclays PLC Annual Report 2021.
The
following table summarises the fair value of financial assets and
liabilities measured at amortised cost on the Group’s balance
sheet.
|
As at 30.06.22
|
As at 31.12.21
|
|
Carrying amount
|
Fair value
|
Carrying amount
|
Fair value
|
Financial assets
|
£m
|
£m
|
£m
|
£m
|
Loans and advances at amortised cost
|
395,824
|
396,475
|
361,451
|
362,424
|
Reverse repurchase agreements and other similar secured
lending
|
1,639
|
1,639
|
3,227
|
3,227
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
Deposits at amortised cost
|
(568,670)
|
(568,715)
|
(519,433)
|
(519,436)
|
Repurchase agreements and other similar secured
borrowing
|
(28,566)
|
(28,569)
|
(28,352)
|
(28,358)
|
Debt securities in issue
|
(115,906)
|
(115,777)
|
(98,867)
|
(100,657)
|
Subordinated liabilities
|
(11,871)
|
(11,799)
|
(12,759)
|
(13,334)
|
12.
Loans and advances and deposits at amortised cost
|
As at 30.06.22
|
As at 31.12.21
|
|
£m
|
£m
|
Loans and advances at amortised cost to banks
|
12,532
|
9,698
|
Loans and advances at amortised cost to customers
|
337,220
|
319,922
|
Debt securities at amortised cost
|
46,072
|
31,831
|
Total loans and advances at amortised cost
|
395,824
|
361,451
|
|
|
|
Deposits at amortised cost from banks
|
29,891
|
17,819
|
Deposits at amortised cost from customers
|
538,779
|
501,614
|
Total deposits at amortised cost
|
568,670
|
519,433
|
13.
Goodwill and intangible assets
Goodwill
and intangible assets are allocated to business operations
according to business segments as follows:
|
As at 30.06.22
|
As at 31.12.21
|
|
Goodwill
|
Intangibles
|
Total
|
Goodwill
|
Intangibles
|
Total
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Barclays UK
|
3,560
|
1,247
|
4,807
|
3,560
|
1,233
|
4,793
|
Barclays International
|
308
|
3,079
|
3,387
|
291
|
2,930
|
3,221
|
Head Office
|
44
|
7
|
51
|
42
|
5
|
47
|
Total
|
3,912
|
4,333
|
8,245
|
3,893
|
4,168
|
8,061
|
The
Group performed an impairment review to assess the recoverability
of its goodwill and intangible asset balances as at 31 December
2021. The outcome of this review is disclosed on pages 382-385 of
the Barclays PLC Annual Report 2021. No impairment was recognised
as a result of the review as value in use exceeded carrying amount.
A review of the Group's goodwill and intangible assets as at 30
June 2022 did not identify the presence of impairment.
14.
Subordinated liabilities
|
Half year ended 30.06.22
|
Year ended 31.12.21
|
|
£m
|
£m
|
Opening balance as at 1 January
|
12,759
|
16,341
|
Issuances
|
259
|
1,890
|
Redemptions
|
(1,180)
|
(4,807)
|
Other
|
33
|
(665)
|
Closing balance
|
11,871
|
12,759
|
Issuances
of £259m comprise £128m USD Floating Rate Notes,
£89m ZAR Floating Rate Notes and £42m EUR Floating Rate
Notes issued externally by Barclays subsidiaries.
Redemptions
of £1,180m comprise £1,039m notes issued externally by
Barclays Bank PLC, £74m USD Floating Rate Notes issued
externally by a Barclays subsidiary and £67m GBP Undated
Subordinated Loan Notes (secured) issued externally by a Barclays
securitisation special purpose vehicle (SPV). £1,039m notes
issued externally by Barclays Bank PLC comprise £838m EUR
6.625% Fixed Rate Subordinated Notes, £147m USD 6.86% Callable
Perpetual Core Tier One Notes, £42m EUR Subordinated Floating
Rate Notes and £12m GBP 6% Callable Perpetual Core Tier One
Notes.
Other
movements predominantly comprise foreign exchange movements and
fair value hedge adjustments.
|
|
Restated1
|
|
As at 30.06.22
|
As at 31.12.21
|
|
£m
|
£m
|
Customer
redress
|
1,985
|
530
|
Legal,
competition and regulatory matters
|
418
|
226
|
Redundancy
and restructuring
|
216
|
326
|
Undrawn
contractually committed facilities and guarantees
|
526
|
542
|
Onerous
contracts
|
—
|
5
|
Sundry
provisions
|
281
|
279
|
Total
|
3,426
|
1,908
|
1
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
Over-issuance of securities
As at
30 June 2022, Barclays PLC has recognised a balance sheet provision
of £1,757m (December 2021: £220m) in relation to the
Over-issuance of Securities (see Basis of preparation on page
87 for more information), out
of which £1,592m (December 2021: £220m) is due to the
over-issuance of structured notes (within Customer redress) and
£165m (December 2021: nil) relates to liabilities that could
be incurred arising out of ongoing discussions in respect of a
potential SEC resolution (within Legal, competition and regulatory
matters).
The
amount of the provision in relation to the rescission rights of
investors in over-issued structured notes is determined by (among
other things) the market value of the structured notes subject to
the Rescission Offer, participation rates in such Rescission Offer,
prevailing interest rates, and movements in foreign exchange rates.
The majority of the structured notes subject to the Rescission
Offer provide an equity linked return to investors. As such, the
value of these notes is highly sensitive to movements in the price
of individual securities and a range of indices.
The
increase in the provision of £1,372m predominantly reflects a
reduction in the market value of the structured notes and
additional accrued interest that would be payable to investors on
rescission. The US equity markets have been volatile during the
first half of 2022, with significant reductions in the value of US
equity indices such as the S&P 500 from the year end 2021
levels, which has led to a reduction in the market value of the
structured notes, and increased the size of the provision. The
provision does not include the impact of market hedges that have
been entered into subsequent to the year-end and were initiated
from the end of the first quarter of 2022 to reduce the net
volatility to the income statement. When determining these market
hedges, consideration was given to changes in the rescission costs
which would arise from volatility in the market along with the
positioning of the Markets business.
The
structured notes also accrue interest on a monthly basis (at
current prevailing interest rates and participation rate
assumptions this is c£34m a month) until the Rescission Price
has been paid. The provision also assumes that not all structured
note investors whose securities are out of the money will accept
the Rescission Offer. If all investors were to accept the
Rescission Offer, the provision would increase by
c£60m.
The
remaining increase in the provision of £165m results from
Barclays PLC’s estimate of the potential SEC
resolution.
As at
30 June 2022, the Group’s IAS 19 net pension surplus across
all schemes was £4.9bn (December 2021: £3.6bn). The UK
Retirement Fund (UKRF), which is the Group’s main scheme, had
an IAS 19 net pension surplus of £5.2bn (December
2021: £3.8bn). The movement for the UKRF was driven by an
overall increase in AA corporate bond yields (used for discounting
future liabilities), a reduction in long-term expected price
inflation assumption and the payment of deficit reduction
contributions. These movements were partially offset by the fall in
the value of UKRF's assets and the impact of high recent inflation
on the liabilities.
UKRF funding valuations
The
latest annual update as at 30 September 2021 showed the funding
position had improved to a surplus of £0.6bn from a deficit of
£0.9bn shown at 30 September 2020. The improvement was mainly
due to £0.7bn of deficit reduction contributions and
favourable asset returns, partially offset by higher expected long
term price inflation. The deficit recovery plan agreed at the last
triennial valuation requires deficit reduction contributions from
Barclays Bank PLC of £294m in 2022 and £286m in 2023. The
deficit reduction contributions are in addition to the regular
contributions to meet the Group’s share of the cost of
benefits accruing over each year. £147m of the 2022 deficit
reduction contributions were paid in April, with the remaining
£147m due in September. The next triennial actuarial valuation
of the UKRF is due to be completed in 2023 with an effective date
of 30 September 2022.
During
2019 and 2020, the UKRF, the Group’s main pension scheme,
subscribed for non-transferable listed senior fixed rate notes for
£1.25bn issued by entities consolidated within the Group under
IFRS 10. As a result of these transactions, the CET1 impact of the
2019 and 2020 deficit contributions was deferred until 2023, 2024
and 2025 upon maturity of the notes. Following the PRA’s
statement on 13 April 2022, Barclays is planning to unwind these
transactions and to agree the terms and timing of this unwind with
the UKRF Trustee as part of the next triennial actuarial valuation
as at 30 September 2022. Upon unwind, this would result in a
c.30bps reduction to the CET1 ratio potentially being accelerated
to Q4 2022 from 2023, 2024 and 2025.
17.
