1
Exhibit 99.1
Barclays PLC
This exhibit includes portions from the previously published Results Announcement of Barclays PLC relating to the nine months
ended 30 September 2020, as amended in part to comply with the requirements of Regulation G and Item 10(e) of Regulation S-K
promulgated by the US Securities and Exchange Commission (SEC), including the reconciliation of certain financial information to
comparable measures prepared in accordance with International Financial Reporting Standards (IFRS). The purpose of this
document is to provide such additional disclosure as required by Regulation G and Regulation S-K item 10(e), to delete certain
information not in compliance with SEC regulations and to include reconciliations of certain non-IFRS figures to the most directly
equivalent IFRS figures for the periods presented. This document does not update or otherwise supplement the information
contained in the previously published Results Announcement. Any reference to a website in this document is made for
informational purposes only, and information found at such websites is not incorporated by reference into this document.
An audit opinion has not been rendered in respect of this document.
Notes
2
The terms Barclays or Group refer to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income stat ement analysis compares the nine
months ended 30 September 2020 to the corresponding nine months of 2019 and balance sheet analysis as at 30 September 2020 with comparatives relating
to 31 December 2019 and 30 September 2019. The abbreviations ‘£m’ and ‘£bn’ represent millions and thousands of millions of Pounds Sterling respectively;
the abbreviations ‘$m’ and ‘$bn’ represent millions and thousands of millions of US Dollars respectively; and the abbreviations ‘€m’ and ‘€bn’ represent
millions and thousands of millions of Euros respectively.
There are a number of key judgement areas, for example impairment calculations, which are based on models and which are subject to ongoing adjustment
and modifications. Reported numbers reflect best estimates and judgements at the given point in time.
Relevant terms that are used in this document but are not defined under applicable regulatory guidance or International Financial Reporting Standards (IFRS)
are explained in the results glossary that can be accessed at home.barclays/investor -relations/reports-and-events/latest-financial-results.
The information in this announcement, which was approved by the Board of Directors on 22 October 2020, does not comprise statutory accounts within the
meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2019, which 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.
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 42 to 52 for further information and calculations of non-IFRS performance measures included
throughout this document, and the most directly comparable IFRS measures.
Key non-IFRS measures included in this document, and the most directly comparable IFRS measures, are:
– Attributable profit/(loss) excluding litigation and conduct represents attributable profit/(loss) excluding litigation and conduct charges. The comparable IFRS
measure is attributable profit/(loss). A reconciliation is provided on pages 44 to 51;
– Average allocated equity represents the average shareholders’ equity that is allocated to the businesses. The comparable IFRS measure is average equity. A
reconciliation is provided on pages 44 to 50;
– Average allocated tangible equity is calculated as the average of the previous month’s period end allocated tangible equity and the current month’s period
end allocated tangible equity. The average allocated tangible equity for the period is the average of the monthly averages within that period. Period end
allocated tangible equity is calculated as 13.0% (2019: 13.0%) of RWAs for each business, adjusted for capital deductions, excluding goodwill and intangible
assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office allocated tangible equity represents the difference between the
Group’s tangible shareholders’ equity and the amounts allocated to businesses. The comparable IFRS measure is average equity. A reconciliation is provided
on pages 44 to
��
50;– Average tangible shareholders’ equity is calculated as the average of the previous month’s period end tangible equity and the current month’s period end
tangible equity. The average tangible shareholders’ equity for the period is the average of the monthly averages within that period. The comparable IFRS
measure is average equity. A reconciliation is provided on pages 44 to 50;
– Basic earnings per share excluding litigation and conduct is calculated by dividing statutory profit after tax attributable to ordinary shareholders excluding
litigation and conduct charges, by the basic weighted average number of shares. The comparable IFRS measure is basic earnings per share. A reconciliation is
provided on pages 44 to 46;
– Cost: income ratio excluding litigation and conduct represents operating expenses excluding litigation and conduct charges, divided by total income. The
comparable IFRS measure is cost: income ratio. A reconciliation is provided on pages 44 to 50;
– Operating expenses excluding litigation and conduct represents operating expenses excluding litigation and conduct charges. The comparable IFRS measure
is operating expenses. A reconciliation is provided on pages 44 to 50;
– Pre -provision profits is calculated by excluding credit impairment charges from profit before tax. The comparable IFRS measure is profit before tax. A
reconciliation is provided on pages 44 to 46;
– Pre -provision profits excluding litigation and conduct is calculated by excluding litigation and conduct, and credit impairment charges from profit before tax.
The comparable IFRS measure is profit before tax. A reconciliation is provided on pages 44 to 46;
– Profit/(loss) before tax excluding litigation and conduct represents profit/(loss) before tax excluding litigation and conduct charges. The comparable IFRS
measure is profit/(loss) before tax. A reconciliation is provided on pages 44 to 51;
– Return on average allocated equity represents the return on shareholders’ equity that is allocated to the businesses. The comparable IFRS measure is return
on equity. A reconciliation is provided on page 52;
– Return on average allocated tangible equity is calculated as the annualised profit after tax attributable to ordinary equity holders of the parent, as a
proportion of average allocated tangible equity. The comparable IFRS measure is return on equity. A reconciliation is provided on page 52;
– Return on average allocated tangible equity excluding litigation and conduct is calculated as the annualised profit after tax attributable to ordinary equity
holders of the parent excluding litigation and conduct charges, as a proportion of average allocated tangible equity. The comparable IFRS measure is return
on equity. A reconciliation is provided on page 52;
Notes
3
– Return on average tangible shareholders’ equity is calculated as the annualised profit after tax attributable to ordinary equity holders of the parent, as a
proportion of averag e shareholders’ equity excluding non-controlling interests and other equity instruments adjusted for the deduction of intangible assets
and goodwill. The comparable IFRS measure is return on equity. A reconciliation is provided on page 52; and
– Tangible net asset value per share is calculated by dividing shareholders’ equity, excluding non-controlling interests and other equity instruments, less
goodwill and intangible assets, by the number of issued ordinary shares. The comparable IFRS measure is net asset value per share. A reconciliation is
provided on page 51.
Forward -looking statements
This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and
Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers that no forward -looking statement is a
guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in
the forward -looking statements. These forward -looking statements can be identified by the fact that they do not relate only to historical or current facts.
Forward -looking statements sometimes use words such as ‘may’, ‘will’, ‘seek’, ‘continue’, ‘aim’, ‘anticipate’, ‘target’, ‘projected’, ‘expect’, ‘estimate’, ‘intend’,
‘plan’, ‘goal’, ‘believe’, ‘achieve’ or other words of similar meaning. Forward -looking statements can be made in writing but also may be made verbally by
members of the management of the Group (including, without limitation, during management presentations to financial analysts) in connection with this
document. Examples of forward -looking statements include, among others, statements or guidance regardi ng or relating to the Group’s future financial
position, income growth, assets, impairment charges, provisions, business strategy, capital, leverage and other regulatory ratios, payment of dividends
(including dividend payout ratios and expected payment st rategies), projected levels of growth in the banking and financial markets, projected costs or
savings, any commitments and targets, estimates of capital expenditures, plans and objectives for future operations, projected employee numbers, IFRS
impacts and other statements that are not historical fact. By their nature, forward -looking statements involve risk and uncertainty because they relate to
future events and circumstances. The forward -looking statements speak only as at the date on which they are made and such statements may be affected by
changes in legislation, the development of standards and interpretations under IFRS, including evolving practices with regard to the interpretation and
application of accounting and regulatory standards, the outcome of current and future legal proceedings and regulatory investigations, future levels of
conduct provisions, the policies and actions of governmental and regulatory authorities, geopolitical risks and the impact of competition. In addition, factors
including (but not limited to) the following may have an effect: capital, leverage and other regulatory rules applicable to past, current and future periods; UK,
US, Eurozone and global macroeconomic and business conditions; the effects of any volatility in credit markets; market related risks such as changes in
interest rates and foreign exchange rates; effects of changes in valuation of credit market exposures; changes in valuation of issued securities; volatility in
capital markets; changes in credit ratings of any entity within the Group or any securities issued by such entities; direct and indirect impacts of the
coronavirus (COVID-19) pandemic; instability as a result of the exit by the UK from the European Union (EU) (including the outcome of negotiations
concerning the UK’s future trading and security relationship with the EU) and the disruption that may subsequently result in the UK and globally; and the
success of future acquisitions, disposals and other strategic transactions. A number of these influences and factors are beyond the Group’s control. As a
result, the Group’s actual financial position, future results, dividend payments, capital, leverage or other regulatory ratios or other financial and non-financial
metrics or performance measures may differ materially from the statements or guidance set forth in the Group’s forward-looking statements. Additional risks
and factors which may impact the Group’s future financial condition and performance are identified in our filings with the SEC (including, without limitation,
our Annual Report on Form 20-F for the fiscal year ended 31 December 2019 and our 2020 Interim Results Announcement for the six months ended 30 June
2020 filed on Form 6-K), which are available on the SEC’s website at www.sec.gov.
Subject to our obligations under the applicable laws and regulations of any relevant jurisdiction, (including, without limitation, the UK and the US), in relation
to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward -looking statements, whether as a result of new
information, future events or otherwise.
Performance Highlights
4
Open for business during the COVID -19 pandemic, helping support the economy
COVID -19 support
Supporting our customers,
clients, communities, and
colleagues
●
Provided over 640k payment holidays to customers, c.£25bn of COVID -19 support to UK businesses
1
and
helped businesses and institutions access global capital markets including underwriting over £1tn of new
issuance
2
£100m COVID-19 Community Aid Package
Diversified business model delivered a resilient operating performance Q320 YTD
Despite the pandemic, Barclays delivered a Q320 YTD Group profit before tax of £2.4bn (Q319 YTD: £3.3bn, included a Payment Protection
Insurance (PPI) provision of £1.4bn), a return on equity (RoE) of 3.1% (Q319 YTD: 4.3%), a return on tangible equity (RoTE) of 3.6% (Q319 YTD:
5.1%), earnings per share (EPS) of 7.6p (Q319 YTD: 10.4p) and a common equity tier 1 (CET1) ratio of 14.6% (December 2019: 13.8%)
Income
Diversified income streams with
strong Q320 YTD CIB income
offsetting challenges in Barclays
UK and CC&P
Group income of £16.8bn up 3% versus prior year
●
Barclays International income of £12.4bn, up 11% versus prior year
-
Corporate and Investment Bank (CIB) income of £9.8bn, up 24%
driven by strong Markets income
reflecting wider spreads and market share gains
3
-
Consumer, Cards and Payments (CC&P) income of £2.6bn, down 21%
margin compression and reduced payments activity
●
Barclays UK income of £4.7bn down 12% versus prior year
reflecting lower interest rates and unsecured
lending balances, COVID -19 customer support actions and the removal of certain fees
Credit impairment charges
Increased impairment
provisioning driving higher
coverage ratios across portfolios
Group credit impairment charges increased to £4.3bn (Q319 YTD: £1.4bn)
IFRS 9 scenarios and £0.7bn in respect of single name wholesale loan charges
●
Impairment coverage ratio for the unsecured consumer lending and wholesale portfolios increased to
12.2% (FY19: 8.1%) and 1.5% (FY19: 0.8%) respectively
Costs
4
Improved cost: income ratio
Group operating expenses of £10.0bn down 1% versus prior year
●
Cost efficiencies and cost discipline contributed to positive cost: income jaws of 4% resulting in an
improved cost: income ratio of 59% (Q319 YTD: 62%)
●
Group total operating expenses, including litigation and conduct, of £10.1bn
ratio, including litigation and conduct, of 60% (Q319 YTD: 72%)
Capital, liquidity, NAV and TNAV
Strong capital and liquidity
position
CET1 ratio of 14.6%, a YTD increase of 80bps
●
The increase over the first nine months of the year reflects profits, regulatory measures and cancellation
of the full year 2019 dividend payment, partially offset by a YTD increase in Risk Weighted Assets (RWAs)
●
Headroom of 3.3% above Maximum Distributable Amount (MDA) hurdle of 11.3%
5
●
The Group liquidity pool was £327bn (December 2019: £211bn) and the liquidity coverage ratio (LCR) was
181% (December 2019: 160%)
●
Net asset value (NAV) per share was 322p (December 2019: 309p). Tangible net asset value (TNAV) per
share increased to 275p (December 2019: 262p)
Q320 performance
Q320 Barclays UK and CC&P
income improved from Q220,
whilst CIB remains strong year on
year
Q320 Group profit before tax of £1.1bn (Q319: £0.2bn), resulting in a RoE of 4.3% (Q319: (2.1%)), a RoTE of
5.1% (Q319: (2.4%)) and EPS of 3.5p (Q319: (1.7p))
●
Q320 Group income of £5.2bn, down 6% versus prior year
●
Q320 Barclays International income of £3.8bn, up 1% versus prior year
-
Q320 CIB income of £2.9bn, up 11% versus prior
but down 12% versus prior quarter
-
Q320 CC&P income of £0.9bn, down 23% versus prior year but up 26% versus prior
quarter
improved from the Q220 low point reflecting recovery in US cards spend, deposit repricing, UK
merchant acquiring volumes, and the non-recurrence of a £100m valuation loss in Barclays’
preference shares in Visa Inc.
●
Q320 Barclays UK income of £1.6bn, down 16% versus prior year but up 6% versus prior quarter
improved from the Q220 low point with Q320 net interest margin (NIM) stable at 2.51% (Q220: 2.48%)
●
Q320 Group credit impairment charge of £0.6bn, up 32% versus prior year but down 63% versus prior
quarter
●
Q320 Group operating expenses
of £3.4bn
4
, up 3% versus prior year and 2% versus prior quarter. Q320
Group total operating expenses, including litigation and conduct, of £3.5bn
●
CET1 ratio of 14.6%, an increase of 40bps in Q320 mainly due to lower RWAs
1
Total payment holiday s granted as at 30 September 2020, business lending and commer cial paper issuance data as at 19 October 2020.
2
Across Equity and Debt Capital Markets.
3
Data source: Coalition, H120 Competitor Analysis. Market share represents Barclays share of the total industry Revenue Pool. Analysis is based on Barclays internal
business structure and internal revenues.
4
Excluding litigation and conduct.
5
Barclays’ MDA hurdle will fluctuate depending on the total RWAs at each reporting period and any future regulatory changes.
Performance Highlights
5
Group outlook
Outlook remains uncertain and
subject to change depending on
the evolution and persistence of
the COVID -19 pandemic and the
outcome of Brexit negotiations
Income
●
Certain headwinds to income in Barclays UK are expected to persist in 2021 including the low interest
rate environment
●
The drivers of CC&P income are showing signs of recovery but the outlook remains uncertain
●
After a strong Q320 YTD CIB performance driven by Markets, the franchise is well positioned for the
future
Impairment
●
Provided macroeconomic assumptions remain consistent with expectations, we expect the H220
impairment charge to be materially below that of H120 and it is likely that the full year 2021 impairment
charge will be below that of 2020
Costs
●
The Group expects FY20 costs, excluding litigation and conduct, to be broadly flat versus FY19. However,
the Group will be evaluating actions to reduce structural costs, which could result in additional charges,
the timing and size of which remain to be determined
Capital
●
The Group remains in a strong capital position and is confident of its capital generation capacity over
time, acknowledging likely headwinds to the CET1 ratio from procyclica l effects on RWAs and reduced
benefit from transitional relief on IFRS 9 impairment
●
The Board recognises the importance of capital returns to shareholders and will provide an update on its
policy and dividends at FY20 results
Performance Highlights
6
Barclays Group results
for the nine months ended
30.09.20
30.09.19
£m
£m
% Change
Total income
16,825
16,331
3
Credit impairment charges
(4,346)
(1,389)
Net operating income
12,479
14,942
(16)
Operating expenses
(9,954)
(10,051)
1
Litigation and conduct
(106)
(1,682)
94
Total operating expenses
(10,060)
(11,733)
14
Other net income
-
51
Profit before tax
2,419
3,260
(26)
Tax charge
(441)
(814)
46
Profit after tax
1,978
2,446
(19)
Non-controlling interests
(41)
(38)
(8)
Other equity instrument holders
(631)
(628)
-
Attributable profit
1,306
1,780
(27)
Performance measures
Return on average shareholders' equity
3.1%
4.3%
Return on average tangible shareholders' equity
3.6%
5.1%
Average shareholders' equity (£bn)
Average tangible shareholders' equity (£bn)
Cost: income ratio
60%
72%
Loan loss rate (bps)
164
53
Basic earnings per share
7.6p
10.4p
Dividend per share
-
3.0p
Performance measures excluding litigation and conduct
1
Profit before tax
2,525
4,942
(49)
Attributable profit
1,378
3,391
(59)
Return on average tangible shareholders' equity
3.8%
9.7%
Cost: income ratio
59%
62%
Basic earnings per share
8.0p
19.7p
As at 30.09.20
As at 31.12.19
As at 30.09.19
Balance sheet and capital management
2
£bn
£bn
£bn
Loans and advances at amortised cost
344.4
339.1
345.1
Deposits at amortised cost
494.6
415.8
420.6
Net asset value per share
322p
309p
320p
Tangible net asset value per share
275p
262p
274p
Common equity tier 1 ratio
14.6%
13.8%
13.4%
Common equity tier 1 capital
45.5
40.8
41.9
Risk weighted assets
310.7
295.1
313.3
Average UK leverage ratio
5.1%
4.5%
4.6%
UK leverage ratio
5.2%
5.1%
4.8%
Funding and liquidity
Group liquidity pool (£bn)
327
211
226
Liquidity coverage ratio
181%
160%
151%
Loan: deposit ratio
70%
82%
82%
1
Refer to pages 42 to 51 for further information and calculations of performance measures excluding litigation and conduct.
2
Refer to pages 31 to 37 for further information on how capital, RWAs and leverage are calculated.
Group Finance Director’s Review
7
Group performance
●
RoE was 3.1% (Q319 YTD: 4.3%). Statutory RoTE was 3.6% (Q319 YTD: 5.1%) and statutory EPS was 7.6p (Q319 YTD: 10.4p)
●
Profit before tax was £2,419m (Q319 YTD: £3,260m). Excluding litigation and conduct, profit before tax was £2,525m (Q319
YTD: £4,942m), as positive operating leverage from a 3% increase in income and 1% reduction in operating expenses was offset
by materially higher credit impairment charges
●
Pre-provision profits
1
in CIB more than offset income headwinds in Barclays UK and CC&P
●
Total income increased 3% to £16,825m. Barclays UK income decreased 12%. Barcl ays International income increased 11%,
with CIB income up 24% and CC&P income down 21%
●
Credit impairment charges increased to £4,346m (Q319 YTD: £1,389m). This increase was primarily driven by the impact from
revised IFRS 9 scenarios (the “COVID -19 scenarios”) reflecting forecast deterioration in macroeconomic variables (including a
prolonged period of heightened UK and US unemployment), partially offset by the estimated impact of central bank,
government and other support measures, and £746m in respect of single name wholesale loan charges in CIB
●
The Group cost: income ratio was 60% (Q319 YTD: 72%). Operating expenses decreased 1% to £9,954m reflecting cost
efficiencies and continued cost discipline in the current environment. The Group delivered positive cost: income jaws of 4%
which resulted in the Group cost: income ratio, excluding litigation and conduct, reducing to 59% (Q319 YTD: 62%)
●
The effective tax rate was 18.2% (Q319 YTD: 25.0%). This reflects the tax benefit recognised for a re-measurement of UK
deferred tax assets as a result of the UK corporation tax rate being maintained at 19%. The Group’s effective tax rate for the full
year is expected to be around 20%, excluding litigation and conduct
●
Attributable profit was £1,306m (Q319 YTD: £1,780m). Excluding litigation and conduct, attributable profit was £1,378m (Q319
YTD: £3,391m), generating a RoTE of 3.8% (Q319 YTD: 9.7%) and EPS of 8.0p (Q319 YTD: 19.7p)
●
Total assets increased to £1,422bn (December 2019: £1,140bn), primarily due to a £91bn increase in cash and balances at
central banks, £67bn increase in derivative assets and £50bn increase in financial assets at fair value through the income
statement. This is due to the low interest rate environment, increased client activity and the appreciat ion of period end USD
against GBP
●
Loans and advances at amortised cost increased by £5bn to £344bn, which reflects the £9.7bn of lending under the government
backed Bounce Back Loan Scheme (BBLS) and the CBILS which Barclays UK has provided to support businesses through the
COVID -19 pandemic and £3.2bn of mortgage growth. This was partially offset by lower card balances
●
Deposits at amortised cost increased by £79bn to £495bn, primarily due to CIB clients increasing liquidity, lower consumer
spending levels and precautionary balance build
●
NAV per share was 322p (December 2019: 309p). TNAV per share increased to 275p (December 2019: 262p) reflecting 7.6p of
statutory EPS and positive reserve movements, including retirement benefit re-measurements and currency translation
reserves
Barclays UK
●
Profit before tax was £264m (Q319 YTD: £375m). Profit before tax, excluding litigation and conduct, was £300m (Q319 YTD:
£1,899m). RoE was 1.6% (Q319 YTD: (1.5%)). RoTE was 2.5% (Q319 YTD: 17.2%) reflecting a challenging operating environment
and materially higher credit impairment charges
●
Total income decreased 12% to £4,721m. Net interest income reduced 11% to £3,917m with a NIM of 2.63% (Q319 YTD:
3.10%). Net fee, commission and other income decreased 18% to £804m
–
Personal Banking income decreased 11% to £2,627m, reflecting deposit margin compression, COVID -19 customer support
actions, and lower unsecured lending balances, partially offset by deposit balance growth and transfer of Barclays Partner
Finance (BPF) from Barclays International in Q220
–
Barclaycard Consumer UK income decreased 20% to £1,165m as reduced borrowing and spend levels by customers resulted
in a lower level of interest earning lending (IEL) balances, as well as planned lower debt sales
–
Business Banking income decreased 6% to £929m due to deposit margin compression, lower transactional fee volumes as a
result of COVID -19 and related customer support actions, partially offset by balance growth
●
Credit impairment charges increased to £1,297m (Q319 YTD: £522m) reflecting forecast deterioration in macroeconomic
variables in the COVID -19 scenarios, partially offset by the estimated impact of central bank, government and other support
measures. As at 30 September 2020, 30 and 90 day arrears rates in UK cards were 1.7% (Q319: 1.7%) and 0.8% (Q319: 0.8%)
respectively
1
Excluding litigation and conduct.
