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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Barclays Plc | LSE:BARC | London | Ordinary Share | GB0031348658 | ORD 25P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
1.68 | 0.93% | 183.20 | 183.48 | 183.52 | 185.68 | 182.82 | 183.32 | 54,857,915 | 16:35:20 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Commercial Banks, Nec | 25.38B | 5.26B | 0.3470 | 5.29 | 27.81B |
TIDMBARC TIDM96ES
RNS Number : 6098X
Barclays PLC
23 February 2017
Barclays PLC
Results Announcement
31 December 2016
Table of Contents
Results Announcement Page Notes 1 Performance Highlights 2-6 Group Finance Director's Review 7-11 Results by Business -- Barclays UK 12-14 * Barclays International 15-17 * Head Office 18 19-20 * Barclays Non-Core 21 * Discontinued Operation - Africa Banking Quarterly Results Summary 22-24 Quarterly Core Results by Business 25-29 Quarterly Discontinued Operation Results 30 Performance Management * Margins and Balances 31 * Remuneration 32-33 Risk Management * Liquidity 34-37 * Capital 38-44 * Credit Risk 45-49 Statement of Director's Responsibilities 50 Condensed Consolidated Financial Statements 51-55 Financial Statement Notes 56-64 Appendix: Non-IFRS performance measures 65-75 Shareholder Information 76
BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE: +44 (0) 20 7116 1000. COMPANY NO. 48839
Notes
The term Barclays or Group refers to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis compares the year ended 31 December 2016 to the corresponding twelve months of 2015 and balance sheet analysis as at 31 December 2016 with comparatives relating to 31 December 2015. The abbreviations 'GBPm' and 'GBPbn' represent millions and thousands of millions of Pounds Sterling respectively; the abbreviations '$m' and '$bn' represent millions and thousands of millions of US Dollars respectively; and the abbreviations 'EURm' and 'EURbn' represent millions and thousands of millions of Euros respectively.
Comparatives have been restated to reflect the implementation of the Group business reorganisation. These restatements were detailed in our announcement on 14 April 2016, accessible at home.barclays/results.
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.
Notable items as set out on page 5 are considered to be significant items impacting comparability of performance and have been called out for each of the business segments. Results excluding notable items have been included in the appendix.
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/results.
The information in this announcement, which was approved by the Board of Directors on 22 February 2017, does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2016, which included certain information required for the Joint Annual Report on Form 20-F of Barclays PLC and Barclays Bank PLC to the US Securities and Exchange Commission (SEC) and which contained an unqualified audit report under Section 495 of the Companies Act 2006 (which did not make any statements under Section 498 of the Companies Act 2006) have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.
These results will be furnished as a Form 20-F to the SEC as soon as practicable following their publication. Once furnished with the SEC, copies of the Form 20-F will also be available from the Barclays Investor Relations website home.barclays/results 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 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 business' performance between financial periods, and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays' management. However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document, and the most directly comparable IFRS measures.
Forward-looking statements
This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as 'may', 'will', 'seek', 'continue', 'aim', 'anticipate', 'target', 'projected', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', 'achieve' or other words of similar meaning. Examples of forward-looking statements include, among others, statements or guidance regarding the Group's future financial position, income growth, assets, impairment charges, provisions, notable items, business strategy, structural reform, capital, leverage and other regulatory ratios, payment of dividends (including dividend pay-out ratios and expected payment strategies), projected levels of growth in the banking and financial markets, projected costs or savings, original and revised commitments and targets in connection with the strategic cost programme and the Group Strategy Update, rundown of assets and businesses within Barclays Non-Core, sell down of the Group's interest in Barclays Africa Group Limited, estimates of capital expenditures and plans and objectives for future operations, projected employee numbers 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, 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, future levels of notable items, 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 (including with regard to the future structure of the Group) applicable to past, current and future periods; UK, US, Africa, Eurozone and global macroeconomic and business conditions; the effects of continued 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 Group or any securities issued by such entities; the potential for one or more countries exiting the Eurozone; the implications of the results of the 23 June 2016 referendum in the United Kingdom and the disruption that may result in the UK and globally from the withdrawal of the United Kingdom from the European Union; the implementation of the strategic cost programme; and the success of future acquisitions, disposals and other strategic transactions. A number of these influences and factors are beyond the Group's control. As a result, the Group's actual future results, dividend payments, and capital and leverage ratios may differ materially from the plans, goals, expectations and guidance set forth in the Group's forward-looking statements. Additional risks and factors which may impact the Group's future financial condition and performance are identified in our filings with the SEC (including, without limitation, our annual report on form 20-F for the fiscal year ended 31 December 2016), 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
Transatlantic Consumer, Corporate and Investment Bank with Global Reach
Our strategy is on track with good progress in 2016
-- Core returns: * Core business performed well reflecting the benefits of diversification across customers and clients, geographies and products, with a 4% growth in profit before tax excluding notable items(1) to GBP6,436m, delivering a 9.4% return on average allocated tangible equity that was GBP4bn higher at GBP41bn * Return on average allocated tangible equity (RoTE) excluding notable items in Barclays UK was 19.3% and in Barclays International was 8.0% ---------------------- -------------------------------------------------------------- -- Non-Core rundown: * GBP22bn reduction in risk weighted assets (RWAs) to GBP32bn, despite adverse foreign exchange (FX) movements * Completed the sale of a number of businesses during the year, including the Asia wealth and investment management, and Southern European cards businesses in Q416, and signed the agreement for the sale of the French retail business in the quarter * Good progress on the accelerated rundown of Non-Core; decision taken to close the unit six months ahead of plan on 30 June 2017 with RWAs expected to be approximately GBP25bn at this date ---------------------- -------------------------------------------------------------- -- Common Equity Tier 1 (CET1) * Profit before tax of GBP3,230m drove strong organic ratio: capital ratio growth with 100bps of CET1 ratio accretion to 12.4% * In Q416, the CET1 ratio increased 80bps through reduced RWAs, and an increase in reserves, including from the GBP1.1bn improvement in the deficit of the UK Retirement Fund (UKRF) defined benefit pension scheme * On track to meeting revised end-state CET1 capital ratio of 150bps to 200bps above the minimum regulatory level ---------------------- -------------------------------------------------------------- -- Core costs: * Decision taken in Q416, relating to 2016 compensation awards, to more closely align income statement recognition with performance awards and harmonise deferral structures across the Group * The total incentive awards granted reduced 1% to GBP1,533m, with the changes to awards resulting in a GBP395m income statement charge in Q416, of which GBP390m was in Core. As a result, Core costs for 2016 exceeded the guidance of GBP13.0bn(2) by that amount -- Core cost: income ratio excluding notable items improved from 62% to 61% ---------------------- -------------------------------------------------------------- -- Barclays Africa -- First sale of 12.2% stake completed in May 2016, Group Limited resulting in a c.10bps benefit to the CET1 ratio (BAGL) sell down: * Separation terms now agreed with BAGL, subject to regulatory approval. These terms include contributions totalling GBP765m payable over the period through to completion of the next sale of Barclays' stake in BAGL to below 50% * Remain on track to achieve regulatory deconsolidation, with further sell down subject to regulatory approval. Estimate in excess of 75bps Group CET1 ratio accretion on regulatory deconsolidation based on the 31 December 2016 BAGL share price and ZAR exchange rate ---------------------- -------------------------------------------------------------- -- Holding Company (HoldCo) transition: * Progressed the transition to HoldCo funding with GBP12.1bn of issuance and GBP7.4bn of Operating Company (OpCo) capital and debt repurchased or redeemed * Moody's upgraded the HoldCo's long-term senior rating one notch to Baa2 on 12 December 2016 ---------------------- -------------------------------------------------------------- 1 Notable items in Core totalled a net loss before tax of GBP420m (2015: GBP2,442m), as detailed on page 5. Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document. 2 Guidance excluded litigation and conduct charges and was adjusted for FX at Q316.
Group Chief Executive Officer's Review
"A year ago we laid out our intention to accelerate the restructuring of Barclays and refocus our business as a transatlantic, consumer, corporate and investment bank, anchored in London and New York.
We have made strong progress against this agenda in 2016.
Our Core businesses, Barclays UK and Barclays International, are doing well, with profit before tax excluding notable items up 4% to GBP6.4bn.
Barclays UK produced an impressive RoTE of 19.3% excluding notable items, and continues to deliver market-leading innovation for customers, including voice security, contactless cash, a new direct investing platform, and in airing the first fraud prevention TV ad campaign from a major UK bank.
Barclays International delivered a RoTE of 8.0% excluding notable items. We brought further focus to the Corporate and Investment Bank, with income growing 6%, solidifying our position in the bulge bracket. We also saw strong growth in Consumer, Cards and Payments, as income increased 21%, driven by improvements in all key businesses.
Combined, the Core RoTE, excluding notable items, was 9.4%.
Accelerating the closure of Barclays Non-Core is a key part of realising the potential of Barclays. In 2016 we reduced Non-Core RWAs by GBP22bn, with GBP12bn of that reduction coming in the final quarter alone. Today, we are announcing that we will close Non-Core on 30 June 2017, six months earlier than previously targeted.
We reduced our ownership of Barclays Africa with an initial sale of 12.2% in May. In the fourth quarter we agreed with local management and submitted to regulators our proposed separation arrangements for Barclays Africa. This is a key milestone before a further reduction in our stake at the appropriate time.
The progress on our priorities resulted in organic profit generation which strengthened our CET1 capital ratio by 100 basis points in 2016 to 12.4%. This puts us well on track to meet our end-state target and we are well positioned to absorb headwinds over the next few years. Certain legacy conduct issues remain and we intend to make further progress on them.
In short, we have accomplished a lot in a year, and I am thankful to each and every one of our colleagues who have made this possible. Their efforts mean that, in 2017, we can begin to move on from the restructuring of Barclays, shifting our focus solely to the future, and in particular to how we can generate attractive, sustainable, and distributable returns for our shareholders.
This means increasing management focus on Barclays UK and Barclays International, the future of this firm. Together, they encompass a diverse set of market leading consumer and wholesale businesses, giving us growth opportunities across a wide waterfront, and resilience in earnings.
And we intend to build these businesses on a foundation of world class operations and technology, where core functions for our Group are standardised across the company, streamlining costs, driving high quality analytics, and hugely improving the experience of our customers and clients, which is key to driving loyalty and long term growth.
We are now just months away from completing the restructuring of Barclays, and I am more optimistic than ever for our prospects in 2017, and beyond."
James E Staley, Group Chief Executive Officer
Barclays Group results for the year ended 31.12.16 31.12.15 YoY GBPm GBPm % Change ============================================ ========== ========== ======== Total income 21,451 22,040 (3) Credit impairment charges and other provisions (2,373) (1,762) (35) ============================================ ========== ========== ======== Net operating income 19,078 20,278 (6) Operating expenses (14,565) (13,723) (6) UK bank levy (410) (426) 4 Litigation and conduct (1,363) (4,387) 69 ============================================ ========== ========== ======== Total operating expenses (16,338) (18,536) 12 Other net income/(expenses) 490 (596) ============================================ ========== ========== ======== Profit before tax 3,230 1,146 Tax charge (993) (1,149) 14 ============================================ ========== ========== ======== Profit/(loss) after tax in respect of continuing operations 2,237 (3) Profit after tax in respect of discontinued operation(1) 591 626 (6) Non-controlling interests in respect of continuing operations (346) (348) 1 Non-controlling interests in respect of discontinued operation(1) (402) (324) (24) Other equity holders(2) (457) (345) (32) ============================================ ========== ========== ======== Attributable profit/(loss) 1,623 (394) Performance measures ============================================ ========== ========== ======== Return on average tangible shareholders' equity(2) 3.6% (0.7%) Average tangible shareholders' equity (GBPbn) 48.7 47.7 Cost: income ratio 76% 84% Loan loss rate (bps) 53 42 Basic earnings/(loss) per share(2) 10.4p (1.9p) Dividend per share 3.0p 6.5p Balance sheet and capital management ============================================ ========== ========== ======== Tangible net asset value per share 290p 275p Common equity tier 1 ratio 12.4% 11.4% Common equity tier 1 capital GBP45.2bn GBP40.7bn Risk weighted assets GBP366bn GBP358bn Leverage ratio 4.6% 4.5% Fully loaded tier 1 capital GBP52.0bn GBP46.2bn Leverage exposure GBP1,125bn GBP1,028bn Funding and liquidity ============================================ ========== ========== ======== Group liquidity pool GBP165bn GBP145bn CRD IV liquidity coverage ratio 131% 133% Loan: deposit ratio(3) 83% 86% 1 Refer to page 21 for further information on the Africa Banking discontinued operation. 2 The profit after tax attributable to other equity holders of GBP457m (2015: GBP345m) is offset by a tax credit recorded in reserves of GBP128m (2015: GBP70m). The net amount of GBP329m (2015: GBP275m), along with non-controlling interests (NCI) is deducted from profit after tax in order to calculate earnings per share and return on average tangible shareholders' equity. 3 Loan: deposit ratio for Barclays UK, Barclays International and Non-Core, excluding investment banking businesses. Barclays Core and Non-Core Barclays Core Barclays Non-Core results for the year ended ============================== ============================ 31.12.16 31.12.15 YoY 31.12.16 31.12.15 YoY GBPm GBPm % Change GBPm GBPm % Change ====================================== ========== ======== ======== ======== ======== ======== Total income 22,615 21,428 6 (1,164) 612 Credit impairment charges and other provisions (2,251) (1,628) (38) (122) (134) 9 ====================================== ========== ======== ======== ======== ======== ======== Net operating income/(expenses) 20,364 19,800 3 (1,286) 478 Operating expenses (13,056) (11,765) (11) (1,509) (1,958) 23 UK bank levy (334) (338) 1 (76) (88) 14 Litigation and conduct (1,117) (3,887) 71 (246) (500) 51 ====================================== ========== ======== ======== ======== ======== ======== Total operating expenses (14,507) (15,990) 9 (1,831) (2,546) 28 Other net income/(expenses) 159 (61) 331 (535) ====================================== ========== ======== ======== ======== ======== ======== Profit/(loss) before tax 6,016 3,749 60 (2,786) (2,603) (7) Tax (charge)/credit (1,975) (1,479) (34) 982 330 ====================================== ========== ======== ======== ======== ======== ======== Profit/(loss) after tax 4,041 2,270 78 (1,804) (2,273) 21 Non-controlling interests (297) (266) (12) (49) (82) 40 Other equity holders (394) (282) (40) (63) (63) - ====================================== ========== ======== ======== ======== ======== ======== Attributable profit/(loss)(1) 3,350 1,722 95 (1,916) (2,418) 21 Performance measures ====================================== ========== ======== ======== ======== ======== ======== Return on average allocated tangible equity 8.4% 4.8% Average allocated tangible equity (GBPbn)(1) 41.0 36.8 7.8 10.9 Period end allocated tangible equity (GBPbn)(1) 43.8 37.8 5.4 8.5 Cost: income ratio 64% 75% n/m n/m Loan loss rate (bps) 58 45 22 23 Basic earnings/(loss) per share contribution 20.5p 10.7p (11.3p) (14.4p) Capital management ====================================== ========== ======== ======== ======== ======== ======== Risk weighted assets(1) GBP334bn GBP304bn GBP32bn GBP54bn Leverage exposure(1) GBP1,024bn GBP879bn GBP101bn GBP149bn Notable items ====================================== ========== ======== ======== ======== ======== ======== Total income Own credit (35) 430 - - Gain on disposal of Barclays' share of Visa Europe Limited 615 - - - Gains on US Lehman acquisition assets - 496 - - Litigation and conduct Provisions for UK customer redress (1,000) (2,649) - (123) Provisions for ongoing investigations and litigation including Foreign Exchange - (1,036) - (201) Operating expenses Gain on valuation of a component of the defined retirement benefit liability - 429 - - Impairment of goodwill and other assets relating to businesses being disposed - - - (96) Other net expenses Losses on sale relating to the Spanish, Portuguese and Italian businesses - (112) - (468) -------------------------------------- ---------- -------- -------- -------- -------- -------- Total notable items (420) (2,442) - (888)
Excluding notable items, the Core return on average allocated tangible equity was 9.4% (2015: 11.2%) and the Core basic earnings per share was 23.1p (2015: 24.9p). Excluding notable items, the Non-Core basic loss per share was 11.3p (2015: 10.2p).
1 Attributable profit in respect of the Africa Banking discontinued operation is reported at the Group level only. Allocated tangible equity, RWAs and leverage exposure are reported in Head Office within Core. Year ended Year ended 31.12.16 31.12.15 YoY Income by business GBPm GBPm % Change ======================= ========== ========== ======== Barclays UK 7,517 7,343 2 Barclays International 14,995 13,747 9 Head Office 103 338 (70) ======================= ========== ========== ======== Barclays Core 22,615 21,428 6 Barclays Non-Core (1,164) 612 ======================= ========== ========== ======== Barclays Group 21,451 22,040 (3) Profit/(loss) before tax by business ===================================== ======= ======= === Barclays UK 1,738 585 Barclays International 4,211 3,278 28 Head Office 67 (114) ===================================== ======= ======= === Barclays Core 6,016 3,749 60 Barclays Non-Core (2,786) (2,603) (7) ===================================== ======= ======= === Barclays Group 3,230 1,146
Group Finance Director's Review
2016 reflected the good operational performance of Barclays UK and Barclays International with the benefits of diversification across customers and clients, geographies and products coming through. The Core business generated a RoTE excluding notable items of 9.4% (2015: 11.2%) on a GBP4bn increased average allocated tangible equity base of GBP41bn. The Core business also generated positive cost: income jaws and we intend to continue to reduce the Group's structural cost base, targeting a Group cost: income ratio of less than 60% over time. The accelerated Non-Core rundown resulted in a reduction in RWAs of GBP22bn to GBP32bn resulting in the decision to close the unit six months ahead of plan on 30 June 2017. Capital ratio progression towards end-state target of 150bps to 200bps above the minimum regulatory level was strong with a CET1 ratio of 12.4% (December 2015: 11.4%), largely reflecting profit generation in the period.
Group performance
-- Return on average tangible shareholders' equity was 3.6% (2015: (0.7%)) and basic earnings per share was 10.4p (2015: (1.9p)) -- Profit before tax increased to GBP3,230m (2015: GBP1,146m). The Group performance reflected good Core results whilst being impacted by the Non-Core loss before tax of GBP2,786m (2015: GBP2,603m) and provisions for UK customer redress of GBP1,000m (2015: GBP2,772m). The appreciation of average USD and EUR against GBP positively impacted income and adversely affected impairment and operating expenses -- Total income decreased 3% to GBP21,451m as Non-Core income reduced GBP1,776m to a net expense of GBP1,164m due to the acceleration of the Non-Core rundown, while Core income increased 6% to GBP22,615m driven by Barclays International -- Credit impairment charges increased GBP611m to GBP2,373m including a GBP320m charge in Q316 following the management review of the UK and US cards portfolio impairment modelling. This resulted in a 11bps increase in the loan loss rate to 53bps -- Total operating expenses reduced 12% to GBP16,338m reflecting lower litigation and conduct charges. This was partially offset by the non-recurrence of the prior year gain of GBP429m on the valuation of a component of the defined retirement benefit liability, increased structural reform implementation costs, and a GBP150m charge in Barclays International in Q316, relating to a reduction in the real estate footprint which will generate savings in future periods. Operating expenses also included a GBP395m additional charge in Q416 relating to 2016 compensation awards -- The effective tax rate on profit before tax decreased to 30.7% (2015: 100.3%) principally as a result of a reduction in non-deductible charges -- Profit after tax in respect of continuing operations increased to GBP2,237m (2015: loss of GBP3m). Profit after tax in relation to the Africa Banking discontinued operation decreased 6% to GBP591m as increased credit impairment charges and operating expenses were partially offset by income growth -- Notable items totalled a net loss before tax of GBP420m (2015: GBP3,330m) comprising provisions for UK customer redress of GBP1,000m (2015: GBP2,772m), a GBP615m (2015: GBPnil) gain on disposal of Barclays' share of Visa Europe Limited and an own credit loss of GBP35m (2015: gain of GBP430m)
All performance commentary which follows excludes the impact of notable items. Refer to pages 68-71 for a reconciliation of results excluding notable items.
