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BCS Barclays

Filed: 28 Jul 21, 10:56am
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
 
FORM 6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
July 28, 2021
 
Barclays PLC
(Name of Registrant)
 
1 Churchill Place
London E14 5HP
England
(Address of Principal Executive Office)
 
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
 
Form 20-F x Form 40-F
 
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes No x
 
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):
 
This Report on Form 6-K is filed by Barclays PLC.
 
This Report comprises:
 
Information given to The London Stock Exchange and furnished pursuant to
General Instruction B to the General Instructions to Form 6-K.
 
 
__________________________________________________________________________________
 
 
 
SIGNATURES
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 BARCLAYS PLC
 (Registrant)
 
Date: July 28, 2021
 
 
By: /s/ Garth Wright
--------------------------------
 Garth Wright
 Assistant Secretary
 
 
 
 
Barclays PLC
 
 
 
Interim Results Announcement
 
 
 
30 June 2021
 
 
 
Table of Contents
 
 
Results Announcement
 
Page
 Notes
 
1
Performance Highlights
 
2
Group Chief Executive Officer’s Review
 
6
Group Finance Director’s Review
 
7
Results by Business 
Barclays UK
 
9
 
Barclays International11
 
Head Office16
Quarterly Results Summary
 
17
Quarterly Results by Business
 
18
Performance Management 
Margins and Balances
 
24
 
Risk Management
 
Risk Management and Principal Risks
 
26
Credit Risk
 
28
Market Risk
 
  49
Treasury and Capital Risk
 
50
Statement of Directors’ Responsibilities
 
65
 
Independent Review Report to Barclays PLC
 66
Condensed Consolidated Financial Statements
 
67
Financial Statement Notes
 
78
Appendix: Non-IFRS Performance Measures
 
104
Shareholder Information
 
109
 
 
BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE: +44 (0) 20 7116 1000. COMPANY NO. 48839.
 
Notes
  
The terms Barclays or Group refer to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis compares the six months ended 30 June 2021 to the corresponding six months of 2020 and balance sheet analysis as at 30 June 2021 with comparatives relating to 31 December 2020 and 30 June 2020. 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 27 July 2021, does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2020, which contained an unmodified audit report under Section 495 of the Companies Act 2006 (which did not make any statements under Section 498 of the Companies Act 2006) have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.
 
These results will be furnished as a Form 6-K to the US Securities and Exchange Commission (SEC) as soon as practicable following their publication. Once furnished with the SEC, a copy of the Form 6-K will be available from the SEC’s website at www.sec.gov.
  
Barclays is a frequent issuer in the debt capital markets and regularly meets with investors via formal road-shows and other ad hoc meetings. Consistent with its usual practice, Barclays expects that from time to time over the coming quarter it will meet with investors globally to discuss these results and other matters relating to the Group.

 
Non-IFRS performance measures
 
Barclays management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses’ performance between financial periods and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays management. However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Refer to the appendix on pages 97 to102 for further information and calculations of non-IFRS performance measures included throughout this document, and the most directly comparable IFRS measures.
 
 
Forward-looking statements
 
This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as ‘may’, ‘will’, ‘seek’, ‘continue’, ‘aim’, ‘anticipate’, ‘target’, ‘projected’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’, ‘achieve’ or other words of similar meaning. Forward-looking statements can be made in writing but also may be made verbally by members of the management of the Group (including, without limitation, during management presentations to financial analysts) in connection with this document. Examples of forward-looking statements include, among others, statements or guidance regarding or relating to the Group’s future financial position, income growth, assets, impairment charges, provisions, business strategy, capital, leverage and other regulatory ratios, capital distributions (including dividend pay-out ratios and expected payment strategies), projected levels of growth in the banking and financial markets, projected costs or savings, any commitments and targets, estimates of capital expenditures, plans and objectives for future operations, projected employee numbers, IFRS impacts and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. The forward-looking statements speak only as at the date on which they are made. Forward-looking statements may be affected by changes in legislation, the development of standards and interpretations under IFRS, including evolving practices with regard to the interpretation and application of accounting and regulatory standards, the outcome of current and future legal proceedings and regulatory investigations, future levels of conduct provisions, the policies and actions of governmental and regulatory authorities, the Group’s ability along with governments and other stakeholders to measure, manage and mitigate the impacts of climate change effectively, geopolitical risks and the impact of competition. In addition, factors including (but not limited to) the following may have an effect: capital, leverage and other regulatory rules applicable to past, current and future periods; UK, US, Eurozone and global macroeconomic and business conditions; the effects of any volatility in credit markets; market related risks such as changes in interest rates and foreign exchange rates; effects of changes in valuation of credit market exposures; changes in valuation of issued securities; volatility in capital markets; changes in credit ratings of any entity within the Group or any securities issued by such entities; direct and indirect impacts of the coronavirus (COVID-19) pandemic; instability as a result of the UK’s exit from the European Union (“EU”), the effects of the EU-UK Trade and Cooperation Agreement and the disruption that may subsequently result in the UK and globally; the risk of cyber-attacks, information or security breaches or technology failures on the Group’s reputation, business or operations; and the success of future acquisitions, disposals and other strategic transactions. A number of these influences and factors are beyond the Group’s control. As a result, the Group’s actual financial position, future results, capital distributions, capital, leverage or other regulatory ratios or other financial and non-financial metrics or performance measures may differ materially from the statements or guidance set forth in the Group’s forward-looking statements. Additional risks and factors which may impact the Group’s future financial condition and performance are identified in Barclays PLC’s filings with the SEC (including, without limitation, Barclays PLC’s Annual Report on Form 20-F for the fiscal year ended 31 December 2020 and Interim Results Announcement for the six months ended 30 June 2021 filed on Form 6-K), which are available on the SEC’s website at www.sec.gov.
 
Subject to Barclays’ obligations under the applicable laws and regulations of any relevant jurisdiction, (including, without limitation, the UK and the US), in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
Performance Highlights
 
Group return on tangible equity (RoTE) of 16.4% for H121. Announced increased capital distributions, with half year dividend of 2.0p per share and intend to initiate a further share buyback of up to £500m
 
Barclays delivered a strong Group profit before tax in H121 of £5.0bn (H120: £1.3bn) and attributable profit of £3.8bn (H120: £0.7bn). This delivered a RoTE of 16.4% (H120: 2.9%) and earnings per share (EPS) of 22.2p (H120: 4.0p)
 
 
 
IncomeGroup income of £11.3bn down 3% versus prior year reflecting currency headwinds
 Barclays International income of £8.2bn, down 5% versus prior year
Resilient income as the Group continues to benefit from diversified income streams Corporate and Investment Bank (CIB) income of £6.6bn, down 5% with strong Equities and Investment Banking fees performance, up 38% and 27% respectively, whilst FICC was down 37% versus a strong H120
 Consumer, Cards and Payments (CC&P) income of £1.6bn, down 4% primarily reflecting lower interest earning US cards balances
 Barclays UK income of £3.2bn increased 1% reflecting strong mortgages performance with record net balance growth of £6.9bn, partially offset by lower interest earning UK cards balances and the effect of lower interest rates
Excluding the impact of the 10% depreciation of average USD against GBP, Group income was up versus prior year
Credit impairmentGroup credit impairment net release of £0.7bn (H120: £3.7bn charge)
Improved macroeconomic outlook and benign credit environmentThe net release included a reversal of £1.1bn in non-default charges, primarily reflecting the improved macroeconomic outlook. Excluding this reversal, the charge was £0.4bn, reflecting reduced unsecured lending balances and the benign credit environment
CostsGroup total operating expenses of £7.2bn up 10% versus prior year, resulting in a cost: income ratio of 64% (H120: 57%)
Investing for income growth whilst taking structural cost actionsTotal operating expenses included structural cost actions of £321m (H120: £78m), primarily related to the real estate review in Q221, higher performance costs reflective of improved returns, and continued investment and business growth, partially offset by the benefit from the depreciation of average USD against GBP and efficiency savings
Capital / capital distributionsCommon equity tier 1 (CET1) ratio of 15.1%, in line with December 2020
Announced increased capital distributionsHalf year dividend of 2.0p (H120: 0p) per share to be paid on 17 September 2021
Completed £700m share buyback in April
Intend to initiate a further share buyback of up to £500m, which would have an effect of 17bps on the CET1 ratio
 
 
Q221 performance
 
 
 
Q221 performance
 
 
 
Robust performance, with profitability benefiting from a credit impairment net release and the upwards re-measurement of UK DTAs
 
 
 
Q221 Group profit before tax of £2.6bn (Q220: £0.4bn), RoTE of 18.1% (Q220: 0.7%) and EPS of 12.3p (Q220: 0.5p)
 
Q221 Group income of £5.4bn, up 1% versus prior year despite currency headwinds. Barclays International income of £3.8bn was down 5% versus prior year, reflecting CIB income of £3.0bn, down 10% versus prior year and CC&P income of £0.8bn, up 21% versus prior year driven by a valuation loss in 2020. Barclays UK income of £1.6bn was up 11% versus prior year
 
Q221 Group credit impairment net release of £0.8bn (Q220: £1.6bn charge), reflecting a reversal of £1.0bn in non-default charges, primarily reflecting the improved macroeconomic outlook. Excluding this reversal, the charge was £0.2bn, which is broadly aligned with prior quarter
 
Q221 Group total operating expenses of £3.7bn, up £0.3bn versus prior year, reflecting structural cost actions
Q221 attributable profit of £2.1bn (Q220: £0.1bn), which included an income statement tax benefit of £0.4bn on the upwards re-measurement of UK deferred tax assets (DTAs)
The CET1 ratio as at June 2021 was 15.1%, up 50bps in the quarter, driven by profits and lower Risk Weighted Assets (RWAs)
 
 
Group outlook and targets
 
 
 
 
 
 
 
 
 
 
 
 
Outlook
Whilst the macroeconomic environment has improved, the outlook remains uncertain and subject to change depending on the evolution and persistence of the COVID-19 pandemic
 
 
 
Returns
 
 
Expect to deliver a RoTE above 10% in 2021
 
 
Impairment
 
 
The quarterly impairment run rate is expected to remain below historical levels in coming quarters given reduced unsecured lending balances and the improved macroeconomic outlook, acknowledging the continuing uncertainty
 
 
Costs
 
FY21 costs, excluding structural cost actions and performance costs, are expected to be broadly in line with FY201
 
Total full year 2021 costs are expected to be above 2020, due to higher structural cost actions, including a real estate charge in Q221, and higher performance costs, reflecting improved returns
 
 
Capital
 
 
FY21 CET1 ratio is expected to remain above the target range of 13-14%, given the economic environment remains uncertain and capital headwinds in 2022, including the c.40bps impact from the reversal of software amortisation benefit from 1 January 2022
 
 
Capital returns
 
Barclays’ capital returns policy incorporates a progressive ordinary dividend, supplemented by additional cash returns, including share buybacks as and when appropriate
 
Dividends will continue to be paid semi-annually, with the half year dividend expected to represent, under normal circumstances, around one-third of the total dividend for the year
 
 
 
Targets
 
 
 
Continue to target the following over the medium term:
 
Returns: RoTE of greater than 10%
Cost efficiency: Cost: income ratio below 60%
Capital adequacy: CET1 ratio in the range of 13-14%
 
 
1Group cost outlook is based on an average rate of 1.38 (USD/GBP) in H221 and subject to foreign currency movements.
 
 
Barclays Group results
for the half year ended
 
 
30.06.21
 
30.06.20
 
 
 
£m
 
£m
 
% Change
 
Net interest income3,9034,223(8)
Net fee, commission and other income
 
7,4127,398 
Total income11,31511,621(3)
Credit impairment releases/(charges)742(3,738) 
Net operating income12,0577,88353
Operating expenses(7,132)(6,563)(9)
Litigation and conduct(99)(30) 
Total operating expenses(7,231)(6,593)(10)
Other net income/expenses153(18) 
Profit before tax4,9791,272 
Tax charge(759)(113) 
Profit after tax4,2201,159 
Non-controlling interests(19)(37)49
Other equity instrument holders(389)(427)9
Attributable profit3,812695 
    
Performance measures   
Return on average tangible shareholders' equity16.4%2.9% 
Average tangible shareholders' equity (£bn)46.548.6 
Cost: income ratio64%57% 
Loan loss rate (bps)207 
Basic earnings per share22.2p4.0p 
Dividend per share2.0p 
Basic weighted average number of shares (m)17,14017,294 
Period end number of shares (m)16,99817,345 
Share buyback announced (£m)500 
Total payout equivalent per share4.9p 
    
 
As at 30.06.21
 
As at 31.12.20
 
As at 30.06.20
 
Balance sheet and capital management1
 
£bn
 
£bn
 
£bn
 
Loans and advances at amortised cost348.5342.6354.9
Loans and advances at amortised cost impairment coverage ratio1.8%2.4%2.5%
Deposits at amortised cost500.9481.0466.9
Tangible net asset value per share281p269p284p
Common equity tier 1 ratio15.1%15.1%14.2%
Common equity tier 1 capital46.246.345.4
Risk weighted assets306.4306.2319.0
Average UK leverage ratio4.8%5.0%4.7%
UK leverage ratio5.0%5.3%5.2%
    
Funding and liquidity   
Group liquidity pool (£bn)291266298
Liquidity coverage ratio162%162%186%
Loan: deposit ratio70%71%76%
 
 
1Refer to pages 54 to 60 for further information on how capital, RWAs and leverage are calculated.
 
 
Group Chief Executive Officer’s Review
 
 “This has been a strong first half, clearly demonstrating the benefits of our resilient and diversified universal bank in supporting the growth of capital markets, our corporate clients and retail customers. Barclays UK, and the CIB and CC&P businesses within Barclays International have all delivered strong double-digit RoTE. Our investment banking fees and equities businesses have delivered record income1, and we are seeing encouraging signs of recovery in consumer banking. Our profitability, strong capital position and balance sheet have enabled us to increase capital distributions to shareholders.
 
We are starting to see the resurgence of activity across our businesses, with Group income up on the same period last year when excluding the impact of FX movements. Our CIB business is well-positioned to benefit from continued growth in debt and equity capital markets, with Global Markets and Investment Banking fees income up 36% since 2019, and our strong retail businesses are poised to support and benefit from a consumer recovery.
 
We are also continuing to build our presence where we see further opportunities to scale, by organically growing our own products and service, and by partnering. Whilst we continue to develop our leading payments services including our new Barclays Cubed platform, we are also able to partner with major businesses in our US consumer banking business. In CIB, we are enhancing our ability to compete for client business with a stronger product and service set, from transaction banking to our equity franchise, alongside a build-out of our sectoral expertise in healthcare, technology and sustainability.
 
We will continue to invest behind those opportunities we see for growing income and returns across our businesses, whilst also driving efficiencies and savings across Barclays. Excluding performance costs and structural cost actions, costs in 2021 will be broadly in line with 20202.
 
Against this backdrop of economic recovery, our robust approach to risk management means we are making a net impairment release of £0.7bn versus a charge of £3.7bn in H120. We also delivered a CET1 ratio of 15.1%, and increased capital distributions, with the announcement of a half year dividend of 2 pence per share, alongside the intention to initiate a share buyback of up to £500m. This is in addition to the £700m share buyback completed in April.
 
Alongside the role we play in supporting economic growth, we are firmly focused on our wider societal responsibilities. We continue to drive hard on our ambition to be a net zero bank, and support the aims of the Paris Agreement, already having provided nearly half of our £100bn green financing commitment through our capital markets and lending expertise. We continue to develop our ability to measure our financed emissions and track them at a portfolio level through our unique BlueTrack TM methodology.
 
We have also demonstrated our ability, and willingness, to support customers and clients through the pandemic, and we are mindful that this support will need to continue as we see the pandemic subside.
 
Taken together, we continue to invest behind opportunities for growth, manage our capital and balance sheet conservatively, and focus on our role in society. With a first half profit before tax of £5bn, quadruple the same period last year, and a RoTE of 16.4%, this is a good first half performance. It provides a strong platform on which to build in the second half, and to deliver a full year RoTE in excess of 10%.”
 
 
 
James E Staley, Group Chief Executive Officer
 
1Period covering Q114 - Q221. Pre 2014 financials were not restated following re-segmentation in Q116.
2Group cost outlook is based on an average rate of 1.38 (USD/GBP) in H221 and subject to foreign currency movements.
 
 
Group Finance Director’s Review
 
Group performance
 
Barclays delivered a profit before tax of £4,979m (H120: £1,272m), RoTE of 16.4% (H120: 2.9%), and EPS of 22.2p (H120: 4.0p). Profitability benefitted from a credit impairment net release and the upwards re-measurement of UK DTAs. The 10% depreciation of average USD against GBP adversely impacted income and profits and positively impacted total operating expenses
 
Total income decreased to £11,315m (H120: £11,621m). Barclays UK income increased 1%. Barclays International income decreased 5%, with CIB income down 5% and CC&P income down 4%. Excluding the impact of the 10% depreciation of average USD against GBP, total income was up, reflecting the Group’s diversified income streams
Credit impairment net release of £742m (H120: £3,738m charge) driven by an improved macroeconomic outlook used in the Q221 scenario refresh, lower unsecured lending balances and a benign credit environment. Barclays has maintained and refined management judgements in respect of customers and clients considered to be potentially more vulnerable as government and other support schemes start to reduce. The reduction in unsecured lending balances and growth in secured balances, with the mix impact contributing to a decrease in the Group’s loan coverage ratio to 1.8% (December 2020: 2.4%), with an unsecured loan coverage ratio at 10.2% (December 2020: 12.3%) and wholesale loan coverage ratio at 1.1% (December 2020: 1.5%)
 
Total operating expenses increased 10% to £7,231m, due to structural cost actions of £321m primarily relating to the real estate review, higher performance costs that reflect improvement in returns, and continued investment and business growth, partially offset by efficiency savings. This resulted in a cost: income ratio of 64% (H120: 57%)
 
The effective tax rate was 15.2% (H120: 8.9%). This reflects the £392m tax benefit recognised for the re-measurement of the Group’s UK DTAs as a result of the UK corporation tax rate increase from 19% to 25% from 1 April 2023
 
Attributable profit was £3,812m (H120: £695m)
 
As a result of the share buyback completed in April, the period end number of shares was 16,998m (December 2020: 17,359m)
 
Total assets increased to £1,376bn (December 2020: £1,350bn) primarily due to a £26bn increase in cash at central banks, a £19bn increase in trading portfolio assets due to increased activity and a £19bn increase in financial assets at fair value due to an increase in secured lending, partially offset by a £46bn decrease in derivative assets driven by an increase in major interest rate curves
Tangible net asset value (TNAV) per share increased to 281p (December 2020: 269p) primarily reflecting 22.2p of EPS, partially offset by negative reserve movements
 
 
 
Group capital and leverage
 
 
The CET1 ratio remained stable at 15.1% (December 2020: 15.1%)
 
 
 
CET1 capital reduced by £0.1bn to £46.2bn (December 2020: £46.3bn) as profit before tax of £5.0bn was offset by the removal of temporary regulatory supporting measures introduced in 2020, dividends paid and foreseen and pensions deficit contribution payments. The £1.1bn release of non-defaulted credit impairment was more than offset by a reduction in IFRS 9 transitional relief which also decreased due to impairment migrations from stage 2 to stage 3 and the relief on the pre-2020 impairment charge reducing from 70% to 50% in 2021
 
 
 
RWAs remained broadly stable at £306.4bn (December 2020: £306.2bn) primarily due to increased client and trading activity within CIB and growth in mortgages within Barclays UK, partially offset by lower consumer lending
 
 
The average UK leverage ratio decreased to 4.8% (December 2020: 5.0%). The average leverage exposure increased by £45.1bn to £1,192.0bn (December 2020: £1,146.9bn) largely driven by an increase in securities financing transactions (SFTs), trading portfolio assets (TPAs) and potential future exposure (PFE) on derivatives
 
 
 
Group funding and liquidity
 
The liquidity pool was £291bn (December 2020: £266bn) and the liquidity coverage ratio remained significantly above the 100% regulatory requirement at 162% (December 2020: 162%), equivalent to a surplus of £108bn (December 2020: £99bn). The increase in the pool is driven by continued deposit growth, further borrowing from the Bank of England’s Term Funding Scheme with additional incentives for SMEs and a seasonal increase in short-term wholesale funding, which were partly offset by an increase in business funding consumption
 
Wholesale funding outstanding, excluding repurchase agreements, was £158.7bn (December 2020: £145.0bn). The Group issued £5.9bn equivalent of minimum requirement for own funds and eligible liabilities (MREL) instruments from Barclays PLC (the Parent company) during the year. The Group is well advanced in its MREL issuance plans relative to the estimated 1 January 2022 requirement
  
 
Capital distributions
 
Barclays understands the importance of delivering attractive total cash returns to shareholders. Barclays is therefore committed to maintaining an appropriate balance between total cash returns to shareholders, investment in the business and maintaining a strong capital position. Going forward, Barclays intends to pay a progressive ordinary dividend, taking into account these objectives and the earnings outlook of the Group. It is also the Board’s intention to continue to supplement the ordinary dividends with additional cash returns, including share buybacks, to shareholders as and when appropriate
 
Barclays will pay a half year dividend per share of 2.0p on 17 September 2021, and intends to initiate a share buyback of up to £500m which is expected to commence in Q321. This is in addition to the £700m share buyback completed in April
 
The Board will assess the appropriate level and form of capital distributions as the year progresses
 
Dividends will continue to be paid semi-annually, with the half year dividend expected to represent, under normal circumstances, around one-third of the total dividend for the year
 
 
 
Tushar Morzaria, Group Finance Director
 
Results by Business
  
 
Barclays UK
Half year ended
 
Half year ended
 
 
 
30.06.21
 
30.06.20
 
 
Income statement information£m£m
% Change
 
Net interest income2,5862,637(2)
Net fee, commission and other income61353415
Total income3,1993,1711
Credit impairment releases/(charges)443(1,064) 
Net operating income3,6422,10773
Operating expenses(2,114)(2,041)(4)
Litigation and conduct(22)(11) 
Total operating expenses(2,136)(2,052)(4)
Other net income
 
13 
Profit before tax1,50668 
Attributable profit1,01952 
    
 
As at 30.06.21
 
As at 31.12.20
 
As at 30.06.20
 
Balance sheet information
£bn
 
£bn
 
£bn
 
Loans and advances to customers at amortised cost207.8205.4202.0
Total assets311.2289.1287.6
Customer deposits at amortised cost255.5240.5225.7
Loan: deposit ratio87%89%92%
Risk weighted assets72.273.777.9
Period end allocated tangible equity9.99.710.3
    
 
Half year ended
 
Half year ended
 
 
Key facts
30.06.21
 
30.06.20
 
 
Average loan to value of mortgage portfolio1
51%52% 
Average loan to value of new mortgage lending1
69%68% 
Number of branches755904 
Mobile banking active customers9.4m8.7m 
30 day arrears rate - Barclaycard Consumer UK1.4%2.0% 
    
Performance measures   
Return on average allocated tangible equity20.6%1.0% 
Average allocated tangible equity (£bn)9.910.2 
Cost: income ratio67%65% 
Loan loss rate (bps)101 
Net interest margin2.54%2.69% 
 
 
1Average loan to value of mortgages is balance weighted and reflects both residential and buy-to-let (BTL) mortgage portfolios within the Home Loans portfolio.
 
 
Analysis of Barclays UK
 
Half year ended
 
Half year ended
 
 
30.06.21
 
30.06.20
 
 
Analysis of total income£m£m
% Change
 
Personal Banking1,9101,7946
Barclaycard Consumer UK605803(25)
Business Banking68457419
Total income3,1993,1711
    
Analysis of credit impairment releases/(charges)   
Personal Banking50(264) 
Barclaycard Consumer UK398(697) 
Business Banking(5)(103) 
Total credit impairment releases/(charges)443(1,064) 
    
 
As at 30.06.21
 
As at 31.12.20
 
As at 30.06.20
 
Analysis of loans and advances to customers at amortised cost
£bn
 
£bn
 
£bn
 
Personal Banking162.4157.3154.9
Barclaycard Consumer UK8.89.911.5
Business Banking36.638.235.6
Total loans and advances to customers at amortised cost207.8205.4202.0
    
Analysis of customer deposits at amortised cost   
Personal Banking191.0179.7169.6
Barclaycard Consumer UK0.10.10.1
Business Banking64.460.756.0
Total customer deposits at amortised cost255.5240.5225.7
 
 
Barclays UK delivered a RoTE of 20.6% including the benefit from a net impairment release following an improved UK macroeconomic outlook. Income increased 1% reflecting strong growth in mortgage balances of £6.9bn at improved margins, despite a £1.5bn reduction in unsecured lending balances. Barclays UK grew deposits by £15.0bn, further strengthening the liquidity position reflected in the loan: deposit ratio of 87%, 2% lower than FY20.
 
 
Income statement – H121 compared to H120
 
Profit before tax increased to £1,506m (H120: £68m). RoTE was 20.6% (H120: 1.0%) reflecting materially lower credit impairment charges
 
Total income increased 1% to £3,199m. Net interest income reduced 2% to £2,586m with a net interest margin (NIM) of 2.54% (H120: 2.69%). Net fee, commission and other income increased 15% to £613m
 
 
Personal Banking income increased 6% to £1,910m, reflecting strong growth in mortgages alongside improved margins, balance growth in deposits and the non-recurrence of COVID-19 customer support actions, partially offset by deposit margin compression from lower interest rates and lower unsecured lending balances
 
 
Barclaycard Consumer UK income decreased 25% to £605m as reduced borrowing and continued payments by customers resulted in a lower level of interest earning lending (IEL) balances
 
 
Business Banking income increased 19% to £684m due to lending and deposit balance growth from £12.1bn of government scheme lending and the non-recurrence of COVID-19 and related customer support actions, partially offset by deposit margin compression from lower interest rates
 
Credit impairment net release of £443m (H120: £1,064m charge) was driven by an improved macroeconomic outlook used in the Q221 scenario refresh. The primary driver is a reduction in the anticipated peak of UK unemployment with the majority of this provision release in UK cards and personal loans. As at 30 June 2021, 30 and 90 day arrears rates in UK cards were 1.4% (H120: 2.0%) and 0.6% (H120: 1.0%) respectively
Total operating expenses increased 4% to £2,136m reflecting investment spend and higher operational and customer service costs, including ongoing financial assistance, partially offset by efficiency savings
 
 
Balance sheet – 30 June 2021 compared to 31 December 2020
 
 
Loans and advances to customers at amortised cost increased 1% to £207.8bn predominantly from £6.9bn of mortgage growth following continued strong flow of new applications as well as strong customer retention, offset by a £1.8bn decrease in the Education, Social Housing and Local Authority (ESHLA) portfolio and £1.5bn lower unsecured lending balances, albeit loans and advances in Barclaycard Consumer UK stabilised in Q221
 
 
Customer deposits at amortised cost increased 6% to £255.5bn reflecting an increase of £11.3bn and £3.7bn in Personal Banking and Business Banking respectively, further strengthening the liquidity position and contributing to a loan: deposit ratio of 87% (December 2020: 89%)
 
 
RWAs decreased to £72.2bn (December 2020: £73.7bn) driven by a reduction in unsecured lending and ESHLA, partially offset by growth in mortgages
 
 
 
Barclays International
Half year ended
 
Half year ended
 
 
 
30.06.21
 
30.06.20
 
 
Income statement information£m£m
% Change
 
Net interest income1,5591,845(16)
Net trading income3,3894,020(16)
Net fee, commission and other income3,2702,78917
Total income8,2188,654(5)
Credit impairment releases/(charges)293(2,619) 
Net operating income8,5116,03541
Operating expenses(4,606)(4,405)(5)
Litigation and conduct(84)(11) 
Total operating expenses(4,690)(4,416)(6)
Other net income
 
2210 
Profit before tax3,8431,629 
Attributable profit2,698997 
    
 
As at 30.06.21
 
As at 31.12.20
 
As at 30.06.20
 
Balance sheet information
£bn
 
£bn
 
£bn
 
Loans and advances at amortised cost121.9122.7138.1
Trading portfolio assets147.1127.7109.5
Derivative financial instrument assets255.4301.8306.8
Financial assets at fair value through the income statement190.4170.7154.3
Cash collateral and settlement balances108.597.5130.8
Other assets223.5221.4236.3
Total assets1,046.81,041.81,075.8
Deposits at amortised cost245.4240.5241.2
Derivative financial instrument liabilities246.9300.4307.6
Loan: deposit ratio50%51%57%
Risk weighted assets223.2222.3231.2
Period end allocated tangible equity31.830.231.6
    
 
Half year ended
 
Half year ended
 
 
Performance measures
30.06.21
 
30.06.20
 
 
Return on average allocated tangible equity16.7%6.2% 
Average allocated tangible equity (£bn)32.332.4 
Cost: income ratio57%51% 
Loan loss rate (bps)368 
Net interest margin3.95%3.67% 
 
 
Analysis of Barclays International   
Corporate and Investment Bank
Half year ended
 
Half year ended
 
 
 
30.06.21
 
30.06.20
 
 
Income statement information£m£m
% Change
 
Net interest income640669(4)
Net trading income3,4114,043(16)
Net fee, commission and other income2,5222,22114
Total income6,5736,933(5)
Credit impairment releases/(charges)272(1,320) 
Net operating income6,8455,61322
Operating expenses(3,509)(3,370)(4)
Litigation and conduct(2)(3)33
Total operating expenses(3,511)(3,373)(4)
Other net income13(67)
Profit before tax3,3352,24349
Attributable profit2,3121,51453
    
 
As at 30.06.21
 
As at 31.12.20
 
As at 30.06.20
 
Balance sheet information
£bn
 
£bn
 
£bn
 
Loans and advances at amortised cost91.092.4104.9
Trading portfolio assets147.0127.5109.3
Derivative financial instrument assets255.3301.7306.7
Financial assets at fair value through the income statement190.3170.4153.7
Cash collateral and settlement balances107.796.7129.7
Other assets192.5194.9205.5
Total assets983.8983.61,009.8
Deposits at amortised cost178.2175.2173.9
Derivative financial instrument liabilities
 
246.8300.3307.6
Risk weighted assets194.3192.2198.3
    
 
Half year ended
 
Half year ended
 
 
Performance measures
30.06.21
 
30.06.20
 
 
Return on average allocated tangible equity16.3%11.0% 
Average allocated tangible equity (£bn)28.327.7 
Cost: income ratio53%49% 
    
    
Analysis of total income
£m
 
£m
 
% Change
 
FICC2,0993,326(37)
Equities1,7091,23838
Global Markets1
3,8084,564(17)
Advisory38123959
Equity capital markets46924790
Debt capital markets882881 
Investment Banking fees1
1,7321,36727
Corporate lending24417242
Transaction banking789830(5)
Corporate1,0331,0023
Total income6,5736,933(5)
 
 
1Previously labelled as “Markets” and “Banking fees”.
 