Called up share capital
|
Ordinary share capital
|
Share premium
|
Total share capital and share premium
|
Half year ended 30.06.22
|
£m
|
£m
|
£m
|
Opening balance as at 1 January
|
4,188
|
348
|
4,536
|
Issue of shares under employee share schemes
|
6
|
27
|
33
|
Repurchase of shares
|
(61)
|
—
|
(61)
|
Closing balance
|
4,133
|
375
|
4,508
|
Called
up share capital comprises 16,531m (December 2021: 16,752m)
ordinary shares of 25p each. The decrease is mainly due to the
repurchase of 244m shares as part of the £1.0bn share buyback
announced in the FY21 results, partially offset by an increase due
to the issuance of shares under employee share
schemes.
18.
Other equity instruments
|
Half year ended 30.06.22
|
Year ended 31.12.21
|
|
£m
|
£m
|
Opening balance as at 1 January
|
12,259
|
11,172
|
Issuances
|
1,247
|
1,078
|
Redemptions
|
(1,132)
|
—
|
Securities held by the Group
|
(17)
|
9
|
Closing balance
|
12,357
|
12,259
|
Other
equity instruments of £12,357m (December 2021: £12,259m)
comprise AT1 securities issued by Barclays PLC. There was one
issuance and one redemption in the six months to 30 June
2022.
The AT1
securities are perpetual securities with no fixed maturity and are
structured to qualify as AT1 instruments under prevailing capital
rules applicable as at the relevant issue date. AT1 securities are
undated and are redeemable, at the option of Barclays PLC, in whole
on (i) the initial call date, or on any fifth anniversary after the
initial call date or (ii) any day falling in a named period ending
on the initial reset date, or on any fifth anniversary after the
initial reset date. In addition, the AT1 securities are redeemable,
at the option of Barclays PLC, in whole in the event of certain
changes in the tax or regulatory treatment of the securities. Any
redemptions require the prior consent of the PRA.
All
Barclays PLC AT1 securities will be converted into ordinary shares
of Barclays PLC, at a pre-determined price, should the fully loaded
CET1 ratio of the Group fall below 7%.
|
As at 30.06.22
|
As at 31.12.21
|
|
£m
|
£m
|
Currency translation reserve
|
4,443
|
2,740
|
Fair value through other comprehensive income reserve
|
(1,081)
|
(283)
|
Cash flow hedging reserve
|
(4,671)
|
(853)
|
Own credit reserve
|
(103)
|
(960)
|
Other reserves and treasury shares
|
1,194
|
1,126
|
Total
|
(218)
|
1,770
|
Currency translation reserve
The
currency translation reserve represents the cumulative gains and
losses on the retranslation of the Group’s net investment in
foreign operations, net of the effects of hedging.
As at
30 June 2022, there was a credit balance of £4,443m (December
2021: £2,740m credit) in the currency translation reserve. The
£1,703m credit movement principally reflects the weakening of
GBP against USD during the period.
Fair value through other comprehensive income reserve
The
fair value through other comprehensive income reserve represents
the changes in the fair value of fair value through other
comprehensive income investments since initial
recognition.
As at
30 June 2022, there was a debit balance of £1,081m (December
2021: £283m debit) in the fair value through other
comprehensive income reserve. The loss of £798m is principally
driven by a loss of £1,237m from the decrease in fair value of
bonds due to increasing bond yields, £5m of net gains
transferred to the income statement and £39m of gains
transferred to retained earnings on sale of 7.45% equity stake in
Absa Group Limited. This is partially offset by a gain of
£153m due to an increase in the Absa Group Limited share price
and a tax credit of £326m.
Cash flow hedging reserve
The
cash flow hedging reserve represents the cumulative gains and
losses on effective cash flow hedging instruments that will be
recycled to the income statement when the hedged transactions
affect profit or loss.
As at
30 June 2022, there was a debit balance of £4,671m (December
2021: £853m debit) in the cash flow hedging reserve. The
decrease of £3,818m principally reflects a £4,747m
decrease in the fair value of interest rate swaps held for hedging
purposes as major interest rate forward curves increased and
£429m of gains transferred to the income statement. This is
partially offset by a tax credit of £1,358m.
Own credit reserve
The own
credit reserve reflects the cumulative own credit gains and losses
on financial liabilities at fair value. Amounts in the own credit
reserve are not recycled to profit or loss in future
periods.
As at
30 June 2022, there was a debit balance of £103m (December
2021: £960m debit) in the own credit reserve. The movement of
£857m principally reflects a £1,258m gain from the
widening of Barclays’ funding spreads partially offset by a
tax charge of £403m.
Other reserves and treasury shares
Other
reserves relate to redeemed ordinary and preference shares issued
by the Group. Treasury shares relate to Barclays PLC shares held
principally in relation to the Group’s various share
schemes.
As at
30 June 2022, there was a credit balance of £1,194m (December
2021: £1,126m credit) in other reserves and treasury shares.
This is driven by an increase of £61m due to the repurchase of
244m shares as part of the £1.0bn share buyback and a £7m
increase in the treasury shares balance held in relation to
employee share schemes.
20.
Contingent liabilities and commitments
|
As at 30.06.22
|
As at 31.12.21
|
Contingent liabilities and financial guarantees
|
£m
|
£m
|
Guarantees and letters of credit pledged as collateral
security
|
16,463
|
15,549
|
Performance guarantees, acceptances and endorsements
|
5,877
|
5,797
|
Total
|
22,340
|
21,346
|
|
|
|
Commitments
|
|
|
Documentary credits and other short-term trade related
transactions
|
1,888
|
1,584
|
Standby facilities, credit lines and other commitments
|
396,038
|
344,127
|
Total
|
397,926
|
345,711
|
Further
details on contingent liabilities, where it is not practicable to
disclose an estimate of the potential financial effect on Barclays
relating to legal and competition and regulatory matters can be
found in Note 21.
21.
Legal, competition and regulatory matters
The
Group faces legal, competition and regulatory challenges, many of
which are beyond our control. The extent of the impact of these
matters cannot always be predicted but may materially impact our
operations, financial results, condition and prospects. Matters
arising from a set of similar circumstances can give rise to either
a contingent liability or a provision, or both, depending on the
relevant facts and circumstances.
The
recognition of provisions in relation to such matters involves
critical accounting estimates and judgments in accordance with the
relevant accounting policies applicable to Note 15, Provisions. We
have not disclosed an estimate of the potential financial impact or
effect on the Group of contingent liabilities where it is not
currently practicable to do so. Various matters detailed in this
note seek damages of an unspecified amount. While certain matters
specify the damages claimed, such claimed amounts do not
necessarily reflect the Group’s potential financial exposure
in respect of those matters.
Matters
are ordered under headings corresponding to the financial
statements in which they are disclosed.
1.
Barclays
PLC and Barclays Bank PLC
Investigations into certain advisory services
agreements
FCA proceedings
In
2008, Barclays Bank PLC and Qatar Holdings LLC entered into two
advisory service agreements (the Agreements). The Financial Conduct
Authority (FCA) conducted an investigation into whether the
Agreements may have related to Barclays PLC’s capital
raisings in June and November 2008 (the Capital Raisings) and
therefore should have been disclosed in the announcements or public
documents relating to the Capital Raisings. In 2013, the FCA issued
warning notices (the Notices) finding that Barclays PLC and
Barclays Bank PLC acted recklessly and in breach of certain
disclosure-related listing rules, and that Barclays PLC was also in
breach of Listing Principle 3. The financial penalty provided in
the Notices is £50m. Barclays PLC and Barclays Bank PLC
continue to contest the findings. Following the conclusion of the
Serious Fraud Office (SFO) proceedings against certain former
Barclays executives resulting in their acquittals, the FCA
proceedings, which were stayed, have resumed. A hearing took place
before the Regulatory Decisions Committee in the first quarter of
2022 and a decision is expected in the second half of
2022.
Investigations into LIBOR and other benchmarks and related civil
actions
Regulators
and law enforcement agencies, including certain competition
authorities, from a number of governments have conducted
investigations relating to Barclays Bank PLC’s involvement in
allegedly manipulating certain financial benchmarks, such as LIBOR.
Various individuals and corporates in a range of jurisdictions have
threatened or brought civil actions against the Group and other
banks in relation to the alleged manipulation of LIBOR and/or other
benchmarks.
USD LIBOR civil actions
The
majority of the USD LIBOR cases, which have been filed in various
US jurisdictions, have been consolidated for pre-trial purposes in
the US District Court in the Southern District of New York (SDNY).
The complaints are substantially similar and allege, among other
things, that Barclays PLC, Barclays Bank PLC, Barclays Capital Inc.
(BCI) and other financial institutions individually and
collectively violated provisions of the US Sherman Antitrust Act
(Antitrust Act), the US Commodity Exchange Act (CEA), the US
Racketeer Influenced and Corrupt Organizations Act (RICO), the
Securities Exchange Act of 1934 and various state laws by
manipulating USD LIBOR rates.