Group Finance Director’s Review
8
Barclays UK (continued)
●
Operating expenses increased 5% to £3,136m as efficiency savings were more than offset by higher servicing and financial
assistance costs, as well as the transfer of BPF and further investment
●
Loans and advances to customers at amortised cost increased 5% to £203.9bn predominantly through £9.7bn of BBLS and CBILS
lending, £3.2bn of mortgage growth and the £2.2bn transfer of BPF, partially offset by £4.0bn lower UK cards balances
●
Customer deposits at amortised cost increased 13% to £232.0bn due to lower customer spending and precautionary balance
build
●
RWAs increased to £76.2bn (December 2019: £74.9bn) driven by the transfer of BPF and growth in mortgages, partially offset
by a reduction in consumer loans
Barclays International
●
Profit before tax was £2,794m, RoE was 7.3% (Q319 YTD: 10.0%), CIB RoE was 10.5% (Q319 YTD: 9.2%) and CC&P RoE was
(9.3)% (Q319 YTD: 13.2%). Profit before tax, excluding litigation and conduct, decreased 19% to £2,833m with a RoTE of 7.6%
(Q319 YTD: 10.4%), reflecting a RoTE of 10.5% (Q319 YTD: 9.3%) in CIB and (9.9)% (Q319 YTD: 15.8%) in CC&P
●
Total income increased to £12,435m (Q319 YTD: £11,223m)
–
CIB income increased 24% to £9,838m
–
Markets income of £6,255m (Q319 YTD: £4,116m) was the best ever Q3 YTD on a comparable basis
1
reflecting an
increase in market share in the first half of the year
2
. FICC income increased 64% to £4,326m driven by strong
performances in macro and credit, mainly reflecting wider spreads. Equities income increased 31% to £1,929m driven
by derivatives and cash due to higher levels of client activity and volatility
–
Banking fees income increased 1% to £1,977m as a strong performance in equity and debt capital markets, representing
the best ever Q3 YTD on a comparable basis for these businesses
1
, was offset by lower fee income in advisory which
was impacted by a reduced fee pool
3
–
Within Corporate, Transaction banking income decreased 6% to £1,202m as deposit balance growth was more than
offset by margin compression. Corporate lending income decreased by 28% to £404m reflecting c.£210m of losses on
fair value lending positions and on mark-to -market and carry costs on related hedges in Q320 YTD
–
CC&P income decreased 21% to £2,597m as the impacts of the COVID -19 pandemic resulted in lower balances on co-
branded cards, margin compression and reduced payments activity. Q220 included a c.£100m valuation loss on Barclays’
preference shares in Visa Inc. resulting from the Q220 Supreme Court ruling concerning charges paid by merchants
●
Credit impairment charges increased to £2,989m (Q319 YTD: £844m)
–
CIB credit impairment charges increased to £1,507m (Q319 YTD: £127m), reflecting £746m in respect of single name
wholesale loan charges and the impact from updates to forecast macroeconomic variables, partially offset by the estimated
impact of central bank, government and other support measures
–
CC&P credit impairment charges increased to £1,482m (Q319 YTD: £717m) reflecting the impact from updates to forecast
macroeconomic variables, partially offset by the estimated impact of central bank, government and other support
measures. As at 30 September 2020, 30 and 90 day arrears in US cards were 2.3% (Q319: 2.6%) and 1.1% (Q319: 1.3%)
respectively
●
Operating expenses decreased 4% to £6,632m
–
CIB operating expenses decreased 2% to £5,086m due to cost efficiencie s and discipline in the current environment
–
CC&P operating expenses decreased 11% to £1,546m reflecting cost efficiencies, lower marketing spend due to the impacts
of the COVID -19 pandemic and transfer of BPF to Barclays UK in Q220
●
RWAs increased to £224.7bn (December 2019: £209.2bn) primarily due to increased market volatility, client activity and a
reduction in credit quality within CIB, partially offset by lower CC&P balances
1
Period covering Q114 – Q320. Pre 2014 financials were not restated following re-segmentation in Q116.
2
Data source: Coalition, H120 Competitor Analysis. Market share represents Barclays share of the total industry Revenue Pool. Analysis is based on Barclays internal
business structure and internal revenues.
3
Data source: Dealogic for the period covering 1 January to 30 September 2020.
Group Finance Director’s Review
9
Head Office
●
Loss before tax was £639m (Q319 YTD: £593m). Loss before tax, excluding litigation and conduct, was £608m (Q319 YTD:
£465m)
●
Total income was an expense of £331m (Q319 YTD: £286m), which included treasury items and hedge accounting, mark-to-
market losses on legacy investments and funding costs of legacy capital instruments, partially offset by the recognition of
dividends on Barclays’ stake in Absa Group Limited
●
Credit impairment charges increased to £60m (Q319 YTD: £23m) due to impacts from the COVID -19 scenarios on the Italian
home loan portfolio, partially offset by the estimated impact of central bank, government and other support measures
●
Operating expenses were £186m (Q319 YTD: £155m), which included £73m of charitable donations from Barclays’ COVID -19
Community Aid Package
●
Other net expenses were £31m (Q319 YTD: £1m), which included a fair value loss on an investment in an associate
●
RWAs decreased to £9.8bn (December 2019: £11.0bn) driven by the reduction in value of Barclays’ stake in Absa Group Limited
Group capital and leverage
●
The CET1 ratio increased to 14.6% (December 2019: 13.8%)
–
CET1 capital increased by £4.7bn to £45.5bn reflecting resilient capital generation through £6.3bn of profits after tax,
excluding credit impairment charges and a £1.0bn increase due to the cancellation of the full year 2019 dividend. The CET1
capital increase also reflects new regulatory measures implemented in June 2020 for IFRS 9 transitional relief and prudent
valuation
–
RWAs increased by £15.6bn to £310.7bn primarily due to higher market volatility and client activity within CIB as well as a
reduction in credit quality, partially offset by lower consumer lending
●
The average UK leverage ratio increased to 5.1% (December 2019: 4.5%) primarily driven by the increase in CET1 capital. The
average leverage exposure decreased by £32bn to £1,111bn (December 2019: £1,143bn) largely driven by the Prudential
Regulation Authority’s (PRA) early adoption of CRR II settlement netting
Group funding and liquidity
●
The liquidity pool was £327bn (December 2019: £211bn) and the LCR remained significantly above the 100% regulatory
requirement at 181% (December 2019: 160%), equivalent to a surplus of £143bn (December 2019: £78bn). The increase in the
liquidity pool, LCR and surplus is driven by a 19% growth in customer deposits and actions to maintain a prudent funding and
liquidity position in the current environment
●
Wholesale funding outstanding, excluding repurchase agreements, was £175.3bn (December 2019: £147.1bn). The Group
issued £6.6bn equivalent of minimum requirement for own funds and eligible liabilities (MREL) instruments from Barclays PLC
(the Parent company) during the year to date. The Group is well advanced in its MREL issuance plans, with a Barclays PLC MREL
ratio of 32.8% as at 30 September 2020 (December 2019: 31.2%) relative to an estimated requirement (including requisite
buffers) of c.29.9% by 1 January 2022
Other matters
●
As at 30 September 2020, the Group held a provision of £300m relating to PPI. Since the provision increase to £1.4bn in Q319,
96% of the items outstanding as at 30 September 2019 have been resolved (including invalid items and claims from the Official
Receiver with whom we reached an agreement in Q320). Observations from these resolved complaints continue to support the
provision level
Group Finance Director’s Review
10
Group outlook and targets
Outlook remains uncertain and subject to change depending on the evolution and persistence of the COVID -19 pandemic and the
outcome of Brexit negotiations
Income
●
Certain headwinds to income in Barclays UK are expected to persist in 2021 including the low interest rate environment
●
The drivers of CC&P income are showing signs of recovery but the outlook remains uncertain
●
After a strong Q320 YTD CIB performance driven by Markets, the franchise is well positioned for the future
Impairment
●
Provided macroeconomic assumptions remain consistent with expectations, we expect the H220 impairment charge to be
materially below that of H120 and it is likely that the full year 2021 impairment charge will be below that of 2020
Costs
●
The Group expects FY20 costs, excluding litigation and conduct, to be broadly flat versus FY19. However, the Group will be
evaluating actions to reduce structural costs, which could result in additional charges, the timing and size of which remain to be
determined
Capital
●
The Group remains in a strong capital position and is confident of its capital generation capacity over time, acknowledging likely
headwinds to the CET1 ratio from procyclical effects on RWAs and reduced benefit from transitional relief on IFRS 9 impairment
●
The Board recognises the importance of capital returns to shareholders and will provide an update on its policy and dividends
at FY20 results
Targets
●
The Group continues to target a RoTE of >10%
1
depending on the evolution and persistence of the COVID -19 pandemic and the outcome of Brexit negotiations
Tushar Morzaria , Group Finance Director
1
Excluding litigation and conduct.
Results by Business
11
Barclays UK
Nine months ended
Nine months ended
30.09.20
30.09.19
Income statement information
£m
£m
% Change
Net interest income
3,917
4,410
(11)
Net fee, commission and other income
804
984
(18)
Total income
4,721
5,394
(12)
Credit impairment charges
(1,297)
(522)
Net operating income
3,424
4,872
(30)
Operating expenses
(3,136)
(2,973)
(5)
Litigation and conduct
(36)
(1,524)
98
Total operating expenses
(3,172)
(4,497)
29
Other net income
12
-
Profit before tax
264
375
(30)
Attributable profit/(loss)
165
(157)
As at 30.09.20
As at 31.12.19
As at 30.09.19
Balance sheet information
£bn
£bn
£bn
Loans and advances to customers at amortised cost
203.9
193.7
193.2
Total assets
294.5
257.8
257.9
Customer deposits at amortised cost
232.0
205.5
203.3
Loan: deposit ratio
91%
96%
97%
Risk weighted assets
76.2
74.9
76.8
Nine months ended
Nine months ended
Performance measures
30.09.20
30.09.19
Return on average allocated equity
1.6%
(1.5%)
Return on average allocated tangible equity
2.2%
(2.0%)
Average allocated equity (£bn)
13.7
13.9
Average allocated tangible equity (£bn)
10.2
10.4
Cost: income ratio
67%
83%
Loan loss rate (bps)
81
35
Net interest margin
2.63%
3.10%
Performance measures excluding litigation and conduct
1
£m
£m
% Change
Profit before tax
300
1,899
(84)
Attributable profit
190
1,332
(86)
Return on average allocated tangible equity
2.5%
17.2%
Cost: income ratio
66%
55%
1
Refer to pages 42 to 51 for further information and calculations of performance measures excluding litigation and conduct.
Results by Business
12
Analysis of Barclays UK
Nine months ended
Nine months ended
30.09.20
30.09.19
Analysis of total income
£m
£m
% Change
Personal Banking
2,627
2,945
(11)
Barclaycard Consumer UK
1,165
1,459
(20)
Business Banking
929
990
(6)
Total income
4,721
5,394
(12)
Analysis of credit impairment charges
Personal Banking
(312)
(124)
Barclaycard Consumer UK
(803)
(364)
Business Banking
(182)
(34)
Total credit impairment charges
(1,297)
(522)
As at 30.09.20
As at 31.12.19
As at 30.09.19
Analysis of loans and advances to customers at amortised cost
£bn
£bn
£bn
Personal Banking
155.7
151.9
150.1
Barclaycard Consumer UK
10.7
14.7
14.9
Business Banking
37.5
27.1
28.2
Total loans and advances to customers at amortised cost
203.9
193.7
193.2
Analysis of customer deposits at amortised cost
Personal Banking
173.2
159.2
157.9
Barclaycard Consumer UK
0.1
-
-
Business Banking
58.7
46.3
45.4
Total customer deposits at amortised cost
232.0
205.5
203.3
Results by Business
13
Barclays International
Nine months ended
Nine months ended
30.09.20
30.09.19
Income statement information
£m
£m
% Change
Net interest income
2,668
2,976
(10)
Net trading income
5,548
3,270
70
Net fee, commission and other income
4,219
4,977
(15)
Total income
12,435
11,223
11
Credit impairment charges
(2,989)
(844)
Net operating income
9,446
10,379
(9)
Operating expenses
(6,632)
(6,923)
4
Litigation and conduct
(39)
(30)
(30)
Total operating expenses
(6,671)
(6,953)
4
Other net income
19
52
(63)
Profit before tax
2,794
3,478
(20)
Attributable profit
1,779
2,419
(26)
As at 30.09.20
As at 31.12.19
As at 30.09.19
Balance sheet information
£bn
£bn
£bn
Loans and advances at amortised cost
128.0
132.8
138.1
Trading portfolio assets
122.3
113.3
119.4
Derivative financial instrument assets
295.9
228.9
286.0
Financial assets at fair value through the income statement
178.2
128.4
158.0
Cash collateral and settlement balances
121.8
79.4
112.5
Other assets
261.7
178.6
195.6
Total assets
1,107.9
861.4
1,009.6
Deposits at amortised cost
262.4
210.0
217.6
Derivative financial instrument liabilities
293.3
228.9
283.3
Loan: deposit ratio
49%
63%
63%
Risk weighted assets
224.7
209.2
223.1
Nine months ended
Nine months ended
Performance measures
30.09.20
30.09.19
Return on average allocated equity
7.3%
10.0%
Return on average allocated tangible equity
7.5%
10.3%
Average allocated equity (£bn)
32.4
32.3
Average allocated tangible equity (£bn)
31.8
31.2
Cost: income ratio
54%
62%
Loan loss rate (bps)
300
80
Net interest margin
3.71%
4.00%
Performance measures excluding litigation and conduct
1
£m
£m
% Change
Profit before tax
2,833
3,508
(19)
Attributable profit
1,808
2,445
(26)
Return on average allocated tangible equity
7.6%
10.4%
Cost: income ratio
53%
62%
1
Refer to pages 42 to 51 for further information and calculations of performance measures excluding litigation and conduct.
Results by Business
14
Analysis of Barclays International
Corporate and Investment Bank
Nine months ended
Nine months ended
30.09.20
30.09.19
Income statement information
£m
£m
% Change
FICC
4,326
2,638
64
Equities
1,929
1,478
31
Markets
6,255
4,116
52
Advisory
329
574
(43)
Equity capital markets
369
273
35
Debt capital markets
1,279
1,108
15
Banking fees
1,977
1,955
1
Corporate lending
404
563
(28)
Transaction banking
1,202
1,283
(6)
Corporate
1,606
1,846
(13)
Total income
9,838
7,917
24
Credit impairment charges
(1,507)
(127)
Net operating income
8,331
7,790
7
Operating expenses
(5,086)
(5,191)
2
Litigation and conduct
(6)
(30)
80
Total operating expenses
(5,092)
(5,221)
2
Other net income
4
27
(85)
Profit before tax
3,243
2,596
25
Attributable profit
2,141
1,787
20
As at 30.09.20
As at 31.12.19
As at 30.09.19
Balance sheet information
£bn
£bn
£bn
Loans and advances at amortised cost
96.8
92.0
95.8
Trading portfolio assets
122.2
113.3
119.3
Derivative financial instrument assets
295.9
228.8
286.0
Financial assets at fair value through the income statement
177.9
127.7
157.3
Cash collateral and settlement balances
121.0
78.5
111.6
Other assets
228.9
155.3
171.5
Total assets
1,042.7
795.6
941.5
Deposits at amortised cost
195.6
146.2
152.1
Derivative financial instrument liabilities
293.2
228.9
283.2
Risk weighted assets
193.3
171.5
184.9
Nine months ended
Nine months ended
Performance measures
30.09.20
30.09.19
Return on average tangible equity
10.5%
9.2%
Return on average allocated tangible equity
10.5%
9.2%
Average allocated equity (£bn)
27.2
25.9
Average allocated tangible equity (£bn)
27.2
25.9
Cost: income ratio
52%
66%
Performance measures excluding litigation and conduct
1
£m
£m
% Change
Profit before tax
3,249
2,626
24
Attributable profit
2,145
1,813
18
Return on average allocated tangible equity
10.5%
9.3%
Cost: income ratio
52%
66%
1
Refer to pages 42 to 51 for further information and calculations of performance measures excluding litigation and conduct.
Results by Business
15
Analysis of Barclays International
Consumer, Cards and Payments
Nine months ended
Nine months ended
30.09.20
30.09.19
Income statement information
£m
£m
% Change
Net interest income
1,694
2,105
(20)
Net fee, commission, trading and other income
903
1,201
(25)
Total income
2,597
3,306
(21)
Credit impairment charges
(1,482)
(717)
Net operating income
1,115
2,589
(57)
Operating expenses
(1,546)
(1,732)
11
Litigation and conduct
(33)
-
Total operating expenses
(1,579)
(1,732)
9
Other net income
15
25
(40)
(Loss)/profit before tax
(449)
882
Attributable (loss)/profit
(362)
632
As at 30.09.20
As at 31.12.19
As at 30.09.19
Balance sheet information
£bn
£bn
£bn
Loans and advances at amortised cost
31.2
40.8
42.3
Total assets
65.2
65.8
68.1
Deposits at amortised cost
66.8
63.8
65.5
Risk weighted assets
31.4
37.7
38.2
Nine months ended
Nine months ended
Performance measures
30.09.20
30.09.19
Return on average allocated equity
(9.3%)
13.2%
Return on average allocated tangible equity
(10.6%)
15.8%
Average allocated equity (£bn)
5.2
6.4
Average allocated tangible equity (£bn)
4.6
5.3
Cost: income ratio
61%
52%
Loan loss rate (bps)
577
213
Performance measures excluding litigation and conduct
1
£m
£m
% Change
(Loss)/profit before tax
(416)
882
Attributable (loss)/profit
(337)
632
Return on average allocated tangible equity
(9.9%)
15.8%
Cost: income ratio
60%
52%
1
Refer to pages 42 to 51 for further information and calculations of performance measures excluding litigation and conduct.
Results by Business
16
Head Office
Nine months ended
Nine months ended
30.09.20
30.09.19
Income statement information
£m
£m
% Change
Net interest income
(307)
(323)
5
Net fee, commission and other income
(24)
37
Total income
(331)
(286)
(16)
Credit impairment charges
(60)
(23)
Net operating income
(391)
(309)
(27)
Operating expenses
(186)
(155)
(20)
Litigation and conduct
(31)
(128)
76
Total operating expenses
(217)
(283)
23
Other net expenses
(31)
(1)
Loss before tax
(639)
(593)
(8)
Attributable loss
(638)
(482)
(32)
As at 30.09.20
As at 31.12.19
As at 30.09.19
Balance sheet information
£bn
£bn
£bn
Total assets
19.3
21.0
22.9
Risk weighted assets
9.8
11.0
13.4
Nine months ended
Nine months ended
Performance measures
30.09.20
30.09.19
Average allocated equity (£bn)
10.5
8.4
Average allocated tangible equity (£bn)
6.5
5.0
Performance measures excluding litigation and conduct
1
£m
£m
% Change
Loss before tax
(608)
(465)
(31)
Attributable loss
(620)
(386)
(61)
1
Refer to pages 42 to 51 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results Summary
17
Barclays Group
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
2,055
1,892
2,331
2,344
2,445
2,360
2,258
2,296
Net fee, commission and other income
3,149
3,446
3,952
2,957
3,096
3,178
2,994
2,777
Total income
5,204
5,338
6,283
5,301
5,541
5,538
5,252
5,073
Credit impairment charges
(608)
(1,623)
(2,115)
(523)
(461)
(480)
(448)
(643)
Net operating income
4,596
3,715
4,168
4,778
5,080
5,058
4,804
4,430
Operating costs
(3,391)
(3,310)
(3,253)
(3,308)
(3,293)
(3,501)
(3,257)
(3,624)
UK bank levy
-
-
-
(226)
-
-
-
(269)
Operating expenses
(3,391)
(3,310)
(3,253)
(3,534)
(3,293)
(3,501)
(3,257)
(3,893)
Guaranteed Minimum Pensions (GMP) charge
-
-
-
-
-
-
-
(140)
Litigation and conduct
(76)
(20)
(10)
(167)
(1,568)
(53)
(61)
(60)
Total operating expenses
(3,467)
(3,330)
(3,263)
(3,701)
(4,861)
(3,554)
(3,318)
(4,093)
Other net income/(expenses)
18
(26)
8
20
27
27
(3)
37
Profit before tax
1,147
359
913
1,097
246
1,531
1,483
374
Tax charge
(328)
(42)
(71)
(189)
(269)
(297)
(248)
(75)
Profit/(loss) after tax
819
317
842
908
(23)
1,234
1,235
299
Non-controlling interests
(4)
(21)
(16)
(42)
(4)
(17)
(17)
(83)
Other equity instrument holders
(204)
(206)
(221)
(185)
(265)
(183)
(180)
(230)
Attributable profit/(loss)
611
90
605
681
(292)
1,034
1,038
(14)
Performance measures
Return on average shareholders' equity
4.3%
0.6%
4.4%
5.0%
(2.1%)
7.6%
7.8%
(0.1%)
Return on average tangible shareholders' equity
5.1%
0.7%
5.1%
5.9%
(2.4%)
9.0%
9.2%
(0.1%)
Average shareholders' equity (£bn)
56.4
58.4
55.2
54.5
56.4
54.0
53.2
52.2
Average tangible shareholders' equity (£bn)
48.3
50.2
47.0
46.4
48.4
46.2
45.2
44.3
Cost: income ratio
67%
62%
52%
70%
88%
64%
63%
81%
Loan loss rate (bps)
69
179
223
60
52
56
54
77
Basic earnings/(loss) per share
3.5p
0.5p
3.5p
3.9p
(1.7p)
6.0p
6.1p
(0.1p)
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
1,223
379
923
1,264
1,814
1,584
1,544
434
Attributable profit
668
106
604
803
1,233
1,074
1,084
48
Return on average tangible shareholders' equity
5.5%
0.8%
5.1%
6.9%
10.2%
9.3%
9.6%
0.4%
Cost: income ratio
65%
62%
52%
67%
59%
63%
62%
79%
Basic earnings per share
3.9p
0.6p
3.5p
4.7p
7.2p
6.3p
6.3p
0.3p
Balance sheet and capital management
2
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances at amortised cost
344.4
354.9
374.1
339.1
345.1
339.3
330.7
326.4
Total assets
1,421.7
1,385.1
1,444.3
1,140.2
1,290.4
1,232.8
1,193.5
1,133.3
Deposits at amortised cost
494.6
466.9
470.7
415.8
420.6
413.6
412.7
394.8
Net asset value per share
322p
331p
332p
309p
320p
322p
312p
309p
Tangible net asset value per share
275p
284p
284p
262p
274p
275p
266p
262p
Common equity tier 1 ratio
14.6%
14.2%
13.1%
13.8%
13.4%
13.4%
13.0%
13.2%
Common equity tier 1 capital
45.5
45.4
42.5
40.8
41.9
42.9
41.4
41.1
Risk weighted assets
310.7
319.0
325.6
295.1
313.3
319.1
319.7
311.9
Average UK leverage ratio
5.1%
4.7%
4.5%
4.5%
4.6%
4.7%
4.6%
4.5%
Average UK leverage exposure
1,111.1
1,148.7
1,176.2
1,142.8
1,171.2
1,134.6
1,105.5
1,110.0
UK leverage ratio
5.2%
5.2%
4.5%
5.1%
4.8%
5.1%
4.9%
5.1%
UK leverage exposure
1,095.1
1,071.1
1,178.7
1,007.7
1,099.8
1,079.4
1,065.0
998.6
Funding and liquidity
Group liquidity (£bn)
327
298
237
211
226
238
232
227
Liquidity coverage ratio
181%
186%
155%
160%
151%
156%
160%
169%
Loan: deposit ratio
70%
76%
79%
82%
82%
82%
80%
83%
1
Re fer to pages 42 to 51 for further information and calculations of performance measures excluding litigation and conduct.
2
Refer to pages 31 to 37 for further information on how capital, RWAs and leverage are calculated.
