Barclays PLC
Results Announcement
31 December 2018
Barclays PLC
Table of Contents
Results Announcement
Page
Notes
1
Performance Highlights
2-3
Group Chief Executive Officer’s Review
4
Group Finance Director’s Review
5-7
Results by Business
Barclays UK
8-10
Barclays International
11-14
Head Office
15
Quarterly Results Summary
16
Quarterly Results by Business
17-22
Barclays Non-Core Results
23
Discontinued Operation Results
24
Performance Management
Margins and Balances
25
Remuneration
26-27
Risk Management
Risk Management and Principal Risks
28
Credit Risk
29-40
Market Risk
41
Treasury and Capital Risk
42-51
Statement of Directors’ Responsibilities
52
Condensed Consolidated Financial Statements
53-57
Financial Statement Notes
58-63
Appendix: Non-IFRS Performance Measures
64-72
Shareholder Information
73
BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE: +44 (0) 20 7116 1000. COMPANY NO. 48839.
Notes
Barclays PLC
1
The terms Barclays or Barclays Group refer to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis
compares the year ended 31 December 2018 to the corresponding twelve months of 2017 and balance sheet analysis as at 31 December 2018 with
comparatives relating to 31 December 2017. 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; 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/annual-reports.
The information in this announcement, which was approved by the Board of Directors on 20 February 2019, does not comprise statutory accounts
within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2018, which contain an unqualified
audit report under Section 495 of the Companies Act 2006 (which does not make any statements under Section 498 of the Companies Act 2006) will
be delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.
These results will be furnished as a Form 6-K to the SEC as soon as practicable following their publication. Once furnished with the SEC, copies of
these results will also be available from the Barclays Investor Relations website at home.barclays/investor-relations/reports-and-events/annual-
reports and 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 Barclays 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 Barclays 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 64 to 72 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 Barclays 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. Examples of forward-looking statements
include, among others, statements or guidance regarding or relating to the Barclays Group’s future financial position, income growth, assets,
impairment charges, provisions, business strategy, capital, leverage and other regulatory ratios, payment of dividends (including dividend payout ratios
and expected payment 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 9 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. These may be affected by changes in legislation, the development of standards and interpretations under International Financial
Reporting Standards including the continuing impact of IFRS 9 implementation, evolving practices with regard to the interpretation and application of
accounting and regulatory standards, the outcome of current and future legal proceedings and regulatory investigations, future levels of conduct
provisions, the policies and actions of governmental and regulatory authorities, geopolitical risks and the impact of competition. In addition, factors
including (but not limited to) the following may have an effect: capital, leverage and other regulatory rules applicable to past, current and future
periods; UK, US, Eurozone and global macroeconomic and business conditions; the effects of any volatility in credit markets; market related risks such
as changes in interest rates and foreign exchange rates; effects of changes in valuation of credit market exposures; changes in valuation of issued
securities; volatility in capital markets; changes in credit ratings of any entities within the Barclays Group or any securities issued by such entities; the
potential for one or more countries exiting the Eurozone; instability as a result of the exit by the United Kingdom from the European Union and the
disruption that may subsequently result in the UK and globally; and the success of future acquisitions, disposals and other strategic transactions. A
number of these influences and factors are beyond the Barclays Group’s control. As a result, the Barclays Group’s actual future results, dividend
payments, and capital and leverage ratios may differ materially from the plans, goals, expectations and guidance set forth in the Barclays Group’s
forward-looking statements. Additional risks and factors which may impact the Barclays Group’s future financial condition and performance are
identified in our filings with the SEC (including, without limitation, our Annual Report on Form 20-F for the fiscal year ended 31 December 2018),
which are available on the SEC’s website at www.sec.gov.
Subject to our obligations under the applicable laws and regulations of the United Kingdom and the United States in relation to disclosure and ongoing
information, we undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future
events or otherwise.
Performance Highlights
Barclays PLC
2
Improved financial performance with Group return on tangible equity of 8.5%
and earnings per share of 21.9p
1
Delivering improving earnings for shareholders
Improving operating leverage and investing in medium term growth initiatives with a particular focus on capital light activities
with attractive returns
Common equity tier 1 (CET1) ratio of 13.2% is at the end-state target of c.13%, with future profit generation supporting both
investment and cash returns to shareholders
Returns
1
Group RoTE targets of >9% in
2019 and >10% in 2020
Earnings per share (EPS) of 21.9p (2017: negative 3.5p) and Group return on tangible equity
(RoTE) of 8.5% (2017: negative 1.2%), with profit before tax (PBT) up 20% to £5.7bn
Barclays UK RoTE of 16.7% (2017: 17.8%), as PBT decreased 3% to £2.4bn
Barclays International RoTE of 8.7% (2017: 4.4%), as PBT increased 10% to £3.9bn
Cost efficiency
Group cost guidance of
£13.6-13.9bn
1
in 2019, and
cost: income ratio of <60%
over time
Group operating expenses decreased 2% to £13.9bn in line with guidance after excluding a
charge for Guaranteed Minimum Pensions (GMP)
The cost: income ratio, excluding litigation and conduct charges, improved to 66% (2017:
68%)
Creating capacity within the cost base through elimination of legacy costs and productivity
savings via Barclays Execution Services (BX) to improve operating leverage and investment
in medium term growth initiatives, while delivering a reduction in absolute costs in 2018
Capital and dividends
At end-state CET1 ratio
target of c.13%
6.5p total dividend
for 2018
Generated 140bps of capital from profits, more than offset by 71bps impact from litigation
and conduct charges, 53bps from ordinary dividends and Additional Tier 1 (AT1) coupons
paid and foreseen, and 33bps from the decision to redeem Preference Shares and Additional
Tier 1 (AT1) securities in December 2018
Capital returns policy updated – progressive ordinary dividend, supplemented by share
buybacks as and when appropriate
Barclays Group profit before tax was £3.5bn (2017: £3.5bn) which included litigation and conduct charges of £2.2bn (2017:
£1.2bn) principally related to a £1.4bn settlement with the US Department of Justice (DoJ) with regard to Residential Mortgage-
Backed Securities (RMBS) and charges of £0.4bn (2017: £0.7bn) due to Payment Protection Insurance (PPI) in Q118
Excluding litigation and conduct charges, Group profit before tax increased 20% to £5.7bn despite the adverse effect of the
3% depreciation of average USD against GBP. Income was stable and operating expenses reduced 2%. The cost: income ratio
improved to 66% (2017: 68%) which included a £140m charge to reflect the estimated increase in pension obligations due to
GMP. Credit impairment charges reduced 37% to £1.5bn including updates for consensus-based macroeconomic forecasts in
the UK and US during the year and the prudent management of credit risk. This improvement was partially offset by a Q418
£150m specific charge for the impact of the anticipated economic uncertainty in the UK
Barclays UK profit before tax increased to £2.0bn (2017: £1.7bn). Excluding litigation and conduct, profit before tax decreased
3% to £2.4bn reflecting a 5% increase in impairment charges, due to a £100m charge for the anticipated economic uncertainty
in the UK. Income was stable as lower interest margins were offset by strong balance sheet growth. Expenses increased 1%
reflecting continued investment to grow the business and improve future operating efficiency. RoTE excluding litigation and
conduct was 16.7% (2017: 17.8%)
Barclays International profit before tax increased to £3.8bn (2017: £3.3bn). Income growth in Markets and the Consumer,
Cards and Payments business was offset by the non-recurrence of prior year one-offs, from a US asset card sale and a valuation
gain on Barclays’ preference shares in Visa Inc, and lower Banking income. Credit impairment charges decreased 56% primarily
due to single name recoveries, updates for consensus-based macroeconomic forecasts in the UK and US, non-recurrence of
single name charges in 2017 and the repositioning of the US cards portfolio towards a lower risk mix. Total operating
expenses decreased 2% as continued investments in business growth, talent and technology were offset by lower costs for
restructuring and structural reform. RoTE excluding litigation and conduct was 8.7% (2017: 4.4%), with the Corporate and
Investment Bank (CIB) and Consumer, Cards and Payments delivering 7.1% and 17.3% (2017: 2.2% and 16.8%) respectively
Attributable profit was £1.4bn (2017: loss of £1.9bn). This reflected the non-recurrence of a £2.5bn loss related to the sell
down of Barclays Africa Group Limited (BAGL) and a tax charge of £1.1bn compared to a 2017 charge of £2.2bn which included
a one-off net charge of £0.9bn due to the re-measurement of US deferred tax assets (DTAs). Basic earnings per share was 9.4p
(2017: loss per share of 10.3p) and excluding litigation and conduct was 21.9p (2017: loss per share of 3.5p)
Tangible net asset value (TNAV) per share was 262p (December 2017: 276p) as 21.9p of earnings per share, excluding
litigation and conduct, was more than offset by the implementation of IFRS 9, impact of litigation and conduct charges,
the redemption of Preference Shares and AT1 securities, as well as dividend payments. In Q418 TNAV increased by 2p, the third
consecutive quarter of TNAV accretion
1 Excluding litigation and conduct, with returns targets based on a Barclays Group CET1 ratio of c.13%.
Performance Highlights
Barclays PLC
3
Barclays Group results
for the year ended
31.12.18
31.12.17
£m
£m
% Change
Total income
21,136
21,076
-
Credit impairment charges and other provisions
(1,468)
(2,336)
37
Net operating income
19,668
18,740
5
Operating costs
(13,627)
(13,884)
2
UK bank levy
(269)
(365)
26
Operating expenses
(13,896)
(14,249)
2
GMP charge
(140)
-
Litigation and conduct
(2,207)
(1,207)
(83)
Total operating expenses
(16,243)
(15,456)
(5)
Other net income
69
257
(73)
Profit before tax
3,494
3,541
(1)
Tax charge
(1,122)
(2,240)
50
Profit after tax in respect of continuing operations
2,372
1,301
82
Loss after tax in respect of discontinued operation
-
(2,195)
Non-controlling interests in respect of continuing operations
(226)
(249)
9
Non-controlling interests in respect of discontinued operation
-
(140)
Other equity instrument holders
1
(752)
(639)
(18)
Attributable profit/(loss)
1,394
(1,922)
Performance measures
Return on average tangible shareholders' equity
1
3.6%
(3.6%)
Average tangible shareholders' equity (£bn)
44.1
48.9
Cost: income ratio
77%
73%
Loan loss rate (bps)
2
44
57
Basic earnings/(loss) per share
1
9.4p
(10.3p)
Dividend per share
6.5p
3.0p
Performance measures excluding litigation and conduct
3
Profit before tax
5,701
4,748
20
Attributable profit/(loss)
3,530
(772)
Return on average tangible shareholders' equity
1
8.5%
(1.2%)
Cost: income ratio
66%
68%
Basic earnings/(loss) per share
1
21.9p
(3.5p)
Balance sheet and capital management
4
£bn
£bn
Tangible net asset value per share
262p
276p
Common equity tier 1 ratio
13.2%
13.3%
Common equity tier 1 capital
41.1
41.6
Risk weighted assets
311.9
313.0
UK leverage ratio
5.1%
5.1%
UK leverage exposure
999
985
Average UK leverage ratio
5
4.5%
4.9%
Average UK leverage exposure
5
1,110
1,045
Funding and liquidity
Group liquidity pool (£bn)
227
220
Liquidity coverage ratio
169%
154%
Loan: deposit ratio
83%
81%
1 The profit after tax attributable to other equity instrument holders of £752m (2017: £639m) is offset by a tax credit recorded in reserves of £203m (2017:
£174m). The net amount of £549m (2017: £465m), along with non-controlling interests, is deducted from profit after tax in order to calculate earnings per
share and return on average tangible shareholders’ equity.
2 Comparatives calculated based on gross loans and advances at amortised cost prior to the balance sheet presentation change and IAS 39 impairment
charge.
3 Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.
4 Capital, RWAs and leverage measures are calculated applying the transitional arrangements of the Capital Requirements Regulation (CRR). This includes
IFRS 9 transitional arrangements.
5 The average UK leverage ratio and exposure are for Q4, refer to page 49 for details on the averaging methodology for both 2018 and 2017.
6 The fully loaded CET1 ratio was 12.8%, with £39.8bn of CET1 capital and £311.8bn of Risk Weights Assets (RWA), calculated without applying the transitional
arrangements of the CRR.
Group Chief Executive Officer’s Review
Barclays PLC
4
“2018 represented a very significant period for Barclays.
In the course of the year, having resolved major legacy issues and reduced the drag from low returning businesses, we started
to see the earnings potential of the bank, as the strategy we have implemented began to deliver.
This was evident in the improved performance across the Group compared to 2017.
Excluding litigation and conduct, profits before tax were up by 20% to £5,701m and our Group Return on Tangible Equity was
8.5% for the year – close to our 2019 financial target of greater than 9%.
Earnings per share excluding litigation and conduct for the full year was 21.9p. Our CET1 capital ratio of 13.2% is at our target
of around 13%, and we have grown tangible book value for three quarters in a row.
The progress made on these key measures demonstrates that our plan is working and we have a strong foundation on which
to achieve our returns targets for this year and next.
The fundamental strength of our Group rests on a diversified, though connected, portfolio of businesses. Barclays is well
diversified by geography, by product and by currency between our consumer and wholesale businesses, designed to produce
consistent and attractive returns through the economic cycle. The results for 2018 demonstrate this.
Our overriding priority for 2019 and 2020 is the attainment of our returns targets. Beyond those we are also focusing on
medium term revenue growth opportunities – opportunities which rely on technology rather than capital. Such investment
and focus beyond the immediate was simply not a viable option during the many years of reshaping this company. The
efficiencies we have driven have created the capacity to invest to strengthen and grow our business within our cost guidance
of £13.6-13.9bn for 2019, although we have the ability to flex that investment to a degree to support our RoTE targets if the
environment requires us to do so.
In 2018, based on our strong capital generation, Barclays restored the dividend to 6.5p and redeemed expensive preference
shares dating from the financial crisis. This is excellent progress, but not sufficient.
Going forward the principal calls on future earnings should now be returns to shareholders and investing to grow the business.
We will use the strong capital generation of the bank to return a greater proportion of those earnings to shareholders by way
of dividends and to supplement those dividends with additional returns, including share buybacks. I am optimistic for our
prospects to do more in 2019 and beyond.”
James E Staley, Group Chief Executive Officer
Group Finance Director’s Review
Barclays PLC
5
Results for the year reflected good progress against our strategy. Excluding litigation and conduct charges, the Group return
on tangible equity was 8.5% with earnings per share of 21.9p. Stable income and a reduction in operating expenses drove
positive jaws and an improved cost: income ratio of 66%, with a 37% improvement in credit impairment charges resulting in
a 20% increase in profit before tax despite the 3% depreciation of average USD against GBP.
The CET1 ratio of 13.2% is at the end-state target, and Barclays declares a total dividend of 6.5p for 2018.
Group performance
Profit before tax was £3,494m (2017: £3,541m). Excluding litigation and conduct charges, profit before tax increased
20% to £5,701m driven by an improvement in credit impairment charges and a reduction in operating expenses. The 3%
depreciation of average USD against GBP adversely impacted profits
Total income was £21,136m (2017: £21,076m). Barclays UK income was stable as lower interest margins were offset by
strong balance sheet growth. Barclays International income growth in Markets, which increased 9%, was offset by lower
Banking income, primarily from a 20% decrease in Corporate lending income reflecting the strategy of redeploying Risk
Weighted Assets (RWAs) to higher returning businesses. Consumer, Cards and Payments income growth was offset by
the non-recurrence of prior year one-offs, from a US asset card sale and a valuation gain on Barclays’ preference shares
in Visa Inc. Head Office income was a net expense of £273m (2017: £159m), and the Group benefited from the non-
recurrence of negative income associated with the former Non-Core division, which was closed on 1 July 2017
Credit impairment charges decreased 37% to £1,468m primarily driven by single name recoveries, updates to consensus-
based macroeconomic forecasts in the UK and US during the year, the non-recurrence of single name charges in 2017,
portfolio adjustments as IFRS 9 has continued to embed and the prudent management of credit risk, including the impact
of repositioning the US cards portfolio towards a lower risk mix. This decrease was partially offset by a Q418 £150m
specific charge for the impact of the anticipated economic uncertainty in the UK. The Barclays Group loan loss rate was
44bps (2017: 57bps)
Operating expenses of £13,896m (2017: £14,249m) reduced 2% as continued investment to grow the business and
improve future operating efficiency was more than offset by elimination of legacy costs, productivity savings and a lower
bank levy charge due to a reduction in the levy rate and the impact of prior year adjustments. The cost: income ratio,
excluding litigation and conduct, reduced to 66% (2017: 68%)
Total operating expenses of £16,243m (2017: £15,456m) included litigation and conduct charges of £2,207m (2017:
£1,207m) and a £140m charge for GMP in relation to the equalisation of obligations for members of the Barclays Bank
UK Retirement Fund (UKRF). There was no capital impact of the GMP charge as, at 31 December 2018, the UKRF remained
in accounting surplus
Other net income declined to £69m (2017: £257m) primarily reflecting the non-recurrence of gains on the sales of
Barclays’ share in VocaLink and a joint venture in Japan in Q217
The Group’s effective tax rate reduced to 32.1% (2017: 63.3%). The 2017 rate included a one-off net charge due to the
re-measurement of DTAs as a result of the reduction in the US federal corporate income tax rate. The underlying effective
tax rate was 20.9% (2017: 29.4%), due to the lower US federal corporate income tax rate and the beneficial impact of
adjustments to prior periods recognised in 2018
The Group's underlying effective tax rate for future periods is expected to be in the low-to mid-20 percents, excluding the
impact of the future accounting change that will require tax relief on payments in relation to AT1 instruments to be
recognised in the income statement, as opposed to retained earnings
Attributable profit was £1,394m (2017: loss of £1,922m). This reflected the non-recurrence of a £2.5bn loss related to
the sell down of BAGL and a tax charge of £1,122m compared to a 2017 charge of £2,240m which included a one-off net
charge of £0.9bn due to the re-measurement of US DTAs
RoTE was 8.5% (2017: negative 1.2%) and earnings per share was 21.9p (2017: loss per share of 3.5p), excluding litigation
and conduct. Statutory RoTE was 3.6% (2017: negative 3.6%) and basic earnings per share was 9.4p (2017: loss per share
10.3p)
TNAV per share was 262p (December 2017: 276p) as 21.9p of earnings per share, excluding litigation and conduct, was
more than offset by the implementation of IFRS 9, impact of litigation and conduct charges, the redemption of Preference
Shares and AT1 securities, as well as dividend payments. In Q418 TNAV increased by 2p, the third consecutive quarter of
TNAV accretion
Group Finance Director’s Review
Barclays PLC
6
Group capital and leverage
Barclays’ CET1 ratio ended the year at 13.2% (December 2017: 13.3%), at our end-state target of c.13%
CET1 capital decreased £0.5bn to £41.1bn as underlying profit generation of £4.2bn, was more than offset by £2.1bn of
litigation and conduct charges, as the bank resolved major legacy matters, £1.7bn for ordinary dividends and AT1
coupons paid and foreseen, and £1.0bn from the redemption of capital instruments
RWAs remained broadly stable at £311.9bn (December 2017: £313.0bn). The Group continued to actively manage capital
allocation to businesses during the year, including the redeployment of RWAs within CIB to higher returning businesses,
while targeting growth in selected consumer businesses in Barclays UK and Consumer, Cards and Payments. Within
Barclays UK, the increase in RWAs included the impact of a change in the regulatory methodology for the Education,
Social Housing and Local Authority (ESHLA) portfolio which was partly offset by a reduction in Head Office due to the
regulatory deconsolidation of BAGL
The UK leverage ratio remained flat at 5.1% (December 2017: 5.1%). The UK leverage exposure increased marginally to
£999bn (December 2017: £985bn) including securities financing transactions (SFTs), due to the CIB utilising leverage
balance sheet more efficiently within high returning financing businesses. The average UK leverage ratio decreased to
4.5% (December 2017: 4.9%)
Group funding and liquidity
The liquidity pool increased to £227bn (December 2017: £220bn) driven largely by net deposit growth across businesses.