Core performance
-- The Core business generated a RoTE of 9.4% (2015: 11.2%) on an average allocated tangible equity base that was GBP4bn higher at GBP41bn, due to Core earnings generation and capital returned from the Non-Core -- Profit before tax increased 4% to GBP6,436m reflecting good performance in both Barclays UK and Barclays International, with an improvement in the cost: income ratio to 61% (2015: 62%). This included the benefit of the appreciation of average USD and EUR against GBP -- Total income increased 7% to GBP22,035m with Barclays International income increasing 10% to GBP14,531m, with growth in both Corporate and Investment Bank, and Consumer, Cards and Payments, while Barclays UK income was broadly in line at GBP7,366m (2015: GBP7,343m) -- Credit impairment charges increased 38% to GBP2,251m resulting in a 13bps increase in the loan loss rate to 58bps, including a GBP320m charge in Q316 following the management review of the UK and US cards portfolio impairment modelling, and a number of single name exposures -- Total operating expenses increased 6% to GBP13,507m, including a GBP390m charge in Q416 relating to the 2016 compensation awards, increased structural reform implementation costs, and a GBP150m charge in Barclays International in Q316 relating to a reduction in the real estate footprint
Barclays UK
-- RoTE was 19.3% (2015: 21.1%) as profit before tax decreased 5% to GBP2,587m driven by an increase in credit impairment charges, partially offset by a reduction in total operating expenses -- Total income was broadly in line at GBP7,366m (2015: GBP7,343m), within which: - Personal Banking income increased 1% to GBP3,762m, Barclaycard Consumer UK income decreased 2% to GBP2,022m and Wealth, Entrepreneurs & Business Banking (WEBB) income increased 1% to GBP1,582m - Net interest income increased 1% to GBP6,048m, with the net interest margin increasing 6bps to 3.62% reflecting higher margins on deposits, partially offset by lower mortgage margins -- Credit impairment charges increased GBP190m to GBP896m due to a GBP200m charge in Q316 following the management review of the cards portfolio impairment modelling. Delinquency trends improved with the 30 and 90 day arrears rates on the cards portfolio reducing to 1.9% (2015: 2.3%) and 0.9% (2015: 1.2%) respectively -- Total operating expenses reduced 1% to GBP3,882m reflecting savings realised from strategic cost programmes, relating to restructuring of the branch network and technology improvements, partially offset by structural reform programme implementation costs. The cost: income ratio was stable at 53% (2015: 53%)
Barclays International
-- RoTE was 8.0% (2015: 9.5%) as profit before tax decreased 3% to GBP3,747m including the impact of the appreciation of average USD and EUR against GBP. This was driven by increased credit impairment charges and operating expenses, partially offset by strong income growth in Consumer, Cards and Payments and Corporate and Investment Bank -- Total income increased 10% to GBP14,531m, including the appreciation of average USD and EUR against GBP, within which: - Consumer, Cards and Payments income increased 21% to GBP3,998m, driven by continued growth across all key businesses - Corporate and Investment Bank income increased 6% to GBP10,533m as Markets income increased 9% to GBP5,279m, within which Credit increased 44% to GBP1,185m and Macro increased 9% to GBP2,304m, partially offset by a 6% reduction in Equities to GBP1,790m. Banking income increased 3% to GBP5,249m driven by strong growth in Banking fees, which increased 15% to GBP2,397m, partially offset by a 12% reduction in Corporate lending to GBP1,195m. Transactional banking was broadly in line at GBP1,657m (2015: GBP1,663m) -- Credit impairment charges increased 47% to GBP1,355m, within which Consumer, Cards and Payments impairment increased 51% to GBP1,095m driven by growth in receivables, a change in portfolio mix and a GBP120m charge in Q316 following the management review of the
cards portfolio impairment modelling. Delinquency trends in Barclaycard US worsened with the 30 and 90 day arrears rates increasing to 2.6% (2015: 2.2%) and 1.3% (2015: 1.1%) respectively. Corporate and Investment Bank impairment increased 31% to GBP260m primarily from impairment of a number of single name exposures -- Total operating expenses increased 11% to GBP9,461m including an additional charge in Q416 relating to the 2016 compensation awards, higher structural reform programme implementation costs, a GBP150m charge in Q316 to reduce the real estate footprint and increased costs in Consumer, Cards and Payments driven by continued growth. These increases were partially offset by lower litigation and conduct costs
Head Office
-- Profit before tax was GBP102m (2015: loss of GBP380m) reflecting increased net income from treasury operations, structural reform programme implementation costs included in operating expenses in 2015, now included in the businesses, and increased other net income primarily due to recycling of the currency translation reserve to the income statement on completion of the sale of the Southern European cards business
Non-Core performance
-- Strong performance in the accelerated rundown of Non-Core resulted in RWAs decreasing GBP22.2bn to GBP32.1bn, despite the impact of the appreciation of USD and EUR against GBP, driven by a GBP10bn reduction in Derivatives, a GBP3bn reduction in Securities and loans, a GBP4bn reduction in Businesses RWAs and a GBP4bn reallocation to Head Office of operational risk RWAs associated with exited businesses and assets -- Loss before tax increased to GBP2,786m (2015: GBP1,715m) driven by reduced income and increased losses resulting from continued progress on the rundown of Businesses, Securities and loans, and Derivatives, partially offset by lower operating expenses and an increase in other net income from business disposals -- Total income reduced GBP1,776m to a net expense of GBP1,164m including fair value losses on the Education, Social Housing, and Local Authority (ESHLA) portfolio of GBP393m (2015: GBP359m). Excluding these fair value losses, negative income was GBP771m - Businesses income reduced GBP654m to GBP485m due to the completion of the sale of a number of income generating businesses - Securities and loans income decreased GBP288m to a net expense of GBP638m primarily driven by the impact of restructuring the ESHLA Lender Option Borrower Option (LOBO) loan terms in Q216 - Derivatives income reduced GBP834m to a net expense of GBP1,011m primarily reflecting the costs of running down the portfolio -- Credit impairment charges improved 9% to GBP122m driven by lower impairment charges in European businesses -- Total operating expenses improved 14% to GBP1,831m reflecting cost savings from ceasing certain investment banking activities in a number of countries and the completion of the sale of a number of businesses, partially offset by a c.GBP200m increase in restructuring charges, which totalled c.GBP400m -- Other net income of GBP331m (2015: net expense of GBP70m) included gains on the sale of Barclays Risk Analytics and Index Solutions, the Asia wealth and investment management business and the Southern European cards business, partially offset by the loss on sale of the French retail business of GBP455m -- The intention is to close Non-Core on 30 June 2017 with approximately GBP25bn of RWAs
Group capital and leverage
-- The fully loaded CRD IV CET1 ratio increased to 12.4% (December 2015: 11.4%) reflecting an increase in CET1 capital of GBP4.5bn to GBP45.2bn, despite RWAs increasing by GBP7bn to GBP366bn - The increase in CET1 capital was largely driven by profits of GBP2.1bn generated in the period, after absorbing the impact of notable items. Other favourable movements included the currency translation reserve as a result of the appreciation of all major currencies against GBP - The increase in RWAs was principally due to the appreciation of ZAR, USD and EUR against GBP and business growth, which together more than offset RWA reductions in Non-Core -- The leverage ratio increased to 4.6% (December 2015: 4.5%) driven by a GBP5.8bn increase in fully loaded Tier 1 capital to GBP52.0bn partially offset by an increase in leverage exposure of GBP97bn to GBP1,125bn. Total IFRS assets increased 8% to GBP1,213bn from December 2015 contributing to the 9% increase in leverage exposure - The IFRS asset increase was mainly driven by loans and advances and other assets which increased GBP82bn to GBP707bn. The increase was primarily due to the appreciation of major currencies against GBP, an increase in liquidity pool assets, and lending growth in Barclays UK and Barclays International. This was partially offset by the rundown and exit of Non-Core assets - Net derivative leverage exposure remained broadly flat as an increase in IFRS derivative assets of GBP19bn to GBP347bn was offset by an increase in IFRS derivative liabilities resulting in regulatory derivative netting increasing GBP20bn to GBP313bn. The increase was mainly within foreign exchange derivatives driven by an increase in trade volumes and appreciation of all major currencies against GBP -- Tangible net asset value per share increased to 290p (December 2015: 275p) driven by profit generated in the period and net favourable reserve movements
Group funding and liquidity
-- The Group continued to maintain surpluses to its internal and regulatory requirements. The liquidity pool increased to GBP165bn (December 2015: GBP145bn), primarily driven by the appreciation of USD and EUR against GBP and a net increase in deposits and wholesale funding to support business growth. The Liquidity Coverage Ratio (LCR) was 131% (December 2015: 133%), equivalent to a surplus of GBP39bn (December 2015: GBP37bn) -- Wholesale funding outstanding excluding repurchase agreements was GBP158bn (December 2015: GBP142bn). The increase was driven by the prudent management of the liquidity position, HoldCo issuance and the appreciation of USD and EUR against GBP. The Group issued GBP12.1bn equivalent of capital and term senior unsecured debt from the HoldCo of which GBP8.6bn equivalent and GBP0.7bn equivalent in public and private senior unsecured debt respectively, and GBP2.8bn of capital instruments. In the same period GBP7.4bn of Barclays Bank PLC (OpCo) capital and senior unsecured debt was repurchased or redeemed -- On 12 December 2016, Moody's upgraded both the HoldCo's and OpCo's long term senior unsecured ratings one notch to Baa2 and A1 respectively. The negative outlooks remained
Other matters
-- The acquisition of Barclays' share of Visa Europe Limited by Visa Inc. completed on 21 June 2016 resulting in the recognition of a pre-tax gain on disposal of GBP615m in income in Q216 -- Additional UK customer redress provisions of GBP1,000m (2015: GBP2,772m) relating to Payment Protection Insurance (PPI) were recognised. GBP400m was recognised in Q216 reflecting an updated estimate of costs, primarily relating to ongoing remediation programmes, with GBP600m recognised in Q316 to reflect the current estimate of the impact of the revised complaints deadline proposed in Financial Conduct Authority (FCA) consultation paper 16/20 issued on 2 August 2016. The remaining PPI provision as at December 2016 was GBP1,979m (December 2015: GBP2,106m) -- In Q216, Barclays redeemed its $1.15bn 7.75% Series 4 Non-Cumulative Callable Dollar Preference Shares. In Q316, Barclays redeemed its $750m 6.625% Series 2 Non-Cumulative Callable Dollar Preference Shares. These redemptions resulted in a 10bps detriment to the CET1 ratio, but will result in an ongoing reduction in preference share dividends payable of $139m per annum -- On 5 May 2016, Barclays executed the first tranche of the sell down of the Group's interest in BAGL with the sale of 12.2% of BAGL's issued share capital. Following completion of this first tranche, Barclays' holding represents 50.1% of BAGL's issued share capital. Barclays continues to explore opportunities to reduce its shareholding to a level that would permit regulatory deconsolidation. Barclays also continues to work closely with BAGL management on arrangements for operational separation of the two businesses -- The terms of the transitional services arrangements and related separation payments have been agreed with BAGL and submitted to relevant regulators as part of a request for approval for Barclays to sell down to below a 50% holding. These proposed separation terms include contributions totalling GBP765m, of which GBP27.5m was paid in 2016, with the remainder to be paid over the period through to completion of any initial sale of Barclays' stake in BAGL to below 50%. The majority of these funds would be used by BAGL to separate from the Barclays group, including termination of the existing Master Services Agreement, making investments in
branding, operations and technology, and covering separation related expenses. In addition, Barclays will contribute an amount equivalent to 1.5% of BAGL's market capitalisation to a new Broad-Based Black Economic Empowerment scheme, equating to approximately GBP130m at the 31 December 2016 share price and ZAR exchange rate, and expects to incur some additional operating expenses in respect of delivering the separation of the businesses under the transitional services arrangements -- It is estimated that the selldown of the Group's interest in BAGL to a level that achieves regulatory deconsolidation will result in greater than 75bps accretion to the Group's CET1 ratio, based on the BAGL share price of ZAR168.69 and ZAR exchange rate of 16.78 at 31 December 2016, after taking account of the separation costs referred to above -- Certain legal proceedings and investigations relating to legacy issues remain outstanding, including a civil complaint filed by the DOJ against Barclays in December 2016 relating to mortgage-backed securities sold between 2005 and 2007 which Barclays is defending. Resolving outstanding legacy issues in an appropriate timeframe will continue to be a priority. Please see note 29 to the financial statements in the Annual Report for details of relevant matters
Dividends
-- A final dividend for 2016 of 2.0p per share will be paid on 5 April 2017, resulting in a total 3.0p dividend per share for the year
Outlook and Guidance
-- Barclays today announces the intention to close Non-Core early at 30 June 2017, at which point RWAs are expected to be approximately GBP25bn. The composition of the assets at that date are expected to consist primarily of residual derivatives, Italian mortgages and the ESHLA portfolio. Further information on the allocation of the residual Non-Core between Barclays UK and Barclays International will be provided on closure -- Loss before tax in 2017 generated by Non-Core operations is expected to be approximately GBP1bn, excluding fair value gains or losses on the ESHLA portfolio. A greater proportion of this loss is expected to occur in H117 reflecting continued exit costs -- The end-state CET1 capital ratio target has been revised to 150-200bps above the minimum regulatory level, providing 400-450bps buffer to the Bank of England stress test systemic reference point
Tushar Morzaria, Group Finance Director
Results by Business
Barclays UK Year ended Year ended 31.12.16 31.12.15 YoY Income statement information(1) GBPm GBPm % Change ======================================= ========== ========== ======== Net interest income 6,048 5,973 1 Net fee, commission and other income 1,469 1,370 7 ======================================= ========== ========== ======== Total income 7,517 7,343 2 Credit impairment charges and other provisions (896) (706) (27) ======================================= ========== ========== ======== Net operating income 6,621 6,637 - Operating expenses (3,792) (3,464) (9) UK bank levy (48) (77) 38 Litigation and conduct (1,042) (2,511) 59 ======================================= ========== ========== ======== Total operating expenses (4,882) (6,052) 19 Other net expenses (1) - ======================================= ========== ========== ======== Profit before tax 1,738 585 Attributable profit/(loss) 828 (47) Balance sheet information ======================================= ========== ========== ======== Loans and advances to customers at amortised cost (GBPbn) 166.4 166.1 Total assets (GBPbn) 209.6 202.5 Customer deposits (GBPbn) 189.0 176.8 Risk weighted assets (GBPbn) 67.5 69.5 Key facts ======================================= ========== ========== ======== Average LTV of mortgage portfolio(2) 48% 49% Average LTV of new mortgage lending(2) 63% 64% Number of branches 1,305 1,362 Barclays mobile banking customers 5.7m 4.7m 30 day arrears rate - Barclaycard Consumer UK 1.9% 2.3% Performance measures ======================================= ========== ========== ======== Return on average allocated tangible equity 9.6% (0.3%) Average allocated tangible equity (GBPbn) 8.9 9.3 Cost: income ratio 65% 82% Loan loss rate (bps) 52 42 Loan: deposit ratio 88% 94% Net interest margin 3.62% 3.56% Notable items ======================================= ========== ========== ======== Total income Gain on disposal of Barclays' share of Visa Europe Limited 151 - Litigation and conduct Provisions for UK customer redress (1,000) (2,431) Operating expenses Gain on valuation of a component of the defined retirement benefit liability - 296 ======================================= ========== ========== ======== Total notable items (849) (2,135)
Excluding notable items, the Barclays UK return on average allocated tangible equity was 19.3% (2015: 21.1%).
1 Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document. 2 Average LTV of mortgage portfolio and new mortgage lending calculated on the balance weighted basis. Analysis of Barclays UK Year ended Year ended 31.12.16 31.12.15 YoY Analysis of total income GBPm GBPm % Change ====================================== ========== ========== ======== Personal Banking 3,891 3,714 5 Barclaycard Consumer UK 2,022 2,065 (2) Wealth, Entrepreneurs & Business Banking 1,604 1,564 3 ====================================== ========== ========== ======== Total income 7,517 7,343 2 Analysis of credit impairment charges and other provisions ====================================== ========== ========== ======== Personal Banking (183) (194) 6 Barclaycard Consumer UK (683) (488) (40) Wealth, Entrepreneurs & Business Banking (30) (24) (25) ====================================== ========== ========== ======== Total credit impairment charges and other provisions (896) (706) (27) Analysis of loans and advances to customers at amortised cost (GBPbn) ====================================== ========== ========== ======== Personal Banking 135.0 134.0 Barclaycard Consumer UK 16.5 16.2 Wealth, Entrepreneurs & Business Banking 14.9 15.9 ====================================== ========== ========== ======== Total loans and advances to customers at amortised cost 166.4 166.1 Analysis of customer deposits (GBPbn) ====================================== ========== ========== ======== Personal Banking 139.3 131.0 Barclaycard Consumer UK - - Wealth, Entrepreneurs & Business Banking 49.7 45.8 ====================================== ========== ========== ======== Total customer deposits 189.0 176.8
2016 compared to 2015
-- Profit before tax increased GBP1,153m to GBP1,738m reflecting lower provisions for UK customer redress. Profit before tax excluding notable items(1) decreased 5% to GBP2,587m driven by an increase in credit impairment charges following the management review of the cards portfolio impairment modelling, partially offset by a reduction in total operating expenses -- Total income, including a gain on disposal of Barclays' share of Visa Europe Limited recognised in Personal Banking and Wealth, Entrepreneurs & Business Banking (WEBB) increased 2% to GBP7,517m. Total income excluding notable items was broadly in line at GBP7,366m (2015: GBP7,343m), within which: - Personal Banking income increased 1% to GBP3,762m driven by improved deposit margins and balance growth, partially offset by lower mortgage margins - Barclaycard Consumer UK income decreased 2% to GBP2,022m primarily as a result of the European Interchange Fee Regulation, which came into full effect from December 2015, offset by balance growth and gains from debt sales
- WEBB income increased 1% to GBP1,582m reflecting improved margins and deposit growth, partially offset by reduced transactional fee income - Net interest income increased 1% to GBP6,048m due to balance growth and deposit pricing initiatives, partially offset by lower mortgage margins - Net interest margin increased 6bps to 3.62% reflecting higher margins on deposits, partially offset by lower mortgage margins - Net fee, commission and other income decreased 4% to GBP1,318m due to the impact of the European Interchange Fee Regulation in Barclaycard Consumer UK, which came into full effect from December 2015, and reduced fee and commission income in WEBB -- Credit impairment charges increased 27% to GBP896m due to a GBP200m charge in Q316 following the management review of the cards portfolio impairment modelling. The 30 day and 90 day arrears rates on the cards portfolio improved year-on-year to 1.9% (2015: 2.3%) and 0.9% (2015: 1.2%) respectively -- Total operating expenses, including provisions for UK customer redress of GBP1,000m (2015: GBP2,431m), reduced 19% to GBP4,882m. Total operating expenses excluding notable items reduced 1% to GBP3,882m reflecting savings realised from strategic cost programmes, relating to restructuring of the branch network and technology improvements, offset by structural reform programme implementation costs -- The cost: income ratio excluding notable items was 53% (2015: 53%) and RoTE excluding notable items was 19.3% (2015: 21.1%) -- Loans and advances to customers were stable at GBP166.4bn (December 2015: GBP166.1bn) -- Total assets increased GBP7.1bn to GBP209.6bn primarily reflecting an increase in the allocated liquidity pool -- Customer deposits increased 7% to GBP189.0bn primarily driven by higher balances in Personal Banking and WEBB -- RWAs reduced GBP2.0bn to GBP67.5bn primarily driven by changes in the mortgages credit risk model 1 Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document. Barclays International Year ended Year ended 31.12.16 31.12.15 YoY Income statement information(1) GBPm GBPm % Change ============================================ ========== ========== ======== Net interest income 4,512 4,324 4 Net trading income 4,580 3,782 21 Net fee, commission and other income 5,903 5,641 5 ============================================ ========== ========== ======== Total income 14,995 13,747 9 Credit impairment charges and other provisions (1,355) (922) (47) ============================================ ========== ========== ======== Net operating income 13,640 12,825 6 Operating expenses (9,129) (8,029) (14) UK bank levy (284) (253) (12) Litigation and conduct (48) (1,310) 96 ============================================ ========== ========== ======== Total operating expenses (9,461) (9,592) 1 Other net income 32 45 (29) ============================================ ========== ========== ======== Profit before tax 4,211 3,278 28 Attributable profit 2,412 1,758 37 Balance sheet information ============================================ ========== ========== ======== Loans and advances to banks and customers at amortised cost (GBPbn)(2) 211.3 184.1 Trading portfolio assets (GBPbn) 73.2 61.9 Derivative financial instrument assets (GBPbn) 156.2 111.5 Derivative financial instrument liabilities (GBPbn) 160.6 119.0 Reverse repurchase agreements and other similar secured lending (GBPbn) 13.4 24.7 Financial assets designated at fair value (GBPbn) 62.3 46.8 Total assets (GBPbn) 648.5 532.2 Customer deposits (GBPbn)(3) 216.2 185.6 Risk weighted assets (GBPbn) 212.7 194.8 Performance measures ============================================ ========== ========== ======== Return on average allocated tangible equity 9.8% 7.2% Average allocated tangible equity (GBPbn) 25.5 24.9 Cost: income ratio 63% 70% Loan loss rate (bps) 63 49 Loan: deposit ratio 86% 88% Net interest margin(4) 3.98% 3.80% Notable items ============================================ ========== ========== ======== Total income Gain on disposal of Barclays' share of Visa Europe Limited 464 - Gains on US Lehman acquisition assets - 496 Litigation and conduct Provisions for UK customer redress - (218) Provisions for ongoing investigations and litigation including Foreign Exchange - (984) Operating expenses Gain on valuation of a component of the defined retirement benefit liability - 133 -------------------------------------------- ---------- ---------- -------- Total notable items 464 (573)
Excluding notable items, the Barclays International return on average allocated tangible equity was 8.0% (2015: 9.5%).
1 Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document. 2 As at 31 December 2016 loans and advances included GBP185.9bn (December 2015: GBP162.6bn) of loans and advances to customers (including settlement balances of GBP19.5bn (December 2015: GBP18.5bn) and cash collateral of GBP30.1bn (December 2015: GBP24.8bn)), and GBP25.4bn (December 2015: GBP21.5bn) of loans and advances to banks (including settlement balances of GBP1.7bn (December 2015: GBP1.6bn) and cash collateral of GBP6.3bn (December 2015: GBP5.7bn)). Loans and advances to banks and customers in respect of Consumer, Cards and Payments were GBP39.7bn (December 2015: GBP32.1bn). 3 As at 31 December 2016 customer deposits included settlement balances of GBP16.6bn (December 2015: GBP16.3bn) and cash collateral of GBP20.8bn (December 2015: GBP15.9bn). 4 Barclays International margins have been restated to include interest earning lending within the investment banking business. Analysis of Barclays International Year ended Year ended Corporate and Investment Bank 31.12.16 31.12.15 YoY Income statement information GBPm GBPm % Change ===================================== ========== ========== ======== Analysis of total income Credit 1,185 824 44 Equities 1,790 1,912 (6) Macro 2,304 2,108 9 ===================================== ========== ========== ======== Markets 5,279 4,844 9 Banking fees 2,397 2,087 15 Corporate lending 1,195 1,361 (12) Transactional banking 1,657 1,663 - ===================================== ========== ========== ======== Banking 5,249 5,111 3 Other 5 495 (99) ===================================== ========== ========== ======== Total income 10,533 10,450 1 Credit impairment charges and other provisions (260) (199) (31) Total operating expenses (7,624) (7,929) 4 Profit before tax 2,650 2,322 14 Balance sheet information ===================================== ========== ========== ======== Risk weighted assets (GBPbn) 178.6 167.3 Performance measures ===================================== ========== ========== ======== Return on average allocated tangible equity 6.1% 5.4% Average allocated tangible equity (GBPbn) 21.9 21.9
Excluding notable items, the CIB return on average allocated tangible equity was 6.1% (2015: 8.2%).
Consumer, Cards and Payments Income statement information ========================================== ======== ======== ==== Total income 4,462 3,297 35 Credit impairment charges and other provisions (1,095) (723) (51) Total operating expenses (1,837) (1,663) (10) Profit before tax 1,561 956 63 Balance sheet information ========================================== ======== ======== ==== Loans and advances to banks and customers at amortised cost (GBPbn) 39.7 32.1 Customer deposits (GBPbn) 50.0 41.8 Risk weighted assets (GBPbn) 34.1 27.5 Key facts ========================================== ======== ======== ==== 30 days arrears rate - Barclaycard US 2.6% 2.2% Total number of Barclaycard business clients 355,000 341,000 Value of payments processed GBP296bn GBP271bn Performance measures ========================================== ======== ======== ==== Return on average allocated tangible equity 31.4% 20.2% Average allocated tangible equity (GBPbn) 3.6 3.0
Excluding notable items, the Consumer, Cards and Payments return on average allocated tangible equity was 19.1% (2015: 18.9%).