Quarterly Results by Business
18
Barclays UK
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
1,280
1,225
1,412
1,478
1,503
1,438
1,469
1,513
Net fee, commission and other income
270
242
292
481
343
333
308
350
Total income
1,550
1,467
1,704
1,959
1,846
1,771
1,777
1,863
Credit impairment charges
(233)
(583)
(481)
(190)
(101)
(230)
(191)
(296)
Net operating income
1,317
884
1,223
1,769
1,745
1,541
1,586
1,567
Operating costs
(1,095)
(1,018)
(1,023)
(1,023)
(952)
(1,022)
(999)
(1,114)
UK bank levy
-
-
-
(41)
-
-
-
(46)
Operating expenses
(1,095)
(1,018)
(1,023)
(1,064)
(952)
(1,022)
(999)
(1,160)
Litigation and conduct
(25)
(6)
(5)
(58)
(1,480)
(41)
(3)
(15)
Total operating expenses
(1,120)
(1,024)
(1,028)
(1,122)
(2,432)
(1,063)
(1,002)
(1,175)
Other net (expenses)/income
(1)
13
-
-
-
(1)
1
(2)
Profit/(loss) before tax
196
(127)
195
647
(687)
477
585
390
Attributable profit/loss
113
(123)
175
438
(907)
328
422
241
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances to customers at amortised
cost
203.9
202.0
195.7
193.7
193.2
189.1
187.5
187.6
Total assets
294.5
287.6
267.5
257.8
257.9
259.0
253.1
249.7
Customer deposits at amortised cost
232.0
225.7
207.5
205.5
203.3
200.9
197.3
197.3
Loan: deposit ratio
91%
92%
96%
96%
97%
97%
96%
96%
Risk weighted assets
76.2
77.9
77.7
74.9
76.8
76.2
76.6
75.2
Performance measures
Return on average allocated equity
3.3%
(3.6%)
5.1%
12.7%
(26.1%)
9.5%
12.2%
7.1%
Return on average allocated tangible equity
4.5%
(4.8%)
6.9%
17.0%
(34.9%)
12.7%
16.3%
9.6%
Average allocated equity (£bn)
13.7
13.9
13.7
13.8
13.9
13.8
13.9
13.6
Average allocated tangible equity (£bn)
10.1
10.3
10.1
10.3
10.4
10.3
10.4
10.1
Cost: income ratio
72%
70%
60%
57%
132%
60%
56%
63%
Loan loss rate (bps)
43
111
96
38
20
47
40
61
Net interest margin
2.51%
2.48%
2.91%
3.03%
3.10%
3.05%
3.18%
3.20%
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Profit/(loss) before tax
221
(121)
200
705
793
518
588
405
Attributable profit/(loss)
130
(118)
178
481
550
358
424
253
Return on average allocated tangible equity
5.2%
(4.6%)
7.0%
18.7%
21.2%
13.9%
16.4%
10.1%
Cost: income ratio
71%
69%
60%
54%
52%
58%
56%
62%
1
Refer to pages 42 to 51 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results by Business
19
Analysis of Barclays UK
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
Analysis of total income
£m
£m
£m
£m
£m
£m
£m
£m
Personal Banking
833
826
968
1,064
1,035
946
964
998
Barclaycard Consumer UK
362
367
436
533
472
497
490
522
Business Banking
355
274
300
362
339
328
323
343
Total income
1,550
1,467
1,704
1,959
1,846
1,771
1,777
1,863
Analysis of credit impairment (charges)/releases
Personal Banking
(48)
(130)
(134)
(71)
(36)
(36)
(52)
(44)
Barclaycard Consumer UK
(106)
(396)
(301)
(108)
(49)
(175)
(140)
(250)
Business Banking
(79)
(57)
(46)
(11)
(16)
(19)
1
(2)
Total credit impairment charges
(233)
(583)
(481)
(190)
(101)
(230)
(191)
(296)
Analysis of loans and advances to customers at
amortised cost
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Personal Banking
155.7
154.9
153.4
151.9
150.1
147.3
145.9
146.0
Barclaycard Consumer UK
10.7
11.5
13.6
14.7
14.9
15.1
15.0
15.3
Business Banking
37.5
35.6
28.7
27.1
28.2
26.7
26.6
26.3
Total loans and advances to customers at
amortised cost
203.9
202.0
195.7
193.7
193.2
189.1
187.5
187.6
Analysis of customer deposits at amortised cost
Personal Banking
173.2
169.6
161.4
159.2
157.9
156.3
154.1
154.0
Barclaycard Consumer UK
0.1
0.1
-
-
-
-
-
-
Business Banking
58.7
56.0
46.1
46.3
45.4
44.6
43.2
43.3
Total customer deposits at amortised cost
232.0
225.7
207.5
205.5
203.3
200.9
197.3
197.3
Quarterly Results by Business
20
Barclays International
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
823
847
998
965
1,059
1,017
900
984
Net trading income
1,528
1,660
2,360
929
1,110
1,016
1,144
837
Net fee, commission and other income
1,430
1,503
1,286
1,558
1,581
1,870
1,526
1,400
Total income
3,781
4,010
4,644
3,452
3,750
3,903
3,570
3,221
Credit impairment charges
(370)
(1,010)
(1,609)
(329)
(352)
(247)
(245)
(354)
Net operating income
3,411
3,000
3,035
3,123
3,398
3,656
3,325
2,867
Operating costs
(2,227)
(2,186)
(2,219)
(2,240)
(2,282)
(2,435)
(2,206)
(2,441)
UK bank levy
-
-
-
(174)
-
-
-
(210)
Operating expenses
(2,227)
(2,186)
(2,219)
(2,414)
(2,282)
(2,435)
(2,206)
(2,651)
Litigation and conduct
(28)
(11)
-
(86)
-
(11)
(19)
(33)
Total operating expenses
(2,255)
(2,197)
(2,219)
(2,500)
(2,282)
(2,446)
(2,225)
(2,684)
Other net income
9
4
6
17
21
13
18
32
Profit before tax
1,165
807
822
640
1,137
1,223
1,118
215
Attributable profit/(loss)
782
468
529
397
799
832
788
(21)
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances at amortised cost
128.0
138.1
167.0
132.8
138.1
134.8
130.9
127.2
Trading portfolio assets
122.3
109.5
101.6
113.3
119.4
120.0
117.2
104.0
Derivative financial instrument assets
295.9
306.8
341.5
228.9
286.0
243.8
217.3
222.1
Financial assets at fair value through the income
statement
178.2
154.3
188.4
128.4
158.0
154.7
153.5
144.7
Cash collateral and settlement balances
121.8
130.8
153.2
79.4
112.5
101.3
97.8
74.3
Other assets
261.7
236.3
201.5
178.6
195.6
196.8
202.3
189.8
Total assets
1,107.9
1,075.8
1,153.2
861.4
1,009.6
951.4
919.0
862.1
Deposits at amortised cost
262.4
241.2
263.3
210.0
217.6
212.0
215.5
197.2
Derivative financial instrument liabilities
293.3
307.6
338.8
228.9
283.3
243.0
213.5
219.6
Loan: deposit ratio
49%
57%
63%
63%
63%
64%
61%
65%
Risk weighted assets
224.7
231.2
237.9
209.2
223.1
214.8
216.1
210.7
Performance measures
Return on average allocated equity
10.0%
5.5%
6.6%
5.0%
9.6%
10.3%
10.0%
(0.3%)
Return on average allocated tangible equity
10.2%
5.6%
6.8%
5.1%
9.9%
10.7%
10.4%
(0.3%)
Average allocated equity (£bn)
31.2
34.2
31.9
31.9
33.3
32.1
31.6
32.4
Average allocated tangible equity (£bn)
30.6
33.5
31.2
30.9
32.2
31.1
30.5
31.3
Cost: income ratio
60%
55%
48%
72%
61%
63%
62%
83%
Loan loss rate (bps)
112
284
377
96
99
72
73
107
Net interest margin
3.79%
3.43%
3.93%
4.29%
4.10%
3.91%
3.99%
3.98%
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
1,193
818
822
726
1,137
1,234
1,137
248
Attributable profit
803
476
529
461
801
840
804
13
Return on average allocated tangible equity
10.5%
5.7%
6.8%
6.0%
10.0%
10.8%
10.6%
0.2%
Cost: income ratio
59%
55%
48%
70%
61%
62%
62%
82%
1
Refer to pages 42 to 51 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results by Business
21
Analysis of Barclays International
Corporate and Investment Bank
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
FICC
1,000
1,468
1,858
726
816
920
902
570
Equities
691
674
564
409
494
517
467
375
Markets
1,691
2,142
2,422
1,135
1,310
1,437
1,369
945
Advisory
90
84
155
202
221
221
132
242
Equity capital markets
122
185
62
56
86
104
83
53
Debt capital markets
398
463
418
322
381
373
354
330
Banking fees
610
732
635
580
688
698
569
625
Corporate lending
232
61
111
202
195
216
152
243
Transaction banking
372
381
449
397
424
444
415
412
Corporate
604
442
560
599
619
660
567
655
Other
-
-
-
-
-
-
-
(74)
Total income
2,905
3,316
3,617
2,314
2,617
2,795
2,505
2,151
Credit impairment charges
(187)
(596)
(724)
(30)
(31)
(44)
(52)
(35)
Net operating income
2,718
2,720
2,893
2,284
2,586
2,751
2,453
2,116
Operating costs
(1,716)
(1,680)
(1,690)
(1,691)
(1,712)
(1,860)
(1,619)
(1,835)
UK bank levy
-
-
-
(156)
-
-
-
(188)
Operating expenses
(1,716)
(1,680)
(1,690)
(1,847)
(1,712)
(1,860)
(1,619)
(2,023)
Litigation and conduct
(3)
(3)
-
(79)
(4)
(7)
(19)
(23)
Total operating expenses
(1,719)
(1,683)
(1,690)
(1,926)
(1,716)
(1,867)
(1,638)
(2,046)
Other net income
1
3
-
1
12
3
12
15
Profit before tax
1,000
1,040
1,203
359
882
887
827
85
Attributable profit/(loss)
627
694
820
193
609
596
582
(84)
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances at amortised cost
96.8
104.9
128.2
92.0
95.8
92.1
90.6
86.4
Trading portfolio assets
122.2
109.3
101.5
113.3
119.3
119.9
117.2
104.0
Derivative financial instruments assets
295.9
306.7
341.4
228.8
286.0
243.7
217.3
222.1
Financial assets at fair value through the income
statement
177.9
153.7
187.8
127.7
157.3
154.1
152.9
144.2
Cash collateral and settlement balances
121.0
129.7
152.2
78.5
111.6
100.4
96.9
73.4
Other assets
228.9
205.5
171.4
155.3
171.5
168.1
163.2
160.4
Total assets
1,042.7
1,009.8
1,082.5
795.6
941.5
878.3
838.1
790.5
Deposits at amortised cost
195.6
173.9
198.4
146.2
152.1
145.4
151.4
136.3
Derivative financial instrument liabilities
293.2
307.6
338.7
228.9
283.2
242.9
213.5
219.6
Risk weighted assets
193.3
198.3
201.7
171.5
184.9
175.9
176.6
170.9
Performance measures
Return on average allocated equity
9.5%
9.5%
12.5%
3.0%
9.1%
9.2%
9.3%
(1.3%)
Return on average allocated tangible equity
9.5%
9.6%
12.5%
3.0%
9.1%
9.2%
9.3%
(1.3%)
Average allocated equity (£bn)
26.4
29.1
26.2
25.9
26.9
25.8
25.2
26.0
Average allocated tangible equity (£bn)
26.4
29.0
26.2
25.8
26.9
25.8
25.1
26.0
Cost: income ratio
59%
51%
47%
83%
66%
67%
65%
95%
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
1,003
1,043
1,203
438
886
894
846
108
Attributable profit/(loss)
629
696
820
251
614
601
598
(57)
Return on average allocated tangible equity
9.5%
9.6%
12.5%
3.9%
9.2%
9.3%
9.5%
(0.9%)
Cost: income ratio
59%
51%
47%
80%
65%
67%
65%
94%
1
Refer to pages 42 to 51 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results by Business
22
Analysis of Barclays International
Consumer, Cards and Payments
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
518
513
663
717
720
720
665
664
Net fee, commission, trading and other income
358
181
364
421
413
388
400
406
Total income
876
694
1,027
1,138
1,133
1,108
1,065
1,070
Credit impairment charges
(183)
(414)
(885)
(299)
(321)
(203)
(193)
(319)
Net operating income
693
280
142
839
812
905
872
751
Operating costs
(511)
(506)
(529)
(549)
(570)
(575)
(587)
(606)
UK bank levy
-
-
-
(18)
-
-
-
(22)
Operating expenses
(511)
(506)
(529)
(567)
(570)
(575)
(587)
(628)
Litigation and conduct
(25)
(8)
-
(7)
4
(4)
-
(10)
Total operating expenses
(536)
(514)
(529)
(574)
(566)
(579)
(587)
(638)
Other net income
8
1
6
16
9
10
6
17
Profit/(loss) before tax
165
(233)
(381)
281
255
336
291
130
Attributable profit/(loss)
155
(226)
(291)
204
190
236
206
63
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances at amortised cost
31.2
33.2
38.8
40.8
42.3
42.7
40.3
40.8
Total assets
65.2
66.0
70.7
65.8
68.1
73.1
80.9
71.6
Deposits at amortised cost
66.8
67.3
64.9
63.8
65.5
66.6
64.1
60.9
Risk weighted assets
31.4
32.9
36.2
37.7
38.2
38.9
39.5
39.8
Performance measures
Return on average allocated equity
12.9%
(17.7%)
(20.7%)
13.6%
11.8%
14.9%
12.8%
3.9%
Return on average allocated tangible equity
14.7%
(20.2%)
(23.5%)
15.9%
14.2%
17.8%
15.4%
4.8%
Average allocated equity (£bn)
4.8
5.1
5.7
6.0
6.4
6.3
6.4
6.4
Average allocated tangible equity (£bn)
4.2
4.5
5.0
5.1
5.3
5.3
5.4
5.3
Cost: income ratio
61%
74%
52%
50%
50%
52%
55%
60%
Loan loss rate (bps)
211
455
846
273
283
180
182
290
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Profit/(loss) before tax
190
(225)
(381)
288
251
340
291
140
Attributable profit/(loss)
174
(220)
(291)
210
187
239
206
70
Return on average allocated tangible equity
16.5%
(19.6%)
(23.5%)
16.3%
14.0%
18.0%
15.4%
5.4%
Cost: income ratio
58%
73%
52%
50%
50%
52%
55%
59%
1
Refer to pages 42 to 51 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results by Business
23
Head Office
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
(48)
(180)
(79)
(99)
(117)
(95)
(111)
(201)
Net fee, commission and other income
(79)
41
14
(11)
62
(41)
16
190
Total income
(127)
(139)
(65)
(110)
(55)
(136)
(95)
(11)
Credit impairment (charges)/releases
(5)
(30)
(25)
(4)
(8)
(3)
(12)
7
Net operating expenses
(132)
(169)
(90)
(114)
(63)
(139)
(107)
(4)
Operating costs
(69)
(106)
(11)
(45)
(59)
(44)
(52)
(69)
UK bank levy
-
-
-
(11)
-
-
-
(13)
Operating expenses
(69)
(106)
(11)
(56)
(59)
(44)
(52)
(82)
GMP charge
-
-
-
-
-
-
-
(140)
Litigation and conduct
(23)
(3)
(5)
(23)
(88)
(1)
(39)
(12)
Total operating expenses
(92)
(109)
(16)
(79)
(147)
(45)
(91)
(234)
Other net income/(expenses)
10
(43)
2
3
6
15
(22)
7
Loss before tax
(214)
(321)
(104)
(190)
(204)
(169)
(220)
(231)
Attributable loss
(284)
(255)
(99)
(154)
(184)
(126)
(172)
(234)
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Total assets
19.3
21.7
23.6
21.0
22.9
22.4
21.4
21.5
Risk weighted assets
9.8
9.9
10.0
11.0
13.4
28.1
27.0
26.0
Performance measures
Average allocated equity (£bn)
11.5
10.3
9.6
8.8
9.2
8.1
7.7
6.2
Average allocated tangible equity (£bn)
7.6
6.4
5.6
5.2
5.8
4.8
4.3
2.9
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Loss before tax
(191)
(318)
(99)
(167)
(116)
(168)
(181)
(219)
Attributable loss
(265)
(252)
(103)
(139)
(118)
(124)
(144)
(218)
1
Refer to pages 42 to 51 for further information and calculations of performance measures excluding litigation and conduct.
Performance Management
24
Margins and balances
Nine months ended 30.09.20
Nine months ended 30.09.19
Net interest
income
Average
customer
assets
Net interest
margin
Net interest
income
Average
customer
assets
Net interest
margin
£m
£m
%
£m
£m
%
Barclays UK
3,917
199,048
4,410
189,994
Barclays International
1
2,686
96,799
2,985
99,862
Total Barclays UK and Barclays International
6,603
295,847
7,395
289,856
Other
2
(325)
(332)
Total Barclays Group
6,278
7,063
1
Barclays International margins include interest earning lending balances within the investment banking business.
2
Other includes Head Office and non-lending related investment banking businesses not included in Barclays International margins.
The Group’s combined product and equity structural hedge notional as at 30 September 2020 was £181bn, with an average
duration of 2.5 to 3 years. Group net interest income includes gross structural hedge contributions of £1.3bn (Q319 YTD: £1.4bn)
and net structural hedge contributions of £0.9 bn (Q319 YTD: £0.4bn). Gross structural hedge contributions represent the absolute
level of interest earned from the fixed receipts on the basket of swaps in the structural hedge, while the net structural hedge
contributions represent the net interest earned on the difference between the structural hedge rate and prevailing floating rates.
Quarterly analysis for Barclays UK and Barclays International
Net interest
income
Average
customer
assets
Net interest
margin
Three months ended 30.09.20
£m
£m
%
Barclays UK
Barclays International
1
Total Barclays UK and Barclays International
Three months ended 30.06.20
Barclays UK
1,225
199,039
2.48
Barclays International
1
868
101,706
3.43
Total Barclays UK and Barclays International
2,093
300,745
2.80
Three months ended 31.03.20
Barclays UK
1,412
195,204
2.91
Barclays International
1
980
100,171
3.93
Total Barclays UK and Barclays International
2,392
295,375
3.26
Three months ended 31.12.19
Barclays UK
1,478
193,610
3.03
Barclays International
1
1,036
95,819
4.29
Total Barclays UK and Barclays International
2,514
289,429
3.45
Three months ended 30.09.19
Barclays UK
1,503
192,262
3.10
Barclays International
1
1,038
100,589
4.10
Total Barclays UK and Barclays International
2,541
292,851
3.44
1
Barclays International margins include interest earning lending balances within the investment banking business.
Credit Risk
25
Loans and advances at amortised cost by stage
The table below presents an analysis of loans and advances at amortised cost by gross exposure, impairment allowance,
impairment charge and coverage ratio by stage allocation and business segment as at 30 September 2020. Also included are off-
balance sheet loan commitments and financial guarantee contracts by gross exposure, impairment allowance and coverage ratio by
stage allocation as at 30 September 2020.
Impairment allowance under IFRS 9 considers both the drawn and the undrawn counterparty exposure. For retail portfolios, the
total impairment allowance is allocated to the drawn exposure to the extent that the allowance does not exceed the exposure, as
ECL is not reported separately. Any excess is reported on the liability side of the balance sheet as a provision. For wholesale
portfolios, the impairment allowance on the undrawn exposure is reported on the liability side of the balance sheet as a provision.
Gross exposure
Impairment allowance
Net
exposure
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
As at 30.09.20
£m
£m
£m
£m
£m
£m
£m
£m
£m
Barclays UK
149,393
25,846
2,704
177,943
329
1,563
1,150
3,042
174,901
Barclays International
16,866
5,366
1,691
23,923
412
1,296
1,275
2,983
20,940
Head Office
4,519
668
871
6,058
8
53
352
413
5,645
Total Barclays Group retail
170,778
31,880
5,266
207,924
749
2,912
2,777
6,438
201,486
Barclays UK
30,540
3,887
1,138
35,565
58
98
143
299
35,266
Barclays International
74,789
31,775
2,422
108,986
129
793
1,002
1,924
107,062
Head Office
595
34
629
33
33
596
Total Barclays Group
wholesale
1
105,924
35,662
3,594
145,180
187
891
1,178
2,256
142,924
Total loans and advances at
amortised cost
276,702
67,542
8,860
353,104
936
3,803
3,955
8,694
344,410
Off-balance sheet loan
commitments and financial
guarantee contracts
2
282,551
65,407
1,500
349,458
138
751
46
935
348,523
Total
3
559,253
132,949
10,360
702,562
1,074
4,554
4,001
9,629
692,933
As at 30.09.20
Period ended 30.09.20
Coverage ratio
Loan impairment charge and loan loss rate
4
Stage 1
Stage 2
Stage 3
Total
Loan impairment
charge
Loan loss rate
%
%
%
%
£m
bps
Barclays UK
0.2
6.0
42.5
1.7
966
73
Barclays International
2.4
24.2
75.4
12.5
1,423
795
Head Office
0.2
7.9
40.4
6.8
60
132
Total Barclays Group retail
0.4
9.1
52.7
3.1
2,449
157
Barclays UK
0.2
2.5
12.6
0.8
174
65
Barclays International
0.2
2.5
41.4
1.8
954
117
Head Office
-
-
97.1
5.2
Total Barclays Group
wholesale
1
0.2
2.5
32.8
1.6
1,128
104
Total loans and advances at
amortised cost
0.3
5.6
44.6
2.5
3,577
135
Off-balance sheet loan
commitments and financial
guarantee contracts
2
-
1.1
3.1
0.3
627
Other financial assets subject
to impairment
3
142
Total
4
0.2
3.4
38.6
1.4
4,346
1
Includes Wealth and Private Banking exposures measured on an individual basis, and excludes Business Banking exposures that are managed on a collective basis.
The net impact is a difference in total exposure of £701m of balances reported as wholesale loans on page 27 in the Loans and advances at amortised cost by
product disclosure.
2
Excludes loan commitments and financial guarantees of £8.6bn carried at fair value.
3
Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through
other comprehensive income and other assets. These have a total gross exposure of £197.8bn and impairment allowance of £161m. This comprises £13m ECL on
£192. 1bn stage 1 assets, £38m on £5.6bn stage 2 fair value through other comprehensive income assets, other assets, cash collateral and settlement balances and
£110m on £112m stage 3 other assets.
4
Q320 YTD loan impairment charge represents nine months of impairment charge, annualised to calculate the loan loss rate. The loan loss rate for Q320 YTD is
164bps after applying the total impairment charge of £4,346m.
Credit Risk
26
Gross exposure
Impairment allowance
Net
exposure
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
As at 31.12.19
£m
£m
£m
£m
£m
£m
£m
£m
£m
Barclays UK
143,097
23,198
2,446
168,741
198
1,277
974
2,449
166,292
Barclays International
27,886
4,026
1,875
33,787
352
774
1,359
2,485
31,302
Head Office
4,803
500
826
6,129
5
36
305
346
5,783
Total Barclays Group retail
175,786
27,724
5,147
208,657
555
2,087
2,638
5,280
203,377
Barclays UK
27,891
2,397
1,124
31,412
16
38
108
162
31,250
Barclays International
92,615
8,113
1,615
102,343
136
248
447
831
101,512
Head Office
2,974
-
37
3,011
-
-
35
35
2,976
Total Barclays Group
wholesale
1
123,480
10,510
2,776
136,766
152
286
590
1,028
135,738
Total loans and advances at
amortised cost
299,266
38,234
7,923
345,423
707
2,373
3,228
6,308
339,115
Off-balance sheet loan
commitments and financial
guarantee contracts
2
321,140
19,185
935
341,260
97
170
55
322
340,938
Total
3
620,406
57,419
8,858
686,683
804
2,543
3,283
6,630
680,053
As at 31.12.19
Year ended 31.12.19
Coverage ratio
Loan impairment charge and loan loss rate
4
Stage 1
Stage 2
Stage 3
Total
Loan impairment
charge
Loan loss rate
%
%
%
%
£m
bps
Barclays UK
0.1
5.5
39.8
1.5
661
39
Barclays International
1.3
19.2
72.5
7.4
999
296
Head Office
0.1
7.2
36.9
5.6
27
44
Total Barclays Group retail
0.3
7.5
51.3
2.5
1,687
81
Barclays UK
0.1
1.6
9.6
0.5
33
11
Barclays International
0.1
3.1
27.7
0.8
113
11
Head Office
-
-
94.6
1.2
-
-
Total Barclays Group
wholesale
1
0.1
2.7
21.3
0.8
146
11
Total loans and advances at
amortised cost
0.2
6.2
40.7
1.8
1,833
53
Off-balance sheet loan
commitments and financial
guarantee contracts
2
-
0.9
5.9
0.1
71
Other financial assets subject
to impairment
3
8
Total
4
0.1
4.4
37.1
1.0
1,912
1
Includes Wealth and Private Banking exposures measured on an individual basis, and excludes Business Banking exposures that are managed on a collective basis.