The liquidity coverage ratio (LCR) increased to 169% (December 2017: 154%), equivalent to a surplus of £90bn
(December 2017: £75bn) to the 100% regulatory requirement. Barclays Group also continued to maintain surpluses to
its internal liquidity requirements. The strong liquidity position reflects the Barclays Group’s prudent approach given the
continued macroeconomic uncertainty
Barclays Group issued £12.2bn of minimum requirement for own funds and eligible liabilities (MREL) instruments from
Barclays PLC (the Parent company) in a range of tenors and currencies. Barclays Group is well advanced in its MREL
issuance plans, with a Barclays PLC MREL ratio of 28.1% as at 31 December 2018 relative to an estimated requirement
including requisite buffers of 30.0% by 1 January 2022
Barclays Bank PLC continued to issue in the shorter-term markets and Barclays Bank UK PLC issued in the shorter-term
and secured markets, helping to maintain their stable and diversified funding bases
The overall funding structure has improved further – Barclays Group has continued to reduce its reliance on short-term
wholesale funding, where the proportion maturing in less than 1 year fell to 30% (December 2017: 31%)
Other matters
In Q118 Barclays reached a settlement with the US DoJ to resolve the civil complaint brought by the DoJ in December
2016 relating to RMBS sold by Barclays between 2005 and 2007. Barclays paid a civil monetary penalty of $2.0bn (£1.4bn)
In May 2018 Barclays announced that the Crown Court had dismissed all of the charges that had been brought by the
Serious Fraud Office (SFO) against Barclays PLC and Barclays Bank PLC regarding matters which arose in the context of
Barclays’ capital raisings in 2008. In October 2018, the High Court denied the SFO’s application to reinstate the charges,
which were consequently dismissed
Additional charges of £0.4bn (2017: £0.7bn) relating to PPI were recognised in Q118. The remaining PPI provision as at
31 December 2018 was £0.9bn (December 2017: £1.6bn) to cover claims through to the deadline of 29 August 2019.
Management views its current PPI provision as appropriate, but will continue to closely monitor complaint trends and the
associated provision adequacy
On 1 April 2018 Barclays successfully established its ring-fenced bank, Barclays Bank UK PLC, after receiving approval
from the Prudential Regulation Authority (PRA) and the High Court of Justice of England and Wales to implement the
ring-fencing transfer scheme under Part VII of the Financial Services Markets Act 2000
In Q418 Barclays Bank Ireland PLC (BBI) received confirmation of its extended banking licence as part of Barclays’ plans
to expand BBI in anticipation of the UK’s departure from the EU in March 2019. On 29 January 2019 Barclays received
approval from the High Court of Justice of England and Wales for its banking business transfer scheme application under
Part VII of the Financial Services and Markets Act 2000
Group Finance Director’s Review
Barclays PLC
7
Dividends
A half year dividend of 2.5p per share was paid on 17 September 2018. Barclays declares a full year dividend of 4.0p per
share, resulting in a total dividend of 6.5p per share for 2018
Barclays understands the importance of delivering attractive 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 supplement the ordinary
dividends with additional cash returns, including share buybacks, to shareholders as and when appropriate
Outlook and guidance
Barclays is on track in the execution of its strategy and continues to target a RoTE
1
of greater than 9% for 2019 and greater
than 10% for 2020 and operating expenses
1
guidance in the range of £13.6–13.9bn for 2019. The Group’s 2018 results
reflect good progress towards these targets
Tushar Morzaria, Group Finance Director
1 Excluding litigation and conduct, with returns targets based on a Barclays Group CET1 ratio of c.13%.
Results by Business
Barclays PLC
8
Barclays UK
Year ended
Year ended
31.12.18
31.12.17
Income statement information
£m
£m
% Change
Net interest income
6,028
6,086
(1)
Net fee, commission and other income
1,355
1,297
4
Total income
7,383
7,383
-
Credit impairment charges and other provisions
(826)
(783)
(5)
Net operating income
6,557
6,600
(1)
Operating costs
(4,075)
(4,030)
(1)
UK bank levy
(46)
(59)
22
Litigation and conduct
(483)
(759)
36
Total operating expenses
(4,604)
(4,848)
5
Other net income/(expenses)
3
(5)
Profit before tax
1,956
1,747
12
Attributable profit
1,158
853
36
Balance sheet information
£bn
£bn
Loans and advances to customers at amortised cost
187.6
183.8
Total assets
249.7
237.4
Customer deposits at amortised cost
197.3
193.4
Loan: deposit ratio
96%
95%
Risk weighted assets
75.2
70.9
Period end allocated tangible equity
10.2
9.6
Key facts
Average loan to value of mortgage portfolio
48%
48%
Average loan to value of new mortgage lending
65%
64%
Number of branches
1,058
1,208
Mobile banking active customers
7.3m
6.4m
30 day arrears rate - Barclaycard Consumer UK
1.8%
1.8%
Performance measures
Return on average allocated tangible equity
11.9%
9.8%
Average allocated tangible equity (£bn)
10.0
9.1
Cost: income ratio
62%
66%
Loan loss rate (bps)
1
43
42
Net interest margin
3.23%
3.49%
Performance measures excluding litigation and conduct
2
£m
£m
Profit before tax
2,439
2,506
(3)
Attributable profit
1,630
1,586
3
Return on average allocated tangible equity
16.7%
17.8%
Cost: income ratio
56%
55%
1 Comparatives calculated based on gross loans and advances at amortised cost prior to the balance sheet presentation change and IAS 39 impairment
charge.
2 Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.
Results by Business
Barclays PLC
9
Analysis of Barclays UK
Year ended
Year ended
31.12.18
31.12.17
Analysis of total income
£m
£m
% Change
Personal Banking
1
4,006
4,214
(5)
Barclaycard Consumer UK
2,104
1,977
6
Business Banking
1
1,273
1,192
7
Total income
7,383
7,383
-
Analysis of credit impairment charges and other provisions
Personal Banking
1
(173)
(221)
22
Barclaycard Consumer UK
(590)
(541)
(9)
Business Banking
1
(63)
(21)
Total credit impairment charges and other provisions
(826)
(783)
(5)
Analysis of loans and advances to customers at amortised cost
£bn
£bn
Personal Banking
1
146.0
141.3
Barclaycard Consumer UK
15.3
16.4
Business Banking
1
26.3
26.1
Total loans and advances to customers at amortised cost
187.6
183.8
Analysis of customer deposits at amortised cost
Personal Banking
1
154.0
153.1
Barclaycard Consumer UK
-
-
Business Banking
1
43.3
40.3
Total customer deposits at amortised cost
197.3
193.4
1 In Q218, Wealth was reclassified from Wealth, Entrepreneurs & Business Banking (now named Business Banking) to Personal Banking. Comparatives have
been restated.
Results by Business
Barclays PLC
10
In 2018, Barclays officially stood up Barclays Bank UK PLC as part of structural reform, being the first bank in the UK to become
legally ring-fenced. Throughout 2018, Barclays UK has maintained its position in the market as a leader in innovation,
investing to transform customer interactions. Building long term, meaningful customer and client relationships continues to
deliver sustainable balance sheet growth and returns, within a prudent risk appetite. This is further enhanced by investment
to automate and digitise the provision of tailored products and services, meeting customers’ needs on their terms.
2018 compared to 2017
Income statement
RoTE excluding litigation and conduct was 16.7% (2017: 17.8%) reflecting the continuing strength of Barclays UK
business. Including litigation and conduct charges of £483m (2017: £759m), RoTE increased to 11.9% (2017: 9.8%)
Total income was stable at £7,383m (2017: £7,383m) as lower interest margins were offset by strong balance sheet
growth in secured lending and customer deposits
– Personal Banking income decreased 5% to £4,006m as continued momentum in mortgage lending and growth in
customer deposits was more than offset by the non-recurrence of an update to effective interest rate modelling in
Q417, a valuation gain on Barclays’ preference shares in Visa Inc. in Q117 and the realignment of clients from Barclays
UK to Barclays International as part of structural reform
– Barclaycard Consumer UK income increased 6% to £2,104m reflecting a focus on sustainable growth and the non-
recurrence of remediation provisioning in H217
– Business Banking income increased 7% to £1,273m driven by strong deposit growth and the realignment of clients
from Barclays International to Barclays UK as part of structural reform
– Net interest margin decreased 26bps to 3.23% reflecting growth in secured lending at lower margins and the
integration of the ESHLA portfolio
Credit impairment charges increased 5% to £826m primarily due to a Q418 £100m specific charge for the impact of the
anticipated economic uncertainty in the UK. This was partially offset by improved consensus-based macroeconomic
forecasts during the year and the continued prudent management of credit risk reflected in the broadly stable 30 and 90
day arrears rates in UK cards of 1.8% (2017: 1.8%) and 0.9% (2017: 0.8%) respectively
Operating expenses excluding litigation and conduct increased 1% to £4,121m as continued investment to grow the
business, including digitisation of the bank and improvements to future operating efficiency, were partially offset by cost
efficiencies and lower costs of setting up the ring-fenced bank. The cost: income ratio excluding litigation and conduct
was 56% (2017: 55%)
Balance sheet
Loans and advances to customers at amortised cost increased 2% to £187.6bn reflecting £4.6bn of mortgage growth
Total assets increased 5% to £249.7bn reflecting increases in the liquidity pool including the transfer of treasury assets
from Head Office and loans and advances to customers
Customer deposits at amortised cost increased 2% to £197.3bn as strong deposit growth was partially offset by the net
realignment of clients between Barclays UK and Barclays International as part of structural reform
RWAs increased to £75.2bn (December 2017: £70.9bn) primarily due to growth in mortgages and UK cards, and
regulatory methodology changes for the ESHLA portfolio
Results by Business
Barclays PLC
11
Barclays International
Year ended
Year ended
31.12.18
31.12.17
Income statement information
£m
£m
% Change
Net interest income
3,815
4,307
(11)
Net trading income
4,450
3,971
12
Net fee, commission and other income
5,761
6,104
(6)
Total income
14,026
14,382
(2)
Credit impairment charges and other provisions
(658)
(1,506)
56
Net operating income
13,368
12,876
4
Operating costs
(9,324)
(9,321)
-
UK bank levy
(210)
(265)
21
Litigation and conduct
(127)
(269)
53
Total operating expenses
(9,661)
(9,855)
2
Other net income
68
254
(73)
Profit before tax
3,775
3,275
15
Attributable profit
2,441
847
Balance sheet information
£bn
£bn
Loans and advances at amortised cost
127.2
126.8
Trading portfolio assets
104.0
113.0
Derivative financial instrument assets
222.1
236.2
Derivative financial instrument liabilities
219.6
237.8
Financial assets at fair value through the income statement
144.7
104.1
Total assets
862.1
856.1
Deposits at amortised cost
197.2
187.3
Loan: deposit ratio
65%
68%
Risk weighted assets
210.7
210.3
Period end allocated tangible equity
29.9
27.5
Performance measures
Return on average allocated tangible equity
8.4%
3.4%
Average allocated tangible equity (£bn)
31.0
28.1
Cost: income ratio
69%
69%
Loan loss rate (bps)
1
50
75
Net interest margin
4.11%
4.16%
Performance measures excluding litigation and conduct
2
£m
£m
Profit before tax
3,902
3,544
10
Attributable profit
2,547
1,107
Return on average allocated tangible equity
8.7%
4.4%
Cost: income ratio
68%
67%
1 Comparatives calculated based on gross loans and advances at amortised cost prior to the balance sheet presentation change and IAS 39 impairment
charge.
2 Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.
Results by Business
Barclays PLC
12
Analysis of Barclays International
Corporate and Investment Bank
Year ended
Year ended
31.12.18
31.12.17
Income statement information
£m
£m
% Change
FICC
1
2,863
2,875
-
Equities
2,037
1,629
25
Markets
4,900
4,504
9
Banking fees
2,531
2,612
(3)
Corporate lending
878
1,093
(20)
Transaction banking
1,627
1,629
-
Banking
5,036
5,334
(6)
Other
(171)
40
Total income
9,765
9,878
(1)
Credit impairment releases/(charges) and other provisions
150
(213)
Net operating income
9,915
9,665
3
Operating expenses
(7,281)
(7,475)
3
Litigation and conduct
(68)
(267)
75
Total operating expenses
(7,349)
(7,742)
5
Other net income
27
133
(80)
Profit before tax
2,593
2,056
26
Balance sheet information
£bn
£bn
Loans and advances at amortised cost
86.4
88.2
Deposits at amortised cost
136.3
128.0
Risk weighted assets
170.9
176.2
Performance measures
Return on average allocated tangible equity
6.9%
1.1%
Average allocated tangible equity (£bn)
26.0
24.0
Performance measures excluding litigation and conduct
2
£m
£m
Profit before tax
2,661
2,323
15
Return on average allocated tangible equity
7.1%
2.2%
1 Fixed income, currencies and commodities (FICC) is composed of Credit and Macro income.
2 Refer to pages 64 to 72 for more information and calculations of performance measures excluding litigation and conduct.
Results by Business
Barclays PLC
13
Analysis of Barclays International
Consumer, Cards and Payments
Year ended
Year ended
31.12.18
31.12.17
Income statement information
£m
£m
% Change
Total income
4,261
4,504
(5)
Credit impairment charges and other provisions
(808)
(1,293)
38
Net operating income
3,453
3,211
8
Operating expenses
(2,253)
(2,111)
(7)
Litigation and conduct
(59)
(2)
Total operating expenses
(2,312)
(2,113)
(9)
Other net income
41
121
(66)
Profit before tax
1,182
1,219
(3)
Balance sheet information
£bn
£bn
Loans and advances at amortised cost
40.8
38.6
Deposits at amortised cost
60.9
59.3
Risk weighted assets
39.8
34.1
Key facts
30 day arrears rate – Barclaycard US
2.7%
2.6%
Total number of Barclaycard business clients
374,000
366,000
Value of payments processed (£bn)
344
322
Performance measures
Return on average allocated tangible equity
16.5%
16.7%
Average allocated tangible equity (£bn)
5.0
4.2
Performance measures excluding litigation and conduct
1
£m
£m
Profit before tax
1,241
1,221
2
Return on average allocated tangible equity
17.3%
16.8%
1 Refer to pages 64 to 72 for more information and calculations of performance measures excluding litigation and conduct.
Results by Business
Barclays PLC
14
In 2018, Barclays International made good progress on executing our strategy and improving returns, delivering underlying growth
in Consumer, Cards & Payments; a strong performance in Markets, where the global ranking improved one place; and a record year
for Advisory within Banking. This progress gives confidence that by continuing to build out the businesses through targeted
deployment of financial resources and investments in talent and technology, growth can be accelerated towards achieving increased
returns.
2018 compared to 2017
Income statement
Profit before tax increased 10% to £3,902m achieving a RoTE of 8.7% (2017: 4.4%), reflecting improved returns in both CIB of
7.1% (2017: 2.2%) and Consumer, Cards and Payments of 17.3% (2017: 16.8%) excluding litigation and conduct
The 3% depreciation of average USD against GBP adversely impacted profits and income, and positively impacted credit
impairment charges and operating expenses
Total income was £14,026m (2017: £14,382m)
– CIB income of £9,765m decreased 1% as Markets income increased 9% to £4,900m, reflecting gains in market share
1
, offset
by a decrease in Banking income of 6% to £5,036m
– FICC income was stable at £2,863m (2017: £2,875m) with significant share gains despite a challenging environment
– Equities income increased 25% to £2,037m becoming one of the highest growing Equities franchises relative to peers,
substantially improving our global ranking. This was driven by strength in derivatives and continued growth in the equity
financing franchise through increased client balances, together with technology investment, which resulted in higher
electronic revenues
– Banking fee income decreased 3% to £2,531m as Barclays maintained its highest rank and global fee share in 4 years,
including a record year in Advisory, which was more than offset by debt and equity underwriting fees being down across
the industry
– Corporate lending income reduced 20% to £878m reflecting the strategy of redeploying RWAs within the CIB towards
higher returning business and the transfer of clients between Barclays UK and Barclays International as part of structural
reform
– Transaction banking income was stable at £1,627m (2017: £1,629m) as strong and targeted growth in deposits was
offset by the transfer of clients between Barclays UK and Barclays International as part of structural reform
– Consumer, Cards and Payments income decreased 5% to £4,261m. Excluding material one-off items in both 2017 and 2018,
related to US cards portfolio sales and revaluation of Barclays preference shares in Visa Inc, underlying income increased due
to growth in US cards
Credit impairment charges decreased 56% to £658m
– CIB credit impairment charges decreased to a release of £150m (2017: charge of £213m) primarily due to single name
recoveries, improved consensus-based macroeconomic forecasts during the year, the non-recurrence of single name
charges in 2017 and the prudent management of credit risk, partially offset by a Q418 £50m specific charge for the
anticipated economic uncertainty in the UK
– Consumer, Cards and Payments credit impairment charges decreased 38% to £808m reflecting the non-recurrence of a
£168m charge in Q317 relating to deferred consideration from the Q117 asset sale in US cards, improved consensus-based
macroeconomic forecasts in the US and the impact of repositioning the US cards portfolio towards a lower risk mix
Total operating expenses decreased 2% to £9,661m as continued investments in business growth, talent and technology were
offset by lower restructuring and structural reform costs, and a reduced impact from the change in compensation awards
introduced in Q416
Other net income decreased to £68m (2017: £254m) due to the non-recurrence of a gain of £109m on the sale of Barclays’ share
in VocaLink to MasterCard and a gain of £76m on the sale of a joint venture in Japan in Q217
Attributable profit increased to £2,441m (2017: £847m) as 2017 was impacted by the one-off tax charge due to the re-
measurement of US DTAs
Balance sheet
Loans and advances at amortised cost remained broadly flat at £127.2bn (December 2017: £126.8bn)
Derivative financial instrument assets and liabilities decreased £14.1bn to £222.1bn and £18.2bn to £219.6bn respectively, due
to a decrease in interest rate derivatives, driven by an increase in major interest rate forward curves, and the adoption of daily
settlement under the London Clearing House (LCH) rules, partially offset by increased foreign exchange and equity derivative
volumes
Financial assets at fair value through the income statement increased £40.6bn to £144.7bn primarily due to the impact of the
transition to IFRS 9 and increased reverse repurchase agreements activity
Total assets increased £6.0bn to £862.1bn including the transfer of treasury assets from Head Office
Deposits at amortised cost increased £9.9bn to £197.2bn, due to the integration of treasury liabilities from Head Office and a
strong and targeted increase in deposits
RWAs were in line at £210.7bn (December 2017: £210.3bn) as reductions in CIB were offset by increased lending in Consumer,
Cards & Payments
1 All Markets ranks and shares: Coalition, FY18 Preliminary Competitor Analysis based on the Coalition Index and Barclays’ internal business structure.
Results by Business
Barclays PLC
15
Head Office
Year ended
Year ended
31.12.18
31.12.17
Income statement information
£m
£m
% Change
Net interest income
(781)
(435)
(80)
Net fee, commission and other income
508
276
84
Total income
(273)
(159)
(72)
Credit impairment releases/(charges) and other provisions
16
(17)
Net operating income
(257)
(176)
(46)
Operating costs
(228)
(277)
18
UK bank levy
(13)
(41)
68
GMP charge
(140)
-
Litigation and conduct
(1,597)
(151)
Total operating expenses
(1,978)
(469)
Other net expenses
(2)
(189)
99
Loss before tax
(2,237)
(834)
Attributable loss
(2,205)
(868)
Balance sheet information
£bn
£bn
Total assets
21.5
39.7
Risk weighted assets
26.0
31.8
Period end allocated tangible equity
4.9
10.0
Performance measures
Average allocated tangible equity (£bn)
3.1
9.3
Performance measures excluding litigation and conduct
1
£m
£m
Loss before tax
(640)
(683)
6
Attributable loss
(647)
(731)
11
1 Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.
2018 compared to 2017
Income statement
Loss before tax excluding litigation and conduct was £640m (2017: £683m). Including litigation and conduct charges of
£1,597m (2017: £151m) primarily related to the £1,420m settlement with the US DoJ relating to RMBS, loss before tax
was £2,237m (2017: £834m)
Total income was an expense of £273m (2017: £159m) reflecting legacy capital instrument funding costs of £351m and
hedge accounting expenses. This was partially offset by a one-off gain of £155m from the settlement of receivables
relating to the Lehman Brothers acquisition in Q218, lower net expenses from treasury operations, higher Absa Group
Limited dividend income and mark-to-market gains on legacy investments
Operating expenses excluding litigation and conduct and a GMP charge, reduced to £241m (2017: £318m) driven by
lower costs associated with legacy Non-Core assets and businesses, and reduced bank levy. Total operating expenses of
£1,978m (2017: £469m) included litigation and conduct charges of £1,597m (2017: £151m) and a £140m charge for
GMP in relation to the equalisation of obligations for members of the Barclays Bank UKRF
Other net expenses were £2m (2017: £189m) due to non-recurrence of a £180m expense in Q217 on the recycling of the
currency translation reserve to the income statement on the sale of Barclays Bank Egypt
Balance sheet
Total assets decreased to £21.5bn (December 2017: £39.7bn) reflecting the transfer of treasury assets to Barclays UK and
Barclays International as part of structural reform
RWAs decreased to £26.0bn (December 2017: £31.8bn) reflecting the net reduction due to BAGL regulatory
deconsolidation
Quarterly Results Summary
Barclays PLC
16
Barclays Group
Q418
Q318
Q218
Q118
Q417
Q317
Q217
1
Q117
1
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
2,296
2,388
2,190
2,188
2,272
2,475
2,579
2,519
Net fee, commission and other income
2,777
2,741
3,386
3,170
2,750
2,698
2,479
3,304
Total income
5,073
5,129
5,576
5,358
5,022
5,173
5,058
5,823
Credit impairment charges and other
provisions
(643)
(254)
(283)
(288)
(573)
(709)
(527)
(527)
Net operating income
4,430
4,875
5,293
5,070
4,449
4,464
4,531
5,296
Operating costs
(3,624)
(3,329)
(3,310)
(3,364)
(3,621)
(3,274)
(3,398)
(3,591)
UK bank levy
(269)
-
-
-
(365)
-
-
-
Operating expenses
(3,893)
(3,329)
(3,310)
(3,364)
(3,986)
(3,274)
(3,398)
(3,591)
GMP charge
(140)
-
-
-
-
-
-
-
Litigation and conduct
(60)
(105)
(81)
(1,961)
(383)
(81)
(715)
(28)
Total operating expenses
(4,093)
(3,434)
(3,391)
(5,325)
(4,369)
(3,355)
(4,113)
(3,619)
Other net income/(expenses)
37
20
(7)
19
13
(2)
241
5
Profit/(loss) before tax
374
1,461
1,895
(236)
93
1,107
659
1,682
Tax charge
(145)
(240)
(433)
(304)
(1,138)
(324)
(305)
(473)
Profit/(loss) after tax in respect of
continuing operations
229
1,221
1,462
(540)
(1,045)
783
354
1,209
Loss after tax in respect of discontinued
operation
-
-
-
-
-
-
(1,537)
(658)
Attributable to:
Ordinary equity holders of the parent
(76)
1,002
1,232
(764)
(1,294)
583
(1,401)
190
Other equity instrument holders
230
176
175
171
181
157
162
139
Non-controlling interests in respect of
continuing operations
75
43
55
53
68
43
59
79
Non-controlling interests in respect of
discontinued operation
-
-
-
-
-
-
(3)
143
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Total assets
1,133.3
1,170.8
1,149.6
1,142.2
1,133.2
1,149.3
1,135.3
1,203.8
Tangible net asset value per share
262p
260p
259p
251p
276p
281p
284p
292p
Risk weighted assets
311.9
316.2
319.3
317.9
313.0
324.3
327.4
360.9
Average UK leverage exposure
1,110.0
1,119.0
1,081.8
1,089.9
1,044.6
1,035.1
1,092.2
1,130.4
Performance measures
Return on average tangible shareholders'
equity
(0.1%)
9.4%
11.8%
(6.5%)
(10.3%)
5.1%
(11.0%)
1.8%
Average tangible shareholders' equity (£bn)
44.3
44.6
43.5
44.2
48.1
48.9
49.3
49.4
Cost: income ratio
81%
67%
61%
99%
87%
65%
81%
62%
Loan loss rate (bps)
2
77
30
35
36
56
66
49
47
Basic (loss)/earnings per share
(0.1p)
6.1p
7.5p
(4.2p)
(7.3p)
3.7p
(8.0p)
1.3p
Performance measures excluding
litigation and conduct
3
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
434
1,566
1,976
1,725
476
1,188
1,374
1,710
Attributable (loss)/profit
(14)
1,087
1,291
1,166
(943)
660
(698)
209
Return on average tangible shareholders'
equity
0.4%
10.2%
12.3%
11.0%
(7.4%)
5.7%
(5.3%)
2.0%
Cost: income ratio
79%
65%
59%
63%
79%
63%
67%
62%
Basic earnings/(loss) per share
0.3p
6.6p
7.8p
7.1p
(5.3p)
4.1p
(3.8p)
1.5p
1 Results included Barclays Non-Core and the Africa Banking discontinued operation; refer to pages 23 to 24 for further detail.