2016 compared to 2015
-- Profit before tax increased 28% to GBP4,211m, including the gain on disposal of Barclays' share of Visa Europe Limited. Profit before tax excluding notable items(1) decreased 3% to GBP3,747m driven by an 11% increase in total operating expenses, and a 47% increase in impairment, partially offset by a 10% increase in total income -- Total income excluding notable items increased 10% to GBP14,531m, including the appreciation of average USD and EUR against GBP, with Consumer, Cards and Payments income increasing 21% to GBP3,998m and Corporate and Investment Bank (CIB) income increasing 6% to GBP10,533m - Markets income increased 9% to GBP5,279m, within which: - Credit income increased 44% to GBP1,185m driven by strong performance in fixed income flow credit which benefitted from increased market volatility and client demand - Equities income decreased 6% to GBP1,790m with lower client activity in Asia and the simplification of the EMEA business, partially offset by improved performance in cash, derivatives and financing in H216 - Macro income increased 9% to GBP2,304m driven by increased activity post the EU referendum decision and US elections - Banking income increased 3% to GBP5,249m within which: - Banking fees income increased 15% to GBP2,397m driven by higher debt underwriting and advisory fees, partially offset by lower equity underwriting fees - Corporate lending reduced 12% to GBP1,195m due to losses on fair value hedges and the non-recurrence of one-off work-out gains recognised in Q215 - Transactional banking was broadly flat at GBP1,657m (2015: GBP1,663m) as income from higher deposit balances was offset by margin compression - Consumer, Cards and Payments income increased 21% to GBP3,998m driven by growth across all key businesses and the appreciation of average USD and EUR against GBP -- Credit impairment charges increased 47% to GBP1,355m including the appreciation of average USD and EUR against GBP, within which: - CIB credit impairment charges increased 31% to GBP260m driven by the impairment of a number of single name exposures - Consumer, Cards and Payments credit impairment charges increased 51% to GBP1,095m primarily driven by balance growth, a change in portfolio mix and a GBP120m charge in Q316 following a management review of the cards portfolio impairment modelling -- Total operating expenses excluding notable items increased 11%, within which: - CIB increased 12% to GBP7,624m. In addition to the appreciation of average USD against GBP this reflected an additional charge in Q416 relating to the 2016 compensation awards, higher restructuring costs, GBP150m of which related to reducing the real estate footprint in Q316, and higher structural reform programme implementation costs including those relating to the incorporation of the US Intermediate Holding Company (IHC) on 1 July 2016. These increases were partially offset by lower litigation and conduct costs - Consumer, Cards and Payments increased 7% to GBP1,837m due to continued business growth and the appreciation of average USD and EUR against GBP, partially offset by lower restructuring costs -- The cost: income ratio excluding notable items was 65% (2015: 64%) and RoTE excluding notable items was 8.0% (2015: 9.5%) -- Loans and advances to banks and customers at amortised cost increased GBP27.2bn to GBP211.3bn with CIB increasing GBP19.7bn to GBP171.7bn due to increased lending and cash collateral and the appreciation of USD and EUR against GBP. Consumer, Cards and Payments increased GBP7.6bn to GBP39.7bn driven by appreciation of USD and EUR against GBP and growth in Barclaycard US, including the acquisition of the JetBlue credit card portfolio -- Trading portfolio assets increased GBP11.3bn to GBP73.2bn due to an increase in client activity and appreciation of major currencies against GBP -- Derivative financial instrument assets and liabilities increased GBP44.7bn to GBP156.2bn and GBP41.6bn to GBP160.6bn respectively, due to the appreciation of USD and EUR against GBP and decreases in forward interest rates -- Financial assets designated at fair value increased GBP15.5bn to GBP62.3bn and reverse repurchase agreements and other similar lending decreased GBP11.3bn to GBP13.4bn. Since 2015, new reverse repurchase agreements in certain businesses have been designated at fair value to better align to the way the business manages the portfolio's risk and performance. On a net basis reverse repos have increased by GBP4.2bn as a result of increased matched book trading -- Customer deposits increased GBP30.6bn to GBP216.2bn, with CIB increasing GBP22.6bn to GBP166.3bn primarily driven by increases in deposits cash collateral and the appreciation of USD and EUR against GBP. Consumer, Cards and Payments increased GBP8.2bn to GBP50.0bn driven by balance growth in Barclaycard US and Private Banking, and the appreciation of USD and EUR against GBP -- RWAs increased GBP17.9bn to GBP212.7bn, due to the appreciation of USD against GBP, and business growth, including the acquisition of the JetBlue credit card portfolio in Consumer, Cards and Payments 1 Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document. Head Office Year ended Year ended 31.12.16 31.12.15 YoY Income statement information(1) GBPm GBPm % Change Net interest income (183) (305) 40 Net fee, commission and other income 286 643 (56) ======================================== ========== ========== ======== Net operating income 103 338 (70) Operating expenses (135) (272) 50 UK bank levy (2) (8) 75 Litigation and conduct (27) (66) 59 ======================================== ========== ========== ======== Total operating expenses (164) (346) 53 Other net income/(expenses) 128 (106) ======================================== ========== ========== ======== Profit/(loss) before tax 67 (114) Attributable profit 110 11 Balance sheet information ======================================== ========== ========== ======== Total assets (GBPbn)(2) 75.2 59.4 Risk weighted assets (GBPbn)(2) 53.3 39.7 Performance measures ======================================== ========== ========== ======== Average allocated tangible equity (GBPbn) 6.5 2.6 Notable items ---------------------------------------- ---------- ---------- -------- Total income Own credit (35) 430 Litigation and conduct Provisions for ongoing investigations and litigation including Foreign Exchange - (52) Other net expenses Losses on sale relating to the Spanish, Portuguese and Italian businesses - (112) ---------------------------------------- ---------- ---------- -------- Total notable items (35) 266
2016 compared to 2015
-- Profit before tax was GBP67m (2015: loss of GBP114m). Profit before tax excluding notable items(1) improved from a loss of GBP380m to a profit of GBP102m -- Net operating income excluding notable items increased to GBP138m (2015: loss of GBP92m) primarily due to changes in net income from treasury operations -- Total operating expenses excluding notable items reduced to GBP164m (2015: GBP294m) primarily due to a reduction in structural reform implementation costs now allocated to the businesses -- Other net income excluding notable items increased to GBP128m (2015: GBP6m) primarily due to recycling of the currency translation reserve on the disposal of the Southern European cards business -- Total assets increased GBP15.8bn to GBP75.2bn primarily driven by the appreciation of ZAR against GBP -- RWAs increased GBP13.6bn to GBP53.3bn primarily driven by the appreciation of ZAR against GBP and the reallocation of operational risk RWAs from Non-Core associated with exited businesses and assets 1 Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document. 2 Includes Africa Banking assets held for sale of GBP65.1bn (December 2015: GBP47.9bn) and risk weighted assets of GBP 42.3bn (December 2015: GBP31.7bn). Barclays Non-Core Year ended Year ended 31.12.16 31.12.15 YoY Income statement information(1) GBPm GBPm % Change ============================================ ========== ========== ======== Net interest income 160 615 (74) Net trading income (1,703) (706) Net fee, commission and other income 379 703 (46) ============================================ ========== ========== ======== Total income (1,164) 612 Credit impairment charges and other provisions (122) (134) 9 ============================================ ========== ========== ======== Net operating (expenses)/income (1,286) 478 Operating expenses (1,509) (1,958) 23 UK bank levy (76) (88) 14 Litigation and conduct (246) (500) 51 ============================================ ========== ========== ======== Total operating expenses (1,831) (2,546) 28 Other net income/(expenses) 331 (535) ============================================ ========== ========== ======== Loss before tax (2,786) (2,603) (7) Attributable loss (1,916) (2,418) 21 Balance sheet information ============================================ ========== ========== ======== Loans and advances to banks and customers at amortised cost (GBPbn)(2) 51.1 51.8 Derivative financial instrument assets (GBPbn) 188.7 213.7 Derivative financial instrument liabilities (GBPbn) 178.6 202.1 Reverse repurchase agreements and other similar secured lending (GBPbn) 0.1 3.1 Financial assets designated at fair value (GBPbn) 14.5 21.4 Total assets (GBPbn) 279.7 325.8 Customer deposits (GBPbn)(3) 12.5 20.9 Risk weighted assets (GBPbn) 32.1 54.3 Performance measures ============================================ ========== ========== ======== Average allocated tangible equity (GBPbn) 7.8 10.9 Period end allocated tangible equity (GBPbn) 5.4 8.5 Loan loss rate (bps) 22 23 Notable items ============================================ ========== ========== ======== Litigation and conduct Provisions for UK customer redress - (123) Provisions for ongoing investigations and litigation including Foreign Exchange - (201) Operating expenses Impairment of goodwill and other assets relating to businesses being disposed - (96) Other net expenses Losses on sale relating to the Spanish, Portuguese and Italian businesses - (468) ============================================ ========== ========== ======== Total notable items - (888) Analysis of total income ============================================ ========== ========== ======== Businesses 485 1,139 (57) Securities and loans (638) (350) (82) Derivatives (1,011) (177) ============================================ ========== ========== ======== Total income (1,164) 612 1 Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document. 2 As at 31 December 2016 loans and advances included GBP38.5bn (December 2015: GBP40.4bn) of loans and advances to customers (including settlement balances of GBP0.1bn (December 2015: GBP0.3bn) and cash collateral of GBP17.3bn (December 2015: GBP19.0bn)), and GBP12.6bn (December 2015: GBP11.4bn) of loans and advances to banks (including settlement balances of GBP0.1bn (December 2015: GBPnil) and cash collateral of GBP12.1bn (December 2015: GBP10.1bn)). 3 As at 31 December 2016 customer deposits included settlement balances of GBP0.1bn (December 2015: GBP0.2bn) and cash collateral of GBP11.9bn (December 2015: GBP12.3bn).
2016 compared to 2015
-- Loss before tax increased to GBP2,786m (2015: GBP2,603m). Loss before tax excluding notable items(1) increased to GBP2,786m (2015: GBP1,715m) driven by reduced income and increased losses resulting from continued progress on the rundown of Derivatives, Businesses and Securities and loans, partially offset by lower operating expenses and higher other net income primarily from business and country exits -- Total income reduced GBP1,776m to a net expense of GBP1,164m - Businesses income reduced GBP654m to GBP485m due to the impact of lower income following the completion of the sale of a number of income generating businesses and fees paid to Head Office relating to the termination of internal hedging and funding positions no longer required - Securities and loans income decreased GBP288m to a net expense of GBP638m primarily driven by the impact of restructuring the ESHLA portfolio, the non-recurrence of a GBP91m provision release relating to a litigation matter in Q115 and portfolio rundown. Fair value losses on the ESHLA portfolio were GBP393m (2015: GBP359m) - Derivatives income reduced GBP834m to a net expense of GBP1,011m principally reflecting the costs of running down the portfolio -- Credit impairment charges improved 9% to GBP122m due to lower impairment charges in European businesses -- Total operating expenses excluding notable items improved 14% to GBP1,831m reflecting cost savings from ceasing certain investment banking activities in a number of countries and the completion of the sale of a number of businesses, partially offset by a c.GBP200m increase in restructuring charges, which totalled c.GBP400m -- Other net income excluding notable items of GBP331m (2015: net expense of GBP70m) included gains on the sale of Barclays Risk Analytics and Index Solutions, the Asia wealth and investment management business and the Southern European cards business, partially offset by the loss on sale of the French retail business of GBP455m -- Loans and advances to banks and customers at amortised cost decreased GBP0.7bn to GBP51.1bn due to the sale of the Asia wealth and investment management business, and the rundown and exit of historical investment bank assets, partially offset by the recognition of GBP8bn of ESHLA loans at amortised cost, following the restructure of LOBO loan terms -- Total assets decreased GBP46.1bn to GBP279.7bn due to lower derivative financial instrument assets which decreased GBP25.0bn to GBP188.7bn whilst derivative financial instrument liabilities decreased GBP23.5bn to GBP178.6bn mainly on continued rundown of the derivative back book -- Leverage exposure decreased GBP47bn to GBP101bn due to reduced potential future exposure on derivatives and trading portfolio assets -- RWAs reduced GBP22.2bn to GBP32.1bn despite the appreciation of USD and EUR against GBP, including a GBP10bn reduction in Derivatives, a GBP3bn reduction in Securities and loans, a GBP4bn reduction in Businesses RWAs, and a GBP4bn reallocation of operational risk RWAs to Head Office associated with business disposals and exits 1 Refer to the appendix on pages 65-75 for further information, reconciliations
and calculations of non-IFRS performance measures included throughout this document.
Discontinued Operation
On 1 March 2016, Barclays announced its intention to sell down the Group's interest in BAGL. This sell down is intended to be to a level which will permit deconsolidation from an accounting and regulatory perspective, subject to shareholder and regulatory approvals as required. On 5 May 2016 Barclays executed the first tranche of the sell down of the Group's interest in BAGL with the sale of 12.2% of BAGL's issued share capital. Following completion of the sale, Barclays' holding represents 50.1% of BAGL's issued share capital.
The terms of the transitional services arrangements and related separation payments have been agreed with BAGL and submitted to relevant regulators as part of a request for approval for Barclays to sell down to below a 50% holding. These proposed separation terms include contributions totalling GBP765m, of which GBP27.5m was paid in 2016, with the remainder to be paid over the period through to completion of any initial sale of Barclays' stake in BAGL to below 50%. The majority of these funds would be used by BAGL to separate from the Barclays group, including termination of the existing Master Services Agreement, making investments in branding, operations and technology, and covering separation related expenses. In addition, Barclays will contribute an amount equivalent to 1.5% of BAGL's market capitalisation to a new Broad-Based Black Economic Empowerment scheme, equating to approximately GBP130m at the 31 December 2016 share price and ZAR exchange rate, and expects to incur some additional operating expenses in respect of delivering the separation of the businesses under the transitional services arrangements.
These proposed contributions have been taken into account in assessing whether any impairment of the BAGL disposal group was required in the Group's balance sheet. No impairment of the BAGL disposal group was required at 31 December 2016, as the market value of BAGL less estimated costs to sell at the prevailing share price and ZAR exchange rate was GBP8.4bn, which was greater than the carrying asset value of BAGL at that date of GBP7.3bn, plus the proposed costs of separation referred to above.
The Africa Banking business meets the requirements for presentation as a discontinued operation. As such, these results have been presented as two lines on the face of the Group income statement, representing the profit after tax and non-controlling interest in respect of the discontinued operation. Were the fair value of BAGL, based on its quoted share price, less estimated costs to sell, to fall below the carrying amount of the net assets of BAGL including goodwill on acquisition, a resulting impairment to Barclays' stake in BAGL would also be recognised through these lines.
Africa Banking Year ended Year ended 31.12.16 31.12.15 YoY Income statement information GBPm GBPm % Change ===================================== ========== ========== ======== Net interest income 2,169 1,950 11 Net fee, commission and other income 1,577 1,464 8 ===================================== ========== ========== ======== Total income 3,746 3,414 10 Credit impairment charges and other provisions (445) (353) (26) ===================================== ========== ========== ======== Net operating income 3,301 3,061 8 Operating expenses (2,345) (2,091) (12) UK bank levy (65) (50) (30) ===================================== ========== ========== ======== Total operating expenses (2,410) (2,141) (13) Other net income 6 7 (14) ===================================== ========== ========== ======== Profit before tax 897 927 (3) Profit after tax 591 626 (6) Attributable profit 189 302 (37) Balance sheet information ===================================== ========== ========== ======== Total assets (GBPbn)(1) 65.1 47.9 Risk weighted assets (GBPbn)(1) 42.3 31.7 Key Facts ===================================== ========== ========== ======== Period end - ZAR/GBP 16.78 23.14 Average - ZAR/GBP(2) 20.04 19.57 Barclays Africa Group Limited share price (ZAR) 168.69 143.49 Barclays Africa Group Limited number of shares (m) 848 848 1 Africa Banking assets held for sale and RWAs are reported in Head Office within Core. 2 The average rate is derived from daily spot rates during the year.
Quarterly Results Summary
Barclays Group Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115 Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Net interest income 2,523 2,796 2,530 2,688 2,726 2,692 2,664 2,526 Net fee, commission and other income 2,469 2,650 3,442 2,353 1,722 2,789 3,797 3,124 ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Total income 4,992 5,446 5,972 5,041 4,448 5,481 6,461 5,650 Credit impairment charges and other provisions (653) (789) (488) (443) (554) (429) (393) (386) ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Net operating income 4,339 4,657 5,484 4,598 3,894 5,052 6,068 5,264 Operating expenses (3,812) (3,581) (3,425) (3,747) (3,547) (3,552) (3,557) (3,067) UK bank levy (410) - - - (426) - - - Litigation and conduct (97) (741) (447) (78) (1,722) (699) (927) (1,039) Total operating expenses (4,319) (4,322) (3,872) (3,825) (5,695) (4,251) (4,484) (4,106) Other net income/(expenses) 310 502 (342) 20 (274) (182) (39) (101) ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Profit/(loss) before tax 330 837 1,270 793 (2,075) 619 1,545 1,057 Tax credit/(charge) 50 (328) (467) (248) (164) (133) (324) (528) ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Profit/(loss) after tax in respect of continuing operations 380 509 803 545 (2,239) 486 1,221 529 Profit after tax in respect of discontinued operation 71 209 145 166 101 167 162 196 Attributable to: ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Ordinary equity holders of the parent 99 414 677 433 (2,422) 417 1,146 465 Other equity holders 139 110 104 104 107 79 79 80 Non-controlling interests 213 194 167 174 177 157 158 180 Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Total assets 1,213.1 1,324.0 1,351.3 1,248.9 1,120.0 1,236.5 1,196.7 1,416.4 Risk weighted assets 365.6 373.4 366.3 363.0 358.4 381.9 376.7 395.9 Leverage exposure 1,125.5 1,185.1 1,155.4 1,082.0 1,027.8 1,140.7 1,139.3 1,254.7 Performance measures ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Return on average tangible shareholders' equity 1.1% 3.6% 5.8% 3.8% (20.1%) 3.6% 9.8% 4.0% Average tangible shareholders' equity (GBPbn) 48.9 49.4 48.3 48.3 47.8 47.6 47.2 48.1 Cost: income ratio 87% 79% 65% 76% 128% 78% 69% 73% Loan loss rate (bps) 58 66 41 40 53 37 35 32 Basic earnings/(loss) per share 0.8p 2.6p 4.2p 2.7p (14.4p) 2.6p 7.0p 2.9p Notable items GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Total income Own credit 46 (264) 292 (109) (175) 195 282 128 Gain on disposal of Barclays' share of Visa Europe Limited - - 615 - - - - - Gains on US Lehman acquisition
assets - - - - - - 496 - Litigation and conduct Provisions for UK customer redress - (600) (400) - (1,450) (290) (850) (182) Provisions for ongoing investigations and litigation including Foreign Exchange - - - - (167) (270) - (800) Operating expenses Gain on valuation of a component of the defined retirement benefit liability - - - - - - - 429 Impairment of goodwill and other assets relating to businesses being disposed - - - - (96) - - - Other net expenses Losses on sale relating to the Spanish, Portuguese and Italian businesses - - - - (261) (201) - (118) -------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- Total notable items 46 (864) 507 (109) (2,149) (566) (72) (543)
Excluding notable items, the Q416 Group return on average tangible shareholders' equity was 0.7% (Q415: (1.9%)) and basic earnings/(loss) per share was 0.5p (Q415: (1.3p)).
Barclays Core Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115 Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm =============================== ======= ======= ======= ======= ======= ======= ======= ======= Net interest income 2,577 2,718 2,491 2,591 2,555 2,557 2,510 2,371 Net fee, commission and other income 2,834 2,887 3,825 2,692 1,961 2,708 3,709 3,057 =============================== ======= ======= ======= ======= ======= ======= ======= ======= Total income 5,411 5,605 6,316 5,283 4,516 5,265 6,219 5,428 Credit impairment charges and other provisions (606) (769) (462) (414) (522) (388) (373) (345) =============================== ======= ======= ======= ======= ======= ======= ======= ======= Net operating income 4,805 4,836 5,854 4,869 3,994 4,877 5,846 5,083 Operating expenses (3,471) (3,270) (3,057) (3,258) (2,992) (3,094) (3,061) (2,618) UK bank levy (334) - - - (338) - - - Litigation and conduct (46) (639) (420) (12) (1,634) (419) (819) (1,015) Total operating expenses (3,851) (3,909) (3,477) (3,270) (4,964) (3,513) (3,880) (3,633) Other net income/(expenses) 164 4 (18) 9 (5) 13 14 (83) =============================== ======= ======= ======= ======= ======= ======= ======= ======= Profit/(loss) before tax 1,118 931 2,359 1,608 (975) 1,377 1,980 1,367 Tax charge (272) (522) (696) (485) (92) (299) (474) (614) =============================== ======= ======= ======= ======= ======= ======= ======= ======= Profit/(loss) after tax 846 409 1,663 1,123 (1,067) 1,078 1,506 753 Non-controlling interests (76) (57) (80) (84) (81) (54) (64) (68) Other equity holders (121) (95) (89) (89) (92) (63) (61) (65) =============================== ======= ======= ======= ======= ======= ======= ======= ======= Attributable profit/(loss) 649 257 1,494 950 (1,240) 961 1,381 620 Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn =============================== ======= ======= ======= ======= ======= ======= ======= ======= Total assets 933.4 964.3 972.2 883.6 794.2 862.0 830.5 919.4 Risk weighted assets 333.5 329.5 319.6 312.2 304.1 316.3 308.1 318.0 Performance measures =============================== ======= ======= ======= ======= ======= ======= ======= ======= Return on average allocated tangible equity 6.4% 2.7% 15.0% 9.9% (12.8%) 10.4% 15.5% 7.1% Average tangible equity (GBPbn) 42.4 41.8 40.4 39.3 38.1 37.5 35.9 35.6 Cost: income ratio 71% 70% 55% 62% 110% 67% 62% 67% Loan loss rate (bps) 61 74 45 42 57 39 38 35 Basic earnings/(loss) per share 4.0p 1.7p 9.0p 5.8p (7.3p) 5.8p 8.4p 3.8p Notable items GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm =============================== ======= ======= ======= ======= ======= ======= ======= ======= Total income Own credit 46 (264) 292 (109) (175) 195 282 128 Gain on disposal of Barclays' share of Visa Europe Limited - - 615 - - - - - Gains on US Lehman acquisition assets - - - - - - 496 - Litigation and conduct Provisions for UK customer redress - (600) (400) - (1,392) (290) (800) (167) Provisions for ongoing investigations and litigation including Foreign Exchange - - - - (167) (69) - (800) Operating expenses Gain on valuation of a component of the defined retirement benefit liability - - - - - - - 429 Other net expenses Losses on sale relating to the Spanish, Portuguese and Italian businesses - - - - (15) - - (97) ------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- Total notable items 46 (864) 507 (109) (1,749) (164) (22) (507)
Excluding notable items, the Q416 Core return on average allocated tangible equity was 5.8% (Q415: 6.3%) and the Core basic earnings per share was 3.7p (Q415: 3.6p).
Barclays Non-Core Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115 Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ================================ ====== ===== ======= ====== ======= ====== ====== ====== Net interest income (54) 78 40 96 171 135 154 155 Net trading income (462) (288) (463) (490) (398) (124) (57) (127) Net fee, commission and other income 97 51 79 152 159 204 146 194 ================================ ====== ===== ======= ====== ======= ====== ====== ====== Total income (419) (159) (344) (242) (68) 215 243 222 Credit impairment charges and other provisions (47) (20) (26) (29) (32) (41) (20) (41) ================================ ====== ===== ======= ====== ======= ====== ====== ====== Net operating (expenses)/income (466) (179) (370) (271) (100) 174 223 181 Operating expenses (341) (311) (368) (489) (555) (458) (496) (449) UK bank levy (76) - - - (88) - - - Litigation and conduct (51) (102) (27) (66) (89) (279) (108) (24) ================================ ====== ===== ======= ====== ======= ====== ====== ====== Total operating expenses (468) (413) (395) (555) (732) (737) (604) (473) Other net income/(expenses) 146 498 (324) 11 (268) (195) (54) (18) ================================ ====== ===== ======= ====== ======= ====== ====== ====== Loss before tax (788) (94) (1,089) (815) (1,100) (758) (435) (310) Tax credit/(charge) 322 194 229 237 (72) 166 150 86 ================================ ====== ===== ======= ====== ======= ====== ====== ====== (Loss)/profit after tax (466) 100 (860) (578) (1,172) (592) (285) (224) Non-controlling interests (14) (13) (12) (10) (19) (21) (21) (20) Other equity holders (18) (15) (15) (15) (17) (15) (18) (14) ================================ ====== ===== ======= ====== ======= ====== ====== ====== Attributable (loss)/profit (498) 72 (887) (603) (1,208) (628) (324) (258) Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn ================================ ====== ===== ======= ====== ======= ====== ====== ====== Loans and advances to banks and customers at amortised cost 51.1 58.7 68.5 55.4 51.8 57.1 60.4 73.1 Derivative financial instrument assets 188.7 253.2 262.8 249.7 213.7 243.3 223.9 305.6 Derivative financial instrument liabilities 178.6 243.0 253.4 239.1 202.1 235.0 216.7 299.6 Reverse repurchase agreements and other similar secured
lending 0.1 0.1 0.1 0.7 3.1 8.5 16.7 43.7 Financial assets designated at fair value 14.5 15.5 15.4 23.4 21.4 22.8 22.1 25.0 Total assets 279.7 359.8 379.1 365.4 325.8 374.5 366.2 497.0 Customer deposits 12.5 16.0 17.4 19.3 20.9 25.8 27.9 29.9 Risk weighted assets 32.1 43.9 46.7 50.9 54.3 65.6 68.6 77.9 Performance measures ================================ ====== ===== ======= ====== ======= ====== ====== ====== Average allocated tangible equity (GBPbn) 6.5 7.6 7.9 9.0 9.7 10.2 11.3 12.4 Period end allocated tangible equity (GBPbn) 5.4 7.2 7.8 8.5 8.5 10.2 10.1 11.7 Loan loss rate (bps) 31 13 14 21 25 27 13 17 Basic (loss)/earnings per share contribution (2.9p) 0.5p (5.2p) (3.6p) (7.2p) (3.7p) (1.9p) (1.5p) Notable items GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ================================ ====== ===== ======= ====== ======= ====== ====== ====== Litigation and conduct Provisions for UK customer redress - - - - (58) - (50) (15) Provisions for ongoing investigations and litigation including Foreign Exchange - - - - - (201) - - Operating expenses Impairment of goodwill and other assets relating to businesses being disposed - - - - (96) - - - Other net expenses Losses on sale relating to the Spanish, Portuguese and Italian business - - - - (246) (201) - (21) -------------------------------- ------ ----- ------- ------ ------- ------ ------ ------ Total notable items - - - - (400) (402) (50) (36) Analysis of total income ================================ ====== ===== ======= ====== ======= ====== ====== ====== Businesses (73) 181 181 196 229 314 292 304 Securities and loans 161 (34) (363) (402) (195) (87) - (68) Derivatives (507) (306) (162) (36) (102) (12) (49) (14) ================================ ====== ===== ======= ====== ======= ====== ====== ====== Total income (419) (159) (344) (242) (68) 215 243 222
Excluding notable items, the Non-Core basic loss per share was 2.9p (Q415: 5.1p).