The net impact is a difference in total exposure of £6,434m of balances reported as wholesale loans on page 27 in the Loans and advances at amortised cost by
product disclosure.
2
Excludes loan commitments and financial guarantees of £17.7bn carried at fair value.
3
Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through
other comprehensive income and other assets. These have a total gross exposure of £149.3bn and impairment allowance of £24m. This comprises £12m ECL on
£148.5bn stage 1 assets, £2m on £0.8bn stage 2 fair value through other comprehensive income assets, cash collateral and settlement balances and £10m on £10m
stage 3 other assets.
4
The loan loss rate is 55bps after applying the total impairment charge of £1,912m.
Credit Risk
27
Loans and advances at amortised cost by product
The table below presents a breakdown of loans and advances at amortised cost and the impairment allowance with stage
allocation by asset classification.
Stage 2
As at 30.09.20
Stage 1
Not past
due
<=30 days
past due
>30 days
past due
Total
Stage 3
Total
Gross exposure
£m
£m
£m
£m
£m
£m
£m
Home loans
135,995
17,262
1,843
969
20,074
2,234
158,303
Credit cards, unsecured loans and other retail lending
33,815
11,005
483
273
11,761
3,344
48,920
Wholesale loans
106,892
31,887
3,275
545
35,707
3,282
145,881
Total
276,702
60,154
5,601
1,787
67,542
8,860
353,104
Impairment allowance
Home loans
20
62
11
12
85
392
497
Credit cards, unsecured loans and other retail lending
754
2,461
164
173
2,798
2,423
5,975
Wholesale loans
162
821
92
7
920
1,140
2,222
Total
936
3,344
267
192
3,803
3,955
8,694
Net exposure
Home loans
135,975
17,200
1,832
957
19,989
1,842
157,806
Credit cards, unsecured loans and other retail lending
33,061
8,544
319
100
8,963
921
42,945
Wholesale loans
106,730
31,066
3,183
538
34,787
2,142
143,659
Total
275,766
56,810
5,334
1,595
63,739
4,905
344,410
Coverage ratio
%
%
%
%
%
%
%
Home loans
-
0.4
0.6
1.2
0.4
17.5
0.3
Credit cards, unsecured loans and other retail lending
2.2
22.4
34.0
63.4
23.8
72.5
12.2
Wholesale loans
0.2
2.6
2.8
1.3
2.6
34.7
1.5
Total
0.3
5.6
4.8
10.7
5.6
44.6
2.5
As at 31.12.19
Gross exposure
£m
£m
£m
£m
£m
£m
£m
Home loans
135,713
14,733
1,585
725
17,043
2,155
154,911
Credit cards, unsecured loans and other retail lending
46,012
9,759
496
504
10,759
3,409
60,180
Wholesale loans
117,541
9,374
374
684
10,432
2,359
130,332
Total
299,266
33,866
2,455
1,913
38,234
7,923
345,423
Impairment allowance
Home loans
22
37
14
13
64
346
432
Credit cards, unsecured loans and other retail lending
542
1,597
159
251
2,007
2,335
4,884
Wholesale loans
143
284
9
9
302
547
992
Total
707
1,918
182
273
2,373
3,228
6,308
Net exposure
Home loans
135,691
14,696
1,571
712
16,979
1,809
154,479
Credit cards, unsecured loans and other retail lending
45,470
8,162
337
253
8,752
1,074
55,296
Wholesale loans
117,398
9,090
365
675
10,130
1,812
129,340
Total
298,559
31,948
2,273
1,640
35,861
4,695
339,115
Coverage ratio
%
%
%
%
%
%
%
Home loans
-
0.3
0.9
1.8
0.4
16.1
0.3
Credit cards, unsecured loans and other retail lending
1.2
16.4
32.1
49.8
18.7
68.5
8.1
Wholesale loans
0.1
3.0
2.4
1.3
2.9
23.2
0.8
Total
0.2
5.7
7.4
14.3
6.2
40.7
1.8
The number of customers who remain on payment holidays granted in response to the pandemic continues to fall. Across the Group’s
material portfolios as at 30 September 2020, c.£4.4bn of UK mortgage, c.£0.1bn of UK credit card and c.£0.1bn of US credit card
lending remained on payment holidays.
Credit Risk
28
Measurement uncertainty
Scenarios used to calculate the Group’s ECL charge were reviewed and updated in September 2020 with the Baseline scenario
reflecting the latest consensus economic forecasts. Changes in the consensus Baseline forecasts since June 2020 include a more
prolonged period of high unemployment in the UK but faster reduction in US unemployment levels in the short term. Economic
growth in the UK and the US begins to recover in 2021 in the downside scenarios. In the upside scenarios, the strong rebound in UK
and US GDP continues into the end of 2020, following the bounce-back in growth in Q320 and, subsequently, the projections stay
above the year on year growth rates seen in the Baseline for a prol onged period of time before finally reverting to the long term
run rate. This reflects the assumption of a potential vaccine being available in the first half of 2021 and pent up savings being
deployed into a more certain consumer environment to drive significant growth. Scenario weights have been updated to reflect the
latest economics.
As a result of government and Barclays support measures put in place to support customers and clients, significant credit
deterioration has not yet occurred. This support is causing a timing difference between economic drivers such as GDP and
unemployment rates, and the resultant impairment defaults. This is expected to delay the effects of distress and therefore
increases uncertainty on the timing of the stress and the rea lisation of defaults. The Q320 review did not identify any new
information to substantiate a change in the level of expected credit losses on non-defaulted positions from that recognised at
H120. This has led to the maintenance of coverage levels and stagi ng mix whilst recognising the associated ECL charge on defaults
that have arisen in the quarter.
The economic environment remains uncertain and future impairment charges may be subject to further volatility (including from
changes to macroeconomic variable forecasts) depending on the longevity of the COVID -19 pandemic and related containment
measures, as well as the longer term effectiveness of central bank, government and other support measures.
The tables below show the key consensus macroeconomic varia bles used in the Q320 Baseline scenario and the probability weights
applied to each scenario.
Credit Risk
29
Baseline average macroeconomic variables used in the calculation of ECL
2020
2021
2022
Expected Worst
Point
As at 30.09.20
%
UK GDP
1
(10.3)
6.2
3.3
(59.8)
UK unemployment
2
5.5
6.9
6.2
8.1
UK HPI
3
0.4
1.5
1.4
(0.9)
UK bank rate
0.2
(0.1)
(0.1)
(0.1)
US GDP
1
(4.4)
3.8
3.0
(32.9)
US unemployment
4
8.4
6.9
5.6
13.0
US HPI
5
1.8
1.8
2.9
0.7
US federal funds rate
0.5
0.3
0.3
0.1
As at 30.06.20
UK GDP
1
(8.7)
6.1
2.9
(51.4)
UK unemployment
2
6.6
6.5
4.4
8.0
UK HPI
3
0.6
2.0
-
(1.5)
UK bank rate
0.2
0.1
0.1
0.1
US GDP
1
(4.2)
4.4
(0.3)
(30.4)
US unemployment
4
9.3
7.6
5.5
13.4
US HPI
5
1.1
1.8
(0.8)
(1.9)
US federal funds rate
0.5
0.3
0.3
0.3
1
Average Real GDP seasonally adjusted change in year; expected worst point is the minimum seasonally adjusted quarterly annualised rate.
2
Average UK unemployment rate 16-year+.
3
Change in average yearly UK HPI = Halifax All Houses, All Buyers index, relative to prior year end; worst point is based on cumulative drawdown in year relative to
prior year end.
4
Average US civilian unemployment rate 16-year+.
5
Change in average yearly US HPI = FHFA house price index, relative to prior year end; worst point is based on cumulative drawdown in year relative to prior year end.
Scenario probability weighting
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 30.09.20
Scenario probability weighting
20.1
21.6
23.5
19.2
15.6
As at 30.06.20
Scenario probability weighting
20.3
22.4
25.4
17.5
14.4
As at 31.12.19
Scenario probability weighting
10.1
23.1
40.8
22.7
3.3
Treasury and Capital Risk
30
Composition of the Group liquidity pool
As at 30.09.20
As at 31.12.19
Liquidity pool
Liquidity pool of which CRR LCR eligible
3
Liquidity pool
Cash
Level 1
Level 2A
£bn
£bn
£bn
£bn
£bn
Cash and deposits with central banks
1
248
243
-
-
153
Government bonds
2
AAA to AA-
32
-
31
1
31
A+ to A-
18
-
11
7
2
BBB+ to BBB-
2
-
2
-
3
Total government bonds
52
-
44
8
36
Other
Government guaranteed issuers, PSEs and GSEs
10
-
8
1
9
International organisations and MDBs
8
-
8
-
7
Covered bonds
8
-
6
2
6
Other
1
-
-
-
-
Total other
27
-
22
3
22
Total as at 30 September 2020
327
243
66
11
211
Total as at 31 December 2019
211
150
50
3
1
Includes cash held at central banks and surplus cash at central banks related to payment schemes. Over 99% (December 2019: over 98%) was placed with the Bank
of England, US Federal Reserve, European Central Bank, Bank of Japan and Swiss National Bank.
2
Of which over 77% (December 2019: over 67%) comprised UK, US, French, German, Japanese, Swiss and Dutch securities.
3
The LCR eligible liquidity pool is adjusted for trapped liquidity and other regulatory deductions. It also in corporates other CRR (as amended by CRR II) qualifying
assets that are not eligible under Barclays’ internal risk appetite.
The Group liquidity pool increased to £327bn as at 30 September 2020 (December 2019: £211bn) driven by a 19% growth in
customer deposit and actions to maintain a prudent funding and liquidity position in the current environment . The liquidity pool is
held unencumbered and is not used to support payment or clearing requirements. Such requirements are treated as part of our
regular business funding. The liquidity pool is intended to offset stress outflows, and comprises the above cash and unencumbered
assets.
The composition of the pool is subject to limits set by the Board and the 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.
Treasury and Capital Risk
31
Capital
The Group’s Overall Capital Requirement for CET1 is 11.3% 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 2.8% Pillar 2A requirement and a 0.0% Countercyclical
Capital Buffer (CCyB).
The Group’s CCyB is based on the buffer rate applicable for each jurisdiction in which the Group has exposures. On 11 March 2020,
the Financial Poli cy Committee set the CCyB rate for UK exposures at 0% with immediate effect. The buffer rates set by other
national authorities for non-UK exposures are not currently material. Overall, this results in a 0.0% CCyB for the Group.
The Group’s Pillar 2A requirement as per the PRA’s Individual Capital Requirement is 5.0% of which at least 56.25% needs to be met
with CET1 capital, equating to approximately 2.8% of RWAs. The Pillar 2A requirement is subject to at least annual review and has
been set as a nominal capital amount. This is based on a point in time assessment and the requirement (when expressed as a
proportion of RWAs) will change depending on the total RWAs at each reporting period.
On 27 June 2019, CRR II came into force amending CRR. As an amending regulation, the existing provisions of CRR apply unless they
are amended by CRR II. Certain aspects of CRR II are dependent on final technical standards to be issued by the European Banking
Authority (EBA) and adopted by the European Commission as well as UK implementation of the rules.
On 27 June 2020, CRR was further amended to accelerate specific CRR II measures and implement a new IFRS 9 transitional relief
calculation. Previously due to be implemented in June 2021, the accelerated measures primarily relate to the CRR leverage
calculation to include additional settlement netting and limited changes to the calculation of RWAs. For UK leverage calculations,
the PRA early adopted the CRR II settlement netting measure in April 2020.
The IFRS 9 transitional arrangements have been extended by two years and a new modified calculation has been introduced. 100%
relief will be applied to increases in stage 1 and stage 2 provisions from 1 January 2020 throughout 2020 and 2021; 75% in 2022;
50% in 2023; 25% in 2024 with no relief applied from 2025. The phasing out of transitional relief on the “day 1” impact of IFRS 9 as
well as increases in stage 1 and stage 2 provisions between 1 January 2018 and 31 December 2019 under the modified calculation
remain unchanged and continue to be subject to 70% transitional relief throughout 2020; 50% for 2021; 25% for 2022 and with no
relief applied from 2023.
On 22 April 2020, the regulatory technical standards on prudent valuation were amended to include an increase to diversification
factors applied to certain additional valuation adjustments. The amendments will also impact own funds and will apply until 31
December 2020 inclusive.
The disclosures in the following section reflect Barclays’ interpretation of the current rules and guidance.
Treasury and Capital Risk
32
Capital ratios
1,2,3
As at
As at
As at
30.09.20
30.06.20
31.12.19
CET1
14.6%
14.2%
13.8%
Tier 1 (T1)
18.7%
17.8%
17.7%
Total regulatory capital
22.5%
21.7%
21.6%
Capital resources
£m
£m
£m
Total equity excluding non-controlling interests per the balance sheet
67,816
68,304
64,429
Less: other equity instruments (recognised as AT1 capital)
(12,012)
(10,871)
(10,871)
Adjustment to retained earnings for foreseeable dividends
(65)
(44)
(1,096)
Other regulatory adjustments and deductions
Additional value adjustments (PVA)
(1,241)
(1,517)
(1,746)
Goodwill and intangible assets
(8,154)
(8,154)
(8,109)
Deferred tax assets that rely on future profitability excluding temporary differences
(422)
(444)
(479)
Fair value reserves related to gains or losses on cash flow hedges
(1,745)
(1,914)
(1,002)
Gains or losses on liabilities at fair value resulting from own credit
717
(233)
260
Defined benefit pension fund assets
(1,785)
(2,094)
(1,594)
Direct and indirect holdings by an institution of own CET1 instruments
(50)
(50)
(50)
Adjustment under IFRS 9 transitional arrangements
2,512
2,459
1,126
Other regulatory adjustments
(62)
(62)
(55)
CET1 capital
45,509
45,380
40,813
AT1 capital
Capital instruments and related share premium accounts
12,012
10,871
10,871
Qualifying AT1 capital (including minority interests) issued by subsidiaries
622
691
687
Other regulatory adjustments and deductions
(80)
(80)
(130)
AT1 capital
12,554
11,482
11,428
T1 capital
58,063
56,862
52,241
T2 capital
Capital instruments and related share premium accounts
9,451
9,028
7,650
Qualifying T2 capital (including minority interests) issued by subsidiaries
2,516
3,396
3,984
Credit risk adjustments (excess of impairment over expected losses)
36
36
16
Other regulatory adjustments and deductions
(160)
(160)
(250)
Total regulatory capital
69,906
69,162
63,641
Total RWAs
310,727
318,987
295,131
1
CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR as amended by CRR II applicable as at the reporting date . This
includes IFRS 9 transitional arrangements and the grandfathering of CRR and CRR II non-compliant capital instruments.
2
The fully loaded CET1 ratio, as is relevant for assessing against the conversion trigger in Barclays PLC AT1 securities, was 13.9%, with £43.0bn of CET1 capital and
£309.8bn of RWAs calculated without applying the transitional arrangements of the CRR as amended by CRR II applicable as at the reporting date.
3
The Barclays PLC CET1 ratio, as is relevant for assessing against the conversion trigger in Barclays Bank PLC T2 Contingent Capital Notes, was 14.6%. For this
calculation CET1 capital and RWAs are calculated applying the transitional arrangements under the CRR, including the IFRS 9 transitional arrangements. The benefit
of the Financial Services Authority (FSA) October 2012 interpretation of the transitional provisions, relating to the implementatio n of CRD IV, expired in December
2017.
Treasury and Capital Risk
33
Movement in CET1 capital
Three months
Nine months
ended
ended
30.09.20
30.09.20
£m
£m
Opening CET1 capital
45,380
40,813
Profit for the period attributable to equity holders
815
1,937
Own credit relating to derivative liabilities
16
19
Dividends paid and foreseen
(225)
400
Increase in retained regulatory capital generated from earnings
606
2,356
Net impact of share schemes
(268)
20
Fair value through other comprehensive income reserve
173
(205)
Currency translation reserve
(716)
504
Other reserves
(3)
(6)
(Decrease) / increase in other qualifying reserves
(814)
313
Pension remeasurements within reserves
(323)
322
Defined benefit pension fund asset deduction
309
(191)
Net impact of pensions
(14)
131
Additional value adjustments (PVA)
276
505
Goodwill and intangible assets
-
(45)
Deferred tax assets that rely on future profitability excluding those arising from temporary differences
22
57
Adjustment under IFRS 9 transitional arrangements
53
1,386
Other regulatory adjustments
-
(7)
Increase in regulatory capital due to adjustments and deductions
351
1,896
Closing CET1 capital
45,509
45,509
CET1 capital increased £4.7bn to £45.5bn (December 2019: £40.8bn).
£1.9bn of capital generated from profits, and a £1.0bn increase due to the cancellation of the full year 2019 dividend were partially
offset by £0.6bn of AT1 coupons paid. Other significant movements in the period were:
●
A £0.5bn increase in the currency translation reserve mainly driven by the appreciation of period end USD and EUR
against GBP
●
A £0.5bn increase due to a reduction in PVA which includes the temporary increase to diversification factors applied to
certain additional valuation adjustments
●
A £1.4bn increase in the IFRS 9 transitional relief after tax , following new impairment charges and the implementation of
new regulatory measures which allow for 100% relief on increases in stage 1 and stage 2 impairment throughout 2020
and 2021
Treasury and Capital Risk
34
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 30.09.20
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Barclays UK
7,350
56,373
369
-
-
100
125
-
11,851
76,168
Corporate and Investment Bank
24,800
76,464
11,628
20,645
106
2,545
13,043
22,709
21,388
193,328
Consumer, Cards and Payments
20,597
2,921
168
47
-
35
-
75
7,538
31,381
Barclays International
45,397
79,385
11,796
20,692
106
2,580
13,043
22,784
28,926
224,709
Head Office
3,701
6,022
-
-
-
-
-
-
127
9,850
Barclays Group
56,448
141,780
12,165
20,692
106
2,680
13,168
22,784
40,904
310,727
As at 30.06.20
Barclays UK
7,428
58,048
359
48
122
11,851
77,856
Corporate and Investment Bank
27,032
77,983
11,879
20,472
218
3,871
12,830
22,638
21,387
198,310
Consumer, Cards and Payments
21,901
3,168
157
46
27
95
7,539
32,933
Barclays International
48,933
81,151
12,036
20,518
218
3,898
12,830
22,733
28,926
231,243
Head Office
3,578
6,183
-
127
9,888
Barclays Group
59,939
145,382
12,395
20,518
218
3,946
12,952
22,733
40,904
318,987
As at 31.12.19
Barclays UK
5,189
57,455
235
-
-
23
178
-
11,821
74,901
Corporate and Investment Bank
25,749
62,177
12,051
16,875
276
2,470
12,854
17,626
21,475
171,553
Consumer, Cards and Payments
27,209
2,706
92
37
-
11
-
103
7,532
37,690
Barclays International
52,958
64,883
12,143
16,912
276
2,481
12,854
17,729
29,007
209,243
Head Office
5,104
5,754
-
-
-
-
-
-
129
10,987
Barclays Group
63,251
128,092
12,378
16,912
276
2,504
13,032
17,729
40,957
295,131
Movement analysis of RWAs
Credit risk
Counterparty
credit risk
Market risk
Operational risk
Total RWAs
£m
£m
£m
£m
£m
Opening RWAs (as at 31.12.19)
191,343
32,070
30,761
40,957
295,131
Book size
(4,793)
1,963
10,031
(53)
7,148
Acquisitions and disposals
(119)
-
-
-
(119)
Book quality
9,792
1,112
-
-
10,904
Model updates
1,933
(50)
-
-
1,883
Methodology and policy
(1,879)
548
(4,840)
-
(6,171)
Foreign exchange movements
1
1,951
-
-
-
1,951
Total RWA movements
6,885
3,573
5,191
(53)
15,596
Closing RWAs (as at 30.09.20)
198,228
35,643
35,952
40,904
310,727
1
Foreign exchange movements do not include foreign exchange for counterparty credit risk or market risk.
Overall RWAs increased £15.6bn mainly driven by:
Credit risk RWAs increased £6.9bn mainly due to:
●
Book size decreased RWAs £4.8bn primarily due to a reduction in lending activities, repayments and lower IEL balances
●
Book quality increased RWAs £9.8bn mainly due to a reduction in credit quality primarily within CIB
●
Model updates increased RWAs £1.9bn primarily due to modelled risk weight recalibrations
●
Methodology and policy decreased RWAs £1.9bn primarily due the application of revised SME discount factors following
the early adoption of specific CRR II measures
●
FX increased RWAs £2.0bn due to the appreciation of period end USD against GBP
Treasury and Capital Risk
35
Counterparty credit risk RWAs increased £3.6bn mainly due to:
●
Book size increased RWAs £2.0bn primarily due to an increase in trading activities across SFTs and derivatives
●
Book quality increased RWAs £1.1bn primarily due to a reduction in credit quality within CIB
Market risk RWAs increased £5.2bn mainly due to:
●
Book size increased RWAs £10.0bn primarily due to an increase in trading activities and higher market volatility
●
Methodology and policy decreased RWAs £4.8bn primarily due to the removal of a Risk Not In VaR (RNIV) and a reduct ion
in pre COVID -19 VaR back testing exceptions
Treasury and Capital Risk
36
Leverage ratio and exposures
The Group is subject to a leverage ratio requirement of 3.8% as at 30 September 2020. This comprises the 3.25% minimum
requirement, a G-SII additional leverage ratio buffer (G-SII ALRB) of 0.53% and a countercyclical leverage ratio buffer (CCLB) of
0.0%. Although the leverage ratio is expressed in terms of T1 capital, 75% of the minimum requirement, equating to 2.4375%,
needs to be met with CET1 capital. In addition, the G-SII ALRB must be covered solely with CET1 capital. The CET1 capital held
against the 0.53% G-SII ALRB was £5.8bn.
The Group is required to disclose an average UK leverage ratio which is based on capital on the last day of each month in the
quarter and an exposure measure for each day in the quarter. The Group is also required to disclose a UK leverage ratio based on
capital and exposure on the last day of the quarter. Both approaches exclude qualifying claims on central banks from the leverage
exposures and include the PRA’s early adoption of CRR II settlement netting.