2 Comparatives calculated based on gross loans and advances at amortised cost prior to the balance sheet presentation change and IAS 39 impairment
charge.
3 Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results by Business
Barclays PLC
17
Barclays UK
Q418
Q318
Q218
Q118
Q417
Q317
Q217
Q117
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
1,513
1,529
1,493
1,493
1,540
1,501
1,534
1,511
Net fee, commission and other income
350
367
343
295
330
351
286
330
Total income
1,863
1,896
1,836
1,788
1,870
1,852
1,820
1,841
Credit impairment charges and other provisions
(296)
(115)
(214)
(201)
(184)
(201)
(220)
(178)
Net operating income
1,567
1,781
1,622
1,587
1,686
1,651
1,600
1,663
Operating costs
(1,114)
(988)
(968)
(1,005)
(1,117)
(980)
(974)
(959)
UK bank levy
(46)
-
-
-
(59)
-
-
-
Litigation and conduct
(15)
(54)
(3)
(411)
(53)
(11)
(699)
4
Total operating expenses
(1,175)
(1,042)
(971)
(1,416)
(1,229)
(991)
(1,673)
(955)
Other net (expenses)/income
(2)
1
5
(1)
(5)
1
(1)
-
Profit/(loss) before tax
390
740
656
170
452
661
(74)
708
Attributable profit/(loss)
232
500
464
(38)
245
423
(285)
470
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances to customers at amortised
cost
187.6
186.7
185.3
184.3
183.8
182.2
166.6
164.5
Total assets
249.7
252.0
245.9
235.2
237.4
230.4
203.4
203.0
Customer deposits at amortised cost
197.3
195.8
194.3
192.0
193.4
189.3
187.4
184.4
Loan: deposit ratio
96%
96%
96%
96%
95%
97%
89%
90%
Risk weighted assets
75.2
74.8
75.0
72.5
70.9
70.0
66.1
66.3
Period end allocated tangible equity
10.2
10.1
10.2
9.8
9.6
9.5
8.6
8.8
Performance measures
Return on average allocated tangible equity
9.6%
20.1%
18.8%
(1.1%)
10.7%
18.4%
(12.7%)
21.6%
Average allocated tangible equity (£bn)
10.1
10.1
10.1
9.8
9.6
9.4
8.7
8.9
Cost: income ratio
63%
55%
53%
79%
66%
54%
92%
52%
Loan loss rate (bps)
1
61
24
45
43
39
43
52
43
Net interest margin
3.20%
3.22%
3.22%
3.27%
3.32%
3.28%
3.70%
3.69%
Performance measures excluding
litigation and conduct
2
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
405
794
659
581
505
672
625
704
Attributable profit
244
548
465
373
282
431
406
467
Return on average allocated tangible equity
10.1%
22.0%
18.8%
15.7%
12.3%
18.7%
19.1%
21.5%
Cost: income ratio
62%
52%
53%
56%
63%
53%
54%
52%
1 Comparatives calculated based on gross loans and advances at amortised cost prior to the balance sheet presentation change and IAS 39 impairment
charge.
2 Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results by Business
Barclays PLC
18
Analysis of Barclays UK
Q418
Q318
Q218
Q118
Q417
Q317
Q217
Q117
Analysis of total income
£m
£m
£m
£m
£m
£m
£m
£m
Personal Banking
1
998
1,021
1,015
972
1,116
1,022
1,033
1,043
Barclaycard Consumer UK
522
551
504
527
445
539
495
498
Business Banking
1
343
324
317
289
309
291
292
300
Total income
1,863
1,896
1,836
1,788
1,870
1,852
1,820
1,841
Analysis of credit impairment
(charges)/releases and other provisions
Personal Banking
1
(44)
(8)
(49)
(72)
(56)
(57)
(60)
(48)
Barclaycard Consumer UK
(250)
(88)
(139)
(113)
(124)
(145)
(149)
(123)
Business Banking
1
(2)
(19)
(26)
(16)
(4)
1
(11)
(7)
Total credit impairment charges and other
provisions
(296)
(115)
(214)
(201)
(184)
(201)
(220)
(178)
Analysis of loans and advances to customers
at amortised cost
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Personal Banking
1
146.0
145.4
143.6
142.1
141.3
140.4
138.6
136.6
Barclaycard Consumer UK
15.3
15.3
15.2
15.2
16.4
16.3
16.2
16.1
Business Banking
1
26.3
26.0
26.5
27.0
26.1
25.5
11.8
11.8
Total loans and advances to customers at
amortised cost
187.6
186.7
185.3
184.3
183.8
182.2
166.6
164.5
Analysis of customer deposits at amortised
cost
Personal Banking
1
154.0
153.4
152.9
151.9
153.1
152.1
151.1
149.2
Barclaycard Consumer UK
-
-
-
-
-
-
-
-
Business Banking
1
43.3
42.4
41.4
40.1
40.3
37.2
36.3
35.2
Total customer deposits at amortised cost
197.3
195.8
194.3
192.0
193.4
189.3
187.4
184.4
1 In Q218, Wealth was reclassified from Wealth, Entrepreneurs & Business Banking (now named Business Banking) to Personal Banking. Comparatives have
been restated.
Quarterly Results by Business
Barclays PLC
19
Barclays International
Q418
Q318
Q218
Q118
Q417
Q317
Q217
Q117
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
984
965
853
1,013
987
1,148
1,060
1,112
Net trading income
837
1,103
1,094
1,416
935
815
1,039
1,182
Net fee, commission and other income
1,400
1,222
1,760
1,379
1,397
1,352
1,511
1,844
Total income
3,221
3,290
3,707
3,808
3,319
3,315
3,610
4,138
Credit impairment charges and other provisions
(354)
(143)
(68)
(93)
(386)
(495)
(279)
(346)
Net operating income
2,867
3,147
3,639
3,715
2,933
2,820
3,331
3,792
Operating costs
(2,441)
(2,277)
(2,306)
(2,300)
(2,428)
(2,182)
(2,276)
(2,435)
UK bank levy
(210)
-
-
-
(265)
-
-
-
Litigation and conduct
(33)
(32)
(47)
(15)
(255)
(5)
4
(13)
Total operating expenses
(2,684)
(2,309)
(2,353)
(2,315)
(2,948)
(2,187)
(2,272)
(2,448)
Other net income
32
12
11
13
21
19
202
12
Profit before tax
215
850
1,297
1,413
6
652
1,261
1,356
Attributable (loss)/profit
(72)
650
890
973
(1,168)
359
819
837
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances at amortised cost
127.2
132.4
125.5
117.5
126.8
134.4
135.2
145.5
Trading portfolio assets
104.0
124.6
116.5
114.9
113.0
91.2
83.3
83.0
Derivative financial instrument assets
222.1
214.8
228.2
214.1
236.2
242.8
108.4
105.3
Derivative financial instrument liabilities
219.6
213.7
224.9
210.8
237.8
242.9
116.8
112.8
Financial assets at fair value through the income
statement
144.7
147.8
141.2
150.6
104.1
103.7
94.1
81.3
Total assets
862.1
900.2
886.5
866.6
856.1
867.1
681.6
677.2
Deposits at amortised cost
197.2
200.3
191.0
167.2
187.3
191.9
192.0
189.4
Loan: deposit ratio
65%
66%
66%
70%
68%
70%
70%
77%
Risk weighted assets
210.7
214.6
218.0
214.2
210.3
218.2
212.2
214.3
Period end allocated tangible equity
29.9
30.2
30.5
30.0
27.5
28.0
26.8
27.1
Performance measures
Return on average allocated tangible equity
(0.3%)
8.8%
11.8%
13.4%
(15.9%)
5.4%
12.4%
12.5%
Average allocated tangible equity (£bn)
31.3
31.1
31.4
30.1
28.5
28.9
27.4
27.7
Cost: income ratio
83%
70%
63%
61%
89%
66%
63%
59%
Loan loss rate (bps)
1
107
41
22
31
76
88
54
62
Net interest margin
3.98%
3.87%
4.03%
4.57%
4.31%
4.21%
4.07%
4.06%
Performance measures excluding
litigation and conduct
2
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
248
882
1,344
1,428
261
657
1,257
1,369
Attributable (loss)/profit
(38)
676
924
985
(918)
363
816
846
Return on average allocated tangible equity
0.2%
9.2%
12.2%
13.6%
(12.4%)
5.5%
12.3%
12.6%
Cost: income ratio
82%
69%
62%
60%
81%
66%
63%
59%
1 Comparatives calculated based on gross loans and advances at amortised cost prior to the balance sheet presentation change and IAS 39 impairment
charge.
2 Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results by Business
Barclays PLC
20
Analysis of Barclays International
Corporate and Investment Bank
Q418
Q318
Q218
Q118
Q417
Q317
Q217
Q117
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
FICC
570
688
736
869
607
627
752
889
Equities
375
471
601
590
362
350
455
462
Markets
945
1,159
1,337
1,459
969
977
1,207
1,351
Banking fees
625
519
704
683
605
607
674
726
Corporate lending
243
197
198
240
269
277
278
269
Transaction banking
412
416
385
414
408
419
404
398
Banking
1,280
1,132
1,287
1,337
1,282
1,303
1,356
1,393
Other
(74)
(56)
(44)
3
1
-
1
38
Total income
2,151
2,235
2,580
2,799
2,252
2,280
2,564
2,782
Credit impairment (charges)/releases and other
provisions
(35)
3
23
159
(127)
(36)
1
(51)
Net operating income
2,116
2,238
2,603
2,958
2,125
2,244
2,565
2,731
Operating expenses
(2,023)
(1,712)
(1,773)
(1,773)
(2,129)
(1,656)
(1,760)
(1,930)
Litigation and conduct
(23)
(32)
-
(13)
(255)
(5)
4
(11)
Total operating expenses
(2,046)
(1,744)
(1,773)
(1,786)
(2,384)
(1,661)
(1,756)
(1,941)
Other net income
15
4
5
3
7
10
116
-
Profit/(loss) before tax
85
498
835
1,175
(252)
593
925
790
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances at amortised cost
86.4
93.3
87.8
81.3
88.2
95.4
96.7
106.8
Deposits at amortised cost
136.3
137.6
130.3
107.6
128.0
133.4
134.1
131.0
Risk weighted assets
170.9
175.9
180.4
181.3
176.2
185.2
178.9
180.6
Performance measures
Return on average allocated tangible equity
(1.3%)
6.6%
9.1%
13.0%
(20.2%)
5.9%
11.1%
8.2%
Average allocated tangible equity (£bn)
26.0
25.9
26.4
25.6
24.3
24.8
23.3
23.5
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
108
530
835
1,188
3
598
921
801
Return on average allocated tangible equity
(0.9%)
7.0%
9.1%
13.2%
(16.1%)
6.0%
11.1%
8.3%
1 Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results by Business
Barclays PLC
21
Analysis of Barclays International
Consumer, Cards and Payments
Q418
Q318
Q218
Q118
Q417
Q317
Q217
Q117
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Total income
1,070
1,055
1,127
1,009
1,067
1,035
1,046
1,356
Credit impairment charges and other provisions
(319)
(146)
(91)
(252)
(259)
(459)
(280)
(295)
Net operating income
751
909
1,036
757
808
576
766
1,061
Operating expenses
(628)
(565)
(533)
(527)
(564)
(526)
(516)
(505)
Litigation and conduct
(10)
-
(47)
(2)
-
-
-
(2)
Total operating expenses
(638)
(565)
(580)
(529)
(564)
(526)
(516)
(507)
Other net income
17
8
6
10
14
9
86
12
Profit before tax
130
352
462
238
258
59
336
566
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances at amortised cost
40.8
39.1
37.7
36.2
38.6
39.0
38.5
38.7
Deposits at amortised cost
60.9
62.7
60.7
59.6
59.3
58.5
57.9
58.4
Risk weighted assets
39.8
38.7
37.6
32.9
34.1
33.0
33.3
33.7
Performance measures
Return on average allocated tangible equity
4.8%
19.8%
26.2%
15.6%
8.9%
2.2%
19.4%
36.4%
Average allocated tangible equity (£bn)
5.3
5.2
5.0
4.5
4.2
4.2
4.1
4.2
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
140
352
509
240
258
59
336
568
Return on average allocated tangible equity
5.4%
19.9%
28.9%
15.7%
9.0%
2.2%
19.4%
36.5%
1 Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.
Quarterly Results by Business
Barclays PLC
22
Head Office
Q418
Q318
Q218
Q118
Q417
Q317
Q217
Q117
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
(201)
(106)
(156)
(318)
(254)
(174)
108
(115)
Net fee, commission and other income
190
49
189
80
87
180
(24)
33
Total income
(11)
(57)
33
(238)
(167)
6
84
(82)
Credit impairment releases/(charges) and other
provisions
7
4
(1)
6
(3)
(13)
(1)
-
Net operating (expenses)/income
(4)
(53)
32
(232)
(170)
(7)
83
(82)
Operating costs
(69)
(64)
(36)
(59)
(76)
(112)
(40)
(49)
UK bank levy
(13)
-
-
-
(41)
-
-
-
GMP charge
(140)
-
-
-
-
-
-
-
Litigation and conduct
(12)
(19)
(31)
(1,535)
(75)
(65)
(1)
(10)
Total operating expenses
(234)
(83)
(67)
(1,594)
(192)
(177)
(41)
(59)
Other net income/(expenses)
7
7
(23)
7
(3)
(22)
(164)
-
Loss before tax
(231)
(129)
(58)
(1,819)
(365)
(206)
(122)
(141)
Attributable loss
(236)
(148)
(122)
(1,699)
(371)
(199)
(175)
(123)
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Total assets
21.5
18.6
17.2
40.4
39.7
51.7
17.3
74.5
Risk weighted assets
26.0
26.8
26.3
31.2
31.8
36.1
26.2
52.9
Period end allocated tangible equity
4.9
4.2
3.6
3.0
10.0
10.4
9.0
8.8
Performance measures
Average allocated tangible equity (£bn)
2.9
3.4
2.0
4.3
10.0
10.5
8.8
7.6
Performance measures excluding
litigation and conduct
1
£m
£m
£m
£m
£m
£m
£m
£m
Loss before tax
(219)
(110)
(27)
(284)
(290)
(141)
(121)
(131)
Attributable loss
(220)
(137)
(98)
(192)
(307)
(134)
(174)
(116)
1 Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.
Barclays Non-Core Results
Barclays PLC
23
The Barclays Non-Core segment was closed on 1 July 2017 with the residual assets and liabilities reintegrated into, and
associated financial performance subsequently reported in, Barclays UK, Barclays International and Head Office. Financial
results up until 30 June 2017 are reflected in the Non-Core segment within the Barclays Group’s results.
Barclays Non-Core
Year ended
Year ended
31.12.18
31.12.17
Income statement information
£m
£m
Net interest income
-
(112)
Net trading income
-
(488)
Net fee, commission and other income
-
70
Total income
-
(530)
Credit impairment charges and other provisions
-
(30)
Net operating expenses
-
(560)
Operating expenses
-
(256)
Litigation and conduct
-
(28)
Total operating expenses
-
(284)
Other net income
-
197
Loss before tax
-
(647)
Attributable loss
-
(419)
Q418
Q318
Q218
Q118
Q417
Q317
Q217
Q117
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
-
-
-
-
-
-
(123)
11
Net trading income
-
-
-
-
-
-
(411)
(77)
Net fee, commission and other income
-
-
-
-
-
-
78
(8)
Total income
-
-
-
-
-
-
(456)
(74)
Credit impairment charges and other provisions
-
-
-
-
-
-
(27)
(3)
Net operating expenses
-
-
-
-
-
-
(483)
(77)
Operating expenses
-
-
-
-
-
-
(108)
(148)
Litigation and conduct
-
-
-
-
-
-
(19)
(9)
Total operating expenses
-
-
-
-
-
-
(127)
(157)
Other net income/(expenses)
-
-
-
-
-
-
204
(7)
Loss before tax
-
-
-
-
-
-
(406)
(241)
Tax credit
-
-
-
-
-
-
207
75
Loss after tax
-
-
-
-
-
-
(199)
(166)
Non-controlling interests
-
-
-
-
-
-
(8)
(9)
Other equity instrument holders
-
-
-
-
-
-
(19)
(18)
Attributable loss
-
-
-
-
-
-
(226)
(193)
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Loans and advances to banks and customers at
amortised cost
-
-
-
-
-
-
48.3
49.5
Derivative financial instrument assets
-
-
-
-
-
-
150.3
164.2
Derivative financial instrument liabilities
-
-
-
-
-
-
143.0
155.3
Financial assets designated at fair value
-
-
-
-
-
-
12.1
13.4
Total assets
-
-
-
-
-
-
233.0
249.1
Customer deposits
-
-
-
-
-
-
11.8
12.9
Risk weighted assets
-
-
-
-
-
-
22.8
27.4
Discontinued Operation Results
Barclays PLC
24
Following the reduction of the Barclays Group’s interest in BAGL in 2017, Barclays’ remaining holding of 14.9%, for the full
year 2018 is reported as a financial asset at fair value through other comprehensive income in the Head Office segment, with
Barclays’ share of Absa Group Limited’s dividend recognised in the Head Office income statement.
Africa Banking
Year ended
Year ended
31.12.18
31.12.17
1
Income statement information
£m
£m
Net interest income
-
1,024
Net fee, commission and other income
-
762
Total income
-
1,786
Credit impairment charges and other provisions
-
(177)
Net operating income
-
1,609
Operating expenses excluding impairment of Barclays' holding in BAGL
-
(1,130)
Other net income excluding loss on sale of BAGL
-
5
Profit before tax excluding impairment of Barclays' holding in BAGL and loss on sale of
BAGL
-
484
Impairment of Barclays' holding in BAGL
-
(1,090)
Loss on sale of BAGL
-
(1,435)
Loss before tax
-
(2,041)
Tax charge
-
(154)
Loss after tax
-
(2,195)
Attributable loss
-
(2,335)
1 The Africa Banking income statement represents five months of results as a discontinued operation to 31 May 2017.
Q418
Q318
Q218
Q118
Q417
Q317
Q217
1
Q117
Income statement information
£m
£m
£m
£m
£m
£m
£m
£m
Net interest income
-
-
-
-
-
-
407
617
Net fee, commission and other income
-
-
-
-
-
-
297
465
Total income
-
-
-
-
-
-
704
1,082
Credit impairment charges and other provisions
-
-
-
-
-
-
(71)
(106)
Net operating income
-
-
-
-
-
-
633
976
Operating expenses excluding impairment of
Barclays' holding in BAGL
-
-
-
-
-
-
(477)
(653)
Other net income excluding loss on sale of
BAGL
-
-
-
-
-
-
3
2
Profit before tax excluding impairment of
Barclays' holding in BAGL and loss on sale of
BAGL
-
-
-
-
-
-
159
325
Impairment of Barclays' holding in BAGL
-
-
-
-
-
-
(206)
(884)
Loss on sale of BAGL
-
-
-
-
-
-
(1,435)
-
Loss before tax
-
-
-
-
-
-
(1,482)
(559)
Loss after tax
-
-
-
-
-
-
(1,537)
(658)
Attributable loss
-
-
-
-
-
-
(1,534)
(801)
Balance sheet information
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Total assets
-
-
-
-
-
-
-
66.0
Risk weighted assets
-
-
-
-
-
-
9.8
41.3
1 The Africa Banking income statement represents two months of results as a discontinued operation to 31 May 2017.
Performance Management
Barclays PLC
25
Margins and balances
Year ended 31.12.18
Year ended 31.12.17
Net interest
income
Average
customer
assets
Net interest
margin
Net interest
income
Average
customer
assets
Net interest
margin
£m
£m
%
£m
£m
%
Barclays UK
6,028
186,881
3.23
6,086
174,484
3.49
Barclays International
1
3,966
96,434
4.11
4,326
104,039
4.16
Total Barclays UK and Barclays International
9,994
283,315
3.53
10,412
278,523
3.74
Other
2
(932)
(567)
Total Barclays Group
9,062
9,845
1 Barclays International margins include interest earning lending balances within the investment banking business.
2 Other includes Head Office and non-interest earning lending balances within the investment banking business. Barclays Non-Core is included in the first six
months of the comparative period.
Net interest margin decreased 21bps to 3.53% primarily reflecting the full year impact of the integration of ESHLA portfolio
on 1 July 2017, the mix shift given growth in secured lending and the recategorisation of certain treasury income following
ring-fencing (from net interest income to non-interest income). Barclays Group net interest income decreased 8% to £9.1bn
including gross structural hedge contributions of £1.7bn (2017: £1.7bn).
Quarterly analysis for Barclays UK and Barclays International
Net interest
income
Average
customer
assets
Net interest
margin
1
Three months ended 31.12.18
£m
£m
%
Barclays UK
1,513
187,813
3.20
Barclays International
2
994
99,137
3.98
Total Barclays UK and Barclays International
2,507
286,950
3.47
Three months ended 30.09.18
Barclays UK
1,529
188,239
3.22
Barclays International
2
945
96,785
3.87
Total Barclays UK and Barclays International
2,474
285,024
3.44
Three months ended 30.06.18
Barclays UK
1,493
186,053
3.22
Barclays International
2
962
95,728
4.03
Total Barclays UK and Barclays International
2,455
281,781
3.49
Three months ended 31.03.18
Barclays UK
1,493
185,351
3.27
Barclays International
2
1,065
94,530
4.57
Total Barclays UK and Barclays International
2,558
279,881
3.71
Three months ended 31.12.17
Barclays UK
1,540
184,058
3.32
Barclays International
2
1,071
98,500
4.31
Total Barclays UK and Barclays International
2,611
282,558
3.67
1 The Group’s treasury results are reported directly within Barclays UK and Barclays International following ring-fencing, resulting in gains and losses made on
certain activities being recognised as Other income. These amounts had previously been included in Net interest income and the Net interest margin through
transfer pricing.