Quarterly Core Results by Business
Barclays UK Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115 Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ================================= ======= ======= ======= ===== ======= ======= ======= ===== Net interest income 1,502 1,569 1,476 1,501 1,509 1,499 1,479 1,486 Net fee, commission and other income 326 374 467 302 325 375 325 345 ================================= ======= ======= ======= ===== ======= ======= ======= ===== Total income 1,828 1,943 1,943 1,803 1,834 1,874 1,804 1,831 Credit impairment charges and other provisions (180) (350) (220) (146) (219) (154) (166) (167) ================================= ======= ======= ======= ===== ======= ======= ======= ===== Net operating income 1,648 1,593 1,723 1,657 1,615 1,720 1,638 1,664 Operating expenses (989) (904) (947) (952) (920) (925) (970) (649) UK bank levy (48) - - - (77) - - - Litigation and conduct (28) (614) (399) (1) (1,466) (76) (801) (168) ================================= ======= ======= ======= ===== ======= ======= ======= ===== Total operating expenses (1,065) (1,518) (1,346) (953) (2,463) (1,001) (1,771) (817) Other net (expenses)/income - - (1) - 1 1 1 (3) ================================= ======= ======= ======= ===== ======= ======= ======= ===== Profit/(loss) before tax 583 75 376 704 (847) 720 (132) 844 Attributable profit/(loss) 383 (163) 141 467 (1,078) 541 (174) 664 Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn ================================= ======= ======= ======= ===== ======= ======= ======= ===== Loans and advances to customers at amortised cost 166.4 166.6 166.0 166.2 166.1 166.7 166.1 166.0 Total assets 209.6 209.1 204.6 201.7 202.5 204.1 202.2 199.6 Customer deposits 189.0 185.5 181.7 179.1 176.8 173.4 171.6 168.7 Risk weighted assets 67.5 67.4 67.1 69.7 69.5 71.0 71.7 72.3 Net interest margin 3.56% 3.72% 3.56% 3.62% 3.58% 3.54% 3.54% 3.60% Performance measures ================================= ======= ======= ======= ===== ======= ======= ======= ===== Return on average allocated tangible equity 18.2% (7.1%) 6.6% 20.5% (46.5%) 23.3% (7.3%) 28.3% Average allocated tangible equity (GBPbn) 8.6 8.7 9.0 9.3 9.2 9.3 9.4 9.4 Cost: income ratio 58% 78% 69% 53% 134% 53% 98% 45% Loan loss rate (bps) 42 82 52 34 51 36 40 40 Notable items GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ================================= ======= ======= ======= ===== ======= ======= ======= ===== Total income Gain on disposal of Barclays' share of Visa Europe Limited - - 151 - - - - - Litigation and conduct Provisions for UK customer redress - (600) (400) - (1,391) (73) (800) (167) Operating expenses Gain on valuation of a component of the defined retirement benefit liability - - - - - - - 296 --------------------------------- ------- ------- ------- ----- ------- ------- ------- ----- Total notable items - (600) (249) - (1,391) (73) (800) 129
Excluding notable items, the Q416 Barclays UK return on average allocated tangible equity was 17.1% (Q415: 14.8%).
Analysis of Barclays UK Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115 Analysis of total income GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm =============================== ===== ===== ===== ===== ===== ===== ===== ===== Personal Banking 934 970 1,068 919 945 938 905 927 Barclaycard Consumer UK 507 561 463 491 505 552 503 505 Wealth, Entrepreneurs & Business Banking 387 412 412 393 384 384 396 399 =============================== ===== ===== ===== ===== ===== ===== ===== ===== Total income 1,828 1,943 1,943 1,803 1,834 1,874 1,804 1,831 Analysis of credit impairment charges and other provisions =============================== ===== ===== ===== ===== ===== ===== ===== ===== Personal Banking (50) (47) (44) (42) (39) (36) (50) (69) Barclaycard Consumer UK (118) (291) (169) (105) (176) (111) (106) (95) Wealth, Entrepreneurs & Business Banking (12) (12) (7) 1 (4) (7) (10) (3) =============================== ===== ===== ===== ===== ===== ===== ===== ===== Total credit impairment charges and other provisions (180) (350) (220) (146) (219) (154) (166) (167) Analysis of loans and advances to customers at amortised cost GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn =============================== ===== ===== ===== ===== ===== ===== ===== ===== Personal Banking 135.0 135.3 134.7 134.7 134.0 134.5 134.4 134.3 Barclaycard Consumer UK 16.5 16.2 16.2 16.0 16.2 15.9 15.8 15.7 Wealth, Entrepreneurs & Business Banking 14.9 15.1 15.1 15.5 15.9 16.3 15.9 16.0 =============================== ===== ===== ===== ===== ===== ===== ===== ===== Total loans and advances to customers at amortised cost 166.4 166.6 166.0 166.2 166.1 166.7 166.1 166.0 Analysis of customer deposits =============================== ===== ===== ===== ===== ===== ===== ===== ===== Personal Banking 139.3 137.2 134.8 132.9 131.0 128.4 126.7 123.4 Barclaycard Consumer UK - - - - - - - - Wealth, Entrepreneurs & Business Banking 49.7 48.3 46.9 46.2 45.8 45.0 44.9 45.3 =============================== ===== ===== ===== ===== ===== ===== ===== ===== Total customer deposits 189.0 185.5 181.7 179.1 176.8 173.4 171.6 168.7 Barclays International
Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115 Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Net interest income 1,046 1,355 1,001 1,110 1,121 1,109 1,077 1,018 Net trading income 1,131 1,074 1,130 1,245 593 817 1,299 1,073 Net fee, commission and other income 1,415 1,422 1,908 1,158 1,254 1,297 1,726 1,363 ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Total income 3,592 3,851 4,039 3,513 2,968 3,223 4,102 3,454 Credit impairment charges and other provisions (426) (420) (240) (269) (303) (235) (206) (178) ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Net operating income 3,166 3,431 3,799 3,244 2,665 2,988 3,896 3,276 Operating expenses (2,497) (2,337) (2,074) (2,221) (2,007) (2,059) (2,027) (1,936) UK bank levy (284) - - - (253) - - - Litigation and conduct (17) (17) (10) (4) (151) (302) (12) (845) ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Total operating expenses (2,798) (2,354) (2,084) (2,225) (2,411) (2,361) (2,039) (2,781) Other net income 5 8 11 8 8 9 13 15 ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Profit before tax 373 1,085 1,726 1,027 262 636 1,870 510 Attributable profit/(loss) 43 623 1,171 575 (24) 422 1,376 (16) Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Loans and advances to banks and customers at amortised cost 211.3 233.7 230.6 215.9 184.1 220.3 210.5 224.7 Trading portfolio assets 73.2 73.8 68.1 64.3 61.9 72.8 75.3 92.7 Derivative financial instrument assets 156.2 155.6 181.4 150.1 111.5 133.7 116.0 172.8 Derivative financial instrument liabilities 160.6 160.5 187.5 155.4 119.0 142.0 124.8 182.3 Reverse repurchase agreements and other similar secured lending 13.4 17.3 19.7 19.1 24.7 68.0 57.4 57.1 Financial assets designated at fair value 62.3 72.0 68.3 59.6 46.8 5.6 5.6 5.2 Total assets 648.5 681.9 679.9 618.4 532.2 596.1 566.1 656.2 Customer deposits 216.2 224.1 226.5 213.1 185.6 207.0 197.7 206.2 Risk weighted assets 212.7 214.6 209.3 202.2 194.8 204.0 195.4 202.6 Performance measures ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Return on average allocated tangible equity 1.0% 10.0% 19.2% 9.5% (0.2%) 7.0% 22.5% (0.1%) Average allocated tangible equity (GBPbn) 26.6 25.7 24.8 25.1 24.9 24.7 24.7 25.3 Cost: income ratio 78% 61% 52% 63% 81% 73% 50% 81% Loan loss rate (bps) 78 71 41 50 65 42 38 32 Net interest margin(1) 3.91% 4.21% 3.92% 3.78% 3.79% 3.85% 3.86% 3.66% Notable items GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ====================================== ======= ======= ======= ======= ======= ======= ======= ======= Total income Gain on disposal of Barclays' share of Visa Europe Limited - - 464 - - - - - Gains on US Lehman acquisition assets - - - - - - 496 - Litigation and conduct Provisions for UK customer redress - - - - - (218) - - Provisions for ongoing investigations and litigation including Foreign Exchange - - - - (145) (39) - (800) Operating expenses Gain on valuation of a component of the defined retirement benefit liability - - - - - - - 133 -------------------------------------- ------- ------- ------- ------- ------- ------- ------- ------- Total notable items - - 464 - (145) (257) 496 (667)
Excluding notable items, the Q416 Barclays International return on average allocated tangible equity was 1.0% (Q415: 3.5%).
1 Barclays International margins have been restated to include interest earning lending within the investment banking business. Analysis of Barclays International Corporate and Investment Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115 Bank Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm =============================== ======= ======= ======= ======= ======= ======= ======= ======= Analysis of total income Credit 261 333 269 322 195 191 218 220 Equities 410 461 406 513 319 416 588 589 Macro 505 614 612 573 382 487 582 657 =============================== ======= ======= ======= ======= ======= ======= ======= ======= Markets 1,176 1,408 1,287 1,408 896 1,094 1,388 1,466 Banking fees 650 644 622 481 458 501 580 548 Corporate lending 303 284 312 296 312 377 387 285 Transactional banking 401 458 390 408 415 419 416 413 =============================== ======= ======= ======= ======= ======= ======= ======= ======= Banking 1,354 1,386 1,324 1,185 1,185 1,297 1,383 1,246 Other 1 1 - 3 16 (17) 495 1 =============================== ======= ======= ======= ======= ======= ======= ======= ======= Total income 2,531 2,795 2,611 2,596 2,097 2,374 3,266 2,713 Credit impairment (charges)/ releases and other provisions (90) (38) (37) (95) (83) (75) (42) 1 Total operating expenses (2,287) (1,872) (1,665) (1,800) (1,962) (1,940) (1,605) (2,422) Profit before tax 155 885 909 701 52 358 1,620 292 Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn =============================== ======= ======= ======= ======= ======= ======= ======= ======= Risk weighted assets 178.6 182.5 178.4 172.6 167.3 177.4 170.0 177.1 Performance measures =============================== ======= ======= ======= ======= ======= ======= ======= ======= Return on average allocated tangible equity (1.2%) 9.2% 9.5% 7.3% (2.5%) 4.5% 22.3% (2.5%) Average allocated tangible equity (GBPbn) 22.6 21.9 21.3 21.6 21.8 21.7 21.7 22.3
Excluding notable items, the Q416 CIB return on average allocated tangible equity was (1.2%) (Q415: 1.8%).
Consumer, Cards and Payments Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ============================= ===== ===== ===== ===== ===== ===== ===== ===== Total income 1,061 1,056 1,428 917 871 849 836 741 Credit impairment charges and other provisions (336) (382) (203) (174) (219) (160) (165) (179) Total operating expenses (511) (482) (419) (425) (449) (421) (434) (359) Profit before tax 218 200 817 326 210 278 250 218 Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn ============================= ===== ===== ===== ===== ===== ===== ===== ===== Loans and advances to banks and customers at amortised cost 39.7 36.8 35.4 32.9 32.1 30.6 29.6 29.8 Customer deposits 50.0 48.3 46.9 44.2 41.8 39.8 38.4 40.1 Risk weighted assets 34.1 32.1 30.9 29.6 27.5 26.6 25.4 25.5 Performance measures ============================= ===== ===== ===== ===== ===== ===== ===== ===== Return on average allocated
tangible equity 13.2% 14.8% 77.9% 23.4% 15.3% 24.7% 23.4% 17.5% Average allocated tangible equity (GBPbn) 4.0 3.7 3.5 3.4 3.2 3.1 3.0 3.0
Excluding notable items, the Q416 Consumer, Cards and Payments return on average allocated tangible equity was 13.2% (Q415: 15.7%).
Head Office Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115 Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ====================================== ===== ===== ===== ===== ===== ===== ===== ===== Net interest income 29 (206) 14 (20) (75) (51) (46) (133) Net fee, commission and other income (38) 17 320 (13) (210) 220 358 275 ====================================== ===== ===== ===== ===== ===== ===== ===== ===== Total income (9) (189) 334 (33) (285) 169 312 142 Credit impairment releases/(charges) and other provisions - 1 (2) 1 - 1 (1) - ====================================== ===== ===== ===== ===== ===== ===== ===== ===== Net operating (expenses)/income (9) (188) 332 (32) (285) 170 311 142 Operating expenses 15 (29) (36) (85) (64) (110) (64) (34) UK bank levy (2) - - - (8) - - - Litigation and conduct (1) (8) (11) (7) (17) (42) (6) (1) ====================================== ===== ===== ===== ===== ===== ===== ===== ===== Total operating expenses 12 (37) (47) (92) (89) (152) (70) (35) Other net income/(expenses) 159 (4) (28) 1 (14) 2 1 (95) ====================================== ===== ===== ===== ===== ===== ===== ===== ===== Profit/(loss) before tax 162 (229) 257 (123) (388) 20 242 12 Attributable profit/(loss) 223 (203) 182 (92) (140) (1) 180 (28) Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn ====================================== ===== ===== ===== ===== ===== ===== ===== ===== Total assets(1) 75.2 73.3 87.7 63.4 59.4 61.8 62.2 63.6 Risk weighted assets(1) 53.3 47.5 43.2 40.3 39.7 41.3 41.0 43.1 Performance measures ====================================== ===== ===== ===== ===== ===== ===== ===== ===== Average allocated tangible equity (GBPbn) 7.2 7.4 6.6 5.0 3.9 3.4 1.8 0.9 Notable items GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ====================================== ===== ===== ===== ===== ===== ===== ===== ===== Total income Own credit 46 (264) 292 (109) (175) 195 282 128 Litigation and conduct Provisions for ongoing investigations and litigation including Foreign Exchange - - - - (23) (29) - - Other net expenses Losses on sale relating to the Spanish, Portuguese and Italian businesses - - - - (15) - - (97) -------------------------------------- ----- ----- ----- ----- ----- ----- ----- ----- Total notable items 46 (264) 292 (109) (213) 166 282 31 1 Includes Africa Banking assets held for sale and RWAs.
Quarterly Discontinued Operation Results
Africa Banking Q416 Q316 Q216 Q116 Q415 Q315 Q215 Q115 Income statement information GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ============================= ===== ===== ===== ===== ===== ===== ===== ===== Net interest income 626 561 502 480 468 471 506 505 Net fee, commission and other income 441 421 377 338 346 351 364 403 ============================= ===== ===== ===== ===== ===== ===== ===== ===== Total income 1,067 982 879 818 814 822 870 908 Credit impairment charges and other provisions (105) (96) (133) (111) (93) (66) (103) (91) ============================= ===== ===== ===== ===== ===== ===== ===== ===== Net operating income 962 886 746 707 721 756 767 817 Operating expenses (727) (598) (543) (477) (501) (515) (536) (539) UK bank levy (65) - - - (50) - - - Total operating expenses (792) (598) (543) (477) (551) (515) (536) (539) Other net income 2 2 1 1 3 1 1 2 ============================= ===== ===== ===== ===== ===== ===== ===== ===== Profit before tax 172 290 204 231 173 242 232 280 Profit after tax 71 209 145 166 101 167 162 196 Attributable (loss)/profit (52) 85 70 86 25 85 88 104 Balance sheet information GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn ============================= Total assets(1) 65.1 61.1 56.0 52.7 47.9 50.2 52.2 55.9 Risk weighted assets(1) 42.3 39.9 36.1 33.9 31.7 33.8 34.4 37.3 1 Africa Banking assets held for sale and RWAs are reported in Head Office within Core.
Performance Management
Margins and balances Year ended 31.12.16 Year ended 31.12.15 Net interest Average Net interest Net interest Average Net interest income customer margin income customer margin assets assets GBPm GBPm % GBPm GBPm % ---------------------------- ------------ --------- ------------ ------------ --------- ------------ Barclays UK 6,048 167,233 3.62 5,973 167,599 3.56 Barclays International(1) 4,275 107,333 3.98 3,841 101,164 3.80 ---------------------------- ------------ --------- ------------ ------------ --------- ------------ Total Barclays UK and Barclays International 10,323 274,566 3.76 9,814 268,763 3.65 Other(2) 214 794 ---------------------------- ------------ --------- ------------ ------------ --------- ------------ Total net interest income 10,537 10,608 1 Barclays International margins have been restated to include interest earning lending within the investment banking business. 2 Other includes Head Office, Barclays Non-Core and non-lending related investment banking balances. -- Total Barclays UK and Barclays International net interest income increased 6% to GBP10.3bn due to: - An increase in average customer assets to GBP274.6bn (2015: GBP268.8bn) with growth in Barclays International, while Barclays UK remained stable - Net interest margin increased 11bps to 3.76% primarily due to growth in interest earning lending within the cards portfolio of Barclays International and higher margins on deposits in Barclays UK -- Group net interest income decreased to GBP10.5bn (2015: GBP10.6bn) including net structural hedge contributions of GBP1.5bn (2015: GBP1.4bn) -- Net interest margin by business reflects movements in the Group's internal funding rates which are based on the cost to the Group of alternative funding in wholesale markets. The internal funding rate prices intra-group funding and liquidity to appropriately give credit to businesses with net surplus liquidity and to charge those businesses in need of alternative funding at a rate that is driven by prevailing market rates and includes a term premium Quarterly analysis for Barclays UK and Three months ended 31.12.16 Barclays International Net interest Average customer Net interest income assets margin GBPm GBPm % --------------------------------------------- ------------ ---------------- ------------ Barclays UK 1,502 167,935 3.56 Barclays International(1) 1,110 112,936 3.91 --------------------------------------------- ------------ ---------------- ------------ Total Barclays UK and Barclays International 2,612 280,871 3.70 Three months ended 30.09.16 ============================================= ============================================ Barclays UK 1,569 167,713 3.72 Barclays International(1) 1,149 108,571 4.21 --------------------------------------------- ------------ ---------------- ------------ Total Barclays UK and Barclays International 2,718 276,284 3.91
Three months ended 30.06.16 ============================================= ============================================ Barclays UK 1,476 166,891 3.56 Barclays International(1) 1,021 104,707 3.92 --------------------------------------------- ------------ ---------------- ------------ Total Barclays UK and Barclays International 2,497 271,598 3.70 Three months ended 31.03.16 ============================================= ============================================ Barclays UK 1,501 166,727 3.62 Barclays International(1) 995 105,994 3.78 --------------------------------------------- ------------ ---------------- ------------ Total Barclays UK and Barclays International 2,496 272,721 3.68 Three months ended 31.12.15 ============================================= ============================================ Barclays UK 1,509 167,405 3.58 Barclays International(1) 991 103,844 3.79 --------------------------------------------- ------------ ---------------- ------------ Total Barclays UK and Barclays International 2,500 271,249 3.66 1 Barclays International margins have been restated to include interest earning lending within the investment banking business.
Remuneration
Deferred awards 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. For 2016 awards, there have been changes in the proportion of bonuses which are deferred, to harmonise deferral structures across the Group, and to more closely align the incentive awards granted with the income statement charge, as illustrated below. The combined effect of these changes is to accelerate the rate at which the awards are recognised in the income statement, resulting in an increase in the charge for 2016 of GBP395m. There is expected to be a lesser effect in 2017 and 2018 as these changes take full effect. See page 104 of the Remuneration Report and Note 8 in the Annual Report for additional information on the changes. The table also shows the other elements of compensation and staff costs.
Barclays Group -------------------------------- Year ended Year ended 31.12.16 31.12.15 GBPm GBPm % Change ============================================ ---------- ---------- -------- Incentive awards granted Current year bonus 1,018 788 (29) Deferred bonus 441 665 34 Commissions and other incentives(1) 74 91 19 ============================================ ========== ---------- -------- Total incentive awards granted 1,533 1,544 1 Reconciliation of incentive awards granted to income statement charge: Less: deferred bonuses granted but not charged in current year (300) (665) 55 Add: current year charges for deferred bonuses from previous years 690 856 19 Other differences between incentive awards granted and income statement charge (26) 26 ============================================ ========== ---------- -------- Income statement charge for performance costs 1,897 1,761 (8) Other income statement charges: Salaries 4,121 4,183 1 Social security costs 589 587 - Post retirement benefits(2) 486 494 2 Other compensation costs 352 276 (28) -------------------------------------------- ========== ---------- -------- Total compensation costs(3) 7,445 7,301 (2) Other resourcing costs(4) 1,978 1,981 - Total staff costs 9,423 9,282 (2) Group compensation as % of income excluding notable items(5) 35.7 34.6
For further detail on remuneration refer to the Remuneration Report on pages 99-133 of the Annual Report.
1 Amounts previously included in 2015 as commitments are now included in current year bonus and deferred bonus for consistency with 2016. 2 2015 post retirement benefits exclude the impact of a GBP429m gain on valuation of a component of the defined benefit liability. Including the gain would result in compensation: income ratio of 32.5%. 3 In addition, GBP212m of Group compensation (2015: GBP236m) was capitalised as internally generated software. 4 Other resourcing costs include outsourcing, redundancy and restructuring costs and other temporary staff costs. 5 Core compensation as a percentage of income excluding notable items was 31.2% (2015: 31.3%) and CIB compensation as a percentage of income excluding notable items was 41.9% (2015: 39.5%), including the impact of the change in the 2016 compensation awards.
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(2) ====================== ==================== Year ended Year ended Year ended 2018 and 31.12.15 31.12.16 31.12.17 beyond Barclays Group GBPm GBPm GBPm GBPm ===================================== ========== ========== ========== ======== Deferred bonuses from 2013 and earlier bonus pools 402 110 14 - Deferred bonuses from 2014 bonus pool 454 191 80 12 Deferred bonuses from 2015 bonus pool 389 175 86 Deferred bonuses from 2016 bonus pool 141 135 133 ===================================== ========== ========== ========== ======== Income statement charge for deferred bonuses 856 831 404 231 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 2017 and beyond. Change in charging of deferred bonus profile Expected payment Income statement Grant date date(s)(1) charge profile =================== Post-2016 Pre-2016 Year awards awards =========== ==================== ===== ========= ======== March 2017 2016 33% 0% 2017 33% 48% March 2018 (33.3%) 2018 22% 35% March 2019 (33.3%) 2019 10% 15% March 2020 (33.3%) 2020 2% 2% 1 Certain awards may be subject to an additional holding period. 2 The income statement charge is based on the period over which conditions are met.