 
Analysis of Barclays International   
Consumer, Cards and Payments
Half year ended
 
Half year ended
 
 
 
30.06.21
 
30.06.20
 
 
Income statement information
£m
 
£m
 
% Change
 
Net interest income9191,176(22)
Net fee, commission, trading and other income72654533
Total income1,6451,721(4)
Credit impairment releases/(charges)21(1,299) 
Net operating income1,666422 
Operating expenses(1,097)(1,035)(6)
Litigation and conduct(82)(8) 
Total operating expenses(1,179)(1,043)(13)
Other net income217 
Profit/(loss) before tax508(614) 
Attributable profit/(loss)386(517) 
    
 
As at 30.06.21
 
As at 31.12.20
 
As at 30.06.20
 
Balance sheet information
£bn
 
£bn
 
£bn
 
Loans and advances at amortised cost30.930.333.2
Total assets63.058.266.0
Deposits at amortised cost67.265.367.3
Risk weighted assets29.030.132.9
    
 
Half year ended
 
Half year ended
 
 
Key facts
30.06.21
 
30.06.20
 
 
30 day arrears rate – Barclaycard US1.6%2.4% 
US cards customer FICO score distribution   
<66010%14% 
>66090%86% 
Total number of Barclaycard payments clientsc.372,000c.368,000 
Value of payments processed (£bn)1
160156 
    
Performance measures   
Return on average allocated tangible equity19.1%(21.9)% 
Average allocated tangible equity (£bn)4.04.7 
Cost: income ratio72%61% 
Loan loss rate (bps)714 
 
 
 
Half year ended
 
Half year ended
 
 
30.06.21
 
30.06.20
 
 
Analysis of total income£m£m
% Change
 
International Cards and Consumer Bank1,0501,257(16)
Private Bank3933629
Unified Payments20210298
Total income1,6451,721(4)
 
 
1Includes £129bn (H120: £124bn) of merchant acquiring payments.
 
 
Barclays International delivered a RoTE of 16.7% reflecting the benefits of a diversified business. CIB delivered a RoTE of 16.3% reflecting a strong performance in Equities and Investment Banking fees, offset by a decrease in FICC against a very strong H120 comparative. CC&P RoTE improved significantly to 19.1% as a decline in income, reflecting lower cards balances, was more than offset by an improvement in impairment.
 
Income statement – H121 compared to H120

 
Profit before tax increased 136% to £3,843m with a RoTE of 16.7% (H120: 6.2%), reflecting a RoTE of 16.3% (H120: 11.0%) in CIB and 19.1% (H120: (21.9)%) in CC&P
 
The 10% depreciation of average USD against GBP adversely impacted income and profits and positively impacted total operating expenses
 
Total income decreased to £8,218m (H120: £8,654m)
 
 CIB income decreased 5% to £6,573m
  
Global Markets income decreased 17% to £3,808m as a strong performance in Equities, representing the best ever first half of the year on a comparable basis1, was more than offset by FICC. Equities income increased 38% to £1,709m driven by derivatives, reflecting strong client activity, and financing through increased client balances. FICC income decreased 37% to £2,099m due to tighter spreads and the non-recurrence of H120 client activity levels
 
  
Investment Banking fees income, representing the best ever first half of the year on a comparable basis1, increased 27% to £1,732m driven by a strong performance in Equity capital markets and Advisory reflecting an increase in the fee pool and an increased market share2
 
  
Within Corporate, Transaction banking income decreased 5% to £789m as deposit balance growth was more than offset by margin compression. Corporate lending income increased by 42% to £244m driven by the non-recurrence of losses on the mark-to-market of lending and related hedge positions partially offset by a current year write-off on a single name
 
 
 
CC&P income decreased 4% to £1,645m
 
  
International Cards and Consumer Bank income decreased 16% to £1,050m reflecting lower cards balances
 
  
Private Bank income increased 9% to £393m, which included a gain on a property sale
 
  
Unified Payments income increased 98% to £202m driven by the non-recurrence of 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 net release of £293m (H120: £2,619m charge) was driven by an improved macroeconomic outlook used in the Q221 scenario refresh
 
 
CIB credit impairment net release of £272m (H120: £1,320m charge), supported by a benign credit risk environment and limited single name wholesale loan charges
 
 
CC&P credit impairment net release of £21m (H120: £1,299m charge) partially driven by lower delinquencies and customer repayments. As at 30 June 2021, 30 and 90 day arrears in US cards were 1.6% (H120: 2.4%) and 0.9% (H120: 1.4%) respectively
 
Total operating expenses increased 6% to £4,690m
 
CIB total operating expenses increased 4% to £3,511m due to higher performance costs that reflected an improvement in returns
 
 
CC&P total operating expenses increased 13% to £1,179m driven by the impact of higher investment spend, including marketing, and customer remediation costs related to a legacy portfolio
 
 
 
Balance sheet – 30 June 2021 compared to 31 December 2020
 
 
 
Trading portfolio assets increased £19.4bn to £147.1bn due to increased activity
 
Derivative financial instruments assets decreased £46.4bn and liabilities decreased £53.5bn to £255.4bn and £246.9bn respectively, driven by an increase in major interest rate curves
 
Financial assets at fair value through the income statement increased £19.7bn to £190.4bn driven by increased secured lending
 
Cash collateral and settlements balances increased £11.0bn to £108.5bn due to increased client activity
 
Deposits at amortised cost increased £4.9bn to £245.4bn due to clients increasing liquidity
 
RWAs increased to £223.2bn (December 2020: £222.3bn) primarily due to increased client and trading activity within CIB, partially offset by the depreciation of period end EUR and USD against GBP
 
 
 
1Period covering Q114 – Q221. Pre 2014 financials were not restated following re-segmentation in Q116.
2Data source: Dealogic for the period covering 1 January to 30 June 2021.
 
 
Head Office
Half year ended
 
Half year ended
 
 
 
30.06.21
 
30.06.20
 
 
Income statement information£m£m
% Change
 
Net interest income(242)(259)7
Net fee, commission and other income14055 
Total income(102)(204)50
Credit impairment releases/(charges)6(55) 
Net operating income(96)(259)63
Operating expenses(412)(117) 
Litigation and conduct7(8) 
Total operating expenses(405)(125) 
Other net income/(expenses)
 
131(41) 
Loss before tax(370)(425)13
Attributable profit/(loss)95(354) 
    
 
As at 30.06.21
 
As at 31.12.20
 
As at 30.06.20
 
Balance sheet information
£bn
 
£bn
 
£bn
 
Total assets18.318.621.7
Risk weighted assets11.110.29.9
Period end allocated tangible equity5.96.87.4
    
 
Half year ended
 
Half year ended
 
 
Performance measures
30.06.21
 
30.06.20
 
 
Average allocated tangible equity (£bn)4.36.0 
 
 
Income statement – H121 compared to H120
 
 
 
Loss before tax was £370m (H120: £425m)
Total income was an expense of £102m (H120: £204m), which primarily reflected hedge accounting, funding costs on legacy capital instruments and treasury items, partially offset by mark-to-market gains on legacy investments
Credit impairment net release of £6m (H120: £55m charge) was driven by an improved macroeconomic outlook used in the Q221 scenario refresh, resulting in a provision release for the Italian home loan portfolio
Total operating expenses were £405m (H120: £125m), which included a charge of £266m relating to structural cost actions taken as part of the real estate review
Other net income was £131m (H120: £41m expense) driven by a fair value gain in Barclays’ associate investment holding in the Business Growth Fund
 
Balance sheet – 30 June 2021 compared to 31 December 2020
 
RWAs were £11.1bn (December 2020: £10.2bn)
 
 
Quarterly Results Summary
 
 
Barclays Group
 
          
 
Q221
 
Q121
 
 
Q420
 
Q320
 
Q220
 
Q120
 
 
Q419
 
Q319
 
Income statement information
 
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
Net interest income2,0521,851 1,8452,0551,8922,331 2,3442,445
Net fee, commission and other income3,3634,049 3,0963,1493,4463,952 2,9573,096
Total income5,4155,900 4,9415,2045,3386,283 5,3015,541
Credit impairment releases/(charges)797(55) (492)(608)(1,623)(2,115) (523)(461)
Net operating income6,2125,845 4,4494,5963,7154,168 4,7785,080
Operating costs(3,587)(3,545) (3,480)(3,391)(3,310)(3,253) (3,308)(3,293)
UK bank levy (299) (226)
Litigation and conduct(66)(33) (47)(76)(20)(10) (167)(1,568)
Total operating expenses(3,653)(3,578) (3,826)(3,467)(3,330)(3,263) (3,701)(4,861)
Other net income/(expenses)21132 2318(26)8 2027
Profit before tax2,5802,399 6461,147359913 1,097246
Tax charge(263)(496) (163)(328)(42)(71) (189)(269)
Profit/(loss) after tax2,3171,903 483819317842 908(23)
Non-controlling interests(15)(4) (37)(4)(21)(16) (42)(4)
Other equity instrument holders(194)(195) (226)(204)(206)(221) (185)(265)
Attributable profit/(loss)2,1081,704 22061190605 681(292)
           
Performance measures          
Return on average tangible shareholders' equity18.1%14.7% 1.8%5.1%0.7%5.1% 5.9%(2.4)%
Average tangible shareholders' equity (£bn)46.546.5 47.648.350.247.0 46.448.4
Cost: income ratio67%61% 77%67%62%52% 70%88%
Loan loss rate (bps)6 5669179223 6052
Basic earnings/(loss) per share12.3p9.9p 1.3p3.5p0.5p3.5p 3.9p(1.7)p
Basic weighted average number of shares (m)17,14017,293 17,30017,29817,29417,278 17,20017,192
Period end number of shares (m)16,99817,223 17,35917,35317,34517,332 17,32217,269
           
Balance sheet and capital management1
£bn
 
£bn
 
 
£bn
 
£bn
 
£bn
 
£bn
 
 
£bn
 
£bn
 
Loans and advances at amortised cost348.5345.8 342.6344.4354.9374.1 339.1345.1
Loans and advances at amortised cost impairment coverage ratio1.8%2.2% 2.4%2.5%2.5%2.1% 1.8%1.9%
Total assets1,376.31,379.7 1,349.51,421.71,385.11,444.3 1,140.21,290.4
Deposits at amortised cost500.9498.8 481.0494.6466.9470.7 415.8420.6
Tangible net asset value per share281p267p 269p275p284p284p 262p274p
Common equity tier 1 ratio15.1%14.6% 15.1%14.6%14.2%13.1% 13.8%13.4%
Common equity tier 1 capital46.245.9 46.345.545.442.5 40.841.9
Risk weighted assets306.4313.4 306.2310.7319.0325.6 295.1313.3
Average UK leverage ratio4.8%4.9% 5.0%5.1%4.7%4.5% 4.5%4.6%
Average UK leverage exposure1,192.01,174.9 1,146.91,111.11,148.71,176.2 1,142.81,171.2
UK leverage ratio5.0%5.0% 5.3%5.2%5.2%4.5% 5.1%4.8%
UK leverage exposure1,153.61,145.4 1,090.91,095.11,071.11,178.7 1,007.71,099.8
           
Funding and liquidity          
Group liquidity pool (£bn)291290 266327298237 211226
Liquidity coverage ratio162%161% 162%181%186%155% 160%151%
Loan: deposit ratio70%69% 71%70%76%79% 82%82%
 
 
1Refer to pages 54 to 60 for further information on how capital, RWAs and leverage are calculated.
 
 
Quarterly Results by Business
 
 
Barclays UK          
 
Q221
 
Q121
 
 
Q420
 
Q320
 
Q220
 
Q120
 
 
Q419
 
Q319
 
Income statement information
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
Net interest income1,3051,281 1,3171,2801,2251,412 1,4781,503
Net fee, commission and other income318295 309270242292 481343
Total income1,6231,576 1,6261,5501,4671,704 1,9591,846
Credit impairment releases/(charges)520(77) (170)(233)(583)(481) (190)(101)
Net operating income2,1431,499 1,4561,3178841,223 1,7691,745
Operating costs(1,078)(1,036) (1,134)(1,095)(1,018)(1,023) (1,023)(952)
UK bank levy (50) (41)
Litigation and conduct(19)(3) 4(25)(6)(5) (58)(1,480)
Total operating expenses(1,097)(1,039) (1,180)(1,120)(1,024)(1,028) (1,122)(2,432)
Other net income/(expenses) 6(1)13 
Profit/(loss) before tax1,046460 282196(127)195 647(687)
Attributable profit/(loss)721298 160113(123)175 438(907)
           
Balance sheet information
£bn
 
£bn
 
 
£bn
 
£bn
 
£bn
 
£bn
 
 
£bn
 
£bn
 
Loans and advances to customers at amortised cost207.8205.7 205.4203.9202.0195.7 193.7193.2
Total assets311.2309.1 289.1294.5287.6267.5 257.8257.9
Customer deposits at amortised cost255.5247.5 240.5232.0225.7207.5 205.5203.3
Loan: deposit ratio87%88% 89%91%92%96% 96%97%
Risk weighted assets72.272.7 73.776.277.977.7 74.976.8
Period end allocated tangible equity9.910.0 9.710.010.310.3 10.310.4
           
Performance measures          
Return on average allocated tangible equity29.1%12.0% 6.5%4.5%(4.8)%6.9% 17.0%(34.9)%
Average allocated tangible equity (£bn)9.99.9 9.810.110.310.1 10.310.4
Cost: income ratio68%66% 73%72%70%60% 57%132%
Loan loss rate (bps)14 314311196 3820
Net interest margin2.55%2.54% 2.56%2.51%2.48%2.91% 3.03%3.10%
 
 
Analysis of Barclays UK
Q221
 
Q121
 
 
Q420
 
Q320
 
Q220
 
Q120
 
 
Q419
 
Q319
 
Analysis of total income
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
Personal Banking987923 895833826968 1,0641,035
Barclaycard Consumer UK290315 354362367436 533472
Business Banking346338 377355274300 362339
Total income1,6231,576 1,6261,5501,4671,704 1,9591,846
           
Analysis of credit impairment releases/(charges)          
Personal Banking72(22) (68)(48)(130)(134) (71)(36)
Barclaycard Consumer UK434(36) (78)(106)(396)(301) (108)(49)
Business Banking14(19) (24)(79)(57)(46) (11)(16)
Total credit impairment releases/(charges)520(77) (170)(233)(583)(481) (190)(101)
           
Analysis of loans and advances to customers at amortised cost
£bn
 
£bn
 
 
£bn
 
£bn
 
£bn
 
£bn
 
 
£bn
 
£bn
 
Personal Banking162.4160.4 157.3155.7154.9153.4 151.9150.1
Barclaycard Consumer UK8.88.7 9.910.711.513.6 14.714.9
Business Banking36.636.6 38.237.535.628.7 27.128.2
Total loans and advances to customers at amortised cost207.8205.7 205.4203.9202.0195.7 193.7193.2
           
Analysis of customer deposits at amortised cost          
Personal Banking191.0186.0 179.7173.2169.6161.4 159.2157.9
Barclaycard Consumer UK0.10.1 0.10.10.1 
Business Banking64.461.4 60.758.756.046.1 46.345.4
Total customer deposits at amortised cost255.5247.5 240.5232.0225.7207.5 205.5203.3
 
 
Barclays International          
 
Q221
 
Q121
 
 
Q420
 
Q320
 
Q220
 
Q120
 
 
Q419
 
Q319
 
Income statement information
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
Net interest income811748 614823847998 9651,059
Net trading income1,4551,934 1,3721,5281,6602,360 9291,110
Net fee, commission and other income1,5531,717 1,5001,4301,5031,286 1,5581,581
Total income3,8194,399 3,4863,7814,0104,644 3,4523,750
Credit impairment releases/(charges)27122 (291)(370)(1,010)(1,609) (329)(352)
Net operating income4,0904,421 3,1953,4113,0003,035 3,1233,398
Operating costs(2,168)(2,438) (2,133)(2,227)(2,186)(2,219) (2,240)(2,282)
UK bank levy (240) (174)
Litigation and conduct(63)(21) (9)(28)(11) (86)
Total operating expenses(2,231)(2,459) (2,382)(2,255)(2,197)(2,219) (2,500)(2,282)
Other net income139 9946 1721
Profit before tax1,8721,971 8221,165807822 6401,137
Attributable profit1,2671,431 441782468529 397799
           
Balance sheet information
£bn
 
£bn
 
 
£bn
 
£bn
 
£bn
 
£bn
 
 
£bn
 
£bn
 
Loans and advances at amortised cost121.9123.5 122.7128.0138.1167.0 132.8138.1
Trading portfolio assets147.1131.1 127.7122.3109.5101.6 113.3119.4
Derivative financial instrument assets255.4269.4 301.8295.9306.8341.5 228.9286.0
Financial assets at fair value through the income statement190.4197.5 170.7178.2154.3188.4 128.4158.0
Cash collateral and settlement balances108.5109.7 97.5121.8130.8153.2 79.4112.5
Other assets223.5221.7 221.4261.7236.3201.5 178.6195.6
Total assets1,046.81,052.9 1,041.81,107.91,075.81,153.2 861.41,009.6
Deposits at amortised cost245.4251.2 240.5262.4241.2263.3 210.0217.6
Derivative financial instrument liabilities246.9260.2 300.4293.3307.6338.8 228.9283.3
Loan: deposit ratio50%49% 51%49%57%63% 63%63%
Risk weighted assets223.2230.0 222.3224.7231.2237.9 209.2223.1
Period end allocated tangible equity31.832.7 30.230.531.633.1 29.631.4
           
Performance measures          
Return on average allocated tangible equity15.6%17.7% 5.8%10.2%5.6%6.8% 5.1%9.9%
Average allocated tangible equity (£bn)32.432.3 30.530.633.531.2 30.932.2
Cost: income ratio58%56% 68%60%55%48% 72%61%
Loan loss rate (bps)(7) 90112284377 9699
Net interest margin3.96%3.92% 3.41%3.79%3.43%3.93% 4.29%4.10%
 
 
Analysis of Barclays International          
           
Corporate and Investment Bank
Q221
 
Q121
 
 
Q420
 
Q320
 
Q220
 
Q120
 
 
Q419
 
Q319
 
Income statement information
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
Net interest income370270 110305334335 248339
Net trading income1,4941,917 1,3971,5351,8122,231 9511,126
Net fee, commission and other income1,1151,407 1,1311,0651,1701,051 1,1151,152
Total income2,9793,594 2,6382,9053,3163,617 2,3142,617
Credit impairment releases/(charges)22943 (52)(187)(596)(724) (30)(31)
Net operating income3,2083,637 2,5862,7182,7202,893 2,2842,586
Operating costs(1,623)(1,886) (1,603)(1,716)(1,680)(1,690) (1,691)(1,712)
UK bank levy (226) (156)
Litigation and conduct(1)(1) 2(3)(3) (79)(4)
Total operating expenses(1,624)(1,887) (1,827)(1,719)(1,683)(1,690) (1,926)(1,716)
Other net income1 213 112
Profit before tax1,5841,751 7611,0001,0401,203 359882
Attributable profit1,0491,263 413627694820 193609
           
Balance sheet information
£bn
 
£bn
 
 
£bn
 
£bn
 
£bn
 
£bn
 
 
£bn
 
£bn
 
Loans and advances at amortised cost91.094.3 92.496.8104.9128.2 92.095.8
Trading portfolio assets147.0130.9 127.5122.2109.3101.5 113.3119.3
Derivative financial instruments assets255.3269.4 301.7295.9306.7341.4 228.8286.0
Financial assets at fair value through the income statement190.3197.3 170.4177.9153.7187.8 127.7157.3
Cash collateral and settlement balances107.7108.8 96.7121.0129.7152.2 78.5111.6
Other assets192.5190.8 194.9228.9205.5171.4 155.3171.5
Total assets983.8991.5 983.61,042.71,009.81,082.5 795.6941.5
Deposits at amortised cost178.2185.2 175.2195.6173.9198.4 146.2152.1
Derivative financial instrument liabilities246.8260.2 300.3293.2307.6338.7 228.9283.2
Risk weighted assets194.3201.3 192.2193.3198.3201.7 171.5184.9
           
Performance measures          
Return on average allocated tangible equity14.8%17.9% 6.3%9.5%9.6%12.5% 3.0%9.1%
Average allocated tangible equity (£bn)28.428.2 26.326.429.026.2 25.826.9
Cost: income ratio55%53% 69%59%51%47% 83%66%
           
           
Analysis of total income
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
FICC8951,204 8121,0001,4681,858 726816
Equities777932 542691674564 409494
Global Markets1
1,6722,136 1,3541,6912,1422,422 1,1351,310
Advisory218163 2329084155 202221
Equity capital markets226243 10412218562 5686
Debt capital markets429453 418398463418 322381
Investment Banking fees1
873859 754610732635 580688
Corporate lending38206 18623261111 202195
Transaction banking396393 344372381449 397424
Corporate434599 530604442560 599619
Total income2,9793,594 2,6382,9053,3163,617 2,3142,617
 
 
1Previously labelled as “Markets” and “Banking fees”.
 
 
Analysis of Barclays International    
           
Consumer, Cards and Payments
Q221
 
Q121
 
 
Q420
 
Q320
 
Q220
 
Q120
 
 
Q419
 
Q319
 
Income statement information
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
Net interest income441478 504518513663 717720
Net fee, commission, trading and other income399327 344358181364 421413
Total income840805 8488766941,027 1,1381,133
Credit impairment releases/(charges)42(21) (239)(183)(414)(885) (299)(321)
Net operating income882784 609693280142 839812
Operating costs(545)(552) (530)(511)(506)(529) (549)(570)
UK bank levy (14) (18)
Litigation and conduct(62)(20) (11)(25)(8) (7)4
Total operating expenses(607)(572) (555)(536)(514)(529) (574)(566)
Other net income138 7816 169
Profit/(loss) before tax288220 61165(233)(381) 281255
Attributable profit/(loss)218168 28155(226)(291) 204190
           
Balance sheet information
£bn
 
£bn
 
 
£bn
 
£bn
 
£bn
 
£bn
 
 
£bn
 
£bn
 
Loans and advances at amortised cost30.929.2 30.331.233.238.8 40.842.3
Total assets63.061.4 58.265.266.070.7 65.868.1
Deposits at amortised cost67.266.0 65.366.867.364.9 63.865.5
Risk weighted assets29.028.8 30.131.432.936.2 37.738.2
           
Performance measures          
Return on average allocated tangible equity21.8%16.5% 2.7%14.7%(20.2)%(23.5)% 15.9%14.2%
Average allocated tangible equity (£bn)4.04.1 4.24.24.55.0 5.15.3
Cost: income ratio72%71% 65%61%74%52% 50%50%
Loan loss rate (bps)27 286211455846 273283
 
 
Head Office          
 
Q221
 
Q121
 
 
Q420
 
Q320
 
Q220
 
Q120
 
 
Q419
 
Q319
 
Income statement information
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
Net interest income(64)(178) (86)(48)(180)(79) (99)(117)
Net fee, commission and other income37103 (85)(79)4114 (11)62
Total income(27)(75) (171)(127)(139)(65) (110)(55)
Credit impairment releases/(charges)6 (31)(5)(30)(25) (4)(8)
Net operating expenses(21)(75) (202)(132)(169)(90) (114)(63)
Operating costs(341)(71) (213)(69)(106)(11) (45)(59)
UK bank levy (9) (11)
Litigation and conduct16(9) (42)(23)(3)(5) (23)(88)
Total operating expenses(325)(80) (264)(92)(109)(16) (79)(147)
Other net income/(expenses)8123 810(43)2 36
Loss before tax(338)(32) (458)(214)(321)(104) (190)(204)
Attributable profit/(loss)120(25) (381)(284)(255)(99) (154)(184)
           
Balance sheet information
£bn
 
£bn
 
 
£bn
 
£bn
 
£bn
 
£bn
 
 
£bn
 
£bn
 
Total assets18.317.7 18.619.321.723.6 21.022.9
Risk weighted assets11.110.7 10.29.89.910.0 11.013.4
Period end allocated tangible equity5.93.3 6.87.17.46.0 5.65.5
           
Performance measures          
Average allocated tangible equity (£bn)4.24.3 7.37.66.45.6 5.25.8
 
 
Performance Management
 
 
Margins and balances
 
      
 
Half year ended 30.06.21
 
Half year ended 30.06.20
 
 
Net interest income
 
Average customer assets
 
Net interest margin
 
Net interest income
 
Average customer assets
 
Net interest margin
 
 
£m
 
£m
 
%
 
£m
 
£m
 
%
 
Barclays UK
 
2,586
 
204,930
 
2.54
 
2,637
 
197,023
 
2.69
 
Barclays International1,2
1,51877,4133.951,848101,2863.67
Total Barclays UK and Barclays International
 
4,104
 
282,343
 
2.93
 
4,485
 
298,309
 
3.02
 
Other3
 
(201)
 
  
(262)
 
  
Total Barclays Group
 
3,903
 
  
4,223
 
  
 
 
1Barclays International margins include IEL balances within the investment banking business.
2Barclays amended the presentation of the premium paid for purchased financial guarantees which are embedded in notes it issues directly to the market in Q420 from net investment income to interest expense within net interest income. Had the equivalent H120 interest expense been recognised in net interest income, the Barclays International and Total Barclays UK and Barclays International NIMs would have been 3.57% and 2.99% respectively.
3Other 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 June 2021 was £198bn (June 2020: £174bn), with an average duration of close to 3 years (2020: average duration 2.5 to 3 years). Group net interest income includes gross structural hedge contributions of £689m (H120: £866m) and net structural hedge contributions of £592m (H120: £555m). 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.
 
The Group net interest margin decreased 9bps to 2.93%. Barclays UK net interest margin decreased 15bps to 2.54% reflecting lower unsecured lending balances and lower UK rates, partially offset by strong mortgage retention at improved margins. Average customer assets increased due to growth from government scheme lending and strong mortgage growth. Barclays International net interest margin increased 28bps to 3.95% driven by changes in product mix and lower average customer assets.
 
 
 
Quarterly analysis for Barclays UK and Barclays International
 
Net interest income
 
Average customer assets
 
Net interest margin
 
Three months ended 30.06.21
 
£m
 
£m
 
%
 
Barclays UK
 
1,305
 
205,168
 
2.55
 
Barclays International1
 
763
 
77,330
 
3.96
 
Total Barclays UK and Barclays International
 
2,068
 
282,498
 
2.94
 
    
Three months ended 31.03.21
 
   
Barclays UK
 
1,281
 
204,663
 
2.54
 
Barclays International1
 
755
 
78,230
 
3.92
 
Total Barclays UK and Barclays International
 
2,036
 
282,893
 
2.92
 
    
Three months ended 31.12.20
 
   
Barclays UK
 
1,317
 
204,315
 
2.56
 
Barclays International1,2
 
696
 
81,312
 
3.41
 
Total Barclays UK and Barclays International
 
2,013
 
285,627
 
2.80
 
    
Three months ended 30.09.20
 
   
Barclays UK
 
1,280
 
203,089
 
2.51
 
Barclays International1,2
 
838
 
88,032
 
3.79
 
Total Barclays UK and Barclays International
 
2,118
 
291,121
 
2.89
 
    
Three months ended 30.06.20
 
   
Barclays UK
 
1,225
 
199,039
 
2.48
 
Barclays International1,2
 
868
 
101,706
 
3.43
 
Total Barclays UK and Barclays International
 
2,093
 
300,745
 
2.80
 
 
 
1Barclays International margins include IEL balances within the investment banking business.
2The reclassification of expense of the premium paid for purchased financial guarantees from net investment income to net interest income was recognised in full in Q420 and resulted in a 0.48% reduction on the Q420 Barclays International NIM and 0.14% reduction on the Q420 Total Barclays UK and Barclays International NIM. Had the equivalent impact been reflected in the respective quarters, the Barclays International NIM would have been 3.33% in Q220, 3.68% in Q320 and 3.77% in Q420. Total Barclays UK and Barclays International NIMs would have been 2.77% in Q220, 2.86% in Q320 and 2.91% in Q420 respectively.
 
 
Risk Management
 
Risk management and principal risks
 
The roles and responsibilities of the business groups, Risk and Compliance, in the management of risk in the Group are defined in the Enterprise Risk Management Framework. The purpose of the framework is to identify the principal risks of the Group, the process by which the Group sets its appetite for these risks in its business activities, and the consequent limits which it places on related risk taking.
 
The framework identifies eight principal risks: credit risk, market risk, treasury and capital risk, operational risk, model risk, conduct risk, reputation risk and legal risk. Further detail on these risks and how they are managed is available in the Barclays PLC Annual Report 2020 (pages 145 to 166) or online at home.barclays/annualreport.
 
Material existing and emerging risks
 
There have been no significant changes to these principal risks or previously identified material existing and emerging risks in the period other than an update to the risk relating to the impact of benchmark interest rates on the Group as a result of developments relating to benchmark reform, as set out below.
 
Impact of benchmark interest rate reforms on the Group
 
For several years, global regulators and central banks have been driving international efforts to reform key benchmark interest rates and indices, such as the London Interbank Offered Rate (LIBOR), which are used to determine the amounts payable under a wide range of transactions and make them more reliable and robust. This has resulted in significant changes to the methodology and operation of certain benchmarks and indices, the adoption of alternative ‘risk-free’ reference rates (RFRs) and the proposed discontinuation of certain reference rates (including LIBOR), with further changes anticipated, including UK, EU and US legislative proposals to deal with ‘tough legacy’ contracts that cannot convert into or cannot add fall-back RFRs. The consequences of reform are unpredictable and may have an adverse impact on any financial instruments linked to, or referencing, any of these benchmark interest rates.
 
Uncertainty as to the nature of such potential changes, the availability and/or suitability of alternative RFRs, the participation of customers and third-party market participants in the transition process and associated challenges with respect to required documentation changes, and other reforms may adversely affect a broad range of transactions (including any securities, loans and derivatives which use LIBOR to determine the amount of interest payable that are included in the Group’s financial assets and liabilities) that use these reference rates and indices and introduce a number of risks for the Group, including, but not limited to:
 
Conduct risk: in undertaking actions to transition away from using certain reference rates (such as LIBOR) to new alternative RFRs, the Group faces conduct risks. These may lead to customer complaints, regulatory sanctions or reputational impact if the Group is considered to be (among other things) (i) undertaking market activities that are manipulative or create a false or misleading impression, (ii) misusing sensitive information or not identifying or appropriately managing or mitigating conflicts of interest, (iii) providing customers with inadequate advice, misleading information, unsuitable products or unacceptable service, (iv) not taking a consistent approach to remediation for customers in similar circumstances, (v) unduly delaying the communication and migration activities in relation to client exposure, leaving them insufficient time to prepare, or (vi) colluding or inappropriately sharing information with competitors
Litigation risk: members of the Group may face legal proceedings, regulatory investigations and/or other actions or proceedings regarding (among other things) (i) the conduct risks identified above, (ii) the interpretation and enforceability of provisions in LIBOR-based contracts, and (iii) the Group’s preparation and readiness for the replacement of LIBOR with alternative RFRs
Financial risk: the valuation of certain of the Group’s financial assets and liabilities may change. Moreover, transitioning to alternative RFRs may impact the ability of members of the Group to calculate and model amounts receivable by them on certain financial assets and determine the amounts payable on certain financial liabilities (such as debt securities issued by them) because currently alternative RFRs (such as the Sterling Overnight Index Average (SONIA) and the Secured Overnight Financing Rate (SOFR)) are look-back rates whereas term rates (such as LIBOR) allow borrowers to calculate at the start of any interest period exactly how much is payable at the end of such interest period. This may have a material adverse effect on the Group’s cash flows
Pricing risk: changes to existing reference rates and indices, discontinuation of any reference rate or indices and transition to alternative RFRs may impact the pricing mechanisms used by the Group on certain transactions
Operational risk: changes to existing reference rates and indices, discontinuation of any reference rate or index and transition to alternative RFRs may require changes to the Group’s IT systems, trade reporting infrastructure, operational processes, and controls. In addition, if any reference rate or index (such as LIBOR) is no longer available to calculate amounts payable, the Group may incur additional expenses in amending documentation for new and existing transactions and/or effecting the transition from the original reference rate or index to a new reference rate or index
Accounting risk: an inability to apply hedge accounting in accordance with IAS 39 could lead to increased volatility in the Group’s financial results and performance
 
 
Any of these factors may have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

For further details on the impacts of benchmark interest rate reforms on the Group, see Note 41 to Barclays PLC’s audited financial statements for the year ended 31 December 2020 and Note 23.