2 Barclays International margins include interest earning lending balances within the investment banking business.
Performance Management
Barclays PLC
26
Remuneration
Deferred bonuses are payable only once an employee meets certain conditions, including a specified period of service. This
creates a timing difference between the communication of the bonus pool and the charges that are recognised in the income
statement which are reconciled in the table below to show the charge for performance costs. In 2016, there was a change in
the proportion of bonuses which were deferred, to harmonise deferral structures across the Group, and amendments to the
deferred bonuses, which accelerated the rate at which these are charged in the income statement, as illustrated on page 27.
The combined effect of these changes was to increase the charge for 2016 by £395m, with lesser effects in 2017 and 2018.
The changes were designed to more closely align the incentive awards granted with the income statement charge. Refer to
the Remuneration Report on pages 99-126 of the Barclays PLC Annual Report for further detail on remuneration. The table
below includes the other elements of compensation and staff costs.
Year ended
Year ended
31.12.18
31.12.17
£m
£m
% Change
Incentive awards granted:
Current year bonus
1,067
990
(8)
Deferred bonus
515
442
(17)
Commissions and other incentives
67
74
9
Total incentive awards granted
1,649
1,506
(9)
Reconciliation of incentive awards granted to income statement charge:
Less: deferred bonuses granted but not charged in current year
(359)
(302)
(19)
Add: current year charges for deferred bonuses from previous years
299
457
35
Other differences between incentive awards granted and income statement charge
(33)
)
29
231
Income statement charge for performance costs
1,556
1,690
8
Other income statement charges:
Salaries
4,200
3,982
(5)
Social security costs
558
580
4
Post-retirement benefits
619
493
(26)
Other compensation costs
413
378
(9)
Total compensation costs
1
7,346
7,123
(3)
Other resourcing costs
2
1,283
1,437
11
Total staff costs
8,629
8,560
(1)
Group compensation as % of income
3,4
34.1
33.8
Group staff costs as % of income
4
40.2
40.6
1 In addition, Group compensation of £296m (2017: £312m) was capitalised as internally generated software.
2 Other resourcing costs include outsourcing, redundancy and restructuring costs, and other temporary staff costs.
3 Within the Corporate and Investment Bank, front office compensation as a percentage of total income was 25.6% (2017: 25.5%).
4 Excludes £140m relating to a GMP charge within Post-retirement benefits.
Performance Management
Barclays PLC
27
Deferred bonuses have been awarded and are expected to be charged to the income statement in the years outlined in the
table that follows:
Year in which income statement charge is expected to be taken for deferred bonuses awarded to date
1
Actual
Expected
1,2
Year ended
Year ended
Year ended
2020 and
31.12.17
31.12.18
31.12.19
beyond
£m
£m
£m
£m
Deferred bonuses from 2015 and earlier bonus pools
298
82
9
-
Deferred bonuses from 2016 bonus pool
159
87
40
7
Deferred bonuses from 2017 bonus pool
140
130
67
41
Deferred bonuses from 2018 bonus pool
-
156
164
114
Income statement charge for deferred bonuses
597
455
280
162
1 The actual amount charged depends upon whether conditions have been met and will vary compared with the above expectation.
2 Does not include the impact of grants which will be made in 2019 and beyond.
Charging of deferred bonus profile
1
Income statement charge
profile
3
Grant date
Expected payment
date(s)
2
Year
2018
awards
Pre-2016
awards
March 2019
2018
35%
0%
2019
34%
48%
March 2020 (33.3%)
2020
21%
35%
March 2021 (33.3%)
2021
9%
15%
March 2022 (33.3%)
2022
1%
2%
1 Represents a typical vesting schedule for deferred awards. Certain awards may be subject to 5- or 7-year deferral in line with regulatory requirements.
2 Share awards may be subject to an additional holding period.
3 The income statement charge is based on the period over which conditions are met.
Risk Management
Barclays PLC
28
Risk management and Principal Risks
The roles and responsibilities of the business groups, Risk and Compliance, in the management of risk in Barclays Group are
defined in the Enterprise Risk Management Framework. The purpose of the framework is to identify the principal risks of
Barclays Group, the process by which Barclays Group sets its appetite for these risks in its business activities, and the
consequent limits which it places on related risk taking. The framework identifies eight principal risks: credit risk; market risk;
treasury and capital risk; operational risk; conduct risk; reputation risk; model risk; and legal risk. Further detail on these risks
and how they are managed is available in the Barclays PLC Annual Report 2018 or online at home.barclays/investor-
relations/reports-and-events/annual-reports.
The following section gives an overview of credit risk, market risk, and treasury and capital risk for the period.
Credit Risk
Barclays PLC
29
Loans and advances at amortised cost by stage (audited)
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 31 December 2018. Also included are
off-balance sheet loan commitments and financial guarantee contracts by gross exposure, and impairment allowance and
coverage ratio by stage allocation as at 31 December 2018. Barclays does not hold any material purchased or originated credit
impaired assets as at year-end.
Gross exposure
Impairment allowance
Net
exposure
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
As at 31.12.18
£m
£m
£m
£m
£m
£m
£m
£m
£m
Barclays UK
134,911
25,279
3,040
163,230
183
1,389
1,152
2,724
160,506
Barclays International
26,714
4,634
1,830
33,178
352
965
1,315
2,632
30,546
Head Office
6,510
636
938
8,084
9
47
306
362
7,722
Total Barclays Group retail
168,135
30,549
5,808
204,492
544
2,401
2,773
5,718
198,774
Barclays UK
22,824
4,144
1,272
28,240
16
70
117
203
28,037
Barclays International
87,344
8,754
1,382
97,480
128
244
439
811
96,669
Head Office
2,923
-
41
2,964
-
-
38
38
2,926
Total Barclays Group
wholesale
113,091
12,898
2,695
128,684
144
314
594
1,052
127,632
Total loans and advances at
amortised cost
281,226
43,447
8,503
333,176
688
2,715
3,367
6,770
326,406
Off-balance sheet loan
commitments and financial
guarantee contracts
1
309,989
22,126
684
332,799
99
150
22
271
332,528
Total
2
591,215
65,573
9,187
665,975
787
2,865
3,389
7,041
658,934
As at 31.12.18
Year ended 31.12.18
Coverage ratio
Loan impairment charge and loan loss rate
Stage 1
Stage 2
Stage 3
Total
Loan impairment
charge
Loan loss rate
%
%
%
%
£m
bps
Barclays UK
0.1
5.5
37.9
1.7
830
51
Barclays International
1.3
20.8
71.9
7.9
844
254
Head Office
0.1
7.4
32.6
4.5
15
19
Total Barclays Group retail
0.3
7.9
47.7
2.8
1,689
83
Barclays UK
0.1
1.7
9.2
0.7
74
26
Barclays International
0.1
2.8
31.8
0.8
(142)
-
Head Office
-
-
92.7
1.3
(31)
-
Total Barclays Group
wholesale
0.1
2.4
22.0
0.8
(99)
-
Total loans and advances at
amortised cost
0.2
6.2
39.6
2.0
1,590
48
Off-balance sheet loan
commitments and financial
guarantee contracts
1
-
0.7
3.2
0.1
(125)
Other financial assets
subject to impairment
3
Total
0.1
4.4
36.9
1.1
1,468
1 Excludes loan commitments and financial guarantees of £11.7bn carried at fair value.
2 Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value
through other comprehensive income, and other assets. These have a total gross exposure of £129.9bn and impairment allowance of £12m. This comprises
£10m ECL on £129.3bn stage 1 assets and £2m on £0.6bn stage 2 fair value through other comprehensive income assets.
Credit Risk
Barclays PLC
30
Gross exposure
Impairment allowance
Net
exposure
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
As at 01.01.18
£m
£m
£m
£m
£m
£m
£m
£m
£m
Barclays UK
129,837
25,798
3,152
158,787
142
1,310
1,142
2,594
156,193
Barclays International
22,427
7,051
1,466
30,944
292
1,298
1,080
2,670
28,274
Head Office
6,498
1,596
952
9,046
8
62
294
364
8,682
Total Barclays Group retail
158,762
34,445
5,570
198,777
442
2,670
2,516
5,628
193,149
Barclays UK
22,835
3,880
1,092
27,807
25
88
114
227
27,580
Barclays International
75,331
11,128
2,345
88,804
139
349
694
1,182
87,622
Head Office
8,689
139
74
8,902
2
5
58
65
8,837
Total Barclays Group
wholesale
106,855
15,147
3,511
125,513
166
442
866
1,474
124,039
Total loans and advances at
amortised cost
265,617
49,592
9,081
324,290
608
3,112
3,382
7,102
317,188
Off-balance sheet loan
commitments and financial
guarantee contracts
1
275,364
38,867
1,442
315,673
133
259
28
420
315,253
Total
2
540,981
88,459
10,523
639,963
741
3,371
3,410
7,522
632,441
Coverage ratio
Stage 1
Stage 2
Stage 3
Total
As at 01.01.18
%
%
%
%
Barclays UK
0.1
5.1
36.2
1.6
Barclays International
1.3
18.4
73.7
8.6
Head Office
0.1
3.9
30.9
4.0
Total Barclays Group retail
0.3
7.8
45.2
2.8
Barclays UK
0.1
2.3
10.4
0.8
Barclays International
0.2
3.1
29.6
1.3
Head Office
-
3.6
78.4
0.7
Total Barclays Group
wholesale
0.2
2.9
24.7
1.2
Total loans and advances at
amortised cost
0.2
6.3
37.2
2.2
Off-balance sheet loan
commitments and financial
guarantee contracts
1
0.1
-
0.7
1.9
Total
0.1
3.8
32.4
1.2
1 Excludes loan commitments and financial guarantees of £18.9bn carried at fair value.
2 Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value
through other comprehensive income, and other assets. These have a total gross exposure of £128.1bn and impairment allowance of £9m.
Credit Risk
Barclays PLC
31
Loans and advances at amortised cost by product (audited)
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 31.12.18
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
130,066
15,672
1,672
862
18,206
2,476
150,748
Credit cards, unsecured loans and other retail lending
45,785
11,262
530
437
12,229
3,760
61,774
Corporate loans
105,375
12,177
360
475
13,012
2,267
120,654
Total
281,226
39,111
2,562
1,774
43,447
8,503
333,176
Impairment allowance
Home loans
31
56
13
13
82
351
464
Credit cards, unsecured loans and other retail lending
528
1,895
169
240
2,304
2,511
5,343
Corporate loans
129
300
16
13
329
505
963
Total
688
2,251
198
266
2,715
3,367
6,770
Net exposure
Home loans
130,035
15,616
1,659
849
18,124
2,125
150,284
Credit cards, unsecured loans and other retail lending
45,257
9,367
361
197
9,925
1,249
56,431
Corporate loans
105,246
11,877
344
462
12,683
1,762
119,691
Total
280,538
36,860
2,364
1,508
40,732
5,136
326,406
Coverage ratio
%
%
%
%
%
%
%
Home loans
-
0.4
0.8
1.5
0.5
14.2
0.3
Credit cards, unsecured loans and other retail lending
1.2
16.8
31.9
54.9
18.8
66.8
8.6
Corporate loans
0.1
2.5
4.4
2.7
2.5
22.3
0.8
Total
0.2
5.8
7.7
15.0
6.2
39.6
2.0
As at 01.01.18
Gross exposure
£m
£m
£m
£m
£m
£m
£m
Home loans
125,224
17,108
1,612
604
19,324
2,425
146,973
Credit cards, unsecured loans and other retail lending
40,482
13,562
702
502
14,766
3,544
58,792
Corporate loans
99,911
14,534
407
561
15,502
3,112
118,525
Total
265,617
45,204
2,721
1,667
49,592
9,081
324,290
Impairment allowance
Home loans
38
77
10
13
100
326
464
Credit cards, unsecured loans and other retail lending
441
2,086
203
245
2,534
2,291
5,266
Corporate loans
129
444
22
12
478
765
1,372
Total
608
2,607
235
270
3,112
3,382
7,102
Net exposure
Home loans
125,186
17,031
1,602
591
19,224
2,099
146,509
Credit cards, unsecured loans and other retail lending
40,041
11,476
499
257
12,232
1,253
53,526
Corporate loans
99,782
14,090
385
549
15,024
2,347
117,153
Total
265,009
42,597
2,486
1,397
46,480
5,699
317,188
Coverage ratio
%
%
%
%
%
%
%
Home loans
-
0.5
0.6
2.2
0.5
13.4
0.3
Credit cards, unsecured loans and other retail lending
1.1
15.4
28.9
48.8
17.2
64.6
9.0
Corporate loans
0.1
3.1
5.4
2.1
3.1
24.6
1.2
Total
0.2
5.8
8.6
16.2
6.3
37.2
2.2
The overall coverage ratio reduced from 2.2% to 2.0% driven predominantly by the reduction of Stage 3 single name
exposures within Corporate loans.
The credit card, unsecured loans and other retail lending coverage ratio decreased to 8.6% from 9.0% due to the increase in
Stage 1 balances which carry lower levels of ECL, with the Stage 2 increase including an adjustment for the anticipated UK
economic uncertainty.
There are relatively low coverage ratios for Stage 3 Home loans and Corporate loans reflecting the secured nature of these
exposures.
Credit Risk
Barclays PLC
32
Movement in gross exposures and impairment allowance including provisions for loan
commitments and financial guarantees (audited)
The following tables present a reconciliation of the opening to the closing balance of the exposure and impairment allowance.
Explanation of the terms: 12-month ECL, lifetime ECL and credit-impaired are included in the Barclays Group Annual Report
2018 on page 273.
Gross exposure for loans and advances at amortised
cost (audited)
Stage 1
Stage 2
Stage 3
Total
£m
£m
£m
£m
As at 1 January 2018
265,617
49,592
9,081
324,290
Net transfers between stages
1,385
(3,602)
2,217
-
Business activity in the year
74,419
2,680
374
77,473
- of which: Barclays UK
29,467
1,493
326
31,286
- of which: Barclays International
42,346
1,164
44
43,554
Net drawdowns and repayments
(13,140)
136
162
(12,842)
- of which: Barclays UK
(10,269)
(980)
(322)
(11,571)
- of which: Barclays International
(1,305)
1,348
561
604
Final repayments
(41,946)
(5,359)
(1,071)
(48,376)
- of which: Barclays UK
(11,728)
(1,753)
(478)
(13,959)
- of which: Barclays International
(29,421)
(3,520)
(549)
(33,490)
Disposals
(5,109)
-
(369)
(5,478)
Write-offs
-
-
(1,891)
(1,891)
As at 31 December 2018
1
281,226
43,447
8,503
333,176
Impairment allowance on loans and advances at
amortised cost (audited)
Stage 1
Stage 2
Stage 3
Total
£m
£m
£m
£m
As at 1 January 2018
608
3,112
3,382
7,102
Net transfers between stages
798
(1,182)
384
-
Business activity in the year
223
173
95
491
Net re-measurement and movement due to exposure and risk
parameter changes
(865)
638
1,918
1,691
UK economic uncertainty adjustment
-
150
-
150
Final repayments
(76)
(176)
(152)
(404)
Disposals
-
-
(369)
(369)
Write-offs
-
-
(1,891)
(1,891)
As at 31 December 2018
1
688
2,715
3,367
6,770
Reconciliation of ECL movement to impairment charge/(release)
for the period
ECL movement excluding assets derecognised due to disposals and
write-offs
1,928
Net recoveries post write-offs
(195)
Exchange and other adjustments
(143)
Impairment release on loan commitments and financial guarantees
2
(125)
Impairment charge on other financial assets
1
3
Income statement charge/(release) for the period
1,468
1 Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value
through other comprehensive income and other assets. These have a total gross exposure of £129.9bn (1 January 2018: £128.1bn) and impairment
allowance of £12m (1 January 2018: £9m). This comprises £10m ECL on £129.3bn Stage 1 assets and £2m on £0.6bn Stage 2 fair value through other
comprehensive income assets.
2 Impairment release of £125m on loan commitments and financial guarantees represents a reduction in impairment allowance of £149m partially offset by
exchange and other adjustments of £24m.
Credit Risk
Barclays PLC
33
Gross exposure on loans and advances at amortised cost has increased by £8.9bn in 2018 driven by Stage 1 increases due
to:
Growth in Barclays UK Home Loans portfolio of £4.6bn
Increased lending in Portfolio Management, Equity derivatives and Equity financing in Barclays International of £6.6bn
Balance sheet growth and currency exchange movements in US Cards of £2.5bn
New securities for the liquidity asset buffer in the UK Service Company of £2.3bn and £1.0bn in Barclays International
offset by the disposal of a long dated liquidity buffer portfolio of UK gilts totalling £5.1bn, reduction in Corporate lending
of £2.5bn and continued repayments on Italian Mortgages of £1.0bn
Net transfers between stages represents the movements of positions from, for example, Stage 1 to Stage 2 following a
Significant Increase in Credit Risk (SICR) or to Stage 3 as positions move into default. Equally, improvement in credit quality
will result in positions moving to lower stages. These are the primary driver for the changes in impairment allowance and the
income statement charge. The improvement in PDs and macroeconomic variables during 2018 resulted in net exposures
moving from Stage 2 into Stage 1. The transfers into Stage 3 was from defaulted assets moving mainly from Stage 2.
Disposals includes the sale of a long dated liquidity buffer portfolio of UK gilts and debt sale activity. Write-offs represent the
gross asset write-down during the period.
The impairment allowance decreased by £332m in the period. This is due to a net reduction in Barclays International
predominantly from write-offs and a positive impact of macroeconomic variables changes during the year, offset by a £150m
charge in UK Cards and UK Corporate loans from anticipated economic uncertainty in the UK. Credit quality across wholesale
portfolios and underlying arrears rates in the retail portfolio have been relatively stable over the period.
Gross exposure for loan commitments and financial
guarantees (audited)
Stage 1
Stage 2
Stage 3
Total
£m
£m
£m
£m
As at 1 January 2018
275,364
38,867
1,442
315,673
Net transfers between stages
13,521
(13,552)
31
-
Business activity in the year
65,404
811
-
66,215
Net drawdowns and repayments
(14,491)
4,298
(473)
(10,666)
Final repayments
(29,809)
(8,298)
(316)
(38,423)
As at 31 December 2018
309,989
22,126
684
332,799
Impairment allowance on loan commitments and
financial guarantees (audited)
Stage 1
Stage 2
Stage 3
Total
£m
£m
£m
£m
As at 1 January 2018
133
259
28
420
Net transfers between stages
42
(43)
1
-
Business activity in the year
18
-
-
18
Net re-measurement and movement due to exposure and risk
parameter changes
(79)
(22)
44
(57)
Final repayments
(15)
(44)
(51)
(110)
As at 31 December 2018
99
150
22
271
`
Credit Risk
Barclays PLC
34
Stage 2 decomposition
1
Net exposure
Impairment
allowance
As at 31.12.18
£m
£m
Quantitative test
28,159
2,506
Qualitative test
12,023
183
30 dpd backstop
550
26
Total Stage 2
40,732
2,715
1 Where balances satisfy more than one of the above three criteria for determining a significant increase in credit risk, the corresponding net exposure and
ECL has been assigned in order of categories presented.
Stage 2 exposures are predominantly identified using quantitative tests where the lifetime PD has deteriorated more than a
pre-determined amount since origination. This is augmented by inclusion of accounts meeting the designated high risk
criteria (including watchlist) for the portfolio under the qualitative test. A small number of other accounts (1% of impairment
allowances and 1% of net exposure) are included in Stage 2. These accounts are not otherwise identified by the quantitative
or qualitative tests but are more than 30 days past due. The percentage triggered by this backstop criteria is a measure of the
effectiveness of the Stage 2 criteria in identifying deterioration prior to delinquency.
For further detail on the three criteria for determining a significant increase in credit risk required for Stage 2 classification,
refer to Note 7 on page 273 of the Barclays PLC Annual Report 2018.
Credit Risk
Barclays PLC
35
Measurement uncertainty and sensitivity analysis
The measurement of ECL involves increased complexity and judgement, including estimation of probabilities of default (PD),
loss given default (LGD), a range of unbiased future economic scenarios, estimation of expected lives, estimation of exposures
at default (EAD) and assessing significant increases in credit risk. Impairment charges will tend to be more volatile than under
IAS 39 and will be recognised earlier. Unsecured products with longer expected lives, such as revolving credit cards, are the
most impacted.
Barclays Group uses a five-scenario model to calculate ECL. An external consensus forecast is assembled from key sources,
including HM Treasury, Bloomberg and the Urban Land Institute, 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 similar severity to internal stress tests, whilst also considering
IFRS 9 specific sensitivities and non-linearity. Downside 2 is benchmarked to the Bank of England’s annual cyclical 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 be symmetric to the adverse scenarios, subject to a ceiling calibrated to relevant recent favourable benchmark
scenarios. The scenarios include six economic core variables, (GDP, unemployment and House Price Index (HPI) in both the
UK and US markets), and expanded variables using statistical models based on historical correlations. All five scenarios
converge to a steady state after eight years.
Scenario Weights (audited)
The methodology for estimating probability weights for each of the scenarios involves a comparison of the distribution of key
historic UK and US macroeconomic variables against the forecast paths of the five scenarios. The methodology works such
that the baseline (reflecting current consensus outlook) has the highest weight and the weights of adverse and favourable
scenarios depend on the deviation from the baseline; the further from the baseline, the smaller the weight. The probability
weights of the scenarios as of 31 December 2018 are shown below. A single set of five scenarios is used across all portfolios
and all five weights are normalised to equate to 100%. The same scenarios and weights that are used in the estimation of
expected credit losses are also used for Barclays internal planning purposes. The impacts across the portfolios are different
because of the sensitivities of each of the portfolios to specific macroeconomic variables, for example, mortgages are highly
sensitive to house prices and base rates, credit cards and unsecured consumer loans are highly sensitive to unemployment.