Leverage ratios
1,2
As at
30.09.20
As at
30.06.20
As at
31.12.19
£m
£m
£m
Average UK leverage ratio
5.1%
4.7%
4.5%
Average T1 capital
3
56,690
54,548
51,823
Average UK leverage exposure
1,111,052
1,148,720
1,142,819
UK leverage ratio
5.2%
5.2%
5.1%
CET1 capital
45,509
45,380
40,813
AT1 capital
11,932
10,791
10,741
T1 capital
3
57,441
56,171
51,554
UK leverage exposure
1,095,097
1,071,138
1,007,721
UK leverage exposure
Accounting assets
Derivative financial instruments
296,551
307,258
229,236
Derivative cash collateral
67,034
77,063
56,589
Securities financing transactions (SFTs)
178,736
160,015
111,307
Loans and advances and other assets
879,348
840,781
743,097
Total IFRS assets
1,421,669
1,385,117
1,140,229
Regulatory consolidation adjustments
(1,943)
(1,982)
(1,170)
Derivatives adjustments
Derivatives netting
(269,441)
(279,151)
(207,756)
Adjustments to cash collateral
(58,298)
(67,718)
(48,464)
Net written credit protection
15,890
14,442
13,784
Potential future exposure (PFE) on derivatives
122,426
123,468
119,118
Total derivatives adjustments
(189,423)
(208,959)
(123,318)
SFTs adjustments
20,274
21,226
18,339
Regulatory deductions and other adjustments
(18,011)
(18,297)
(11,984)
Weighted off-balance sheet commitments
110,749
108,436
105,289
Qualifying central bank claims
(205,451)
(173,033)
(119,664)
Settlement netting
(42,767)
(41,370)
-
UK leverage exposure
2
1,095,097
1,071,138
1,007,721
1
Fully loaded average UK leverage ratio was 4.9%, with £54.2bn of T1 capital and £1,109bn of leverage exposure. Fully loaded UK leverage ratio was 5.0%, with
£54.9bn of T1 capital and £1,093bn of leverage exposure.
Fully loaded UK leverage ratios are calculated without applying the transitional arrangements of the CRR
as amended by CRR II applicable as at the reporting date.
2
Capital and leverage measures are calculated applying the transitional arrangements of the CRR as amended by CRR II applicable as at the reporting date .
3
T1 capital is calculated in line with the PRA Handbook.
Treasury and Capital Risk
37
The average UK leverage ratio increased to 5.1% (December 2019: 4.5%), driven by an increase in T1 capital. The leverage expos ure
decreased by £32bn to £1,111bn, primarily driven by the PRA’s early adoption of CRR II settlement netting.
The UK leverage ratio increased to 5.2% (December 2019: 5.1%), driven by an increase in T1 capital. The UK leverage exposure
increased by £87bn to £1,095bn, primarily driven by an increase in SFTs of £67bn. Loans, advances and other assets increase of
£136bn was broadly offset by qualifying central bank claims and the PRA’s early adoption of CRR II settlement netting.
The Group also discloses a CRR leverage ratio
1
guidelines on disclosure under Part Eight of the CRR (see Barc lays PLC Pillar 3 Report Q3 2020, expected to be published on 23
October 2020 and which will be available at home.barclays/investor -relations/reports -and-events/latest -financial-results).
1
CRR leverage ratio as amended by CRR II applicable as at the reporting date.
Treasury and Capital Risk
38
MREL
CRR II requirements relating to own funds and eligible liabilities came into effect from 27 June 2019. Eligible liabilities have been
calculated reflecting the Group’s interpretation of the current rules and guidance. Certain aspects of CRR II are dependent on final
technical standards to be issued by the EBA and adopted by the European Commission as well as UK implementation of the rules.
The Group is required to meet the higher of: (i) the MREL set by the Bank of England; and (ii) the requirements in CRR II, both of
which have RWA and leverage based requirements. MREL is subject to phased implementation and will be fully implemented by 1
January 2022, at which time the Group’s indicative MREL is expected to be two times the sum of its Pillar 1 and Pillar 2A
requirements, as set by the Bank of England. In addition, CET1 capital cannot be counted towards both MREL and the capital
buffers, meaning that the buffers will effectively be applied above both the Pillar 1 and Pillar 2A requirements relating to own funds
and eligible liabilities. The Bank of England will review the MREL calibration by the end of 2020, including assessing the proposal for
Pillar 2A recapitalisation, which may drive a different 1 January 2022 MREL than currently proposed.
Own funds and eligible liabilities ratios
1
As at
30.09.20
As at
30.06.20
As at
31.12.19
CET1 capital
14.6%
14.2%
13.8%
AT1 capital instruments and related share premium accounts
2
3.8%
3.4%
3.6%
T2 capital instruments and related share premium accounts
2
3.0%
2.8%
2.5%
Eligible liabilities
11.3%
12.0%
11.2%
Total Barclays PLC (the Parent company) own funds and eligible liabilities
32.8%
32.4%
31.2%
Qualifying AT1 capital (including minority interests) issued by subsidiaries
0.2%
0.2%
0.2%
Qualifying T2 capital (including minority interests) issued by subsidiaries
0.8%
1.1%
1.3%
Total own funds and eligible liabilities, including eligible Barclays Bank PLC instruments
33.8%
33.7%
32.8%
Own funds and eligible liabilities
1
£m
£m
£m
CET1 capital
45,509
45,380
40,813
AT1 capital instruments and related share premium accounts
2
11,932
10,791
10,741
T2 capital instruments and related share premium accounts
2
9,327
8,904
7,416
Eligible liabilities
35,209
38,308
33,025
Total Barclays PLC (the Parent company) own funds and eligible liabilities
101,977
103,383
91,995
Qualifying AT1 capital (including minority interests) issued by subsidiaries
622
691
687
Qualifying T2 capital (including minority interests) issued by subsidiaries
2,516
3,396
3,984
Total own funds and eligible liabilities, including eligible Barclays Bank PLC instruments
105,115
107,470
96,666
Total RWAs
1
310,727
318,987
295,131
1
CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR as amended by CRR II applicable as at the reporting date. This
includes IFRS 9 transitional arrangements and the grandfathering of CRR and CRR II non-compliant capital instruments.
2
Includes other AT1 capital regulatory adjustments and deductions of £80m (December 2019: £130m), and other T2 credit risk adjustments and deductions of £124m
(December 2019: £234m).
Condensed Consolidated Financial Statements
39
Condensed consolidated income statement
Nine months
ended
Nine months
ended
30.09.20
30.09.19
£m
£m
Total income
16,825
16,331
Credit impairment charges
(4,346)
(1,389)
Net operating income
12,479
14,942
Operating expenses excluding litigation and conduct
(9,954)
(10,051)
Litigation and conduct
(106)
(1,682)
Operating expenses
(10,060)
(11,733)
Other net income
-
51
Profit before tax
2,419
3,260
Tax charge
(441)
(814)
Profit after tax
1,978
2,446
Attributable to:
Equity holders of the parent
1,306
1,780
Other equity instrument holders
631
628
Total equity holders of the parent
1,937
2,408
Non-controlling interests
41
38
Profit after tax
1,978
2,446
Earnings per share
p
p
Basic earnings per ordinary share
7.6
10.4
Condensed Consolidated Financial Statements
40
Condensed consolidated balance sheet
As at
As at
30.09.20
31.12.19
Assets
£m
£m
Cash and balances at central banks
240,973
150,258
Cash collateral and settlement balances
125,413
83,256
Loans and advances at amortised cost
344,410
339,115
Reverse repurchase agreements and other similar secured lending
15,436
3,379
Trading portfolio assets
122,741
114,195
Financial assets at fair value through the income statement
182,760
133,086
Derivative financial instruments
296,551
229,236
Financial assets at fair value through other comprehensive income
71,289
65,750
Investments in associates and joint ventures
741
721
Goodwill and intangible assets
8,163
8,119
Current tax assets
630
412
Deferred tax assets
2,929
3,290
Other assets
9,633
9,412
Total assets
1,421,669
1,140,229
Liabilities
Deposits at amortised cost
494,593
415,787
Cash collateral and settlement balances
112,532
67,341
Repurchase agreements and other similar secured borrowing
20,972
14,517
Debt securities in issue
98,688
76,369
Subordinated liabilities
20,259
18,156
Trading portfolio liabilities
51,075
36,916
Financial liabilities designated at fair value
249,322
204,326
Derivative financial instruments
293,446
229,204
Current tax liabilities
454
313
Deferred tax liabilities
-
23
Other liabilities
11,271
11,617
Total liabilities
1,352,612
1,074,569
Equity
Called up share capital and share premium
4,630
4,594
Other reserves
5,349
4,760
Retained earnings
45,825
44,204
Shareholders' equity attributable to ordinary shareholders of the parent
55,804
53,558
Other equity instruments
12,012
10,871
Total equity excluding non-controlling interests
67,816
64,429
Non-controlling interests
1,241
1,231
Total equity
69,057
65,660
Total liabilities and equity
1,421,669
1,140,229
Condensed Consolidated Financial Statements
41
Condensed consolidated statement of changes in equity
Called up
share capital
and share
premium
Other equity
instruments
Other
reserves
Retained
earnings
Total
Non-
controlling
interests
Total
equity
Nine months ended 30.09.20
£m
£m
£m
£m
£m
£m
£m
Balance as at 1 January 2020
4,594
10,871
4,760
44,204
64,429
1,231
65,660
Profit after tax
-
631
-
1,306
1,937
41
1,978
Retirement benefit remeasurements
-
-
-
322
322
-
322
Other
-
-
604
(7)
597
-
597
Total comprehensive income for the period
-
631
604
1,621
2,856
41
2,897
Equity settled share schemes
36
-
-
338
374
-
374
Issue and exchange of other equity
instruments
-
1,142
-
-
1,142
-
1,142
Other equity instruments coupons paid
-
(631)
-
-
(631)
-
(631)
Vesting of shares under employee share
schemes
-
-
(15)
(339)
(354)
-
(354)
Dividends paid
-
-
-
-
-
(40)
(40)
Other movements
-
(1)
-
1
-
9
9
Balance as at 30 September 2020
4,630
12,012
5,349
45,825
67,816
1,241
69,057
Three months ended 30.09.20
Balance as at 1 July 2020
4,620
10,871
6,996
45,817
68,304
1,237
69,541
Profit after tax
-
204
-
611
815
4
819
Retirement benefit remeasurements
-
-
-
(323)
(323)
-
(323)
Other
-
-
(1,646)
(1)
(1,647)
-
(1,647)
Total comprehensive income for the period
-
204
(1,646)
287
(1,155)
4
(1,151)
Equity settled share schemes
10
-
-
(265)
(255)
-
(255)
Issue and exchange of other equity
instruments
-
1,142
-
-
1,142
-
1,142
Other equity instruments coupons paid
-
(204)
-
-
(204)
-
(204)
Vesting of shares under employee share
schemes
-
-
(1)
(12)
(13)
-
(13)
Dividends paid
-
-
-
-
-
(3)
(3)
Other movements
-
(1)
-
(2)
(3)
3
-
Balance as at 30 September 2020
4,630
12,012
5,349
45,825
67,816
1,241
69,057
As at
As at
30.09.20
31.12.19
Other reserves
£m
£m
Currency translation reserve
3,848
3,344
Fair value through other comprehensive income reserve
(392)
(187)
Cash flow hedging reserve
1,745
1,002
Own credit reserve
(811)
(373)
Other reserves and treasury shares
959
974
Total
5,349
4,760
Appendix: Non-IFRS Performance Measures
42
The Group’s management believes that the non-IFRS performance measures included in this document provide valuable
information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing
the businesses’ performance between financial periods, and provide more detail concerning the elements of performance which
the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also
reflect an important aspect of the way in which operating targets are defined and performance is monitored by management.
However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should
consider the IFRS measures as well.
Non-IFRS performance measures glossary
Measure
Definition
Loan: deposit ratio
Loans and advances at amortised cost divided by deposits at amortised cost.
Period end allocated
tangible equity
Allocated tangible equity is calculated as 13.0% (2019: 13.0%) of RWAs for each business, adjusted
for capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group
uses for capital planning purposes. Head Office allocated tangible equity represent s the difference
between the Group’s tangible shareholders’ equity and the amounts allocated to businesses.
Average tangible
shareholders’ equity
Calculated as the average of the previous month’s period end tangible equity and the current
month’s period end tangible equity. The average tangible shareholders’ equity for the period is the
average of the monthly averages within that period.
Average allocated
tangible equity
Calculated as the average of the previous month’s period end allocated tangible equity and the
current month’s period end allocated tangible equity. The average allocated tangible equity for the
period is the average of the monthly averages within that period.
Return on average
tangible shareholders’
equity
Annualised profit after tax attributable to ordinary equity holders of the parent, as a proportion of
average shareholders’ equity excluding non-controlling interests and other equity instruments
adjusted for the deduction of intangible assets and goodwill. The components of the calculation have
been included on page 43.
Return on average
allocated tangible equity
Annualised profit after tax attributable to ordinary equity holders of the parent, as a proportion of
average allocated tangible equity. The components of the calculation have been included on page 43 .
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 25.
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 24.
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 51.
Performance measures
excluding litigation and
conduct
Calculated by excluding litigation and conduct charges from performance measures. The components
of the calculations have been included on pages 44 to 51.
Pre -provision profits
Calculated by excluding credit impairment charges from profit before tax. The components of the
calculation have been included on pages 44 to 46.
Pre -provision profits
excluding litigation and
conduct
Calculated by excluding credit impairment charges, and litigation and conduct charges from profit
before tax. The components of the calculation have been included on pages 44 to 46.
Appendix: Non-IFRS Performance Measures
43
Returns
Return on average tangible equity is calculated as profit after tax attributable to ordinary equity holders of the parent as a
proportion of average tangible equity, excluding non-controlling and other equity interests for businesses. Allocated tangible equity
has been calculated as 13.0% (2019: 13.0%) of RWAs for each business, adjusted for capital deductions, excluding goodwill and
intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office average allocated tan gible
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
Nine months ended 30.09.20
£m
£bn
%
Barclays UK
165
10.2
2.2
2,141
27.2
10.5
(362)
4.6
(10.6)
Barclays International
1,779
31.8
7.5
Head Office
(638)
6.5
n/m
Barclays Group
1,306
48.5
3.6
Nine months ended 30.09.19
Barclays UK
(157)
10.4
(2.0)
1,787
25.9
9.2
632
5.3
15.8
Barclays International
2,419
31.2
10.3
Head Office
(482)
5.0
n/m
Barclays Group
1,780
46.6
5.1
Appendix: Non-IFRS Performance Measures
44
Performance measures excluding litigation and conduct
Nine months ended 30.09.20
Barclays UK
Corporate and
Investment
Bank
Consumer,
Cards and
Payments
Barclays
International
Head Office
Barclays
Group
Cost: income ratio
£m
£m
£m
£m
£m
£m
Total operating expenses
(3,172)
(5,092)
(1,579)
(6,671)
(217)
(10,060)
Impact of litigation and conduct
36
6
33
39
31
106
Operating expenses
(3,136)
(5,086)
(1,546)
(6,632)
(186)
(9,954)
Total income
4,721
9,838
2,597
12,435
(331)
16,825
Cost: income ratio excluding litigation and
conduct
66%
52%
60%
53%
n/m
59%
Profit before tax
Profit/(loss) before tax
264
3,243
(449)
2,794
(639)
2,419
Impact of litigation and conduct
36
6
33
39
31
106
Profit/(loss) before tax excluding litigation and
conduct
300
3,249
(416)
2,833
(608)
2,525
Profit attributable to ordinary equity holders of
the parent
Attributable profit/(loss)
165
2,141
(362)
1,779
(638)
1,306
Post -tax impact of litigation and conduct
25
4
25
29
18
72
Profit/(loss) attributable to ordinary equity
holders of the parent excluding litigation and
conduct
190
2,145
(337)
1,808
(620)
1,378
Return on average tangible shareholders'
equity
£bn
£bn
£bn
£bn
£bn
£bn
Average shareholders' equity
13.7
27.2
5.2
32.4
10.5
56.6
Average goodwill and intangibles
(3.5)
-
(0.6)
(0.6)
(4.0)
(8.1)
Average tangible shareholders' equity
10.2
27.2
4.6
31.8
6.5
48.5
Return on average tangible shareholders'
equity excluding litigation and conduct
2.5%
10.5%
(9.9%)
7.6%
n/m
3.8%
Basic earnings per ordinary share
Basic weighted average number of shares (m)
17,298
Basic earnings per ordinary share excluding
litigation and conduct
8.0p
Pre -provision profits
Profit before tax excluding credit impairment
charges and litigation and conduct
£m
Profit before tax
2,419
Impact of credit impairment charges
4,346
Profit before tax excluding credit impairment
charges
6,765
Impact of litigation and conduct
106
Profit before tax excluding credit impairment
charges and litigation and conduct
6,871
Appendix: Non-IFRS Performance Measures
45
Nine months ended 30.09.19
Barclays UK
Corporate and
Investment
Bank
Consumer,
Cards and
Payments
Barclays
International
Head Office
Barclays
Group
Cost: income ratio
£m
£m
£m
£m
£m
£m
Total operating expenses
(4,497)
(5,221)
(1,732)
(6,953)
(283)
(11,733)
Impact of litigation and conduct
1,524
30
-
30
128
1,682
Operating expenses
(2,973)
(5,191)
(1,732)
(6,923)
(155)
(10,051)
Total income
5,394
7,917
3,306
11,223
(286)
16,331
Cost: income ratio excluding litigation and
conduct
55%
66%
52%
62%
n/m
62%
Profit before tax
Profit/(loss) before tax
375
2,596
882
3,478
(593)
3,260
Impact of litigation and conduct
1,524
30
-
30
128
1,682
Profit/(loss) before tax excluding litigation and
conduct
1,899
2,626
882
3,508
(465)
4,942
Profit attributable to ordinary equity holders of
the parent
Attributable (loss)/profit
(157)
1,787
632
2,419
(482)
1,780
Post -tax impact of litigation and conduct
1,489
26
-
26
96
1,611
Profit/(loss) attributable to ordinary equity
holders of the parent excluding litigation and
conduct
1,332
1,813
632
2,445
(386)
3,391
Return on average tangible shareholders'
equity
£bn
£bn
£bn
£bn
£bn
£bn
Average shareholders' equity
13.9
25.9
6.4
32.3
8.4
54.6
Average goodwill and intangibles
(3.5)
-
(1.1)
(1.1)
(3.4)
(8.0)
Average tangible shareholders' equity
10.4
25.9
5.3
31.2
5.0
46.6
Return on average tangible shareholders'
equity excluding litigation and conduct
17.2%
9.3%
15.8%
10.4%
n/m
9.7%
Basic earnings per ordinary share
Basic weighted average number of shares (m)
17,192
Basic earnings per ordinary share excluding
litigation and conduct
19.7p
Pre -provision profits
Profit before tax excluding credit impairment
charges and litigation and conduct
£m
Profit before tax
3,260
Impact of credit impairment charges
1,389
Profit before tax excluding credit impairment
charges
4,649
Impact of litigation and conduct
1,682
Profit before tax excluding credit impairment
charges and litigation and conduct
6,331
Appendix: Non-IFRS Performance Measures
46
Barclays Group
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
Cost: income ratio
£m
£m
£m
£m
£m
£m
£m
£m
Total operating expenses
(3,467)
(3,330)
(3,263)
(3,701)
(4,861)
(3,554)
(3,318)
(4,093)
Impact of litigation and conduct
76
20
10
167
1,568
53
61
60
Operating expenses
(3,391)
(3,310)
(3,253)
(3,534)
(3,293)
(3,501)
(3,257)
(4,033)
Total income
5,204
5,338
6,283
5,301
5,541
5,538
5,252
5,073
Cost: income ratio excluding litigation and
conduct
65%
62%
52%
67%
59%
63%
62%
79%
Profit before tax
Profit before tax
1,147
359
913
1,097
246
1,531
1,483
374
Impact of litigation and conduct
76
20
10
167
1,568
53
61
60
Profit before tax excluding litigation and
conduct
1,223
379
923
1,264
1,814
1,584
1,544
434
Profit attributable to ordinary equity holders
of the parent
Attributable profit/(loss)
611
90
605
681
(292)
1,034
1,038
(14)
Post -tax impact of litigation and conduct
57
16
(1)
122
1,525
40
46
62
Profit attributable to ordinary equity holders
of the parent excluding litigation and conduct
668
106
604
803
1,233
1,074
1,084
48
Return on average tangible shareholders'
equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average shareholders' equity
56.4
58.4
55.2
54.5
56.4
54.0
53.2
52.2
Average goodwill and intangibles
(8.1)
(8.2)
(8.2)
(8.1)
(8.0)
(7.8)
(8.0)
(7.9)
Average tangible shareholders' equity
48.3
50.2
47.0
46.4
48.4
46.2
45.2
44.3
Return on average tangible shareholders'
equity excluding litigation and conduct
5.5%
0.8%
5.1%
6.9%
10.2%
9.3%
9.6%
0.4%
Basic earnings per ordinary share
Basic weighted average number of shares (m)
17,298
17,294
17,278
17,200
17,192
17,178
17,111
17,075
Basic earnings per ordinary share excluding
litigation and conduct
3.9p
0.6p
3.5p
4.7p
7.2p
6.3p
6.3p
0.3p
Pre -provision profits
Profit before tax excluding credit impairment
charges and litigation and conduct
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
1,147
359
913
1,097
246
1,531
1,483
374
Impact of credit impairment charges
608
1,623
2,115
523
461
480
448
643
Profit before tax excluding credit impairment
charges
1,755
1,982
3,028
1,620
707
2,011
1,931
1,017
Impact of litigation and conduct
76
20
10
167
1,568
53
61
60
Profit before tax excluding credit impairment
charges and litigation and conduct
1,831
2,002
3,038
1,787
2,275
2,064
1,992
1,077
Appendix: Non-IFRS Performance Measures
47
Barclays UK
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
Cost: income ratio
£m
£m
£m
£m
£m
£m
£m
£m
Total operating expenses
(1,120)
(1,024)
(1,028)
(1,122)
(2,432)
(1,063)
(1,002)
(1,175)
Impact of litigation and conduct
25
6
5
58
1,480
41
3
15
Operating expenses
(1,095)
(1,018)
(1,023)
(1,064)
(952)
(1,022)
(999)
(1,160)
Total income
1,550
1,467
1,704
1,959
1,846
1,771
1,777
1,863
Cost: income ratio excluding litigation and
conduct
71%
69%
60%
54%
52%
58%
56%
62%
Profit before tax
Profit/(loss) before tax
196
(127)
195
647
(687)
477
585
390
Impact of litigation and conduct
25
6
5
58
1,480
41
3
15
Profit/(loss) before tax excluding litigation and
conduct
221
(121)
200
705
793
518
588
405
Profit attributable to ordinary equity holders
of the parent
Attributable profit/(loss)
113
(123)
175
438
(907)
328
422
241
Post -tax impact of litigation and conduct
17
5
3
43
1,457
30
2
12
Profit/(loss) attributable to ordinary equity
holders of the parent excluding litigation and
conduct
130
(118)
178
481
550
358
424
253
Return on average allocated tangible equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average allocated equity
13.7
13.9
13.7
13.8
13.9
13.8
13.9
13.6
Average goodwill and intangibles
(3.6)
(3.6)
(3.6)
(3.5)
(3.5)
(3.5)
(3.5)
(3.5)
Average allocated tangible equity
10.1
10.3
10.1
10.3
10.4
10.3
10.4
10.1
Return on average allocated tangible equity
excluding litigation and conduct
5.2%
(4.6%)
7.0%
18.7%
21.2%
13.9%
16.4%
10.1%
Appendix: Non-IFRS Performance Measures
48
Barclays International
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
Cost: income ratio
£m
£m
£m
£m
£m
£m
£m
£m
Total operating expenses
(2,255)
(2,197)
(2,219)
(2,500)
(2,282)
(2,446)
(2,225)
(2,684)
Impact of litigation and conduct
28
11
-
86
-
11
19
33
Operating expenses
(2,227)
(2,186)
(2,219)
(2,414)
(2,282)
(2,435)
(2,206)
(2,651)
Total income
3,781
4,010
4,644
3,452
3,750
3,903
3,570
3,221
Cost: income ratio excluding litigation and