Putative
class actions and individual actions seek unspecified damages with
the exception of one lawsuit, in which the plaintiffs are seeking
no less than $100m in actual damages and additional punitive
damages against all defendants, including Barclays Bank PLC. Some
of the lawsuits also seek trebling of damages under the Antitrust
Act and RICO. Barclays Bank PLC has previously settled certain
claims. Two class action settlements, where Barclays Bank PLC has
respectively paid $7.1m and $20m, have received final court
approval. Barclays Bank PLC also settled two further matters for
$7.5m, and $1.95m respectively.
Sterling LIBOR civil actions
In
2016, two putative class actions filed in the SDNY against Barclays
Bank PLC, BCI and other Sterling LIBOR panel banks alleging, among
other things, that the defendants manipulated the Sterling LIBOR
rate in violation of the Antitrust Act, CEA and RICO, were
consolidated. The defendants’ motion to dismiss the claims
was granted in 2018. The plaintiffs have appealed the
dismissal.
Japanese Yen LIBOR civil actions
In
2012, a putative class action was filed in the SDNY against
Barclays Bank PLC and other Japanese Yen LIBOR panel banks by a
lead plaintiff involved in exchange-traded derivatives and members
of the Japanese Bankers Association’s Euroyen Tokyo Interbank
Offered Rate (Euroyen TIBOR) panel. The complaint alleges, among
other things, manipulation of the Euroyen TIBOR and Yen LIBOR rates
and breaches of the CEA and the Antitrust Act. In 2014, the court
dismissed the plaintiff’s antitrust claims, and, in 2020, the
court dismissed the plaintiff’s remaining CEA claims. The
plaintiff has appealed the lower court’s dismissal of such
claims.
In
2015, a second putative class action, making similar allegations to
the above class action, was filed in the SDNY against Barclays PLC,
Barclays Bank PLC and BCI. Barclays and the plaintiffs have reached
a settlement of $17.75m for both actions, which is subject to court
approval.
SIBOR/SOR civil action
In
2016, a putative class action was filed in the SDNY against
Barclays PLC, Barclays Bank PLC, BCI and other defendants, alleging
manipulation of the Singapore Interbank Offered Rate (SIBOR) and
Singapore Swap Offer Rate (SOR). The plaintiffs and remaining
defendants (which includes Barclays Bank PLC) have reached a joint
settlement to resolve this matter for $91m, which has received
preliminary court approval. A final court approval hearing has been
scheduled for November 2022. The financial impact of
Barclays’ share of the joint settlement is not expected to be
material to the Group’s operating results, cash flows or
financial position.
ICE LIBOR civil actions
In
2019, several putative class actions were filed in the SDNY against
a panel of banks, including Barclays PLC, Barclays Bank PLC, BCI,
other financial institution defendants and Intercontinental
Exchange Inc. and certain of its affiliates (ICE), asserting
antitrust claims that defendants manipulated USD LIBOR through
defendants’ submissions to ICE. These actions have been
consolidated. The defendants’ motion to dismiss was granted
in 2020 and the plaintiffs appealed. In February 2022, the
dismissal was affirmed on appeal. The plaintiffs have not sought
U.S. Supreme Court review. This matter is now
concluded.
In
August 2020, an ICE LIBOR-related action was filed by a group of
individual plaintiffs in the US District Court for the Northern
District of California on behalf of individual borrowers and
consumers of loans and credit cards with variable interest rates
linked to USD ICE LIBOR. The plaintiffs' motion seeking, among
other things, preliminary and permanent injunctions to enjoin the
defendants from continuing to set LIBOR or enforce any financial
instrument that relies in whole or in part on USD LIBOR was denied.
The defendants have moved to dismiss the case.
Non-US benchmarks civil actions
There
remains one claim, issued in 2017, against Barclays Bank PLC and
other banks in the UK in connection with alleged manipulation of
LIBOR. Proceedings have also been brought in a number of other
jurisdictions in Europe, Argentina and Israel relating to alleged
manipulation of LIBOR and EURIBOR. Additional proceedings in other
jurisdictions may be brought in the future.
Credit Default Swap civil action
A
putative antitrust class action is pending in New Mexico federal
court against Barclays Bank PLC, BCI and various other financial
institutions. The plaintiffs, the New Mexico State Investment
Council and certain New Mexico pension funds, allege that the
defendants conspired to manipulate the benchmark price used to
value Credit Default Swap (CDS) contracts at settlement (i.e. the
CDS final auction price). The plaintiffs allege violations of US
antitrust laws and the CEA, and unjust enrichment under state law.
The defendants have moved to dismiss the case.
Foreign Exchange investigations and related civil
actions
In
2015, the Group reached settlements totalling approximately $2.38bn
with various US federal and state authorities and the FCA in
relation to investigations into certain sales and trading practices
in the Foreign Exchange market.
The
European Commission announced two settlements in May 2019 and the
Group paid penalties totalling approximately €210m. In June
2019, the Swiss Competition Commission announced two settlements
and the Group paid penalties totalling approximately CHF27m. In
December 2021, the European Commission announced a final settlement
which required the Group to pay penalties totalling approximately
€54m, which amount has been provided for in previous periods.
The financial impact of any ongoing investigations is not expected
to be material to the Group’s operating results, cash flows
or financial position.
Various
individuals and corporates in a range of jurisdictions have
threatened or brought civil actions against the Group and other
banks in relation to alleged manipulation of Foreign Exchange
markets.
FX opt out civil action
In
2018, Barclays Bank PLC and BCI settled a consolidated action filed
in the SDNY, alleging manipulation of Foreign Exchange markets
(Consolidated FX Action), for a total amount of $384m. Also in
2018, a group of plaintiffs who opted out of the Consolidated FX
Action filed a complaint in the SDNY against Barclays PLC, Barclays
Bank PLC, BCI and other defendants. Some of the plaintiffs' claims
were dismissed in 2020.
Retail basis civil action
In
2015, a putative class action was filed against several
international banks, including Barclays PLC and BCI, on behalf of a
proposed class of individuals who exchanged currencies on a retail
basis at bank branches (Retail Basis Claims). The SDNY has ruled
that the Retail Basis Claims are not covered by the settlement
agreement in the Consolidated FX Action. The Court subsequently
dismissed all Retail Basis Claims against the Group and all other
defendants. The plaintiffs have filed an amended
complaint.
Non-US FX civil actions
Legal
proceedings have been brought or are threatened against Barclays
PLC, Barclays Bank PLC, BCI and Barclays Execution Services Limited
(BX) in connection with alleged manipulation of Foreign Exchange in
the UK, a number of other jurisdictions in Europe, Israel, Brazil
and Australia. Additional proceedings may be brought in the
future.
The
above-mentioned proceedings include two purported class actions
filed against Barclays PLC, Barclays Bank PLC, BX, BCI and other
financial institutions in the UK Competition Appeal Tribunal (CAT)
in 2019 following the settlements with the European Commission
described above. The CAT refused to certify these claims in the
first quarter of 2022 although the claimants are seeking permission
to appeal. Also in 2019, a separate claim was filed in the UK in
the High Court of Justice (High Court), and subsequently
transferred to the CAT, by various banks and asset management firms
against Barclays Bank PLC and other financial institutions alleging
breaches of European and UK competition laws related to FX
trading.
Metals related civil actions
A
number of US civil complaints, each on behalf of a proposed class
of plaintiffs, have been consolidated and transferred to the SDNY.
The complaints allege that Barclays Bank PLC and other members of
The London Gold Market Fixing Ltd. manipulated the prices of gold
and gold derivative contracts in violation of the Antitrust Act and
other federal laws. The parties have reached a joint settlement to
resolve this matter for $50m, which has received preliminary court
approval, with the final court approval hearing scheduled for
August 2022. The financial impact of Barclays’ share of the
joint settlement is not expected to be material to the
Group’s operating results, cash flows or financial position.
A separate US civil complaint by a proposed class of plaintiffs
against a number of banks, including Barclays Bank PLC, BCI and BX,
alleging manipulation of the price of silver in violation of the
CEA, the Antitrust Act and state antitrust and consumer protection
laws, has been dismissed as against the Barclays entities. The
plaintiffs have the option to seek the court’s permission to
appeal.
Civil
actions have also been filed in Canadian courts against Barclays
PLC, Barclays Bank PLC, Barclays Capital Canada Inc. and BCI on
behalf of proposed classes of plaintiffs alleging manipulation of
gold and silver prices.
US residential mortgage related civil actions
There
are two pending US Residential Mortgage-Backed Securities (RMBS)
related civil actions arising from unresolved repurchase requests
submitted by Trustees for certain RMBS, alleging breaches of
various loan-level representations and warranties (R&Ws) made
by Barclays Bank PLC and/or a subsidiary acquired in 2007. In one
action, the Barclays defendants’ motion for summary judgment
was granted in June 2022 and the plaintiffs’ R&W breach
claim was dismissed. The plaintiffs may appeal. The other
repurchase action is pending.