The table below shows the core macroeconomic variables for each scenario and the respective scenario weights.
Scenario probability weighting
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 31 December 2018
%
%
%
%
%
Scenario probability weighting
9
24
41
23
3
Macroeconomic variables
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 31 December 2018
%
%
%
%
%
UK GDP
1
4.5
3.1
1.7
0.3
(4.1)
UK unemployment
2
3.4
3.9
4.3
5.7
8.8
UK HPI
3
46.4
32.6
3.2
(0.5)
(32.1)
US GDP
1
4.8
3.7
2.1
0.4
(3.3)
US unemployment
2
3.0
3.4
3.7
5.2
8.4
US HPI
3
36.9
30.2
4.1
-
(17.4)
1 Highest annual growth in Upside scenarios; 5-year average in Baseline; lowest annual growth in Downside scenarios.
2 Lowest point in Upside scenarios; 5-year average in Baseline; highest point in Downside scenarios.
3 5-year cumulative growth in Upside scenarios; 5-year average in Baseline; cumulative fall (peak-to-trough) in Downside scenarios.
Over the year, the macroeconomic baseline variables improved in the US, notably HPI. The UK macroeconomic baseline
variables improved slightly overall.
Credit Risk
Barclays PLC
36
ECL sensitivity analysis to UK economic forecasts for key principal portfolios
The table below shows the estimated ECL impact on key principal portfolios for both a positive growth (Upward scenario)
and a downturn (Downward scenario) of UK consensus macroeconomic variables. The inputs for the Downward scenario
have been modelled by replacing the Baseline macroeconomic variables by the Downside 1 variables (with no changes to US
and other non-UK macroeconomic variables, as highlighted below). Similarly, the Upward scenario uses Upside 1 UK
macroeconomic variables for the Baseline scenario. The Downside 2, Downside 1, Upside 1 and Upside 2 macroeconomic
variables are held constant but the probability weights have been re-calibrated.
Barclays impairment as at 31 December 2018 includes an adjustment of £150m representing a charge for the estimated
impact of anticipated economic uncertainty in the UK. This adjustment was estimated broadly on the output of the UK
Downward scenario below.
Scenario probability weighting
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
%
%
%
%
%
UK Upward scenario
18
33
36
11
2
UK Downward scenario
8
18
40
28
6
Macroeconomic variables
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 31.12.18
%
%
%
%
%
UK Upward scenario
UK GDP
4.5
3.1
3.1
0.3
(4.1)
UK unemployment
3.4
3.9
3.9
5.7
8.8
UK HPI
46.4
32.6
32.6
(0.5)
(32.1)
US GDP
4.8
3.7
2.1
0.4
(3.3)
US unemployment
3.0
3.4
3.7
5.2
8.4
US HPI
36.9
30.2
4.1
-
(17.4)
UK Downward scenario
UK GDP
4.5
3.1
0.3
0.3
(4.1)
UK unemployment
3.4
3.9
5.7
5.7
8.8
UK HPI
46.4
32.6
(0.5)
(0.5)
(32.1)
US GDP
4.8
3.7
2.1
0.4
(3.3)
US unemployment
3.0
3.4
3.7
5.2
8.4
US HPI
36.9
30.2
4.1
-
(17.4)
Sensitivity to UK economic forecasts
Stage 1
Stage 2
Stage 3
Total
Gross exposure (£m)
∆ UK
Upward
scenario
∆ UK
Downward
scenario
∆ UK
Upward
scenario
∆ UK
Downward
scenario
∆ UK
Upward
scenario
∆ UK
Downward
scenario
∆ UK
Upward
scenario
∆ UK
Downward
scenario
Home loans
506
(889)
(506)
889
-
-
-
-
Credit cards, unsecured loans and other retail
lending
294
(252)
(294)
252
-
-
-
-
Corporate loans
79
(13)
(79)
13
-
-
-
-
ECL (£m)
Home loans
-
-
(3)
6
(1)
2
(4)
8
Credit cards, unsecured loans and other retail
lending
(4)
4
(102)
104
(15)
15
(121)
123
Corporate loans
1
7
(4)
13
(46)
28
(49)
48
Credit Risk
Barclays PLC
37
Home loans: Total ECL increases by £8m in the Downward scenario, driven by the increase in the probability weight attributed
to the Downside 2 scenario. This represents a greater likelihood of the UK economy entering into a severe downturn than
under the current consensus.
Credit cards, unsecured loans and other retail lending: Total ECL decreases by £121m in the Upward scenario driven by
£294m of balance migration as assets transition from Stage 2 to Stage 1 and lower coverage on Stage 2 assets driven by the
more favourable consensus forecast. Total ECL increases by £123m in the Downward scenario, mainly driven by the UK cards
portfolio.
Corporate loans: Total ECL decreases by £49m in the Upward scenario predominately driven by more favourable recovery
outcomes for large single names in Stage 3. The Downward scenario results in total ECL impact of £48m, driven by higher
coverage in Stage 2 and less favourable recovery outcomes for large single names in Stage 3.
Credit Risk
Barclays PLC
38
ECL sensitivity analysis to US economic forecasts for key principal portfolios
The table below shows the estimated ECL impact on key principal portfolios for both a positive growth (Upward scenario)
and a downturn (Downward scenario) of US consensus macroeconomic variables. The inputs for the Downward scenario
have been modelled by replacing the Baseline macroeconomic variables by the Downside 1 variables (with no changes to UK
and other non-US macroeconomic variables, as highlighted below). Similarly, the Upward scenario uses Upside 1 US
macroeconomic variables for the Baseline scenario. The Downside 2, Downside 1, Upside 1 and Upside 2 macroeconomic
variables are held constant but the probability weights have been re-calibrated.
Scenario probability weighting
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
%
%
%
%
%
US Upward scenario
18
33
36
11
2
US Downward scenario
5
14
40
34
7
Macroeconomic variables for US Downward scenario
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 31 December 2018
%
%
%
%
%
US Upward scenario
UK GDP
4.5
3.1
1.7
0.3
(4.1)
UK unemployment
3.4
3.9
4.3
5.7
8.8
UK HPI
46.4
32.6
3.2
(0.5)
(32.1)
US GDP
4.8
3.7
3.7
0.4
(3.3)
US unemployment
3.0
3.4
3.4
5.2
8.4
US HPI
36.9
30.2
30.2
-
(17.4)
US Downward scenario
UK GDP
4.5
3.1
1.7
0.3
(4.1)
UK unemployment
3.4
3.9
4.3
5.7
8.8
UK HPI
46.4
32.6
3.2
(0.5)
(32.1)
US GDP
4.8
3.7
0.4
0.4
(3.3)
US unemployment
3.0
3.4
5.2
5.2
8.4
US HPI
36.9
30.2
-
-
(17.4)
Sensitivity to US economic forecasts
Stage 1
Stage 2
Stage 3
Total
Gross exposure (£m)
∆ US
Upward
scenario
∆ US
Downward
scenario
∆ US
Upward
scenario
∆ US
Downward
scenario
∆ US
Upward
scenario
∆ US
Downward
scenario
∆ US
Upward
scenario
∆ US
Downward
scenario
Credit cards, unsecured loans and other retail
lending
214
(312)
(214)
312
-
-
-
-
Corporate loans
83
(46)
(83)
46
-
-
-
-
ECL (£m)
Credit cards, unsecured loans and other retail
lending
(4)
6
(76)
144
(6)
7
(86)
157
Corporate loans
(3)
10
(15)
34
(35)
54
(53)
98
Credit cards, unsecured loans and other retail lending: Total ECL decreases by £86m in Upward scenario driven by £214m
of balance migration as assets transition from Stage 2 to Stage 1 and lower coverage on Stage 2 assets driven by the more
favourable consensus forecast. Total ECL impact of £157m in Downward scenario, greater than the Upward scenario, driven
by non-linearity effects and the relative severity of the Downward scenario.
Corporate loans: Total ECL increases by £98m in the Downward scenario driven by a less favourable recovery outcome for
one large single name in Stage 3, where Barclays estimated additional losses of £39m in addition to the loss estimated under
the Baseline scenario, and higher coverage in Stage 2 assets driven by the less favourable consensus forecast. There is a
greater impact on coverage ratios (Stage 2 in particular) than the UK scenarios driven largely by the underlying portfolio
quality, with the US portfolio possessing a higher proportion of unsecured leveraged lending.
Credit Risk
Barclays PLC
39
Analysis of specific portfolios and asset types
Secured home loans
The UK home loan portfolio comprises first lien home loans and accounts for 91% (December 2017: 90%) of Barclays Group’s
total home loans balances.
Home loans principal portfolios
Barclays UK
As at
31.12.18
As at
31.12.17
Gross loans and advances (£m)
136,517
132,132
30-day arrears rate, excluding recovery book (%)
0.4
0.4
90-day arrears rate, excluding recovery book (%)
0.1
0.1
Annualised gross charge-off rates – 180 days past due (%)
0.3
0.2
Recovery book proportion of outstanding balances (%)
0.2
0.3
Recovery book impairment coverage ratio (%)
7.1
11.2
Average marked to market LTV
Balance weighted (%)
48.9
47.6
Valuation weighted (%)
35.8
35.2
For >100% LTVs
Balances (£m)
147
215
Marked to market collateral (£m)
130
188
Balances in recovery book (%)
5.5
5.9
New lending
Year ended
31.12.18
Year ended
31.12.17
New home loan bookings (£m)
23,008
22,665
New home loans proportion > 90% LTV (%)
1.8
2.1
Average LTV on new home loans: balance weighted (%)
65.4
63.8
Average LTV on new home loans: valuation weighted (%)
57.4
56.0
Home loans principal portfolios - distribution of balances by LTV
1
As at 31.12.18
Distribution of
balances
Distribution of
impairment
allowance
Coverage ratio
Barclays UK
%
%
%
<=75%
90.6
50.9
-
>75% and <=90%
8.6
22.1
0.1
>90% and <=100%
0.7
7.7
0.5
>100%
0.1
19.3
10.8
1 Portfolio marked to market based on the most updated valuation including recovery book balances. Updated valuations reflect the application of the latest
HPI available as at 31 December 2018.
Despite the proposed UK withdrawal from the European Union creating large levels of uncertainty in the housing market and
competitor pricing putting pressure on new flow, portfolio stock has increased year on year. However, delinquencies remain
very low and stable and recovery stock has reduced. Recovery book coverage rate reduced to 7.1% (2017:11.2%) reflecting
the new impairment methodology following the transition to IFRS 9.
The reduction in home loans that have LTV >100% to £147m (2017: £215m) was driven by increases in HPI through the
second half of the year.
Owner-occupied interest-only home loans comprised 26% (December 2017: 28%) of total balances. The average balance
weighted LTV on these loans decreased to 38.8% (December 2017: 39.7%). The 90 day arrears rate excluding recovery book
remained steady at 0.3% (December 2017: 0.3%).
Credit Risk
Barclays PLC
40
Buy to Let (BTL) home loans comprised 12% (2017: 11%) of total balances. The average balance weighted LTV increased
to 55.4% (2017: 53.7%) driven by the volume of new business written. Whilst the average balance weighted LTV of new
business remained stable during 2018, it is higher than for the existing book and increased the total book average figure as
a result. This increase was partially offset by increases in house prices applied during the second half of the year with positive
movements in HPI reported. The BTL 90-day arrears rate excluding recovery book remained steady at 0.1% (2017: 0.1%).
Italian home loans and advances at amortised cost reduced to £7.9bn (1 January 2018: £8.8bn) and continues to run-off
since new bookings ceased in 2016. The portfolio is secured on residential property with an average balance weighted
marked to market LTV of 61.8% (2017: 61.0%). 90 day arrears and gross charge-off rates remained stable at 1.4% (2017:
1.4%) and 0.8% (2017: 0.8%) respectively.
Credit cards, unsecured loans and other retail lending
The principal portfolios listed below accounted for 87% (2017: 87%) of Barclays Group’s total credit cards, unsecured loans
and other retail lending.
Principal portfolios
Gross exposure
30 day arrears rate,
excluding recovery
book
90 day arrears rate,
excluding recovery
book
Annualised gross
charge-off rate
As at 31.12.18
£m
%
%
%
Barclays UK
UK cards
17,285
1.8
0.9
4.7
UK personal loans
6,335
2.3
1.1
3.7
Barclays International
US cards
22,178
2.7
1.4
5.7
Barclays partner finance
4,216
1.1
0.4
2.3
Germany consumer lending
3,545
1.9
0.8
2.9
As at 31.12.17
Barclays UK
UK cards
17,686
1.8
0.8
5.0
UK personal loans
6,255
2.5
1.2
3.3
Barclays International
US cards
21,350
2.6
1.3
5.0
Barclays partner finance
3,814
1.3
0.5
2.6
Germany consumer lending
3,384
2.3
1.0
3.2
UK cards: 30 and 90 day arrears rates remained stable. The annualised gross charge-off rate reduced to 4.7% (2017: 5.0%)
as a result of charge-offs returning to stabilised levels in 2018 following one-off accelerated charge-offs in 2017.
UK personal loans: 30 and 90 day arrears rates reduced slightly, whilst the annualised charge-off rate increased. These
movements were as a result of accounts remaining in collections longer than expected during 2017 being moved to charge-
off following resolution of collections performance issues.
US cards: The annualised gross charge-off rate increased to 5.7% (2017: 5.0%) broadly in line with trends across the industry
and change in portfolio mix reflecting a one-off asset sale benefiting 2017.
Barclays partner finance: 30 and 90 day arrears rates reduced driven by improved quality of new business and better arrears
management.
Germany consumer lending: Arrears and charge-off rates reduced due to improved performance in collections along with
booking lower risk business.
Market Risk
Barclays PLC
41
Analysis of management value at risk (VaR)
The table below shows the total management VaR on a diversified basis by risk factor. Total management VaR includes all
trading positions in CIB and Head Office.
Limits are applied against each risk factor VaR as well as total management VaR, which are then cascaded further by risk
managers to each business.
Management VaR (95%) by asset class
1
Year ended 31.12.18
Year ended 31.12.17
Average
High
2
Low
2
Average
High
2
Low
2
£m
£m
£m
£m
£m
£m
Credit risk
11
16
8
12
18
8
Interest rate risk
8
19
3
8
15
4
Equity risk
7
14
4
8
14
4
Basis risk
6
8
4
5
6
3
Spread risk
6
9
3
5
8
3
Foreign exchange risk
3
7
2
3
7
2
Commodity risk
1
2
-
2
3
1
Inflation risk
3
4
2
2
4
1
Diversification effect
2
(24)
n/a
n/a
(26)
n/a
n/a
Total management VaR
21
27
15
19
26
14
1 Excludes BAGL from 23 July 2018.
2 Diversification effects recognise that forecast losses from different assets or businesses are unlikely to occur concurrently, hence the expected aggregate loss
is lower than the sum of the expected losses from each area. Historic 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.
Management VaR remained relatively stable year on year. The marginal increase in average management VaR in 2018 was
due to a higher volatility environment compared to 2017.
Treasury and Capital Risk
Barclays PLC
42
The Barclays 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 Barclays 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
As at 31 December 2018, the Barclays Group held eligible liquid assets in excess of 100% of net stress outflows to its internal
and external regulatory requirements. The short term stress scenarios comprise 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.
Liquidity Coverage Ratio
As at 31.12.18
As at 31.12.17
£bn
£bn
Eligible liquidity buffer
219
215
Net stress outflows
(129)
(140)
Surplus
90
75
Liquidity coverage ratio
169%
154%
The Barclays 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.
Treasury and Capital Risk
Barclays PLC
43
Composition of the Group liquidity pool
As at 31.12.18
As at 31.12.17
Liquidity
pool
Liquidity pool of which interim
CRD IV LCR-eligible
3
Liquidity pool
Cash
Level 1
Level 2A
£bn
£bn
£bn
£bn
£bn
Cash and deposits with central banks
1
181
176
-
-
173
Government bonds
2
AAA to AA-
27
-
23
-
31
BBB+ to BBB-
4
-
4
-
2
Other LCR ineligible government bonds
1
-
-
-
1
Total government bonds
32
-
27
-
34
Other
Government guaranteed issuers, PSEs and GSEs
6
-
5
1
6
International organisations and MDBs
5
-
5
-
4
Covered bonds
3
-
3
-
2
Other
-
-
-
-
1
Total other
14
-
13
1
13
Total as at 31 December 2018
227
176
40
1
Total as at 31 December 2017
220
169
43
2
1 Of which over 99% (December 2017: over 99%) was placed with the Bank of England, US Federal Reserve, European Central Bank, Bank of Japan and Swiss
National Bank.
2 Of which over 71% (December 2017: over 84%) comprised of UK, US, French, German, Swiss and Dutch securities.
3 The LCR eligible liquidity pool is adjusted for trapped liquidity and other regulatory deductions. It also incorporates other CRD IV qualifying assets that are
not eligible under Barclays’ internal risk appetite.
The Barclays Group liquidity pool was £227bn as at 31 December 2018 (December 2017: £220bn). During 2018, the month-
end liquidity pool ranged from £207bn to £243bn (December 2017: £165bn to £232bn), and the month-end average balance
was £225bn (December 2017: £202bn). 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 31 December 2018, 90% (December 2017: 93%) of the liquidity pool was located in Barclays Bank PLC and Barclays
Bank UK 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 portion of the liquidity
pool is restricted due to regulatory requirements, it is assumed to be unavailable to the rest of the Barclays Group in calculating
the LCR.
Deposit funding
As at 31.12.18
As at 31.12.17
Loans and
advances at
amortised
cost
Deposits at
amortised
cost
Loan: deposit
ratio
1
Loan: deposit
ratio
1
Funding of loans and advances
£bn
£bn
%
%
Barclays UK
189
197
96%
95%
Barclays International
127
197
65%
68%
Head Office
11
-
Barclays Group
326
395
83%
81%
1 The loan: deposit ratio is calculated as loans and advances at amortised cost divided by deposits at amortised cost. Comparatives have been restated based
on this approach.
Treasury and Capital Risk
Barclays PLC
44
Composition of wholesale funding
Wholesale funding outstanding (excluding repurchase agreements) was £154bn (December 2017: £144bn). In 2018,
Barclays Group issued £12.2bn of MREL eligible instruments from Barclays PLC (the Parent company) in a range of different
tenors and currencies.
Barclays Bank PLC continued to issue in the shorter-term markets and Barclays Bank UK PLC issued in the shorter-term and
secured markets, helping to maintain their stable and diversified funding bases.
Barclays Group has continued to reduce its reliance on short-term wholesale funding, where the proportion maturing in less
than 1 year fell to 30% (December 2017: 31%). Wholesale funding of £46.7bn (December 2017: £44.9bn) matures in less
than one year, of which £19.1bn (December 2017: £13.8bn)
2
relates to term funding. Although not a requirement, the
liquidity pool exceeded wholesale funding maturing in less than one year by £180bn (December 2017: £175bn).
Maturity profile of wholesale funding
1,2
<1
1-3
3-6
6-12
<1
1-2
2-3
3-4
4-5
>5
month
months
months
months
year
years
years
years
years
years
Total
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Barclays PLC (the Parent company)
Senior unsecured (public benchmark)
-
-
-
1.6
1.6
1.1
4.4
1.3
6.7
16.3
31.4
Senior unsecured (privately placed)
-
-
-
-
-
-
0.2
-
0.2
0.5
0.9
Subordinated liabilities
-
-
-
-
-
-
-
-
-
6.8
6.8
Barclays Bank PLC (including
subsidiaries)
Certificates of deposit and commercial
paper
0.1
7.8
3.5
8.0
19.4
1.2
0.8
0.5
0.1
-
22.0
Asset backed commercial paper
2.0
3.7
1.1
-
6.8
-
-
-
-
-
6.8
Senior unsecured (public benchmark)
-
0.3
1.1
1.1
2.5
3.0
0.4
-
-
1.2
7.1
Senior unsecured (privately placed)
3
0.1
3.0
2.3
5.6
11.0
7.7
4.6
2.6
4.0
16.5
46.4
Asset backed securities
-
-
-
1.0
1.0
1.2
0.2
0.2
0.6
2.6
5.8
Subordinated liabilities
0.2
0.1
-
0.1
0.4
0.9
5.2
3.4
-
4.1
14.0
Other
0.1
-
-
-
0.1
0.1
-
-
0.3
1.1
1.6
Barclays Bank UK PLC (including
subsidiaries)
Certificates of deposit and commercial
paper
-
1.0
0.2
0.1
1.3
-
-
-
-
-
1.3
Covered bonds
-
-
-
1.8
1.8
1.0
1.0
2.4
1.3
1.1
8.6
Asset backed securities
-
-
-
0.8
0.8
0.5
-
-
-
-
1.3
Total as at 31 December 2018
2.5
15.9
8.2
20.1
46.7
16.7
16.8
10.4
13.2
50.2
154.0
Of which secured
2.0
3.7
1.1
3.6
10.4
2.7
1.2
2.6
1.9
3.7
22.5
Of which unsecured
0.5
12.2
7.1
16.5
36.3
14.0
15.6
7.8
11.3
46.5
131.5
Total as at 31 December 2017
7.2
14.9
12.5
10.3
44.9
18.7
12.0
13.6
10.8
43.7
143.7
Of which secured
1.9
5.1
1.0
0.2
8.2
3.5
2.0
1.0
2.5
3.1
20.3
Of which unsecured
5.3
9.8
11.5
10.1
36.7
15.2
10.0
12.6
8.3
40.6
123.4
1 The composition of wholesale funds principally comprises of the debt securities and subordinated liabilities. It does not include participation in the central
bank monetary initiatives which are reported within repurchase agreements and other similar secured borrowing.
2 Term funding comprises of public benchmark and privately placed senior unsecured notes, covered bonds, asset-backed securities (ABS) and subordinated
debt where the original maturity of the instrument is more than 1 year.
3 Includes structured notes of £35.7bn, of which £6.2bn matures within one year.
Treasury and Capital Risk
Barclays PLC
45
Capital
Barclays’ fully loaded CET1 regulatory requirement is 11.7% 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 applicable from 1
January 2019, and a 0.5% Countercyclical Capital Buffer (CCyB).