Credit Risk
 
Loans and advances at amortised cost by stage
 
The table below presents an analysis of loans and advances at amortised cost by gross exposure, impairment allowance, impairment charge and coverage ratio by stage allocation and business segment as at 30 June 2021. Also included are off-balance sheet loan commitments and financial guarantee contracts by gross exposure, impairment allowance and coverage ratio by stage allocation as at 30 June 2021.
 
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 30.06.21
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
£m
 
Barclays UK158,58723,5762,715184,878 3131,0359442,292182,586
Barclays International23,2862,8861,76027,932 5757811,0042,36025,572
Head Office4,0035027605,265 3393584004,865
Total Barclays Group retail185,87626,9645,235218,075 8911,8552,3065,052213,023
Barclays UK36,0691,7271,08138,877 63498920138,676
Barclays International82,51513,6171,42597,557 2313296731,23396,324
Head Office522332557 3131526
Total Barclays Group wholesale1
119,10615,3472,538136,991 2943787931,465135,526
Total loans and advances at amortised cost304,98242,3117,773355,066 1,1852,2333,0996,517348,549
Off-balance sheet loan commitments and financial guarantee contracts2
298,15045,696664344,510 22843649713343,797
Total3
603,13288,0078,437699,576 1,4132,6693,1487,230692,346
           
 
As at 30.06.21
 
 
Half year ended 30.06.21
 
 
 
Coverage ratio
 
 
Loan impairment release and loan loss rate
 
 
 
Stage 1
 
Stage 2
 
Stage 3
 
Total
 
 
Loan impairment release
 
Loan loss rate
 
 
 
%
 
%
 
%
 
%
 
 
£m
 
bps
 
 
Barclays UK0.2 4.4 34.8 1.2   (259) —  
Barclays International2.5 27.1 57.0 8.4   (19) —  
Head Office0.1 7.8 47.1 7.6   (6) —  
Total Barclays Group retail0.5 6.9 44.0 2.3   (284) —  
Barclays UK0.2 2.8 8.2 0.5   (23) —  
Barclays International0.3 2.4 47.2 1.3   (75) —  
Head Office— — 96.9 5.6   —  —  
Total Barclays Group wholesale1
0.2 2.5 31.2 1.1   (98) —  
Total loans and advances at amortised cost0.4 5.3 39.9 1.8   (382) —  
Off-balance sheet loan commitments and financial guarantee contracts2
0.1 1.0 7.4 0.2   (343)   
Other financial assets subject to impairment3
      (17)   
Total0.2 3.0 37.3 1.0   (742)   
 
 
1Includes 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 £7,796m of balances reported as wholesale loans on page 29 in the Loans and advances at amortised cost by product disclosure.
2Excludes loan commitments and financial guarantees of £21bn carried at fair value.
3Other 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 £186.0bn and impairment allowance of £114m. This comprises £9m ECL on £185.8bn Stage 1 assets, £3m on £58m Stage 2 fair value through other comprehensive income assets, cash collateral and settlement balances and £102m on £109m Stage 3 other assets.
 
 
 
Gross exposure
 
 
Impairment allowance
 
Net exposure
 
 
Stage 1
 
Stage 2
 
Stage 3
 
Total
 
 
Stage 1
 
Stage 2
 
Stage 3
 
Total
 
As at 31.12.20
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
£m
 
Barclays UK153,25023,8962,732179,878 3321,5091,1472,988176,890
Barclays International1
21,0485,5001,99228,540 3961,3291,2052,93025,610
Head Office4,2677208445,831 4513804355,396
Total Barclays Group retail178,56530,1165,568214,249 7322,8892,7326,353207,896
Barclays UK31,9184,3251,12637,369 1312911625837,111
Barclays International1
79,91116,5652,27098,746 2885468591,69397,053
Head Office57033603 3131572
Total Barclays Group wholesale2
112,39920,8903,429136,718 3016751,0061,982134,736
Total loans and advances at amortised cost290,96451,0068,997350,967 1,0333,5643,7388,335342,632
Off-balance sheet loan commitments and financial guarantee contracts3
289,93952,8912,330345,160 256758501,064344,096
Total4
580,903103,89711,327696,127 1,2894,3223,7889,399686,728
           
 
As at 31.12.20
 
 
Year ended 31.12.20
 
 
 
Coverage ratio
 
 
Loan impairment charge and loan loss rate5
 
 
Stage 1
 
Stage 2
 
Stage 3
 
Total
 
 
Loan impairment charge
 
Loan loss rate
 
 
 
%
 
%
 
%
 
%
 
 
£m
 
bps
 
 
Barclays UK0.2 6.3 42.0 1.7   1,070 59 
Barclays International1
1.9 24.2 60.5 10.3   1,680 589 
Head Office0.1 7.1 45.0 7.5   91 156 
Total Barclays Group retail0.4 9.6 49.1 3.0   2,841 133 
Barclays UK— 3.0 10.3 0.7   154 41 
Barclays International1
0.4 3.3 37.8 1.7   914 93 
Head Office— — 93.9 5.1     
Total Barclays Group wholesale2
0.3 3.2 29.3 1.4   1,068 78 
Total loans and advances at amortised cost0.4 7.0 41.5 2.4   3,909 111 
Off-balance sheet loan commitments and financial guarantee contracts3
0.1 1.4 2.1 0.3   776   
Other financial assets subject to impairment4
      153   
Total5
0.2 4.2 33.4 1.4   4,838   
 
 
1Private Banking have refined the methodology to classify £5bn of their exposure between Wholesale and Retail during the year.
2Includes 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 £7,551m of balances reported as wholesale loans on page 29 in the Loans and advances at amortised cost by product disclosure.
3Excludes loan commitments and financial guarantees of £9.5bn carried at fair value.
4Other 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 £180.3bn and impairment allowance of £165m. This comprises £11m ECL on £175.7bn Stage 1 assets, £9m on £4.4bn Stage 2 fair value through other comprehensive income assets, other assets and cash collateral and settlement balances and £145m on £154m Stage 3 other assets.
5The loan loss rate is 138 bps after applying the total impairment charge of £4,838m.
 
 
Loans and advances at amortised cost by product
 
 
 
The table below presents a breakdown of loans and advances at amortised cost and the impairment allowance with stage allocation by asset classification.
 
 
 
  
Stage 2
 
  
As at 30.06.21
 
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
 
144,10317,9911,66682320,4802,235166,818
Credit cards, unsecured loans and other retail lending
 
34,5375,6423002096,1512,77343,461
Wholesale loans
 
126,34214,76052939115,6802,765144,787
Total
 
304,98238,3932,4951,42342,3117,773355,066
        
Impairment allowance
 
       
Home loans
 
15566769389473
Credit cards, unsecured loans and other retail lending
 
8341,5471001201,7671,8524,453
Wholesale loans
 
3363815113978581,591
Total1,1851,9841111382,2333,0996,517
        
Net exposure
 
       
Home loans
 
144,08817,9351,66081620,4111,846166,345
Credit cards, unsecured loans and other retail lending
 
33,7034,095200894,38492139,008
Wholesale loans
 
126,00614,37952438015,2831,907143,196
Total303,79736,4092,3841,28540,0784,674348,549
        
Coverage ratio
 
%%%%%%%
Home loans
 
— 0.3 0.4 0.9 0.3 17.4 0.3 
Credit cards, unsecured loans and other retail lending
 
2.4 27.4 33.3 57.4 28.7 66.8 10.2 
Wholesale loans
 
0.3 2.6 0.9 2.8 2.5 31.0 1.1 
Total0.4 5.2 4.4 9.7 5.3 39.9 1.8 
        
As at 31.12.20
 
       
Gross exposure
 
£m£m£m£m£m£m£m
Home loans
 
138,63916,6511,78587619,3122,234160,185
Credit cards, unsecured loans and other retail lending
 
33,0219,47054430610,3203,17246,513
Wholesale loans
 
119,30419,5011,09777621,3743,591144,269
Total290,96445,6223,4261,95851,0068,997350,967
        
Impairment allowance
 
       
Home Loans
 
3357131484421538
Credit cards, unsecured loans and other retail lending
 
6802,3821802072,7692,2515,700
Wholesale Loans
 
32065050117111,0662,097
Total1,0333,0892432323,5643,7388,335
        
Net exposure
 
       
Home loans
 
138,60616,5941,77286219,2281,813159,647
Credit cards, unsecured loans and other retail lending
 
32,3417,088364997,55192140,813
Wholesale loans
 
118,98418,8511,04776520,6632,525142,172
Total
 
289,93142,5333,1831,72647,4425,259342,632
        
Coverage ratio
 
%%%%%%%
Home loans
 
— 0.3 0.7 1.6 0.4 18.8 0.3 
Credit cards, unsecured loans and other retail lending
 
2.1 25.2 33.1 67.6 26.8 71.0 12.3 
Wholesale loans
 
0.3 3.3 4.6 1.4 3.3 29.7 1.5 
Total0.4 6.8 7.1 11.8 7.0 41.5 2.4 
 
 
Loans and advances at amortised cost by selected sectors
 
The table below presents a breakdown of loans and advances at amortised cost and the impairment allowance, with gross exposure and stage allocation for selected industry sectors within the wholesale loans portfolio. The industry sectors have been selected based upon the level of management focus they have received following the onset of the COVID-19 pandemic.
 
The gross loans and advances to selected sectors have decreased over the year driven by repayments and lower drawdowns. The reduction in provisions is informed by the improved macroeconomic outlook used in the Q221 scenario refresh, partially offset by management judgments to reflect the risk of uncertainty still prevailing within these sectors. The wholesale portfolio also benefits from a hedge protection programme that enables effective risk management against systemic losses. An additional £0.1bn (December 2020: £0.1bn) impairment allowance has been applied to the undrawn exposures not included in the table below.
 
 
 
 Gross exposure Impairment allowance
 Stage 1Stage 2Stage 3Total Stage 1Stage 2Stage 3Total
As at 30.06.21£m£m£m£m £m£m£m£m
Air travel30532221648 3131834
Hospitality and leisure4,0191,9072986,224 486849165
Oil and gas1,8774652342,576 1412128154
Retail4,0899621485,199 633044137
Shipping48522012717 53540
Transportation1,7681611022,031 2043761
Total12,5434,03781517,395 153162276591
Total of Wholesale exposures10%26%29%12% 45%41%32%37%
          
 Gross exposure Impairment allowance
 Stage 1Stage 2Stage 3Total Stage 1Stage 2Stage 3Total
As at 31.12.20£m£m£m£m £m£m£m£m
Air travel36752556948 9272359
Hospitality and leisure4,4402,3873137,140 5311561229
Oil and gas1,7548544653,073 3127140198
Retail3,9071,1532835,343 7851108237
Shipping30838912709 230133
Transportation1,1482531251,526 19105786
Total11,9245,5611,25418,739 192260390842
Total of Wholesale exposures10%26%35%13% 60%37%37%40%
 
 
The coverage ratio for selected sectors has decreased from 4.5% as at 31 December 2020 to 3.4% as at 30 June 2021.
 
Exposure to UK commercial real estate of £9.4bn, excluding government backed schemes, was in line with 31 December 2020 (£10.0bn). Coverage decreased from 0.98% to 0.61% in the period.
 
Movement in gross exposures and impairment allowance including provisions for loan commitments and financial guarantees
 
The following tables present a reconciliation of the opening to the closing balance of the exposure and impairment allowance. An explanation of the terms 12-month ECL, lifetime ECL and credit-impaired is included in the Barclays PLC Annual Report 2020 on page 296. Transfers between stages in the table have been reflected as if they had taken place at the beginning of the year. The movements are measured over a 6-month period.
 
 
 
Loans and advances at amortised cost
 Stage 1Stage 2Stage 3Total
 
Gross exposure
 
ECL
 
Gross exposure
 
ECL
 
Gross exposure
 
ECL
 
Gross exposure
 
ECL
 
Home loans
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
As at 1 January 2021138,6393319,312842,234421160,185538
Transfers from Stage 1 to Stage 2(6,369)(2)6,3692
Transfers from Stage 2 to Stage 13,61521(3,615)(21)
Transfers to Stage 3(160)(337)(7)4977
Transfers from Stage 3211193(140)(3)
Business activity in the year19,2312380119,6113
Changes to models used for calculation1
(4)3834
Net drawdowns, repayments, net re-measurement and movement due to exposure and risk parameter changes(4,670)(38)(667)13(124)(54)(5,461)(79)
Final repayments(6,204)(1)(1,081)(2)(220)(8)(7,505)(11)
Disposals
Write-offs2
(12)(12)(12)(12)
As at 30 June 20213
144,1031520,480692,235389166,818473
         
Credit cards, unsecured loans and other retail lending
As at 1 January 202133,02168010,3202,7693,1722,25146,5135,700
Transfers from Stage 1 to Stage 2(1,590)(72)1,59072
Transfers from Stage 2 to Stage 14,3761,080(4,376)(1,080)
Transfers to Stage 3(264)(12)(572)(282)836294
Transfers from Stage 330253814(68)(39)
Business activity in the year3,8555058143183,94472
Changes to models used for calculation1
(5)(33)14(24)
Net drawdowns, repayments, net re-measurement and movement due to exposure and risk parameter changes4
(3,134)(866)(808)310(123)282(4,065)(274)
Final repayments(1,757)(46)(99)(17)(140)(50)(1,996)(113)
Disposals5
(101)(74)(101)(74)
Write-offs2
(834)(834)(834)(834)
As at 30 June 20213
34,5378346,1511,7672,7731,85243,4614,453
 
 
1Changes to models used for calculation include a £34m movement in Home loans, £24m in Credit cards, unsecured loans and other retail lending and £36m in Wholesale loans. These reflect methodology changes made during the year. Barclays continually review the output of models to determine accuracy of the ECL calculation including review of model monitoring, external benchmarking and experience of model operation over an extended period of time. This ensures that the models used continue to reflect the risks inherent across the businesses.
2In H121, gross write-offs amounted to £1,001m (H120: £953m) and post write-off recoveries amounted to £31m (H120: £15m). Net write-offs represent gross write-offs less post write-off recoveries and amounted to £970m (H120: £938m).
3Other 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 £186.0bn (December 2020: £180.3bn) and impairment allowance of £114m (December 2020: £165m). This comprises £9m ECL (December 2020: £11m) on £185.8bn stage 1 assets (December 2020: £175.7bn), £3m (December 2020: £9m) on £58m stage 2 fair value through other comprehensive income assets, other assets and cash collateral and settlement balances (December 2020: £4.4bn) and £102m (December 2020: £145m) on £109m stage 3 other assets (December 2020: £154m).
4Transfers and risk parameter changes include a £0.3bn net release in ECL arising from a reclassification of £2.2bn gross loans and advances from Stage 2 to Stage 1 in Credit cards, unsecured loans and other retail lending. The reclassification followed a review of back-testing of results which indicated that accuracy of origination probability of default characteristics require management adjustments to correct and was first established in Q220.
5
The £101m disposals reported within Credit cards, unsecured loans and other retail lending portfolio relates to debt sales undertaken during the year. The £1.7bn disposal reported within Wholesale loans includes a sale of £0.7bn debt securities as part of Group Treasury Operations and a £1.0bn sale of Barclays Asset Finance.
 
 
Loans and advances at amortised cost
 Stage 1Stage 2Stage 3Total
 
Gross exposure
 
ECL
 
Gross exposure
 
ECL
 
Gross exposure
 
ECL
 
Gross exposure
 
ECL
 
Wholesale loans
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
As at 1 January 2021119,30432021,3747113,5911,066144,2692,097
Transfers from Stage 1 to Stage 2(4,636)(12)4,63612
Transfers from Stage 2 to Stage 18,410188(8,410)(188)
Transfers to Stage 3(249)(2)(226)(17)47519
Transfers from Stage 35151437613(891)(27)
Business activity in the year23,266351,181301912224,63887
Changes to models used for calculation1
(7)(29)(36)
Net drawdowns, repayments, net re-measurement and movement due to exposure and risk parameter changes81(153)(47)(37)(185)(1)(151)(191)
Final repayments(18,854)(39)(3,042)(95)(203)(33)(22,099)(167)
Disposals2
(1,495)(8)(162)(3)(58)(33)(1,715)(44)
Write-offs3
(155)(155)(155)(155)
As at 30 June 20214
126,34233615,6803972,765858144,7871,591
         
Reconciliation of ECL movement to impairment charge/(release) for the period
£m
 
Home loans       (53)
Credit cards, unsecured loans and other retail lending (339)
Wholesale loans (307)
ECL movement excluding assets derecognised due to disposals and write-offs (699)
Recoveries and reimbursements5
 185
Exchange and other adjustments6
 132
Impairment charge on loan commitments and other financial guarantees (343)
Impairment charge on other financial assets4
 (17)
Income statement release for the period       (742)
 
 
1Changes to models used for calculation include a £34m movement in Home Loans, £24m in Credit cards, unsecured loans and other retail lending and £36m in Wholesale loans. These reflect methodology changes made during the year. Barclays continually review the output of models to determine accuracy of the ECL calculation including review of model monitoring, external benchmarking and experience of model operation over an extended period of time. This ensures that the models used continue to reflect the risks inherent across the businesses.
2
The £101m disposals reported within Credit cards, unsecured loans and other retail lending portfolio relates to debt sales undertaken during the year. The £1.7bn disposal reported within Wholesale loans includes a sale of £0.7bn debt securities as part of Group Treasury Operations and a £1.0bn sale of Barclays Asset Finance.
3In H121, gross write-offs amounted to £1,001m (H120: £953m) and post write-off recoveries amounted to £31m (H120: £15m). Net write-offs represent gross write-offs less post write-off recoveries and amounted to £970m (H120: £938m).
4Other 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 £186.0bn (December 2020: £180.3bn) and impairment allowance of £114m (December 2020: £165m). This comprises £9m ECL (December 2020: £11m) on £185.8bn stage 1 assets (December 2020: £175.7bn), £3m (December 2020: £9m) on £58m stage 2 fair value through other comprehensive income assets, other assets and cash collateral and settlement balances (December 2020: £4.4bn) and £102m (December 2020: £145m) on £109m stage 3 other assets (December 2020: £154m).
5Recoveries and reimbursements includes a net loss in relation to reimbursements from financial guarantee contracts held with third parties of £216m (H120 gain: £279m) and post write off recoveries of £31m (H120: £15m).
6Includes foreign exchange and interest and fees in suspense.
 
 
Loan commitments and financial guarantees
 Stage 1Stage 2Stage 3Total
 
Gross exposure
 
ECL
 
Gross exposure
 
ECL
 
Gross exposure
 
ECL
 
Gross exposure
 
ECL
 
Home loans
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
As at 1 January 202111,861516512,382
Net transfers between stages(74)713
Business activity in the year6,28716,288
Net drawdowns, repayments, net re-measurement and movement due to exposure and risk parameter changes(7,397)(17)(2)(7,416)
Limit management and final repayments(238)(22)(3)(263)
As at 30 June 202110,439549310,991
         
Credit cards, unsecured loans and other retail lending
As at 1 January 2021114,3715512,11730522923126,717383
Net transfers between stages5,784217(6,081)(212)297(5)
Business activity in the year3,3781321113,4113
Net drawdowns, repayments, net re-measurement and movement due to exposure and risk parameter changes(1,005)(215)11463(248)4(1,139)(148)
Limit management and final repayments(4,941)(4)(398)(5)(57)(3)(5,396)(12)
As at 30 June 2021117,587545,78415222220123,593226
         
Wholesale loans        
As at 1 January 2021163,70720140,2584532,09627206,061681
Net transfers between stages682116504(112)(1,186)(4)
Business activity in the year37,211282,9158912940,138126
Net drawdowns, repayments, net re-measurement and movement due to exposure and risk parameter changes1,603(146)680(63)(28)22,255(207)
Limit management and final repayments(33,079)(25)(4,994)(83)(455)(5)(38,528)(113)
As at 30 June 2021170,12417439,36328443929209,926487
 
 
Management adjustments to models for impairment
 
Management adjustments to impairment models are made in the ordinary course of business in order to reflect changes in policy or correct model performance issues identified through model monitoring. These adjustments remain in place until they are incorporated into future model development and are then retired. In addition, they may also be made in response to circumstances or uncertainty at the period end and this is particularly true of the ongoing COVID-19 pandemic.
 
Total management adjustments to impairment allowance are presented by product below.
 
Overview of management adjustments to models for impairment allowance1
 
 
 
 
As at 30.06.21
 
As at 31.12.20
 
 Management adjustments to impairment allowancesProportion of total impairment allowancesManagement adjustments to impairment allowancesProportion of total impairment allowances
 £m%£m%
Home loans
 
8317.5
131
 
24.3
 
Credit cards, unsecured loans and other retail lending
 
1,14524.5
1,234
 
20.3
 
Wholesale loans
 
64330.9
23
 
0.8
 
Total
 
1,87125.9
1,388
 
14.8
 
 
 
Management adjustments to models for impairment allowance1
 
 
 
 
Impairment allowance pre management adjustments2
Economic uncertainty adjustmentsOther adjustmentsTotal impairment allowance
As at 30.06.21£m£m£m£m
Home loans
 
3904142473
Credit cards, unsecured loans and other retail lending
 
3,5341,398(253)4,679
Wholesale loans
 
1,435651(8)2,078
Total
 
5,3592,090(219)7,230
     
As at 31.12.20
 
    
Home loans
 
407
 
21
 
110
 
538
 
Credit cards, unsecured loans and other retail lending
 
4,849
 
1,625
 
(391)
 
6,083
 
Wholesale loans
 
2,755
 
421
 
(398)
 
2,778
 
Total
 
8,011
 
2,067
 
(679)
 
9,399
 
 
 
1Positive values reflect an increase in impairment allowance.
2Includes £4.3bn (December 2020: £6.8bn) of modelled ECL, £0.8bn (December 2020: £0.9bn) of individually assessed impairments and £0.3bn (December 2020: £0.3bn) ECL from non-modelled exposures.
 
 
Economic uncertainty adjustments
 
 
The COVID-19 pandemic has impacted the global economy since early 2020 and macroeconomic forecasts indicate longer-term impacts that will result in higher unemployment levels and customer and client stress. However, to date, little real credit deterioration has occurred, largely as a result of government and other support measures. Observed 30-day arrears rates have reduced in US cards 1.6% (December 2020: 2.5%; December 2019: 2.7%) and in UK cards 1.4% (December 2020: 1.7%; December 2019: 1.7%) due to payment holidays granted to customers impacted by COVID-19 which reduced the delinquency entrance rate and overall flow through delinquency. However, uncertainty remains as government and other support measures taper down as to whether these schemes have either averted or delayed credit losses.
 
In order to address this uncertainty, adjustments to the modelled provisions were made in 2020. COVID-19 related economic uncertainty adjustments of £2.1bn (December 2020: £2.1bn) continue to be recognised, specifically to address whether support measures have averted or delayed credit losses. However, within this, the approach has been refined and uncertainty is now captured in two distinct ways: firstly, the identification of specific customers and clients who may be more vulnerable to the withdrawal of relief and secondly, macroeconomic and risk parameter uncertainties which are applied at a portfolio level.
 
A summary of the adjustments is provided below:
 
A £1.2bn adjustment has been applied to customers and clients considered potentially vulnerable to the withdrawal of government and other support schemes. In US consumer card portfolios, the populations identified are those who have higher potential risk indicators and in the UK we have specifically considered the impact of furlough schemes ending (equivalent to UK unemployment increasing to 7.2%). In wholesale portfolios, the populations identified are specific clients who may exhibit greater cross default risk between COVID-19 and other financing exposures, including clients with Bounce Back Loans in Business Banking, and those corporate sectors deemed more vulnerable to the economic impacts of COVID-19. This adjustment is split between credit cards and unsecured loans, £0.9bn, and wholesale loans, £0.3bn
Expert judgement has been used to adjust the probability of default at portfolio level to pre-COVID-19 levels to reflect the impact of temporary support measures on underlying customer and client behaviour. Following a refinement to methodology, this has reduced to £0.5bn from £0.7bn in December 2020. A £(0.1)bn PMA to recognise government guarantees remains in place
Macroeconomic variables which may be temporarily influenced by support measures have been adjusted at a portfolio level enabling the model to consume the economic stress. This is reduced to £0.5bn from £1.2bn at December 2020 as management judgements have been refined towards potentially vulnerable customers and clients as the pandemic evolves
 
 
Other adjustments
 
Home loans: The low average LTV nature of the UK Home Loans portfolio means that modelled ECL estimates are low in all but the most severe economic scenarios. An adjustment is held to maintain an appropriate level of ECL.
 
Credit cards, unsecured loans and other retail lending: This materially relates to a net release in ECL due to reclassification of loans and advances from Stage 2 to Stage 1 in credit cards and unsecured loans. The reclassification followed a review of back-testing of results which indicated that the accuracy of origination probability of default characteristics requires management adjustments to correct and was first established in Q220.
 
Wholesale loans: Represents the net of adjustments for Business Banking and Investment Bank for model inaccuracies informed by back-testing. An adjustment to offset modelled ECL output in the Investment Bank to limit excessive ECL sensitivity to the macroeconomic variable for Federal Tax Receipts in place at December 2020 is materially reduced due to the Q221 scenario refresh.
 
Measurement uncertainty
 
The Group uses a five-scenario model to calculate ECL. An external consensus forecast is assembled from key sources, including HM Treasury (short and medium-term forecasts), Bloomberg (based on median of economic forecasts) and the Urban Land Institute (for US House Prices), which forms the Baseline scenario. In addition, two adverse scenarios (Downside 1 and Downside 2) and two favourable scenarios (Upside 1 and Upside 2) are derived, with associated probability weightings. The adverse scenarios are calibrated to a broadly similar severity to Barclays’ internal stress tests and stress scenarios provided by regulators whilst also considering IFRS 9 specific sensitivities and non-linearity. Downside 2 is benchmarked to the Bank of England’s stress scenarios and to the most severe scenario from Moody’s inventory, but is not designed to be the same. The favourable scenarios are calibrated to reflect upside risks to the Baseline scenario to the extent that is broadly consistent with recent favourable benchmark scenarios. All scenarios are regenerated at a minimum semi-annually. The scenarios include eight economic variables, (GDP, unemployment, House Price Index (HPI) and base rates, in both the UK and US markets), and expanded variables using statistical models based on historical correlations. The upside and downside shocks are designed to evolve over a five-year stress horizon, with all five scenarios converging to a steady state after approximately eight years.
 
Macroeconomic indicators were refreshed in Q221, with key drivers for the baseline scenario more optimistic than Q420, resulting in a net ECL provision release. In the Baseline scenario, UK GDP returns to the pre-pandemic level by mid-2022 with peak UK unemployment of just over 6% in Q421. In the Upside 2 scenario, effective fiscal stimulus measures, including public investments in infrastructure and skills, provide a boost to demand and confidence, which in turn leads to economic activity in almost all advanced economies returning to the pre-COVID-19 pandemic levels by the end of 2021. Unemployment levels decline back below 5% by H222 in the UK, and below 4% by early 2022 in the US. In the Downside 2 scenario supply and distribution issues slow the vaccination process and the emergence of new virus variants that are not susceptible to the existing vaccines fuels the outbreak again resulting in full national lockdowns in Q321. This leads to significant falls in GDP in Q321 and UK and US unemployment reaching c.10% and 12% respectively.
 
Although the macroeconomic outlook has improved, the Group’s view on uncertainty remains unchanged, believing potential credit deterioration could be seen once government support is removed, particularly in vulnerable areas of the portfolio. In response, economic uncertainty PMAs remained relatively stable at c.£2.1bn. For further details see page 34.
 
Limited defaults have been observed to date in response to the COVID-19 pandemic, partly as a result of government and bank support measures. However, such support measures are scheduled to taper down from Q321 bringing with it uncertainty. Despite improvement in macroeconomic variables in the period, unemployment remains at elevated levels but portfolios are yet to respond, and may not do so until support measures fall away.
 
The methodology for estimating probability weights for each of the scenarios involves a comparison of the distribution of key historical UK and US macroeconomic variables against the forecast paths of the 5 scenarios. The range of forecast paths generated in the calculation of the weights at 30 June 2021 is slightly narrower than 31 December 2020 due to lower levels of uncertainty. The Upside 2 and Downside 2 scenarios are therefore nearer the tails of the distribution than previously resulting in lower weights. See page 39 for probability weightings used at H121.
 
The tables below show the key consensus macroeconomic variables used in the scenarios (3-year annual paths), the probability weights applied to each scenario and the macroeconomic variables by scenario using ‘specific bases’ i.e. the most extreme position of each variable in the context of the scenario, for example, the highest unemployment for downside scenarios and the lowest unemployment for upside scenarios. The 5-year average table provides additional transparency.
 
 
 
Baseline average macroeconomic variables used in the calculation of ECL
 
 
2021
 
2022
 
2023
 
As at 30.06.21
 
 %
 
 %
 
 %
 
UK GDP1
 
4.95.62.3
UK unemployment2
 
5.85.75.1
UK HPI3
 
(0.5)0.33.1
UK bank rate
 
0.10.20.4
US GDP1
 
5.73.91.6
US unemployment4
 
5.64.54.4
US HPI5
 
3.93.53.5
US federal funds rate
 
0.30.30.7
    
As at 31.12.20
 
   
UK GDP1
 
6.33.32.6
UK unemployment2
 
6.76.45.8
UK HPI3
 
2.42.35.0
UK bank rate
 
(0.1)
US GDP1
 
3.93.12.9
US unemployment4
 
6.95.75.6
US HPI5
 
2.84.74.7
US federal funds rate
 
0.30.30.3
 
 
1Average Real GDP seasonally adjusted change in year.
2Average UK unemployment rate 16-year+.
3Change in average yearly UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
4Average US civilian unemployment rate 16-year+.
5Change in average yearly US HPI = FHFA House Price Index, relative to prior year end.
 
 
Downside 2 average economic variables used in the calculation of ECL
 
 
2021
 
2022
 
2023
 
As at 30.06.21
 
 %
 
 %
 
 %
 
UK GDP1
 
(1.7)2.05.2
UK unemployment2
 
7.38.26.6
UK HPI3
 
(5.8)(5.8)0.2
UK bank rate
 
0.1
US GDP1
 
1.51.42.0
US unemployment4
 
8.711.09.3
US HPI5
 
(4.9)(3.0)1.1
US federal funds rate
 
0.30.30.3
    
As at 31.12.20
 
   
UK GDP1
 
(3.9)6.52.6
UK unemployment2
 
8.09.37.8
UK HPI3
 
(13.6)(10.8)0.5
UK bank rate
 
(0.2)(0.2)(0.1)
US GDP1
 
(2.4)3.62.1
US unemployment4
 
13.411.910.1
US HPI5
 
(17.2)(0.7)0.6
US federal funds rate
 
0.30.30.3
 
 
1Average Real GDP seasonally adjusted change in year.
2Average UK unemployment rate 16-year+.
3Change in average yearly UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
4Average US civilian unemployment rate 16-year+.
5Change in average yearly US HPI = FHFA house price index, relative to prior year end.
 