Barclays
Bank PLC has reached settlements to resolve two other repurchase
actions, which have received final court approval. Payment of the
settlement amount of one of those repurchase actions was completed
in the first quarter of 2022, and the other will be completed in
the third quarter of 2022. The financial impact of the settlements
is not expected to be material to the Group’s operating
results, cash flows or financial position.
In
2020, a civil litigation claim was filed in the New Mexico First
Judicial District Court by the State of New Mexico against six
banks, including BCI, on behalf of two New Mexico state pension
funds and the New Mexico State Investment Council relating to
legacy RMBS purchases. As to BCI, the complaint alleges that the
funds purchased approximately $22m in RMBS underwritten by BCI. The
parties have reached a joint settlement to resolve this matter for
$32.5m. The settlement was paid in April 2022. The financial impact
of BCI’s share of the joint settlement is not material to the
Group’s operating results, cash flows or financial
position.
Government and agency securities civil actions
Treasury auction securities civil actions
Consolidated
putative class action complaints filed in US federal court against
Barclays Bank PLC, BCI and other financial institutions under the
Antitrust Act and state common law allege that the defendants (i)
conspired to manipulate the US Treasury securities market and/or
(ii) conspired to prevent the creation of certain platforms by
boycotting or threatening to boycott such trading platforms. The
court dismissed the consolidated action in March 2021. The
plaintiffs filed an amended complaint. The defendants’ motion
to dismiss the amended complaint was granted in March 2022. The
plaintiffs are appealing this decision.
In
addition, certain plaintiffs have filed a related, direct action
against BCI and certain other financial institutions, alleging that
defendants conspired to fix and manipulate the US Treasury
securities market in violation of the Antitrust Act, the CEA and
state common law.
Supranational, Sovereign and Agency bonds civil
actions
Civil
antitrust actions have been filed in the SDNY and Federal Court of
Canada in Toronto against Barclays Bank PLC, BCI, BX, Barclays
Capital Securities Limited and, with respect to the civil action
filed in Canada only, Barclays Capital Canada, Inc. and other
financial institutions alleging that the defendants conspired to
fix prices and restrain competition in the market for US
dollar-denominated Supranational, Sovereign and Agency
bonds.
In one
of the actions filed in the SDNY, the court granted the
defendants’ motion to dismiss the plaintiffs’
complaint. The dismissal was affirmed on appeal; however, the
district court subsequently informed the parties of a potential
conflict. The motion to dismiss were assigned to a new district
court judge and the plaintiffs have moved to vacate the dismissal
order. The plaintiffs have voluntarily dismissed the other SDNY
action. In the Federal Court of Canada action, the plaintiffs
reached settlements with a small number of banks in 2020 (not
including Barclays Capital Canada, Inc.). The plaintiffs have
commenced the class certification process. There is no court
scheduled deadline and the action remains at an early
stage.
Variable Rate Demand Obligations civil actions
Civil
actions have been filed against Barclays Bank PLC and BCI and other
financial institutions alleging the defendants conspired or
colluded to artificially inflate interest rates set for Variable
Rate Demand Obligations (VRDOs). VRDOs are municipal bonds with
interest rates that reset on a periodic basis, most commonly
weekly. Two actions in state court have been filed by private
plaintiffs on behalf of the states of Illinois and California.
Three putative class action complaints have been consolidated in
the SDNY. In the consolidated SDNY class action, certain of the
plaintiffs’ claims were dismissed in November 2020 and
defendants’ motion for partial dismissal of the amended
consolidated complaint was granted in part and denied in part in
June 2022. In the California action, the plaintiffs’ claims
were dismissed in June 2021. The plaintiffs have appealed the
dismissal.
Odd-lot corporate bonds antitrust class action
In
2020, BCI, together with other financial institutions, were named
as defendants in a putative class action. The complaint alleges a
conspiracy to boycott developing electronic trading platforms for
odd-lots and price fixing. The plaintiffs demand unspecified money
damages. The defendants’ motion to dismiss was granted in
2021 and the plaintiffs have appealed the dismissal. The district
court subsequently informed the parties of a potential conflict and
the case was reassigned to a new district court judge. The
plaintiffs have filed a motion seeking a ruling that would vacate
the dismissal and allow the plaintiffs to file an amended complaint
if the appeals court remands the case for further
proceedings.
Interest rate swap and credit default swap US civil
actions
Barclays
PLC, Barclays Bank PLC and BCI, together with other financial
institutions that act as market makers for interest rate swaps
(IRS) are named as defendants in several antitrust class actions
which were consolidated in the SDNY in 2016. The complaints allege
the defendants conspired to prevent the development of exchanges
for IRS and demand unspecified money damages.
In
2018, trueEX LLC filed an antitrust class action in the SDNY
against a number of financial institutions including Barclays PLC,
Barclays Bank PLC and BCI based on similar allegations with respect
to trueEX LLC’s development of an IRS platform. In 2017, Tera
Group Inc. filed a separate civil antitrust action in the SDNY
claiming that certain conduct alleged in the IRS cases also caused
the plaintiff to suffer harm with respect to the Credit Default
Swaps market. In 2018 and 2019, respectively, the court dismissed
certain claims in both cases for unjust enrichment and tortious
interference but denied motions to dismiss the federal and state
antitrust claims, which remain pending.
BDC Finance L.L.C.
In
2008, BDC Finance L.L.C. (BDC) filed a complaint in the Supreme
Court of the State of New York (NY Supreme Court), demanding
damages of $298m, alleging that Barclays Bank PLC had breached a
contract in connection with a portfolio of total return swaps
governed by an ISDA Master Agreement (the Master Agreement).
Following a trial, the court ruled in 2018 that Barclays Bank PLC
was not a defaulting party, which was affirmed on appeal. In April
2021, the trial court entered judgement in favour of Barclays Bank
PLC for $3.3m and as yet to be determined legal fees and costs. BDC
appealed. In January 2022, the appellate court reversed the trial
court’s summary judgment decision in favour of Barclays Bank
PLC and remanded the case to the lower court for further
proceedings, with the trial scheduled to commence in the fourth
quarter of 2022.
In
2011, BDC’s investment advisor, BDCM Fund Adviser, L.L.C. and
its parent company, Black Diamond Capital Holdings, L.L.C. also
sued Barclays Bank PLC and BCI in Connecticut State Court for
unspecified damages allegedly resulting from Barclays Bank
PLC’s conduct relating to the Master Agreement, asserting
claims for violation of the Connecticut Unfair Trade Practices Act
and tortious interference with business and prospective business
relations. This case is currently stayed.
Civil actions in respect of the US Anti-Terrorism Act
There
are a number of civil actions, on behalf of more than 4,000
plaintiffs, filed in US federal courts in the US District Court in
the Eastern District of New York (EDNY) and SDNY against Barclays
Bank PLC and a number of other banks. The complaints generally
allege that Barclays Bank PLC and those banks engaged in a
conspiracy to facilitate US dollar-denominated transactions for the
Iranian Government and various Iranian banks, which in turn funded
acts of terrorism that injured or killed the plaintiffs or the
plaintiffs’ family members. The plaintiffs seek to recover
damages for pain, suffering and mental anguish under the provisions
of the US Anti-Terrorism Act, which allow for the trebling of any
proven damages.
The
court granted the defendants’ motions to dismiss three out of
the six actions in the EDNY. The plaintiffs have appealed in one
action. The remaining actions are stayed pending a decision on the
appeal. Out of the two actions in the SDNY, the court also granted
the defendants’ motion to dismiss the first action, which is
stayed pending a decision on the EDNY appeal. The second SDNY
action is stayed, pending any appeal on the dismissal of the
first.
Shareholder derivative action
In
November 2020, a purported Barclays shareholder filed a putative
derivative action in New York state court against BCI and a number
of current and former members of the Board of Directors of Barclays
PLC and senior executives or employees of the Group. The
shareholder filed the claim on behalf of nominal defendant Barclays
PLC, alleging that the individual defendants harmed the company
through breaches of their duties, including under the Companies Act
2006. The plaintiff seeks damages on behalf of Barclays PLC for the
losses that Barclays PLC allegedly suffered as a result of these
alleged breaches. An amended complaint was filed in April 2021,
which BCI and certain other defendants moved to dismiss. The motion
to dismiss was granted in April 2022. The plaintiffs are appealing
the decision.
Derivative transactions civil action
In
2021, Vestia (a Dutch housing association) brought a claim against
Barclays Bank PLC in the UK in the High Court in relation to a
series of derivative transactions entered into with Barclays Bank
PLC between 2008 and 2011, seeking damages of £329m. Barclays
Bank PLC is defending the claim and has made a
counterclaim.