Liquidity
Overview
The Group has a comprehensive Key Risk Control Framework for managing the Group's liquidity risk. The Liquidity Framework meets the PRA's standards and is designed to ensure the Group maintains liquidity resources that are sufficient in amount and quality, and a funding profile that is appropriate to meet the liquidity risk appetite. The Liquidity Framework is delivered via a combination of policy formation, review and governance, analysis, stress testing, limit setting and monitoring.
While Barclays has a comprehensive framework for managing the Group's liquidity risks, liquidity risk is managed separately at Barclays Africa Group Limited (BAGL) due to local currency and funding requirements. Unless stated otherwise, all disclosures in this section exclude BAGL and they are reported on a stand-alone basis. Adjusting for local requirements, BAGL liquidity risk is managed on a consistent basis to Barclays Group.
Liquidity stress testing
Barclays manages the Group's liquidity position against the Group's internally defined Liquidity Risk Appetite (LRA) and regulatory metrics such as CRD IV Liquidity Coverage Ratio (LCR). As at December 2016, the Group held eligible liquid assets well in excess of 100% of net stress outflows for both the 30 day Barclays-specific LRA and the LCR.
Barclays' LRA (30 day Barclays Compliance with internal and regulatory specific requirement)(1, CRD IV: stress tests 2) LCR(2) GBPbn GBPbn ---------------------------------------------- ------------------------- ------- Eligible liquidity buffer 173 166 Net stress outflows (144) (127) ============================================== ------------------------- ------- Surplus 29 39 Liquidity pool as a percentage of anticipated net outflows as at 31 December 2016 120% 131% Liquidity pool as a percentage of anticipated net outflows as at 31 December 2015 131% 133%
Barclays plans to maintain its surplus at an adequate level to the internal and regulatory stress requirements, whilst considering risks to market funding conditions and its liquidity position. The continuous reassessment of these risks may lead to actions being taken with respect to sizing of the liquidity pool.
1 Of the three stress scenarios monitored as part of the LRA, the 30 day Barclays specific scenario results in the lowest ratio at 120% (2015 131%). This compares to 134% (2015: 144%) under the 90 day market-wide scenario and 144% (2015: 133%) under the 30 day combined scenario. 2 Includes BAGL. Liquidity pool of Liquidity which Liquidity Liquidity pool pool CRD IV LCR-eligible pool Level Level 31.12.16 Cash 1 2A 31.12.15 GBPbn GBPbn GBPbn GBPbn GBPbn ---------------------------------------- --------- ------- ------- ------ --------- Cash and deposits with central banks(1) 103 101 48 Government bonds(2) AAA to AA- 34 34 A+ to A- 3 3 BBB+ to BBB- 1 1 Other LCR Ineligible Government bonds 1 ---------------------------------------- --------- ------- ------- ------ --------- Total Government bonds 39 38 75 Other ======================================== ========= ======= ======= ====== ========= Government Guaranteed Issuers, PSEs and GSEs 12 9 3 International Organisations and MDBs 6 7 Covered bonds 1 1 Corporate bonds Other 4 ---------------------------------------- --------- ------- ------- ------ ========= Total other 23 17 3 22 Total as at 31 December 2016 165 101 55 3 Total as at 31 December 2015 145 45 87 8 1 Of which over 98% (2015: over 97%) was placed with the Bank of England, US Federal Reserve, European Central Bank, Bank of Japan and Swiss National Bank. 2 Of which over 90% (2015: over 92%) are comprised of UK, US, Japanese, French, German, Danish, Swiss and Dutch securities.
The Group liquidity pool was GBP165bn at 31 December 2016 (2015: GBP145bn). During 2016, the month-end liquidity pool ranged from GBP132bn to GBP175bn (2015: GBP142bn to GBP168bn), and the month-end average balance was GBP153bn (2015: GBP155bn). The liquidity pool is held unencumbered and is not used to support payment or clearing requirements.
Barclays manages the liquidity pool on a centralised basis. As at 31 December 2016, 91% (2015: 94%) of the liquidity pool was located in Barclays Bank PLC and was available to meet liquidity needs across the Barclays Group. The residual liquidity pool is held predominantly within Barclays Capital Inc (BCI). The portion of the liquidity pool outside of Barclays Bank PLC is held against entity-specific stressed outflows and regulatory requirements.
Deposit funding As at 31.12.16 As at 31.12.15 ----------------------------------------- --------------- Loans and advances Customer Loan to deposit Loan to deposit to customers deposits ratio ratio Funding of loans and advances to customers GBPbn GBPbn % % ------------------------------------------- ------------- --------- --------------- --------------- Barclays UK 167 189 Barclays International 98 152 Non-Core 19 - ------------------------------------------- ------------- --------- --------------- --------------- Total Barclays UK, Barclays International and Non-Core(1) 284 341 83% 86% Barclays International, Head Office and Non-Core(2) 109 82 ------------------------------------------- ------------- --------- --------------- --------------- Total 393 423 93% 95%
Total Barclays UK, Barclays International and Non-Core(1) are largely funded by customer deposits. The loan to deposit ratio for these businesses was 83% (2015: 86%). The customer deposits in excess of loans and advances are primarily used to fund liquidity buffer requirements for these businesses. The loan to deposit ratio for the Group is 93% (2015: 95%).
As at 31 December 2016, GBP139bn (2015: GBP129bn) of total customer deposits were insured through the UK Financial Services Compensation Scheme and other similar schemes. In addition to these customer deposits, there were GBP4bn (2015: GBP4bn) of other liabilities insured or guaranteed by governments.
1 Excluding investment banking businesses. 2 Including investment banking businesses.
Wholesale Funding
Composition of wholesale funding(1)
The Group's total wholesale funding outstanding (excluding repurchase agreements) was GBP158bn (2015: GBP142bn). GBP70bn (2015: GBP54bn) of wholesale funding matures in less than one year, of which GBP22bn (2015: GBP14bn) relates to term funding.
Outstanding wholesale funding comprised of GBP26bn (2015: GBP25bn) of secured funding and GBP132bn (2015: GBP117bn) of unsecured funding.
Maturity profile of wholesale funding(2) <1 1-3 3-6 6-12 <1 1-2 2-3 3-4 4-5 month months months months year years years years years >5 years Total GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn ------------------------- ------ ------- ------- ------- ----- ------ ------ ------ ------ -------- ----- Barclays PLC Senior unsecured (public benchmark) - - - - - 0.9 1.6 1.1 4.5 7.9 16.0 Senior unsecured (privately placed) - - - - - 0.1 - - 0.2 0.5 0.8 Subordinated liabilities - - - - - - - 1.1 - 2.7 3.8 ------------------------- ------ ------- ------- ------- ----- ------ ------ ------ ------ -------- ----- Barclays Bank PLC Deposits from banks 9.2 4.3 1.7 1.1 16.3 0.2 - 0.3 - - 16.8 Certificates of deposit and commercial paper 0.3 5.2 5.6 10.9 22.0 0.7 1.1 0.5 0.5 0.3 25.1 Asset backed commercial paper 3.7 3.1 0.7 - 7.5 - - - - - 7.5 Senior unsecured (public benchmark) 1.7 0.6 1.6 - 3.9 - 2.7 0.7 0.7 1.1 9.1 Senior unsecured (privately placed)(3) 0.6 1.5 3.6 3.5 9.2 7.3 5.5 3.2 1.6 10.0 36.8 Covered bonds - 1.8 1.6 1.5 4.9 1.0 1.8 - 1.0 3.7 12.4 Asset backed securities - 0.6 1.0 0.6 2.2 0.7 1.4 0.4 - 0.7 5.4 Subordinated liabilities - - - 1.3 1.3 3.2 0.1 1.0 5.5 8.5 19.6 Other(4) 1.1 0.2 0.6 1.1 3.0 0.2 0.2 0.3 0.1 0.7 4.5 ------------------------- ------ ------- ------- ------- ----- ------ ------ ------ ------ -------- ----- Total as at 31 December
2016 16.6 17.3 16.4 20.0 70.3 14.3 14.4 8.6 14.1 36.1 157.8 Of which secured 3.7 5.6 3.4 2.3 15.0 1.8 3.2 0.4 1.0 4.4 25.8 Of which unsecured 12.9 11.7 13.0 17.7 55.3 12.5 11.2 8.2 13.1 31.7 132.0 ------------------------- ------ ------- ------- ------- ----- ------ ------ ------ ------ -------- ----- Total as at 31 December 2015 15.8 15.3 8.6 13.8 53.5 16.5 12.6 13.7 8.3 37.3 141.9 Of which secured 4.2 3.9 1.6 0.3 10.0 5.1 2.4 2.8 0.5 4.5 25.3 Of which unsecured 11.6 11.4 7.0 13.5 43.5 11.4 10.2 10.9 7.8 32.8 116.6 1 The composition of wholesale funds comprises the balance sheet reported Deposits from Banks, Financial liabilities at Fair Value, Debt Securities in Issue and Subordinated Liabilities, excluding cash collateral and settlement balances and collateral swaps. Included within deposits from banks are GBP4.5bn of liabilities drawn in the European Central Bank's facilities. 2 Term funding maturities comprise public benchmark and privately placed senior unsecured notes, covered bonds/asset-backed securities (ABS) and subordinated debt where the original maturity of the instrument was more than 1 year. 3 Includes structured notes of GBP30.8bn, GBP7.7bn of which matures within one year. 4 Primarily comprised of fair value deposits GBP3bn and secured financing transactions of physical gold GBP0.5bn.
Term financing
In preparation for a Single Point of Entry resolution model, Barclays has made good progress on the issuance of debt capital and term senior unsecured funding from Barclays PLC, the holding company, replacing maturing debt in Barclays Bank PLC.
The Group issued GBP12.1bn equivalent of capital and senior unsecured debt from the holding company of which GBP8.6bn equivalent and GBP0.7bn equivalent in public and private senior unsecured debt respectively, and GBP2.8bn of capital instruments. In the same period GBP7.4bn of Barclays Bank PLC capital and senior unsecured debt was bought back or called.
The Group has GBP21.2bn(1) of term funding maturing in 2017 and GBP13.2bn in 2018.
The Group expects to continue to issue public wholesale debt in 2017, in order to maintain a stable and diverse funding base by type, currency and distribution channel.
1 Includes GBP0.2bn bilateral secured funding.
Credit ratings
In addition to monitoring and managing key metrics related to the financial strength of the Group, Barclays also solicits independent credit ratings by Standard & Poor's (S&P), Moody's, Fitch and Rating and Investment Information (R&I). These ratings assess the creditworthiness of the Group, its subsidiaries and branches and are based on reviews of a broad range of business and financial attributes including risk management processes and procedures, capital strength, earnings, funding, asset quality, liquidity, accounting and governance.
Standard As at 31 December 2016 & Poor's Moody's Fitch ====================== ============== =============== ========== Barclays Bank PLC Long-term A- (Negative) A1 (Negative) A (Stable) Short-term A-2 P-1 F1 Stand-alone rating(1) bbb+ baa2 a ---------------------- -------------- --------------- ---------- Barclays PLC Long-term BBB (Negative) Baa2 (Negative) A (Stable) Short-term A-2 P-3 F1 1 Refers to Standard & Poor's Stand-Alone Credit Profile (SACP), Moody's Baseline Credit Assessment (BCA) and Fitch's Viability Rating (VR).
During the year, Barclays' ratings outlooks for Moody's and S&P were changed to Negative from Stable following the outcome of the EU referendum in June 2016. The rating actions were part of a wider set of actions which saw the two agencies place several UK banks on negative outlooks whilst affirming the ratings. The ratings continue to carry a stable outlook with Fitch.
In December 2016 Moody's upgraded senior long term ratings for both Barclays Bank PLC and Barclays PLC by one notch reflecting the continued build-up of loss absorbing capacity at Barclays PLC which would provide additional protection for Barclays Bank PLC's depositors and senior unsecured creditors, and Barclays PLC's senior unsecured creditors in a failure scenario. The negative outlooks assigned in June remained in place as the rating agency's assessment of Barclays' standalone credit strength was unaffected by the rating action.
S&P and Fitch affirmed Barclays' ratings in July and December 2016 respectively as part of their periodic reviews.
Barclays also solicits issuer ratings from R&I for local issuances purposes in Japan and the ratings of A- for Barclays PLC and A for Barclays Bank PLC were affirmed in July 2016 with stable outlooks.
Capital
CRD IV capital
Barclays' current regulatory requirement is to meet a fully loaded CRD IV CET1 ratio comprising the required 4.5% minimum CET1 ratio and, phased in from 2016, a Combined Buffer Requirement. This currently comprises a Capital Conservation Buffer (CCB) of 2.5% and a Globally Systemically Important Institution (G-SII) buffer determined by the PRA in line with guidance from the Financial Stability Board (FSB). Both buffers are subject to phased implementation, the CCB is phased in at 25% per annum with 0.625% applicable for 2016. The G-SII buffer for 2016 and 2017 has been set at 2% and is also phased in at 25% per annum with 0.5% applicable for 2016 and 1% for 2017. On 21 November 2016 the FSB confirmed that the G-SII buffer for 2018 will be 1.5% with 1.1% applicable for 2018 and taking full effect from 2019 onwards.
Also forming part of the Combined Buffer Requirement is a Counter-Cyclical Capital Buffer (CCyB) and a Systemic Risk Buffer (SRB). On 30 November 2016 the Financial Policy Committee (FPC) reaffirmed that it expects to maintain a CCyB of 0% on UK exposures until at least June 2017. Other national authorities also determine the appropriate CCyBs that should be applied to exposures in their jurisdiction. During 2016, CCyBs started to apply for Barclays' exposures to other jurisdictions; however based on current exposures these are not material. No SRB has been set to date.
In addition, Barclays' Pillar 2A requirement as per the PRA's Individual Capital Guidance (ICG) for 2016 based on a point in time assessment was 3.9% of which 56% needs to be met in CET1 form, equating to approximately 2.2% of RWAs. The Pillar 2A requirement is subject to at least annual review and for 2017 Barclays' Pillar 2A add-on will be 4.0%, with approximately 2.3% of RWAs needing to be met in CET1 form. All capital, RWA and leverage calculations reflect Barclays' interpretation of the current rules.
As at 31 December 2016, Barclays' CET1 ratio was 12.4% which exceeds the 2016 transitional minimum requirement of 7.8% including the minimum 4.5% CET1 ratio requirement, 2.2% of Pillar 2A, a 0.625% CCB buffer, a 0.5% G-SII buffer and a 0% CCyB.
As at As at As at ================================================ Capital ratios 31.12.16 30.09.16 31.12.15 ================================================ ======== ======== ======== Fully loaded CET1(1,2) 12.4% 11.6% 11.4% PRA Transitional Tier 1(3,4) 15.6% 14.8% 14.7% PRA Transitional Total Capital(3,4) 19.6% 18.8% 18.6% Capital resources GBPm GBPm GBPm ================================================ ======== ======== ======== Shareholders' equity (excluding non-controlling interests) per the balance sheet 64,873 63,929 59,810 Less: other equity instruments (recognised as AT1 capital) (6,449) (6,442) (5,305) Adjustment to retained earnings for foreseeable dividends (388) (276) (631) Minority interests (amount allowed in consolidated CET1) 1,825 1,695 950 Other regulatory adjustments and deductions: Additional value adjustments (PVA) (1,571) (1,742) (1,602) Goodwill and intangible assets (9,054) (8,847) (8,234) Deferred tax assets that rely on future profitability excluding temporary differences (494) (623) (855) Fair value reserves related to gains or losses on cash flow hedges (2,104) (2,952) (1,231) Excess of expected losses over impairment (1,294) (1,272) (1,365) Gains or losses on liabilities at fair value resulting from own credit 86 72 127 Defined-benefit pension fund assets (38) (40) (689) Direct and indirect holdings by an institution of own CET1 instruments (50) (50) (57) Deferred tax assets arising from temporary differences (amount above 10% threshold) (183) (49) - Other regulatory adjustments 45 (226) (177) ================================================ ======== ======== ======== Fully loaded CET1 capital 45,204 43,177 40,741 Additional Tier 1 (AT1) capital Capital instruments and related share premium accounts 6,449 6,442 5,305 Qualifying AT1 capital (including
minority interests) issued by subsidiaries 5,445 5,658 6,718 Other regulatory adjustments and deductions (130) (130) (130) ================================================ ======== ======== ======== Transitional AT1 capital(5) 11,764 11,970 11,893 ================================================ ======== ======== ======== PRA Transitional Tier 1 capital 56,968 55,147 52,634 Tier 2 (T2) capital Capital instruments and related share premium accounts 3,769 3,631 1,757 Qualifying T2 capital (including minority interests) issued by subsidiaries 11,366 11,664 12,389 Other regulatory adjustments and deductions (257) (254) (253) ================================================ ======== ======== ======== PRA Transitional total regulatory capital 71,846 70,188 66,527 1 The transitional regulatory adjustments to CET1 capital are no longer applicable resulting in CET1 capital on a fully loaded basis being equal to that on a transitional basis. 2 The CRD IV CET1 ratio (FSA October 2012 transitional statement) as applicable to Barclays' Tier 2 Contingent Capital Notes was 13.7% based on GBP50bn of transitional CRD IV CET1 capital and GBP366bn of RWAs. 3 The PRA transitional capital is based on the PRA Rulebook and accompanying supervisory statements. 4 As at 31 December 2016, Barclays' fully loaded Tier 1 capital was GBP51,993m, and the fully loaded Tier 1 ratio was 14.2%. Fully loaded total regulatory capital was GBP67,772m and the fully loaded total capital ratio was 18.5%. The fully loaded Tier 1 capital and total capital measures are calculated without applying the transitional provisions set out in CRD IV and assessing compliance of AT1 and T2 instruments against the relevant criteria in CRD IV. 5 Of the GBP11.8bn transitional AT1 capital, fully loaded AT1 capital used for the leverage ratio comprises the GBP6.4bn capital instruments and related share premium accounts, GBP0.5bn qualifying minority interests and GBP0.1bn capital deductions. It excludes legacy Tier 1 capital instruments issued by subsidiaries that are subject to grandfathering. Movement in CET1 capital Three months ended Year ended 31.12.16 31.12.16 GBPm GBPm ------------------------------------------------------- ------------ ---------- Opening CET1 capital 43,177 40,741 Profit for the period attributable to equity holders 238 2,080 Own credit 14 (41) Dividends paid and foreseen (212) (843) ------------------------------------------------------- ------------ ---------- Increase in retained regulatory capital generated from earnings 40 1,196 Net impact of share schemes 330 535 Available for sale reserves (91) (391) Currency translation reserves 637 3,674 Other reserves 3 (778) ------------------------------------------------------- ------------ ---------- Increase in other qualifying reserves 879 3,040 Retirement benefit reserve 768 (988) Defined-benefit pension fund asset deduction 2 651 ------------------------------------------------------- ------------ ---------- Net impact of pensions 770 (337) Minority interests 130 875 Additional value adjustments (PVA) 171 31 Goodwill and intangible assets (207) (820) Deferred tax assets that rely on future profitability excluding those arising from temporary differences 129 361 Excess of expected loss over impairment (22) 71 Direct and indirect holdings by an institution of own CET1 instruments - 7 Deferred tax assets arising from temporary differences (amount above 10% threshold) (134) (183) Other regulatory adjustments 271 222 ------------------------------------------------------- ------------ ---------- Increase in regulatory capital due to adjustments and deductions 338 564 Closing CET1 capital 45,204 45,204 -- The CET1 ratio improved to 12.4% (December 2015: 11.4%) primarily driven by an increase in CET1 capital of GBP4.5bn to GBP45.2bn primarily as a result of profits of GBP2.1bn generated in the year, after absorbing the impact of notable items. Regulatory capital generated from earnings after absorbing the impact of own credit and dividends paid and foreseen increased CET1 capital by GBP1.2bn. Other significant movements in the year were: - A GBP3.0bn increase in other qualifying reserves including a GBP3.7bn increase in the currency translation reserves as USD, EUR and ZAR strengthened against GBP; partially offset by a GBP0.4bn decrease as a result of preference share redemptions and a GBP0.4bn decrease in AFS reserves - A GBP0.3bn decrease, net of tax, as a result of movements relating to pensions. There was a GBP1.0bn decrease in the retirement benefit reserve largely within the UKRF, which is the Groups main pension scheme, moving from a GBP0.8bn surplus in December 2015 to a GBP27m deficit in December 2016. The decrease in reserves was partially offset by the removal of a GBP0.7bn capital deduction for the UKRF asset in December 2015 - A GBP0.9bn increase in minority interests following the sale of 12.2% of BAGL's issued share capital was partially offset by GBP0.3bn higher capital deductions -- Transitional AT1 capital remained largely flat in the period as redemptions and repurchases of GBP1.3bn of CRD IV end point non-qualifying preference shares, Tier One Notes and Reserve Capital Instruments were offset by the issuance of $1.5bn of qualifying AT1 capital instruments Risk weighted assets (RWAs) by risk type and business Counterparty credit Operational Total Credit risk risk Market risk risk RWAs =============== ================================== ============== =========== ======= Settlement Std IRB Std IRB Risk CVA Std IMA As at 31.12.16 GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm ===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== ======= Barclays UK 5,592 49,591 47 - - - - - 12,293 67,523 Barclays International 53,201 82,327 13,515 13,706 30 3,581 9,343 9,460 27,538 212,701 Head Office(1) 9,048 27,122 77 1,157 - 927 482 2,323 12,156 53,292 ===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== ======= Barclays Core 67,841 159,040 13,639 14,863 30 4,508 9,825 11,783 51,987 333,516 Barclays Non-Core 4,714 9,945 1,043 6,081 37 2,235 477 2,928 4,673 32,133 ===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== ======= Barclays Group 72,555 168,985 14,682 20,944 67 6,743 10,302 14,711 56,660 365,649 As at 30.09.16 ===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== ======= Barclays UK 5,886 49,183 9 - - 39 - - 12,293 67,410 Barclays International 51,498 82,020 14,201 13,945 82 4,931 11,485 8,900 27,538 214,600 Head Office(1) 8,527 25,174 43 1,088 - 844 580 2,560 8,685 47,501 ===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== ======= Barclays Core 65,911 156,377 14,253 15,033 82 5,814 12,065 11,460 48,516 329,511 Barclays Non-Core 7,009 11,037 1,740 7,435 2 4,287 695 3,526 8,144 43,875 ===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== ======= Barclays Group 72,920 167,414 15,993 22,468 84 10,101 12,760 14,986 56,660 373,386 As at 31.12.15
===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== ======= Barclays UK 6,562 50,763 26 - - - - - 12,174 69,525 Barclays International 45,892 77,275 10,463 11,055 516 3,406 8,373 10,196 27,657 194,833 Head Office(1) 8,291 20,156 54 538 8 382 399 1,903 8,003 39,734 ===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== ======= Barclays Core 60,745 148,194 10,543 11,593 524 3,788 8,772 12,099 47,834 304,092 Barclays Non-Core 8,704 12,797 1,653 9,430 1 7,480 1,714 3,679 8,826 54,284 ===================== ====== ======= ====== ====== ========== ====== ====== ====== =========== ======= Barclays Group 69,449 160,991 12,196 21,023 525 11,268 10,486 15,778 56,660 358,376 1 Includes Africa Banking discontinued operation. Movement analysis of risk weighted assets Counterparty Operational Credit risk credit risk Market risk risk Total RWAs ============================== =========== ============ =========== =========== ========== GBPbn GBPbn GBPbn GBPbn GBPbn As at 01.01.16 230.4 45.0 26.3 56.7 358.4 Book size 0.8 1.2 (0.6) - 1.4 Acquisitions and disposals (6.4) (0.2) - - (6.6) Book quality (0.5) (0.4) 0.6 - (0.3) Model updates (2.9) (2.0) (0.3) - (5.2) Methodology and policy 1.1 (1.2) (1.0) - (1.1) Foreign exchange movements(1) 19.0 - - - 19.0 ------------------------------ ----------- ------------ ----------- ----------- ---------- As at 31.12.16 241.5 42.4 25.0 56.7 365.6 1 Foreign exchange movement does not include FX for modelled counterparty risk or modelled market risk.