 
Downside 1 average economic variables used in the calculation of ECL
 
 
2021
 
2022
 
2023
 
As at 30.06.21
 
 %
 
 %
 
 %
 
UK GDP1
 
0.64.44.2
UK unemployment2
 
6.46.65.6
UK HPI3
 
(3.1)(2.7)1.7
UK bank rate
 
0.10.10.2
US GDP1
 
3.42.51.6
US unemployment4
 
7.47.96.1
US HPI5
 
(0.5)0.22.3
US federal funds rate
 
0.30.30.3
    
As at 31.12.20
 
   
UK GDP1
 
0.16.63.2
UK unemployment2
 
7.38.06.9
UK HPI3
 
(6.7)(3.5)1.7
UK bank rate
 
(0.1)(0.1)
US GDP1
 
0.43.62.3
US unemployment4
 
11.08.96.9
US HPI5
 
(5.9)1.82.6
US federal funds rate
 
0.30.30.3
 
 
1Average Real GDP seasonally adjusted change in year.
2Average UK unemployment rate 16-year+.
3Change in average yearly UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
4Average US civilian unemployment rate 16-year+.
5Change in average yearly US HPI = FHFA House Price Index, relative to prior year end.
 
 
Upside 2 average economic variables used in the calculation of ECL
 
 202120222023
As at 30.06.21 % % %
UK GDP1
 
6.89.44.0
UK unemployment2
 
5.54.94.4
UK HPI3
 
4.69.911.3
UK bank rate
 
0.10.40.6
US GDP1
 
6.58.23.4
US unemployment4
 
5.33.83.8
US HPI5
 
6.58.07.3
US federal funds rate
 
0.30.31.1
    
As at 31.12.20
 
   
UK GDP1
 
12.25.33.9
UK unemployment2
 
6.25.54.8
UK HPI3
 
6.610.410.8
UK bank rate
 
0.10.30.3
US GDP1
 
7.14.64.0
US unemployment4
 
5.54.34.1
US HPI5
 
8.89.18.9
US federal funds rate
 
0.30.40.6
 
 
1Average Real GDP seasonally adjusted change in year.
2Average UK unemployment rate 16-year+.
3Change in average yearly UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
4Average US civilian unemployment rate 16-year+.
5Change in average yearly US HPI = FHFA House Price Index, relative to prior year end.
 
 
Upside 1 average economic variables used in the calculation of ECL
 
 
2021
 
2022
 
2023
 
As at 30.06.21
 
 %
 
 %
 
 %
 
UK GDP1
 
5.97.33.0
UK unemployment2
 
5.65.24.7
UK HPI3
 
1.54.57.4
UK bank rate
 
0.10.20.6
US GDP1
 
6.15.82.4
US unemployment4
 
5.54.24.2
US HPI5
 
6.26.85.7
US federal funds rate
 
0.30.30.9
    
As at 31.12.20
 
   
UK GDP1
 
9.33.93.4
UK unemployment2
 
6.46.05.2
UK HPI3
 
4.66.16.1
UK bank rate
 
0.10.10.3
US GDP1
 
5.54.03.7
US unemployment4
 
6.04.84.6
US HPI5
 
6.86.76.3
US federal funds rate
 
0.30.30.5
 
 
1Average Real GDP seasonally adjusted change in year.
2Average UK unemployment rate 16-year+.
3Change in average yearly UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
4Average US civilian unemployment rate 16-year+.
5Change in average yearly US HPI = FHFA House Price Index, relative to prior year end.
 
 
Scenario probability weighting
 
 Upside 2Upside 1BaselineDownside 1Downside 2
 %%%%%
As at 30.06.21
 
     
Scenario probability weighting
 
19.6
 
24.5
 
26.4
 
16.9
 
12.6
 
As at 31.12.20
 
     
Scenario probability weighting
 
20.2
 
24.2
 
24.7
 
15.5
 
15.4
 
 
 
Specific bases show the most extreme position of each variable in the context of the scenario, for example, the highest unemployment for downside scenarios, average unemployment for baseline scenarios and lowest unemployment for upside scenarios. GDP and HPI downside and upside scenario data represents the lowest and highest points relative to the start point in the 20 quarter period.
 
 
 
Macroeconomic variables (specific bases)1
 
     
 Upside 2Upside 1BaselineDownside 1Downside 2
As at 30.06.21 % % % % %
UK GDP2
 
25.920.23.3(4.2)(8.1)
UK unemployment3
 
4.14.35.17.59.8
UK HPI4
 
48.225.51.6(5.8)(11.8)
UK bank rate3
 
0.10.10.40.30.1
US GDP2
 
23.718.32.8(0.2)(3.2)
US unemployment3
 
3.84.24.78.912.0
US HPI4
 
41.232.63.6(1.3)(7.9)
US federal funds rate3
 
0.30.30.81.50.8
      
As at 31.12.20
 
     
UK GDP2
 
14.28.80.7(22.1)(22.1)
UK unemployment3
 
4.04.05.78.410.1
UK HPI4
 
48.230.83.6(4.5)(18.3)
UK bank rate3
 
0.10.10.60.6
US GDP2
 
15.712.81.6(10.6)(10.6)
US unemployment3
 
3.83.86.413.013.7
US HPI4
 
42.230.93.8(3.7)(15.9)
US federal funds rate3
 
0.10.10.31.31.3
 
 
1UK GDP = Real GDP growth seasonally adjusted; UK unemployment = UK unemployment rate 16-year+; UK HI = Halifax All Houses, All Buyers Index; US GDP = Real GDP growth seasonally adjusted; US unemployment = US civilian unemployment rate 16-year+; US HPI = FHFA House Price Index. 20 quarter period starts from Q121 (2020: Q120).
2Maximum growth relative to Q420 (2020: Q419), based on 20 quarter period in Upside scenarios; 5-year yearly average Compound Annual Growth Rate (CAGR) in Baseline; minimum growth relative to Q420 (2020: Q419), based on 20 quarter period in Downside scenarios.
3Lowest quarter in 20 quarter period in Upside scenarios; 5-year average in Baseline; highest quarter in 20 quarter period in Downside scenarios.
4Maximum growth relative to Q420 (2020: Q419), based on 20 quarter period in Upside scenarios; 5-year quarter end CAGR in Baseline; minimum growth relative to Q420 (2020: Q419), based on 20 quarter period in Downside scenarios.
 
 
Average basis represents the average quarterly value of variables in the 20 quarter period with GDP and HPI based on yearly average and quarterly CAGRs respectively.
 
 
 
Macroeconomic variables (5 year averages)1
 
     
 Upside 2Upside 1BaselineDownside 1Downside 2
As at 30.06.21 % % % % %
UK GDP2
 
5.2
 
4.2
 
3.3
 
2.6
 
1.8
 
UK unemployment3
 
4.6
 
4.8
 
5.1
 
5.7
 
6.5
 
UK HPI4
 
8.2
 
4.7
 
1.6
 
 
(1.6)
 
UK bank rate3
 
0.7
 
0.6
 
0.4
 
0.2
 
 
US GDP2
 
4.6
 
3.7
 
2.8
 
2.0
 
1.4
 
US unemployment3
 
4.1
 
4.4
 
4.7
 
6.3
 
8.5
 
US HPI4
 
7.1
 
5.8
 
3.6
 
1.6
 
(0.4)
 
US federal funds rate3
 
1.1
 
0.9
 
0.8
 
0.6
 
0.3
 
      
As at 31.12.20
 
     
UK GDP2
 
2.5
 
1.6
 
0.7
 
0.1
 
(0.9)
 
UK unemployment3
 
5.0
 
5.3
 
5.7
 
6.5
 
7.2
 
UK HPI4
 
8.2
 
5.5
 
3.6
 
(0.2)
 
(3.6)
 
UK bank rate3
 
0.3
 
0.2
 
 
 
(0.1)
 
US GDP2
 
2.9
 
2.4
 
1.6
 
0.8
 
0.1
 
US unemployment3
 
5.3
 
5.7
 
6.4
 
8.3
 
10.4
 
US HPI4
 
7.3
 
5.5
 
3.8
 
0.8
 
(3.0)
 
US federal funds rate3
 
0.5
 
0.5
 
0.3
 
0.3
 
0.3
 
 
 
1UK GDP = Real GDP growth seasonally adjusted; UK unemployment = UK unemployment rate 16-year+; UK HPI = Halifax All Houses, All Buyers Index; US GDP = Real GDP growth seasonally adjusted; US unemployment = US civilian unemployment rate 16-year+; US HPI = FHFA House Price Index.
25-year yearly average CAGR, starting 2020 (2020: 2019).
35-year average. Period based on 20 quarters from Q121 (2020: Q120).
45-year quarter end CAGR, starting Q420 (2020: Q419).
 
 
ECL under 100% weighted scenarios for modelled portfolios
 
The table below shows the ECL assuming scenarios have been 100% weighted. Model exposures are allocated to a stage based on the individual scenario rather than through a probability-weighted approach as required for Barclays reported impairment allowances. As a result, it is not possible to back solve to the final reported weighted ECL from the individual scenarios as a balance may be assigned to a different stage dependent on the scenario. Model exposure uses exposure at default (EAD) values and is not directly comparable to gross exposure used in prior disclosures. For Credit cards, unsecured loans and other retail lending, an average EAD measure is used (12-month or lifetime, depending on stage allocation in each scenario). Therefore, the model exposure movement into Stage 2 is higher than the corresponding Stage 1 reduction.
 
All ECL using a model is included, with the exception of Treasury assets (£4m of ECL). Non-modelled exposures and management adjustments are excluded. Management adjustments can be found in the Management adjustments to models for impairment section.
 
Model exposures allocated to Stage 3 do not change in any of the scenarios as the transition criteria relies only on observable evidence of default as at 30 June 2021 and not on macroeconomic scenarios.
 
The Downside 2 scenario represents a severe global recession with substantial falls in both UK and US GDP. Unemployment in UK markets rises towards 9.8% and US markets rises towards 12% and there are substantial falls in asset prices including housing. Under the Downside 2 scenario, model exposure moves between stages as the economic environment weakens. This can be seen in the movement of £18bn of model exposure into Stage 2 between the Weighted and Downside 2 scenario. ECL increases in Stage 2 predominantly due to unsecured portfolios as economic conditions deteriorate.
 
 
 
 Scenarios
As at 30.06.21
 
WeightedUpside 2Upside 1BaselineDownside 1Downside 2
Stage 1 Model Exposure (£m)      
Home loans131,134133,584132,343130,694128,711126,953
Credit cards, unsecured loans and other retail lending44,01445,18544,80944,30742,38339,252
Wholesale loans160,174162,762162,201160,564158,614152,164
Stage 1 Model ECL (£m)      
Home loans423468
Credit cards, unsecured loans and other retail lending379269288324456486
Wholesale loans248187203224306352
Stage 1 Coverage (%)      
Home loans
Credit cards, unsecured loans and other retail lending0.90.60.60.71.11.2
Wholesale loans0.20.10.10.10.20.2
Stage 2 Model Exposure (£m)      
Home loans24,34521,89523,13624,78526,76928,526
Credit cards, unsecured loans and other retail lending7,1755,7336,2056,8199,06612,625
Wholesale loans33,66631,07731,63933,27635,22541,676
Stage 2 Model ECL (£m)      
Home loans201315182739
Credit cards, unsecured loans and other retail lending1,0767338419761,5442,517
Wholesale loans7735946467099391,342
Stage 2 Coverage (%)      
Home loans0.10.10.10.10.10.1
Credit cards, unsecured loans and other retail lending15.012.813.614.317.019.9
Wholesale loans2.31.92.02.12.73.2
Stage 3 Model Exposure (£m)      
Home loans1,8291,8291,8291,8291,8291,829
Credit cards, unsecured loans and other retail lending2,3742,3742,3742,3742,3742,374
Wholesale loans1
1,3741,3741,3741,3741,3741,374
Stage 3 Model ECL (£m)      
Home loans324307315325337352
Credit cards, unsecured loans and other retail lending1,8781,8501,8641,8751,9051,920
Wholesale loans1
676566676972
Stage 3 Coverage (%)      
Home loans17.716.817.217.818.419.2
Credit cards, unsecured loans and other retail lending79.177.978.579.080.280.9
Wholesale loans1
4.94.74.84.95.05.2
Total Model ECL (£m)      
Home loans348322333347370399
Credit cards, unsecured loans and other retail lending3,3332,8522,9933,1753,9054,923
Wholesale loans1
1,0888469151,0001,3141,766
Total Model ECL4,7694,0204,2414,5225,5897,088
 
 
1Material wholesale loan defaults are individually assessed across different recovery strategies. As a result, ECL of £783m is reported as individually assessed impairments in the table below.
 
 
Reconciliation to total ECL£m
Total model ECL4,769
ECL from individually assessed impairments on stage 3 loans783
ECL from non-modelled and other management adjustments1
1,678
Total ECL
 
7,230
 
 
 
1Includes £1.9bn post-model adjustments of which £0.4bn is included as part of total model ECL and £0.2bn ECL from non-modelled exposures.
 
 
The dispersion of results around the Baseline is an indication of uncertainty around the future projections. The disclosure highlights the results of the alternative scenarios enabling the reader to understand the extent of the impact on exposure and ECL from the upside/downside scenarios. Consequently, the use of five scenarios with associated weightings results in a total weighted ECL uplift from the Baseline ECL of 5.5%, largely driven by credit card losses which have more linear loss profiles than UK home loans and wholesale loan positions.
 
Home loans: Total weighted ECL of £348m represents a 0.3% increase over the Baseline ECL (£347m), and coverage ratios remain steady across the Upside scenarios, Baseline and Downside 1 scenario. However, total ECL increases in the Downside 2 scenario to £399m, driven by a significant fall in UK HPI (11.8%) reflecting the non-linearity of the UK portfolio.
 
Credit cards, unsecured loans and other retail lending: Total weighted ECL of £3,333m represents a 5% increase over the Baseline ECL (£3,175m) reflecting the range of economic scenarios used, mainly impacted by unemployment and other key retail variables. Total ECL increases to £4,923m under Downside 2 scenario, mainly driven by Stage 2, where coverage rates increase to 19.9% from a weighted scenario approach of 15% and circa £5.5bn increase in model exposure that meets the Significant Increase in Credit Risk criteria and transitions from Stage 1 to Stage 2.
 
Wholesale loans: Total weighted ECL of £1,088m represents an 8.8% increase over the Baseline ECL (£1,000m) reflecting the range of economic scenarios used, with exposures in the Investment Bank particularly sensitive to the Downside 2 scenario.
 
 
 
 Scenarios
As at 31.12.20
 
WeightedUpside 2Upside 1BaselineDownside 1Downside 2
Stage 1 Model Exposure (£m)      
Home loans131,422134,100133,246132,414130,547128,369
Credit cards, unsecured loans and other retail lending51,95253,27152,93251,99550,16848,717
Wholesale loans149,099155,812154,578152,141144,646131,415
Stage 1 Model ECL (£m)      
Home loans64561442
Credit cards, unsecured loans and other retail lending392316340372415415
Wholesale loans262242258249278290
Stage 1 Coverage (%)      
Home loans
Credit cards, unsecured loans and other retail lending0.80.60.60.70.80.9
Wholesale loans0.20.20.20.20.20.2
Stage 2 Model Exposure (£m)      
Home loans19,18016,50217,35618,18820,05522,233
Credit cards, unsecured loans and other retail lending13,39910,57211,57913,17616,47719,322
Wholesale loans32,67725,96327,19829,63537,13050,361
Stage 2 Model ECL (£m)      
Home loans373132334263
Credit cards, unsecured loans and other retail lending2,2071,6181,8372,1382,8653,564
Wholesale loans1,4109521,0471,2231,7712,911
Stage 2 Coverage (%)      
Home loans0.20.20.20.20.20.3
Credit cards, unsecured loans and other retail lending16.515.315.916.217.418.4
Wholesale loans4.33.73.84.14.85.8
Stage 3 Model Exposure (£m)      
Home loans1,7781,7781,7781,7781,7781,778
Credit cards, unsecured loans and other retail lending2,5852,5852,5852,5852,5852,585
Wholesale loans1
2,2112,2112,2112,2112,2112,211
Stage 3 Model ECL (£m)      
Home loans307282286290318386
Credit cards, unsecured loans and other retail lending2,0031,9471,9722,0012,0552,078
Wholesale loans1
146128134141157184
Stage 3 Coverage (%)      
Home loans17.315.916.116.317.921.7
Credit cards, unsecured loans and other retail lending77.575.376.377.479.580.4
Wholesale loans1
6.65.86.16.47.18.3
Total Model ECL (£m)      
Home loans350317323329374491
Credit cards, unsecured loans and other retail lending4,6023,8814,1494,5115,3356,057
Wholesale loans1
1,8181,3221,4391,6132,2063,385
Total Model ECL6,7705,5205,9116,4537,9159,933
 
 
1Material wholesale loan defaults are individually assessed across different recovery strategies. As a result, ECL of £902m is reported as individually assessed impairments in the table below.
 
 
Reconciliation to total ECL1
£m
Total model ECL6,770
ECL from individually assessed impairments on stage 3 loans902
ECL from non-modelled and other management adjustments1,727
Total ECL
 
9,399
 
 
 
1
Includes £1.4bn of post-model adjustments and £0.3bn ECL from non-modelled exposures.
 
 
Analysis of specific portfolios and asset types
 
Payment holidays
 
Payment holidays are substantially concluded and due to roll off by the end of July 2021. The impact of payment holidays on delinquency performance in the period has been modest and as such detail has not been included in the commentaries below.
 
Secured home loans
 
The UK home loan portfolio primarily comprises first lien mortgages and accounts for 93% (December 2020: 93%) of the Group’s total home loans balance.
 
 
 
Home loans principal portfolios
 
Barclays UK
 
 
As at 30.06.21
 
As at 31.12.20
 
Gross loans and advances (£m)155,247148,343
90 day arrears rate, excluding recovery book (%)0.10.2
Annualised gross charge-off rates - 180 days past due (%)0.60.6
Recovery book proportion of outstanding balances (%)0.60.6
Recovery book impairment coverage ratio (%)3.43.2
   
Average marked to market LTV  
Balance weighted %51.350.7
Valuation weighted %38.037.6
   
New lending
 
Half year ended 30.06.21
 
Half year ended 30.06.20
 
New home loan bookings (£m)19,1209,977
New home loan proportion > 90% LTV (%)0.93.7
Average LTV on new home loans: balance weighted (%)68.768.4
Average LTV on new home loans: valuation weighted (%)61.360.0
 
 
Home loans principal portfolios – distribution of balances by LTV1
             
 Distribution of balancesDistribution of impairment allowanceCoverage ratio
 Stage 1Stage 2Stage 3TotalStage 1Stage 2Stage 3TotalStage 1Stage 2Stage 3Total
Barclays UK%%%%%%%%%%%%
As at 30.06.21            
<=75%74.411.80.786.96.016.424.446.80.11.7
>75% and <=90%11.40.912.33.920.410.835.11.214.20.1
>90% and <=100%0.70.70.40.83.44.62.046.90.3
>100%0.10.10.22.910.413.50.28.183.59.0
As at 31.12.20            
<=75%75.711.60.687.917.915.019.051.90.11.8
>75% and <=90%10.80.811.69.714.87.632.10.11.216.00.2
>90% and <=100%0.40.40.81.52.24.50.12.635.70.7
>100%0.10.10.73.47.411.50.710.369.18.0
 
 
1Portfolio mark to market based on the most updated valuation including recovery book balances. Updated valuations reflect the application of the latest HPI available as at 30 June 2021.
 
 
The increased level of new business was driven by elevated demand in the house purchase market supported by government intervention including stamp duty relief. Also, with the gradual roll back of COVID restrictions, high LTV products were re-introduced in a phased manner during 2021, including the introduction of a 95% LTV product under the Government’s mortgage guarantee scheme in April 2021. The comparatively lower LTV > 90% new loan proportion is primarily a result of the mortgage guarantee scheme being live for only 3 months of H121.
 
Head Office: Italian home loans and advances at amortised cost reduced to £5.1bn (2020: £5.7bn). The portfolio is secured on residential property with an average balance weighted mark to market LTV of 61% (2020: 62.1%). 90 day arrears decreased to 1.4% (2020: 1.7%), gross charge-off rates decreased to 0.8% (2020: 1.0%).
 
Credit cards, unsecured loans and other retail lending
 
The principal portfolios listed below accounted for 83% (December 2020: 84%) of the Group’s total credit cards, unsecured loans and other retail lending.
 
 
 
Principal portfoliosGross exposure30 day arrears rate, excluding recovery book90 day arrears rate, excluding recovery bookAnnualised gross write-off rateAnnualised net write-off rate
As at 30.06.21£m%%%%
Barclays UK     
UK cards10,2021.40.64.94.8
UK personal loans4,0752.31.43.93.6
Barclays Partner Finance2,3620.50.21.31.3
Barclays International     
US cards15,8951.60.95.65.4
Germany consumer lending3,3981.50.70.90.8
      
As at 31.12.20
 
     
Barclays UK     
UK cards11,9111.70.82.92.9
UK personal loans4,5912.31.23.43.1
Barclays Partner Finance2,4690.50.31.11.1
Barclays International     
US cards16,8452.51.45.65.6
Germany consumer lending3,4581.90.81.21.1
 
 
UK cards: 30 and 90 day arrears rates reduced by 0.3% and 0.2% to 1.4% and 0.6% respectively, despite balances reducing by c.£1.7bn. The reduction in arrears was driven by continued COVID support measures, along with improved book quality reflecting lower consumer demand, tighter lending criteria and reduced customer credit limits. Gross and net write-off rates increased significantly to 4.9% and 4.8% respectively as a result of the significant reduction in overall balances since the accounts originally charged off. In addition, fewer debt sales in 2020, allowed balances to follow the contractual write-off processes, rather than accelerated write-offs due to debt sales.
 
UK personal loans: 30 day arrears rate was stable at 2.3% whilst the 90 day arrears rate increased by 0.2% to 1.4%. The increase in late cycle arrears was driven by a higher flow in to delinquency, specifically in Q121, of customers previously granted a payment holiday, as well as an overall reduction in balances. Gross and net write-off rates increased as a result of the reduction in overall balances.
 
Barclays Partner Finance: 30 and 90 day arrears rates remain stable and in line with December 2020.
 
US cards: 30 and 90 day arrears rates improved and remain below pre-pandemic levels due to government support schemes and industry payment deferrals that were made available to consumers. These factors also contributed to the decrease in balances.
 
Germany consumer lending: 30 and 90 day arrears rates decreased, reflecting better-than-expected customer resilience, helped by government support schemes. In addition, improvements in collections processes and the implementation of tighter underwriting criteria helped improve the credit quality of the book.
 
 
Market Risk
 
Analysis of management value at risk (VaR)
 
The table below shows the total management VaR on a diversified basis by asset class. Total management VaR includes all trading positions in CIB and Treasury and it is calculated with a one-day holding period. VaR limits are applied to total management VaR and by asset class. Additionally, the market risk management function applies VaR sub-limits to material businesses and trading desks.
 
 
 
Management VaR (95%) by asset class
            
 
Half year ended 30.06.21
 
 
Half year ended 31.12.20
 
 
Half year ended 30.06.20
 
 AverageHighLow AverageHighLow AverageHighLow
 £m£m£m £m£m£m £m£m£m
Credit risk
18
 
30
 
9
 
 
19
 
23
 
15
 
 223810
Interest rate risk
 
8
 
15
 
4
 
 
11
 
17
 
6
 
 9176
Equity risk
 
10
 
15
 
6
 
 
10
 
16
 
7
 
 15356
Basis risk
 
7
 
10
 
4
 
 
10
 
12
 
7
 
 10167
Spread risk
 
4
 
6
 
3
 
 
5
 
7
 
4
 
 593
Foreign exchange risk
 
3
 
6
 
2
 
 
5
 
7
 
3
 
 572
Commodity risk
 
 
1
 
 
 
1
 
1
 
 
 11
Inflation risk
 
2
 
3
 
2
 
 
2
 
3
 
1
 
 121
Diversification effect1
(30)n/an/a (35)n/an/a (33)n/an/a
Total management VaR223613 283520 355718
 
 
1Diversification effects recognise that forecast losses from different assets or businesses are unlikely to occur concurrently, hence the expected aggregate loss is lower than the sum of the expected losses from each area. Historical correlations between losses are taken into account in making these assessments. The high and low VaR figures reported for each category did not necessarily occur on the same day as the high and low VaR reported as a whole. Consequently, a diversification effect balance for the high and low VaR figures would not be meaningful and is therefore omitted from the above table.
 
 
Average management VaR decreased 21% to £22m (H220: £28m), reflecting a reduction of £5m due to a methodology update which changed the historical lookback period of the VaR model from two years to one year and reduced risk taking in the period. The methodology change has increased the responsiveness of the model to changes over time in volatility levels in the lookback period.
 
Treasury and Capital Risk
 
The Group has a comprehensive Key Risk Control Framework for managing its liquidity risk. The liquidity framework meets the PRA standards and is designed to maintain liquidity resources that are sufficient in amount and quality, and a funding profile that is appropriate to meet the Group’s Liquidity Risk Appetite (LRA). The liquidity framework is delivered via a combination of policy formation, review and governance, analysis, stress testing, limit setting and monitoring.
 
Liquidity risk stress testing
 
The liquidity risk stress assessment measures the potential contractual and contingent stress outflows under a range of scenarios, which are then used to determine the size of the liquidity pool that is immediately available to meet anticipated outflows if a stress occurs. The short-term scenarios include a 30 day Barclays-specific stress event, a 90 day market-wide stress event and a 30 day combined scenario consisting of both a Barclays specific and market-wide stress event. The Group also runs a long-term liquidity stress test, which measures the anticipated outflows over a 12 month market-wide scenario.
 
The CRR (as amended by CRR II) liquidity coverage ratio (LCR) requirement takes into account the relative stability of different sources of funding and potential incremental funding requirements in a stress. The LCR is designed to promote short-term resilience of a bank’s liquidity risk profile by holding sufficient high quality liquid assets to survive an acute stress scenario lasting for 30 days.
 
As at 30 June 2021, the Group held eligible liquid assets in excess of 100% of net stress outflows to its internal and external regulatory requirements.
 
 
 
Liquidity coverage ratio
 
  
 As at 30.06.21As at 31.12.20
 £bn£bn
Eligible liquidity buffer
280
 
258
Net stress outflows
(172)
 
(159)
Surplus
108
 
99
   
Liquidity coverage ratio
162%
 
162%
 
 
The Group plans to maintain its surplus to the internal and regulatory stress requirements at an efficient level, while considering risks to market funding conditions and its liquidity position. The continuous reassessment of these risks may lead to execution of appropriate actions to resize the liquidity pool.
 
 
 
Composition of the Group liquidity pool
 
 
As at 30.06.21
 
As at 31.12.20
 
 
Liquidity pool
 
Liquidity pool of which CRD IV LCR eligible3
 
Liquidity pool
 
 
Cash
 
Level 1
 
Level 2A
 
 £bn£bn£bn£bn£bn
Cash and deposits with central banks1
224
 
217
 
 
 
197
      
Government bonds2
     
AAA to AA-
39
 
 
30
 
1
 
31
A+ to A-
6
 
 
1
 
5
 
13
BBB+ to BBB-
2
 
 
2
 
 
1
Total government bonds
47
 
 
33
 
6
 
45
      
Other     
Government Guaranteed Issuers, PSEs and GSEs
8
 
 
5
 
2
 
10
International Organisations and MDBs
4
 
 
4
 
 
6
Covered bonds
7
 
 
6
 
2
 
8
Other
1
 
 
 
 
Total other
20
 
 
15
 
4
 
24
      
Total as at 30 June 2021
291
 
217
 
48
 
10
 
266
Total as at 31 December 20202661925511 
 
 
1Includes cash held at central banks and surplus cash at central banks related to payment schemes. Over 98% (December 2020: over 98%) was placed with the Bank of England, US Federal Reserve, European Central Bank, Bank of Japan and Swiss National Bank.
2Of which over 76% (December 2020: over 78%) comprised UK, US, French, German, Japanese, Swiss and Dutch securities.
3The LCR eligible liquidity pool is adjusted for trapped liquidity and other regulatory deductions. It also incorporates other CRR (as amended by CRR II) qualifying assets that are not eligible under Barclays’ internal risk appetite.
 
 
The Group liquidity pool increased to £291bn as at 30 June 2021 (December 2020: £266bn) driven by continued deposit growth, further borrowing from the Bank of England’s Term Funding Scheme with additional incentives for SMEs and a seasonal increase in short-term wholesale funding, which were partly offset by an increase in business funding consumption. During H121, the month-end liquidity pool ranged from £290bn to £308bn (H220: £266bn to £332bn), and the month-end average balance was £296bn (H220: £318bn). The liquidity pool is held unencumbered and is not used to support payment or clearing requirements. Such requirements are treated as part of our regular business funding. The liquidity pool is intended to offset stress outflows, and comprises the above cash and unencumbered assets.
 
 
 
As at 30 June 2021, 60% (December 2020: 64%) of the liquidity pool was located in Barclays Bank PLC, 27% (December 2020: 23%) in Barclays Bank UK PLC and 6% (December 2020: 7%) in Barclays Bank Ireland PLC. The residual portion of the liquidity pool is held outside of these entities, predominantly in US subsidiaries, to meet entity-specific stress outflows and local regulatory requirements. To the extent the use of this residual portion of the liquidity pool is restricted due to local regulatory requirements, it is assumed to be unavailable to the rest of the Group in calculating the LCR.
 
 
 
The composition of the pool is subject to limits 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.
 
 
 
Deposit funding
 
     
 As at 30.06.21 As at 31.12.20
 Loans and advances at amortised costDeposits at amortised cost
Loan: deposit ratio1
 
Loan: deposit ratio1
Funding of loans and advances£bn£bn% %
Barclays UK
 
222
 
256
 
87
 
 
89 
 
Barclays International
 
122
 
245
 
50
 
 
51 
 
Head Office
 
5
 
    
Barclays Group
 
349
 
501
 
70
 
 
71 
 
 
 
1The loan: deposit ratio is calculated as loans and advances at amortised cost divided by deposits at amortised cost.
 
 
Funding structure and funding relationships
 
The basis for liquidity risk management is a funding structure that reduces the probability of a liquidity stress leading to an inability to meet funding obligations as they fall due. The Group’s overall funding strategy is to develop a diversified funding base (geographically, by type and by counterparty) and maintain access to a variety of alternative funding sources, to provide protection against unexpected fluctuations, while minimising the cost of funding.
 
Within this, the Group aims to align the sources and uses of funding. As such, retail and corporate loans and advances are largely funded by deposits in the relevant entities, with the surplus primarily funding the liquidity pool. The majority of reverse repurchase agreements are matched by repurchase agreements. Derivative liabilities and assets are largely matched. A substantial proportion of balance sheet derivative positions qualify for counterparty netting and the remaining portions are largely offset when netted against cash collateral received and paid. Wholesale debt and equity is used to fund residual assets.
 
These funding relationships as at 30 June 2021 are summarised below:
 
 
 
 As at 30.06.21As at 31.12.20  As at 30.06.21As at 31.12.20
Assets£bn£bn Liabilities and equity£bn£bn
Loans and advances at amortised cost1
340335 Deposits at amortised cost501481
Group liquidity pool291266 <1 Year wholesale funding5843
    >1 Year wholesale funding101102
Reverse repurchase agreements, trading portfolio assets, cash collateral and settlement balances419376 Repurchase agreements, trading portfolio liabilities, cash collateral and settlement balances362324
Derivative financial instruments257302 Derivative financial instruments247301
Other assets2
6971 Other liabilities3932
    Equity6867
Total assets1,3761,350 Total liabilities and equity1,3761,350
 
 
1Adjusted for liquidity pool debt securities reported at amortised cost of £9bn (December 2020: £8bn).
2Other assets include fair value assets that are not part of reverse repurchase agreements or trading portfolio assets, and other asset categories.
 