conduct
59%
55%
48%
70%
61%
62%
62%
82%
Profit before tax
Profit before tax
1,165
807
822
640
1,137
1,223
1,118
215
Impact of litigation and conduct
28
11
-
86
-
11
19
33
Profit before tax excluding litigation and conduct
1,193
818
822
726
1,137
1,234
1,137
248
Profit attributable to ordinary equity holders of
the parent
Attributable profit/(loss)
782
468
529
397
799
832
788
(21)
Post -tax impact of litigation and conduct
21
8
-
64
2
8
16
34
Profit attributable to ordinary equity holders of
the parent excluding litigation and conduct
803
476
529
461
801
840
804
13
Return on average allocated tangible equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average allocated equity
31.2
34.2
31.9
31.9
33.3
32.1
31.6
32.4
Average goodwill and intangibles
(0.6)
(0.7)
(0.7)
(1.0)
(1.1)
(1.0)
(1.1)
(1.1)
Average allocated tangible equity
30.6
33.5
31.2
30.9
32.2
31.1
30.5
31.3
Return on average allocated tangible equity
excluding litigation and conduct
10.5%
5.7%
6.8%
6.0%
10.0%
10.8%
10.6%
0.2%
Appendix: Non-IFRS Performance Measures
49
Corporate and Investment Bank
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
Cost: income ratio
£m
£m
£m
£m
£m
£m
£m
£m
Total operating expenses
(1,719)
(1,683)
(1,690)
(1,926)
(1,716)
(1,867)
(1,638)
(2,046)
Impact of litigation and conduct
3
3
-
79
4
7
19
23
Operating expenses
(1,716)
(1,680)
(1,690)
(1,847)
(1,712)
(1,860)
(1,619)
(2,023)
Total income
2,905
3,316
3,617
2,314
2,617
2,795
2,505
2,151
Cost: income ratio excluding litigation and
conduct
59%
51%
47%
80%
65%
67%
65%
94%
Profit before tax
Profit before tax
1,000
1,040
1,203
359
882
887
827
85
Impact of litigation and conduct
3
3
-
79
4
7
19
23
Profit before tax excluding litigation and conduct
1,003
1,043
1,203
438
886
894
846
108
Profit attributable to ordinary equity holders of
the parent
Attributable profit/(loss)
627
694
820
193
609
596
582
(84)
Post -tax impact of litigation and conduct
2
2
-
58
5
5
16
27
Profit/(loss) attributable to ordinary equity
holders of the parent excluding litigation and
conduct
629
696
820
251
614
601
598
(57)
Return on average allocated tangible equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average allocated equity
26.4
29.1
26.2
25.9
26.9
25.8
25.2
26.0
Average goodwill and intangibles
-
(0.1)
-
(0.1)
-
-
(0.1)
-
Average allocated tangible equity
26.4
29.0
26.2
25.8
26.9
25.8
25.1
26.0
Return on average allocated tangible equity
excluding litigation and conduct
9.5%
9.6%
12.5%
3.9%
9.2%
9.3%
9.5%
(0.9%)
Appendix: Non-IFRS Performance Measures
50
Consumer, Cards and Payments
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
Cost: income ratio
£m
£m
£m
£m
£m
£m
£m
£m
Total operating expenses
(536)
(514)
(529)
(574)
(566)
(579)
(587)
(638)
Impact of litigation and conduct
25
8
-
7
(4)
4
-
10
Operating expenses
(511)
(506)
(529)
(567)
(570)
(575)
(587)
(628)
Total income
876
694
1,027
1,138
1,133
1,108
1,065
1,070
Cost: income ratio excluding litigation and
conduct
58%
73%
52%
50%
50%
52%
55%
59%
Profit before tax
Profit/(loss) before tax
165
(233)
(381)
281
255
336
291
130
Impact of litigation and conduct
25
8
-
7
(4)
4
-
10
Profit/(loss) before tax excluding litigation and
conduct
190
(225)
(381)
288
251
340
291
140
Profit attributable to ordinary equity holders of
the parent
Attributable profit/(loss)
155
(226)
(291)
204
190
236
206
63
Post -tax impact of litigation and conduct
19
6
-
6
(3)
3
-
7
Profit/(loss) attributable to ordinary equity
holders of the parent excluding litigation and
conduct
174
(220)
(291)
210
187
239
206
70
Return on average allocated tangible equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average allocated equity
4.8
5.1
5.7
6.0
6.4
6.3
6.4
6.4
Average goodwill and intangibles
(0.6)
(0.6)
(0.7)
(0.9)
(1.1)
(1.0)
(1.0)
(1.1)
Average allocated tangible equity
4.2
4.5
5.0
5.1
5.3
5.3
5.4
5.3
Return on average allocated tangible equity
excluding litigation and conduct
16.5%
(19.6%)
(23.5%)
16.3%
14.0%
18.0%
15.4%
5.4%
Appendix: Non-IFRS Performance Measures
51
Head Office
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
Profit before tax
£m
£m
£m
£m
£m
£m
£m
£m
Loss before tax
(214)
(321)
(104)
(190)
(204)
(169)
(220)
(231)
Impact of litigation and conduct
23
3
5
23
88
1
39
12
Loss before tax excluding litigation and conduct
(191)
(318)
(99)
(167)
(116)
(168)
(181)
(219)
Profit attributable to ordinary equity holders of
the parent
Attributable loss
(284)
(255)
(99)
(154)
(184)
(126)
(172)
(234)
Post -tax impact of litigation and conduct
19
3
(4)
15
66
2
28
16
Attributable loss excluding litigation and conduct
(265)
(252)
(103)
(139)
(118)
(124)
(144)
(218)
Tangible net asset value per share
As at
As at
As at
30.09.20
31.12.19
30.09.19
£m
£m
£m
Total equity excluding non-controlling interests
67,816
64,429
66,197
Other equity instruments
(12,012)
(10,871)
(10,860)
Shareholders' equity attributable to ordinary shareholders of the parent
55,804
53,558
55,337
Goodwill and intangibles
(8,163)
(8,119)
(8,068)
Tangible shareholders' equity attributable to ordinary shareholders of the parent
47,641
45,439
47,269
m
m
m
Shares in issue
17,353
17,322
17,269
p
p
p
Net asset value per share
Tangible net asset value per share
Appendix: Non-IFRS Performance Measures
52
Profit/(loss) attributable to ordinary
equity holders of the parent
Q320
YTD
Q319
YTD
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Barclays UK
165
(157)
113
(123)
175
438
(907)
328
422
241
Corporate and Investment Bank
2,141
1,787
627
694
820
193
609
596
582
(84)
Consumer, Cards and Payments
(362)
632
155
(226)
(291)
204
190
236
206
63
Barclays International
1,779
2,419
782
468
529
397
799
832
788
(21)
Head Office
(638)
(482)
(284)
(255)
(99)
(154)
(184)
(126)
(172)
(234)
Barclays Group
1,306
1,780
611
90
605
681
(292)
1,034
1,038
(14)
Average equity
Q320
YTD
Q319
YTD
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Barclays UK
13.7
13.9
13.7
13.9
13.7
13.8
13.9
13.8
13.9
13.6
Corporate and Investment Bank
27.2
25.9
26.4
29.1
26.2
25.9
26.9
25.8
25.2
26.0
Consumer, Cards and Payments
5.2
6.4
4.8
5.1
5.7
6.0
6.4
6.3
6.4
6.4
Barclays International
32.4
32.3
31.2
34.2
31.9
31.9
33.3
32.1
31.6
32.4
Head Office
10.5
8.4
11.5
10.3
9.6
8.8
9.2
8.1
7.7
6.2
Barclays Group
56.6
54.6
56.4
58.4
55.2
54.5
56.4
54.0
53.2
52.2
Return on average equity
Q320
YTD
Q319
YTD
Q320
Q220
Q120
Q419
Q319
Q219
Q119
Q418
%
%
%
%
%
%
%
%
%
%
Barclays UK
1.6%
(1.5%)
3.3%
(3.6%)
5.1%
12.7%
(26.1%)
9.5%
12.2%
7.1%
Corporate and Investment Bank
10.5%
9.2%
9.5%
9.5%
12.5%
3.0%
9.1%
9.2%
9.3%
(1.3%)
Consumer, Cards and Payments
(9.3%)
13.2%
12.9%
(17.7%)
(20.7%)
13.6%
11.8%
14.9%
12.8%
3.9%
Barclays International
7.3%
10.0%
10.0%
5.5%
6.6%
5.0%
9.6%
10.3%
10.0%
(0.3%)
Head Office
n/m
n/m
n/m
n/m
n/m
n/m
n/m
n/m
n/m
n/m
Barclays Group
3.1%
4.3%
4.3%
0.6%
4.4%
5.0%
(2.1%)
7.6%
7.8%
(0.1%)
Shareholder Information
53
Results timetable
1
Date
2020 Full Year Results and Annual Report
25 February 2021
% Change
3
Exchange rates
2
30.09.20
30.06.20
30.09.19
30.06.20
30.09.19
Period end - USD/GBP
1.29
1.24
1.23
4%
5%
YTD average - USD/GBP
1.27
1.26
1.27
1%
-
3 month average - USD/GBP
1.29
1.24
1.23
4%
5%
Period end - EUR/GBP
1.10
1.10
1.13
-
(3%)
YTD average - EUR/GBP
1.13
1.14
1.13
(1%)
-
3 month average - EUR/GBP
1.11
1.13
1.11
(2%)
-
Share price data
Barclays PLC (p)
97.61
114.42
150.40
Barclays PLC number of shares (m)
17,353
17,345
17,269
For further information please contact
Investor relations
Media relations
Chris Manners +44 (0) 20 7773 2136
Tom Hoskin +44 (0) 20 7116 4755
More information on Barclays can be found on our website: home.barclays.
Registered office
1 Churchill Place, London, E14 5HP, United Kingdom. Tel: +44 (0) 20 7116 1000. Company number: 48839.
Registrar
Equiniti, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom.
Tel: 0371 384 2055
4
American Depositary Receipts (ADRs)
J.P.Morgan Chase Bank, N.A
StockTransfer@equiniti.com
Tel: +1 800 990 1135 (toll free in US and Canada), +1 651 453 2128 (outside the US and Canada) or +1 866 700 1652 (for the hearing
impaired).
J.P.Morgan Chase Bank N.A., Shareowner Services, PO Box 64504, St Paul, MN 55164-0504, USA.
Delivery of ADR certificates and overnight mail
J.P.Morgan Chase Bank N.A., Shareowner Services, 1110 Centre Pointe Curve, Suite 101, Mendota Heights, MN 55120, USA.
1
Note that these dates are provisional and subject to change.
2
The average rates shown above are derived from daily spot rates during the year.
3
The change is the impact to GBP reported information.
4
Lines open 8.30am to 5.30pm (UK time), Monday to Friday, excluding UK public holidays in England and Wales.
Glossary of Terms
54
‘A -IRB’ / ‘Advanced -Internal Ratings Based’
‘Acceptances and endorsements’
Barclays Group expects most acceptances to be presented, but reimbursement by the customer is normally immediate.
Endorsements are residual liabilities of the Barclays Group in respect of bills of exchange which have been paid and subsequently
rediscounted.
‘Additional Tier 1 (AT1) capital’
premium.
‘Additional Tier 1 (AT1) securities’
‘Advanced Measurement Approach (AMA)’
required capital for operational risk. Banks can only use this approach subject to approval from their local regulators.
‘Agencies’
‘Agency Mortgage -Backed Securities’
‘All price risk (APR)’
An estimate of all the material market risks, including rating migration and defaul t for the correlation trading
portfolio.
‘American Depository Receipts (ADR)’
A negotiable certificate that represents the ownership of shares in a non-US company (for
example Barclays) trading in US financial markets.
‘Americas’
‘Annual Earnings at Risk (AEaR)’
A measure of the potential change in Net Interest Income (NII) due to an interest rate movement
over a one-year period.
‘Annualised cumulative weighted average lifetime PD’
The probability of default over the remaining life of the asset, expressed as
an annual rate, reflecting a range of possible economic scenarios.
‘Application scorecards’
Algorithm based decision tools used to aid business decisions and manage credit risk based on available
customer data at the point of application for a product.
‘Arrears’
loan is unpaid or overdue. Such customers are also said to be in a state of delinquency. When a customer is in arrears, their entire
outstanding balance is said to be delinquent, meaning that delinquent balances are the total outstanding loans on which payments
are overdue.
‘Asia’
‘Asset Backed Commercial Paper’
entities for funding purposes.
‘Asset Backed Securities (ABS)’
can comprise any assets which attract a set of associated cash flows but are commonly pools of residential or commercial
mortgages and, in the case of Collateralised Debt Obligations (CDOs), the referenced pool may be ABS or other classes of assets.
‘Attributable profit’
capital securities classified as equity.
‘Average allocated tangible equity’
Calculated as the average of the previous month’s period end allocated tangible equity and the
current month’s period end allocated tangible equity. The average allocated tangible equity for the period is the average of the
monthly averages within that period.
‘Average tangible shareholders’ equity’
Calculated as the average of the previous month’s period end tangible equity and the
current month’s period end tangible equity. The average tangible shareholders’ equity for the period is the average of the monthly
averages within that period.
‘Average UK leverage ratio’
As per the PRA rulebook, is calculated as the average capital measure based on the last day of each
month in the quarter divided by the average exposure measure for the quarter, where the average exposure is based on each day
in the quarter.
‘Back testing’
Includes a number of techniques that assess the continued statistical validity of a model by simulating how the model
would have predicted recent experience.
‘Barclays Africa’ or ‘Absa’ or ‘Absa Group Limited’
Barclays Africa Group Limited (now Absa Group Limited), which was previously a
subsidiary of the Barclays Group. Following a sell down of shares resulting in a loss of control, the Barclays Group’s shareholding in
Absa Group Limited is now classified as a financial asset at fair value through other comprehensive income.
‘Balance weighted Loan to Value (LTV) ratio’
calculating marked to market LTVs derived by calculating individual LTVs at account level and weighting it by the balances to arrive
Glossary of Terms
55
at the average position. Balance weighted loan to value is calculated using the following formula: LTV = ((loan balance 1 x MTM
LTV% for loan 1) + (loan balance 2 x MTM LTV% for loan 2) + ...) / total outstandings in portfolio.
‘Barclaycard’
consumer lending, merchant acquiring, commercial cards and point of sale finance. Barclaycard has scaled operations in the UK, US,
Germany and Scandinavia.
‘Barclaycard Consumer UK’
‘Barclays’ or ’Barclays Group’
‘Barclays Bank Group’
‘Barclays Bank UK Group’
‘Barclays Operating businesses’
The core Barclays businesses operated by Barclays UK (which include the UK Personal banking; UK
business banking and the Barclaycard consumer UK businesses) and Barclays Internati onal (the large UK Corporate business; the
international Corporate and Private Bank businesses; the Investment Bank; the international Barclaycard business; and payments).
‘Barclays Execution Services’ or ‘BX’ or ‘BSerL’ or ‘Group Service Company’
Barclays Execution Services Limited, the Group services
company set up to provide services to Barclays UK and Barclays International to deliver operational continuity.
‘Barclays International’
The segment of Barclays held by Barclays Bank PLC. The division includes the large UK Corporate business;
the international Corporate and Private Bank businesses; the Investment Bank; the international Barclaycard business; and
payments.
‘Barclays UK’
The segment of Barclays held by Barclays Bank UK PLC. The division includes the UK Personal banking; UK business
banking and the Barclaycard consumer UK businesses. Following a transfer from Barclays International in Q2 2020, this also
includes Barclays Partner Finance (BPF).
‘Basel 3’
Basel 3 is a set of measures developed by the Basel Committee on Banking Supervision aiming to strengthen the regulation,
supervision and risk management of banks.
‘Basel Committee of Banking Supervision (BCBS)’ or ‘The Basel Committee’
matters which develops global supervisory standards for the banking industry. Its 45 members are officials from central banks or
prudential supervisors from 28 jurisdictions.
‘Basic Indicator Approach (BIA)’
Under the BIA, banks are required to hold regulatory capital for operational risk equal to 15% of the
annual average, calculated over a rolling three-year period, of the relevant income indicator for the bank as whole.
‘Basis point(s)’ / ‘bp(s)’
interest rates, yields on securities and for other purposes.
‘Basis risk’
imperfectly correlated, especially under stressed market conditions.
‘Behavioural scorecards’
Algorithm based decision tools used to aid business decisions and manage credit risk based on existing
customer data derived from account usage.
‘Book quality’
In the context of the Capital Risk section, changes in RWAs caused by factors such as underlying customer behaviour
or demographics leading to changes in risk profile.
‘Book size’
In the context of the Capital Risk section
,
repayments .
‘Bounce Back Loan Scheme (BBLS)’
A government (British Business Bank) backed loan scheme which allows small and medium- sized
businesses to borrow between £2,000 and £50,000. The UK government guarantees 100% of the loan and pays the first 12 months
of interest on behalf of the borrowers, subject to terms and conditions.
‘Business Banking’
Offers specialist advice, products and services to small and medium enterprises in the UK.
‘Business Lending’
Business Lending in Barclays UK that primarily relates to small and medium enterprises typically with a turnover
up to £16m.
‘Business scenario stresses’
exposures of the Investment Bank.
‘Buy to let mortgage’
A mortgage where the intention of the customer (investor) was to let the property at origination.
‘Capital Conservation Buffer (CCB)’
A capital buffer of 2.5% of a bank’s total exposures that needs to be met with an additional
amount of Common Equity Tier 1 capital above the 4.5% minimum requirement for Common Equity Tier 1 set out in CRR. Its
objective is to conserve a bank’s capital by ensuring that banks build up surplus capital outside periods of stress which can be
drawn down if losses are incurred.
Glossary of Terms
56
‘Capital ratios’
‘Capital Requirements Directive (CRD)’
Directive 2013/36/EU, a component of the CRD IV package which accompanies the Capital
Requirements Regulation and sets out macroprudential standards including the countercyclical capital buffer and capital buffers for
systemically important institutions. Directive (EU) 2019/878, published as part of the EU Risk Reduction Measure package amends
CRD. These amendments entered into force from 27 June 2019, with EU member states required to adopt the measures within the
Directive by 28 December 2020.
‘Capital Requirements Regulation (CRR)’
Regulation (EU) No 575/2013, a component of the CRD IV package which accompanies the
Capital Requirements Directive and sets out detailed rules for capital eligibility, the calculation of RWAs, the measurement of
leverage, the management of large exposures and minimum sta ndards for liquidity. Between 27 June 2019 and 28 June 2023, this
regulation will be amended in line with the requirements of amending Regulation (EU) 2019/876 (CRR II).
‘Capital Requirements Regulation II (CRR II)’
Regulation (EU) 2019/876, amending Regulation (EU) No 575/2013 (CRR). This is a
component of the EU Risk Reduction Measure package. The requirements set out in CRR II will be introduced between 27 June
2019 and 28 June 2023.
‘Capital requirements on the underlying exposures (KIRB)’
An approach available to banks when calculating RWAs for securitisation
exposures. This is based upon the RWA amounts that would be calculated under the IRB approach for the underlying pool of
securitised exposures in the program, had such exposures not been securitised.
‘Capital resources’
CRD. Referred to as ‘own funds’ within EU regulatory texts.
‘Capital risk’
activities and to meet its regulatory capital requirements under normal operating environments or stressed conditions (both actual
and as defined for internal planning or regulatory testing purposes). This includes the risk from the Barclays Group’s pension plans.
‘Central Counterparty’ or ‘Central Clearing Counterparties (CCPs)’
financial transaction, such as a derivative contract or repurchase agreement (repo). Where a central counterparty is used, a single
bi-lateral contract between the buyer and seller is replaced with two contracts , one between the buyer and the CCP and one
between the CCP and the seller. The use of CCPs allows for greater oversight and improved credit risk mitigation in over -the-
counter (OTC) markets.
‘Charge -off’
the recovery of the full balance. This is normally when six payments are in arrears.
‘Client Assets’
Assets managed or administered by Barclays Group on behalf of clients including assets under management (AUM),
custody assets, assets under administration and client deposits.
‘CLOs and Other insured assets’
assets wrapped with Credit Support Annex (CSA) protection.
‘Collateralised Debt Obligation (CDO)’
above) and/or certain other related assets purchased by the issuer. CDOs may feature exposure to sub-prime mortgage assets
through the underlying assets.
‘Collateralised Loan Obligation (CLO)’
made to different classes of owners (in tranches).
‘Collateralised Mortgage Obligation (CMO)’
the mortgages and passes them on to investors of the security.
‘Combined Buffer Requirement’
In the context of the CRD capital obligations, the combined requirements of the Capital
Conservation Buffer, the GSII Buffer, the OSII buffer, the Systemic Risk buffer and an institution specific counter -cyclical buffer.
‘Commercial paper (CP)’
‘Commercia l real estate (CRE)’
Commercial real estate includes office buildings, industrial property, medical centres, hotels, retail
stores, shopping centres, farm land, multifamily housing buildings, warehouses, garages, and industrial properties and other similar
properties. Commercial real estate loans are loans backed by a package of commercial real estate. Note: for the purposes of the
Credit Risk section, the UK CRE portfolio includes property investment, development, trading and housebuilders but excludes social
housing contractors.
‘Commissions and other incentives’
awards.
‘Committee of Sponsoring Organisations of the Treadway Commission Framework (COSO)’
A joint initiative of five private sector
organisations dedicated to the development of frameworks and providing guidance on enterprise risk management, internal
control and fraud deterrence.
Glossary of Terms
57
‘Commodity derivatives’
precious metals, oil and oil related, power and natural gas).
‘Commodity risk’
commodities (e.g. Brent vs. WTI crude prices).
‘Common Equity Tier 1 (CET1) capital’
issued and related share premium, retained earnings and other reserves, less specified regulatory adjustments.
‘Common Equity Tier 1 (CET1) ratio’
‘Compensation: income ratio’
The ratio of compensation expense over total income. Compensation represents total staff costs less
non-compensation items consisting of outsourcing, staff training, redundancy costs and retirement costs.
‘
Comprehensive Capital Analysis and Review (CCAR)’
An annual exercise, required by and evaluated by the Federal Reserve,
through which the largest bank holding companies operating in the US assess whether they have sufficient capital to continue
operations through periods of economic and financial stress and have robust capital -planning processes that account for their
unique risks.
‘Comprehensive Risk Measure (CRM)’
An estimate of all the material market risks, including rating migration and default for the
correlation trading portfolio. Also referred to as All Price Risk (APR) and Comprehensive Risk Capital Charge (CRCC).
‘Conduct risk’
of financial services, including instances of wilful or negligent misconduct.
‘Constant Currency Basis’
Excluding the impact of foreign currency conversion to GBP when comparing financial results in two
different financial periods.
‘Consumer, Cards and Payments’
Barclays US Consumer Bank, Payments (including merchant acquiring and commercial payments),
Barclaycard Germany and the Private Bank.
‘Contingent capital notes (CCNs)’
permanently written off or converted into an equity instrument from the issuer's perspective in the event of the Common Equity
Tier 1 (CET1) ratio of the relevant Barclays Group entity falling below a specific level, or at the direction of regulators.
‘Conversion Trigger’
Used in the context of Contingent Capital Notes and AT1 securities. A capital adequacy trigger event occurs
when the CET1 ratio of the bank falls below a certain level (the trigger) as defined in the Terms & Conditions of the instruments
issued. See ‘Contingent capital notes’.