RWAs increased GBP7.2bn to GBP365.6bn, due to:
-- Book size increased RWAs by GBP1.4bn primarily due to an increase in trading activity in Barclays International and business growth in corporate and consumer lending partially offset by securitisation transactions -- Acquisitions and disposals decreased RWAs by GBP6.6bn primarily due to the rundown of Non-Core portfolios, including the sale of Portuguese and Italian businesses -- Model updates decreased RWAs by GBP5.2bn primarily driven by changes in the mortgages credit risk model in Barclays UK -- Methodology and Policy decreased RWAs by GBP1.1bn primarily driven by the effect of collateral modelling for mismatched FX collateral on average CVA and a new treatment for sovereign exposures, partly offset by modelled wholesale recalibration -- Foreign exchange movements increased RWAs by GBP19.0bn primarily driven by the appreciation of ZAR, USD and EUR against GBP
Leverage ratio and exposures
Effective 1 January 2016, Barclays is required to disclose a leverage ratio and an average leverage ratio applicable to the Group:
-- The leverage ratio is consistent with the December 2015 method of calculation and has been included in the table below. The calculation uses the end point CRR definition of Tier 1 capital for the numerator and the CRR definition of leverage exposure. The current expected minimum fully loaded requirement is 3%, but this could be impacted by the Basel Consultation on the Leverage Framework -- The average leverage ratio as outlined by the PRA Supervisory Statement SS45/15 and the updated PRA rulebook is calculated as the capital measure divided by the exposure measure, where the capital and exposure measure is based on the average of the last day of each month in the quarter. The expected end point minimum requirement is 3.5% comprising of the 3% minimum requirement, a fully phased in G-SII additional leverage ratio buffer (G-SII ALRB) and a countercyclical leverage ratio buffer (CCLB). The minimum requirement is on a phased basis in line with the CET1 G-SII buffer which results in a minimum requirement of 3.175% at 31 December 2016
At 31 December 2016, Barclays' leverage ratio was 4.6% (December 2015: 4.5%) and the average leverage ratio was 4.3%, which exceeds the transitional minimum requirement for Barclays of 3.175% and expected end point minimum requirement of 3.5%.
In August 2016, the PRA implemented the FPC's recommendation to allow firms to exclude qualifying central bank claims from the calculation of the leverage exposure measure, as long as these are matched by deposits denominated in the same currency, subject to firms obtaining permission from the PRA. This change in reporting requirements is effective 1 April 2017 and will result in a modification to the calculation of the exposure measure for the purpose of calculating the UK leverage ratio. At 31 December 2016, Barclays' reported leverage ratio and average leverage ratio disclosed below is unaffected by this announcement as firms are required to disclose based on the existing rules. The impact of the PRA rule modification would have resulted in an average leverage ratio of 4.5% and a leverage ratio at 31 December 2016 of 5.0%.
As at As at As at 31.12.16 30.09.16 31.12.15 GBPbn GBPbn GBPbn ============================================ ========= ========= ========= Accounting assets Derivative financial instruments 347 410 328 Cash collateral 67 74 62 Reverse repurchase agreements and other similar secured lending 13 17 28 Financial assets designated at fair value(1) 79 94 77 Loans and advances and other assets 707 729 625 ============================================ ========= ========= ========= Total IFRS assets 1,213 1,324 1,120 Regulatory consolidation adjustments (6) (8) (10) Derivatives adjustments Derivatives netting (313) (373) (293) Adjustments to cash collateral (50) (59) (46) Net written credit protection 12 20 15 Potential Future Exposure (PFE) on derivatives 136 143 129 ============================================ ========= ========= ========= Total derivatives adjustments (215) (269) (195) Securities financing transactions (SFTs) adjustments 29 36 16 Regulatory deductions and other adjustments (15) (16) (14) Weighted off-balance sheet commitments 119 118 111 ============================================ ========= ========= ========= Total leverage exposure 1,125 1,185 1,028 Fully loaded CET 1 capital 45.2 43.2 40.7 Fully loaded AT1 capital 6.8 6.8 5.4 ============================================ ========= ========= ========= Fully loaded Tier 1 capital 52.0 49.9 46.2 Leverage ratio 4.6% 4.2% 4.5% 1 Included within financial assets designated at fair value are reverse repurchase agreements designated at fair value of GBP63bn (2015: GBP50bn).
The leverage ratio increased to 4.6% (December 2015: 4.5%) primarily driven by a GBP5.8bn increase in fully loaded Tier 1 capital to GBP52.0bn (December 2015: GBP46.2bn), partially offset by an increase in the leverage exposure of GBP97bn to GBP1,125bn (December 2015: GBP1,028bn):
-- The IFRS asset increase was mainly driven by loans and advances and other assets which increased GBP82bn to GBP707bn. The increase was primarily due to the appreciation of major currencies against GBP, an increase in liquidity pool assets and lending growth in Barclays UK and Barclays International. This was partially offset by the rundown and exit of Non-Core assets -- SFT adjustments increased by GBP13bn to GBP29bn, primarily as a result of a change in treatment of securities pre-positioned for use against undrawn central bank lending facilities -- PFE on derivatives increased by GBP7bn to GBP136bn primarily driven by the appreciation of major currencies against GBP, partially offset by compression activity, sale of positions and maturity of trades -- Weighted off balance sheet commitments increased by GBP8bn to GBP119bn primarily driven by the appreciation of major currencies against GBP
The average leverage exposure measure for Q416 was GBP1,206bn resulting in an average leverage ratio of 4.3%. The CET1 capital held against the 0.175% transitional G-SII ALRB was GBP2bn. The impact of the CCLB is currently nil.
The difference between the average leverage ratio and the leverage ratio was primarily driven by higher positions in October and November within trading portfolio assets, reverse repurchase agreements and settlements balances.
Credit Risk
Analysis of retail and wholesale loans and advances and impairment Loans CRLs % Gross and advances of gross loans Impairment net of Credit loans Loan impairment Loan loss and advances allowance impairment Risk Loans and advances charges(1) rates As at 31.12.16 GBPm GBPm GBPm GBPm % GBPm bps ==================== ============= ========== ============= =========== ============= =============== ========= Barclays UK 155,729 1,519 154,210 2,044 1.3 866 56 Barclays International 33,485 1,492 31,993 1,249 3.7 1,085 324 Barclays Core 189,214 3,011 186,203 3,293 1.7 1,951 103 Barclays Non-Core 10,319 385 9,934 838 8.1 102 99 ==================== ============= ========== ============= =========== ============= =============== ========= Total Group retail 199,533 3,396 196,137 4,131 2.1 2,053 103 Barclays UK 15,204 282 14,922 591 3.9 30 20 Barclays International 180,102 748 179,354 1,470 0.8 258 14 Head Office 4,410 - 4,410 - - - - Barclays Core 199,716 1,030 198,686 2,061 1.0 288 14 Barclays Non-Core 41,406 194 41,212 299 0.7 11 3 ==================== ============= ========== ============= =========== ============= =============== ========= Total Group wholesale 241,122 1,224 239,898 2,360 1.0 299 12 Total loans and advances at amortised cost 440,655 4,620 436,035 6,491 1.5 2,352 53 Traded loans 2,975 n/a 2,975 n/a Loans and advances designated at fair value 10,519 n/a 10,519 n/a ==================== ============= ========== ============= =========== Loans and advances held at fair value 13,494 n/a 13,494 n/a Total loans and advances 454,149 4,620 449,529 6,491 As at 31.12.15 ==================== ============= ========== ============= =========== ============= =============== ========= Barclays UK 153,539 1,556 151,983 2,238 1.5 682 44 Barclays International 26,041 897 25,144 863 3.3 714 274 Barclays Core 179,580 2,453 177,127 3,101 1.7 1,396 78 Barclays Non-Core 12,588 464 12,124 936 7.4 139 110 ==================== ============= ========== ============= =========== ============= =============== ========= Total Group retail 192,168 2,917 189,251 4,037 2.1 1,535 80 Barclays UK 16,400 312 16,088 637 3.9 24 15 Barclays International 159,776 617 159,159 1,330 0.8 201 13 Head Office 5,767 - 5,767 - - - - ==================== ============= ========== ============= =========== ============= =============== ========= Barclays Core 181,943 929 181,014 1,967 1.1 225 12 Barclays Non-Core 39,979 336 39,643 441 1.1 (16) (4) ==================== ============= ========== ============= =========== ============= =============== ========= Total Group wholesale 221,922 1,265 220,657 2,408 1.1 209 9 Total loans and advances at amortised cost 414,090 4,182 409,908 6,445 1.6 1,744 42 BAGL loans and advances at amortised cost 31,397 739 30,658 1,372 Traded loans 2,474 n/a 2,474 n/a Loans and advances designated at fair value 17,913 n/a 17,913 n/a ==================== ============= ========== ============= =========== Loans and advances held at fair value 20,387 n/a 20,387 n/a Total loans and advances 465,874 4,921 460,953 7,817 1 Excluding impairment charges on available for sale investments and reverse repurchase agreements.
Total loans and advances decreased by GBP12bn to GBP450bn driven by a GBP31bn decrease due to the reclassification of BAGL balances to held for sale and GBP9bn from the exit of other assets in Non-Core. This was offset by lending of GBP20bn driven by volume growth and foreign currency movements due to the appreciation of average USD and EUR against GBP. There was also a net GBP9bn increase in settlement and cash collateral balances.
Credit risk loans (CRLs) and the ratio of CRLs to gross loans and advances excluding BAGL balances now held for sale remained stable at GBP6.5bn (2015: GBP6.4bn) and 1.5% (2015: 1.6%) respectively.
Loan impairment charges increased GBP0.6bn to GBP2.4bn primarily due to increased charges following the management review of impairment modelling for UK and US cards portfolios and the impairment of a number of single name exposures. Overall, this resulted in a 11bps increase in the loan loss rate to 53bps.
Analysis of potential credit risk loans (PCRLs), potential problem loans (PPLs) and coverage ratios CRLs PPLs PCRLs ====================== ================== ================== As at As at As at As at As at As at 31.12.16 31.12.15 31.12.16 31.12.15 31.12.16 31.12.15 GBPm GBPm GBPm GBPm GBPm GBPm =========================== ========== ========== ======== ======== ======== ======== Barclays UK 2,044 2,238 310 382 2,354 2,620 Barclays International 1,249 863 192 117 1,441 980 Barclays Core 3,293 3,101 502 499 3,795 3,600 Barclays Non-Core 838 936 11 26 849 962 =========================== ========== ========== ======== ======== ======== ======== Total retail 4,131 4,037 513 525 4,644 4,562 Barclays UK 591 637 94 127 685 764 Barclays International 1,470 1,330 1,530 877 3,000 2,207 Barclays Core 2,061 1,967 1,624 1,004 3,685 2,971 Barclays Non-Core 299 441 59 122 358 563 =========================== ========== ========== ======== ======== ======== ======== Total wholesale 2,360 2,408 1,683 1,126 4,043 3,534 Total retail and wholesale 6,491 6,445 2,196 1,651 8,687 8,096 BAGL - 1,372 - 399 - 1,771 =========================== ========== ========== ======== ======== ======== ======== Group total 6,491 7,817 2,196 2,050 8,687 9,867 Impairment allowance CRL coverage PCRL coverage ====================== ================== ================== As at As at As at As at As at As at 31.12.16 31.12.15 31.12.16 31.12.15 31.12.16 31.12.15 GBPm GBPm %% %% =========================== ========== ========== ======== ======= ======== ======= Barclays UK 1,519 1,556 74.3 69.5 64.5 59.4 Barclays International 1,492 897 119.5 103.9 103.5 91.5 Barclays Core 3,011 2,453 91.4 79.1 79.3 68.1 Barclays Non-Core 385 464 45.9 49.6 45.3 48.2 =========================== ========== ========== ======== ======== ======== ======== Total retail 3,396 2,917 82.2 72.3 73.1 63.9 Barclays UK 282 312 47.7 49.0 41.2 40.8
Barclays International 748 617 50.9 46.4 24.9 28.0 Barclays Core 1,030 929 50.0 47.2 28.0 31.3 Barclays Non-Core 194 336 64.9 76.2 54.2 59.7 =========================== ========== ========== ======== ======== ======== ======== Total wholesale 1,224 1,265 51.9 52.5 30.3 35.8 Total retail and wholesale 4,620 4,182 71.2 64.9 53.2 51.7 BAGL - 739 - 53.9 - 41.7 Group total 4,620 4,921 71.2 63.0 53.2 49.9 -- Excluding BAGL balances, CRLs remained stable at GBP6.5bn (2015: GBP6.4bn) with the Group's CRL coverage ratio increasing to 71% (2015: 65%) mainly within retail portfolios -- The CRL coverage ratio for retail portfolios increased to 82% (2015: 72%) primarily due to increased impairment allowances following the management review of impairment modelling of the UK and US cards portfolio -- PPLs increased to GBP2.2bn (2015: GBP1.7bn) primarily within Barclays International wholesale portfolios. The increase was driven by exposures within the Corporate and Investment Bank across a number of industries
Analysis of specific portfolios and asset types
This section provides an analysis of principal portfolios and businesses in the retail and wholesale segments. In particular, home loans, credit cards, overdrafts and unsecured loans are covered for retail segments. In addition, this section details exposures to UK commercial real estate.
Secured home loans
The UK home loans portfolio comprises first lien home loans and accounts for 98%(1) (2015: 98%) of the Group's core home loan balances and 91% (2015: GBP90%) of the Group's total home loan balances. Italy home loans accounts for 100% (2015: 91%) of the Group's Non-Core home loan balances and 7% (2015: 7%) of the Group's total home loan balances.
Home loans principal portfolios(2) Barclays UK -------------------- As at As at 31.12.16 31.12.15 -------------------------------------------------- --------- --------- Gross loans and advances (GBPm) 129,136 127,750 >90 day arrears, excluding recovery book (%) 0.2 0.2 Non-performing proportion of outstanding balances (%) 0.6 0.7 Annualised gross charge-off rates (%) 0.3 0.3 Recovery book proportion of outstanding balances (%) 0.4 0.4 Recovery book impairment coverage ratio (%) 9.1 10.1 1 Remaining balance includes wealth portfolio. 2 Gross loans and advances include loans and advances to customers and banks. Risk metrics based on exposures to customers only.
Barclays UK: Portfolio performance remained steady reflecting the continuing low base rate environment, house price appreciation and steady economic conditions. Non-performing proportion of outstanding balances and recovery book impairment coverage reduced due to a reduction in repossession stock.
Within the UK home loans portfolio:
-- owner-occupied interest-only home loans comprised 31% (2015: 32%) of total balances. The average balance weighted LTV on these loans reduced to 41.7% (2015: 44.7%) as house prices have improved across core regions, and >90 day arrears excluding recovery book remained steady at 0.2% (2015: 0.2%) -- buy-to-let home loans comprised 9% (2015: 9% ) of total balances. The average balance weighted LTV reduced to 52.6% (2015: 54.6%), and >90 day arrears excluding recovery book reduced to 0.1% (2015: 0.2%)
Credit cards and unsecured loans
The principal portfolios listed below accounted for 94% (2015: 92%) of the Group's total credit cards and unsecured loans.
Credit cards and unsecured loans Principal Portfolios 30 day 90 day arrears, arrears, Recovery Recovery excluding excluding Annualised book proportion book impairment Gross loans recovery recovery gross charge-off of outstanding coverage and advances(1) book book rates balances ratio As at 31 December 2016 GBPm % % % % % --------------------- ---------------- ---------- ---------- ----------------- ---------------- ---------------- Barclays UK UK cards(2) 17,833 1.9 0.9 5.5 3.0 83.8 UK personal loans 6,076 2.1 0.9 3.1 4.7 77.2 Barclays International US cards(2) 23,915 2.6 1.3 4.5 2.4 83.6 Barclays Partner Finance 4,041 1.5 0.6 2.5 2.6 81.5 Germany cards 1,812 2.6 1.0 3.7 2.7 79.0 As at 31 December 2015 --------------------- ---------------- ---------- ---------- ----------------- ---------------- ---------------- Barclays UK UK cards(2) 18,502 2.3 1.2 5.2 3.6 82.6 UK personal loans 5,476 1.9 0.8 3.0 7.5 73.9 Barclays International US cards(2) 16,699 2.2 1.1 3.9 2.0 84.8 Barclays Partner Finance(3) 3,986 1.5 0.6 2.4 2.5 82.2 Germany cards 1,419 2.3 1.0 3.8 2.7 81.2 1 Includes loans and advances to customers and banks. Risk metrics based on exposures to customers. 2 For UK and US cards, outstanding recovery book balances for acquired portfolios recognised at fair value (which have no related impairment allowance) have been excluded from the recovery book impairment coverage ratio. Losses have been recognised where related to additional spend from acquired accounts in the period post acquisition. 3 2015 recovery book coverage ratio has been restated from 85.2% to 82.2% to reflect more granular allocation of management adjustments to the recovery book.
UK cards: Gross loans and advances decreased 4% to GBP17.8bn primarily due to reduced loans and advances to banks. Annualised gross charge-off rates increased due to accelerated asset sales in the latter half of the year and accelerated charge off of informal arrangement stock. The recovery book impairment coverage ratio increased, reflecting the impact of increased flow into charge-off.
UK personal loans: 30 day arrears increased to 2.1% (2015: 1.9%) and 90 day arrears increased to 0.9% (2015: 0.8%) driven by portfolio growth and an increased level of operational delinquency from new customer acquisitions. The recovery book proportion of outstanding balances reduced to 4.7% (2015: 7.5%) due to an asset sale that also resulted in an increase in the recovery book impairment coverage ratio to 77.2% (2015: 73.9%).
US cards: Gross loans and advances increased 43% to GBP23.9bn due to portfolio growth, new acquisitions and the appreciation of USD against GBP. Increased arrears and charge-off rates were driven by a change in portfolio mix, volume growth and the appreciation of average USD against GBP.
Barclays Partner Finance: Portfolio arrears and charge-off rates remained broadly steady during 2016.
Germany cards: Loans and advances were 28% higher mainly due to a combination of the appreciation of EUR against GBP and portfolio growth. 90 day arrears and charge off rates remained stable, while the recovery book coverage ratio reduced slightly reflecting favourable recovery expectations.
Exposure to UK commercial real estate (CRE)
The UK CRE portfolio includes property investment, development, trading and house builders but excludes social housing and contractors.
UK CRE summary(1) As at 31.12.16 As at 31.12.15 ------------------------------------------ -------------- -------------- UK CRE loans and advances (GBPm) 11,227 10,690 Past due balances (GBPm) 83 152 Balances past due as % of UK CRE balances (%) 0.7 1.4 Impairment allowances (GBPm) 58 79 Past due coverage ratio (%) 69.9 52.0 Total collateral (GBPm) 23,225 21,858 For the year ended 31.12.16 31.12.15 ------------------------------------------ -------------- -------------- Impairment (credit)/charge (GBPm) (2) 3 1 Based on the most recent valuation assessment. 2015 year end numbers
have been restated following closer alignment of industry classifications between corporate banking and business lending. Maturity analysis of exposure to UK CRE Contractual maturity of UK CRE loans and advances at amortised cost --------------------------------------------------------------------------------------- Over Over Over Over two years five six months one year but not years but not but not more but not Not more more more than more Total Past than than than five than Over loans due balances six months one year two years years ten years ten years and advances GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm -------------- ------------- ----------- ----------- ---------- ---------- ---------- ---------- ------------- As at 31 December 2016 83 774 668 1,200 6,318 700 1,484 11,227 As at 31 December 2015 152 784 744 929 5,678 852 1,551 10,690
Total exposure to UK commercial real estate rose moderately from GBP10.7bn to GBP11.2bn primarily in medium term deals. Past due balances fell to GBP83m from GBP152m due to favourable recovery activity and selective approach to new deals in this sector.
UK CRE LTV analysis Balances as Balances proportion of total ------------------ ---------------------- 31.12.16 31.12.15 31.12.16 31.12.15 GBPm GBPm % % ----------------------- -------- -------- ---------- ---------- Group <=75% 7,884 7,208 70 68 >75% and <=100% 102 244 1 2 >100% and <=125% 15 109 - 1 >125% 60 18 1 - Unassessed balances(1) 2,286 2,370 20 22 Unsecured balances(2) 880 741 8 7 ----------------------- -------- -------- ---------- ---------- Total 11,227 10,690 100 100 1 Corporate banking balances under GBP1m. 2 Unsecured balances primarily relate to working capital facilities agreed to CRE companies.
Statement of Directors' Responsibilities
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 51 to 55), 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 2016; and -- to the best of their knowledge, the management information (set out on pages 1 to 49) 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 2016.