 
Composition of wholesale funding
 
Wholesale funding outstanding (excluding repurchase agreements) was £158.7bn (December 2020: £145bn). In H121, the Group issued £5.9bn of MREL eligible instruments from Barclays PLC (the Parent company) in a range of tenors and currencies.
 
Our operating companies also access wholesale funding markets to maintain their stable and diversified funding bases. Barclays Bank PLC continued to issue in the shorter-term and medium-term notes markets. In addition, Barclays Bank UK PLC continued to issue in the shorter-term markets.
 
Wholesale funding of £57.8bn (December 2020: £42.7bn) matures in less than one year, representing 36% (December 2020: 29%) of total wholesale funding outstanding. This includes £18.8bn (December 2020: £20.3bn) related to term funding2.
 
Maturity profile of wholesale funding1,2
       
 <11-33-66-12<11-22-33-44-5>5 
 monthmonthsmonthsmonthsyearyearsyearsyearsyearsyearsTotal
 £bn£bn£bn£bn£bn£bn£bn£bn£bn£bn£bn
Barclays PLC (the Parent company)           
Senior unsecured (public benchmark)
 
1.2
 
 
0.8
 
2.0
 
4.7
 
6.8
 
6.9
 
5.3
 
12.1
 
37.8
 
Senior unsecured (privately placed)
 
 
0.1
 
 
0.1
 
 
0.3
 
 
 
0.5
 
0.9
 
Subordinated liabilities
 
 
 
 
 
 
 
0.9
 
1.5
 
6.8
 
9.2
 
Barclays Bank PLC (including subsidiaries)           
Certificates of deposit and commercial paper
3.7
 
8.0
 
8.9
 
8.9
 
29.5
 
0.4
 
0.1
 
 
 
 
30.0
 
Asset backed commercial paper
2.1
 
3.2
 
0.3
 
0.1
 
5.7
 
 
 
 
 
 
5.7
 
Senior unsecured (public benchmark)
 
0.1
 
 
1.3
 
1.4
 
 
1.0
 
 
 
0.5
 
2.9
 
Senior unsecured (privately placed)3
0.9
 
2.6
 
2.3
 
5.3
 
11.1
 
7.7
 
7.5
 
4.9
 
3.5
 
21.8
 
56.5
 
Covered Bonds
 
 
 
 
 
 
 
 
 
 
 
Asset backed securities
 
 
0.5
 
0.1
 
0.6
 
0.6
 
0.1
 
0.1
 
0.3
 
1.4
 
3.1
 
Subordinated liabilities
 
0.4
 
 
1.0
 
1.4
 
1.1
 
0.1
 
0.1
 
 
0.9
 
3.6
 
Barclays Bank UK PLC (including subsidiaries)           
Certificates of deposit and commercial paper
1.6
 
2.0
 
0.1
 
0.1
 
3.8
 
 
 
 
 
 
3.8
 
Senior unsecured (public benchmark)
 
 
 
 
 
 
 
 
 
0.2
 
0.2
 
Covered Bonds
 
 
 
2.2
 
2.2
 
1.7
 
 
 
 
1.1
 
5.0
 
Total as at 30 June 2021
8.3
 
17.5
 
12.2
 
19.8
 
57.8
 
16.2
 
15.9
 
12.9
 
10.6
 
45.3
 
158.7
 
Of which secured
2.1
 
3.2
 
0.8
 
2.4
 
8.5
 
2.3
 
0.1
 
0.1
 
0.3
 
2.5
 
13.8
 
Of which unsecured
6.2
 
14.3
 
11.4
 
17.4
 
49.3
 
13.9
 
15.8
 
12.8
 
10.3
 
42.8
 
144.9
 
            
Total as at 31 December 2020
5.7
 
15.4
 
9.5
 
12.1
 
42.7
 
15.6
 
16.7
 
12.3
 
10.2
 
47.5
 
145.0
 
Of which secured
2.3
 
5.0
 
0.7
 
0.5
 
8.5
 
3.1
 
2.2
 
0.5
 
0.2
 
2.6
 
17.1
 
Of which unsecured
3.4
 
10.4
 
8.8
 
11.6
 
34.2
 
12.5
 
14.5
 
11.8
 
10.0
 
44.9
 
127.9
 
 
 
1The composition of wholesale funds comprises the balance sheet reported financial liabilities at fair value, debt securities in issue and subordinated liabilities. It does not include participation in the central bank facilities reported within repurchase agreements and other similar secured borrowing.
2Term funding comprises public benchmark and privately placed senior unsecured notes, covered bonds, asset-backed securities and subordinated debt where the original maturity of the instrument is more than 1 year.
3Includes structured notes of £47.9bn, of which £10.2bn matures within one year.
 
 
Credit ratings
 
In addition to monitoring and managing key metrics related to the financial strength of the Group, Barclays also solicits independent credit ratings from Standard & Poor’s Global (S&P), Moody’s, Fitch, and Rating and Investment Information (R&I). These ratings assess the creditworthiness of the Group, its subsidiaries and its branches, and are based on reviews of a broad range of business and financial attributes including capital strength, profitability, funding, liquidity, asset quality, strategy and governance.
 
 
Barclays Bank PLC
 
Standard & Poor's
 
Moody's
 
Fitch
 
Long-term
 
A / Positive
 
A1 / Stable
 
A+ / Stable
 
Short-term
 
A-1
 
P-1
 
F1
 
    
Barclays Bank UK PLC
 
   
Long-term
 
A / Positive
 
A1 / Stable
 
A+ / Stable
 
Short-term
 
A-1
 
P-1
 
F1
 
    
Barclays PLC
 
   
Long-term
 
BBB / Positive
 
Baa2 /Stable
 
A / Stable
 
Short-term
 
A-2
 
P-2
 
F1
 
 
In June 2021, S&P revised the outlooks of Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC to positive from stable, whilst affirming all ratings. The revisions reflect the view that Barclays is delivering a stronger, more consistent business profile and financial performance.
 
In July 2021, Moody’s revised the outlook of Barclays Bank UK PLC to stable from negative due to their view that asset quality and profitability have stabilised following a turbulent 2020.
 
In July 2021, Fitch revised the outlooks of Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC to stable from negative, whilst affirming all ratings. The revisions reflected improved expectations for economic recovery in Barclays’ key markets and the Group’s resilient performance through the pandemic.
 
Barclays also solicits issuer ratings from R&I, and the ratings of A- for Barclays PLC and A for Barclays Bank PLC were affirmed in November 2020 with stable outlooks.
 
A credit rating downgrade could result in outflows to meet collateral requirements on existing contracts. Outflows related to credit rating downgrades are included in the LRA stress scenarios and a portion of the liquidity pool is held against this risk. Credit ratings downgrades could also result in reduced funding capacity and increased funding costs.
 
The contractual collateral requirement following one- and two-notch long-term and associated short-term downgrades across all credit rating agencies, would result in outflows of £1bn and £4bn respectively, and are provided for in determining an appropriate liquidity pool size given the Group’s liquidity risk appetite. These numbers do not assume any management or restructuring actions that could be taken to reduce posting requirements. These outflows do not include the potential liquidity impact from loss of unsecured funding, such as from money market funds, or loss of secured funding capacity. However, unsecured and secured funding stresses are included in the LRA stress scenarios and a portion of the liquidity pool is held against these risks.
 
 
 
Capital
 
The Group’s Overall Capital Requirement for CET1 is 11.2% 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 2.7% Pillar 2A requirement and a 0% Countercyclical Capital Buffer (CCyB).
 
The Group’s CCyB is based on the buffer rate applicable for each jurisdiction in which the Group has exposures. On 11 March 2020, the Financial Policy Committee (FPC) set the CCyB rate for UK exposures at 0% with immediate effect. The buffer rates set by other national authorities for non-UK exposures are not currently material. Overall, this results in a 0.0% CCyB for the Group.
 
The Group’s Pillar 2A requirement as per the PRA’s Individual Capital Requirement is 4.8% of which at least 56.25% needs to be met with CET1 capital, equating to approximately 2.7% 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. 
 
Following the withdrawal of the UK from the EU, any references to CRR as amended by CRR II mean, unless otherwise specified, CRR as amended by CRR II, as it forms part of UK law pursuant to the European Union (Withdrawal) Act 2018 and subject to the temporary transitional powers (TTP) available to UK regulators to delay or phase-in on-shoring changes to UK regulatory requirements arising at the end of the transition period until 31 March 2022, as at the applicable reporting date. With effect from 26 June 2021, the Financial Services Act 2021 amended CRR as amended by CRR II in part. The amendments included an extension to the application of CRR II settlement netting to the CRR leverage exposure which was due to expire on 27 June 2021 under CRR II quick fix measures. Throughout the TTP period, the Bank of England (BoE) and PRA will continue to review the UK regulatory framework and the Group disclosures will reflect the amended framework as applicable at the effective reporting date.
 
On 26 April 2019, a prudential backstop was implemented for qualifying exposures originating after 26 April 2019 that have been non-performing for more than 2 years. Where minimum coverage requirements for qualifying non-performing exposures are not met, the difference must be deducted from CET1 capital. Different conversion factors are applied for secured and unsecured exposures depending on the length of time the exposures have been non-performing. For 2021, the conversion factor applied to secured non-performing exposures is 0% and for unsecured non-performing exposures is 35% prior to any coverage being applied. For H121 the impact to CET1 capital is immaterial.
 
On 9 July 2021, the PRA published their near final policy statement on the implementation of Basel III standards. The policy statement confirmed the PRA’s intention to revert to the previous treatment of 100% CET1 capital deduction for qualifying software assets, meaning the c.40bps benefit in the CET1 ratio will be reversed from 1 January 2022.
 
 
 
Capital ratios1,2,3
 
As at 30.06.21
 
As at 31.03.21
 
As at 31.12.20
 
CET1
 
15.1%
 
14.6%
 
15.1%
 
Tier 1 (T1)
 
18.9%
 
18.4%
 
19.0%
 
Total regulatory capital
 
22.3%
 
21.8%
 
22.1%
 
    
Capital resources
 
£m
 
£m
 
£m
 
Total equity excluding non-controlling interests per the balance sheet
 
67,052
 
65,105
 
65,797
 
Less: other equity instruments (recognised as AT1 capital)
 
(11,167)
 
(11,179)
 
(11,172)
 
Adjustment to retained earnings for foreseeable ordinary share dividends
 
(510)
 
(303)
 
(174)
 
Adjustment to retained earnings for foreseeable repurchase of shares
 
 
(439)
 
 
Adjustment to retained earnings for foreseeable other equity coupons
 
(35)
 
(42)
 
(30)
 
    
Other regulatory adjustments and deductions
 
   
Additional value adjustments (PVA)
 
(1,447)
 
(1,496)
 
(1,146)
 
Goodwill and intangible assets
 
(6,814)
 
(6,504)
 
(6,914)
 
Deferred tax assets that rely on future profitability excluding temporary differences
 
(664)
 
(629)
 
(595)
 
Fair value reserves related to gains or losses on cash flow hedges
 
(665)
 
(850)
 
(1,575)
 
Gains or losses on liabilities at fair value resulting from own credit
 
934
 
1,202
 
870
 
Defined benefit pension fund assets
 
(1,828)
 
(1,192)
 
(1,326)
 
Direct and indirect holdings by an institution of own CET1 instruments
 
(50)
 
(50)
 
(50)
 
Adjustment under IFRS 9 transitional arrangements
 
1,331
 
2,285
 
2,556
 
Other regulatory adjustments
 
88
 
(4)
 
55
 
CET1 capital
 
46,225
 
45,904
 
46,296
 
    
AT1 capital
 
   
Capital instruments and related share premium accounts
 
11,167
 
11,179
 
11,172
 
Qualifying AT1 capital (including minority interests) issued by subsidiaries
 
648
 
655
 
646
 
Other regulatory adjustments and deductions
 
(80)
 
(80)
 
(80)
 
AT1 capital
 
11,735
 
11,754
 
11,738
 
    
T1 capital
 
57,960
 
57,658
 
58,034
 
    
T2 capital
 
   
Capital instruments and related share premium accounts
 
8,969
 
8,951
 
7,836
 
Qualifying T2 capital (including minority interests) issued by subsidiaries
 
1,401
 
1,641
 
1,893
 
Credit risk adjustments (excess of impairment over expected losses)
 
79
 
95
 
57
 
Other regulatory adjustments and deductions
 
(160)
 
(160)
 
(160)
 
Total regulatory capital
 
68,249
 
68,185
 
67,660
 
    
Total RWAs
 
306,424
 
313,356
 
306,203
 
 
 
1CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR as amended by CRR II. This includes IFRS 9 transitional arrangements and the grandfathering of CRR and CRR II non-compliant capital instruments.
2The fully loaded CET1 ratio, as is relevant for assessing against the conversion trigger in Barclays PLC AT1 securities, was 14.7%, with £44.9bn of CET1 capital and £306.2bn of RWAs calculated without applying the transitional arrangements of the CRR as amended by CRR II.
3The Group’s CET1 ratio, as is relevant for assessing against the conversion trigger in Barclays Bank PLC 7.625% Contingent Capital Notes, was 15.1%. For this calculation CET1 capital and RWAs are calculated applying the transitional arrangements under the CRR as amended by CRR II, including the IFRS 9 transitional arrangements. The benefit of the Financial Services Authority (FSA) October 2012 interpretation of the transitional provisions, relating to the implementation of CRD IV, expired in December 2017.
 
 
Movement in CET1 capitalThree months ended 30.06.21Six months ended 30.06.21
 £m£m
Opening CET1 capital45,90446,296
   
Profit for the period attributable to equity holders2,3024,201
Own credit relating to derivative liabilities317
Ordinary share dividends paid and foreseen(380)(509)
Purchased and foreseeable share repurchase(700)
Other equity coupons paid and foreseen(187)(394)
Increase in retained regulatory capital generated from earnings1,7382,615
   
Net impact of share schemes119(48)
Fair value through other comprehensive income reserve70(250)
Currency translation reserve(17)(495)
Other reserves5(1)
Increase / (decrease) in other qualifying reserves177(794)
   
Pension remeasurements within reserves289103
Defined benefit pension fund asset deduction(636)(502)
Net impact of pensions(347)(399)
   
Additional value adjustments (PVA)49(301)
Goodwill and intangible assets(310)100
Deferred tax assets that rely on future profitability excluding those arising from temporary differences(35)(69)
Adjustment under IFRS 9 transitional arrangements(954)(1,225)
Other regulatory adjustments32
Decrease in regulatory capital due to adjustments and deductions(1,247)(1,493)
   
Closing CET1 capital46,22546,225
 
 
CET1 capital decreased £0.1bn to £46.2bn (December 2020: £46.3bn).
 
£4.2bn of capital generated from profits were partially offset by £1.6bn dividends paid and foreseen including £0.7bn for the share buyback announced with FY20 results, a £0.5bn accrual towards a FY21 dividend and £0.4bn of equity coupons paid. Other significant movements in the period were:
 
A £0.3bn reduction in the fair value through other comprehensive income reserve driven by a decrease in the fair value of bonds due to increasing bond yields
A 0.5bn decrease in the currency translation reserves driven by the depreciation of period end EUR and USD against GBP
A £0.4bn decrease as a result of movements relating to pensions, largely due to deficit contribution payments of £0.35bn in April 2021
A £0.3bn increase in the PVA deduction due to the removal of temporary regulatory supporting measures applied to certain additional valuation adjustments
A £1.2bn decrease in IFRS 9 transitional relief, after tax, primarily due to a credit impairment net release, impairment migrations from stage 2 to stage 3 and a decrease to the amount of relief applied to the pre-2020 impairment charge reducing to 50% in 2021 from 70% in 2020
 
 
RWAs by risk type and business
 
 Credit risk Counterparty credit risk Market Risk Operational riskTotal RWAs
 STDIRB STDIRBSettlement RiskCVA STDIMA 
As at 30.06.21£m£m £m£m£m£m £m£m £m£m
Barclays UK
 
7,151 
 
52,995 
 
 
437 
 
— 
 
— 
 
163 
 
 
33 
 
— 
 
 
11,381 
 
72,160 
 
Corporate and Investment Bank
 
26,406 
 
71,540 
 
 
15,343 
 
18,973 
 
101 
 
2,668 
 
 
17,761 
 
18,010 
 
 
23,453 
 
194,255 
 
Consumer, Cards and Payments
 
19,218 
 
2,509 
 
 
158 
 
40 
 
— 
 
29 
 
 
— 
 
55 
 
 
6,948 
 
28,957 
 
Barclays International
 
45,624 
 
74,049 
 
 
15,501 
 
19,013 
 
101 
 
2,697 
 
 
17,761 
 
18,065 
 
 
30,401 
 
223,212 
 
Head Office
 
4,591 
 
7,269 
 
 
— 
 
— 
 
— 
 
— 
 
 
— 
 
— 
 
 
(808)
 
11,052 
 
Barclays Group
 
57,366 
 
134,313 
 
 
15,938 
 
19,013 
 
101 
 
2,860 
 
 
17,794 
 
18,065 
 
 
40,974 
 
306,424 
 
              
As at 30.03.21
 
             
Barclays UK
 
7,066
 
53,512
 
 
431
 
 
 
217
 
 
64
 
 
 
11,381
 
72,671
 
Corporate and Investment Bank
 
25,832
 
75,854
 
 
13,781
 
19,218
 
102
 
2,452
 
 
16,479
 
24,083
 
 
23,452
 
201,253
 
Consumer, Cards and Payments
 
18,621
 
2,875
 
 
178
 
41
 
 
28
 
 
 
59
 
 
6,949
 
28,751
 
Barclays International
 
44,453
 
78,729
 
 
13,959
 
19,259
 
102
 
2,480
 
 
16,479
 
24,142
 
 
30,401
 
230,004
 
Head Office
 
4,424
 
7,065
 
 
 
 
 
 
 
 
 
 
(808)
 
10,681
 
Barclays Group
 
55,943
 
139,306
 
 
14,390
 
19,259
 
102
 
2,697
 
 
16,543
 
24,142
 
 
40,974
 
313,356
 
              
As at 31.12.20
 
             
Barclays UK
 
7,360
 
54,340
 
 
394
 
 
 
136
 
 
72
 
 
 
11,359
 
73,661
 
Corporate and Investment Bank
 
24,660
 
73,792
 
 
12,047
 
20,280
 
246
 
2,351
 
 
13,123
 
22,363
 
 
23,343
 
192,205
 
Consumer, Cards and Payments
 
19,754
 
3,041
 
 
177
 
45
 
 
31
 
 
 
71
 
 
6,996
 
30,115
 
Barclays International
 
44,414
 
76,833
 
 
12,224
 
20,325
 
246
 
2,382
 
 
13,123
 
22,434
 
 
30,339
 
222,320
 
Head Office
 
4,153
 
6,869
 
 
 
 
 
 
 
 
 
 
(800)
 
10,222
 
Barclays Group
 
55,927
 
138,042
 
 
12,618
 
20,325
 
246
 
2,518
 
 
13,195
 
22,434
 
 
40,898
 
306,203
 
 
 
Movement analysis of RWAs
 
 Credit riskCounterparty credit riskMarket riskOperational riskTotal RWAs
 £m£m£m£m£m
Opening RWAs (as at 31.12.20)193,969 35,707 35,629 40,898 306,203 
Book size378 1,698 1,519 76 3,671 
Acquisitions and disposals(874)— — — (874)
Book quality1,074 277 — — 1,351 
Model updates(1,070)(186)— — (1,256)
Methodology and policy(115)416 (1,289)— (988)
Foreign exchange movements1
(1,683)— — — (1,683)
Total RWA movements(2,290)2,205 230 76 221 
Closing RWAs (as at 30.06.21)191,679 37,912 35,859 40,974 306,424 
 
 
1Foreign exchange movements does not include foreign exchange for counterparty credit risk or market risk.
 
 
Overall RWAs remained broadly stable at £306.4bn (December 2020: £306.2bn).
 
 
 
Credit risk RWAs decreased £2.3bn:
 
 
 
A £1.1bn increase in book quality is primarily due to reduction in credit quality
A £1.1bn decrease in model updates primarily due to modelled risk weight recalibrations
A £1.7bn decrease in FX is due to the depreciation of period end EUR and USD against GBP
 
 
Counterparty Credit risk RWAs increased £2.2bn:
 
A £1.7bn increase in book size primarily due to an increase in trading activities across SFTs and derivatives
 
 
Market risk RWAs increased £0.2bn:
 
A £1.5bn increase in book size primarily due to increased client and trading activities
A £1.3bn decrease in methodology and policy is driven by a change in the historical look back period of the VaR model from two years to one year
 
 
Leverage ratio and exposures
 
The Group is subject to a leverage ratio requirement of 3.8% as at 30 June 2021. This comprises the 3.25% minimum requirement, a G-SII additional leverage ratio buffer (G-SII ALRB) of 0.53% and a countercyclical leverage ratio buffer of 0.0%. Although the leverage ratio is expressed in terms of T1 capital, 75% of the minimum requirement, equating to 2.4375%, needs to be met with CET1 capital. In addition, the G-SII ALRB must be covered solely with CET1 capital. The CET1 capital held against the 0.53% G-SII ALRB was £6.3bn.
 
The Group is required to disclose an average UK leverage ratio which is based on capital on the last day of each month in the quarter and an exposure measure for each day in the quarter. The Group is also required to disclose a UK leverage ratio based on capital and exposure on the last day of the quarter. Both approaches exclude qualifying claims on central banks from the leverage exposures and include the PRA’s adoption of CRR II settlement netting.
 
On 29 June 2021, the FPC and PRA issued a consultation paper on proposed changes to the UK leverage ratio framework. The consultation states the intention to move to a single UK leverage ratio requirement meaning that the CRR leverage ratio will no longer apply for UK banks from 1 January 2022. Whilst largely upholding the existing framework, some technical changes to the exposure measure have been proposed that will align to the Basel III standards. Minimum requirements for the Group remain the same with minimum requirements also expected to be applied at the individual level; individual requirements may be replaced with a sub-consolidated measure, subject to permission from the PRA, from 1 January 2023.
 
 
 
Leverage ratios1,2
As at 30.06.21As at 31.03.21As at 31.12.20
£m£m£m
Average UK leverage ratio4.8%4.9%5.0%
Average T1 capital3
57,28057,04057,069
Average UK leverage exposure1,191,9861,174,8871,146,919
    
UK leverage ratio5.0%5.0%5.3%
    
CET1 capital46,22545,90446,296
AT1 capital11,08711,09911,092
T1 capital3
57,31257,00357,388
    
UK leverage exposure1,153,5701,145,4131,090,907
    
UK leverage exposure   
Accounting assets   
Derivative financial instruments256,636270,717302,446
Derivative cash collateral54,06351,79764,798
Securities financing transactions (SFTs)182,820189,496164,034
Loans and advances and other assets882,814867,646818,236
Total IFRS assets1,376,3331,379,6561,349,514
    
Regulatory consolidation adjustments(1,406)(1,926)(1,144)
    
Derivatives adjustments   
Derivatives netting(229,123)(242,857)(272,275)
Adjustments to collateral(42,774)(45,464)(57,414)
Net written credit protection16,73016,81414,986
Potential future exposure (PFE) on derivatives135,162128,454117,010
Total derivatives adjustments(120,005)(143,053)(197,693)
    
SFTs adjustments23,51122,29421,114
    
Regulatory deductions and other adjustments(22,525)(18,111)(17,469)
    
Weighted off-balance sheet commitments111,870118,134113,704
    
Qualifying central bank claims(172,465)(167,054)(155,890)
    
Settlement netting(41,743)(44,527)(21,229)
    
UK leverage exposure1,153,5701,145,4131,090,907
 
 
1Fully loaded average UK leverage ratio was 4.7%, with £55.5bn of T1 capital and £1,190.2bn of leverage exposure. Fully loaded UK leverage ratio was 4.9%, with £56.0bn of T1 capital and £1,152.2bn of leverage exposure. Fully loaded UK leverage ratios are calculated without applying the transitional arrangements of the CRR as amended by CRR II.
2Capital and leverage measures are calculated applying the transitional arrangements of the CRR as amended by CRR II.
3T1 capital is calculated in line with the PRA Handbook.
 
 
The average UK leverage ratio decreased to 4.8% (December 2020: 5.0%). The average leverage exposure increased by £45.1bn to £1,192.0bn (December 2020: £1,146.9bn) largely driven by an increase in SFTs, TPAs and PFE on derivatives.
 
The UK leverage ratio decreased to 5.0% (December 2020: 5.3%). The UK leverage exposure increased by £62.7bn to £1,153.6bn (December 2020: £1,090.9bn) primarily driven by a £19.3bn increase in TPAs, a £18.8bn increase in SFTs and a £18.2bn increase in PFE on derivatives due to increased trading activity in CIB.
 
The Group also discloses a CRR leverage ratio1 within its additional regulatory disclosures prepared in accordance with EBA guidelines on disclosure under Part Eight of the CRR (see Barclays PLC Pillar 3 Report H1 2021, expected to be published on 13 August 2021 and which will be available at home.barclays/investor-relations/reports-and-events/latest-financial-results).
 
1CRR leverage ratio as amended by CRR II.
 
 
MREL

The Group is currently required to meet the higher of: (i) the requirements set by the BoE based on RWAs and the higher of average and UK leverage exposures; and (ii) the requirements in CRR as amended by CRR II based on RWAs and CRR leverage exposures. The MREL requirements are subject to phased implementation and will be fully implemented by 1 January 2022. As at 30 June 2021, the Group’s MREL requirement was to meet 6.9% of CRR leverage exposures.
 
On 22 July 2021 the BoE published a consultation paper on its approach to setting MREL. Under the proposed changes to their 2018 Statement of Policy, from 1 January 2022, the Group’s expected MREL requirements will be to meet the higher of: (i) two times the sum of Pillar 1 and Pillar 2A; and (ii) the higher of two times the applicable leverage ratio requirement or 6.75% of leverage exposures. As the FPC and PRA’s intention is to move to a single UK leverage framework, this means that CRR leverage exposure requirements in relation to MREL may no longer apply from 1 January 2022. Additionally, the proposals clarify that own funds instruments issued by subsidiaries will no longer be eligible to count towards the Group’s MREL from 1 January 2022.
 
CET1 capital cannot be counted towards both MREL and the capital buffers, meaning that the buffers will effectively be applied above MREL requirements.
 
 
 
Own funds and eligible liabilities ratios1,2
 
As a percentage of RWAs
 
 
As a percentage of CRR leverage exposure
 
 
As at 30.06.21
 
As at 31.03.21
 
As at 31.12.20
 
 
As at 30.06.21
 
As at 31.03.21
 
As at 31.12.20
 
Total Barclays PLC (the Parent company) own funds and eligible liabilities33.7%32.1%32.7% 7.7%7.6%8.0%
Total own funds and eligible liabilities, including eligible Barclays Bank PLC instruments
 
34.4%32.8%33.6% 7.9%7.8%8.2%
        
Own funds and eligible liabilities1,2
 
    
As at 30.06.21
 
As at 31.03.21
 
As at 31.12.20
 
     
£m
 
£m
 
£m
 
CET1 capital
 
    
46,225
 
45,904
 
46,296
 
AT1 capital instruments and related share premium accounts3
 
 
11,087
 
11,099
 
11,092
 
T2 capital instruments and related share premium accounts3
 
    
8,888
 
8,886
 
7,733
 
Eligible liabilities
 
    
37,095
 
34,571
 
35,086
 
Total Barclays PLC (the Parent company) own funds and eligible liabilities
 
 
103,295
 
100,460
 
100,207
 
Qualifying AT1 capital (including minority interests) issued by subsidiaries
 
 
648
 
655
 
646
 
Qualifying T2 capital (including minority interests) issued by subsidiaries
 
 
1,401
 
1,641
 
1,893
 
Total own funds and eligible liabilities, including eligible Barclays Bank PLC instruments 
105,344
 
102,756
 
102,746
 
        
Total RWAs
 
    
306,424
 
313,356
 
306,203
 
Total CRR leverage exposure4
 
    
1,334,929
 
1,320,628
 
1,254,157
 
 
 
1CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR as amended by CRR II. This includes IFRS 9 transitional arrangements and the grandfathering of CRR and CRR II non-compliant capital instruments.
2The BoE has set external MREL based on the higher of RWAs and CRR or UK leverage exposures which could result in the binding measure changing in future periods. The 30 June 2021 Barclays PLC (the Parent company) own funds and eligible liabilities ratio as a percentage of the UK leverage exposure was 9.0% and as a percentage of the average UK leverage exposure was 8.7%.
3Includes other AT1 capital regulatory adjustments and deductions of £80m (December 2020: £80m), and other T2 credit risk adjustments and deductions of £81m (December 2020: £103m).
4Fully loaded CRR leverage exposure is calculated without applying the transitional arrangements of the CRR as amended by CRR II.
 
 
Statement of Directors’ Responsibilities
 
The Directors (the names of whom are set out below) are required to prepare the financial statements on a going concern basis unless it is not appropriate to do so. In making this assessment, the directors have considered information relating to present and future conditions. Each of the Directors confirm that to the best of their knowledge, the condensed consolidated interim financial statements set out on pages 64 to 69 have been prepared in accordance with International Accounting Standard 34, ‘Interim Financial Reporting’, as adopted by the UK, and that the interim management report herein includes a fair review of the information required by Disclosure and Transparency Rules 4.2.7R and 4.2.8R namely:
 
an indication of important events that have occurred during the six months ended 30 June 2021 and their impact on the condensed consolidated interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year
 
 
any related party transactions in the six months ended 30 June 2021 that have materially affected the financial position or performance of Barclays during that period and any changes in the related party transactions described in the last Annual Report that could have a material effect on the financial position or performance of Barclays in the six months ended 30 June 2021
 
 
Signed on 27 July 2021 on behalf of the Board by
 
 
 
James E Staley
 
 
Tushar Morzaria
 
Group Chief Executive
 
 
Group Finance Director
 
 
 
Barclays PLC Board of Directors:
 
 
 
ChairmanExecutive DirectorsNon-Executive Directors
Nigel Higgins
 
James E Staley
Tushar Morzaria
 
Mike Ashley
Tim Breedon CBE
Mohamed A. El-Erian
Dawn Fitzpatrick
Mary Francis CBE
Crawford Gillies
Brian Gilvary
Diane Schueneman
Julia Wilson
 
 
 
Independent Review Report to Barclays PLC
 
 
Conclusion
 
We have been engaged by the company to review the condensed set of financial statements in the Interim Results Announcement for the six months ended 30 June 2021 which comprises:
 
the condensed consolidated income statement and condensed consolidated statement of comprehensive income for the period then ended;
the condensed consolidated balance sheet as at 30 June 2021;
the condensed consolidated statement of changes in equity for the period then ended;
the condensed consolidated cash flow statement for the period then ended; and
the related explanatory notes.
 
 
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Interim Results Announcement for the six months ended 30 June 2021 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted for use in the UK and the Disclosure Guidance and Transparency Rules (“the DTR”) of the UK’s Financial Conduct Authority (“the UK FCA”).
 