The CCB and the G-SII buffer, determined by the PRA in line with guidance from the Financial Stability Board (FSB), were
subject to phased implementation at 25% per annum from 2016 with full effect from 1 January 2019. The CCB has been set
at 2.5% with 1.9% applicable for 2018. The G-SII buffer for 2018 has been set at 1.5% with 1.1% applicable for 2018. The
FSB confirmed that the G-SII buffer will remain at 1.5% applicable for 2019 and 2020.
The Barclays CCyB is based on the buffer rate applicable for each jurisdiction in which Barclays have exposures. On 28
November 2018, the Financial Policy Committee (FPC) increased the CCyB rate for UK exposures from 0.5% to 1%. The buffer
rates set by other national authorities for our non-UK exposures are not currently material. Overall, this results in a 0.5% CCyB
for Barclays for Q418.
Barclays’ Pillar 2A requirement as per the PRA’s Individual Capital Requirement for 2018 is 4.3%, of which at least 56.25%
needs to be met in CET1 form, equating to approximately 2.4% of RWAs. Certain elements of the Pillar 2A requirement are a
fixed quantum whilst others are a proportion of RWAs and are based on a point in time assessment. The Pillar 2A requirement
is subject to at least annual review.
As at 31 December 2018, Barclays’ transitional CET1 ratio was 13.2% which exceeded the 2018 transitional minimum
requirement of 10.4% comprising a 4.5% Pillar 1 minimum, a 1.9% CCB, a 1.1% G-SII buffer, a 0.5% CCyB and a 2.4% Pillar
2A requirement.
Treasury and Capital Risk
Barclays PLC
46
Capital ratios
1,2,3
As at 31.12.18
As at 30.09.18
As at 31.12.17
CET1
13.2%
13.2%
13.3%
Tier 1 (T1)
17.0%
17.5%
17.2%
Total regulatory capital
20.7%
21.3%
21.5%
Capital resources
£bn
£bn
£bn
Total equity excluding non-controlling interests per the balance sheet
62.6
63.2
63.9
Less: other equity instruments (recognised as AT1 capital)
(9.6)
(10.8)
(8.9)
Adjustment to retained earnings for foreseeable dividends
(0.7)
(0.5)
(0.4)
Other regulatory adjustments and deductions
Additional value adjustments (PVA)
(1.7)
(1.6)
(1.4)
Goodwill and intangible assets
(8.0)
(7.9)
(7.9)
Deferred tax assets that rely on future profitability excluding temporary differences
(0.5)
(0.6)
(0.6)
Fair value reserves related to gains or losses on cash flow hedges
(0.7)
(0.4)
(1.2)
Excess of expected losses over impairment
-
-
(1.2)
Gains or losses on liabilities at fair value resulting from own credit
(0.1)
0.1
0.1
Defined benefit pension fund assets
(1.3)
(0.8)
(0.7)
Direct and indirect holdings by an institution of own CET1 instruments
(0.1)
(0.1)
(0.1)
Adjustment under IFRS 9 transitional arrangements
1.3
1.3
-
CET1 capital
41.1
41.7
41.6
AT1 capital
Capital instruments and related share premium accounts
9.6
10.8
8.9
Qualifying AT1 capital (including minority interests) issued by subsidiaries
2.4
2.7
3.5
Other regulatory adjustments and deductions
(0.1)
(0.1)
(0.1)
AT1 capital
11.9
13.5
12.3
T1 capital
53.0
55.2
53.9
T2 capital
Capital instruments and related share premium accounts
6.6
6.6
6.5
Qualifying T2 capital (including minority interests) issued by subsidiaries
5.3
5.6
7.0
Other regulatory adjustments and deductions
(0.3)
(0.3)
(0.3)
Total regulatory capital
64.6
67.2
67.2
Total RWAs
311.9
316.2
313.0
1 CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR. This includes IFRS 9 transitional arrangements and
the grandfathering of CRR non-compliant capital instruments.
2 The fully loaded CET1 ratio, as is relevant for assessing against the conversion trigger in Barclays PLC additional tier 1 (AT1) securities, was 12.8%, with
£39.8bn of CET1 capital and £311.8bn of RWAs calculated without applying the transitional arrangements of the CRR.
3 The Barclays PLC CET1 ratio, as is relevant for assessing against the conversion trigger in Barclays Bank PLC T2 Contingent Capital Notes, was 13.2%. For
this calculation CET1 capital and RWAs are calculated applying the transitional arrangements under the CRR, including the IFRS 9 transitional arrangements.
The benefit of the Financial Services Authority (FSA) October 2012 interpretation of the transitional provisions, relating to the implementation of CRD IV,
expired in December 2017.
Treasury and Capital Risk
Barclays PLC
47
Movement in CET1 capital
Three months ended
Year ended
31.12.18
31.12.18
£bn
£bn
Opening CET1 capital
41.7
41.6
Effects of changes in accounting policies
-
(2.2)
Profit for the period attributable to equity holders
0.2
2.1
Own credit relating to derivative liabilities
-
(0.1)
Dividends paid and foreseen
(0.4)
(1.7)
(Decrease)/ Increase in retained regulatory capital generated from earnings
(0.3)
0.4
Net impact of share schemes
0.1
0.1
Fair value through other comprehensive income reserve
0.2
(0.5)
Currency translation reserve
0.4
0.8
Other reserves
(1.0)
(1.0)
Decrease in other qualifying reserves
(0.3)
(0.6)
Pension remeasurements within reserves
0.6
0.3
Defined benefit pension fund asset deduction
(0.5)
(0.6)
Net impact of pensions
0.1
(0.3)
Additional value adjustments (PVA)
(0.1)
(0.4)
Goodwill and intangible assets
(0.1)
(0.1)
Deferred tax assets that rely on future profitability excluding those arising from temporary
differences
0.1
0.1
Excess of expected loss over impairment
-
1.2
Adjustment under IFRS 9 transitional arrangements
-
1.3
(Decrease)/ Increase in regulatory capital due to adjustments and deductions
(0.1)
2.2
Closing CET1 capital
41.1
41.1
CET1 capital decreased £0.5bn to £41.1bn.
£4.2bn of organic capital generated from profits was more than offset by £2.1bn of litigation and conduct charges, as the
Barclays Group resolved legacy matters, as well as the following significant items:
£1.7bn of dividends paid and foreseen for ordinary dividends and AT1 coupons
A £1bn decrease in other qualifying reserves following the redemption of the legacy $2.65bn 8.125% Series Non-
Cumulative Callable Dollar Preference Shares and $2bn 8.25% AT1 securities due to these instruments being held on the
balance sheet at historical FX rates
A £0.3bn decrease as a result of movements relating to pensions, largely due to deficit contribution payments of £0.25bn
in April 2018 and £0.25bn in September 2018
The implementation of IFRS 9 resulted in a net increase in CET1 capital as the initial decrease in shareholders' equity of £2.2bn
on implementation was more than offset by the transitional relief of £1.3bn and the removal of £1.2bn of regulatory deduction
for the excess of expected loss over impairment.
Treasury and Capital Risk
Barclays PLC
48
Risk weighted assets (RWAs) by risk type and business
Credit risk
Counterparty credit risk
Market risk
Operational
risk
Total
RWAs
Std
IRB
Std
IRB
Settlement
risk
CVA
Std
IMA
As at 31.12.18
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Barclays UK
3.3
59.7
0.2
-
-
0.1
0.1
-
11.8
75.2
Barclays International
55.6
67.0
9.9
15.0
0.2
3.3
13.9
16.8
29.0
210.7
Head Office
4.3
5.8
-
-
-
-
-
-
15.9
26.0
Barclays Group
63.2
132.5
10.1
15.0
0.2
3.4
14.0
16.8
56.7
311.9
As at 30.09.18
Barclays UK
3.4
59.2
0.3
-
-
0.1
-
-
11.8
74.8
Barclays International
51.6
68.8
15.3
16.8
0.1
3.4
15.8
14.4
28.4
214.6
Head Office
4.1
6.0
-
0.2
-
-
-
-
16.5
26.8
Barclays Group
59.1
134.0
15.6
17.0
0.1
3.5
15.8
14.4
56.7
316.2
As at 31.12.17
Barclays UK
3.8
55.0
-
-
-
-
-
-
12.2
70.9
Barclays International
49.1
69.5
17.0
17.2
0.1
2.8
13.3
13.5
27.7
210.3
Head Office
2.9
9.8
0.1
0.6
-
0.2
0.1
1.4
16.8
31.8
Barclays Group
55.8
134.2
17.1
17.9
0.1
3.0
13.4
14.9
56.7
313.0
Movement analysis of RWAs
Credit risk
Counterparty
credit risk
Market risk
Operational
risk
Total RWAs
Year ended 31.12.18
£bn
£bn
£bn
£bn
£bn
Opening RWAs
190.0
38.0
28.3
56.7
313.0
Book size
6.8
(0.6)
2.2
-
8.4
Acquisitions and disposals
(3.6)
(0.3)
(0.2)
-
(4.1)
Book quality
(2.9)
(0.5)
-
-
(3.4)
Model updates
-
-
-
-
-
Methodology and policy
2.2
(7.8)
0.5
-
(5.1)
Foreign exchange movements
1
3.1
-
-
-
3.1
Closing RWAs
195.6
28.8
30.8
56.7
311.9
1 Foreign exchange movements does not include foreign exchange for counterparty credit risk or market risk.
RWAs decreased £1.1bn to £311.9bn:
Book size increased RWAs £8.4bn primarily due to increased lending activity within the Investment Banking and
Consumer, Cards & Payments businesses
Acquisitions and disposals decreased RWAs £4.1bn primarily due to the regulatory deconsolidation of BAGL
Book quality decreased RWAs £3.4bn primarily due to changes in the risk profile in Barclays International
Methodology and policy decreased RWAs £5.1bn primarily due to an extended regulatory permission to use the
modelled exposure measurement approach
Foreign exchange movements increased RWAs £3.1bn primarily due to appreciation of period end USD against GBP
Treasury and Capital Risk
Barclays PLC
49
Leverage ratio and exposures
Barclays is subject to a leverage ratio requirement that is implemented on a phased basis, with a transitional requirement of
3.8% as at 31 December 2018; this comprised the 3.25% minimum requirement, a transitional G-SII additional leverage ratio
buffer (G-SII ALRB) of 0.39% and a countercyclical leverage ratio buffer (CCLB) of 0.2%. 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 and CCLB must be covered solely with CET1 capital. The CET1 capital held against the 0.39%
transitional G-SII ALRB was £4.4bn and the 0.2% CCLB was £2.2bn. The fully loaded UK leverage requirement is expected to
be 4.0%.
From 1 January 2018, following the end of the transitional period Barclays 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.
During the transitional period, the exposure measure was based on the last day of each month in the quarter. Barclays 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.
As at 31.12.18
As at 30.09.18
As at 31.12.17
Leverage ratios
1,2
£bn
£bn
£bn
UK leverage ratio
5.1%
4.9%
5.1%
CET1 capital
41.1
41.7
41.6
AT1 capital
9.5
10.7
8.8
T1 capital
3
50.6
52.5
50.4
UK leverage exposure
999
1,063
985
Average UK leverage ratio
4.5%
4.6%
4.9%
Average T1 capital
3
50.5
51.8
51.2
Average UK leverage exposure
4
1,110
1,119
1,045
UK leverage exposure
Accounting assets
Derivative financial instruments
223
215
238
Derivative cash collateral
48
47
53
Securities financing transactions (SFTs)
121
129
113
Loans and advances and other assets
741
780
729
Total IFRS assets
1,133
1,171
1,133
Regulatory consolidation adjustments
(2)
(1)
8
Derivatives adjustments
Derivatives netting
(202)
(194)
(217)
Adjustments to cash collateral
(42)
(40)
(42)
Net written credit protection
19
16
14
Potential future exposure (PFE) on derivatives
123
133
120
Total derivatives adjustments
(102)
(85)
(125)
SFTs adjustments
17
17
19
Regulatory deductions and other adjustments
(11)
(11)
(13)
Weighted off-balance sheet commitments
108
101
103
Qualifying central bank claims
(144)
(129)
(140)
UK leverage exposure
2
999
1,063
985
1 The fully loaded UK leverage ratio was 4.9%, with £49.3bn of T1 capital and £997bn of leverage exposure calculated without applying the transitional
arrangements of the CRR.
2 Capital and leverage measures are calculated applying the transitional arrangements of the CRR.
3 The T1 capital is calculated in line with the PRA Handbook, which excludes grandfathered AT1 instruments allowed under the CRR.
4 The average UK leverage exposure as at 31 December 2017 was calculated based on the last day of each month in the quarter.
Treasury and Capital Risk
Barclays PLC
50
The UK leverage ratio remained flat at 5.1% (December 2017: 5.1%). The leverage exposure increased marginally to £999bn
(December 2017: £985bn), the leverage exposure movements included:
Loans and advances and other assets increased £12bn to £741bn primarily driven by growth in the UK mortgage
portfolio
SFTs increased £8bn to £121bn primarily driven by the CIB utilising leverage balance sheet more efficiently within
high returning financing businesses
Regulatory consolidation adjustments decreased £10bn primarily driven by the regulatory deconsolidation of BAGL
The average UK leverage ratio decreased to 4.5% (December 2017: 4.9%) partially driven by the change to the daily exposure
measure. Average UK leverage exposures increased due to higher trading activity in SFTs and trading portfolio assets, as well
as a decrease in average Tier 1 capital.
The difference between the average UK leverage ratio and the UK leverage ratio was primarily driven by lower trading portfolio
assets, settlement exposures and SFT exposures at quarter end.
Barclays is required to disclose a CRR leverage ratio. This is included in the additional Barclays regulatory disclosures, prepared
in accordance with European Banking Authority (EBA) guidelines on disclosure requirements under Part Eight of Regulation
(EU) No 575/2013 (see Barclays PLC Pillar 3 Report 2018 (unaudited)), due to be published by 21 February 2019, available at
home.barclays/investor-relations/reports-and-events/annual-reports.
Treasury and Capital Risk
Barclays PLC
51
Minimum requirement for own funds and eligible liabilities (MREL)
Under the Bank of England’s statement of policy on MREL, the Bank of England will set MREL for UK Global Systemically
Important Banks (G-SIBs) as necessary to implement the total loss-absorbing capacity (TLAC) standard. Institution or group-
specific MREL requirements will depend on the preferred resolution strategy for that institution or group.
The MREL requirements will be phased in from 1 January 2019 and will be fully implemented by 1 January 2022, at which
time G-SIBs with resolution entities incorporated in the UK, including Barclays, will be required to meet an MREL equivalent
to the higher of either: (i) two times the sum of its Pillar 1 and Pillar 2A requirements or; (ii) the higher of two times its leverage
ratio requirement or 6.75% of leverage exposures. However, the PRA will review the MREL calibration by the end of 2020,
including assessing the proposal for Pillar 2A recapitalisation which may drive a different 1 January 2022 MREL requirement
than currently proposed. In addition, it is proposed that CET1 capital cannot be counted towards both MREL and the
combined buffer requirement (CBR), meaning that the CBR will effectively be applied above both the Pillar 1 and Pillar 2A
requirements relating to own funds and MREL.
Barclays’ indicative MREL requirement is currently expected to be 30.0% of RWAs from 1 January 2022 consisting of the
following components:
Loss absorption and recapitalisation amounts consisting of 8% Pillar 1 and 4.7% Pillar 2A buffers respectively
Regulatory buffers including a 1.5% G-SII buffer, 2.5% CCB and 0.5% from the planned introduction of a 1% CCyB for the
UK
1
MREL ratios and position
MREL ratios
As at 31.12.18
As at 30.09.18
As at 31.12.17
CET1 capital
2
13.2%
13.2%
13.3%
Additional tier 1 (AT1) capital instruments and related share premium accounts
3.1%
3.4%
2.9%
Tier 2 (T2) capital instruments and related share premium accounts
2.1%
2.1%
2.1%
Term senior unsecured funding
9.7%
9.4%
6.8%
Total Barclays PLC (the Parent company) MREL ratio
28.1%
28.1%
25.0%
Qualifying AT1 capital (including minority interests) issued by subsidiaries
3
0.7%
0.8%
1.1%
Qualifying T2 capital (including minority interests) issued by subsidiaries
3
1.6%
1.7%
2.2%
Total MREL ratio, including eligible Barclays Bank PLC instruments
30.5%
30.7%
28.2%
MREL position
£bn
£bn
£bn
CET1 capital
2
41.1
41.7
41.6
AT1 capital instruments and related share premium accounts
9.6
10.8
8.9
T2 capital instruments and related share premium accounts
6.6
6.6
6.5
Term senior unsecured funding
30.4
29.8
21.2
Total Barclays PLC (the Parent company) MREL position
87.7
89.0
78.2
Qualifying AT1 capital (including minority interests) issued by subsidiaries
3
2.3
2.6
3.4
Qualifying T2 capital (including minority interests) issued by subsidiaries
3
5.1
5.4
6.8
Total MREL position, including eligible Barclays Bank PLC instruments
95.1
97.0
88.4
Total RWAs
2
311.9
316.2
313.0
1 2022 requirements subject to Bank of England review by the end of 2020.
2 CET1 capital and RWAs are calculated applying the transitional arrangements of the CRR. This includes IFRS 9 transitional arrangements and the
grandfathering of CRR non-compliant capital instruments.
3 Includes other AT1 capital regulatory adjustments and deductions of £0.1bn (December 2017: £0.1bn), and other T2 credit risk adjustments and deductions
of £0.3bn (December 2017: £0.3bn).
Statement of Directors’ Responsibilities
Barclays PLC
52
Each of the Directors (the names of whom are set out below) confirm that:
to the best of their knowledge, the condensed consolidated financial statements (set out on pages 53 to 57), which have
been prepared in accordance with the IFRSs as adopted by the European Union, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as
a whole. The condensed consolidated financial statements should be read in conjunction with the annual financial
statements as included in the Annual Report for the year ended 31 December 2018; and
to the best of their knowledge, the management information (set out on pages 1 to 51) includes a fair review of the
development and performance of the business and the position of the Company and the undertakings included in the
consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. This
management information should be read in conjunction with the principal risks and uncertainties included in the Annual
Report for the year ended 31 December 2018.
Signed on behalf of the Board by
James E Staley Tushar Morzaria
Group Chief Executive Group Finance Director
Barclays PLC Board of Directors:
Chairman
John McFarlane
Executive Directors
James E Staley
Tushar Morzaria
Non-executive Directors
Mike Ashley
Tim Breedon CBE
Sir Ian Cheshire
Mary Anne Citrino
Mary Francis CBE
Crawford Gillies
Sir Gerry Grimstone
Reuben Jeffery III
Matthew Lester
Dambisa Moyo
Diane Schueneman
Mike Turner CBE
Condensed Consolidated Financial Statements
Barclays PLC
53
Condensed consolidated income statement
Year ended
Year ended
31.12.18
31.12.17
Continuing operations
Notes
1
£m
£m
Net interest income
9,062
9,845
Net fee and commission income
6,809
6,814
Net trading income
4,566
3,500
Net investment income
585
861
Other income
114
56
Total income
21,136
21,076
Credit impairment charges and other provisions
(1,468)
(2,336)
Net operating income
19,668
18,740
Staff costs
(8,629)
(8,560)
Administration and general expenses
(7,614)
(6,896)
Operating expenses
(16,243)
(15,456)
Profit on disposal of undertakings and share of results of associates and joint ventures
69
257
Profit before tax
3,494
3,541
Tax charge
1
(1,122)
(2,240)
Profit after tax in respect of continuing operations
2,372
1,301
Loss after tax in respect of discontinued operation
-
(2,195)
Profit/(loss) after tax
2,372
(894)
Attributable to:
Equity holders of the parent
1,394
(1,922)
Other equity instrument holders
752
639
Total equity holders of the parent
2,146
(1,283)
Non-controlling interests in respect of continuing operations
2
226
249
Non-controlling interests in respect of discontinued operation
2
-
140
Profit/(loss) after tax
2,372
(894)
Earnings per share
p
p
Basic earnings/(loss) per ordinary share
3
9.4
(10.3)
Basic earnings per ordinary share in respect of continuing operations
3
9.4
3.5
Basic loss per ordinary share in respect of discontinued operation
3
-
(13.8)
Diluted earnings/(loss) per ordinary share
3
9.2
(10.1)
Diluted earnings per ordinary share in respect of continuing operations
3
9.2
3.4
Diluted loss per ordinary share in respect of discontinued operation
3
-
(13.5)
1 For notes to the Financial Statements see pages 58 to 63.
Condensed Consolidated Financial Statements
Barclays PLC
54
Condensed consolidated statement of comprehensive income
Year ended
Year ended
31.12.18
31.12.17
Notes
1
£m
£m
Profit/(loss) after tax
2,372
(894)
Profit after tax in respect of continuing operations
2,372
1,301
Loss after tax in respect of discontinued operation
-
(2,195)
Other comprehensive income/(loss) that may be recycled to profit or loss from continuing operations:
2
Currency translation reserve
11
834
(1,337)
Available for sale reserve
3
11
-
449
Fair value through other comprehensive income reserve
3
11
(226)
-
Cash flow hedging reserve
11
(501)
(948)
Other
11
30
(5)
Other comprehensive income/(loss) that may be recycled to profit or loss from
continuing operations
137
(1,841)
Other comprehensive income/(loss) not recycled to profit or loss from continuing operations:
2
Retirement benefit remeasurements
8
313
53
Fair value through other comprehensive income reserve
3
11
(260)
-
Own credit
11
58
(11)
Other comprehensive income not recycled to profit or loss from continuing operations
111
42
Other comprehensive income/(loss) from continuing operations
248
(1,799)
Other comprehensive income from discontinued operation
-
1,301
Total comprehensive income/(loss):
Total comprehensive income/(loss) for the period, net of tax from continuing operations
2,620
(498)
Total comprehensive loss for the period, net of tax from discontinued operation
-
(894)
Total comprehensive income/(loss)
2,620
(1,392)
Attributable to:
Equity holders of the parent
2,394
(1,749)
Non-controlling interests
226
357
Total comprehensive income/(loss) for the year
2,620
(1,392)
1 For notes to the Financial Statements see pages 58 to 63.
2 Reported net of tax.
3 Following the adoption of IFRS 9, Financial Instruments on 1 January 2018, the fair value through other comprehensive income reserve was introduced
replacing the available for sale reserve.