Timeshare loans, skilled person review, and associated
matters
In
August 2020, the FCA granted an application by Clydesdale Financial
Services Limited (CFS), which trades as Barclays Partner Finance
and houses Barclays’ point-of-sale finance business, for a
validation order with respect to certain loans to customers
brokered between April 2014 and April 2016 by Azure Services
Limited (ASL), a timeshare operator, which did not, at the point of
sale, hold the necessary broker licence. As a condition to the
validation order, the FCA required CFS to undertake a skilled
person review of the assessment of affordability processes for the
loans brokered by ASL (ASL Loans) as well as CFS’ policies
and procedures for assessing affordability and oversight of brokers
more generally, and dictated a remediation methodology in the event
that ASL Loans did not pass the affordability test. CFS voluntarily
agreed to remediate the ASL Loans, in accordance with the
FCA’s methodology and the remediation exercise is
substantively complete. The remaining scope of the skilled person
review is also complete. The skilled person made a number of
observations, some of which were adverse, about both current and
historic affordability practices as well as current oversight
practices. CFS is not required to conduct a full back book review
but, following a review of certain cohorts of loans to determine
historic affordability and/or broker oversight practices that may
have caused customer harm, where harm is identified, CFS’
intention is to remediate. To date CFS has identified a number of
areas for remediation but the scoping exercise is ongoing.
Separately, and notwithstanding this, CFS decided in March 2022 to
extend the proactive remediation of ASL Loans beyond those brokered
between April 2014 to April 2016 to include the full portfolio of
ASL Loans brokered between 2006 and 2018. In the first quarter of
2022, a customer remediation provision of £181m has been
recognised in relation to the remediation of the ASL Loans
originated outside the April 2014 to April 2016 period. This
provision represents the best estimate as at 30 June
2022.
CFS
continues to review complaints about other legacy partner finance
loans, however, it is not currently possible to predict the outcome
of this review or the financial impact on the Group.
Over-issuance of securities in the US
Barclays
Bank PLC maintains a US shelf registration statement with the
Securities and Exchange Commission (SEC) in order to issue
securities to US investors. In May 2017, Barclays Bank PLC was the
subject of an SEC settlement order as a result of which it lost its
status as a “well-known seasoned issuer” (or WKSI) and
was required to register a specified amount of securities to be
issued under any US shelf registration statements filed with the
SEC.
On 10
March 2022, executive management became aware that Barclays Bank
PLC had issued securities materially in excess of the set amount
under its 2019 US shelf registration statement (2019 F-3) and
subsequently became aware that securities had also been issued in
excess of the set amount under the predecessor US shelf
registration statement (the Predecessor Shelf). The securities that
have been over-issued comprise structured notes and exchange traded
notes (ETNs). Securities issued in excess of the amount registered
are considered to be “unregistered securities” for the
purposes of US securities laws, with certain purchasers of those
securities having a right to recover, upon the tender of such
security to Barclays Bank PLC, the consideration paid for such
security with interest, less the amount of any income received, or
to recover damages from Barclays Bank PLC if the purchaser no
longer owns the security and had sold the security at a loss (the
Rescission Price). Barclays Bank PLC is expected to launch a
rescission offer on 1 August 2022, by which Barclays Bank PLC will
offer to repurchase the relevant affected securities for the
rescission price (the Rescission Offer). Although the Rescission
Offer is expected to reduce liability with respect to potential
private civil claims, it will not necessarily prevent such claims
from being asserted against Barclays Bank PLC and/or its
affiliates, including claims under applicable US federal securities
laws.
Further,
the Rescission Offer does not bar the SEC and other regulators from
pursuing enforcement actions against Barclays Bank PLC and its
affiliates, which are expected to result in fines, penalties and/or
other sanctions. The Group is engaged with, and responding to
inquiries and requests for information from, various regulators,
including the SEC. The SEC’s investigation into this matter
is at an advanced stage and the Group has had preliminary
discussions with the staff of the SEC's Division of Enforcement
about resolving this matter.
As at
30 June 2022, Barclays PLC has recognised a balance sheet provision
of £1,757m (December 2021: £220m) in relation to this
matter, out of which £1,592m (December 2021: £220m)
relates to the over-issuance of structured notes and £165m
(December 2021: nil) relates to liabilities that could be incurred
arising out of ongoing discussions in respect of a potential SEC
resolution.
A
contingent liability exists in relation to the over-issuance of
ETNs due to evidentiary challenges and the high level of trading in
the securities. A contingent liability also exists in relation to
any potential civil claims or enforcement actions taken against
Barclays Bank PLC and/or its affiliates, but Barclays Bank PLC is
unable to assess the likelihood of liabilities that may arise out
of such claims or actions. Any liabilities, claims or actions in
connection with the over-issuance of securities under its 2019 F-3
and the Predecessor Shelf could have an adverse effect on Barclays
Bank PLC’s and the Group’s business, financial
condition, results of operations and reputation as a frequent
issuer in the securities markets.
Investigation into
the use of unapproved communications platforms
In July
2022, Barclays Bank PLC and BCI reached an agreement in principle
with the staff of the SEC's Division of Enforcement and the staff
of the Commodity Futures Trading Commission (CFTC) in connection
with investigations by the SEC and the CFTC of Barclays Bank PLC,
BCI and other financial institutions as part of a financial
industry sweep regarding compliance with record-keeping obligations
in connection with business-related communications sent over
unapproved electronic messaging platforms. The SEC and the CFTC
found that Barclays Bank PLC and BCI failed to comply with their
respective record keeping rules, where such communications were
sent or received by employees over electronic messaging channels
that had not been approved by the bank for business use by
employees. The proposed resolution with the SEC and the CFTC, will
include Barclays Bank PLC and BCI paying a combined $125m civil
monetary penalty to the SEC and a $75m civil monetary penalty to
the CFTC. There will also be non-financial components to the
settlements which have yet to be finalised and agreed with the SEC
and CFTC. Subject to final agreement of the terms of the
settlements and related documentation, as well as the SEC's and
CFTC's approval, the civil monetary penalties are expected to be
paid during the third quarter of 2022.
2.
Barclays
PLC, Barclays Bank PLC and Barclays Bank UK PLC
HM Revenue & Customs (HMRC) assessments concerning UK Value
Added Tax
In
2018, HMRC issued notices that have the effect of removing certain
overseas subsidiaries that have operations in the UK from
Barclays’ UK VAT group, in which group supplies between
members are generally free from VAT. The notices have retrospective
effect and correspond to assessments of £181m (inclusive of
interest), of which Barclays would expect to attribute an amount of
approximately £128m to Barclays Bank UK PLC and £53m to
Barclays Bank PLC. HMRC’s decision has been appealed to the
First Tier Tribunal (Tax Chamber).
Local authority civil actions concerning LIBOR
Following
settlement by Barclays Bank PLC of various governmental
investigations concerning certain benchmark interest rate
submissions referred to above in ‘Investigations into LIBOR
and other benchmarks and related civil actions’, in the UK,
certain local authorities brought claims in 2018 against Barclays
Bank PLC and Barclays Bank UK PLC asserting that they entered into
loans between 2006 and 2008 in reliance on misrepresentations made
by Barclays Bank PLC in respect of its conduct in relation to
LIBOR. Barclays Bank PLC and Barclays Bank UK PLC were successful
in their applications to strike out the claims. The claims have
been settled on terms such that the parties have agreed not to
pursue these claims further and to bear their own costs. The
financial impact of the settlements is not material to the
Group’s operating results, cash flows or financial
position.
3.
Barclays
PLC
Alternative trading systems
In
2020, a claim was brought against Barclays PLC in the UK in the
High Court by various shareholders regarding Barclays PLC’s
share price based on the allegations contained within a complaint
by the New York State Attorney General (NYAG) in 2014. Such claim
was settled in 2016, as previously disclosed. The more recent claim
seeks unquantified damages and Barclays is defending the claim. The
NYAG complaint was filed against Barclays PLC and BCI in the NY
Supreme Court alleging, among other things, that Barclays PLC and
BCI engaged in fraud and deceptive practices in connection with LX,
BCI’s SEC-registered alternative trading system.
General
The
Group is engaged in various other legal, competition and regulatory
matters in the UK, the US and a number of other overseas
jurisdictions. It is subject to legal proceedings brought by and
against the Group which arise in the ordinary course of business
from time to time, including (but not limited to) disputes in
relation to contracts, securities, debt collection, consumer
credit, fraud, trusts, client assets, competition, data management
and protection, intellectual property, money laundering, financial
crime, employment, environmental and other statutory and common law
issues.