Signed on behalf of the Board by
James E Staley Tushar Morzaria Group Chief Executive Group Finance Director
Barclays PLC Board of Directors:
Chairman Executive Directors Non-executive Directors John McFarlane James E Staley (Group Chief Executive) Mike Ashley Tushar Morzaria (Group Finance Director) Tim Breedon CBE Mary Francis Crawford Gillies Sir Gerry Grimstone Reuben Jeffery III Dambisa Moyo Diane de Saint Victor Diane Schueneman Stephen Thieke
Condensed Consolidated Financial Statements
Condensed Consolidated Income Statement (audited) Year ended Year ended 31.12.16 31.12.15 Continuing operations Notes(1) GBPm GBPm =================================================== ======== ========== ========== Net interest income 10,537 10,608 Net fee and commission income 6,768 6,859 Net trading income 2,768 3,426 Net investment income 1,324 1,097 Other income 54 50 =================================================== ======== ---------- ---------- Total income 21,451 22,040 Credit impairment charges and other provisions (2,373) (1,762) =================================================== ======== ========== ========== Net operating income 19,078 20,278 Staff costs (9,423) (8,853) Administration and general expenses (6,915) (9,683) =================================================== ======== ========== ========== Operating expenses (16,338) (18,536) Profit/(loss) on disposal of undertakings and share of results of associates and joint ventures 490 (596) =================================================== ======== ========== ========== Profit before tax 3,230 1,146 Tax 2 (993) (1,149) =================================================== ======== ========== ========== Profit/(loss) after tax in respect of continuing operations 2,237 (3) Profit after tax in respect of discontinued operation 591 626 =================================================== ======== ========== ========== Profit after tax 2,828 623 Attributable to: =================================================== ======== ========== ========== Ordinary equity holders of the parent 1,623 (394) Other equity holders 10 457 345 =================================================== ======== ========== ========== Total equity holders 2,080 (49) Profit attributable to non-controlling interests in respect of continuing operations 3 346 348 Profit attributable to non-controlling interests in respect of discontinued operation 3 402 324 =================================================== ======== ========== ========== Profit after tax 2,828 623 Earnings per share =================================================== ======== ========== ========== Basic earnings/(loss) per ordinary share(2) 4 10.4 (1.9) Basic earnings/(loss) per ordinary share in respect of continuing operations 9.3 (3.7) Basic earnings per ordinary share in respect of discontinued operations 1.1 1.8 Diluted earnings/(loss) per ordinary share(2) 10.3 (1.9) 1 For notes to the Financial Statements see pages 56 to 64. 2 The profit after tax attributable to other equity holders of GBP457m (2015: GBP345m) is offset by a tax credit recorded in reserves of GBP128m (2015: GBP70m). The net amount of GBP329m (2015: GBP275m), along with NCI, is deducted from profit after tax in order to calculate earnings per share. Condensed consolidated statement of comprehensive income Year ended Year ended 31.12.16 31.12.15
Continuing operations Notes(1) GBPm GBPm ====================================================== ======== ========== ========== Profit after tax 2,828 623 Profit/(loss) after tax in respect of continuing operations 2,237 (3) Profit after tax in respect of discontinued operation 591 626 Other comprehensive income/(loss) that may be recycled to profit or loss: ====================================================== ======== ========== ========== Currency translation reserve 11 3,024 748 Available for sale reserve 11 (387) (229) Cash flow hedge reserve 11 798 (493) Other 13 20 ====================================================== ======== ========== ========== Total comprehensive income that may be recycled to profit or loss 3,448 46 Other comprehensive (loss)/income not recycled to profit or loss: ====================================================== ======== ========== ========== Retirement benefit remeasurements (980) 916 Other comprehensive income for the period 2,468 962 Total comprehensive income for the year, net of tax from continuing operations 4,705 959 Total comprehensive income/(loss) for the year, net of tax from discontinued operation 2,111 (722) ====================================================== ======== ========== ========== Total comprehensive income for the period 6,816 237 Attributable to: ====================================================== ======== ========== ========== Equity holders of the parent 5,233 45 Non-controlling interests 1,583 192 ====================================================== ======== ========== ========== Total comprehensive income for the period 6,816 237 1 For notes to the Financial Statements see pages 56 to 64. Condensed consolidated balance sheet (audited) As at As at 31.12.16 31.12.15 Assets Notes(1) GBPm GBPm =================================================== ======== ========= ========= Cash and balances at central banks 102,353 49,711 Items in the course of collection from other banks 1,467 1,011 Trading portfolio assets 80,240 77,348 Financial assets designated at fair value 78,608 76,830 Derivative financial instruments 346,626 327,709 Financial investments 63,317 90,267 Loans and advances to banks 43,251 41,349 Loans and advances to customers 392,784 399,217 Reverse repurchase agreements and other similar secured lending 13,454 28,187 Current and deferred tax assets 5,430 4,910 Prepayments, accrued income and other assets 2,893 3,010 Investments in associates and joint ventures 684 573 Goodwill and intangible assets 7,726 8,222 Property, plant and equipment 2,825 3,468 Retirement benefit assets 8 14 836 Assets included in disposal groups classified as held for sale 1 71,454 7,364 =================================================== ======== ========= ========= Total assets 1,213,126 1,120,012 Liabilities =================================================== ======== ========= ========= Deposits from banks 48,214 47,080 Items in the course of collection due to other banks 636 1,013 Customer accounts 423,178 418,242 Repurchase agreements and other similar secured borrowing 19,760 25,035 Trading portfolio liabilities 34,687 33,967 Financial liabilities designated at fair value 96,031 91,745 Derivative financial instruments 340,487 324,252 Debt securities in issue(2) 75,932 69,150 Subordinated liabilities 23,383 21,467 Accruals, deferred income and other liabilities 8,871 10,610 Current and deferred tax liabilities 766 1,025 Provisions 7 4,134 4,142 Retirement benefit liabilities 8 390 423 Liabilities included in disposal groups classified as held for sale 1 65,292 5,997 =================================================== ======== ========= ========= Total liabilities 1,141,761 1,054,148 Equity =================================================== ======== ========= ========= Called up share capital and share premium 9 21,842 21,586 Other reserves 11 6,051 1,898 Retained earnings 30,531 31,021 =================================================== ======== ========= ========= Shareholders' equity attributable to ordinary shareholders of the parent 58,424 54,505 Other equity instruments 10 6,449 5,305 =================================================== ======== ========= ========= Total equity excluding non-controlling interests 64,873 59,810 Non-controlling interests 3 6,492 6,054 =================================================== ======== ========= ========= Total equity 71,365 65,864 1 For notes to the Financial Statements see pages 56 to 64. 2 Debt securities in issue include covered bonds of GBP12.4bn (2015: GBP12.3bn). Condensed consolidated statement of changes in equity (audited) Called up share capital Other and share equity Other Retained Non-controlling Total premium(1) instruments(1) reserves(1) earnings Total interests(2) equity Year ended 31.12.16 GBPm GBPm GBPm GBPm GBPm GBPm GBPm ============================ =========== =============== ============ ========= ======= =============== ======= Balance as at 1 January 2016 21,586 5,305 1,898 31,021 59,810 6,054 65,864 Profit after tax - 457 - 1,434 1,891 346 2,237 Other comprehensive profit after tax for the period - - 3,433 (968) 2,465 3 2,468 ============================ =========== =============== ============ ========= ======= =============== ======= Total comprehensive income net of tax from continuing operations - 457 3,433 466 4,356 349 4,705 Total comprehensive income net of tax from discontinued operation - - 694 183 877 1,234 2,111 ============================ =========== =============== ============ ========= ======= =============== ======= Total comprehensive income for the year - 457 4,127 649 5,233 1,583 6,816 ============================ =========== =============== ============ ========= ======= =============== ======= Issue of shares 256 - - 668 924 - 924 Issue and exchange of equity instruments - 1,132 - - 1,132 - 1,132 Dividends - - - (757) (757) (575) (1,332) Coupons paid on other equity instruments - (457) - 128 (329) - (329) Redemption of preference shares - - - (417) (417) (1,170) (1,587)
Treasury shares - - 26 (415) (389) - (389) Net equity impact of partial BAGL disposal - - - (349) (349) 601 252 Other movements - 12 - 3 15 (1) 14 ============================ =========== =============== ============ ========= ======= =============== ======= Balance as at 31 December 2016 21,842 6,449 6,051 30,531 64,873 6,492 71,365 Year ended 31.12.15 ============================ =========== =============== ============ ========= ======= =============== ======= Balance as at 1 January 2015 20,809 4,322 2,724 31,712 59,567 6,391 65,958 Profit after tax - 345 - (696) (351) 348 (3) Other comprehensive profit after tax for the period - - 25 936 961 1 962 ============================ =========== =============== ============ ========= ======= =============== ======= Total comprehensive income net of tax from continuing operations - 345 25 240 610 349 959 Total comprehensive income net of tax from discontinued operation - - (867) 302 (565) (157) (722) ============================ =========== =============== ============ ========= ======= =============== ======= Total comprehensive income for the year - 345 (842) 542 45 192 237 ============================ =========== =============== ============ ========= ======= =============== ======= Issue of shares 777 - - 571 1,348 - 1,348 Issue and exchange of equity instruments - 995 - - 995 - 995 Dividends - - - (1,081) (1,081) (552) (1,633) Coupons paid on other equity instruments - (345) - 70 (275) - (275) Treasury shares - - 16 (755) (739) - (739) Other movements - (12) - (38) (50) 23 (27) ============================ =========== =============== ============ ========= ======= =============== ======= Balance as at 31 December 2015 21,586 5,305 1,898 31,021 59,810 6,054 65,864 1 Details of share capital, other equity instruments and other reserves are shown on pages 63 and 64. 2 Details of non-controlling interests are shown on page 59. Condensed consolidated cash flow statement (audited) Year ended Year ended 31.12.16 31.12.15 GBPm GBPm ====================================================== ========== ========== Profit before tax 3,230 1,146 Adjustment for non-cash items (15,355) 7,060 Changes in operating assets and liabilities 24,191 8,798 Corporate income tax paid (780) (1,670) ======================================================= ========== ========== Net cash from operating activities 11,286 15,334 Net cash from investing activities 36,707 (6,551) Net cash from financing activities (1,317) (574) Net cash from discontinued operations 405 (1,821) Effect of exchange rates on cash and cash equivalents 10,473 1,689 ======================================================= ========== ========== Net increase in cash and cash equivalents 57,554 8,077 Cash and cash equivalents at beginning of the period 86,556 78,479 ======================================================= ========== ========== Cash and cash equivalents at end of the period 144,110 86,556
Financial Statement Notes
1. Assets included in disposal groups classified as held for sale and associated liabilities
On 1 March 2016, Barclays announced its intention to reduce the Group's 62.3% interest in BAGL. This reduction is intended to be to a level which will permit deconsolidation from an accounting and regulatory perspective, for which approval was granted by shareholders at the Group's general meeting held on 28 April 2016. On 5 May 2016 Barclays sold 12.2% of the Group's interest in BAGL resulting in a transfer to non-controlling interests of GBP601m. Following this sale, Barclays' interest represents 50.1% of BAGL's share capital. The BAGL disposal group includes all assets and liabilities of BAGL and its subsidiaries as well as Group balances associated with BAGL and expected contributions that will form part of the sale.
No impairment for BAGL has been recognised under IFRS 5 as at 31 December 2016. Impairment under IFRS 5 is calculated as the difference between fair value less disposal costs and the carrying value of the disposal group. The fair value is determined by reference to the quoted market price for BAGL and the foreign exchange rate for ZAR/GBP as at 31 December 2016, less the expected contributions on page 57. The fair value less disposal costs and expected contributions exceeds the net asset value at 31 December 2016.
Barclays continues to explore potential options for further disposal of its shares in BAGL during the course of 2017.
Assets included in disposal groups classified as held for sale BAGL Other Total Total 2016 2016 2016 2015 GBPm GBPm GBPm GBPm ====== ===== ====== ===== Cash and balances at central banks 2,689 241 2,930 21 Items in the course of collection from other banks 549 21 570 24 Trading portfolio assets 3,044 40 3,084 - Financial assets designated at fair value 5,546 1,438 6,984 696 Derivative financial instruments 1,992 - 1,992 - Financial investments 4,995 2,742 7,737 1,230 Loans and advances to banks 1,184 482 1,666 74 Loans and advances to customers 41,793 1,711 43,504 5,513 Prepayments, accrued income and other assets 637 59 696 47 Investments in associates and joint ventures 63 24 87 10 Property, plant and equipment 902 52 954 128 Goodwill 965 32 997 - Intangible assets 554 16 570 43 Current and deferred tax assets 124 25 149 22 Retirement benefit assets 33 - 33 - ======================================== ===== Total 65,070 6,883 71,953 7,808 Balance of impairment unallocated under IFRS 5 (499) (499) (444) ======================================== ===== Total assets classified as held for sale 65,070 6,384 71,454 7,364 Liabilities included in disposal groups classified as held for sale BAGL Other Total Total 2016 2016 2016 2015 GBPm GBPm GBPm GBPm ====== ===== ====== ===== Deposits from banks 2,113 36 2,149 - Items in the course of collection due to banks 350 23 373 74 Customer accounts 39,331 3,100 42,431 4,000 Repurchase agreements and other similar secured borrowing 597 - 597 - Trading portfolio liabilities 388 - 388 - Financial liabilities designated at fair value 3,748 3,577 7,325 346 Derivative financial instruments 1,610 1 1,611 3 Debt securities in issue 7,997 - 7,997 1,474 Subordinated liabilities 934 - 934 - Accruals, deferred income and other liabilities 1,061 119 1,180 39 Provisions 52 51 103 34 Current and deferred tax liabilities 154 8 162 (6) Retirement benefit liabilities 26 16 42 33 ======================================== ===== Total liabilities classified as held for sale 58,361 6,931 65,292 5,997 Net assets/(liabilities) classified as held for sale(1) 6,709 (547) 6,162 1,367
Expected contributions to BAGL(2,3) 866 - 866 - ====== ===== ===== Disposal group post contribution 7,575 (547) 7,028 1,367 1 The carrying value of the disposal group is stated after the elimination of internal balances between Barclays and BAGL of GBP595m. Internal balances have been considered in determining the carrying value of BAGL (of GBP7.3bn before the planned contributions in respect of BAGL) for the purposes of measuring the disposal group at the lower of carrying amount and fair value less costs to sell. 2 In December 2016, Barclays finalised proposals regarding planned contributions to the BAGL group relating to the reimbursement of certain expenses as well as contributions for investment to support separation activities. The cash and cash equivalents to make these planned contributions is included within the perimeter of the disposal group, also for the purposes of measuring the disposal group at the lower of carrying amount and fair value less costs to sell. The planned contributions are reported within Cash and balances at central banks in the Group's consolidated balance sheet. 3 In December 2016, Barclays reimbursed BAGL for expenses incurred for an amount of GBP28m. This amount is excluded from the proposed overall potential reimbursement and contribution figure of GBP866m.
The BAGL disposal group meets the requirements for presentation as a discontinued operation. As such, the results, which have been presented as the profit after tax and non-controlling interest in respect of the discontinued operation on the face of the Group income statement, are analysed in the income statement below.
BAGL group income statement As at As at 31.12.16 31.12.15 For the year ended 31 December GBPm GBPm ========= ========= Net interest income 2,169 1,950 Net fee and commission income 1,072 1,033 Net trading income 281 197 Net investment income 45 41 Other income 179 193 ========= Total income 3,746 3,414 Credit impairment charges and other provisions (445) (353) ========= Net operating income 3,301 3,061 Staff costs (1,186) (1,107) Administration and general expenses (653) (545) Depreciation of property, plant and equipment (513) (442) Amortisation of intangible assets (58) (47) ========= Operating expenses (2,410) (2,141) Share of post-tax results of associates and joint ventures 6 7 Profit before tax 897 927 Taxation (306) (301) ========= Profit after tax 591 626 Attributable to: Equity holders of the parent 189 302 Non-controlling interests 402 324 ========= Profit after tax 591 626 Other comprehensive income relating to discontinued operations is as follows: 2016 2015 For the year ended 31 December GBPm GBPm ===== ======= Available for sale assets (9) (22) Currency translation reserves 1,451 (1,223) Cash flow hedge reserves 89 (101) ======= Other comprehensive income, net of tax from discontinued operations 1,531 (1,346) The cash flows attributed to the discontinued operations are as follows: 2016 2015 For the year ended 31 December GBPm GBPm Net cash flows from operating activities 1,164 794 Net cash flows from investing activities (691) (1,883) Net cash flows from financing activities (105) 133 Effect of exchange rates on cash and cash equivalents 37 (865) ======= Net increase/(decrease) in cash and cash equivalents 405 (1,821) 2. Tax
The 2016 tax charge of GBP993m (2015: GBP1,149m), represented an effective tax rate of 30.7% (2015: 100.3%). The effective tax rate is higher than the UK statutory rate of 20% (2015: 20.25%) primarily due to profits earned outside the UK being taxed at higher local statutory tax rates. In addition the effective tax rate is affected by provisions for UK customer redress being non-deductible for tax purposes, non-creditable taxes and non-deductible expenses including UK bank levy. These factors, which have each increased the effective tax rate, are partially offset by the impact of non-taxable gains and income, including those arising from divestments, and adjustments in respect of prior years.
The deferred tax asset of GBP4,869m (2015: GBP4,495m) mainly relates to amounts in the US.
Assets Liabilities As at 31.12.16 As at 31.12.15 As at 31.12.16 As at 31.12.15 Current and deferred tax assets GBPm GBPm GBPm GBPm and liabilities Current tax 561 415 (737) (903) Deferred tax 4,869 4,495 (29) (122) Total 5,430 4,910 (766) (1,025) As at 31.12.16 As at 31.12.15 Deferred tax assets and liabilities GBPm GBPm Intermediate Holding Company (IHC) - US tax group 2,207 2,049 Barclays Bank PLC (US branch) - US tax group 1,766 1,569 Barclays PLC - UK tax group 575 411 Other 321 466 Deferred tax asset 4,869 4,495 Deferred tax liability (29) (122) Net deferred tax 4,840 4,373 Analysis of net deferred tax Temporary differences 4,337 3,471 Tax losses 503 902 Net deferred tax 4,840 4,373 3. Non-controlling interests Profit attributable Equity attributable to non-controlling to non-controlling interest interest Year ended Year ended Year ended Year ended 31.12.16 31.12.15 31.12.16 31.12.15 GBPm GBPm GBPm GBPm Barclays Bank PLC Issued: - Preference shares 340 343 2,698 3,654 - Upper Tier 2 instruments 3 2 272 486 Barclays Africa Group Limited 402 324 3,507 1,902 Other non-controlling interests 3 3 15 12 Total 748 672 6,492 6,054
Equity attributable to non-controlling interests increased by GBP438m to GBP6,492m in December 2016 driven by the sale of 12.2% of the Group's stake in BAGL increasing the non-controlling interest from 37.6% to 49.9% and the appreciation of ZAR against GBP. These increases were partially offset by the redemption of preference shares issued by Barclays Bank PLC.
4. Earnings per share As at As at 31.12.16 31.12.15 GBPm GBPm ======== ======== Profit/(loss) attributable to ordinary equity holders of the parent from continuing and discontinued operations 1,623 (394) Tax credit on profit after tax attributable to other equity holders 128 70 Total profit/(loss) attributable to ordinary equity holders of the parent from continuing and discontinued operations 1,751 (324) Continuing operations
Profit/(loss) attributable to ordinary equity holders of the parent from continuing operations 1,434 (696) Tax credit on profit after tax attributable to other equity holders 128 70 Profit/(loss) attributable to equity holders of the parent from continuing operations 1,562 (626) Discontinued operation Profit attributable to ordinary equity holders of the parent from discontinued operation 189 302 Dilutive impact of convertible options from discontinued operation (1) - Profit attributable to equity holders of the parent from discontinued operations including dilutive impact on convertible options 188 302 Profit/(loss) attributable to equity holders of the parent from continuing and discontinued operations including dilutive impact on convertible options 1,750 (324) As at As at 31.12.16 31.12.15 GBPm GBPm ======== ======== Basic weighted average number of shares in issue 16,860 16,687 Number of potential ordinary shares 184 367 Diluted weighted average number of shares 17,044 17,054 p p Basic earnings per ordinary share(1) 10.4 (1.9) Basic earnings per ordinary share from continuing operations(1) 9.3 (3.7) Basic earnings per ordinary share from discontinued operation 1.1 1.8 Diluted earnings per ordinary share(1) 10.3 (1.9) Diluted earnings per ordinary share from continuing operations(1) 9.2 (3.7) Diluted earnings per ordinary share from discontinued operation 1.1 1.8 1 The profit after tax attributable to other equity holders of GBP457m (2015: GBP345m) is offset by a tax credit recorded in reserves of GBP128m (2015: GBP70m). The net amount of GBP329m (2015: GBP275m), along with NCI, is deducted from profit after tax in order to calculate earnings per share. 5. Dividends on Ordinary Shares
It is Barclays' policy to declare and pay dividends on a semi-annual basis. A final dividend in respect of 2016 of 2.0p per ordinary share will be paid on 5 April 2017 to shareholders on the Share Register on 3 March 2017 and accounted for as a distribution of retained earnings in the year ending 31 December 2017. The financial statements for 2016 include the following dividends paid during the year:
Year ended 31.12.16 Year ended 31.12.15 Per share Total Per share Total Dividends paid during the period p GBPm p GBPm Final dividend paid during period 3.5 588 3.5 578 Interim dividends paid during period 1.0 169 3.0 503 Total 4.5 757 6.5 1,081 6. Fair value of assets and liabilities
The following table shows the Group's assets and liabilities that are held at fair value disaggregated by valuation technique (fair value hierarchy) and balance sheet classification:
Assets and liabilities held at fair value Valuation technique using Significant Quoted market Observable unobservable prices (Level inputs (Level inputs (Level 1) 2) 3) Total GBPm GBPm GBPm GBPm As at 31 December 2016 Trading portfolio assets 41,550 36,625 2,065 80,240 Financial assets designated at fair value 4,031 64,630 9,947 78,608 Derivative financial assets 5,261 332,819 8,546 346,626 Available for sale investments 21,218 36,551 372 58,141 Investment property - - 81 81 Assets included in disposal groups classified as held for sale(1) 6,754 8,511 6,009 21,274 Total assets 78,814 479,136 27,020 584,970 Trading portfolio liabilities (20,205) (14,475) (7) (34,687) Financial liabilities designated at fair value (70) (95,121) (840) (96,031) Derivative financial liabilities (5,051) (328,265) (7,171) (340,487) Liabilities included in disposal groups classified as held for sale(1) (397) (5,224) (6,201) (11,822) Total liabilities (25,723) (443,085) (14,219) (483,027) As at 31 December 2015 Trading portfolio assets 36,676 35,725 4,947 77,348 Financial assets designated at fair value 6,163 52,909 17,758 76,830 Derivative financial assets 6,342 315,949 5,418 327,709 Available for sale investments 42,552 46,693 1,022 90,267 Investment property - - 140 140 Assets included in disposal groups classified as held for sale(1) 26 8 7,330 7,364 Total assets 91,759 451,284 36,615 579,658 Trading portfolio liabilities (23,978) (9,989) - (33,967) Financial liabilities designated at fair value (240) (90,203) (1,302) (91,745) Derivative financial liabilities (5,450) (314,033) (4,769) (324,252) Liabilities included in disposal groups classified as held for sale(1) (1,024) (802) (4,171) (5,997) Total liabilities (30,692) (415,027) (10,242) (455,961) 1 Disposal groups held for sale and measured at fair value less cost to sell are non-recurring fair value instruments and therefore included in the fair value table. For disposal groups that are measured at the carrying amount, only items measured at fair value are included in the table above. 7. Provisions As at As at 31.12.16 31.12.15 GBPm GBPm UK customer redress: Payment Protection Insurance redress 1,979 2,106 Other customer redress 712 896 Legal, competition & regulatory matters 455 489 Redundancy and restructuring 206 186 Undrawn contractually committed facilities and guarantees 67 60 Onerous contracts 385 141 Sundry provisions 330 264 Total 4,134 4,142
Payment Protection Insurance Redress
As at 31 December 2016, Barclays had recognised cumulative provisions totalling GBP8.44bn (31 December 2015: GBP7.44bn) against the cost of Payment Protection Insurance (PPI) redress and associated processing costs with utilisation of GBP6.46bn (31 December 2015: GBP5.33bn), leaving a residual provision of GBP1.98bn (31 December 2015: GBP2.11bn).
Through to 31 December 2016, 1.8m (31 December 2015: 1.6m) customer initiated claims(1) had been received and processed. The volume of claims received during 2016 decreased 8%(2) from 2015. This rate of decline was slower than previously recorded but in line with expectations.
The current provision reflects the estimate of costs of PPI redress primarily relating to customer initiated complaints and on-going remediation programmes. This also includes liabilities managed by third parties arising from portfolios previously sold where Barclays remains liable.
As at 31 December 2016, the provision of GBP1.98bn represents Barclays' best estimate of expected PPI redress reflecting the revised complaints deadline proposed in Financial Conduct Authority (FCA) consultation paper 16/20 issued on 2 August 2016. However, it is possible the eventual outcome may differ from the current estimate. We will continue to review the adequacy of provision level in respect of the on-going level of complaints.
The PPI provision is calculated using a number of key assumptions which continue to involve significant management judgement and modelling:
-- 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 H119 -- 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 of assessing and processing each valid claim
These assumptions remain subjective, in particular due to the uncertainty associated with future claims levels, which include complaints driven by Claims Management Company (CMC) activity.
The current provision represents Barclays' revised best estimate of all future expected costs of PPI redress based on information available at year end.
The following table details actual data through to 31 December 2016, key forecast assumptions used in the provision calculation and a sensitivity analysis illustrating the impact on the provision if the future expected assumptions prove too high or too low.