Scope of review
 
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. We read the other information contained in the Interim Results Announcement and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
 
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
 
Directors’ responsibilities
 
The Interim Results Announcement is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Interim Results Announcement in accordance with the DTR of the UK FCA.
 
As disclosed in Note 1, the Basis of preparation, the latest annual financial statements of the Barclays Group are prepared in accordance with International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union and in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and the next annual financial statements will be prepared in accordance with UK-adopted international accounting standards. The directors are responsible for preparing the condensed set of financial statements included in the Interim Results Announcement in accordance with IAS 34 as adopted for use in the UK.
 
Our responsibility
 
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the Interim Results Announcement based on our review.
 
The purpose of our review work and to whom we owe our responsibilities
 
This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the DTR of the UK FCA. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.
 
 
Michelle Hinchliffe
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London, E14 5GL
 
27 July 2021
 
Condensed Consolidated Financial Statements
  
 
Condensed consolidated income statement (unaudited)
  Half year ended 30.06.21Half year ended 30.06.20
 
Notes1
£m£m
Interest and similar income 5,2796,437
Interest and similar expense (1,376)(2,214)
Net interest income 3,9034,223
Fee and commission income34,6824,399
Fee and commission expense3(976)(1,090)
Net fee and commission income33,7063,309
Net trading income 3,4824,198
Net investment income 152(136)
Other income 7227
Total income 11,31511,621
Credit impairment releases/(charges) 742(3,738)
Net operating income 12,0577,883
    
Staff costs4(4,334)(4,053)
Infrastructure, administration and general expenses5(2,798)(2,510)
Litigation and conduct (99)(30)
Operating expenses (7,231)(6,593)
    
Share of post-tax results of associates and joint ventures 154(31)
Profit on disposal of subsidiaries, associates and joint ventures (1)13
Profit before tax 4,9791,272
Tax charge6(759)(113)
Profit after tax 4,2201,159
    
Attributable to:   
Equity holders of the parent 3,812695
Other equity instrument holders 389427
Total equity holders of the parent 4,2011,122
Non-controlling interests71937
Profit after tax 4,2201,159
    
Earnings per share pp
Basic earnings per ordinary share822.24.0
Diluted earnings per ordinary share821.73.9
 
 
1For notes to the Financial Statements see pages 70 to 96.
 
 
Condensed consolidated statement of comprehensive income (unaudited)
    
  Half year ended 30.06.21Half year ended 30.06.20
 
Notes1
£m£m
Profit after tax 4,2201,159
    
Other comprehensive income/(loss) that may be recycled to profit or loss:2
  
Currency translation reserve19(495)1,220
Fair value through other comprehensive income reserve19(365)137
Cash flow hedging reserve19(911)912
Other19(6)
Other comprehensive income that may be recycled to profit (1,771)2,263
    
Other comprehensive income/(loss) not recycled to profit or loss:2
  
Retirement benefit remeasurements16103645
Fair value through other comprehensive income reserve19115(515)
Own credit19(47)496
Other comprehensive income not recycled to profit 171626
    
Other comprehensive income for the period (1,600)2,889
    
Total comprehensive income for the period 2,6204,048
    
Attributable to:   
Equity holders of the parent 2,6014,011
Non-controlling interests 1937
Total comprehensive income for the period 2,6204,048
 
 
1For notes to the Financial Statements see pages 70 to 96.
2Reported net of tax.
 
 
Condensed consolidated balance sheet (unaudited)
  As at 30.06.21As at 31.12.20
Assets
Notes1
£m£m
Cash and balances at central banks 216,963191,127
Cash collateral and settlement balances 111,921101,367
Loans and advances at amortised cost12348,549342,632
Reverse repurchase agreements and other similar secured lending 4,4599,031
Trading portfolio assets 147,239127,950
Financial assets at fair value through the income statement 194,421175,151
Derivative financial instruments10256,636302,446
Financial assets at fair value through other comprehensive income 73,26078,688
Investments in associates and joint ventures 907781
Goodwill and intangible assets138,1967,948
Property, plant and equipment 3,5814,036
Current tax assets 228477
Deferred tax assets63,7713,444
Retirement benefit assets162,7011,814
Other assets 3,5012,622
Total assets 1,376,3331,349,514
    
Liabilities   
Deposits at amortised cost12500,895481,036
Cash collateral and settlement balances 101,92385,423
Repurchase agreements and other similar secured borrowing 20,00514,174
Debt securities in issue 90,73375,796
Subordinated Liabilities1412,83916,341
Trading portfolio liabilities 56,98647,405
Financial liabilities designated at fair value 264,164249,765
Derivative financial instruments10247,034300,775
Current tax liabilities 592645
Deferred tax liabilities6815
Retirement benefit liabilities16338291
Other liabilities 10,9288,662
Provisions151,7722,304
Total liabilities 1,308,2171,282,632
    
Equity   
Called up share capital and share premium174,5684,637
Other reserves192,8564,461
Retained earnings 48,46145,527
Shareholders' equity attributable to ordinary shareholders of the parent 55,88554,625
Other equity instruments1811,16711,172
Total equity excluding non-controlling interests 67,05265,797
Non-controlling interests71,0641,085
Total equity 68,11666,882
    
Total equity and liabilities 1,376,3331,349,514
 
 
1For notes to the Financial Statements see pages 70 to 96.
 
 
Condensed consolidated statement of changes in equity (unaudited)
 
Called up share capital and share premium1
 
Other equity instruments1
 
Other reserves1
 
Retained earnings
 
Total
 
Non-controlling interests2
 
Total equity
 
Half year ended 30.06.21
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
Balance as at 1 January 20214,63711,1724,46145,52765,7971,08566,882
Profit after tax3893,8124,201194,220
Currency translation movements(495)(495)(495)
Fair value through other comprehensive income reserve(250)(250)(250)
Cash flow hedges(911)(911)(911)
Retirement benefit remeasurements103103103
Own credit(47)(47)(47)
Total comprehensive income for the period389(1,703)3,9152,601192,620
Equity settled share schemes25289314314
Other equity instruments coupon paid(389)(389)(389)
Vesting of employee share schemes4(397)(393)(393)
Dividends paid(173)(173)(16)(189)
Repurchase of shares(94)94(700)(700)(700)
Other movements(5)(5)(24)(29)
Balance as at 30 June 20214,56811,1672,85648,46167,0521,06468,116
        
Half year ended 31.12.20
 
       
Balance as at 1 July 20204,62010,8716,99645,81768,3041,23769,541
Profit after tax4308311,261411,302
Currency translation movements(1,693)(1,693)(1,693)
Fair value through other comprehensive income reserve570570570
Cash flow hedges(339)(339)(339)
Retirement benefit remeasurements(756)(756)(756)
Own credit(1,077)(1,077)(1,077)
Other111111
Total comprehensive income for the period430(2,539)86(2,023)41(1,982)
Equity settled share schemes17(300)(283)(283)
Issue and exchange of other equity instruments311(55)256(158)98
Other equity instruments coupon paid(430)(430)(430)
Vesting of employee share schemes4(20)(16)(16)
Dividends paid(42)(42)
Other movements(10)(1)(11)7(4)
Balance as at 31 December 20204,63711,1724,46145,52765,7971,08566,882
 
 
1Details of share capital, other equity instruments and other reserves are shown on pages 85 to 86.
2Details of non-controlling interests are shown on page 74.
 
 
Condensed consolidated statement of changes in equity (unaudited)
 
Called up share capital and share premium1
 
Other equity instruments1
 
Other reserves1
 
Retained earnings
 
Total
 
Non-controlling interests2
 
Total equity
 
Half year ended 30.06.20
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
Balance as at 1 January 20204,59410,8714,76044,20464,4291,23165,660
Profit after tax4276951,122371,159
Currency translation movements1,2201,2201,220
Fair value through other comprehensive income reserve(378)(378)(378)
Cash flow hedges912912912
Retirement benefit remeasurements645645645
Own credit496496496
Other(6)(6)(6)
Total comprehensive income for the period4272,2501,3344,011374,048
Equity settled share schemes26603629629
Other equity instruments coupon paid(427)(427)(427)
Vesting of employee share schemes(14)(327)(341)(341)
Dividends paid(37)(37)
Other movements3369
Balance as at 30 June 20204,62010,8716,99645,81768,3041,23769,541
 
 
1Details of share capital, other equity instruments and other reserves are shown on pages 85 to 86.
2Details of non-controlling interests are shown on page 74.
 
 
Condensed consolidated cash flow statement (unaudited)
 
  
 Half year ended 30.06.21
Half year ended 30.06.201
 £m£m
Profit before tax4,9791,272
Adjustment for non-cash items2
6,900(1,431)
Net increase in loans and advances at amortised cost2
432(12,868)
Net increase in deposits at amortised cost19,85951,126
Net increase in debt securities in issue13,04124,183
Changes in other operating assets and liabilities3
(5,559)(6,770)
Corporate income tax paid(712)(351)
Net cash from operating activities38,94055,161
Net cash from investing activities2
(3,389)(17,844)
Net cash from financing activities(2,562)3,133
Effect of exchange rates on cash and cash equivalents(5,535)7,814
Net increase/(decrease) in cash and cash equivalents27,45448,264
Cash and cash equivalents at beginning of the period3
210,142166,613
Cash and cash equivalents at end of the period3
237,596214,877
 
 
1H120 comparative figures have been restated to make the condensed cash flow statement more relevant following a review of the disclosure and the accounting policies applied that was undertaken in H220. Amendments, which were first applied in the Barclays PLC Annual Report 2020, have been made to the classification of cash collateral reported within cash and cash equivalents and to the presentation of items within net cash flows from operating and investing activities. Footnotes 2 and 3 below quantify the impact of the changes to the respective cash flow categories in H120 and provide further detail.
2Movements in cash and cash equivalents relating to debt securities at amortised cost were previously shown within loans and advances at amortised cost in operating activities. These debt securities holdings are now considered to be part of the investing activity performed by the Group following a change in accounting policy and have been presented within investing activities in H121. Comparatives have been restated. The effect of this change was to reclassify £6,245m of net cash outflows from operating activities to investing activities in H120.
3Cash and cash equivalents have been restated to exclude cash collateral and settlement balances, with the exception of balances that the Group holds at central banks related to payment schemes. The effect of this change decreased cash and cash equivalents by £28,301m as at 30 June 2020 and £16,774m as at 31 December 2019. As a result, net cash from operating activities decreased by £11,527m in H120, representing the net increase in the cash collateral and settlement balances line item in this period.
 
 
 Financial Statement Notes
 
1. Basis of preparation
 
These condensed consolidated interim financial statements for the six months ended 30 June 2021 have been prepared in accordance with the Disclosure and Transparency Rules (DTR) of the UK’s Financial Conduct Authority (FCA) and IAS 34, Interim Financial Reporting, as published by the International Accounting Standards Board (IASB) and adopted by the UK. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2020. The annual financial statements for the year ended 31 December 2020 were prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with International Financial Reporting Standards (IFRS) and interpretations (IFRICs) as issued by the IASB and adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union as well as adopted by the UK. UK adopted IFRS and EU adopted IFRS are currently the same and were the same as at 31 December 2020.
 
The accounting policies and methods of computation used in these condensed consolidated interim financial statements are the same as those used in the Barclays PLC Annual Report 2020.
 
1. Going concern
 
The financial statements are prepared on a going concern basis, as the Directors are satisfied that the Group and parent company have the resources to continue in business for a period of at least 12 months from approval of the interim financial statements. In making this assessment, the Directors have considered a wide range of information relating to present and future conditions and includes a review of a working capital report (WCR). The WCR is used by the Directors to assess the future performance of the business and that it has the resources in place that are required to meet its ongoing regulatory requirements. The WCR also includes an assessment of the impact of internally generated stress testing scenarios on the liquidity and capital requirement forecasts. The stress tests used were based upon an assessment of reasonably possible downside economic scenarios that the Group could experience.
 
The WCR indicated that the Group had sufficient capital in place to support its future business requirements and remained above its regulatory minimum requirements in the internal stress scenarios.
 
2. Other disclosures
 
The Credit risk disclosures on pages 27 to 45 form part of these interim financial statements.
 
 
 
2. Segmental reporting
 
 
 
Analysis of results by business
 
    
 
Barclays
UK
Barclays
International
Head
Office
Barclays
Group
Half year ended 30.06.21£m£m£m£m
Total income3,1998,218(102)11,315
Credit impairment releases4432936742
Net operating income/(expenses)3,6428,511(96)12,057
Operating expenses(2,114)(4,606)(412)(7,132)
Litigation and conduct(22)(84)7(99)
Total operating expenses(2,136)(4,690)(405)(7,231)
Other net income1
22131153
Profit/(loss) before tax1,5063,843(370)4,979
     
As at 30.06.21£bn£bn£bn£bn
Total assets311.21,046.818.31,376.3
 
 
 
Barclays
UK
Barclays
International
Head
Office
Barclays
Group
Half year ended 30.06.20£m£m£m£m
Total income3,1718,654(204)11,621
Credit impairment charges(1,064)(2,619)(55)(3,738)
Net operating income/(expenses)2,1076,035(259)7,883
Operating expenses(2,041)(4,405)(117)(6,563)
Litigation and conduct(11)(11)(8)(30)
Total operating expenses(2,052)(4,416)(125)(6,593)
Other net income/(expenses)1
1310(41)(18)
Profit/(loss) before tax681,629(425)1,272
     
As at 31.12.20£bn£bn£bn£bn
Total assets289.11,041.818.61,349.5
 
 
1Other net income/(expenses) represents the share of post-tax results of associates and joint ventures, profit (or loss) on disposal of subsidiaries, associates and joint ventures and gains on acquisitions.
 
 
Split of income by geographic region1
 
  
 
Half year ended 30.06.21
 
Half year ended 30.06.20
 
 
£m
 
£m
 
United Kingdom
 
5,895
 
5,989
 
Europe
 
1,222
 
1,199
 
Americas
 
3,608
 
3,776
 
Africa and Middle East
 
20
 
20
 
Asia
 
570
 
637
 
Total
 
11,315
 
11,621
 
 
 
1The geographical analysis is based on the location of the office where the transactions are recorded.
 
3. Net fee and commission income
 
Fee and commission income is disaggregated below and includes a total for fees in scope of IFRS 15, Revenue from Contracts with Customers:
 
 
 
 
Barclays UK
 
Barclays International
 
Head Office
 
Total
 
Half year ended 30.06.21
 
£m
 
£m
 
£m
 
£m
 
Fee type
 
    
Transactional
 
408
 
1,181
 
 
1,589
 
Advisory
 
83
 
459
 
1
 
543
 
Brokerage and execution
 
109
 
553
 
 
662
 
Underwriting and syndication
 
 
1,715
 
 
1,715
 
Other
 
35
 
73
 
3
 
111
 
Total revenue from contracts with customers
 
635
 
3,981
 
4
 
4,620
 
Other non-contract fee income
 
 
62
 
 
62
 
Fee and commission income
 
635
 
4,043
 
4
 
4,682
 
Fee and commission expense
 
(108)
 
(861)
 
(7)
 
(976)
 
Net fee and commission income
 
527
 
3,182
 
(3)
 
3,706
 
 
 
 
Barclays UK
 
Barclays International
 
Head Office
 
Total
 
Half year ended 30.06.20
 
£m
 
£m
 
£m
 
£m
 
Fee type
 
    
Transactional
 
386
 
1,157
 
 
1,543
 
Advisory
 
793061386
Brokerage and execution
 
102
 
685
 
 
787
 
Underwriting and syndication
 
 
1,468
 
 
1,468
 
Other
 
38
 
115
 
2
 
155
 
Total revenue from contracts with customers
 
605
 
3,731
 
3
 
4,339
 
Other non-contract fee income
 
 
60
 
 
60
 
Fee and commission income
 
605
 
3,791
 
3
 
4,399
 
Fee and commission expense
 
(148)
 
(940)
 
(2)
 
(1,090)
 
Net fee and commission income
 
457
 
2,851
 
1
 
3,309
 
 
 
Transactional fees are service charges on deposit accounts, cash management services and transactional processing fees. These include interchange and merchant fee income generated from credit and bank card usage.
 
Advisory fees are generated from wealth management services and investment banking advisory services related to mergers, acquisitions and financial restructurings.
 
Brokerage and execution fees are earned for executing client transactions with various exchanges and over-the-counter markets and assisting clients in clearing transactions.
 
Underwriting and syndication fees are earned for the distribution of client equity or debt securities and the arrangement and administration of a loan syndication. These include commitment fees to provide loan financing.
 
 
 
4. Staff costs
 
 Half year ended 30.06.21Half year ended 30.06.20
Compensation costs£m£m
Upfront bonus charge824476
Deferred bonus charge262269
Other incentives64
Performance costs1,092749
Salaries2,1172,153
Social security costs336317
Post-retirement benefits275268
Other compensation costs223254
Total compensation costs4,0433,741
   
Other resourcing costs  
Outsourcing171175
Redundancy and restructuring2339
Temporary staff costs5558
Other4240
Total other resourcing costs291312
   
Total staff costs4,3344,053
   
Barclays Group compensation costs as a % of total income35.732.2
 
 
No material awards have yet been granted in relation to the 2021 bonus pool as decisions regarding incentive awards are not taken by the Remuneration Committee until the performance for the full year can be assessed. The current year bonus charge for the first six months represents an accrual for estimated costs in accordance with accounting requirements. One of the primary considerations when evaluating the accrual is Group and business level returns, aligning colleague and shareholder interests.
 
The Group has entered into physically settled forward contracts to hedge the settlement of certain share-based payment schemes. The present value of the fixed forward price to be paid under these outstanding contracts is £158m and has been recorded in retained earnings.
 
5. Infrastructure, administration and general expenses
 
 
 
 
Half year ended 30.06.21
 
Half year ended 30.06.20
 
Infrastructure costs
 
£m
 
£m
 
Property and equipment
 
709
 
757
 
Depreciation and amortisation
 
832
 
751
 
Lease payments
 
20
 
26
 
Impairment of property, equipment and intangible assets
 
304
 
32
 
Total infrastructure costs
 
1,865
 
1,566
 
   
Administration and general expenses
 
  
Consultancy, legal and professional fees
 
262
 
270
 
Marketing and advertising
 
163
 
158
 
Other administration and general expenses
 
508
 
516
 
Total administration and general expenses
 
933
 
944
 
   
Total infrastructure, administration and general expenses
 
2,798
 
2,510
 
 
 
6. Tax
 
The tax charge for H121 was £759m (H120: £113m), representing an effective tax rate of 15.2% (H120: 8.9%). The effective tax rate for H121 includes a benefit recognised as a result of the increase in the UK corporation tax rate and absent this benefit the tax charge would have been £1,151m and the effective tax rate would have been 23.1%. The H120 effective tax rate included a benefit recognised for re-measurement of the Group’s UK deferred tax assets as a result of UK corporation tax previously being maintained at a rate of 19%. Included in the H121 tax charge is a credit of £104m (H120: £112m) in respect of payments made on AT1 instruments that are classified as equity for accounting purposes.
 
In its Budget held in March 2021, the UK Government announced that the UK rate of corporation tax will increase from 19% to 25% from 1 April 2023. This legislative change has been enacted, resulting in the Group’s UK deferred tax assets increasing by £223m with a tax benefit in the income statement of £392m and a tax charge within other comprehensive income of £169m.
 
The UK Government also announced that it will undertake a review of the additional 8% banking surcharge during 2021. The Budget Report issued on 3 March 2021 outlines that “the government will set out how it intends to ensure that the combined rate of tax on banks’ profits does not increase substantially from its current level”. Any subsequent reduction in the banking surcharge arising from the Government’s review would result in a tax charge in the income statement and tax credit within the other comprehensive income upon enactment as the Group’s UK deferred tax assets are again re-measured and decreased, the timing of which is uncertain but is expected to occur in H122.
 
In the USA, the Biden administration published in April 2021 The Made In America Tax Plan, which proposes an increase in the US federal corporate income tax rate. This would result in a re-measurement to increase the Group’s US deferred tax assets upon enactment, the timing of which is uncertain. In addition, revisions to international elements of the US tax regime are being considered that could affect the Group’s US tax position in future.
 
The G7 finance ministers published a communiqué on 5 June 2021 which sets out high level political agreement on global tax reform, including the implementation of a global minimum tax rate. The Group will continue to monitor developments and assess the potential impact of associated future legislative changes.
 
 
 
 
As at 30.06.21
 
As at 31.12.20
 
Deferred tax assets and liabilities
 
£m
 
£m
 
USA
 
1,908
 
2,049
 
UK
 
1,380
 
886
 
Other territories
 
483
 
509
 
Deferred tax assets
 
3,771
 
3,444
 
Deferred tax liabilities
 
(8)
 
(15)
 
   
Analysis of deferred tax assets
 
  
Temporary differences
 
2,972
 
2,709
 
Tax losses
 
799
 
735
 
Deferred tax assets
 
3,771
 
3,444
 
 
 
7. Non-controlling interests
 
 
 
 
Profit attributable to
non-controlling interests
 
 
Equity attributable to
non-controlling interests
 
 
Half year ended 30.06.21
 
Half year ended 30.06.20
 
 
As at 30.06.21
 
As at 31.12.20
 
 
£m
 
£m
 
 
£m
 
£m
 
Barclays Bank PLC issued:
 
     
- Preference shares
 
13
 
28
 
 
529
 
529
 
- Upper T2 instruments
 
3
 
9
 
 
533
 
533
 
Other non-controlling interests
 
3
 
 
 
2
 
23
 
Total
 
19
 
37
 
 
1,064
 
1,085
 
 
 
8. Earnings per share
 
 
 
 
Half year ended 30.06.21
 
Half year ended 30.06.20
 
 
£m
 
£m
 
Profit attributable to ordinary equity holders of the parent
 
3,812
 
695
 
   
 
m
 
m
 
Basic weighted average number of shares in issue
 
17,140
 
17,294
 
Number of potential ordinary shares
 
467
 
319
 
Diluted weighted average number of shares
 
17,607
 
17,613
 
   
 
p
 
p
 
Basic earnings per ordinary share
 
22.2
 
4.0
 
Diluted earnings per ordinary share
 
21.7
 
3.9
 
 
 
9. Dividends on ordinary shares
 
 
 
A half year dividend for 2021 of 2.0p (H120: 0p) per ordinary share will be paid on 17 September 2021 to shareholders on the register on 13 August 2021.
 
 
 
 
Half year ended 30.06.21
 
Half year ended 30.06.20
 
 
Per share
 
Total
 
Per share
 
Total
 
Dividends paid during the period
 
p
 
£m
 
p
 
£m
 
Full year dividend paid during period
 
1.0
 
173
 
 
 
 
 
For qualifying US and Canadian resident ADR holders, the half year dividend of 2.0p per ordinary share becomes 8.0p per ADS (representing 4 shares). The ADR depositary will post the half year dividend on 17 September 2021 to ADR holders on the record at close of business on 13 August 2021.
 
The Directors have confirmed their intention to initiate a share buyback of up to £500m after the balance sheet date. The share buyback is expected to commence in the third quarter of 2021. The financial statements for the six months ended 30 June 2021 do not reflect the impact of the proposed share buyback, which will be accounted for as and when shares are repurchased by the Company.
 
 
 
10. Derivative financial instruments
 
 
 
 
Contract notional amount
 
 
Fair value
 
  
Assets
 
Liabilities
 
As at 30.06.21
 
£m
 
 
£m
 
£m
 
Foreign exchange derivatives
 
5,654,026
 
 
66,963
 
(64,194)
 
Interest rate derivatives
 
37,888,009
 
 
134,734
 
(123,436)
 
Credit derivatives
 
920,030
 
 
5,469
 
(5,960)
 
Equity and stock index and commodity derivatives
 
1,541,007
 
 
48,530
 
(52,444)
 
Derivative assets/(liabilities) held for trading
 
46,003,072
 
 
255,696
 
(246,034)
 
     
Derivatives in hedge accounting relationships
 
    
Derivatives designated as cash flow hedges
 
91,278
 
 
806
 
 
Derivatives designated as fair value hedges
 
107,879
 
 
128
 
(993)
 
Derivatives designated as hedges of net investments
 
1,595
 
 
6
 
(7)
 
Derivative assets/(liabilities) designated in hedge accounting relationships
 
200,752
 
 
940
 
(1,000)
 
     
Total recognised derivative assets/(liabilities)
 
46,203,824
 
 
256,636
 
(247,034)
 
     
As at 31.12.20
 
    
Foreign exchange derivatives
 
5,554,037
 
 
84,739
 
(84,381)
 
Interest rate derivatives
 
35,257,371
 
 
172,144
 
(162,402)
 
Credit derivatives
 
847,845
 
 
4,605
 
(5,004)
 
Equity and stock index and commodity derivatives
 
1,510,718
 
 
40,392
 
(48,008)
 
Derivative assets/(liabilities) held for trading
 
43,169,971
 
 
301,880
 
(299,795)
 
     
Derivatives in hedge accounting relationships
 
    
Derivatives designated as cash flow hedges
 
74,437
 
 
386
 
 
Derivatives designated as fair value hedges
 
114,556
 
 
155
 
(980)
 
Derivatives designated as hedges of net investments
 
791
 
 
25
 
 
Derivative assets/(liabilities) designated in hedge accounting relationships
 
189,784
 
 
566
 
(980)
 
     
Total recognised derivative assets/(liabilities)
 
43,359,755
 
 
302,446
 
(300,775)
 
 
 
The IFRS netting posted against derivative assets was £33bn including £4bn of cash collateral netted (December 2020: £44bn including £5bn cash collateral netted) and £31bn for liabilities including £5bn of cash collateral netted (December 2020: £42bn including £7bn of cash collateral netted). Derivative asset exposures would be £230bn (December 2020: £276bn) lower than reported under IFRS if netting were permitted for assets and liabilities with the same counterparty or for which the Group holds cash collateral of £36bn (December 2020: £43bn). Similarly, derivative liabilities would be £225bn (December 2020: £276bn) lower reflecting counterparty netting and cash collateral placed of £31bn (December 2020: £43bn). In addition, non-cash collateral of £5bn (December 2020: £5bn) was held in respect of derivative assets and £3bn (December 2020: £4bn) was placed in respect of derivative liabilities. Collateral amounts are limited to net on balance sheet exposure so as to not include over-collateralisation.
 
11. Fair value of financial instruments
 
This section should be read in conjunction with Note 17, Fair value of financial instruments of the Barclays PLC Annual Report 2020 which provides more detail about accounting policies adopted, valuation methodologies used in calculating fair value and the valuation control framework which governs oversight of valuations. There have been no changes in the accounting policies adopted or the valuation methodologies used.
 
Valuation
 
The following table shows the Group’s assets and liabilities that are held at fair value disaggregated by valuation technique (fair value hierarchy) and balance sheet classification:
 
 
 
 
Valuation technique using
 
 
 
Quoted market prices
 
Observable inputs
 
Significant unobservable inputs
 
 
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Total
 
As at 30.06.21
 
£m
 
£m
 
£m
 
£m
 
Trading portfolio assets
 
73,405
 
71,282
 
2,552
 
147,239
 
Financial assets at fair value through the income statement
 
1,229
 
185,415
 
7,777
 
194,421
 
Derivative financial instruments
 
11,643
 
241,336
 
3,657
 
256,636
 
Financial assets at fair value through other comprehensive income
 
21,375
 
51,837
 
48
 
73,260
 
Investment property
 
 
 
8
 
8
 
Total assets
 
107,652
 
549,870
 
14,042
 
671,564
 
     
Trading portfolio liabilities
 
(30,911)
 
(26,058)
 
(17)
 
(56,986)
 
Financial liabilities designated at fair value
 
(142)
 
(263,710)
 
(312)
 
(264,164)
 
Derivative financial instruments
 
(11,227)
 
(230,207)
 
(5,600)
 
(247,034)
 
Total liabilities
 
(42,280)
 
(519,975)
 
(5,929)
 
(568,184)
 
     
As at 31.12.20
 
    
Trading portfolio assets
 
60,671
 
65,416
 
1,863
 
127,950
 
Financial assets at fair value through the income statement
 
4,503
 
162,142
 
8,506
 
175,151
 
Derivative financial instruments
 
9,155
 
288,822
 
4,469
 
302,446
 
Financial assets at fair value through other comprehensive income
 
19,792
 
58,743
 
153
 
78,688
 
Investment property
 
 
 
10
 
10
 
Total assets
 
94,121
 
575,123
 
15,001
 
684,245
 
     
Trading portfolio liabilities
 
(24,391)
 
(22,986)
 
(28)
 
(47,405)
 
Financial liabilities designated at fair value
 
(159)
 
(249,251)
 
(355)
 
(249,765)
 
Derivative financial instruments
 
(8,762)
 
(285,774)
 
(6,239)
 
(300,775)
 
Total liabilities
 
(33,312)
 
(558,011)
 
(6,622)
 
(597,945)
 
 
 
The following table shows the Group’s Level 3 assets and liabilities that are held at fair value disaggregated by product type:
 
 
 
 
As at 30.06.21
 
As at 31.12.20
 
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
 
£m
 
£m
 
£m
 
£m
 
Interest rate derivatives
 
916
 
(1,269)
 
1,613
 
(1,615)
 
Foreign exchange derivatives
 
151
 
(129)
 
144
 
(143)
 
Credit derivatives
 
100
 
(364)
 
196
 
(351)
 
Equity derivatives
 
2,490
 
(3,838)
 
2,498
 
(4,112)
 
Commodity derivatives
 
 
 
18
 
(18)
 
Corporate debt
 
981
 
(38)
 
698
 
(3)
 
Reverse repurchase and repurchase agreements
 
 
(161)
 
 
(174)
 
Non-asset backed loans
 
6,338
 
 
6,394
 
 
Asset backed securities
 
562
 
 
767
 
(24)
 
Equity cash products
 
402
 
 
542
 
 
Private equity investments
 
979
 
(16)
 
873
 
(14)
 
Other1
 
1,123
 
(114)
 
1,258
 
(168)
 
Total
 
14,042
 
(5,929)
 
15,001
 
(6,622)
 
 
 
1Other includes commercial real estate loans, funds and fund-linked products, asset backed loans, issued debt, commercial paper, government sponsored debt and investment property.
 
 
Assets and liabilities reclassified between Level 1 and Level 2
 
During the period, there were no material transfers between Level 1 and Level 2 (period ended 31 December 2020: no material transfers between Level 1 and Level 2).
 
Level 3 movement analysis
 
The following table summarises the movements in the balances of Level 3 assets and liabilities during the period. The table shows gains and losses and includes amounts for all financial assets and liabilities that are held at fair value transferred to and from Level 3 during the period. Transfers have been reflected as if they had taken place at the beginning of the period.
 
Asset and liability moves between Level 2 and Level 3 are primarily due to i) an increase or decrease in observable market activity related to an input or ii) a change in the significance of the unobservable input, with assets and liabilities classified as Level 3 if an unobservable input is deemed significant.
 