The
Group is also subject to enquiries and examinations, requests for
information, audits, investigations and legal and other proceedings
by regulators, governmental and other public bodies in connection
with (but not limited to) consumer protection measures, compliance
with legislation and regulation, wholesale trading activity and
other areas of banking and business activities in which the Group
is or has been engaged. The Group is cooperating with the relevant
authorities and keeping all relevant agencies briefed as
appropriate in relation to these matters and others described in
this note on an ongoing basis.
At the
present time, Barclays PLC does not expect the ultimate resolution
of any of these other matters to have a material adverse effect on
the Group’s financial position. However, in light of the
uncertainties involved in such matters and the matters specifically
described in this note, there can be no assurance that the outcome
of a particular matter or matters (including formerly active
matters or those matters arising after the date of this note) will
not be material to Barclays PLC’s results, operations or cash
flow for a particular period, depending on, among other things, the
amount of the loss resulting from the matter(s) and the amount of
profit otherwise reported for the reporting period.
22.
Related party transactions
Related
party transactions in the half year ended 30 June 2022 were similar
in nature to those disclosed in the Barclays PLC Annual Report
2021. No related party transactions that have taken place in the
half year ended 30 June 2022 have materially affected the financial
position or the performance of the Group during this
period.
23.
Interest rate benchmark reform
Following
the financial crisis, the reform and replacement of benchmark
interest rates such as LIBOR became a priority for global
regulators. The FCA and other global regulators instructed market
participants to prepare for the cessation of GBP, EUR, CHF, JPY
LIBOR and the 1-week and 2-month USD settings of LIBOR after the
end of 2021, The remaining USD LIBOR settings are scheduled to
cease immediately after 30 June 2023.
How the Group is managing the transition to alternative benchmark
rates
Barclays
established a Group-wide LIBOR Transition Programme, further detail
on the transition programme is available in the Barclays PLC Annual
Report 2021 (Page 417). This Programme oversaw transition for GBP,
EUR, CHF and JPY LIBOR exposures and continues to work to
transition the remaining residual of unremediated exposures off of
synthetic rates, in addition to overseeing USD LIBOR transition in
preparation for the 30 June 2023 cessation.
The
majority of GBP, EUR, CHF and JPY exposures have now transitioned
off of LIBOR and good progress has been made with the unremediated
exposures reported at year-end 2021. A small residual population of
GBP, EUR and JPY contracts remain unremediated at the end of H1
2022. The majority of these have now reset onto GBP and JPY
Synthetic LIBOR rates. We continue to work with clients to
bilaterally transition these trades and have raised potential risks
regarding note holder consent for securitised products and Local
Authority consent for Public Finance Initiative (PFI) loan deals
with our regulators.
The
Barclays Group-wide LIBOR Transition Programme has also commenced
focus on the transition of USD LIBOR exposures impacted by the 30
June 2023 cessation timeline. As with GBP, EUR, CHF and JPY LIBOR,
USD LIBOR transition approaches will vary by product and nature of
counterparty. H122 saw focused efforts to transition uncommitted
lending exposure with further wide scale client engagement for
other products due to commence in H222. Both active conversion of
exposures and inclusion of fallback provisions will be leveraged
for bilateral derivative and non-derivatives products. For cleared
derivatives, Barclays is working with central clearing
counterparties (CCPs) on transition which is expected to follow a
market wide, standardised approach to reform similar to the CCP-led
conversions in 2021.
The
Group met the Q121 Federal Reserve Bank of New York milestone to
cease new use of US dollar LIBOR, with limited exceptions. The
Group has put in place controls so that any exceptions or
exemptions are approved.
24.
Barclays PLC parent company balance sheet
|
As at 30.06.22
|
As at 31.12.21
|
Assets
|
£m
|
£m
|
Investment in subsidiaries
|
63,633
|
62,528
|
Loans and advances to subsidiaries
|
20,369
|
22,072
|
Financial assets at fair value through the income
statement
|
24,052
|
25,091
|
Derivative financial instruments
|
5
|
4
|
Other assets
|
235
|
68
|
Total assets
|
108,294
|
109,763
|
|
|
|
Liabilities
|
|
|
Deposits at amortised cost
|
545
|
488
|
Debt securities in issue
|
22,389
|
25,658
|
Subordinated liabilities
|
10,070
|
9,301
|
Financial liabilities designated at fair value
|
16,888
|
16,319
|
Derivative financial instruments
|
540
|
43
|
Other liabilities
|
104
|
117
|
Total liabilities
|
50,536
|
51,926
|
|
|
|
Equity
|
|
|
Called up share capital
|
4,133
|
4,188
|
Share premium account
|
375
|
348
|
Other equity instruments
|
12,347
|
12,241
|
Other reserves
|
616
|
555
|
Retained earnings
|
40,287
|
40,505
|
Total equity
|
57,758
|
57,837
|
|
|
|
Total liabilities and equity
|
108,294
|
109,763
|
Investment in subsidiaries
The
investment in subsidiaries of £63,633m (December 2021:
£62,528m) predominantly relates to investments in the ordinary
shares of Barclays Bank PLC of £36,340m (December 2021:
£35,590m) and their AT1 securities of £9,849m (December
2021: £9,493m), as well as investments in the ordinary shares
of Barclays Bank UK PLC of £14,245m (December 2021:
£14,245m) and their AT1 securities of £2,570m (December
2021: £2,570m). Barclays PLC considers the carrying value of
its investment in subsidiaries to be fully
recoverable.
Loans and advances to subsidiaries
During
the period, loans and advances to subsidiaries decreased by
£1,703m to £20,369m (December 2021: £22,072m). The
decrease was driven by the maturity of £2,296m intragroup
loans to Barclays Bank PLC and the maturity of £836m
intragroup loans to Barclays Bank UK PLC. There was also a
£397m share buyback which took place in Q222. This was
partially offset by a foreign exchange impact of £1,326m due
to depreciation of GBP against major currencies (although the FX
impact is offset across the balance sheet liabilities) and
£1,010m dividend receipts from Barclays Bank UK
PLC.
Financial assets and liabilities designated at fair
value
Financial
liabilities designated at fair value of £16,888m (December
2021: £16,319m) comprise material issuances during the period
of €2,250m Fixed Rate Resetting Senior Callable Notes and
$400m Zero Coupon Callable Notes. The proceeds raised through these
transactions were used to invest in subsidiaries of Barclays PLC
which are included within the financial assets designated at fair
value through the income statement balance of £24,052m
(December 2021: £25,091m).
Subordinated liabilities and debt securities in issue
During
the period, subordinated liabilities have increased to
£10,070m (December 2021: £9,301m) largely driven by
foreign exchange impact of £819m due to depreciation of GBP
against major currencies. Debt securities in issue of £22,389m
(December 2021: £25,658m) have reduced in the year due to the
maturity of senior issuances.
Called up share capital and share premium
Called
up share capital and share premium of Barclays PLC is £4,508m
(December 2021: £4,536m). The decrease in the year is
primarily due to 244m shares repurchased with a total nominal value
of £61m. This decrease was offset by £33m of shares
issued under employee share schemes.
Other equity instruments
Other
equity instruments comprises AT1 securities issued by Barclays PLC.
The increase in the year of £106m is driven by one issuance
(principal amount of £1,250m) and one redemption (principal
amount of $1,500m).
Other reserves
As at
30 June 2022, there was a balance of £616m (December 2021:
£555m) in other reserves. The increase is due to the
repurchase of shares as part of the share buyback.
Management of internal investments, loans and advances
Barclays
PLC retains the discretion to manage the nature of its internal
investments in subsidiaries according to their regulatory and
business needs. Barclays PLC may invest capital and funding into
Barclays Bank PLC, Barclays Bank UK PLC and other Group
subsidiaries such as Barclays Execution Services Limited and the US
Intermediate Holding Company (IHC).
Appendix: Non-IFRS Performance Measures
The
Group’s management believes that the non-IFRS performance
measures included in this document provide valuable information to
the readers of the financial statements as they enable the reader
to identify a more consistent basis for comparing the
businesses’ performance between financial periods, and
provide more detail concerning the elements of performance which
the managers of these businesses are most directly able to
influence or are relevant for an assessment of the Group. They also
reflect an important aspect of the way in which operating targets
are defined and performance is monitored by
management.
However,
any non-IFRS performance measures in this document are not a
substitute for IFRS measures and readers should consider the IFRS
measures as well.