Condensed Consolidated Financial Statements
Barclays PLC
55
Condensed consolidated balance sheet
As at 31.12.18
As at 31.12.17
2
Assets
Notes
1
£m
£m
Cash and balances at central banks
177,069
171,082
Cash collateral and settlement balances
77,222
77,168
Loans and advances at amortised cost
326,406
324,048
Reverse repurchase agreements and other similar secured lending
2,308
12,546
Trading portfolio assets
104,187
113,760
Financial assets at fair value through the income statement
149,648
116,281
Derivative financial instruments
222,538
237,669
Financial investments
-
58,915
Financial assets at fair value through other comprehensive income
52,816
-
Investments in associates and joint ventures
762
718
Goodwill and intangible assets
7,973
7,849
Property, plant and equipment
2,535
2,572
Current tax assets
1
798
482
Deferred tax assets
1
3,828
3,457
Retirement benefit assets
8
1,768
966
Other assets
3,425
4,542
Assets included in disposal groups classified as held for sale
-
1,193
Total assets
1,133,283
1,133,248
Liabilities
Deposits at amortised cost
394,838
398,701
Cash collateral and settlement balances
67,522
68,143
Repurchase agreements and other similar secured borrowing
18,578
40,338
Debt securities in issue
82,286
73,314
Subordinated liabilities
6
20,559
23,826
Trading portfolio liabilities
37,882
37,351
Financial liabilities designated at fair value
216,834
173,718
Derivative financial instruments
219,643
238,345
Current tax liabilities
1
628
586
Deferred tax liabilities
1
51
44
Retirement benefit liabilities
8
315
312
Other liabilities
7,716
9,011
Provisions
7
2,652
3,543
Total liabilities
1,069,504
1,067,232
Equity
Called up share capital and share premium
9
4,311
22,045
Other reserves
11
5,153
5,383
Retained earnings
43,460
27,536
Shareholders' equity attributable to ordinary shareholders of the parent
52,924
54,964
Other equity instruments
10
9,632
8,941
Total equity excluding non-controlling interests
62,556
63,905
Non-controlling interests
2
1,223
2,111
Total equity
63,779
66,016
Total liabilities and equity
1,133,283
1,133,248
1 For notes to the Financial Statements see pages 58 to 63.
2 Barclays introduced changes to the balance sheet presentation as at 31 December 2017 as a result of the adoption of new accounting policies on 1 January
2018. Further detail on the adoption of new accounting policies can be found in Note 8, Transition disclosures on pages 347 to 354 of the 2018 Annual
Report and the Credit risk disclosures on pages 149 to 175.
Condensed Consolidated Financial Statements
Barclays PLC
56
Condensed consolidated statement of changes in equity
Called up
share capital
and share
premium
1
Other equity
instruments
1
Other
reserves
1
Retained
earnings
Total
Non-
controlling
interests
2
Total
equity
Year ended 31.12.18
£m
£m
£m
£m
£m
£m
£m
Balance as at 31 December 2017
22,045
8,941
5,383
27,536
63,905
2,111
66,016
Effects of changes in accounting policies
-
-
(136)
(2,014)
(2,150)
-
(2,150)
Balance as at 1 January 2018
22,045
8,941
5,247
25,522
61,755
2,111
63,866
Continuing operations
Profit after tax
-
752
-
1,394
2,146
226
2,372
Other comprehensive profit after tax for the
period
-
-
(95)
343
248
-
248
Total comprehensive income for the year
-
752
(95)
1,737
2,394
226
2,620
Issue of new ordinary shares
88
-
-
-
88
-
88
Issue of shares under employee share
schemes
51
-
-
449
500
-
500
Capital reorganisation
3
(17,873)
-
-
17,873
-
-
-
Issue and exchange of other equity
instruments
-
692
-
(308)
384
-
384
Other equity instruments coupons paid
-
(752)
-
203
(549)
-
(549)
Redemption of preference shares
-
-
-
(732)
(732)
(1,309)
(2,041)
Debt to equity reclassification
4
-
-
-
-
-
419
419
Treasury shares
-
-
1
(499)
(498)
-
(498)
Dividends paid
-
-
-
(768)
(768)
(226)
(994)
Other movements
-
(1)
-
(17)
(18)
2
(16)
Balance as at 31 December 2018
4,311
9,632
5,153
43,460
62,556
1,223
63,779
Year ended 31.12.17
Balance as at 31 December 2016
21,842
6,449
6,051
30,531
64,873
6,492
71,365
Effects of changes in accounting policies
-
-
(175)
175
-
-
-
Balance as at 1 January 2017
21,842
6,449
5,876
30,706
64,873
6,492
71,365
Profit after tax
-
639
-
413
1,052
249
1,301
Other comprehensive profit after tax for the
period
-
-
(1,846)
48
(1,798)
(1)
(1,799)
Total comprehensive income net of tax from
continuing operations
-
639
(1,846)
461
(746)
248
(498)
Total comprehensive income net of tax from
discontinued operation
-
-
1,332
(2,335)
(1,003)
109
(894)
Total comprehensive income for the year
-
639
(514)
(1,874)
(1,749)
357
(1,392)
Issue of new ordinary shares
117
-
-
-
117
-
117
Issue of shares under employee share
schemes
86
-
-
505
591
-
591
Issue and exchange of other equity
instruments
-
2,490
-
-
2,490
-
2,490
Other equity instruments coupons paid
-
(639)
-
174
(465)
-
(465)
Redemption of preference shares
-
-
-
(479)
(479)
(860)
(1,339)
Treasury shares
-
-
14
(636)
(622)
-
(622)
Dividends paid
-
-
-
(509)
(509)
(415)
(924)
Net equity impact of partial BAGL disposal
-
-
-
(359)
(359)
(3,462)
(3,821)
Other movements
-
2
7
8
17
(1)
16
Balance as at 31 December 2017
22,045
8,941
5,383
27,536
63,905
2,111
66,016
1 Details of share capital, other equity instruments and other reserves are shown on pages 62 to 63.
2 Details of non-controlling interests are shown on page 58.
3 Details of the capital reorganisation are shown on page 62.
4 Following a review of subordinated liabilities issued by Barclays Bank PLC, certain instruments have been deemed to have characteristics that would qualify
them as equity and have subsequently been reclassified.
Condensed Consolidated Financial Statements
Barclays PLC
57
Condensed consolidated cash flow statement
Year ended
Year ended
31.12.18
31.12.17
Continuing operations
£m
£m
Profit before tax
3,494
3,541
Adjustment for non-cash items
985
6,023
Changes in operating assets and liabilities
4,573
51,855
Corporate income tax paid
(548)
(708)
Net cash from operating activities
8,504
60,711
Net cash from investing activities
678
3,502
Net cash from financing activities
(6,788)
961
Effect of exchange rates on cash and cash equivalents
4,160
(4,773)
Net increase in cash and cash equivalents from continuing operations
6,554
60,401
Net cash from discontinued operation
-
101
Net increase in cash and cash equivalents
6,554
60,502
Cash and cash equivalents at beginning of the period
204,612
144,110
Cash and cash equivalents at end of the period
211,166
204,612
Financial Statement Notes
Barclays PLC
58
1. Tax
The tax charge for 2018 was £1,122m (2017: £2,240m), representing an effective tax rate of 32.1% (2017: 63.3%). Excluding
litigation and conduct and a one-off net charge in 2017 due to the re-measurement of DTAs as a result of the reduction in
the US federal corporate income tax rate under the US Tax Cuts and Jobs Act, the underlying effective tax rate reduced to
20.9% (2017: 29.4%), primarily due to the reduction in the US tax rate and the beneficial impact of adjustments to prior
periods that have been recognised in 2018.
Assets
Liabilities
As at 31.12.18
As at 31.12.17
As at 31.12.18
As at 31.12.17
Current and deferred tax assets and liabilities
£m
£m
£m
£m
Current tax
798
482
(628)
(586)
Deferred tax
3,828
3,457
(51)
(44)
Total
4,626
3,939
(679)
(630)
As at 31.12.18
As at 31.12.17
Deferred tax assets and liabilities
£m
£m
Intermediate Holding Company (IHC) - US tax group
1,454
1,413
Barclays Bank PLC (US branch) - US tax group
1,087
1,234
Barclays PLC - UK tax group
861
492
Other
426
318
Deferred tax assets
3,828
3,457
Deferred tax liabilities
(51)
(44)
Net deferred tax
3,777
3,413
Analysis of net deferred tax
Temporary differences
3,248
2,817
Tax losses
529
596
Net deferred tax
3,777
3,413
2. Non-controlling interests
Profit attributable to
non-controlling interests
Equity attributable to
non-controlling interests
Year ended
Year ended
31.12.18
31.12.17
As at 31.12.18
As at 31.12.17
£m
£m
£m
£m
Barclays Bank PLC issued:
- Preference shares
204
242
529
1,838
- Upper T2 instruments
22
3
691
272
Barclays Africa Group Limited
-
140
-
-
Other non-controlling interests
-
4
3
1
Total
226
389
1,223
2,111
In December, Barclays Bank PLC redeemed its 8.125% USD Preference Shares in full. Following a review of the subordinated
liabilities issued by Barclays Bank PLC, certain instruments have been deemed to have characteristics that would qualify them
as equity and have subsequently been reclassified. These are accounted for as non-controlling interest.
Financial Statement Notes
Barclays PLC
59
3. Earnings per share
Year ended
Year ended
31.12.18
31.12.17
£m
£m
Profit/(loss) attributable to ordinary equity holders of the parent from continuing and discontinued
operations
1,394
(1,922)
Tax credit on profit after tax attributable to other equity holders
203
174
Total profit/(loss) attributable to ordinary equity holders of the parent from continuing and
discontinued operations
1,597
(1,748)
Continuing operations
Profit attributable to ordinary equity holders of the parent from continuing operations
1,394
413
Tax credit on profit after tax attributable to other equity holders
203
174
Profit attributable to equity holders of the parent from continuing operations
1,597
587
Discontinued operation
Loss attributable to ordinary equity holders of the parent from discontinued operation
-
(2,335)
Profit/(loss) attributable to equity holders of the parent from continuing and discontinued operations
including dilutive impact on convertible options
1,597
(1,748)
m
m
Basic weighted average number of shares in issue
17,075
16,996
Number of potential ordinary shares
308
288
Diluted weighted average number of shares
17,383
17,284
p
p
Basic earnings/(loss) per ordinary share
9.4
(10.3)
Basic earnings per ordinary share from continuing operations
9.4
3.5
Basic loss per ordinary share from discontinued operation
-
(13.8)
Diluted earnings/(loss) per ordinary share
9.2
(10.1)
Diluted earnings per ordinary share from continuing operations
9.2
3.4
Diluted loss per ordinary share from discontinued operation
-
(13.5)
4. Dividends on ordinary shares
It is Barclays’ policy to declare and pay dividends on a semi-annual basis. The remaining dividend for 2018 of 4.0p per ordinary
share will be paid on 5 April 2019 to shareholders on the Share Registrar on 1 March 2019 following the 2.5p half year
dividend paid in September and accounted for as a distribution of retained earnings in the year ended 31 December 2019.
The financial statements for 2018 include the following dividends paid during the year:
Year ended 31.12.18
Year ended 31.12.17
Per share
Total
Per share
Total
Dividends paid during the year
p
£m
p
£m
Final year dividend paid during year
2.0
341
2.0
339
Half year dividend paid during year
2.5
427
1.0
170
Total Dividend
4.5
768
3.0
509
Financial Statement Notes
Barclays PLC
60
5. Fair value of financial instruments
The following table shows the Barclays 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 31.12.18
£m
£m
£m
£m
Trading portfolio assets
51,029
49,545
3,613
104,187
Financial assets at fair value through the income statement
8,918
131,348
9,382
149,648
Derivative financial instruments
6,813
210,510
5,215
222,538
Financial assets at fair value through other comprehensive income
19,764
32,697
355
52,816
Investment property
-
-
9
9
Total assets
86,524
424,100
18,574
529,198
Trading portfolio liabilities
(20,654)
(17,225)
(3)
(37,882)
Financial liabilities designated at fair value
(76)
(216,478)
(280)
(216,834)
Derivative financial instruments
(6,152)
(208,748)
(4,743)
(219,643)
Total liabilities
(26,882)
(442,451)
(5,026)
(474,359)
As at 31.12.17
Trading portfolio assets
63,925
47,858
1,977
113,760
Financial assets at fair value through the income statement
4,347
104,187
7,747
116,281
Derivative financial assets
3,786
228,549
5,334
237,669
Available for sale investments
22,841
30,571
395
53,807
Investment property
-
-
116
116
Assets included in disposal groups classified as held for sale
-
-
29
29
Total assets
94,899
411,165
15,598
521,662
Trading portfolio liabilities
(20,905)
(16,442)
(4)
(37,351)
Financial liabilities designated at fair value
-
(173,238)
(480)
(173,718)
Derivative financial liabilities
(3,631)
(229,517)
(5,197)
(238,345)
Total liabilities
(24,536)
(419,197)
(5,681)
(449,414)
6. Subordinated liabilities
Year ended
Year ended
31.12.18
31.12.17
£m
£m
Opening balance as at 1 January
23,826
23,383
Issuances
221
3,041
Redemptions
(3,246)
(1,378)
Other
(242)
(1,220)
Closing balance
20,559
23,826
Issuances of USD floating rate notes totalling £221m.
Redemptions totalling £3,246m include £500m Fixed/Floating Rate Subordinated Callable Notes, €1,750m 6% Fixed Rate
Subordinated Notes (£1,532m), $1,000m 7.75% Contingent Capital Notes (£713m), $99m 7.7% Undated Subordinated
Notes (£72m), €40m Floating Rate Subordinated Notes 2018 (£35m), €235m CMS Linked Subordinated Notes (£206m),
£140m 8.25% Undated Subordinated Notes and a number of small redemptions by Barclays Securities Japan Limited totalling
£48m.
Other movements include £514m due to the appreciation of USD and JPY against GBP offset by the reclassification of
subordinated liabilities to non-controlling interests of £470m.
Financial Statement Notes
Barclays PLC
61
7. Provisions
As at 31.12.18
As at 31.12.17
£m
£m
Payment Protection Insurance redress
888
1,606
Other customer redress
444
639
Legal, competition and regulatory matters
414
435
Redundancy and restructuring
169
159
Undrawn contractually committed facilities and guarantees
271
79
Onerous contracts
139
225
Sundry provisions
327
400
Total
2,652
3,543
Payment Protection Insurance (PPI) redress
As at 31 December 2018, Barclays Group had recognised cumulative provisions totalling £9.6bn (2017: £9.2bn), of which
£0.4bn was recognised in Q118, against the cost of Payment Protection Insurance (PPI) redress and associated processing
costs. Utilisation of the cumulative provisions to date is £8.7bn (2017: £7.6bn), leaving a residual provision of £0.9bn (2017:
£1.6bn).
Through to 31 December 2018, 2.4m (2017: 2.1m) customer initiated claims
1
had been received and processed.
The current provision reflects the estimated costs of PPI redress primarily relating to customer initiated complaints and
ongoing remediation programmes, based on information at year end. This also includes liabilities managed by third parties
arising from portfolios previously sold where Barclays Group remains liable.
As at 31 December 2018, the provision of £0.9bn represents Barclays Group’s best estimate of expected PPI redress reflecting
the complaints deadline implemented by the Financial Conduct Authority (FCA) of 29 August 2019. However, it is possible
the eventual outcome may differ from the current estimate. Barclays Group will continue to review the adequacy of provision
level in respect of the future impacts.
The PPI provision is calculated using a number of key assumptions which continue to involve significant modelling and
management judgement:
Customer initiated claim volumes – claims received but not yet processed plus an estimate of future claims initiated
by customers, where the volume is anticipated to cease after the PPI deadline
Average claim redress – the expected average payment to customers for upheld claims based on the type and age
of the policy/policies
Processing cost per claim – the cost to Barclays Group of assessing and processing each valid claim
These assumptions remain subjective, mainly due to the uncertainty associated with future claims levels, which include
complaints driven by claims management company (CMC) activity and the FCA advertising campaign.
The following table outlines key forecast assumptions used in the provision calculation as at 31 December 2018 and a
sensitivity analysis illustrating the impact on the provision if the future expected assumptions prove too high or too low.
Assumption
Cumulative
actual to 31.12.18
Future expected
policy claims
Sensitivity analysis in
provision
increase/decrease
Customer initiated claims received and processed
1
2,400
290
50k=£117m
Average uphold rate per claim
2
(%)
89
91
1%=£6m
Average redress per valid claim
3
(£)
2,136
2,233
£100=£26m
1 Total mis-selling claims received directly by Barclays Group, including those received via CMCs but excluding those for which no PPI policy exists and excluding
responses to proactive mailing. The sensitivity analysis has been calculated to show the impact of a 50,000 increase or decrease in the number of customer
initiated mis-selling policy claims would have on the provision level inclusive of operational processing costs.
2 Average uphold rate per customer initiated mis-selling claims received directly by Barclays Group and proactive mailings, excluding those for which no PPI
policy exists. The sensitivity analysis has been calculated to show the impact a 1% change in the average uphold rate per claim would have on the provision
level.
3 Average redress stated on a per policy basis for future customer initiated mis-selling complaints received directly by Barclays Group. The sensitivity analysis
has been calculated to show the impact a £100 increase or decrease in the average redress per claim would have on the provision level.
Financial Statement Notes
Barclays PLC
62
8. Retirement benefits
As at 31 December 2018, the Barclays Group’s IAS 19 pension surplus across all schemes was £1.5bn (December 2017:
£0.7bn). The UKRF, which is the Barclays Group’s main scheme, had an IAS 19 pension surplus of £1.7bn (December 2017:
£1.0bn). The movement for the UKRF was driven by an increase in the discount rate, payment of deficit contributions and
lower expected future price inflation, offset by lower than assumed asset returns and new early retirement and cash
commutation factors. The Group has considered all of the implications of the High Court ruling in the Lloyds Banking Group
Pension Trustees case on the requirement to equalise pensions in respect of GMP. This resulted in a £140m increase in
pension obligation which has been recognised as a Past service cost. Any future clarifications to GMP equalisation leading to
a change in financial assumptions are expected to be recognised in equity.
UKRF funding valuations
The scheme actuary prepares an annual update of the UKRF funding position in addition to the full triennial actuarial valuation.
The latest annual update was carried out as at 30 September 2018 and showed a deficit of £4.1bn and a funding level of
88.3%.
The last triennial actuarial valuation of the UKRF had an effective date of 30 September 2016 and was completed in July 2017.
This valuation showed a funding deficit of £7.9bn and a funding level of 81.5%.
The improvement in funding position between 30 September 2016 and 30 September 2018 was largely due to payment of
deficit contributions, higher than assumed asset returns, higher government bond yields and transfers out of the scheme.
The recovery plan agreed as part of the 2016 triennial actuarial valuation requires Barclays Bank PLC to pay deficit
contributions of £0.5bn per annum between 2018 and 2020, followed by £1.0bn per annum between 2021 and 2026. The
deficit reduction contributions are in addition to the regular contributions to meet the Barclays Group’s share of the cost of
benefits accruing over each year. The agreement with the UKRF Trustee also takes into account the changes to the Barclays
Group structure that were implemented as a result of ring-fencing. Barclays Bank PLC remains as the principal employer of
the UKRF. Additional support measures agreed include a collateral arrangement, joint participation of Barclays Bank UK PLC
until 2025, and support from Barclays PLC should Barclays Bank PLC not pay the deficit contributions to the UKRF.
The next triennial actuarial valuation of the UKRF is due to be completed in 2020 with an effective date of 30 September 2019.
9. Called up share capital
Called up share capital comprised 17,133m (December 2017: 17,060m) ordinary shares of 25p each. The increase was due
to the issuance of shares under employee share schemes and the Barclays PLC Scrip Dividend Programme.
On 11 September 2018, the High Court of Justice in England and Wales confirmed the cancellation of the share premium
account of Barclays PLC, with the balance of £17,873m credited to retained earnings.
Year ended 31.12.18
Ordinary
share capital
£m
Share
premium
£m
Total share
capital and
share
premium
£m
Opening balance
4,265
17,780
22,045
Movement
18
(17,752)
(17,734)
Closing balance
4,283
28
4,311
10. Other equity instruments
Other equity instruments of £9,632m (December 2017: £8,941m) include AT1 securities issued by Barclays PLC. The increase
is primarily due to the issuance of one USD AT1 security (December 2017: two issuances of GBP AT1 securities) with a
principal amount of $2.5bn (December 2017: £2.5bn) and a redemption of one USD AT1 security (December 2017: none)
with a principal amount of $2.0bn.
The AT1 securities are perpetual securities with no fixed maturity and are structured to qualify as AT1 instruments under
CRD IV. AT1 securities are undated and are redeemable, at the option of Barclays PLC, in whole but not in part at the initial
call date, or on any fifth anniversary after the initial call 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.
Financial Statement Notes
Barclays PLC
63
11. Other reserves
As at 31.12.18
As at 31.12.17
£m
£m
Currency translation reserve
3,888
3,054
Available for sale reserve
-
364
Fair value through other comprehensive income reserve
(258)
-
Cash flow hedging reserve
660
1,161
Own credit reserve
(121)
(179)
Other reserves and treasury shares
984
983
Total
5,153
5,383
Currency translation reserve
The currency translation reserve represents the cumulative gains and losses on the retranslation of the Barclays Group’s net
investment in foreign operations, net of the effects of hedging.
As at 31 December 2018, there was a credit balance of £3,888m (December 2017: £3,054m credit) in the currency translation
reserve. The £834m credit movement principally reflected the strengthening of period end USD against GBP.
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. Following the adoption of IFRS 9, accumulated fair value
changes of £228m previously recognised in the available for sale reserve are now recorded in fair value through other
comprehensive income.
As at 31 December 2018, there was a debit balance of £258m in the fair value through other comprehensive income reserve
(December 2017: £364m credit in the available for sale reserve). The decrease of £622m was driven by a transfer of £136m
to retained earnings on IFRS 9 transition and a reduction of £584m primarily due to changes in fair value of bonds and
decrease in BAGL share price. There was also £48m of net losses transferred to net profit and a tax credit of £65m with the
remaining balance related to exchange and other movements.