 
 
Level 3 movement analysis
 
 
As at 01.01.21
 
Purchases
 
Sales
 
Issues
 
Settle-
ments
 
Total gains and losses in the period recognised in the income statement
 
Total gains or losses recognised in OCI
 
Transfers
 
As at 30.06.21
 
Trading income
 
Other income
 
In
 
Out
 
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
Corporate debt151305(87)2540(11)423
Non-asset backed loans709620(131)(84)13124(106)1,145
Asset backed securities686112(294)(10)43(48)489
Equity cash products21413(17)3229(9)262
Other10321(51)(1)162(1)233
Trading portfolio assets1,8631,071(529)(135)59398(175)2,552
            
Non-asset backed loans5,580698(299)(687)(119)69(48)5,194
Equity cash products326160(194)(171)181140
Private equity investments874106(9)(8)(5)92(71)979
Other1,7262,291(2,389)(162)(19)1161,464
Financial assets at fair value through the income statement8,5063,255(2,891)(857)(314)11186(119)7,777
            
Non-asset backed loans106(106)
Asset backed securities474(5)248
Assets at fair value through other comprehensive income1534(5)2(106)48
            
Investment property10(2)8
          
Trading portfolio liabilities(28)(3)14(7)7(17)
            
Financial liabilities designated at fair value(355)987(2)(78)18(312)
            
Interest rate derivatives(2)933(121)421(297)(353)
Foreign exchange derivatives158(6)3(34)22
Credit derivatives(155)(117)2(5)12(1)1(1)(264)
Equity derivatives(1,614)(315)(1)(32)(221)(1)28808(1,348)
Net derivative financial instruments1
(1,770)(423)154(336)253476(1,943)
            
Total8,3793,904(3,407)(845)(591)11124591018,113
 
 
1Derivative financial instruments are represented on a net basis. On a gross basis, derivative financial assets were £3,657m and derivative financial liabilities were £5,600m.
 
 
Level 3 movement analysis
 
 
As at 01.01.20
 
Purchases
 
Sales
 
Issues
 
Settle-
ments
 
Total gains and losses in the period recognised in the income statement
 
Total gains or losses recognised in OCI
 
Transfers
 
As at 30.06.20
 
Trading income
 
Other income
 
In
 
Out
 
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
Corporate debt
 
12025(26)4(17)106
Non-asset backed loans
 
9741,926(740)(4)(111)97(320)1,822
Asset backed securities
 
656249(224)(76)(12)41(11)623
Equity cash products
 
3922(4)(67)28(4)347
Other
 
1224828180
Trading portfolio assets
 
2,2642,250(968)(80)(214)178(352)3,078
            
Non-asset backed loans
 
5,4941,050(270)(410)381(58)6,187
Equity cash products
 
83514(22)(28)799
Private equity investments
 
90019(6)(2)2(44)23(12)880
Other
 
1,2711,870(2,017)(18)(8)64241,186
Financial assets at fair value through the income statement
 
8,5002,953(2,293)(430)353(8)47(70)9,052
            
Non-asset backed loans
 
34379(157)(3)262
Asset backed securities
 
86(1)1(1)85
Assets at fair value through other comprehensive income
 
42979(1)(157)1(4)347
            
Investment property
 
13(1)(2)2(2)10
            
Trading portfolio liabilities
 
            
Financial liabilities designated at fair value
 
(362)1(3)(10)2(22)25(369)
            
Interest rate derivatives
 
(206)18102681300(10)381
Foreign exchange derivatives
 
(7)(12)895(8)67
Credit derivatives
 
198(258)11(376)151128(263)
Equity derivatives
 
(819)(448)(1)17(90)(5)(23)(1,369)
Net derivative financial instruments1
 
(834)(688)10(361)4182302(33)(1,184)
            
Total
 
10,0104,594(3,252)(3)(1,028)548(6)(4)507(432)10,934
 
 
1Derivative financial instruments are represented on a net basis. On a gross basis, derivative financial assets were £7,748m and derivative financial liabilities were £8,932m.
 
 
Unrealised gains and losses on Level 3 financial assets and liabilities
 
The following table discloses the unrealised gains and losses recognised in the period arising on Level 3 financial assets and liabilities held at the period end.
 
 
 
 
Half year ended 30.06.21
 
Half year ended 30.06.20
 
 
Income statement
 
Other compre hensive income
 
Total
 
Income statement
 
Other compre hensive income
 
Total
 
 
Trading income
 
Other income
 
Trading income
 
Other income
 
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
Trading portfolio assets
 
35
 
 
 
35
 
(177)
 
 
 
(177)
 
Financial assets at fair value through the income statement
 
(201)
 
114
 
 
(87)
 
397
 
(53)
 
 
344
 
Financial assets at fair value through other comprehensive income
 
 
 
 
 
 
 
(2)
 
(2)
 
Investment properties
 
 
 
 
 
 
(2)
 
 
(2)
 
Trading portfolio liabilities
 
(6)
 
 
 
(6)
 
 
 
 
 
Financial liabilities designated at fair value
 
7
 
 
 
7
 
(16)
 
(1)
 
 
(17)
 
Net derivative financial instruments
 
(367)
 
 
 
(367)
 
248
 
 
 
248
 
Non-current assets/liabilities held for sale
 
    
 
 
 
 
Total
 
(532)
 
114
 
 
(418)
 
452
 
(56)
 
(2)
 
394
 
 
 
Valuation techniques and sensitivity analysis
 
Sensitivity analysis is performed on products with significant unobservable inputs (Level 3) to generate a range of reasonably possible alternative valuations. The sensitivity methodologies applied take account of the nature of valuation techniques used, as well as the availability and reliability of observable proxy and historical data and the impact of using alternative models.
 
Current year valuation and sensitivity methodologies are consistent with those described within Note 17, Fair value of financial instruments in the Barclays PLC Annual Report 2020.
 
 
Sensitivity analysis of valuations using unobservable inputs
 
 
As at 30.06.21
 
As at 31.12.20
 
 
Favourable changes
 
Unfavourable changes
 
Favourable changes
 
Unfavourable changes
 
 
Income statement
 
Equity
 
Income statement
 
Equity
 
Income statement
 
Equity
 
Income statement
 
Equity
 
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
Interest rate derivatives
 
52
 
 
(83)
 
 
82
 
 
(123)
 
 
Foreign exchange derivatives
 
6
 
 
(10)
 
 
6
 
 
(11)
 
 
Credit derivatives
 
53
 
 
(44)
 
 
55
 
 
(44)
 
 
Equity derivatives
 
185
 
 
(193)
 
 
174
 
 
(179)
 
 
Commodity derivatives
 
2
 
 
(2)
 
 
2
 
 
(2)
 
 
Corporate debt
 
22
 
 
(16)
 
 
16
 
 
(14)
 
 
Non-asset backed loans
 
202
 
 
(310)
 
 
190
 
3
 
(409)
 
(3)
 
Equity cash products
 
130
 
 
(119)
 
 
158
 
 
(141)
 
 
Private equity investments
 
223
 
 
(198)
 
 
199
 
 
(227)
 
 
Other1
 
18
 
 
(18)
 
 
21
 
 
(21)
 
 
Total
 
893
 
 
(993)
 
 
903
 
3
 
(1,171)
 
(3)
 
 
 
1Other includes commercial real estate loans, funds and fund-linked products, asset backed loans, issued debt, commercial paper, government sponsored debt and investment property.
 
 
The effect of stressing unobservable inputs to a range of reasonably possible alternatives, alongside considering the impact of using alternative models, would be to increase fair values by up to £893m (December 2020: £906m) or to decrease fair values by up to £993m (December 2020: £1,174m) with substantially all the potential effect impacting profit and loss rather than reserves.
 
Significant unobservable inputs
 
The valuation techniques and significant unobservable inputs for assets and liabilities recognised at fair value and classified as Level 3 are consistent with Note 17, Fair value of financial instruments in the Barclays PLC Annual Report 2020.
 
Fair value adjustments
 
Key balance sheet valuation adjustments are quantified below:
 
 
 
 
As at 30.06.21
 
As at 31.12.20
 
 
£m
 
£m
 
Exit price adjustments derived from market bid-offer spreads
 
(500)
 
(493)
 
Uncollateralised derivative funding
 
(80)
 
(115)
 
Derivative credit valuation adjustments
 
(210)
 
(268)
 
Derivative debit valuation adjustments
 
91
 
113
 
 
 
Exit price adjustments derived from market bid-offer spreads increased by £7m to £500m
Uncollateralised derivative funding decreased by £35m to £80m as a result of tightening input funding spreads
Derivative credit valuation adjustments decreased by £58m to £210m as a result of tightening input counterparty credit spreads
Derivative debit valuation adjustments decreased by £22m to £91m as a result of tightening input Barclays Bank PLC credit spreads
 
 
Portfolio exemption
 
The Group uses the portfolio exemption in IFRS 13, Fair Value Measurement to measure the fair value of groups of financial assets and liabilities. Instruments are measured using the price that would be received to sell a net long position (i.e. an asset) for a particular risk exposure or to transfer a net short position (i.e. a liability) for a particular risk exposure in an orderly transaction between market participants at the balance sheet date under current market conditions. Accordingly, the Group measures the fair value of the group of financial assets and liabilities consistently with how market participants would price the net risk exposure at the measurement date.
 
Unrecognised gains as a result of the use of valuation models using unobservable inputs
 
The amount that has yet to be recognised in income that relates to the difference between the transaction price (the fair value at initial recognition) and the amount that would have arisen had valuation models using unobservable inputs been used on initial recognition, less amounts subsequently recognised, is £126m (December 2020: £116m) for financial instruments measured at fair value and £240m (December 2020: £247m) for financial instruments carried at amortised cost. There are additions of £32m (December 2020: £27m) and amortisation and releases of £22m (December 2020: £24m) for financial instruments measured at fair value and additions of £nil (December 2020: £6m) and amortisation and releases of £7m (December 2020: £14m) for financial instruments carried at amortised cost.
 
Third party credit enhancements
 
Structured and brokered certificates of deposit issued by the Group are insured up to $250,000 per depositor by the Federal Deposit Insurance Corporation (FDIC) in the United States. The FDIC is funded by premiums that Barclays and other banks pay for deposit insurance coverage. The carrying value of these issued certificates of deposit that are designated under the IFRS 9 fair value option includes this third party credit enhancement. The on balance sheet value of these brokered certificates of deposit amounted to £1,241m (December 2020: £1,494m).
 
Comparison of carrying amounts and fair values for assets and liabilities not held at fair value
 
Valuation methodologies employed in calculating the fair value of financial assets and liabilities measured at amortised cost are consistent with those described within Note 17, Fair value of financial instruments in the Barclays PLC Annual Report 2020.
 
The following table summarises the fair value of financial assets and liabilities measured at amortised cost on the Group’s balance sheet.
 
 
 
 
As at 30.06.21
 
As at 31.12.20
 
 
Carrying amount
 
Fair value
 
Carrying amount
 
Fair value
 
Financial assets
 
£m
 
£m
 
£m
 
£m
 
Loans and advances at amortised cost
 
348,549
 
347,733
 
342,632
 
340,516
 
Reverse repurchase agreements and other similar secured lending
 
4,459
 
4,459
 
9,031
 
9,031
 
     
Financial liabilities
 
    
Deposits at amortised cost
 
(500,895)
 
(500,933)
 
(481,036)
 
(481,106)
 
Repurchase agreements and other similar secured borrowing
 
(20,005)
 
(20,005)
 
(14,174)
 
(14,174)
 
Debt securities in issue
 
(90,733)
 
(92,746)
 
(75,796)
 
(77,813)
 
Subordinated liabilities
 
(12,839)
 
(13,434)
 
(16,341)
 
(16,918)
 
 
 
12. Loans and advances and deposits at amortised cost
 
 
 
 
As at 30.06.21
 
As at 31.12.20
 
 
£m
 
£m
 
Loans and advances at amortised cost to banks
 
11,0328,900
Loans and advances at amortised cost to customers
 
309,194309,927
Debt securities at amortised cost
 
28,32323,805
Total loans and advances at amortised cost
 
348,549342,632
   
Deposits at amortised cost from banks
 
17,16517,343
Deposits at amortised cost from customers
 
483,730463,693
Total deposits at amortised cost
 
500,895481,036
 
 
13. Goodwill and intangible assets
 
Goodwill and intangible assets are allocated to business operations according to business segments as follows:
 
 
 
 
As at 30.06.21
 
As at 31.12.20
 
 
Goodwill
 
Intangibles
 
Total
 
Goodwill
 
Intangibles
 
Total
 
 
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
Barclays UK
 
3,560
 
1,570
 
5,130
 
3,560
 
1,618
 
5,178
 
Barclays International
 
2862,7353,0212892,4352,724
Head Office
 
4234542446
Total
 
3,8884,3088,1963,8914,0577,948
 
 
The Group performed an impairment review to assess the recoverability of its goodwill and intangible asset balances as at 31 December 2020. The outcome of this review is disclosed on pages 332-335 of the Barclays PLC Annual Report 2020. The review highlighted that there had been a significant reduction in the value in use of the Personal Banking and Business Banking cash generating units within Barclays UK. No impairment was recognised as a result of the review as value in use exceeded carrying amount. Since the 2020 impairment review, management have observed improvements in the UK macroeconomic environment and interest rate outlook. The Group’s goodwill and intangible assets have been reviewed for indicators of impairment in the period, with no indicators being identified.
 
14. Subordinated liabilities
 
 
 
 
Half year ended 30.06.21
 
Year ended 31.12.20
 
 
£m
 
£m
 
Opening balance as at 1 January
16,341
 
18,156
Issuances1,7341,438
Redemptions(4,534)(3,464)
Other(702)211
Closing balance12,83916,341
 
 
Issuances of £1,734m comprise £855m EUR 1.125% Fixed Rate Resetting Subordinated Callable Notes and £724m USD 3.811% Fixed Rate Resetting Subordinated Callable Notes, both issued externally by Barclays PLC and £82m ZAR Floating Rate Notes and £73m USD Floating Rate Notes issued externally by Barclays subsidiaries.
 
Redemptions of £4,534m comprise £1,961m GBP 10% Fixed Rate Subordinated Notes, £1,339m EUR 6% Fixed Rate Subordinated Notes, £1,075m USD 10.179% Fixed Rate Subordinated Notes and £86m EUR Subordinated Floating Rate Notes, issued externally by Barclays Bank PLC and £73m USD Floating Rate Notes issued externally by a Barclays subsidiary.
 
Other movements predominantly comprise foreign exchange movements and fair value hedge adjustments.
 
 
 
15. Provisions
 
 
 
 
As at 30.06.21
 
As at 31.12.20
 
 
£m
 
£m
 
Customer redress
 
449497
Legal, competition and regulatory matters
 
223268
Redundancy and restructuring
 
88158
Undrawn contractually committed facilities and guarantees
 
7131,064
Onerous contracts
 
1428
Sundry provisions
 
285289
Total1,7722,304
 
 
16. Retirement benefits
 
As at 30 June 2021, the Group’s IAS 19 pension surplus across all schemes was £2.4bn (December 2020: £1.5bn). The UK Retirement Fund (UKRF), which is the Group’s main scheme, had an IAS 19 pension surplus of £2.6bn (December 2020: £1.8bn). The movement for the UKRF was driven by payment of deficit reduction contributions, and an increase in the discount rate, partially offset by higher than expected long-term price inflation.
 
 
UKRF funding valuations
 
The latest annual update as at 30 September 2020 showed the funding deficit had improved to £0.9bn from the £2.3bn shown at the 30 September 2019 triennial valuation. The improvement was mainly due to £1.0bn of deficit reduction contributions paid over the year. The deficit recovery plan agreed at the last triennial valuation requires deficit reduction contributions from Barclays Bank PLC of £700m in 2021, £294m in 2022 and £286m in 2023. The deficit reduction contributions are in addition to the regular contributions to meet the Group’s share of the cost of benefits accruing over each year. £350m of the 2021 deficit reduction contributions were paid in April 2021, with the remaining £350m for 2021 due in September 2021. The next triennial actuarial valuation of the UKRF is due to be completed in 2023 with an effective date of 30 September 2022.
 
 
 
17. Called up share capital
 
 
 
 
Ordinary share capital
 
Share premium
 
Total share capital and share premium
 
Half year ended 30.06.21
 
£m
 
£m
 
£m
 
Opening balance as at 1 January4,3402974,637
Issue of shares under employee share schemes32225
Repurchase of shares(94)(94)
Closing balance4,2493194,568
 
 
Called up share capital comprised 16,998m (December 2020: 17,359m) ordinary shares of 25p each. The decrease is mainly due to the repurchase of 377m shares as part of the £0.7bn share buyback, partially offset by an increase due to the issuance of shares under employee share schemes.
 
18. Other equity instruments
 
 
Half year ended 30.06.21
 
Year ended 31.12.20
 
 
£m
 
£m
 
Opening balance as at 1 January11,17210,871
Issuances1,142
Redemptions(831)
Securities held by the Group(5)(10)
Closing balance11,16711,172
 
 
Other equity instruments of £11,167m (December 2020: £11,172m) include AT1 securities issued by Barclays PLC. There have been no issuances or redemptions in the period.
 
The AT1 securities are perpetual securities with no fixed maturity and are structured to qualify as AT1 instruments under prevailing capital rules applicable as at the relevant issue date. AT1 securities are undated and are redeemable, at the option of Barclays PLC, in whole on (i) the initial call date, or on any fifth anniversary after the initial call date or (ii) any day falling in a named period ending on the initial reset date, or on any fifth anniversary after the initial reset date. In addition, the AT1 securities are redeemable, at the option of Barclays PLC, in whole in the event of certain changes in the tax or regulatory treatment of the securities. Any redemptions require the prior consent of the PRA.
 
All Barclays PLC AT1 securities will be converted into ordinary shares of Barclays PLC, at a pre-determined price, should the fully loaded CET1 ratio of the Group fall below 7%.
 
19. Other reserves
 
 
 
 As at 30.06.21As at 31.12.20
 £m£m
Currency translation reserve
 
2,3762,871
Fair value through other comprehensive income reserve
 
(245)5
Cash flow hedging reserve
 
6641,575
Own credit reserve
 
(1,001)(954)
Other reserves and treasury shares1,062964
Total
 
2,8564,461
 
 
Currency translation reserve
 
The currency translation reserve represents the cumulative gains and losses on the retranslation of the Group’s net investment in foreign operations, net of the effects of hedging.
 
As at 30 June 2021, there was a credit balance of £2,376m (December 2020: £2,871m credit) in the currency translation reserve. The £495m debit movement principally reflects the strengthening of GBP against USD and EUR during the period.
 
Fair value through other comprehensive income reserve
 
The fair value through other comprehensive income reserve represents the unrealised change in the fair value through other comprehensive income investments since initial recognition.
 
As at 30 June 2021, there was a debit balance of £245m (December 2020: £5m credit) in the fair value through other comprehensive income reserve. The loss of £250m is principally driven by a loss of £325m from the decrease in fair value of bonds due to increasing bond yields and £199m of net gains transferred to the income statement. This is partially offset by a gain of £114m due to an increase in the Absa Group Limited share price and a tax credit of £168m. £8m release in impairment was also noted during the period.
 
Cash flow hedging reserve
 
The cash flow hedging reserve represents the cumulative gains and losses on effective cash flow hedging instruments that will be recycled to the income statement when the hedged transactions affect profit or loss.
 
As at 30 June 2021, there was a credit balance of £664m (December 2020: £1,575m credit) in the cash flow hedging reserve. The decrease of £911m principally reflects a £902m decrease in the fair value of interest rate swaps held for hedging purposes as major interest rate forward curves increased and £287m of gains transferred to the income statement. This is partially offset by a tax credit of £282m.
 
Own credit reserve
 
The own credit reserve reflects the cumulative own credit gains and losses on financial liabilities at fair value. Amounts in the own credit reserve are not recycled to profit or loss in future periods.
 
As at 30 June 2021, there was a debit balance of £1,001m (December 2020: £954m debit) in the own credit reserve. The movement of £47m principally reflects a £266m loss from the tightening of Barclays’ funding spreads. This is partially offset by other activity of £100m and a tax credit of £115m.
 
Other reserves and treasury shares
 
Other reserves relate to redeemed ordinary and preference shares issued by the Group. Treasury shares relate to Barclays PLC shares held principally in relation to the Group’s various share schemes.
 
As at 30 June 2021, there was a credit balance of £1,062m (December 2020: £964m credit) in other reserves and treasury shares. This is driven by an increase of £94m due to the repurchase of 377m shares as part of the £0.7bn share buyback and a £4m increase due to a reduction in treasury shares held in relation to employee share schemes.
 
 
 
20. Contingent liabilities and commitments
 
 
 
 As at 30.06.21As at 31.12.20
Contingent liabilities£m£m
Guarantees and letters of credit pledged as collateral security
 
13,519
 
15,665
 
Performance guarantees, acceptances and endorsements
 
5,679
 
5,944
 
Total
 
19,198
 
21,609
 
   
Commitments
 
  
Documentary credits and other short-term trade related transactions
 
1,017
 
1,086
 
Standby facilities, credit lines and other commitments
 
345,281
 
331,963
 
Total
 
346,298
 
333,049
 
 
 
In addition to the above, Note 21, Legal, competition and regulatory matters details out further contingent liabilities where it is not practicable to disclose an estimate of the potential financial effect on Barclays.
 
 
 
21. Legal, competition and regulatory matters
 
The Group faces legal, competition and regulatory challenges, many of which are beyond our control. The extent of the impact of these matters cannot always be predicted but may materially impact our operations, financial results, condition and prospects. Matters arising from a set of similar circumstances can give rise to either a contingent liability or a provision, or both, depending on the relevant facts and circumstances.
 
The recognition of provisions in relation to such matters involves critical accounting estimates and judgments in accordance with the relevant accounting policies applicable to Note 15, Provisions. We have not disclosed an estimate of the potential financial impact or effect on the Group of contingent liabilities where it is not currently practicable to do so. Various matters detailed in this note seek damages of an unspecified amount. While certain matters specify the damages claimed, such claimed amounts do not necessarily reflect the Group’s potential financial exposure in respect of those matters.
 
Matters are ordered under headings corresponding to the financial statements in which they are disclosed.
 
 
 
1. Barclays PLC and Barclays Bank PLC
 
Investigations into certain advisory services agreements and related civil action
 
FCA proceedings
 
In 2008, Barclays Bank PLC and Qatar Holdings LLC entered into two advisory service agreements (the Agreements). The Financial Conduct Authority (FCA) conducted an investigation into whether the Agreements may have related to Barclays PLC’s capital raisings in June and November 2008 (the Capital Raisings) and therefore should have been disclosed in the announcements or public documents relating to the Capital Raisings. In 2013, the FCA issued warning notices (the Notices) finding that Barclays PLC and Barclays Bank PLC acted recklessly and in breach of certain disclosure-related listing rules, and that Barclays PLC was also in breach of Listing Principle 3. The financial penalty provided in the Notices is £50m. Barclays PLC and Barclays Bank PLC continue to contest the findings. Following the conclusion of the Serious Fraud Office (SFO) proceedings against certain former Barclays executives resulting in their acquittals, the FCA proceedings, which were stayed, have resumed.
 
Civil action
 
In 2021, the High Court of Justice (High Court) dismissed a claim brought by PCP Capital Partners LLP and PCP International Finance Limited (PCP) against Barclays Bank PLC for fraudulent misrepresentation and deceit, arising from certain statements made by Barclays Bank PLC to PCP relating to the November 2008 capital raising. PCP’s application to appeal the High Court’s decision has also been refused which concludes these proceedings.
 
Investigations into LIBOR and other benchmarks and related civil actions
 
Regulators and law enforcement agencies, including certain competition authorities, from a number of governments have conducted investigations relating to Barclays Bank PLC’s involvement in allegedly manipulating certain financial benchmarks, such as LIBOR. The SFO closed its investigation with no action to be taken against the Group. Various individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group and other banks in relation to the alleged manipulation of LIBOR and/or other benchmarks.
 
USD LIBOR civil actions
 
The majority of the USD LIBOR cases, which have been filed in various US jurisdictions, have been consolidated for pre-trial purposes in the US District Court in the Southern District of New York (SDNY). The complaints are substantially similar and allege, among other things, that Barclays PLC, Barclays Bank PLC, Barclays Capital Inc. (BCI) and other financial institutions individually and collectively violated provisions of the US Sherman Antitrust Act (Antitrust Act), the US Commodity Exchange Act (CEA), the US Racketeer Influenced and Corrupt Organizations Act (RICO), the Securities Exchange Act of 1934 and various state laws by manipulating USD LIBOR rates.
 
Putative class actions and individual actions seek unspecified damages with the exception of three lawsuits, in which the plaintiffs are seeking a combined total of approximately $100m in actual damages and additional punitive damages against all defendants, including Barclays Bank PLC. Some of the lawsuits also seek trebling of damages under the Antitrust Act and RICO. Barclays Bank PLC has previously settled certain claims. Two class action settlements where Barclays Bank PLC has respectively paid $7.1m and $20m, have received final court approval. Barclays Bank PLC also settled a further matter for $7.5m, paid in June 2021.
 
Sterling LIBOR civil actions
 
In 2016, two putative class actions filed in the SDNY against Barclays Bank PLC, BCI and other Sterling LIBOR panel banks alleging, among other things, that the defendants manipulated the Sterling LIBOR rate in violation of the Antitrust Act, CEA and RICO, were consolidated. The defendants’ motion to dismiss the claims was granted in 2018. The plaintiffs have appealed the dismissal.
 
Japanese Yen LIBOR civil actions
 
In 2012, a putative class action was filed in the SDNY against Barclays Bank PLC and other Japanese Yen LIBOR panel banks by a lead plaintiff involved in exchange-traded derivatives and members of the Japanese Bankers Association’s Euroyen Tokyo Interbank Offered Rate (Euroyen TIBOR) panel. The complaint alleges, among other things, manipulation of the Euroyen TIBOR and Yen LIBOR rates and breaches of the CEA and the Antitrust Act. In 2014, the court dismissed the plaintiff’s antitrust claims, and, in 2020, the court dismissed the plaintiff’s remaining CEA claims. The plaintiff has appealed the lower court’s dismissal of such claims.
 
In 2015, a second putative class action, making similar allegations to the above class action, was filed in the SDNY against Barclays PLC, Barclays Bank PLC and BCI. The plaintiffs filed an amended complaint in 2020, and the defendants have filed a motion to dismiss.
 
SIBOR/SOR civil action
 
In 2016, a putative class action was filed in the SDNY against Barclays PLC, Barclays Bank PLC, BCI and other defendants, alleging manipulation of the Singapore Interbank Offered Rate (SIBOR) and Singapore Swap Offer Rate (SOR). In 2018, the court dismissed all claims against Barclays PLC, Barclays Bank PLC and BCI. The plaintiffs’ appeal of the dismissal of their claims was granted in March 2021 and the matter has been remanded to the lower court for further proceedings.
 
ICE LIBOR civil actions
 
In 2019, several putative class actions were filed in the SDNY against a panel of banks, including Barclays PLC, Barclays Bank PLC, BCI, other financial institution defendants and Intercontinental Exchange Inc. and certain of its affiliates (ICE), asserting antitrust claims that defendants manipulated USD LIBOR through defendants’ submissions to ICE. These actions have been consolidated. The defendants’ motion to dismiss was granted in 2020. The plaintiffs have appealed the dismissal.
 
In August 2020, an ICE LIBOR-related action was filed by a group of individual plaintiffs in the US District Court for the Northern District of California on behalf of individual borrowers and consumers of loans and credit cards with variable interest rates linked to USD ICE LIBOR. Plaintiffs have filed motions seeking, among other things, preliminary and permanent injunctions to enjoin the defendants from continuing to set LIBOR or enforce any financial instrument that relies in whole or in part on USD LIBOR.
 
 
 
Non-US benchmarks civil actions
 
Legal proceedings (which include the claims referred to below in ‘Local authority civil actions concerning LIBOR’) have been brought or threatened against Barclays Bank PLC (and, in certain cases, Barclays Bank UK PLC) in the UK in connection with alleged manipulation of LIBOR, EURIBOR and other benchmarks. Proceedings have also been brought in a number of other jurisdictions in Europe and Israel. Additional proceedings in other jurisdictions may be brought in the future.

Credit Default Swap civil action
 
In July 2021, the New Mexico Attorney General, on behalf of the New Mexico State Investment Council, filed an antitrust class action in the US District Court for the District of New Mexico against Barclays PLC, Barclays Bank PLC, BCI and other financial institutions. The plaintiff alleges that the defendants conspired to manipulate the benchmark price used to value Credit Default Swap (CDS) contracts at settlement (i.e. the CDS final auction price). The plaintiff alleges violations of the Antitrust Act and the CEA, and unjust enrichment under state law.
 
Foreign Exchange investigations and related civil actions
 
In 2015, the Group reached settlements totalling approximately $2.38bn with various US federal and state authorities and the FCA in relation to investigations into certain sales and trading practices in the Foreign Exchange market. The Group continues to provide relevant information to certain authorities.
 
The European Commission is one of a number of authorities still conducting an investigation into certain trading practices in Foreign Exchange markets. The European Commission announced two settlements in May 2019 and the Group paid penalties totalling approximately €210m. In June 2019, the Swiss Competition Commission announced two settlements and the Group paid penalties totalling approximately CHF 27m. The financial impact of the ongoing matters is not expected to be material to the Group’s operating results, cash flows or financial position.
 
Various individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group and other banks in relation to alleged manipulation of Foreign Exchange markets.
 
FX opt out civil action
 
In 2018, Barclays Bank PLC and BCI settled a consolidated action filed in the SDNY, alleging manipulation of Foreign Exchange markets (Consolidated FX Action), for a total amount of $384m. Also in 2018, a group of plaintiffs who opted out of the Consolidated FX Action filed a complaint in the SDNY against Barclays PLC, Barclays Bank PLC, BCI and other defendants. Some of the plaintiff’s claims were dismissed in 2020.
 
Retail basis civil action
 
In 2015, a putative class action was filed against several international banks, including Barclays PLC and BCI, on behalf of a proposed class of individuals who exchanged currencies on a retail basis at bank branches (Retail Basis Claims). The SDNY has ruled that the Retail Basis Claims are not covered by the settlement agreement in the Consolidated FX Action. The Court subsequently dismissed all Retail Basis Claims against the Group and all other defendants. The plaintiffs have filed an amended complaint.
 
Non-US FX civil actions
 
Legal proceedings have been brought or are threatened against Barclays PLC, Barclays Bank PLC, BCI and Barclays Execution Services Limited (BX) in connection with alleged manipulation of Foreign Exchange in the UK, a number of other jurisdictions in Europe, Israel and Australia and additional proceedings may be brought in the future.
 
These include two purported class actions filed against Barclays PLC, Barclays Bank PLC, BX, BCI and other financial institutions in the UK Competition Appeal Tribunal in 2019 following the settlements with the European Commission described above. Also in 2019, a separate claim was filed in the UK in the High Court by various banks and asset management firms against Barclays Bank PLC and other financial institutions alleging breaches of European and UK competition laws related to FX trading.
 
Metals investigations and related civil actions
 
Barclays Bank PLC previously provided information to the US Department of Justice (DoJ), the US Commodity Futures Trading Commission and other authorities in connection with investigations into metals and metals-based financial instruments.
 
A number of US civil complaints, each on behalf of a proposed class of plaintiffs, have been consolidated and transferred to the SDNY. The complaints allege that Barclays Bank PLC and other members of The London Gold Market Fixing Ltd. manipulated the prices of gold and gold derivative contracts in violation of the Antitrust Act and other federal laws. This consolidated putative class action remains pending. A separate US civil complaint by a proposed class of plaintiffs against a number of banks, including Barclays Bank PLC, BCI and BX, alleging manipulation of the price of silver in violation of the CEA, the Antitrust Act and state antitrust and consumer protection laws, has been dismissed as against the Barclays entities. The plaintiffs have the option to seek the court’s permission to appeal.
 