Non-IFRS performance measures glossary
Measure
|
Definition
|
Loan: deposit ratio
|
Loans and advances at amortised cost divided by deposits at
amortised cost. The components of the calculation have been
included on the page 52.
|
Period end allocated tangible equity
|
Allocated
tangible equity is calculated as 13.5% (2021: 13.5%) of RWAs for
each business, adjusted for capital deductions, excluding goodwill
and intangible assets, reflecting the assumptions the Group uses
for capital planning purposes. Head Office allocated tangible
equity represents the difference between the Group’s tangible
shareholders’ equity and the amounts allocated to
businesses.
|
Average tangible shareholders’ equity
|
Calculated as the average of the previous month’s period end
tangible equity and the current month’s period end tangible
equity. The average tangible shareholders’ equity for the
period is the average of the monthly averages within that
period.
|
Average allocated tangible equity
|
Calculated as the average of the previous month’s period end
allocated tangible equity and the current month’s period end
allocated tangible equity. The average allocated tangible equity
for the period is the average of the monthly averages within that
period.
|
Return on average tangible shareholders’ equity
|
Annualised
profit after tax attributable to ordinary equity holders of the
parent, as a proportion of average shareholders’ equity
excluding non-controlling interests and other equity instruments
adjusted for the deduction of intangible assets and goodwill. The
components of the calculation have been included on pages
116 to 120.
|
Return on average allocated tangible equity
|
Annualised
profit after tax attributable to ordinary equity holders of the
parent, as a proportion of average allocated tangible equity. The
components of the calculation have been included on pages
116 to 122.
|
Cost: income ratio
|
Total operating expenses divided by total income.
|
Loan loss rate
|
Quoted
in basis points and represents total annualised impairment charges
divided by gross loans and advances held at amortised cost at the
balance sheet date. The components of the calculation have been
included on page 33. Quoted as
zero when credit impairment is a net release.
|
Net interest margin
|
Annualised
net interest income divided by the sum of average customer assets.
The components of the calculation have been included on page
29.
|
Tangible net asset value per share
|
Calculated
by dividing shareholders’ equity, excluding non-controlling
interests and other equity instruments, less goodwill and
intangible assets, by the number of issued ordinary shares. The
components of the calculation have been included on page
123.
|
Returns
Return
on average tangible equity is calculated as profit after tax
attributable to ordinary equity holders of the parent as a
proportion of average tangible equity, excluding non-controlling
and other equity interests for businesses. Allocated tangible
equity has been calculated as 13.5% (2021: 13.5%) of RWAs for each
business, adjusted for capital deductions, excluding goodwill and
intangible assets, reflecting the assumptions the Group uses for
capital planning purposes. Head Office average allocated tangible
equity represents the difference between the Group’s average
tangible shareholders’ equity and the amounts allocated to
businesses.
|
Profit/(loss) attributable to ordinary equity holders of the
parent
|
|
Average tangible equity
|
|
Return on average tangible equity
|
Half year ended 30.06.22
|
£m
|
|
£bn
|
|
%
|
Barclays UK
|
854
|
|
10.0
|
|
17.0
|
Corporate and Investment Bank
|
1,895
|
|
31.8
|
|
11.9
|
Consumer, Cards and Payments
|
188
|
|
4.4
|
|
8.5
|
Barclays International
|
2,083
|
|
36.2
|
|
11.5
|
Head Office
|
(462)
|
|
2.7
|
|
n/m
|
Barclays Group
|
2,475
|
|
48.9
|
|
10.1
|
|
|
|
|
|
|
Half year ended
30.06.211
|
|
|
|
|
|
Barclays UK
|
1,019
|
|
9.9
|
|
20.6
|
Corporate and Investment Bank
|
2,252
|
|
28.3
|
|
15.9
|
Consumer, Cards and Payments
|
386
|
|
4.0
|
|
19.1
|
Barclays International
|
2,638
|
|
32.3
|
|
16.3
|
Head Office
|
95
|
|
4.3
|
|
n/m
|
Barclays Group
|
3,752
|
|
46.5
|
|
16.1
|
1
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
|
|
|
|
|
|
|
|
Half year ended 30.06.22
|
|
Barclays UK
|
Corporate and Investment Bank
|
Consumer, Cards and Payments
|
Barclays International
|
Head Office
|
Barclays Group
|
Return on average tangible shareholders' equity
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Attributable profit/(loss)
|
854
|
1,895
|
188
|
2,083
|
(462)
|
2,475
|
|
|
|
|
|
|
|
|
£bn
|
£bn
|
£bn
|
£bn
|
£bn
|
£bn
|
Average shareholders' equity
|
13.6
|
31.8
|
5.3
|
37.1
|
6.3
|
57.0
|
Average goodwill and intangibles
|
(3.6)
|
—
|
(0.9)
|
(0.9)
|
(3.6)
|
(8.1)
|
Average tangible shareholders' equity
|
10.0
|
31.8
|
4.4
|
36.2
|
2.7
|
48.9
|
|
|
|
|
|
|
|
Return on average tangible shareholders' equity
|
17.0%
|
11.9%
|
8.5%
|
11.5%
|
n/m
|
10.1%
|
|
Half year ended
30.06.211
|
|
Barclays UK
|
Corporate and Investment Bank
|
Consumer, Cards and Payments
|
Barclays International
|
Head Office
|
Barclays Group
|
Return on average tangible shareholders' equity
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Attributable profit
|
1,019
|
2,252
|
386
|
2,638
|
95
|
3,752
|
|
|
|
|
|
|
|
|
£bn
|
£bn
|
£bn
|
£bn
|
£bn
|
£bn
|
Average shareholders' equity
|
13.5
|
28.3
|
4.6
|
32.9
|
8.0
|
54.4
|
Average goodwill and intangibles
|
(3.6)
|
—
|
(0.6)
|
(0.6)
|
(3.7)
|
(7.9)
|
Average tangible shareholders' equity
|
9.9
|
28.3
|
4.0
|
32.3
|
4.3
|
46.5
|
|
|
|
|
|
|
|
Return on average tangible shareholders' equity
|
20.6%
|
15.9%
|
19.1%
|
16.3%
|
n/m
|
16.1%
|
Performance measures excluding the Over-issuance of
Securities
Profit attributable to ordinary equity holders of the
parent
|
|
|
|
|
|
Half year ended 30.06.22 £m
|
Attributable profit
|
|
|
|
|
|
2,475
|
Post-tax impact of the Over-issuance of Securities
|
|
|
|
|
|
581
|
Profit attributable to ordinary equity holders of the parent
excluding the Over-issuance of Securities
|
|
|
|
|
|
3,056
|
|
|
|
|
|
|
|
Return on average tangible shareholders' equity
|
|
|
|
|
|
£bn
|
Average tangible shareholders' equity
|
|
|
|
|
|
48.9
|
|
|
|
|
|
|
|
Return on average tangible shareholders' equity excluding the
Over-issuance of Securities
|
|
|
|
|
|
12.5 %
|
1.
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
Barclays Group
|
|
|
|
|
|
|
|
|
|
|
Return on average tangible shareholders' equity
|
Q222
|
Q122
|
|
Q4211
|
Q3211
|
Q2211
|
Q121
|
|
Q420
|
Q320
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Attributable profit
|
1,071
|
1,404
|
|
1,079
|
1,374
|
2,048
|
1,704
|
|
220
|
611
|
|
|
|
|
|
|
|
|
|
|
|
|
£bn
|
£bn
|
|
£bn
|
£bn
|
£bn
|
£bn
|
|
£bn
|
£bn
|
Average shareholders' equity
|
57.1
|
56.9
|
|
56.1
|
56.5
|
54.4
|
54.4
|
|
55.7
|
56.4
|
Average goodwill and intangibles
|
(8.1)
|
(8.1)
|
|
(8.1)
|
(8.2)
|
(7.9)
|
(7.9)
|
|
(8.1)
|
(8.1)
|
Average tangible shareholders' equity
|
49.0
|
48.8
|
|
48.0
|
48.3
|
46.5
|
46.5
|
|
47.6
|
48.3
|
|
|
|
|
|
|
|
|
|
|
|
Return on average tangible shareholders' equity
|
8.7%
|
11.5%
|
|
9.0%
|
11.4%
|
17.6%
|
14.7%
|
|
1.8%
|
5.1%
|
Barclays UK
|
|
|
|
|
|
|
|
|
|
|
Return on average allocated tangible equity
|
Q222
|
Q122
|
|
Q421
|
Q321
|
Q221
|
Q121
|
|
Q420
|
Q320
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Attributable profit
|
458
|
396
|
|
420
|
317
|
721
|
298
|
|
160
|
113
|
|
|
|
|
|
|
|
|
|
|
|
|
£bn
|
£bn
|
|
£bn
|
£bn
|
£bn
|
£bn
|
|
£bn
|
£bn
|
Average allocated equity
|
13.6
|
13.7
|
|
13.6
|
13.6
|
13.5
|
13.5
|
|
13.4
|
13.7
|
Average goodwill and intangibles
|
(3.6)
|
(3.6)
|
|
(3.6)
|
(3.6)
|
(3.6)
|
(3.6)
|
|
(3.6)
|
(3.6)
|
Average allocated tangible equity
|
10.0
|
10.1
|
|
10.0
|
10.0
|
9.9
|
9.9
|
|
9.8
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
Return on average allocated tangible equity
|
18.4%
|
15.6%
|
|
16.8%
|
12.7%
|
29.1%
|
12.0%
|
|
6.5%
|
4.5%
|
1.