‘Coronavirus Business Interruption Loan Scheme (CBILS)’
A loan scheme by the British Business Bank (BBB) to support UK based
small and medium-sized businesses (turnover of up to £45 million) adversely impacted by COVID -19. The CBILS scheme provides
loans up to £5 million which are backed by an 80% government (BBB) guarantee. The UK government will pay interest and fees for
the first 12 months on behalf of the borrowers, subject to terms and conditions.
Coronavirus Large Business Interruption Loan Scheme (CLBILS)’
A loan scheme by the British Business Bank (BBB) to support UK
based medium-sized businesses (turnover above £45 million, but with no access to CCFF) adversely impacted by COVID -19, The
CBILS scheme provides loans up to £50 million which are backed by an 80% government (BBB) guarantee.
‘Corporate and Investment Bank (CIB)’
Barclays Corporate and Investment Bank businesses which form part of Barclays
International.
‘Correlation risk’
changes over time.
‘Cost of Equity’
‘Cost: income jaws’
‘Cost: income ratio’
‘Countercyclical Capital Buffer (CCyB)’
An additional buffer introduced as part of the CRD IV package that requires banks to have an
additional cushion of CET 1 capital with which to absorb potential losses, enhancing their resilience and contributing to a stable
financial system.
‘Countercyclical leverage ratio buffer (CCLB)’
A macroprudential buffer that has applied to specific PRA regulated institutions since
2018 and is calculated at 35% of any risk weighted countercyclical capital buffer set by the Financial Policy Committee (FPC). The
CCLB applies in addition to the minimum of 3.25% and any G-SII additional Leverage Ratio Buffer that applies.
‘Counterparty credit risk’
the context of RWAs, a component of RWAs that represents the risk of loss in derivatives, repurchase agreements and similar
transactions resulting from the default of the counterparty.
‘Coverage ratio’
Glossary of Terms
58
‘Covered bonds’
benefit of the holders of the covered bonds.
‘Covid Corporate Finance Facility (CCFF)’:
which make a material UK contribution, helping to bridge coronavirus disruption to their cash flows. The Bank of England provides
liquidity by purchasing short-term debt in the form of commercial paper from corporates. Barclays acts as dealer.
‘CRD IV’
The Fourth Capital Requirements Directive, an EU Directive and an accompanying Regulation (CRR) that together prescribe
EU capital adequacy and liquidity requirements and implements Basel 3 in the European Union.
‘CRD V’
The Fifth Capital Requirements Directive, comprising an EU amending Directive and an accompanying amending Regulation
(CRR II) that together prescribe EU capital adequacy and liquidity requirements and implements enhanced Basel 3 proposals in the
European Union.
‘Credit conversion factor (CCF)’
Factor used to estimate the risk from off -balance sheet commitments for the purpose of calculating
the total Exposure at Default (EAD) used to calculate RWAs.
‘Credit default swaps (CDS)’
for contracting to make payments to the protection buyer in the event of a defined credit event. Credit events normally include
bankruptcy, payment default on a reference asset or assets, or downgrades by a rating agency.
‘Credit derivatives (CDs)’
the seller of the protection.
‘Credit impairment charges’
and impairment charges on fair value through other comprehensive income assets and reverse repurchase agreements.
‘Credit market exposures’
have been significantly impacted by the deterioration in the global credit markets. The exposures include positions subject to fair
value movements in the Income Statement, positions that are classified as loans and advances and available for sale and other
assets.
‘Credit quality step’
maps the credit assessments of a recognised credit rating agency or export credit agency to credit quality steps that determine the
risk weight to be applied to an exposure.
‘Credit rating’
An evaluation of the creditworthiness of an entity seeking to enter into a credit agreement.
‘Credit risk’
their obligations to Barclays, including the whole and timely payment of principal, interest, coll ateral and other receivables. In the
context of RWAs, it is the component of RWAs that represents the risk of loss in loans and advances and similar transactions
resulting from the default of the counterparty.
‘Credit risk mitigation’
be broadly divided into three types; collateral, netting and set-off, and risk transfer.
‘Credit spread’
‘Credit Valuation Adjustment (CVA)’
takes into account the counterparty’s risk of default. The CVA therefore represents an estimate of the adjustment to fair value that
a market participant would make to incorporate the credit risk of the counterparty due to any failure to perform on contractual
agreements.
‘CRR leverage exposure’
‘CRR leverage ratio’
Is calculated using the CRR definition of Tier 1 capital for the numerator and the CRR definition of leverage
exposure as the denominator.
‘Customer assets’
the year to date divided by number of days in the year to date.
‘Customer deposits’
credit institutions. Such funds are recorded as liabilities in the Barclays Group’s balance sheet under deposits at amortised cost.
‘Customer liabilities’
conditions, if the current positions were to be held unchanged for one business day, measured to a specified confidence level.
‘DBRS’
‘Debit Valuation Adjustment (DVA)’
value of a portfolio of trades and the market value which takes into account the Barclays Group’s risk of default. The DVA,
Glossary of Terms
59
therefore, represent s an estimate of the adjustment to fair value that a market participant would make to incorporate the credit
risk of the Barclays Group due to any failure to perform on contractual obligations. The DVA decreases the value of a liability to
take into accoun t a reduction in the remaining balance that would be settled should the Barclays Group default or not perform any
contractual obligations.
‘Debt buybacks’
de-recognition from the balance sheet.
‘Debt securities in issue’
Group and include certificates of deposit and commercial paper.
‘Default grades’
distinguish differences in the probability of default risk.
‘Default fund contributions’
required to contribute to this fund in advance of using a CCP. The default fund can be used by the CCP to cover losses incurred by
the CCP where losses are greater than the margins provided by that member.
‘Derivatives netting’
enforceable bilateral netting agreements and eligible cash collateral received in derivative transactions that meet the requirements
of BCBS 270.
‘Diversification effect’
It is measured as the sum of the individual asset class DVaR estimates less the total DVaR.
‘Dodd-Frank Act (DFA)’
‘Economic Value of Equity (EVE)’
interest rate movement, based on existing balance sheet run-off profile.
'Effective Expected Positive Exposure (EEPE)'
The weighted average over time of effective expected exposure. The weights are the
proportion that an individual exposure represents of the entire exposure horizon time interval.
‘Eligible liabilities’
Liabilities and capital instruments that are eligible to meet MREL that do not already qualify as own funds.
‘Encumbrance’
The use of assets to secure liabilities, such as by way of a lien or charge.
‘Enterprise Risk Management Fra mework (ERMF)’
Risk Management Framework, which describes how Barclays identifies and manages risk. The framework identifies the principal
risks faced by the Barclays Group; set s out risk appetite requirements; sets out roles and responsibilities for risk management; and
sets out risk committee structure.
‘Equities’
‘Equity and stock index derivatives’
stock index swaps and options (including warrants, which are equity options listed on an exchange). The Barclays Group also enters
into fund-linked derivatives, being swaps and options whose underlyings include mutual funds, hedge funds, indices and multi-
asset portfolios. An equity swap is an agreement between two parties to exchange periodic payments, based upon a notional
principal amount, with one side paying fixed or floating interest and the other side paying based on the actual return of the stock or
stock index. An equity option provides the buyer with the right, but not the obligation, either to purchase or sell a specified stock,
basket of stocks or stock index at a specified price or level on or before a specified date.
‘Equity risk’
‘Equity structural hedge’
investment and to smoothen the income over a medium/long term.
‘EU Risk Reduction Measure package’
A collection of amending Regulations and Directives that update core EU regulatory texts and
which came into force on 27 June 2019.
‘Euro Interbank Offered Rate (EURIBOR)’
European interbank market.
‘Europe’
and Eastern Europe.
‘European Banking Authority (EBA)’
The European Banking Authority (EBA) is an independent EU Authority which works to ensure
effective and consistent prudential regulation and supervision across the European banking sector. Its overall objectives are to
maintain financial stability in the EU and to safeguard the integrity, efficiency and orderly functioning of the banking sector.
‘European Securities and Markets Authority (ESMA)’
An independent European Supervisory Authority with the remit of enhancing
the protection of investors and reinforcing stable and well-functioning financial markets in the European Union.
Glossary of Terms
60
‘Eurozone’
Represents the 19 European Union countries that have adopted the euro as their common currency. The 19 countries
are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta,
Netherlands, Portugal, Slovakia, Slovenia and Spain.
‘Expected Credit Losses (ECL)’
during a specified period of time. ECLs must reflect the present value of cash shortfalls, and must reflect the unbiased and
probability weighted assessment of a range of outcomes.
‘Expected Losses’
approach for capital adequacy calculations. It is measured as the Barclays Group's modelled view of anticipated losses based on
Probability of Default (PD), Loss Given Default (LGD) and Exposure at Default (EAD), with a one-year time horizon.
’Expert lender models’
particular counterparty, but where there is insufficient data to support the construction of a statistical model. These models utilise
the knowledge of credit experts that have in depth experience of the specific customer type being modelled.
‘Exposure’
Generally refers to positions or actions taken by the bank, or consequences thereof, that may put a certain amount of a
bank’s resources at risk.
‘Exposure at Default (EAD)’
the event of, and at the time of, that counterparty’s default. At default, the customer may not have drawn the loan fully or may
already have repaid some of the principal, so that exposure may be less than the approved loan limit.
‘External Credit Assessment Institutions (ECAI)’
Institutions whose credit assessments may be used by credit institutions for the
determination of risk weight exposures according to CRR.
‘Federal Reserve Board (FRB)’
Is the governing board of the Federal Reserve System of the US, in charge of making the
country's monetary policy.
'FICC'
Represents Macro (including rates and currency), Credit and Securitised products.
'Financial Policy Committee (FPC)'
remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system. The FPC also has
a secondary objective to support the economic policy of the UK Government.
‘F-IRB’/ 'Foundation-Internal Ratings Based’
‘Financial Conduct Authority (FCA)’
authorised firms. The FCA also has responsibility for the prudential regulation of firms that do not fall within the PRA’s scope.
‘Financial Services Compensation Scheme (FSCS)’
unable to pay claims.
‘Financial collateral comprehensive method (FCCM)’
A counterparty credit risk exposure calculation approach which applies
volatility adjustments to the market value of exposure and collateral when calculating RWA values.
‘Financial Stability Board (FSB)’
An international body that monitors and makes recommendations about the global financial
system. It promotes international financial stability by coordinating national financial authorities and international standard - setting
bodies as they work toward developing strong regulatory, supervisory and other financial sector policies. It fosters a level playing
field by encouraging coherent implementation of these policies across sectors and jurisdictions.
‘Fitch’
‘Forbearance Programmes’
than contractual amounts due where financial distress would otherwise prevent satisfactory repayment within the original terms
and conditions of the contr act. These agreements may be initiated by the customer, Barclays or a third party and include approved
debt counselling plans, minimum due reductions, interest rate concessions and switches from capital and interest repayments to
interest -only payments.
‘Foreclosures in Progress’
The process by which the bank initiates legal action against a customer with the intention of terminating
a loan agreement whereby the bank may repossess the property subject to local law and recover amounts it is owed.
‘Foreign exchange derivatives’
contracts, currency swaps and currency options. Forward foreign exchange contracts are agreements to buy or sell a specified
quantity of foreig n currency, usually on a specified future date at an agreed rate. Currency swaps generally involves the exchange,
or notional exchange, of equivalent amounts of two currencies and a commitment to exchange interest periodically until the
principal amounts are re -exchanged on a future date. Currency options provide the buyer with the right, but not the obligation,
either to purchase or sell a fixed amount of a currency at a specified exchange rate on or before a future date. As compensation for
assuming the option risk, the option writer generally receives a premium at the start of the option period.
‘Foreign exchange risk’
Glossary of Terms
61
Full time equivalent units are the on-job hours paid for employee services divided by the number of ordinary-
time hours normally paid for a full-time staff member when on the job (or contract employees where applicable).
‘Fully loaded’
When a measure is presented or described as being on a fully loaded basis, it is calculated without applying the
transitional provisions set out in Part Ten of CRR.
‘Funded credit protection’
institution derives from the right of that institution, in the event of the default of the counterparty or on the occurrence of other
specified credit events relating to the counterparty, to liquidate, or to obtain transfer or appropriation of, or to retain certain assets
or amounts, or to reduce the amount of the exposure to, or to replace it with, the amount of the difference between the amount of
the exposure and the amount of a claim on the institution.
‘Gains on acquisitions’
contingent liabilities, recognised in a business combination, exceeds the cost of the combination.
‘General Data Protection Regulation (GDPR)’
GDPR (Regulation (EU) 2016/679) is a regulation by which the European Parliament,
the Council of the European Union and the European Commission intend to strengthen and unify data protection for all individuals
within the European Union.
‘General market risk’
broad equity market movement unrelated to any specific attributes of individual securities.
‘Globa l-Systemically Important Banks (G-SIBs or G-SIIs)’
interconnectedness, mean that their distress or failure would cause significant disruption to the wider financial system and
economic activity. The Financial Stability Board and the Basel Committee on Banking Supervision publish a list of globally
systemically important banks.
‘G -SII additional leverage ratio buffer (G-SII ALRB)’
A macroprudential buffer that applies to globally systemically important banks
(G-SIBs) and other major domestic UK banks and building societies, including banks that are subject to ring-fencing requirements.
The G-SII ALRB will be calibrated as 35% (on a phased basis) of the combined systemic risk buffer s that applies to the bank.
‘GSII Buffer’
Common Equity Tier 1 capital required to be held under CRD to ensure that G- SIBs build up surplus capital to
compensate for the systemic risk that such institutions represent to the financial system.
’Grandfathering’
and CRR II non-compliant capital instruments to be included in regulatory capital subject to certain thresholds which decrease over
the transitional period.
‘Gross charge-off rates’
average outstanding balances excluding balances in recoveries. Charge-off to recoveries generally occurs when the collections focus
switches from the collection of arrears to the recovery of the entire outstanding balance, and represents a fundamental change in
the relationship between the bank and the customer. This is a measure of the proportion of customer s that have gone into default
during the period.
‘Gross write-off rates’
and advances held at amortised cost at the balance sheet date.
‘Gross new lending’
‘Guarantee’
of credit substitution.
‘Head Office’
‘High-Net-Worth’
worth customers.
‘High Risk’
In retail banking, ‘High Risk’ is defined as the subset of up-to -date customers who, either through an event or observed
behaviour exhibit potential financial difficulty. Where appropriate, these customers are proactively contacted to assess whether
assistance is required.
‘Home loan’
The borrower gives the lender a lien against the property and the lender can foreclose on the property if the borrower does not
repay the loan per the agreed terms. Also known as a residential mortgage.
‘IHC’ or ‘US IHC’
Barclays US LLC, the intermediate holding company established by Barclays in July 2016, which holds most of
Barclays’ subsidiaries and assets in the US.
‘IMA’ / 'Internal Model Approach’
In the context of RWAs, RWAs for which the exposure amount has been derived via the use of a
PRA approved internal market risk model.
Glossary of Terms
62
‘IMM’ / 'Internal Model Method’
In the context of RWAs, RWAs for which the exposure amount has been derived via the use of a
PRA approved internal counterparty credit risk model.
‘Identified Impairment (II)’
‘IFRS 9 transitional arrangements’
Following the application of IFRS 9 as of 1 January 2018, Article 473a of CRR permits institutions
to phase-in the impact on capital and leverage ratios of the impairment requirements under the new accounting standard.
‘Impairment Allowances’
losses in the lending book. An impairment allowance may either be identified or unidentified and individual or collective.
‘Income’
‘Incremental Risk Charge (IRC)’
An estimate of the incremental risk arising from rating migrations and defaults for traded debt
instruments beyond what is already captured in specific market risk VaR for the non-correlation trading portfolio.
‘Independent Validation Unit (IVU)’
The function within the bank responsible for independent review, challenge and approval of all
models.
‘Individual liquidity guidance (ILG)’
that the PRA has asked the bank to maintain.
‘Inflation risk’
‘Insurance Risk’
The risk of the Barclays Group’s aggregate insurance premiums received from policyholders under a portfolio of
insurance contracts being inadequate to cover the claims arising from those policies.
‘Interchange’
‘Interest -only home loans’
Under the terms of these loans, the customer makes payments of interest only for the entire term of the
mortgage, although customers may make early repayments of the principal within the terms of their agreement. The customer is
responsible for repaying the entire outstanding principal on maturity, which may require the sale of the mortgaged property.
‘Interest rate derivatives’
swaptions. An interest rate swap is an agreement between two parties to exchange fixed rate and floating rate interest by means of
periodic payments based upon a notional principal amount and the interest rates defined in the contract. Certain agreements
combine interest rate and foreign currency swap transactions, which may or may not include the exchange of principal amounts. A
basis swap is a form of interest rate swap, in which both parties exchange interest payme nts based on floating rates, where the
floating rates are based upon different underlying reference indices. In a forward rate agreement, two parties agree a future
settlement of the difference between an agreed rate and a future interest rate, applied to a notional principal amount. The
settlement, which generally occurs at the start of the contract period, is the discounted present value of the payment that would
otherwise be made at the end of that period.
‘Interest rate risk’
the calculation of market risk DVaR, measures the impact of changes in interest (swap) rates and volatilities on cash instruments
and derivatives.
‘Interest rate risk in the banking book (IRRBB)’
The risk that the Barclays Group is exposed to capital or income volatility because of
a mismatch between the interest rate exposures of its (non-traded) assets and liabilities.
‘Internal Assessment Approach (IAA)’
One of three types of calculation that a bank with permission to use the Internal Ratings
Based (IRB) approach may apply to securitisation exposures. It consists of mapping a bank's internal rating methodology for credi t
exposures to those of an External Credit Assessment Institution (ECAI) to determine the appropriate risk weight based on the
ratings based approach. Its applicability is limited to ABCP programmes related to liquidity facilities and credit enhancement.
‘Internal Capital Adequacy Assessment Process (ICAAP)’
Companies are required to perform a formal Internal Capital Adequacy
Assessment Process (ICAAP) as part of the Pillar 2 requirements (BIPRU) and to provide this document to the PRA on a yearly basis.
The ICAAP document summarises the Barclays Group’s risk management framework, including approach to managing all risks (i.e.
Pillar 1 and non-Pillar 1 risks); and, the Barclays Group’s risk appetite, economic capital and stress testing frameworks.
‘Internal Ratings Based (IRB)’
weights. The IRB approach is divided into two alternative applications, Advanced and Foundation:
–
Advanced IRB (A-IRB): the bank uses its own estimates of probability of default (PD), loss given default (LGD) and credit
conversion factor to model a given risk exposure.
–
Foundation IRB: the bank applies its own PD as for Advanced, but it uses standard parameters for the LGD and the credit
conversion factor. The Foundation IRB approach is specifically designed for wholesale credit exposures. Hence retail,
equity, securitisation positions and non-credit obligations asset exposures are treated under standardised or A-IRB.
‘Investment Bank’
The Barclays Group’s investment bank which
consists of origination led and returns focused markets and banking
business which forms part of the Corporate and Investment Bank segment of Barclays International .
Glossary of Terms
63
‘Investment Banking Fees’
businesses – including financial advisory, debt and equity underwriting.
‘Investment grade’
credit rating agencies.
‘ISDA Master Agreement’
framework of documents, designed to enable OTC derivatives to be documented fully and flexibly. The framework consists of a
master agreement, a schedule, confirmations, definition booklets, and a credit support annex. The ISDA master agreement is
published by the International Swaps and Derivatives Association (ISDA).
‘Key Risk Scenarios (KRS)’
Key Risk Scenarios are a summary of the extreme potential risk exposure for each Key Risk in each
business and function, including an assessment of the potential frequency of risk events, the average size of losses and three
extreme scenarios. The Key Risk Scenario assessments are a key input to the Advanced Measurement Approach calculation of
regulatory and economic capital requirements.
‘Large exposure’
A large exposure is defined as the total exposure of a bank to a counterparty or group of connected clients,
whether in the banking book or trading book or both, which in aggregate equals or exceeds 10% of the bank's eligible capital.
‘Legal risk’
obligations including regulatory or contractual requirements.
‘Lending’
In the context of Investment Bank Analysis of Total Income, lending income includes net interest income, gains or losses
on loan sale activity, and risk management activity relating to the loan portfolio.
‘Letters of credit’
will be made on time and in full. In the eve nt that the debtor is unable to make payment, the bank will be required to cover the full
or remaining amount of the purchase.
‘Level 1 assets’
High quality liquid assets under the Basel Committee’s Liquidity Coverage Ratio (LCR), including cash, central bank
reserves and higher quality government securities.
‘Level 2 assets’
Level 2 assets, with the latter comprised of Level 2A and Level 2B assets. Level 2A assets include, for example, lower quality
government securities, covered bonds and corporate debt securities. Level 2B assets include, for example, lower rated corporate
bonds, residential mortgage backed securities and equities that meet certain conditions.
‘Lifetime expected credit losses’
an exposure, reflecting the present value of cash shortfalls over the remaining expected life of the asset.
‘Lifetime Probability’
‘Liquidity Coverage Ratio (LCR)’
days. High- quality liquid assets should be unencumbered, liquid in markets during a time of stress and, ideally, be central bank
eligible. These include, for example, cash and claims on central governments and central banks.
‘Liquidity Pool’
Barclays Group as a contingency to enable the bank to meet cash outflows in the event of stressed market conditions.
‘Liquidity Risk’
The risk that the Barclays Group is unable to meet its contractual or contingent obligations or that is does not have
the appropriate amount, tenor and composition of funding and liquidity to support its assets.
‘Liquidity risk appetite (LRA)’
and in meeting its regulatory obligations.
‘Liquidity Risk Management Framework (the Liquidity Framework)’
The Liquidity Risk Management Framework (the Liquidity
Framework), which is sanctioned by the Board Risk Committee (BRC) and which incorporates liquidity policies, systems and controls
that the Barclays Group has implemented to manage liquidity risk within tolerances approved by the Board and regulatory
agencies.
‘Litigation and conduct charges’ or ‘Litigation and conduct’
Litigation and conduct charges include regulatory fines, litigation
settlements and conduct related customer redress.
‘Loan loss rate’
held at amortised cost at the balance sheet date.
‘Loan to deposit ratio’ or ‘Loan: deposit ratio’
‘Loan to value (LTV) ratio’
of the asset. The ratios are used in determining the appropriate level of risk for the loan and are generally reported as an average
for new mortgages or an entire portfolio. Also see ‘Marked to market (MTM) LTV ratio.’
Glossary of Terms
64
‘London Interbank Offered Rate (LIBOR)’
London interbank market.
‘Loss Given Default (LGD)’
default. LGD comprises the actual loss (the part that is not expected to be recovered), together with the economic costs associated
with the recovery process.
‘Management VaR’
level, if current positions were to be held unchanged for predefined period. Corporate and Investment Bank uses Management VaR
with a two -year equally weighted historical period, at a 95% confidence level, with a one day holding period.
‘Mandatory break clause’
In the context of counterparty credit risk, a contract clause that means a trade will be ended on a
particular date.
‘Marked to market approach’
value of derivative positions as well as a potential future exposure add-on to calculate an exposure to which a risk weight can be
applied. This is also known as the Current Exposure Method.
‘Marked to market (MTM) LTV ratio’
Also see ‘Balance weighted Loan to Value (LTV) ratio’ and ‘Valuation weighted Loan to Value (LTV) ratio.’
‘Market risk’
fluctuation in market variables including, but not limited to, interest rates, foreign exchange, equity prices, commodity prices,
credit spreads, implied volatilities and asset correlations.