Civil actions have also been filed in Canadian courts against Barclays PLC, Barclays Bank PLC, Barclays Capital Canada Inc. and BCI on behalf of proposed classes of plaintiffs alleging manipulation of gold and silver prices.
 
US residential mortgage related civil actions
 
There are various pending civil actions relating to US Residential Mortgage-Backed Securities (RMBS), including four actions arising from unresolved repurchase requests submitted by Trustees for certain RMBS, alleging breaches of various loan-level representations and warranties (R&Ws) made by Barclays Bank PLC and/or a subsidiary acquired in 2007. The unresolved repurchase requests had an original principal balance of approximately $2.1bn. The Trustees have also alleged that the relevant R&Ws may have been breached with respect to a greater (but unspecified) amount of loans than previously stated in the unresolved repurchase requests.
 
These repurchase actions are ongoing. In one repurchase action, the New York Court of Appeals held that claims related to certain R&Ws are time-barred. Barclays Bank PLC has reached a settlement to resolve two of the repurchase actions, which is subject to final court approval. The financial impact of the settlement is not expected to be material to the Group’s operating results, cash flows or financial position. The remaining two repurchase actions are pending.
 
In 2020, a civil litigation claim was filed in the New Mexico First Judicial District Court by the State of New Mexico against six banks, including BCI, on behalf of two New Mexico state pension funds and the New Mexico State Investment Council relating to legacy RMBS purchases. As to BCI, the complaint alleges that the funds purchased approximately $22m in RMBS underwritten by BCI. The plaintiffs have asserted claims under New Mexico state law, which provides for the ability to claim treble damages and civil penalties.
 
Government and agency securities civil actions and related matters
 
Certain governmental authorities have conducted investigations into activities relating to the trading of certain government and agency securities in various markets. The Group provided information in cooperation with such investigations.
 
Civil actions have also been filed on the basis of similar allegations, as described below.
 
Treasury auction securities civil actions
 
Consolidated putative class action complaints filed in US federal court against Barclays Bank PLC, BCI and other financial institutions under the Antitrust Act and state common law allege that the defendants (i) conspired to manipulate the US Treasury securities market and/or (ii) conspired to prevent the creation of certain platforms by boycotting or threatening to boycott such trading platforms. The court dismissed the consolidated action in March 2021. The plaintiffs have filed an amended complaint, which the defendants have moved to dismiss.
 
In addition, certain plaintiffs have filed a related, direct action against BCI and certain other financial institutions, alleging that defendants conspired to fix and manipulate the US Treasury securities market in violation of the Antitrust Act, the CEA and state common law.
 
Supranational, Sovereign and Agency bonds civil actions
 
Civil antitrust actions have been filed in the SDNY and Federal Court of Canada in Toronto against Barclays Bank PLC, BCI, BX, Barclays Capital Securities Limited and, with respect to the civil action filed in Canada only, Barclays Capital Canada, Inc. and other financial institutions alleging that the defendants conspired to fix prices and restrain competition in the market for US dollar-denominated Supranational, Sovereign and Agency bonds.
 
In one of the actions filed in the SDNY, the court granted the defendants’ motions to dismiss the plaintiffs’ complaint. The dismissal was affirmed on appeal. The plaintiffs have voluntarily dismissed the other SDNY action. In the Federal Court of Canada action, the plaintiffs reached settlements with a small number of banks in 2020 (not including Barclays Capital Canada, Inc.), but the plaintiffs have not commenced the class certification process and the action remains at an early stage.
 
Variable Rate Demand Obligations civil actions
 
Civil actions have been filed against Barclays Bank PLC and BCI and other financial institutions alleging the defendants conspired or colluded to artificially inflate interest rates set for Variable Rate Demand Obligations (VRDOs). VRDOs are municipal bonds with interest rates that reset on a periodic basis, most commonly weekly. Two actions in state court have been filed by private plaintiffs on behalf of the states of Illinois and California. Three putative class action complaints, two of which have been consolidated, have been filed in the SDNY (the third complaint was filed in June 2021). In the consolidated SDNY class action, certain of the plaintiff’s claims were dismissed in November 2020. In the California action, the plaintiffs’ claims were dismissed in June 2021. The plaintiffs may appeal.
 
Government bond civil actions
 
In a putative class action filed in the SDNY in 2019, plaintiffs alleged that BCI and certain other bond dealers conspired to fix the prices of US Government sponsored entity bonds in violation of US antitrust law. BCI agreed to a settlement of $87m, which received final court approval in 2020. Separately, various entities in Louisiana, including the Louisiana Attorney General and the City of Baton Rouge, have commenced litigation against Barclays Bank PLC and other financial institutions making similar allegations as the SDNY class action plaintiffs. The parties have reached a settlement to resolve these matters. The financial impact of the settlement is not expected to be material to the Group’s operating results, cash flows or financial position.
 
In 2018, a separate putative class action against various financial institutions including Barclays PLC, Barclays Bank PLC, BCI, Barclays Bank Mexico, S.A., and certain other subsidiaries of the Group was consolidated in the SDNY. The plaintiffs asserted antitrust and state law claims arising out of an alleged conspiracy to fix the prices of Mexican Government bonds. Barclays PLC has settled the claim for $5.7m, which is subject to final court approval.
 
Odd-lot corporate bonds antitrust class action
 
In 2020, BCI, together with other financial institutions, were named as defendants in a putative class action. The complaint alleges a conspiracy to boycott developing electronic trading platforms for odd-lots and price fixing. Plaintiffs demand unspecified money damages. The defendants have filed a motion to dismiss.
 
Interest rate swap and credit default swap US civil actions
 
 
Barclays PLC, Barclays Bank PLC and BCI, together with other financial institutions that act as market makers for interest rate swaps (IRS) are named as defendants in several antitrust class actions which were consolidated in the SDNY in 2016. The complaints allege the defendants conspired to prevent the development of exchanges for IRS and demand unspecified money damages.
 
In 2018, trueEX LLC filed an antitrust class action in the SDNY against a number of financial institutions including Barclays PLC, Barclays Bank PLC and BCI based on similar allegations with respect to trueEX LLC’s development of an IRS platform. In 2017, Tera Group Inc. filed a separate civil antitrust action in the SDNY claiming that certain conduct alleged in the IRS cases also caused the plaintiff to suffer harm with respect to the Credit Default Swaps market. In 2018 and 2019, respectively, the court dismissed certain claims in both cases for unjust enrichment and tortious interference but denied motions to dismiss the federal and state antitrust claims, which remain pending.
 
BDC Finance L.L.C.
 
In 2008, BDC Finance L.L.C. (BDC) filed a complaint in the Supreme Court of the State of New York (NY Supreme Court), demanding damages of $298m, alleging that Barclays Bank PLC had breached a contract in connection with a portfolio of total return swaps governed by an ISDA Master Agreement (the Agreement). Following a trial, the court ruled in 2018 that Barclays Bank PLC was not a defaulting party, which was affirmed on appeal. In April 2021, the trial court entered judgement in favour of Barclays Bank PLC for $3.3m and as yet to be determined legal fees and costs, BDC has appealed.
 
In 2011, BDC’s investment advisor, BDCM Fund Adviser, L.L.C. and its parent company, Black Diamond Capital Holdings, L.L.C. also sued Barclays Bank PLC and BCI in Connecticut State Court for unspecified damages allegedly resulting from Barclays Bank PLC’s conduct relating to the Agreement, asserting claims for violation of the Connecticut Unfair Trade Practices Act and tortious interference with business and prospective business relations. This case is currently stayed.
 
Civil actions in respect of the US Anti-Terrorism Act
 
There are a number of civil actions, on behalf of more than 4,000 plaintiffs, filed in US federal courts in the US District Court in the Eastern District of New York (EDNY) and SDNY against Barclays Bank PLC and a number of other banks. The complaints generally allege that Barclays Bank PLC and those banks engaged in a conspiracy to facilitate US dollar-denominated transactions for the Iranian Government and various Iranian banks, which in turn funded acts of terrorism that injured or killed plaintiffs or plaintiffs’ family members. The plaintiffs seek to recover damages for pain, suffering and mental anguish under the provisions of the US Anti-Terrorism Act, which allow for the trebling of any proven damages.
 
The court granted the defendants’ motions to dismiss three out of the six actions in the EDNY. Plaintiffs have appealed in one action. The remaining actions are stayed pending decisions on the appeal. Out of the two actions in the SDNY, the court also granted the defendants’ motion to dismiss one action. The remaining action is stayed pending any appeal in the former case.
 
Shareholder derivative action
 
In November 2020, a purported Barclays shareholder filed a putative derivative action in New York state court against BCI and a number of current and former members of the Board of Directors of Barclays PLC and senior executives or employees of the Group. The shareholder filed the claim on behalf of nominal defendant Barclays PLC, alleging that the individual defendants harmed the company through breaches of their duties, including under the Companies Act 2006. The plaintiff seeks damages on behalf of Barclays PLC for the losses that Barclays PLC allegedly suffered as a result of these alleged breaches. An amended complaint was filed in April 2021, which BCI and certain other defendants have moved to dismiss.
 
Derivative transactions civil action
 
In July 2021, Vestia (a Dutch housing association) issued a claim against Barclays Bank PLC in the UK in the High Court in relation to a series of derivative transactions entered into with Barclays Bank PLC between 2008 and 2012. The claim has not been served on Barclays.
 
Skilled person review and associated matters
 
In August 2020, the FCA granted an application by Clydesdale Financial Services Limited (CFS), which trades as Barclays Partner Finance and houses Barclays’ point-of-sale finance business, for a validation order with respect to certain loans to customers brokered by Azure Services Limited (ASL), a timeshare operator, which did not, at the point of sale, hold the necessary broker licence. As a condition to the validation order, the FCA required CFS to undertake a skilled person review of the assessment of affordability processes for the loans brokered by ASL (ASL Loans) as well as CFS’ policies and procedures for assessing affordability and oversight of brokers more generally, and dictated a remediation methodology in the event that ASL Loans did not pass the affordability test. CFS has voluntarily agreed to remediate the ASL Loans, which is expected to amount to £37m, in accordance with the FCA’s methodology. The remaining scope of the skilled person review is ongoing and the skilled person is expected to report in the fourth quarter of 2021.
 
It is not currently possible to predict the outcome of the skilled person review and/or whether remediation activity will be undertaken or required in relation to other parts of CFS’ loan portfolio and the scope of, and methodology for, any such remediation.
 
 
 
2. Barclays PLC, Barclays Bank PLC and Barclays Bank UK PLC
 
Investigation into UK cards’ affordability
 
The FCA is investigating certain aspects of the affordability assessment processes used by Barclays Bank UK PLC and Barclays Bank PLC for credit card applications made to Barclays’ UK credit card business. Barclays is providing information in cooperation with the investigation.
 
HM Revenue & Customs (HMRC) assessments concerning UK Value Added Tax
 
In 2018, HMRC issued notices that have the effect of removing certain overseas subsidiaries that have operations in the UK from Barclays’ UK VAT group, in which group supplies between members are generally free from VAT. The notices have retrospective effect and correspond to assessments of £181m (inclusive of interest), of which Barclays would expect to attribute an amount of approximately £128m to Barclays Bank UK PLC and £53m to Barclays Bank PLC. HMRC’s decision has been appealed to the First Tier Tribunal (Tax Chamber).
 
Local authority civil actions concerning LIBOR
 
Following settlement by Barclays Bank PLC of various governmental investigations concerning certain benchmark interest rate submissions referred to above in ‘Investigations into LIBOR and other benchmarks and related civil actions’, in the UK, certain local authorities have brought claims against Barclays Bank PLC and Barclays Bank UK PLC asserting that they entered into loans in reliance on misrepresentations made by Barclays Bank PLC in respect of its conduct in relation to LIBOR. Barclays Bank PLC and Barclays Bank UK PLC were successful in their applications to strike out the claims. One local authority has obtained permission to pursue an appeal against this decision, while the claims brought by the other local authorities have been settled on terms such that the parties have agreed not to pursue these claims and to bear their own costs.
 
3. Barclays PLC
 
Alternative trading systems
 
Barclays PLC has been named as a defendant in a claim brought in the UK in the High Court by various shareholders regarding Barclays PLC’s share price based on the allegations contained within a complaint by the New York State Attorney General (NYAG) in 2014. The NYAG complaint was filed against Barclays PLC and BCI in the NY Supreme Court alleging, among other things, that Barclays PLC and BCI engaged in fraud and deceptive practices in connection with LX, BCI’s SEC-registered alternative trading system. Such claim was settled in 2016, as previously disclosed. This new shareholder claim is seeking unquantified damages.
 
General
 
The Group is engaged in various other legal, competition and regulatory matters in the UK, the US and a number of other overseas jurisdictions. It is subject to legal proceedings brought by and against the Group which arise in the ordinary course of business from time to time, including (but not limited to) disputes in relation to contracts, securities, debt collection, consumer credit, fraud, trusts, client assets, competition, data management and protection, intellectual property, money laundering, financial crime, employment, environmental and other statutory and common law issues.
 
The Group is also subject to enquiries and examinations, requests for information, audits, investigations and legal and other proceedings by regulators, governmental and other public bodies in connection with (but not limited to) consumer protection measures, compliance with legislation and regulation, wholesale trading activity and other areas of banking and business activities in which the Group is or has been engaged. The Group is cooperating with the relevant authorities and keeping all relevant agencies briefed as appropriate in relation to these matters and others described in this note on an ongoing basis.
 
At the present time, Barclays PLC does not expect the ultimate resolution of any of these other matters to have a material adverse effect on the Group’s financial position. However, in light of the uncertainties involved in such matters and the matters specifically described in this note, there can be no assurance that the outcome of a particular matter or matters (including formerly active matters or those matters arising after the date of this note) will not be material to Barclays PLC’s results, operations or cash flow for a particular period, depending on, among other things, the amount of the loss resulting from the matter(s) and the amount of profit otherwise reported for the reporting period.
 
22. Related party transactions
 
Related party transactions in the half year ended 30 June 2021 were similar in nature to those disclosed in the Barclays PLC Annual Report 2020. No related party transactions that have taken place in the half year ended 30 June 2021 have materially affected the financial position or the performance of the Group during this period.
 
23.  Interest rate benchmark reform
 
Following the financial crisis, the reform and replacement of benchmark interest rates such as LIBOR has become a priority for global regulators. The FCA and other global regulators have instructed market participants to prepare for the cessation of LIBOR after the end of 2021, and to adopt RFRs. While it is expected that most reforms affecting the Group will be completed by the end of 2021, consultations and regulatory changes are in progress and as certain US Dollar tenors will continue to be published up to mid-2023, significant remediation efforts will continue beyond the end of 2021.
 
How the Group is managing the transition to alternative benchmark rates
 
Barclays has established a Group-wide LIBOR Transition Programme, further detail on the transition programme is available in the Barclays PLC Annual Report 2020 (page 367).
 
In March 2021, the FCA announced the dates that panel bank submissions for all LIBOR settings will cease, after which representative LIBOR rates will no longer be available, these are: immediately after 31 December 2021, in the case of all sterling, euro, Swiss franc and Japanese yen settings, and the 1-week and 2-month US dollar settings; and immediately after 30 June 2023, in the case of the remaining US dollar settings. Throughout 2021, the FCA will consult with market participants to require continued publication on a ‘synthetic’ basis for some sterling LIBOR settings and, for 1 additional year, some Japanese yen LIBOR settings.
 
Approaches to transition exposure expiring post the expected end dates for LIBOR vary by product and nature of counterparty. The transition we are undertaking is at the request of the regulators, in line with their expectations and according to the regulatory endorsed timetable. The rates to which clients and customers are being transitioned are endorsed by the regulators. We are making disclosures as part of the transition to clarify the rate to be applied and the potential risks inherent in the transition. Barclays is actively engaging with counterparties to transition or include appropriate fallback provisions and transition mechanisms in its floating rate assets and liabilities with maturities after 2021, when most IBORs are expected to cease to be published, or will be published on a non-representative basis for a limited time.
 
Barclays is working with central clearing counterparties where the transition of cleared derivative contracts will follow a market-wide, standardised approach to reform. Barclays is working to the UK Risk Free Rate Working Group (RFRWG) target of completion of active conversion of, and/or addition of robust fallbacks to legacy GBP LIBOR contracts, where viable by the end of Q321. Additionally, plans are in place to address non-GBP and other official sector industry milestones and targets.
 
Progress made during H121
 
Building on the progress made in 2020, the Group has delivered further alternative RFR product capabilities and alternatives to LIBOR across loans, bonds and derivatives. Client outreach is progressing to plan and we have continued to engage actively with customers and counterparties to transition or include the appropriate fallback provisions. The Group has in place detailed plans, processes and procedures to support the transition of the remainder during 2021. Barclays has adhered to the ISDA IBOR Fallbacks Protocol for its major derivative dealing entities and we continue to track progress and engage with clients on their own adherence. Following the progress made during 2020, the Group continues to deliver technology and business process changes in preparation for LIBOR cessation and transitions to RFRs that will be necessary during 2021 and beyond in line with official sector expectations and milestones.
 
The Group met the Q121 UK RFRWG milestone to cease initiation of GBP LIBOR linked loans, securitisations or linear derivatives and the Q221 milestones to cease initiation of new non-linear derivatives, exchange traded futures and Bank Of Japan milestone to cease issuance of JPY LIBOR linked loans and bonds. The Group has put in place controls so that any exceptions or exemptions are approved, and is taking a similar approach to forthcoming cessation
 
 
24. Barclays PLC parent company balance sheet
 
 As at 30.06.21As at 31.12.20
Assets£m£m
Investment in subsidiaries58,82858,886
Loans and advances to subsidiaries23,29524,710
Financial assets at fair value through the income statement21,04617,521
Derivative financial instruments27
Other assets1965
Total assets103,190101,189
   
Liabilities  
Deposits at amortised cost476482
Cash collateral and settlement balances
Debt securities in issue26,66328,428
Subordinated liabilities9,1707,724
Financial liabilities designated at fair value12,1309,507
Other liabilities135176
Total liabilities48,57446,317
   
Equity  
Called up share capital4,2494,340
Share premium account319297
Other equity instruments11,16911,169
Other reserves488394
Retained earnings38,39138,672
Total equity54,61654,872
   
Total liabilities and equity103,190101,189
 
 
Investment in subsidiaries
 
The investment in subsidiaries of £58,828m (December 2020: £58,886m) predominantly relates to investments in Barclays Bank PLC and Barclays Bank UK PLC, as well as holdings of their AT1 securities of £10,995m (December 2020: £10,995m). Barclays PLC considers the carrying value of its investment in subsidiaries to be fully recoverable.
 
Financial assets and liabilities designated at fair value

Financial liabilities designated at fair value of £12,130m (December 2020: £9,507m) comprises material issuances during the period of €750m Floating Notes, $1,000m Fixed Rate Resetting Senior Callable Notes, 600m AUD Fixed-to-Floating and Floating Rate Debt Instruments, and 77,000m JPY Fixed Rate Resetting Senior Callable Notes. The proceeds raised through these transactions were used to invest in subsidiaries of Barclays PLC which are included within the financial assets designated at fair value through the income statement balance of £21,046m (December 2020: £17,521m).
 
Loans and advances to subsidiaries
 
During the period, loans and advances to subsidiaries decreased by £1,415m to £23,295m (December 2020: £24,710m). The decrease was driven by the maturity of £2,200m senior loans to Barclays Bank PLC and a foreign exchange impact of £500m due to appreciation of GBP against major currencies (although the negative FX impact is offset across the balance sheet liabilities). There was also a £700m decrease in relation to the share buyback which took place in Q1 2020. This decrease was partially offset by £1,600m of new issuances of dated subordinated notes by Barclays Bank PLC to Barclays PLC and £776m dividend receipts from Barclays Bank PLC and Barclays Execution Services Limited.
 
Subordinated liabilities and debt securities in issue
 
During H121, Barclays PLC issued €1,000m and $1,000m of Fixed Rate Resetting Subordinated Callable Notes, which is included within the subordinated liabilities balance of £9,170m (December 2020: £7,724m). Debt securities in issue of £26,663m (December 2020: £28,428m) have reduced in the year due to the £2,200m maturity of senior issuances, offset in part by new issuances of €1,250m.
 
Other equity instruments
 
Other equity instruments comprises AT1 securities issued by Barclays PLC. There have been no new issuances or redemptions during the period.
 
Other reserves
 
As at 30 June 2021, there was a balance of £488m (December 2020: £394m) in other reserves. The increase is due to the repurchase of shares as part of the share buyback.
 
Management of internal investments, loans and advances
 
Barclays PLC retains the discretion to manage the nature of its internal investments in subsidiaries according to their regulatory and business needs. Barclays PLC may invest capital and funding into Barclays Bank PLC, Barclays Bank UK PLC and other Group subsidiaries such as Barclays Execution Services Limited and the US Intermediate Holding Company (IHC).
 
Appendix: Non-IFRS Performance Measures
 
 
The Group’s management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses’ performance between financial periods, and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by management.
 
However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well.
 
 
 
Non-IFRS performance measures glossary
 
 
 
Measure
 
Definition
 
Loan: deposit ratio
 
Loans and advances at amortised cost divided by deposits at amortised cost. The components of the calculation have been included on page 50.
 
Period end allocated tangible equity
 
Allocated tangible equity is calculated as 13.5% (2020: 13.0%) of RWAs for each business, adjusted for capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office allocated tangible equity represents the difference between the Group’s tangible shareholders’ equity and the amounts allocated to businesses.
 
Average tangible shareholders’ equity
 
Calculated as the average of the previous month’s period end tangible equity and the current month’s period end tangible equity. The average tangible shareholders’ equity for the period is the average of the monthly averages within that period.
 
Average allocated tangible equity
 
Calculated as the average of the previous month’s period end allocated tangible equity and the current month’s period end allocated tangible equity. The average allocated tangible equity for the period is the average of the monthly averages within that period.
 
Return on average tangible shareholders’ equity
 
Annualised profit after tax attributable to ordinary equity holders of the parent, as a proportion of average shareholders’ equity excluding non-controlling interests and other equity instruments adjusted for the deduction of intangible assets and goodwill. The components of the calculation have been included on page 98 to 100.
 
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 98 to 101.
 
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 27. Quoted as zero across the current reporting period due to credit impairment net release.
 
Net interest margin
 
Annualised net interest income divided by the sum of average customer assets. The components of the calculation have been included on pages 23 to 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 102.
 
 
 
Returns
 
 
 
Return on average tangible equity is calculated as profit after tax attributable to ordinary equity holders of the parent as a proportion of average tangible equity, excluding non-controlling and other equity interests for businesses. Allocated tangible equity has been calculated as 13.5% (2020: 13.0%) of RWAs for each business, adjusted for capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office average allocated tangible equity represents the difference between the Group’s average tangible shareholders’ equity and the amounts allocated to businesses.
 
 
 
 
Profit/(loss) attributable to ordinary equity holders of the parent
 
 
Average tangible equity
 
 
Return on average tangible equity
 
Half year ended 30.06.21
£m
 
 
£bn
 
 
%
 
Barclays UK1,019 9.9 20.6
    Corporate and Investment Bank2,312 28.3 16.3
    Consumer, Cards and Payments386 4.0 19.1
Barclays International2,698 32.3 16.7
Head Office95 4.3 n/m
Barclays Group3,812 46.5 16.4
      
Half year ended 30.06.20     
Barclays UK52 10.2 1.0
    Corporate and Investment Bank1,514 27.7 11.0
    Consumer, Cards and Payments(517) 4.7 (21.9)
Barclays International
997
 
 
32.4
 
 6.2
Head Office
(354)
 
 
6.0
 
 n/m
Barclays Group
695
 
 
48.6
 
 2.9
 
 
       
 Half year ended 30.06.21
 
Barclays UK
 
Corporate and Investment Bank
 
Consumer, Cards and Payments
 
Barclays International
 
Head Office
 
Barclays Group
 
Return on average tangible shareholders' equity
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
Attributable profit1,0192,3123862,698953,812
       
 
£bn
 
£bn
 
£bn
 
£bn
 
£bn
 
£bn
 
Average shareholders' equity13.528.34.632.98.054.4
Average goodwill and intangibles(3.6)(0.6)(0.6)(3.7)(7.9)
Average tangible shareholders' equity9.928.34.032.34.346.5
       
Return on average tangible shareholders' equity20.6%16.3%19.1%16.7%n/m16.4%
 
 
 Half year ended 30.06.20
 
Barclays UK
 
Corporate and Investment Bank
 
Consumer, Cards and Payments
 
Barclays International
 
Head Office
 
Barclays Group
 
Return on average tangible shareholders' equity
£m
 
£m
 
£m
 
£m
 
£m
 
£m
 
Attributable profit/(loss)521,514(517)997(354)695
       
 £bn£bn£bn£bn£bn£bn
Average shareholders' equity13.827.75.433.19.956.8
Average goodwill and intangibles(3.6)(0.7)(0.7)(3.9)(8.2)
Average tangible shareholders' equity10.227.74.732.46.048.6
       
Return on average tangible shareholders' equity1.0%11.0%(21.9)%6.2%n/m2.9%
 
 
Barclays Group          
Return on average tangible shareholders' equity
 
Q221
 
Q121
 
 
Q420
 
Q320
 
Q220
 
Q120
 
 
Q419
 
Q319
 
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
Attributable profit/(loss)2,1081,704 22061190605 681(292)
           
 
£bn
 
£bn
 
 
£bn
 
£bn
 
£bn
 
£bn
 
 
£bn
 
£bn
 
Average shareholders' equity54.454.4 55.756.458.455.2 54.556.4
Average goodwill and intangibles(7.9)(7.9) (8.1)(8.1)(8.2)(8.2) (8.1)(8.0)
Average tangible shareholders' equity46.546.5 47.648.350.247.0 46.448.4
           
Return on average tangible shareholders' equity
 
18.1%14.7% 1.8%5.1%0.7%5.1% 5.9%(2.4)%
 
 
Barclays UK          
 
Q221
 
Q121
 
 
Q420
 
Q320
 
Q220
 
Q120
 
 
Q419
 
Q319
 
Return on average allocated tangible equity
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
Attributable profit/(loss)721298 160113(123)175 438(907)
           
 £bn£bn £bn£bn£bn£bn £bn£bn
Average allocated equity13.513.5 13.413.713.913.7 13.813.9
Average goodwill and intangibles(3.6)(3.6) (3.6)(3.6)(3.6)(3.6) (3.5)(3.5)
Average allocated tangible equity9.99.9 9.810.110.310.1 10.310.4
           
Return on average allocated tangible equity
 
29.1%12.0% 6.5%4.5%(4.8)%6.9% 17.0%(34.9)%
 
 
Barclays International          
 
Q221
 
Q121
 
 
Q420
 
Q320
 
Q220
 
Q120
 
 
Q419
 
Q319
 
Return on average allocated tangible equity
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
Attributable profit1,2671,431 441782468529 397799
           
 £bn£bn £bn£bn£bn£bn £bn£bn
Average allocated equity33.032.8 31.131.234.231.9 31.933.3
Average goodwill and intangibles(0.6)(0.5) (0.6)(0.6)(0.7)(0.7) (1.0)(1.1)
Average allocated tangible equity32.432.3 30.530.633.531.2 30.932.2
           
Return on average allocated tangible equity
 
15.6%17.7% 5.8%10.2%5.6%6.8% 5.1%9.9%
 
 
Corporate and Investment Bank      
 
Q221
 
Q121
 
 
Q420
 
Q320
 
Q220
 
Q120
 
 
Q419
 
Q319
 
Return on average allocated tangible equity
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
Attributable profit1,0491,263 413627694820 193609
           
 £bn£bn £bn£bn£bn£bn £bn£bn
Average allocated equity28.428.2 26.326.429.126.2 25.926.9
Average goodwill and intangibles (0.1) (0.1)
Average allocated tangible equity28.428.2 26.326.429.026.2 25.826.9
           
Return on average allocated tangible equity
 
14.8%17.9% 6.3%9.5%9.6%12.5% 3.0%9.1%
 
 
Consumer, Cards and Payments        
 
Q221
 
Q121
 
 
Q420
 
Q320
 
Q220
 
Q120
 
 
Q419
 
Q319
 
Return on average allocated tangible equity
£m
 
£m
 
 
£m
 
£m
 
£m
 
£m
 
 
£m
 
£m
 
Attributable profit/(loss)218168 28155(226)(291) 204190
           
 £bn£bn £bn£bn£bn£bn £bn£bn
Average allocated equity4.64.6 4.84.85.15.7 6.06.4
Average goodwill and intangibles(0.6)(0.5) (0.6)(0.6)(0.6)(0.7) (0.9)(1.1)
Average allocated tangible equity4.04.1 4.24.24.55.0 5.15.3
           
Return on average allocated tangible equity
 
21.8%16.5% 2.7%14.7%(20.2)%(23.5)% 15.9%14.2%
 
 
Tangible net asset value per shareAs at 30.06.21As at 31.12.20As at 30.06.20
 £m£m£m
Total equity excluding non-controlling interests67,05265,79768,304
Other equity instruments(11,167)(11,172)(10,871)
Goodwill and intangibles(8,196)(7,948)(8,163)
Tangible shareholders' equity attributable to ordinary shareholders of the parent47,68946,67749,270
    
 mmm
Shares in issue16,998
17,359
 
17,345
 
    
 ppp
Tangible net asset value per share281
269
 
284
 
 
 
Shareholder Information
 
 
Results timetable1
  Date   
Ex-dividend date
 
  
12 August 2021
 
Dividend record date  13 August 2021
Cut off time of 5:00pm (UK time) for the receipt of Dividend Re-investment Programme (DRIP) Application Form  27 August 2021
Dividend payment date  17 September 2021
Q321 Results Announcement  21 October 2021
       
For qualifying US and Canadian resident ADR holders, the half year dividend of 2.0p per ordinary share becomes 8.0p per ADS (representing four shares). The ex-dividend, dividend record and dividend payment dates for ADR holders are as shown above.
       
   
% Change3
Exchange rates2
30.06.2131.12.2030.06.20 31.12.2030.06.20
Period end - USD/GBP1.381.371.24 1%11%
6 month average - USD/GBP1.391.311.26 6%10%
3 month average - USD/GBP1.401.321.24 6%13%
Period end - EUR/GBP1.171.121.10 4%6%
6 month average - EUR/GBP1.151.111.14 4%1%
3 month average - EUR/GBP1.161.111.13 5%3%
       
Share price data      
Barclays PLC (p)171.12146.68114.42   
Barclays PLC number of shares (m)16,99817,35917,345   
       
For further information please contact      
       
Investor relationsMedia relations
Chris Manners +44 (0) 20 7773 2136Tom 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 20554 from the UK or +44 121 415 7004 from overseas. 
       
American Depositary Receipts (ADRs)      
Shareowner Services
StockTransfer@equiniti.com
Tel: +1 800 990 1135 (toll free in US and Canada), +1 651 453 2128 (outside the US and Canada)
Shareowner Services, PO Box 64504, St Paul, MN 55164-0504, USA.
       
Delivery of ADR certificates and overnight mail      
Shareowner Services, 1110 Centre Pointe Curve, Suite 101, Mendota Heights, MN 55120, USA.
       
Qualifying US and Canadian resident ADR holders should contact Shareowner Services for further details regarding the DRIP
 
 
1Note that these dates are provisional and subject to change.
2The average rates shown above are derived from daily spot rates during the year.
3The change is the impact to GBP reported information.
4Lines open 8.30am to 5.30pm (UK time), Monday to Friday, excluding UK public holidays in England and Wales.