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
Barclays International
|
|
|
|
|
|
|
|
|
|
|
Return on average allocated tangible equity
|
Q222
|
Q122
|
|
Q4211
|
Q3211
|
Q2211
|
Q121
|
|
Q420
|
Q320
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Attributable profit
|
783
|
1,300
|
|
818
|
1,191
|
1,207
|
1,431
|
|
441
|
782
|
|
|
|
|
|
|
|
|
|
|
|
|
£bn
|
£bn
|
|
£bn
|
£bn
|
£bn
|
£bn
|
|
£bn
|
£bn
|
Average allocated equity
|
38.2
|
36.0
|
|
33.8
|
32.7
|
33.0
|
32.8
|
|
31.1
|
31.2
|
Average goodwill and intangibles
|
(0.9)
|
(0.9)
|
|
(0.9)
|
(0.9)
|
(0.6)
|
(0.5)
|
|
(0.6)
|
(0.6)
|
Average allocated tangible equity
|
37.3
|
35.1
|
|
32.9
|
31.8
|
32.4
|
32.3
|
|
30.5
|
30.6
|
|
|
|
|
|
|
|
|
|
|
|
Return on average allocated tangible equity
|
8.4%
|
14.8%
|
|
9.9%
|
14.9%
|
14.9%
|
17.7%
|
|
5.8%
|
10.2%
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Investment Bank
|
|
|
|
|
|
|
|
|
|
Return on average allocated tangible equity
|
Q222
|
Q122
|
|
Q4211
|
Q3211
|
Q2211
|
Q121
|
|
Q420
|
Q320
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Attributable profit
|
579
|
1,316
|
|
695
|
1,085
|
989
|
1,263
|
|
413
|
627
|
|
|
|
|
|
|
|
|
|
|
|
|
£bn
|
£bn
|
|
£bn
|
£bn
|
£bn
|
£bn
|
|
£bn
|
£bn
|
Average allocated equity
|
32.7
|
30.8
|
|
28.7
|
27.8
|
28.4
|
28.2
|
|
26.3
|
26.4
|
Average goodwill and intangibles
|
—
|
—
|
|
—
|
—
|
—
|
—
|
|
—
|
—
|
Average allocated tangible equity
|
32.7
|
30.8
|
|
28.7
|
27.8
|
28.4
|
28.2
|
|
26.3
|
26.4
|
|
|
|
|
|
|
|
|
|
|
|
Return on average allocated tangible equity
|
7.1%
|
17.1%
|
|
9.7%
|
15.6%
|
14.0%
|
17.9%
|
|
6.3%
|
9.5%
|
Consumer, Cards and Payments
|
|
|
|
|
|
|
|
|
|
Return on average allocated tangible equity
|
Q222
|
Q122
|
|
Q421
|
Q321
|
Q221
|
Q121
|
|
Q420
|
Q320
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
Attributable profit/(loss)
|
204
|
(16)
|
|
123
|
106
|
218
|
168
|
|
28
|
155
|
|
|
|
|
|
|
|
|
|
|
|
|
£bn
|
£bn
|
|
£bn
|
£bn
|
£bn
|
£bn
|
|
£bn
|
£bn
|
Average allocated equity
|
5.5
|
5.2
|
|
5.1
|
4.9
|
4.6
|
4.6
|
|
4.8
|
4.8
|
Average goodwill and intangibles
|
(0.9)
|
(0.9)
|
|
(0.9)
|
(0.9)
|
(0.6)
|
(0.5)
|
|
(0.6)
|
(0.6)
|
Average allocated tangible equity
|
4.6
|
4.3
|
|
4.2
|
4.0
|
4.0
|
4.1
|
|
4.2
|
4.2
|
|
|
|
|
|
|
|
|
|
|
|
Return on average allocated tangible equity
|
17.8%
|
(1.5)%
|
|
11.7%
|
10.5%
|
21.8%
|
16.5%
|
|
2.7%
|
14.7%
|
1.
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
Tangible net asset value per share
|
As at 30.06.22
|
Restated1
As at 31.12.21
|
Restated1
As at 30.06.21
|
|
£m
|
£m
|
£m
|
Total equity excluding non-controlling interests
|
69,627
|
69,052
|
66,992
|
Other equity instruments
|
(12,357)
|
(12,259)
|
(11,167)
|
Goodwill and intangibles
|
(8,245)
|
(8,061)
|
(8,196)
|
Tangible shareholders' equity attributable to ordinary shareholders
of the parent
|
49,025
|
48,732
|
47,629
|
|
|
|
|
|
m
|
m
|
m
|
Shares in issue
|
16,531
|
16,752
|
16,998
|
|
|
|
|
|
p
|
p
|
p
|
Tangible net asset value per share
|
297
|
291
|
280
|
1.
2021 financial metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Restatement of financial
statements (Note 1) on page 87
for more information.
Shareholder Information
|
|
|
|
|
|
|
Results timetable1
|
|
|
Date
|
|
|
|
Ex-dividend date
|
|
|
11 August 2022
|
Dividend record date
|
|
|
12 August 2022
|
Cut off time of 5:00pm (UK time) for the receipt of Dividend
Re-investment Programme (DRIP) Application Form
Mandate
|
|
26 August 2022
|
Dividend payment date
|
|
|
16 September 2022
|
Q322 Results Announcement
|
|
|
26 October 2022
|
|
|
|
|
|
|
|
For qualifying US and Canadian resident ADR holders, the half year
dividend of 2.25p per ordinary share becomes 9.0p per ADS
(representing four shares). The ex-dividend, dividend record and
dividend payment dates for ADR holders are as shown
above
|
|
|
|
|
|
|
|
|
|
|
% Change3
|
Exchange rates2
|
30.06.22
|
31.12.21
|
30.06.21
|
|
31.12.21
|
30.06.21
|
Period end - USD/GBP
|
1.22
|
1.35
|
1.38
|
|
(10)%
|
(12)%
|
6 month average - USD/GBP
|
1.30
|
1.36
|
1.39
|
|
(4)%
|
(6)%
|
3 month average - USD/GBP
|
1.26
|
1.35
|
1.40
|
|
(7)%
|
(10)%
|
Period end - EUR/GBP
|
1.16
|
1.19
|
1.17
|
|
(3)%
|
(1)%
|
6 month average - EUR/GBP
|
1.19
|
1.17
|
1.15
|
|
2%
|
3%
|
3 month average - EUR/GBP
|
1.18
|
1.18
|
1.16
|
|
—
|
2%
|
|
|
|
|
|
|
|
Share price data
|
|
|
|
|
|
|
Barclays PLC (p)
|
153.12
|
187.00
|
171.12
|
|
|
|
Barclays
PLC number of shares (m)4
|
16,531
|
16,752
|
16,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For further information please contact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor relations
|
Media relations
|
Chris Manners +44 (0) 20 7773 2136
|
Tom Hoskin +44 (0) 20 7116 4755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
More information on Barclays can be found on our website:
home.barclays
|
|
|
|
|
|
|
|
|
|
|
|
Registered office
|
|
|
|
|
|
|
1 Churchill Place, London, E14 5HP, United Kingdom. Tel: +44 (0) 20
7116 1000. Company number: 48839.
|
|
|
|
|
|
|
|
|
Registrar
|
|
|
|
|
|
|
Equiniti, Aspect House, Spencer Road, Lancing, West Sussex, BN99
6DA, United Kingdom.
|
|
Tel:
0371 384 20555 from the UK or +44
121 415 7004 from overseas.
|
|
|
|
|
|
|
|
|
American Depositary Receipts (ADRs)
|
|
|
|
|
|
|
EQ Shareowner Services
|
P.O. Box 64854
|
St. Paul, MN 55164-0854
|
United States of America
|
shareowneronline.com
|
|
|
|
|
|
Toll Free Number: +1 800-990-1135
|
|
|
|
|
|
|
Outside the US +1 651-453-2128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delivery of ADR certificates and overnight mail
|
|
|
|
|
|
|
EQ Shareowner Services, 1110 Centre Pointe Curve, Suite 101,
Mendota Heights, MN 55120-4100, USA.
|
1
Note that this date is provisional and subject to
change.
2
The average rates shown above are derived from daily spot rates
during the year.
3
The change is the impact to GBP reported information.
4
The number of shares of 16,531m is different from the 16,509m
quoted in the 1 July 2022 RNS because the share buyback
transactions executed on the 29 and 30 June 2022 did not settle
until 1 July 2022 and 4 July 2022.
5
Lines open 8.30am to 5.30pm (UK time), Monday to Friday, excluding
UK public holidays in England and Wales.
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