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 31 December 2018, there was a credit balance of £660m (December 2017: £1,161m credit) in the cash flow hedging
reserve. The decrease of £501m (December 2017: £944m decrease) principally reflected a £336m decrease in the fair value
of interest rate swaps held for hedging purposes as major interest rate forward curves increased and £332m of gains
transferred to net profit, partially offset by a tax credit of £175m with remaining balance related to exchange movements.
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 31 December 2018, the amount of own credit recognised in the Barclays Group’s other comprehensive income was a
debit balance of £121m (December 2017: £179m debit). The movement of £58m is mainly attributable to the tightening of
Barclays’ funding spreads of £73m offset by tax of £19m.
Other reserves and treasury shares
As at 31 December 2018, there was a credit balance of £984m (December 2017: £983m credit) in other reserves relating to
redeemed ordinary and preference shares issued by the Barclays Group.
This included a debit balance of £27m (December 2017: £28m debit) in other reserves relating to treasury shares. During the
year, £267m (December 2017: £315m) net purchases of treasury shares were made, principally reflecting the increase in
shares held for the purposes of employee share schemes, and £268m (December 2017: £329m) was transferred to retained
earnings reflecting the vesting of deferred share-based payments.
Appendix: Non-IFRS Performance Measures
Barclays PLC
64
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 Barclays 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.
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 43.
Period end allocated
tangible equity
Allocated tangible equity is calculated as 13.0% (2017: 12.0%) of RWAs for each business,
adjusted for capital deductions, excluding goodwill and intangible assets, reflecting the
assumptions the Barclays Group uses for capital planning purposes. Head Office allocated
tangible equity represents the difference between the Barclays Group’s tangible shareholders’
equity and the amounts allocated to businesses.
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
Statutory profit after tax attributable to ordinary equity holders of the parent, including an
adjustment for the tax credit in reserves in respect of other equity instruments, 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 65.
Return on average
allocated tangible
equity
Statutory profit after tax attributable to ordinary equity holders of the parent, including an
adjustment for the tax credit in reserves in respect of other equity instruments, as a proportion
of average allocated tangible equity. The components of the calculation have been included on
page 65.
Cost: income ratio
Total operating expenses divided by total income.
Loan loss rate
Quoted in basis points and represents total 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 29.
Net interest margin
Net interest income divided by the sum of average customer assets. The components of the
calculation have been included on page 25.
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 72.
Performance measures
excluding litigation and
conduct
Calculated by excluding litigation and conduct charges from performance measures. The
components of the calculations have been included on pages 66 to 72.
Appendix: Non-IFRS Performance Measures
Barclays PLC
65
Returns
Return on average tangible equity is calculated as profit after tax attributable to ordinary equity holders of the parent,
including an adjustment for the tax credit in reserves in respect of other equity instruments, as a proportion of average
tangible equity, excluding non-controlling and other equity interests for businesses. Allocated tangible equity has been
calculated as 13.0% (2017: 12.0%) of RWAs for each business, adjusted for capital deductions, excluding goodwill and
intangible assets, reflecting the assumptions the Barclays Group uses for capital planning purposes. Head Office average
allocated tangible equity represents the difference between the Barclays Group’s average tangible shareholders’ equity and
the amounts allocated to businesses.
Attributable
profit/(loss)
Tax credit in
respect of
interest
payments on
other equity
instruments
Profit/(loss)
attributable to
ordinary
equity holders
of the parent
Average
tangible
equity
Return on
average
tangible
equity
For the year ended 31.12.18
£m
£m
£m
£bn
%
Barclays UK
1,158
40
1,198
10.0
11.9
Corporate and Investment Bank
1,641
140
1,781
26.0
6.9
Consumer, Cards and Payments
800
18
818
5.0
16.5
Barclays International
2,441
158
2,599
31.0
8.4
Head Office
(2,205)
5
(2,200)
3.1
n/m
Barclays Group
1,394
203
1,597
44.1
3.6
For the year ended 31.12.17
Barclays UK
853
40
893
9.1
9.8
Corporate and Investment Bank
167
102
269
24.0
1.1
Consumer, Cards and Payments
680
18
698
4.2
16.7
Barclays International
847
120
967
28.1
3.4
Head Office
1
(868)
4
(864)
9.3
n/m
Barclays Non-Core
(419)
10
(409)
2.4
n/m
Africa Banking discontinued operation
1
(2,335)
-
(2,335)
n/m
n/m
Barclays Group
(1,922)
174
(1,748)
48.9
(3.6)
1 Average allocated tangible equity for Africa Banking is included within Head Office.
Appendix: Non-IFRS Performance Measures
Barclays PLC
66
Performance measures excluding litigation and conduct
Year ended 31.12.18
Barclays UK
Corporate
and
Investment
Bank
Consumer,
Cards and
Payments
Barclays
International
Head Office
Barclays
Group
Cost: income ratio
£m
£m
£m
£m
£m
£m
Total operating expenses
(4,604)
(7,349)
(2,312)
(9,661)
(1,978)
(16,243)
Impact of litigation and conduct
483
68
59
127
1,597
2,207
Operating expenses
(4,121)
(7,281)
(2,253)
(9,534)
(381)
(14,036)
Total income
7,383
9,765
4,261
14,026
(273)
21,136
Cost: income ratio excluding litigation and
conduct
56%
75%
53%
68%
n/m
66%
Profit before tax
Profit/(loss) before tax
1,956
2,593
1,182
3,775
(2,237)
3,494
Impact of litigation and conduct
483
68
59
127
1,597
2,207
Profit/(loss) before tax excluding litigation
and conduct
2,439
2,661
1,241
3,902
(640)
5,701
Profit attributable to ordinary equity holders
of the parent
Attributable profit/(loss)
1,158
1,641
800
2,441
(2,205)
1,394
Post-tax impact of litigation and conduct
472
62
44
106
1,558
2,136
Attributable profit/(loss) excluding litigation
and conduct
1,630
1,703
844
2,547
(647)
3,530
Tax credit in respect of interest payments on
other equity instruments
40
140
18
158
5
203
Profit/(loss) attributable to ordinary equity
holders of the parent excluding litigation
and conduct
1,670
1,843
862
2,705
(642)
3,733
Return on average tangible shareholders'
equity
£bn
£bn
£bn
£bn
£bn
£bn
Average shareholders' equity
13.6
26.2
6.1
32.3
6.2
52.1
Goodwill and intangibles
(3.6)
(0.2)
(1.1)
(1.3)
(3.1)
(8.0)
Average tangible shareholders' equity
10.0
26.0
5.0
31.0
3.1
44.1
Return on average tangible shareholders'
equity excluding litigation and conduct
16.7%
7.1%
17.3%
8.7%
n/m
8.5%
Basic earnings per ordinary share
Basic weighted average number of shares (m)
17,075
Basic earnings per ordinary share excluding
litigation and conduct
21.9p
Appendix: Non-IFRS Performance Measures
Barclays PLC
67
Year ended 31.12.17
Barclays UK
Corporate
and
Investment
Bank
Consumer,
Cards and
Payments
Barclays
International
Head Office
1
Barclays
Group
2
Cost: income ratio
£m
£m
£m
£m
£m
£m
Total operating expenses
(4,848)
(7,742)
(2,113)
(9,855)
(469)
(15,456)
Impact of litigation and conduct
759
267
2
269
151
1,207
Operating expenses
(4,089)
(7,475)
(2,111)
(9,586)
(318)
(14,249)
Total income
7,383
9,878
4,504
14,382
(159)
21,076
Cost: income ratio excluding litigation and
conduct
55%
76%
47%
67%
n/m
68%
Profit before tax
Profit/(loss) before tax
1,747
2,056
1,219
3,275
(834)
3,541
Impact of litigation and conduct
759
267
2
269
151
1,207
Profit/(loss) before tax excluding litigation
and conduct
2,506
2,323
1,221
3,544
(683)
4,748
Profit attributable to ordinary equity holders
of the parent
Attributable profit/(loss)
853
167
680
847
(868)
(1,922)
Post-tax impact of litigation and conduct
733
259
1
260
137
1,150
Attributable profit/(loss) excluding
litigation and conduct
1,586
426
681
1,107
(731)
(772)
Tax credit in respect of interest payments on
other equity instruments
40
102
18
120
4
174
Profit/(loss) attributable to ordinary equity
holders of the parent excluding litigation
and conduct
1,626
528
699
1,227
(727)
(598)
Return on average tangible shareholders'
equity
£bn
£bn
£bn
£bn
£bn
£bn
Average shareholders' equity
13.6
24.9
5.6
30.5
10.6
57.1
Goodwill and intangibles
(4.4)
(1.0)
(1.4)
(2.4)
(1.4)
(8.2)
Average tangible shareholders' equity
9.1
24.0
4.2
28.1
9.3
48.9
Return on average tangible shareholders'
equity excluding litigation and conduct
17.8%
2.2%
16.8%
4.4%
n/m
(1.2%)
Basic earnings per ordinary share
Basic weighted average number of shares (m)
16,996
Basic loss per ordinary share excluding
litigation and conduct
(3.5p)
1 Average tangible shareholders' equity for Africa is included within Head Office.
2 Barclays Group results also included Barclays Non-Core and the Africa Banking discontinued operation for the full year 2017.
Appendix: Non-IFRS Performance Measures
Barclays PLC
68
Barclays Group
Q418
Q318
Q218
Q118
Q417
Q317
Q217
Q117
Cost: income ratio
£m
£m
£m
£m
£m
£m
£m
£m
Total operating expenses
(4,093)
(3,434)
(3,391)
(5,325)
(4,369)
(3,355)
(4,113)
(3,619)
Impact of litigation and conduct
60
105
81
1,961
383
81
715
28
Operating expenses
(4,033)
(3,329)
(3,310)
(3,364)
(3,986)
(3,274)
(3,398)
(3,591)
Total income
5,073
5,129
5,576
5,358
5,022
5,173
5,058
5,823
Cost: income ratio excluding litigation and
conduct
79%
65%
59%
63%
79%
63%
67%
62%
Profit before tax
Profit/(loss) before tax
374
1,461
1,895
(236)
93
1,107
659
1,682
Impact of litigation and conduct
60
105
81
1,961
383
81
715
28
Profit before tax excluding litigation and
conduct
434
1,566
1,976
1,725
476
1,188
1,374
1,710
Profit attributable to ordinary equity holders
of the parent
Attributable (loss)/profit
(76)
1,002
1,232
(764)
(1,294)
583
(1,401)
190
Post-tax impact of litigation and conduct
62
85
59
1,930
351
77
703
19
Attributable (loss)/profit excluding litigation
and conduct
(14)
1,087
1,291
1,166
(943)
660
(698)
209
Tax credit in respect of interest payments on
other equity instruments
62
48
47
46
49
43
44
38
Profit/(loss) attributable to ordinary equity
holders of the parent excluding litigation
and conduct
48
1,135
1,338
1,212
(894)
703
(654)
247
Return on average tangible shareholders'
equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average shareholders' equity
52.2
52.5
51.3
52.0
55.9
56.6
57.5
58.5
Goodwill and intangibles
(7.9)
(7.9)
(7.8)
(7.8)
(7.8)
(7.8)
(8.2)
(9.1)
Average tangible shareholders' equity
44.3
44.6
43.5
44.2
48.1
48.9
49.3
49.4
Return on average tangible shareholders'
equity excluding litigation and conduct
0.4%
10.2%
12.3%
11.0%
(7.4%)
5.7%
(5.3%)
2.0%
Basic earnings per ordinary share
Basic weighted average number of shares (m)
17,075
17,074
17,067
17,037
16,996
16,994
16,989
16,924
Basic earnings/(loss) per ordinary share
excluding litigation and conduct
0.3p
6.6p
7.8p
7.1p
(5.3p)
4.1p
(3.8p)
1.5p
Appendix: Non-IFRS Performance Measures
Barclays PLC
69
Barclays UK
Q418
Q318
Q218
Q118
Q417
Q317
Q217
Q117
Cost: income ratio
£m
£m
£m
£m
£m
£m
£m
£m
Total operating expenses
(1,175)
(1,042)
(971)
(1,416)
(1,229)
(991)
(1,673)
(955)
Impact of litigation and conduct
15
54
3
411
53
11
699
(4)
Operating expenses
(1,160)
(988)
(968)
(1,005)
(1,176)
(980)
(974)
(959)
Total income
1,863
1,896
1,836
1,788
1,870
1,852
1,820
1,841
Cost: income ratio excluding litigation and
conduct
62%
52%
53%
56%
63%
53%
54%
52%
Profit before tax
Profit/(loss) before tax
390
740
656
170
452
661
(74)
708
Impact of litigation and conduct
15
54
3
411
53
11
699
(4)
Profit before tax excluding litigation and
conduct
405
794
659
581
505
672
625
704
Profit attributable to ordinary equity holders
of the parent
Attributable profit/(loss)
232
500
464
(38)
245
423
(285)
470
Post-tax impact of litigation and conduct
12
48
1
411
37
8
691
(3)
Attributable profit excluding litigation and
conduct
244
548
465
373
282
431
406
467
Tax credit in respect of interest payments on
other equity instruments
9
10
9
12
13
9
9
9
Profit attributable to ordinary equity holders
of the parent excluding litigation and conduct
253
558
474
385
295
440
415
476
Return on average allocated tangible equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average allocated equity
13.6
13.7
13.6
13.4
13.1
14.0
13.5
13.6
Goodwill and intangibles
(3.5)
(3.6)
(3.5)
(3.5)
(3.5)
(4.6)
(4.8)
(4.7)
Average allocated tangible equity
10.1
10.1
10.1
9.8
9.6
9.4
8.7
8.9
Return on average allocated tangible equity
excluding litigation and conduct
10.1%
22.0%
18.8%
15.7%
12.3%
18.7%
19.1%
21.5%
Appendix: Non-IFRS Performance Measures
Barclays PLC
70
Barclays International
Q418
Q318
Q218
Q118
Q417
Q317
Q217
Q117
Cost: income ratio
£m
£m
£m
£m
£m
£m
£m
£m
Total operating expenses
(2,684)
(2,309)
(2,353)
(2,315)
(2,948)
(2,187)
(2,272)
(2,448)
Impact of litigation and conduct
33
32
47
15
255
5
(4)
13
Operating expenses
(2,651)
(2,277)
(2,306)
(2,300)
(2,693)
(2,182)
(2,276)
(2,435)
Total income
3,221
3,290
3,707
3,808
3,319
3,315
3,610
4,138
Cost: income ratio excluding litigation and
conduct
82%
69%
62%
60%
81%
66%
63%
59%
Profit before tax
Profit before tax
215
850
1,297
1,413
6
652
1,261
1,356
Impact of litigation and conduct
33
32
47
15
255
5
(4)
13
Profit before tax excluding litigation and
conduct
248
882
1,344
1,428
261
657
1,257
1,369
Profit attributable to ordinary equity holders
of the parent
Attributable (loss)/profit
(72)
650
890
973
(1,168)
359
819
837
Post-tax impact of litigation and conduct
34
26
34
12
250
4
(3)
9
Attributable (loss)/profit excluding litigation
and conduct
(38)
676
924
985
(918)
363
816
846
Tax credit in respect of interest payments on
other equity instruments
51
37
36
34
34
32
27
27
Profit/(loss) attributable to ordinary equity
holders of the parent excluding litigation and
conduct
13
713
960
1,019
(884)
395
843
873
Return on average allocated tangible equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average allocated equity
32.4
32.5
32.8
31.4
29.9
31.5
30.1
30.5
Goodwill and intangibles
(1.1)
(1.3)
(1.4)
(1.4)
(1.4)
(2.6)
(2.8)
(2.8)
Average allocated tangible equity
31.3
31.1
31.4
30.1
28.5
28.9
27.4
27.7
Return on average allocated tangible equity
excluding litigation and conduct
0.2%
9.2%
12.2%
13.6%
(12.4%)
5.5%
12.3%
12.6%
Appendix: Non-IFRS Performance Measures
Barclays PLC
71
Corporate and Investment Bank
Q418
Q318
Q218
Q118
Q417
Q317
Q217
Q117
Profit before tax
£m
£m
£m
£m
£m
£m
£m
£m
Profit/(loss) before tax
85
498
835
1,175
(252)
593
925
790
Impact of litigation and conduct
23
32
-
13
255
5
(4)
11
Profit before tax excluding litigation and
conduct
108
530
835
1,188
3
598
921
801
Profit attributable to ordinary equity holders
of the parent
Attributable (loss)/profit
(128)
397
567
805
(1,256)
340
623
460
Post-tax impact of litigation and conduct
27
25
-
10
250
4
(3)
8
Attributable (loss)/profit excluding litigation
and conduct
(101)
422
567
815
(1,006)
344
620
468
Tax credit in respect of interest payments on
other equity instruments
44
34
33
29
29
28
22
23
(Loss)/profit attributable to ordinary equity
holders of the parent excluding litigation and
conduct
(57)
456
600
844
(977)
372
642
491
Return on average allocated tangible equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average allocated equity
26.0
26.2
26.7
25.9
24.7
25.8
24.4
24.8
Goodwill and intangibles
-
(0.2)
(0.3)
(0.3)
(0.4)
(1.1)
(1.2)
(1.3)
Average allocated tangible equity
26.0
25.9
26.4
25.6
24.3
24.8
23.3
23.5
Return on average allocated tangible equity
excluding litigation and conduct
(0.9%)
7.0%
9.1%
13.2%
(16.1%)
6.0%
11.1%
8.3%
Consumer, Cards and Payments
Profit before tax
£m
£m
£m
£m
£m
£m
£m
£m
Profit before tax
130
352
462
238
258
59
336
566
Impact of litigation and conduct
10
-
47
2
-
-
-
2
Profit before tax excluding litigation and
conduct
140
352
509
240
258
59
336
568
Profit attributable to ordinary equity holders of
the parent
Attributable profit
56
253
323
168
88
19
196
377
Post-tax impact of litigation and conduct
7
1
34
2
-
-
-
1
Attributable profit excluding litigation and
conduct
63
254
357
170
88
19
196
378
Tax credit in respect of interest payments on
other equity instruments
7
3
3
5
5
4
5
4
Profit attributable to ordinary equity holders of
the parent excluding litigation and conduct
70
257
360
175
93
23
201
382
Return on average allocated tangible equity
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Average allocated equity
6.4
6.3
6.0
5.5
5.3
5.7
5.7
5.7
Goodwill and intangibles
(1.1)
(1.1)
(1.1)
(1.0)
(1.1)
(1.5)
(1.6)
(1.5)
Average allocated tangible equity
5.3
5.2
5.0
4.5
4.2
4.2
4.1
4.2
Return on average allocated tangible equity
excluding litigation and conduct
5.4%
19.9%
28.9%
15.7%
9.0%
2.2%
19.4%
36.5%
Appendix: Non-IFRS Performance Measures
Barclays PLC
72
Head Office
Q418
Q318
Q218
Q118
Q417
Q317
Q217
Q117
Profit before tax
£m
£m
£m
£m
£m
£m
£m
£m
Loss before tax
(231)
(129)
(58)
(1,819)
(365)
(206)
(122)
(141)
Impact of litigation and conduct
12
19
31
1,535
75
65
1
10
Loss before tax excluding litigation and
conduct
(219)
(110)
(27)
(284)
(290)
(141)
(121)
(131)
Profit attributable to ordinary equity holders of
the parent
Attributable loss
(236)
(148)
(122)
(1,699)
(371)
(199)
(175)
(123)
Post-tax impact of litigation and conduct
16
11
24
1,507
64
65
1
7
Attributable loss excluding litigation and
conduct
(220)
(137)
(98)
(192)
(307)
(134)
(174)
(116)
Tangible net asset value
As at 31.12.18
As at 31.12.17
£m
£m
Total equity excluding non-controlling interests
62,556
63,905
Other equity instruments
(9,632)
(8,941)
Goodwill and intangibles
(7,973)
(7,849)
Tangible shareholders' equity attributable to ordinary shareholders of the parent
44,951
47,115
m
m
Shares in issue
17,133
17,060
p
p
Tangible net asset value per share
262
276
Shareholder Information
Barclays PLC
73
Results timetable
1
Date
Ex-dividend date
28 February 2019
Dividend record date
1 March 2019
Scrip reference share price set and made available to shareholders
7 March 2019
Cut off time of 4.30 pm (UK time) for the receipt of Mandate Forms or Revocation
Forms (as applicable)
15 March 2019
Dividend payment date/first day of dealing in new shares
5 April 2019
Q1 2019 Results Announcement
25 April 2019
For qualifying US and Canadian resident ADR holders, the 2018 full year of 4.0p per ordinary share becomes 16.0p per ADS (representing
four shares). The ex-dividend, dividend record and dividend payment dates for ADR holders are as shown above.
Year ended
Year ended
Exchange rates
2
31.12.18
31.12.17
% Change
3
Period end - USD/GBP
1.28
1.35
(5%)
Average - USD/GBP
1.33
1.29
3%
3 month average - USD/GBP
1.29
1.33
(3%)
Period end - EUR/GBP
1.12
1.13
(1%)
Average - EUR/GBP
1.13
1.14
(1%)
3 month average - EUR/GBP
1.13
1.13
-
Share price data
Barclays PLC (p)
150.52
203.10
Barclays PLC number of shares (m)
17,133
17,060
For further information please contact
Investor relations
Media relations
Lisa Bartrip +44 (0) 20 7773 0708
Thomas Hoskin +44 (0) 20 7116 4755
More information on Barclays can be found on our website: home.barclays.
Registered office
1 Churchill Place, London, E14 5HP, United Kingdom. Tel: +44 (0) 20 7116 1000. Company number: 48839.
Registrar
Equiniti, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom.
Tel: 0371 384 2055
4
from the UK or +44 121 415 7004 from overseas.
1 Note that these dates are provisional and subject to change. Any changes to the Scrip Dividend Programme dates will be made available at
home.barclays/dividends.
2 The average rates shown above are derived from daily spot rates during the year.
3 The change is the impact to GBP reported information.
4 Lines open 8.30am to 5.30pm (UK time), Monday to Friday, excluding UK public holidays in England and Wales.