‘Master netting agreements’
covered by the agreement in the event of the counterparty’s default or bankruptcy or insolvency, resulting in a reduced exposure.
‘Master trust securitisation programmes’
receivables. The trust issues multiple series of securities backed by these receivables.
‘Material Risk Takers (MRTs)’
Categories of staff whose professional activities have or are deemed to have a material impact on
Barclays’ risk profile, as determined in accordance with the European Banking Authority regulatory technical standard on the
identification of such staff.
‘Maximum Distributable Amount (MDA)’
The MDA is a factor representing the available distributable profit whilst remaining in
excess of its combined buffer requirement. CRD IV places restrictions on a bank’s dividend decisions depending on its proximity to
meeting the buffer.
‘Medium-Term Notes’
Investors can choose from differing maturities, ranging from nine months to 30 years. They can be issued on a fixed or floating
coupon basis or with an exotic coupon; with a fixed maturity date (non-callable) or with embedded call or put options or early
repayment triggers. MTNs are most generally issued as senior, unsecured debt.
‘Methodology and policy’
In the context of the Capital Risk section, the effect on RWAs of methodology changes driven by
regulatory policy changes.
‘MiFID II’
The Markets in Financial Instruments Directive 2004/39/EC (known as "MiFID" I) as subsequently amended to MiFID II is a
European Union law that provides harmonised regulation for investment services across the 31 member states of the European
Economic Area.
‘Minimum requirement for own funds and eligible liabilities (MREL)’
A European Union wide requirement under the Bank Recovery
and Resolution Directive for all European banks and investment banks to hold a minimum level of equity and/or loss absorbing
eligible liabilities to ensure the operation of the bail-in tool to absorb losses and recapitalise an institution in resolution. An
institution’s MREL requirement is set by its resolution authority. Amendments in the EU Risk Reduction Measure package are
designed to align MREL and TLAC for EU G-SIBs.
‘Model risk’
The risk of the potential adverse consequences from financial assessments or decisions based on incorrect or misused
model outputs and reports.
‘Model updates’
In the context of the Capital Risk section, changes in RWAs caused by model implementation, changes in model
scope or any changes required to address model malfunctions.
‘Model validation’
Process through which models are independently challenged, tested and verified to prove that they have been
built, implemented and used correctly, and that they continue to be fit-for -purpose.
‘Modelled—VaR’
the PRA.
‘Money market funds’
‘Monoline derivatives’
Glossary of Terms
65
‘Moody’s’
‘Mortgage Servicing Rights (MSR)’
A contractual agreement in which the right to service an existing mortgage is sold by the original
lender to another party that specialises in the various functions involved with servicing mortgages.
‘Multilateral development banks’
national boundaries.
‘National discretion’
certain CRD rules in its jurisdiction.
‘Net asset value per share’
instruments, by the number of issued ordinary shares.
‘Net interest income (NII)’
‘Net interest margin (NIM)’
‘Net investment income’
result on disposal of available for sale assets.
‘Net Stable Funding Ratio (NSFR)’
assuming a stressed scenario. The ratio is required to be over 100%. Available stable funding would include such items as equity
capital, preferred stock with a maturity of over 1 year, or liabilities with a maturity of over 1 year. The required amount of stable
funding is calculate d as the sum of the value of the assets held and funded by the institution, multiplied by a specific required
stable funding (RSF) factor assigned to each particular asset type, added to the amount of potential liquidity exposure multiplied by
its associated RSF factor.
‘Net trading income’
and customer business, together with interest, dividends and funding costs relating to trading activities.
‘Net write-off rate’
recoveries divided by gross loans and advances held at amortised cost at the balance sheet date.
‘Net written credit protection’
credit derivatives protection bought.
‘New bookings’
The total of the original balance on accounts opened in the reporting period, including any applicable fees and
charges included in the loan amount.
‘Non-asset backed debt instruments’
corporate bonds; commercial paper; certificates of deposit; convertible bonds; corporate bonds and issued notes.
‘Non-model method (NMM)’
through the use of CRR norms, as opposed to an internal model.
‘Non-Traded Market Risk’
The risk that the current or future exposure in the banking book (i.e. non-traded book) will impact bank's
capital and/or earnings due to adverse movements in Interest or foreign exchange rates.
‘Non-Traded VaR’
Reflects the volatility in the value of the fair value through other comprehensive income (FVOCI) investments in
the liquidity pool which flow directly through capital via the FVOCI reserve. The underlying methodology to calculate non-traded
VaR is similar to Traded Management VaR, but the two measures are not directly comparable. The Non-Traded VaR represents the
volatility to capital driven by the FVOCI exposures. These exposures are in the banking book and do not meet the criteria for trading
book treatment.
‘Notch’
‘Notional amount’
The nominal or face amount of a financial instrument, such as a loan or a derivative, that is used to calculate
payments made on that instrument.
‘Open Banking’
The Payment Services Directive (PSD2) and the Open API standards and data sharing remedy imposed by the UK
Competition and Markets Authority following its Retail Banking Market Investigation Order.
‘Operating leverage’
‘Operational risk’
events (for example, fraud) where the root cause is not due to credit or market risks.
‘Operational Riskdata eXchange (ORX)’
dedicated to advancing the measurement and management of operational risk in the global financial services industry. Barclays is a
member of ORX.
‘Origination led’
Glossary of Terms
66
‘OSII’
Other systemically important institutions are institutions that are deemed to create risk to financial stability due to their
systemic importance.
‘Over -the-counter (OTC) derivatives’
They offer flexibility because, unlike standardised exchange -traded products, they can be tailored to fit specific needs.
‘Ov erall capital requirement’
The overall capital requirement is the sum of capital required to meet the total of a Pillar 1
requirement, a Pillar 2A requirement, a Global Systemically Important Institution (G- SII) buffer, a Capital Conservation Buffer (CCB)
and a Countercyclical Capital Buffer (CCyB).
‘Own credit’
‘Owner occupied mortgage’
A mortgage where the intention of the customer was to occupy the property at origination.
‘Own funds’
The sum of Tier 1 and Tier 2 capital.
‘Past due items’
Refers to loans where the borrower has failed to make a payment when due under the terms of the loan contract.
‘Payment Protection Insurance (PPI) redress’
costs.
‘Pension Risk’
The risk of the Barclays Group’s earnings and capital being adversely impacted by the Barclays Group’s defined
benefit obligations increasing or the value of the assets backing these defined benefit obligations decreasing due to changes in both
the level and volatility of prices.
‘Performance costs’
term incentives, the accounting charge is spread over the relevant periods in which the employee delivers service.
‘Personal Banking’
Offers retail advice, products and services to community and premier customers in the UK.
‘Period end allocated tangible equity’
adjusted for capital deductions, excluding goodwill and intangible assets, reflecting assumptions the Barclays Group uses for capital
planning purposes. Head Office allocated tangible equity represents the difference between the Barclays Group’s tangible
shareholders’ equity and the amounts allocated to businesses.
‘Pillar 1 requirements’
The minimum regulatory capital requirements to meet the sum of credit (including counterparty credit),
market and operational risk.
‘Pillar 2A requirements’
The additional regulatory capital requirement to meet risks not captured under Pillar 1 requirements. This
requirement is the outcome of the bank’s Internal Capital Adequacy Assessment Process (ICAAP) and the complementary
supervisory review and evaluation carried out by the PRA.
‘Post -model adjustment (PMA)’
portfolio level to account for model input data deficiencies, inadequate model performance or changes to regulatory definitions
(e.g. definition of default) to ensure the model output is accurate, complete and appropriate.
‘Potential Future Exposure (PFE) on derivatives’
exposure on both exchange traded and OTC derivative contrac ts, calculated by assigning a standardised percentage (based on the
underlying risk category and residual trade maturity) to the gross notional value of each contract.
‘PRA waivers’
specific to an organisation and require applications being submitted to and approved by the PRA.
‘Primary securitisations’
The issuance of securities (bonds and commercial papers) for fund-raising.
‘Primary Stress Tests’
losses that might arise from extreme market moves or scenarios. Primary Stress Tests apply stress moves to key liquid risk factors
for each of the major trading asset classes.
‘Prime Services’
business also provides brokerage facilitation services for hedge fund clients offering execution and clearance facilities for a variety
of asset classes.
‘Principal’
interest).
‘Principal Investments’ / ‘Private equity investments’
public exchange. Investment in private equity often involves the investment of capital in private companies or the acquisition of a
public company that results in the delisting of public equity. Capital for private equity investmen t is raised by retail or institutional
investors and used to fund investment strategies such as leveraged buyouts, venture capital, growth capital, distressed investments
and mezzanine capital.
Glossary of Terms
67
‘Principal Risks’
Report.
‘Pro -cyclicality’
cycle, where the subsequent impact on lending or other market behaviours acts as an amplification of the economic cycle by the
financial sector.
‘Probability of Default (PD)’
The likelihood that a loan will not be repaid and will fall into default. PD may be calculated for each
client who has a loan (normally applicable to wholesale customers/clients) or for a portfolio of clients with similar attributes
(normally applicable to retail customers). To calculate PD, Barclays assesses the credit quality of borrowers and other
counterparties and assigns them an internal risk rating. Multiple rating methodologies may be used to inform the rating decision on
individual large credits, such as internal and external models, rating agency ratings, and for wholesale assets market information
such as credit spreads. For smaller credits, a single source may suffice such as the result from an internal rating model.
‘Product structural hedge’
(such as non-interest bearing current accounts and managed rate deposits) and to smoothen the income over a medium/long term.
‘Properties in Possession held as ’Loans and Advances to Customers’’
Properties in the UK and Italy where the customer continues
to retain legal title but where the bank has enforced the possession order as part of the foreclosure process to allow for the
disposal of the asset or the court has ordered the auction of the property.
‘Properties in Possession held as ‘Other Real Estate Owned’’
Properties in South Africa, where the bank has taken legal ownership
of the title as a result of purchase at an auction or similar and treated as ‘Other Real Estate Owned’ within other assets on the
bank’s balance sheet.
‘Proprietary trading’
behalf of customers , so as to make a profit for itself.
‘Prudential Regulation Authority (PRA)’
insurers and a small number of significant investment banks in the UK. The PRA is a subsidiary of the Bank of England.
‘Prudential valuation adjustment (PVA)’
value to comply with regulatory valuation standards, which place greater emphasis on the inherent uncertainty around the value at
which a trading book position could be exited.
‘Public benchmark’
‘Qualifying central bank claims’
An amount calculated in line with the PRA policy statement allowing banks to exclude claims on the
central bank from the calculation of the leverage exposure measure, as long as these are matched by deposits denominated in the
same currency and of identical or longer maturity.
‘Qualifying Revolvi ng Retail Exposure (QRRE)’
In the context of the IRB approach to credit risk RWA calculations, an exposure
meeting the criteria set out in BIPRU 4.6.42 R (2). It includes most types of credit card exposure.
‘Rates’
derivatives.
‘Re -aging’
The returning of a delinquent account to up-to -date status without collecting the full arrears (principal, interest and
fees).
‘Real Estate Mortgage Investment Conduits (REMICs)’
An entity that holds a fixed pool of mortgages and that is
separated into
multiple classes of interests for issuance to investors.
‘Recovery book’
strategies to recover the Group’s exposure.
‘Recovery book Impairment Coverage Ratio’
balance in recoveries.
‘Recovery book proportion of outstanding balances’
all accounts that have charged -off) as at the period end compared to total outstanding balances. The size of the recoveries book
would ultimately have an impact on the overall impairment requirement on the portfolio. Balances in recoveries will decrease if:
assets are written -off; amounts are collected; or assets are sold to a third party (i.e. debt sale).
‘Regulatory capital’
‘Renegotiated loans’
adverse change in the circumstances of the borrower. In the latter case renegotiation can result in an extension of the due date of
payment or repayment plans under which the Barclays Group offers a concessionary rate of interest to genuinely distressed
borrowers. This will result in the asset continuing to be overdue and will be individually impaired where the renegotiated payments
of interest and principal will not recover the original carrying amount of the asset. In other cases, renegotiation will lead to a new
agreement, which is treated as a new loan.
Glossary of Terms
68
‘Repurchase agreement (Repo)’ / ‘Reverse repurchase agreement (Reverse repo)’
financial securities as collateral for an interest bearing cash loan. The borrower agrees to sell a security to the lender subject to a
commitme nt to repurchase the asset at a specified price on a given date. For the party selling the security (and agreeing to
repurchase it in the future) it is a Repurchase agreement or Repo; for the counterparty to the transaction (buying the security and
agreeing to sell in the future) it is a Reverse repurchase agreement or Reverse repo.
‘Reputation risk’
competence by clients, counterparties, inves tors, regulators, employees or the public.
‘Re -securitisations’
positions where the underlying assets are also predominantly securitisation positions.
‘Reserve Capital Instruments (RCIs)’
terms.
‘Residential Mortgage -Backed Securities (RMBS)’
these securities have the right to cash received from future mortgage payments (interest and/or principal).
‘Residual maturity’
The remaining contractual term of a credit obligation associated with a credit exposure.
‘Restructured loans’
has been granted to the debtor that would not otherwise be considered. Where the concession results in the expected cash flows
discounted at the original effective interest rate being less than the loan’s carrying value, an impairment allowance will be raised.
‘Retail Loans’
It includes both secured and unsecured loans such as mortgages and credit card balances, as well as loans to certain smaller
business customers, typically with exposures up to £3m or with a turnover up to £5m.
‘Return on average Risk Weighted Assets’
‘Return on average tangible shareholders’ equity (RoTE)’
Annualised
profit after tax attributable to ordinary equity holders of the
parent, as a proportion of average shareholders’ equity excluding non-controlling interests and other equity instruments adjusted
for the deduction of intangible assets and goodwill.
‘Return on average allocated tangible equity’
Annualised
profit after tax attributable to ordinary equity holders of the parent, as a
proportion of average allocated tangible equity.
‘Risk appetite’
possible outcomes as business plans are implemented.
‘Risk weighted assets (RWAs)’
accordance with the Basel rules as implemented by CRR and local regulators.
‘Risks not in VaR (RNIVS)’
framework.
‘Sarbanes-Oxley requirements’
against corporate govern ance scandals such as Enron, WorldCom and Tyco. All US-listed companies must comply with SOX.
‘Second Lien’
compensation for this debt will only be received after the first lien has been repaid and thus represents a riskier investment than
the first lien.
‘Secondary Stress Tests’
be hedged or reduced within the time period covered in Primary Stress Tests.
‘Secured Overnight Financing Rate (SOFR)’
A broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury
securities in the repurchase agreement (repo) market.
‘Securities Financing Transactions (SFT)’
securities or commodities lending or borrowing transaction, or a margin lending transaction whereby cash collateral is received or
paid in respect of the transfer of a related asset.
‘Securities financing transactions adjustments’
collateral, taking into account master netting agreements.
‘Securities lending arrangements’
to return them at a future date. The counterparty generally provides collateral against non performance in the form of cash or
other assets.
‘Securitisation’
pool, which is used to back new securities. A company sells assets to a special purpose vehicle (SPV) which then issues securities
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69
backed by the assets. This allows the credit quality of the assets to be separated from the credit rating of the original borrower and
transfers risk to external investors.
‘Set-off clauses’
In the context of Counterparty credit risk, contract clauses that allow Barclays to set off amounts owed to us by a
counterparty against amounts owed by us to the counterparty.
‘Settlement balances’
bond) is sold, purchased or otherwise closed out, and the date the asset is delivered by or to the entity (the settlement date) and
cash is received or paid.
‘Settlement risk’
one or more settlement obligations.
‘Significant Increase in Credit Risk (SICR)’
quantitative and qualitative assessments.
‘Slotting’
assessment of factors such as the financial strength of the counterparty. The requirements for the application of the Slotting
approach are detailed in BIPRU 4.5.
‘Sovereign exposure(s)’
‘Specific market risk’
change in an investment due to factors related to the issuer or, in the case of a derivative, the issuer of the underlying investment.
‘Spread risk’
yields.
‘SRB ALRB’
The systemic risk buffer (SRB) additional leverage ratio buffer (ALRB) is firm specific requirement set by the PRA using its
powers under section 55M of the Financial Services and Markets Act (2000). Barclays is required to hold an amount of CET1 capital
that is equal to or greater than its ALRB.
‘Stage 1’
initial recognition. Stage 1 financial instruments are required to recognise a 12 month expected credit loss allowance.
‘Stage 2’
initial recognition. Stage 2 financial instruments are required to recognise a lifetime expected credit loss allowance.
‘Stage 3’
are required to recognise a lifetime expected credit loss allowance.
‘Standard & Poor’s’
‘Standby facilities, credit lines and other commitments’
conditions. Such commitments are either made for a fixed period, or have no specific maturity but are cancellable by the lender
subject to notice requirements.
‘Statutory’
the UK Companies Act 2006 and the requirements of International Financial Reporting Standards (IFRS).
‘Statutory return on average shareholder s’ equity’
average shareholders’ equity.
‘STD’ / ‘Standardised Approach’
risk weights based on counterparty type and a credit rating provided by an External Credit Assessment Institute.
‘Sterling Over Night Index Average (SONIA)’
unsecured market administrated and calculated by the Bank of England.
‘Stress Testing’
have unfavourable effects on the Barclays Group (either financial or non-financial), assessing the Barclays Group’s ability to
withstand such changes, and identifying management actions to mitigate the impact.
‘Stressed Value at Risk (SVaR)’
An estimate of the potential loss arising from a 12-month period of significant financial stress
calibrated to 99% confidence level over a 10-day holding period.
‘Structured entity’
generally created to achieve a narrow and well defined objective with restrictions around their ongoing activities.
‘Structural hedge’ or ‘hedging’
medium/long term on positions that exist within the balance sheet and do not re- price in line with market rates. See also ‘Equity
structural hedge’ and ‘Product structural hedge’.
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‘Structural model of default’
A model based on the assumption that an obligor will default when its assets are insufficient to cover
its liabilities.
‘Structured credit’
structured credit vehicles.
‘Structured finance/notes’
or index and sometimes offers capital protection if the value declines. Structured notes can be linked to equities, interest rates,
funds, commodities and foreign currency.
‘Sub-prime’
delinquencies and potentially more severe problems such as court judgments and bankruptcies. They may also display reduced
repayment capacity as measured by credit scores, high debt-to -income ratios, or other criteria indicating heightened risk of default.
‘Subordinated liabilities’
depositors and other creditors of the issuer.
‘Suprana tional bonds’
Bonds issued by an international organisation, where membership transcends national boundaries (e.g. the
European Union or World Trade Organisation).
‘Synthetic Securitisation Transactions’
Securitisation transactions effected through the use of derivatives.
‘Systemic Risk Buffer’
CET1 capital that may be required to be held as part of the Combined Buffer Requirement increasing the
capacity of UK banks to absorb stress and limiting the damage to the economy as a result of restricted lending.
‘Tangible net asset value (TNAV)’
assets and goodwill.
‘Tangible net asset value per share’
equity instruments, less goodwill and intangible assets, by the number of issued ordinary shares.
‘Tangible shareholders’ equity’
the deduction of intangible assets and goodwill.
‘Term premium’
‘The Fundamental Review of the Trading Book (FRTB)’
on Banking Supervision as part of Basel III applicable to banks’ wholesale trading activities.
‘The Standardised Approach (TSA)’
Under the TSA, banks are required to hold regulatory capital for operational risk equal to the
annual average, calculated over a rolling three-year period, of the relevant income indicator (across all business lines), multiplied by
a supervisory defined percentage factor by business lines.
‘The three lines of defence’
The three lines of defence operating model enables Barclays to separate risk management activities
between those client facing areas of the Barclays Group and associated support functions responsible for identifying risk, operating
within applicable limits and escalating risk events (first line); colleagues in Risk and Compliance who establish the limits, rules and
constraints under which the first line operates and monitors their performance against those limits and constraints (second line);
and, colleagu es in Internal Audit who provide assurance to the Board and Executive Management over the effectiveness of
governance, risk management and control over risks (third line). The Legal function does not sit in any of the three lines, but
supports them all. The Legal function is, however, subject to oversight from Risk and Compliance with respect to operational and
conduct risks.
‘Tier 1 capital’
‘Tier 1 capital ratio’
‘Tier 2 (T2) capita
l’
share premium accounts where qualifying conditions have been met.
‘Tier 2 (T2) securities’
‘Total capital ratio’
Total Regulatory capital as a percentage of RWAs.
‘Total Loss Absorbing Capacity (TLAC)’
A standard published by the FSB which is applicable to G-SIBs and requires a G-SIB to hold a
prescriptive minimum level of instruments and liabilities that should be readily available for bail-in within resolution to absorb
losses and recapitalise the institution.
‘Total outstanding balance’
In retail banking, total outstanding balance is defined as the gross month-end customer balances on all
accounts including accounts charged off to recoveries.
‘Total return swap’
and change in the capital value of the asset. The buyer of the protection in return receives a predetermined amount.
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‘Total balances on forbearance programmes coverage ratio’
a percentage of balance in forbearance.
‘Traded Market Risk’
The risk of a reduction to earnings or capital due to volatility of trading book positions.
‘Trading book’
All positions in financial instruments and commodities held by an institution either with trading intent, or in order to
hedge positions held with trading intent.
‘Traditional Securitisation Transactions’
Securitisation transactions in which an underlying pool of assets generates ca sh flows to
service payments to investors.
‘Transitional’
transitional provisions set out in Part Ten of CRR.
‘Treasury and Capital Risk’
‘Twelve month expected credit losses’
date (or shorter period if the expected life is less than 12 months), weighted by the probability of said default occurring.
‘Twelve month PD’
‘Unencumbered’
‘United Kingdom (UK)’
‘UK Bank levy’
on a percentage of the chargeable equity and liabilities of the bank on its balance sheet date.
‘UK leverage exposure’
Is calculated as per the PRA rulebook, where the exposure calculation also includes the FPC’s
recommendation to allow banks to exclude claims on the central bank from the calculation of the leverage exposure measure, as
long as these are matched by deposits denominated in the same currency and of identical or longer maturity.
‘UK leverage ratio’
As per the PRA rulebook, means a bank’s tier 1 capital divided by its total exposure measure, with this ratio
expressed as a percentage.
‘Unfunded credit protection’
institution derives from the obligation of a third party to pay an amount in the event of the default of the borrower or the
occurrence of other specified credit events.
‘US Partner Portfolio’
retail and financial sectors.
‘US Residential Mortgages’
‘Valuation weighted Loan to Value (LTV) Ratio’
calculating marked to market LTVs derived by comparing total outstanding balance and the value of total collateral we hold against
these balances. Valuation weighted loan to value is calculated using the following formula: LTV = total outstandings in
portfolio/total property values of total outstandings in portfolio.
‘Value at Risk (VaR)’
level and within a specific timeframe.
‘Weighted off balance sheet commitments’
factors used in the Standardised Approach to credit risk.
‘Wholesale loans’ / ‘lending’
‘Write -off (gross)’
to try to recover the asset or it is deemed immaterial or full and final settlement is reached and the shortfall written off. In the
event of write-off, the customer balance is removed from the balance sheet and the impairment allowance held against the asset is
released. Net write-offs represent gross write-offs less post write - off recoveries.
‘Wrong -way risk’
Arises, in a trading exposure, when there is significant correlation between the underlying asset and the
counterparty, which in the event of default would lead to a significant mark to market loss. When assessing the credit exposure of a
wrong -way trade, analysts take into account the correlation between the counterparty and the underlying asset as part of the
sanctioning process.