1 Total claims received directly by Barclays to date, including those received via CMCs but excluding those for which no PPI policy exists and excluding responses to proactive mailing. 2 Gross volumes received including no PPI. Sensitivity Cumulative analysis increase/ actual decrease Assumption to 31.12.16 Future expected in provision Customer initiated claims received and processed(1) 1,840k 650k 50k = GBP100m Average uphold rate per claim(2) 87% 83% 1% = GBP15m Average redress per valid claim(3) GBP2,137 GBP1,950 GBP100 = GBP74m Processing cost per claim(4) GBP410 GBP350 50k = GBP17m 1 Total claims received directly by Barclays to date, including those received via CMCs but excluding those for which no PPI policy exists and excluding responses to proactive mailing. 2 Average uphold rate per customer initiated claims received directly by Barclays and proactive mailings, excluding those for which no PPI policy exists. 3 Average redress stated on a per policy basis for future customer initiated complaints received directly by Barclays and proactive mailings. 4 Processing cost per claim on an upheld complaints basis, includes direct staff costs and associated overheads. 8. Retirement Benefits
As at 31 December 2016, the Group's IAS 19 (Revised) pension deficit across all schemes was GBP0.4bn (2015: GBP0.4bn surplus). The UK Retirement Fund (UKRF), which is the Group's main scheme, had a deficit of GBP0.03bn (2015: GBP0.8bn surplus).
The movement for the UKRF is mainly due to a decrease in discount rate to 2.62% (2015: 3.82%), and an increase in inflation rate to 3.35% (2015: 3.05%) partially offset by deficit contributions, updated mortality assumptions based on scheme experience, and higher than assumed returns on plan assets.
The triennial funding valuation of the UKRF is currently underway with an effective date of 30 September 2016. Contribution requirements, including any deficit recovery plans, are expected to be agreed between the Bank and Trustee by the end of 2017. In these discussions, the Bank and the Trustee are taking into account the impact of the Structural Reform Programme.
The 2013 valuation was completed in 2014 with an effective date of 30 September 2013. The funding deficit at that date was calculated to be GBP3.6bn. Under the agreed recovery plan, deficit contributions of GBP300m were paid in 2016, with further deficit contributions of GBP740m payable each year between 2017 and 2021. Up to GBP500m of the 2021 deficit contributions is payable in 2017 if the funding deficit remains over GBP2.6bn. These deficit contributions are in addition to the regular contributions to meet the Group's share of the cost of benefits accruing over each year.
In non-valuation years the Scheme Actuary prepares an annual update of the funding position. The latest annual update was carried out as at 30 September 2015 and showed a deficit of GBP6.0bn.
9. Called Up Share Capital
Called up share capital comprises 16,963m (2015: 16,805m) ordinary shares of 25p each. The increase was due to the issuance of 116m (2015: 253m) shares under employee share schemes and a further 42m (2015: 54m) issued as part of the Barclays PLC Scrip Dividend Programme.
10. Other Equity Instruments
Other Equity Instruments of GBP6,449m (2015: GBP5,305m) include AT1 securities issued by Barclays PLC. In 2016 there was one issuance of CRD IV end point qualifying AT1 capital instruments, with a principal amount of GBP1.1bn (2015: GBP1.0bn)
The AT1 securities are perpetual securities with no fixed maturity and are structured to qualify as AT1 instruments under CRD IV. All AT1 securities will be converted into ordinary shares of Barclays PLC, at a pre-determined price, should the fully loaded CET1 ratio of Barclays PLC fall below 7.0%.
11. Other Reserves
As at As at 31.12.16 31.12.15 GBPm GBPm Currency translation reserves 3,051 (623) Available for sale reserves (74) 317 Cash flow hedges reserves 2,105 1,261 Other 969 943 Total other reserves 6,051 1,898
Currency Translation Reserve
As at 31 December 2016 there was a credit balance of GBP3,051m (2015: GBP623m debit) in the currency translation reserve. The increase in the credit balance of GBP3,674m (2015: GBP41m debit) principally reflected the strengthening of all major currencies against GBP. The currency translation reserve movement associated with non-controlling interests was a GBP801m credit (2015: GBP435m debit) reflecting the strengthening of ZAR against GBP.
During the year a GBP101m net gain (2015: GBP65m net loss) from recycling of the currency translation reserve was recognised in the income statement.
Available for Sale Reserve
As at 31 December 2016 there was a debit balance of GBP74m (2015: GBP317m credit) in the available for sale reserve. The decrease of GBP391m (2015: GBP245m decrease) was primarily due to a GBP2,192m gain from changes in fair value of Government Bonds, predominantly held in the liquidity pool. This was more than offset by GBP1,677m of losses from related hedging and GBP912m of net gains transferred to net profit, mainly due to GBP615m sale of Visa Europe Limited by Visa Inc. A tax charge of GBP28m was recognised in the period relating to these items.
Cash Flow Hedging Reserve
As at 31 December 2016, there was a credit balance of GBP2,105m (2015: GBP1,261m credit) in the cash flow hedging reserve. The increase of GBP844m (2015: GBP556m decrease) principally reflected a GBP1,595m increase in the fair value of interest rate swaps held for hedging purposes as interest rate forward curves decreased, partially offset by GBP450m gains recycled to the income statement in line with when the hedged item affects profit or loss and tax charge of GBP326m. This tax charge reflects the introduction of the new surcharge of 8% that applies to bank's UK profits with effect from January 2016, in addition to the standard UK corporation tax of 20%.
Other Reserves and Treasury Shares
As at 31 December 2016 there was a credit balance of GBP969m (2015: GBP943m credit) in other reserves and treasury shares. The increase principally reflected GBP166m (2015: GBP618m) transferred from treasury shares reflecting the vesting of deferred share based payments, partially offset by GBP140m (2015: GBP602m) net purchases of treasury shares held for the purposes of employee share schemes.
Appendix: Non-IFRS performance measures
The 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 business' 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 Barclays PLC and its subsidiaries (the Group). They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays' management.
Non-IFRS and IFRS performance measures may also be presented on an excluding notable items basis. Notable items are considered to be significant items impacting comparability of performance.
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 Barclays Core Barclays Core includes Barclays UK, Barclays International and Head Office. A reconciliation of Core statutory results and results excluding notable items is included on page 67. Return on average Statutory profit after tax attributable to ordinary tangible shareholders' shareholders, including an adjustment for the tax credit equity 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 pages 72 and 73. Return on average Statutory profit after tax attributable to ordinary allocated tangible shareholders, including an adjustment for the tax credit shareholders' in reserves in respect of other equity instruments, equity as a proportion of average allocated tangible equity. The components of the calculation have been included on pages 72 and 73. Period end allocated Allocated tangible equity is calculated as 11.5% of tangible equity CRD IV fully loaded risk weighted assets for each business, adjusted for CRD IV fully loaded capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office tangible equity represents the difference between the Group's tangible equity and the amounts allocated to businesses. Average tangible Calculated as the average of the monthly period end shareholders' tangible shareholders' equity during the period. equity Average allocated Calculated as the average of the monthly period end tangible shareholders' allocated tangible shareholders' equity during the equity period. Cost: income Total operating expenses divided by total income. ratio Basic earnings/(loss) The calculation is consistent with the IFRS measure per share contribution and applied to the Barclays Core and Non-Core: statutory (Barclays Core profit after tax attributable to ordinary shareholders, and Non-Core) including an adjustment for the tax credit in reserves in respect of other equity instruments, divided by the Group basic weighted average number of shares. The components of the calculation have been included on page 74.
Non-IFRS performance measures glossary (continued)
Measure Definition Loan loss rate Is quoted in basis points and represents total loan impairment divided by gross loans and advances to customers and banks held at amortised cost at the balance sheet date. Loan: deposit Loans and advances divided by customer accounts calculated ratio for Barclays UK, Barclays International and Non-Core, excluding investment banking businesses. This excludes particular liabilities issued by the retail businesses that have characteristics comparable to retail deposits (for example structured Certificates of Deposit and retail bonds), which are included within debt securities in issue. Notable items Notable items are considered to be significant items impacting comparability of performance and are shown for each of the business segments. A reconciliation between statutory results and results excluding notable items is included on pages 68 to 71 including relevant performance measures. Net interest Net interest income divided by the sum of average customer margin assets. The components of the calculation have been included on page 31. Tangible net Calculated by dividing shareholders equity, excluding asset value per non-controlling interests and other equity instruments, share less goodwill and intangible assets, by the number of issued ordinary shares. The components of the calculation have been included on page 75. Barclays Core reconciliation for the year ended 31.12.16 31.12.15 Barclays Barclays Head Barclays Barclays Barclays Head Barclays UK International Office Core UK International Office Core GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm Total income 7,517 14,995 103 22,615 7,343 13,747 338 21,428 Credit impairment charges and other provisions (896) (1,355) - (2,251) (706) (922) - (1,628) Net operating income 6,621 13,640 103 20,364 6,637 12,825 338 19,800 Operating expenses (3,792) (9,129) (135) (13,056) (3,464) (8,029) (272) (11,765) UK bank levy (48) (284) (2) (334) (77) (253) (8) (338) Litigation and conduct (1,042) (48) (27) (1,117) (2,511) (1,310) (66) (3,887) Total operating expenses (4,882) (9,461) (164) (14,507) (6,052) (9,592) (346) (15,990) Other net (expenses)/income (1) 32 128 159 - 45 (106) (61) Profit/(loss) before tax 1,738 4,211 67 6,016 585 3,278 (114) 3,749 Attributable profit/(loss) 828 2,412 110 3,350 (47) 1,758 11 1,722 Average allocated tangible equity (GBPbn) 8.9 25.5 6.5 41.0 9.3 24.9 2.6 36.8 Risk weighted assets (GBPbn) 67.5 212.7 53.3 333.5 69.5 194.8 39.7 304.1 Notable items Total income Own credit - - (35) (35) - - 430 430 Gain on disposal of Barclays' share of Visa Europe Limited 151 464 - 615 - - - - Gains on US Lehman acquisition assets - - - - - 496 - 496 Litigation and conduct Provisions for UK customer redress (1,000) - - (1,000) (2,431) (218) - (2,649) Provisions for ongoing investigations and litigation including Foreign Exchange - - - - - (984) (52) (1,036) Operating expenses Gain on valuation of a component of the defined retirement benefit liability - - - - 296 133 - 429 Other net expenses Losses on sale relating to the Spanish, Portuguese and Italian businesses - - - - - - (112) (112) Total notable items (849) 464 (35) (420) (2,135) (573) 266 (2,442) Results excluding notable items Total income 7,366 14,531 138 22,035 7,343 13,251 (92) 20,502 Credit impairment charges and other provisions (896) (1,355) - (2,251) (706) (922) - (1,628) Net operating income/ (expenses) 6,470 13,176 138 19,784 6,637 12,329 (92) 18,874 Operating expenses (3,792) (9,129) (135) (13,056) (3,760) (8,162) (272) (12,194) UK bank levy (48) (284) (2) (334) (77) (253) (8) (338) Litigation and conduct (42) (48) (27) (117) (80) (108) (14) (202) Total operating expenses (3,882) (9,461) (164) (13,507) (3,917) (8,523) (294) (12,734) Other net (expenses)/income (1) 32 128 159 - 45 6 51 Profit/(loss) before tax 2,587 3,747 102 6,436 2,720 3,851 (380) 6,191 Attributable profit/(loss) 1,685 1,961 135 3,781 1,961 2,320 (176) 4,105 Results excluding notable items Results Results Results excluding excluding excluding Statutory Notable notable Statutory Notable notable notable Barclays Core results items(1) items results items(1) items items
for the year ended 31.12.16 31.12.15 Income statement information YoY GBPm GBPm GBPm GBPm GBPm GBPm % Change Net interest income 10,377 - 10,377 9,993 - 9,993 4 Net fee, commission and other income 12,238 580 11,658 11,435 926 10,509 11 Total income 22,615 580 22,035 21,428 926 20,502 7 Credit impairment charges and other provisions (2,251) - (2,251) (1,628) - (1,628) (38) Net operating income 20,364 580 19,784 19,800 926 18,874 5 Operating expenses (13,056) - (13,056) (11,765) 429 (12,194) (7) UK bank levy (334) - (334) (338) - (338) 1 Total operating expenses excluding litigation and conduct (13,390) - (13,390) (12,103) 429 (12,532) (7) Litigation and conduct (1,117) (1,000) (117) (3,887) (3,685) (202) 42 Total operating expenses (14,507) (1,000) (13,507) (15,990) (3,256) (12,734) (6) Other net income/(expenses) 159 - 159 (61) (112) 51 Profit before tax 6,016 (420) 6,436 3,749 (2,442) 6,191 4 Attributable profit/(loss) 3,350 (431) 3,781 1,722 (2,383) 4,105 (8) Performance measures Return on average allocated tangible equity 8.4% 9.4% 4.8% 11.2% Cost: income ratio 64% 61% 75% 62% Barclays Non-Core Income statement information Net interest income 160 - 160 615 - 615 (74) Net trading income (1,703) - (1,703) (706) - (706) Net fee, commission and other income 379 - 379 703 - 703 (46) Total income (1,164) - (1,164) 612 - 612 Credit impairment charges and other provisions (122) - (122) (134) - (134) 9 Net operating (expenses)/income (1,286) - (1,286) 478 - 478 Operating expenses (1,509) - (1,509) (1,958) (99) (1,859) 19 UK bank levy (76) - (76) (88) - (88) 14 Litigation and conduct (246) - (246) (500) (324) (176) (40) Total operating expenses (1,831) - (1,831) (2,546) (423) (2,123) 14 Other net income/(expenses) 331 - 331 (535) (465) (70) Loss before tax (2,786) - (2,786) (2,603) (888) (1,715) (62) Attributable loss (1,916) - (1,916) (2,418) (707) (1,711) (12) 1 Refer to page 5 for a breakdown of notable items. Results excluding notable items Results Results Results excluding excluding excluding Statutory Notable notable Statutory Notable notable notable Barclays UK results items(1) items results items(1) items items YoY for the year ended 31.12.16 31.12.15 % Change Income statement GBPm GBPm GBPm GBPm GBPm GBPm information Net interest income 6,048 - 6,048 5,973 - 5,973 1 Net fee, commission and other income 1,469 151 1,318 1,370 - 1,370 (4) Total income 7,517 151 7,366 7,343 - 7,343 - Credit impairment charges and other provisions (896) - (896) (706) - (706) (27) Net operating income 6,621 151 6,470 6,637 - 6,637 (3) Operating expenses (3,792) - (3,792) (3,464) 296 (3,760) (1) UK bank levy (48) - (48) (77) - (77) 38 Litigation and conduct (1,042) (1,000) (42) (2,511) (2,431) (80) 48 Total operating expenses (4,882) (1,000) (3,882) (6,052) (2,135) (3,917) 1 Other net expenses (1) - (1) - - - - Profit before tax 1,738 (849) 2,587 585 (2,135) 2,720 (5) Attributable profit 828 (857) 1,685 (47) (2,008) 1,961 (14) Performance measures Return on average allocated tangible equity 9.6% 19.3% (0.3%) 21.1% Cost: income ratio 65% 53% 82% 53% Analysis of total income Personal Banking 3,891 129 3,762 3,714 - 3,714 1 Barclaycard Consumer UK 2,022 - 2,022 2,065 - 2,065 (2) Wealth, Entrepreneurs & Business Banking 1,604 22 1,582 1,564 - 1,564 1 Total income 7,517 151 7,366 7,343 - 7,343 - 1 Refer to page 12 for a breakdown of notable items. Results excluding notable items Results Results Results excluding excluding excluding Statutory Notable notable Statutory Notable notable notable Barclays International results items(1) items results items(1) items items YoY for the year ended 31.12.16 31.12.15 % Change Income statement information GBPm GBPm GBPm GBPm GBPm GBPm Net interest income 4,512 - 4,512 4,324 - 4,324 4 Net trading income 4,580 - 4,580 3,782 - 3,782 21 Net fee, commission and other income 5,903 464 5,439 5,641 496 5,145 6 Total income 14,995 464 14,531 13,747 496 13,251 10 Credit impairment charges and other provisions (1,355) - (1,355) (922) - (922) (47) Net operating income 13,640 464 13,176 12,825 496 12,329 7 Operating expenses (9,129) - (9,129) (8,029) 133 (8,162) (12) UK bank levy (284) - (284) (253) - (253) (12) Litigation and conduct (48) - (48) (1,310) (1,202) (108) 56 Total operating expenses (9,461) - (9,461) (9,592) (1,069) (8,523) (11) Other net income 32 - 32 45 - 45 (29) Profit before tax 4,211 464 3,747 3,278 (573) 3,851 (3) Attributable profit 2,412 451 1,961 1,758 (562) 2,320 (15) Performance measures Return on average allocated tangible equity 9.8% 8.0% 7.2% 9.5% Cost: income ratio 63% 65% 70% 64% Analysis of Barclays International Corporate and Investment Bank Income statement information Total income 10,533 - 10,533 10,450 496 9,954 6 Credit impairment charges and other provisions (260) - (260) (199) - (199) (31)
Total operating expenses (7,624) - (7,624) (7,929) (1,124) (6,805) (12) Profit before tax 2,650 - 2,650 2,322 (628) 2,950 (10) Performance measures Return on average allocated tangible equity 6.1% 6.1% 5.4% 8.2% Consumer, Cards and Payments Income statement information Total income 4,462 464 3,998 3,297 - 3,297 21 Credit impairment charges and other provisions (1,095) - (1,095) (723) - (723) (51) Total operating expenses (1,837) - (1,837) (1,663) 55 (1,718) (7) Profit before tax 1,561 464 1,097 956 55 901 22 Performance measures Return on average allocated tangible equity 31.4% 19.1% 20.2% 18.9% 1 Refer to page 15 for a breakdown of notable items. Results excluding notable items Results Results Results excluding excluding excluding Statutory Notable notable Statutory Notable notable notable Head Office results items(1) items results items(1) items items YoY for the year ended 31.12.16 31.12.15 % Change Income statement information GBPm GBPm GBPm GBPm GBPm GBPm Net interest income (183) - (183) (305) - (305) 40 Net fee, commission and other income 286 (35) 321 643 430 213 51 Net operating income 103 (35) 138 338 430 (92) Operating expenses (135) - (135) (272) - (272) 50 UK bank levy (2) - (2) (8) - (8) 75 Litigation and conduct (27) - (27) (66) (52) (14) (93) Total operating expenses (164) - (164) (346) (52) (294) 44 Other net income/(expenses) 128 - 128 (106) (112) 6 Profit/(loss) before tax 67 (35) 102 (114) 266 (380) Attributable profit/(loss) 110 (25) 135 11 187 (176) 1 Refer to page 18 for a breakdown of notable items.
Returns
Return on average allocated tangible equity is calculated as profit for the period attributable to ordinary equity holders of the parent (adjusted for the tax credit recorded in reserves in respect of interest payments on other equity instruments) divided by average allocated tangible equity for the period as appropriate, excluding non-controlling and other equity interests for businesses. Allocated tangible equity has been calculated as 11.5% of CRD IV fully loaded risk weighted assets for each business, adjusted for CRD IV fully loaded capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office average tangible equity represents the difference between the Group's average tangible equity and the amounts allocated to businesses.
Year ended Year ended 31.12.16 31.12.15 Attributable profit GBPm GBPm ---------------------------- ---------- Barclays UK 828 (47) Barclays International 2,412 1,758 Head Office 110 11 ---------- Barclays Core 3,350 1,722 Barclays Non-Core (1,916) (2,418) Africa Banking discontinued operation 189 302 ---------- Barclays Group 1,623 (394) Tax credit in respect of interest payments on other equity instruments ---------------------------- ---------- Barclays UK 29 14 Barclays International 83 42 Head Office (1)- --------- Barclays Core 111 56 Barclays Non-Core 17 14 Africa Banking discontinued operation -- --------- Barclays Group 128 70 Profit/(loss) attributable to ordinary equity holders of the parent Barclays UK 857 (33) Barclays International 2,495 1,800 Head Office 109 11 ---------- Barclays Core 3,461 1,778 Barclays Non-Core (1,899) (2,405) Africa Banking discontinued operation 189 302 Barclays Group 1,751 (324) Average allocated tangible equity GBPbn GBPbn Barclays UK 8.9 9.3 Barclays International 25.5 24.9 Head Office(1) 6.5 2.6 ---------- Barclays Core 41.0 36.8 Barclays Non-Core 7.8 10.9 ---------- Barclays Group 48.7 47.7 Return on average allocated tangible equity %% Barclays UK 9.6% (0.3%) Barclays International 9.8% 7.2% ---------- Barclays Core 8.4% 4.8% Barclays Group 3.6% (0.7%) 1 Includes the Africa Banking discontinued operation.
Returns excluding notable items
Year ended Year ended 31.12.16 31.12.15 Attributable profit excluding notable GBPm GBPm items Barclays UK 1,685 1,961 Barclays International 1,961 2,320 Head Office 135 (176) Barclays Core 3,781 4,105 Barclays Non-Core (1,916) (1,711) Africa Banking discontinued operation 189 302 Barclays Group 2,054 2,696 Tax credit in respect of interest payments on other equity instruments ------------------------------------ ------------------------------------
Barclays UK 29 14 Barclays International 83 42 Head Office (1)- ----------------------------------- Barclays Core 111 56 Barclays Non-Core 17 14 Africa Banking discontinued operation -- ----------------------------------- Barclays Group 128 70 Profit/(loss) attributable to ordinary equity holders of the parent excluding notable items Barclays UK 1,714 1,975 Barclays International 2,044 2,362 Head Office 133 (176) ------------------------------------ Barclays Core 3,891 4,161 Barclays Non-Core (1,899) (1,697) Africa Banking discontinued operation 189 302 ------------------------------------ Barclays Group 2,182 2,766 Average allocated tangible equity excluding notable items GBPbn GBPbn Barclays UK 8.9 9.3 Barclays International 25.5 24.9 Head Office(1,2) 6.8 2.9 ------------------------------------ Barclays Core 41.3 37.2 Barclays Non-Core 7.8 10.9 ------------------------------------ Barclays Group 49.0 48.1 Return on average allocated tangible equity excluding notable items %% Barclays UK 19.3% 21.1% Barclays International 8.0% 9.5% ------------------------------------ Barclays Core 9.4% 11.2% Barclays Group 4.4% 5.8% 1 Includes the Africa Banking discontinued operation. 2 Excludes the cumulative post-tax impact of own credit.
Earnings per share
Year ended Year ended 31.12.16 31.12.15 Profit/(loss) attributable to ordinary equity holders of the parent(1) GBPm GBPm Barclays Core 3,461 1,778 Barclays Non-Core (1,899) (2,405) Africa Banking discontinued operation 189 302 ------------------------------------ Barclays Group(2) 1,751 (324) m m Basic weighted average number of shares 16,860 16,683 Basic earnings per ordinary share p p Barclays Core contribution 20.5 10.7 Barclays Non-Core contribution (11.3) (14.4) Barclays Group 10.4 (1.9)
Earnings per share excluding notable items
Profit/(loss) attributable to ordinary equity holders of the parent excluding notable items(1) GBPm GBPm Barclays Core 3,891 4,161 Barclays Non-Core (1,899) (1,697) Africa Banking discontinued operation 189 302 ------------------------------------ Barclays Group(2) 2,182 2,766 Basic earnings per ordinary share excluding notable items p p Barclays Core contribution 23.1 24.9 Barclays Non-Core contribution (11.3) (10.2) Barclays Group 12.9 16.6 1 Profit for the period attributable to ordinary equity holders of the parent includes the tax credit recorded in reserves in respect of interest payments on other equity instruments. The tax credit of GBP128m (2015: GBP70m) is allocated to businesses in proportion to the allocation of the payments in relation to the other equity instruments. 2 Includes the Africa Banking discontinued operation.
Tangible net asset value
Year ended Year ended 31.12.16 31.12.15 GBPm GBPm Total equity excluding non-controlling interests 64,873 59,810 Other equity instruments (6,449) (5,305) Goodwill and intangibles(1) (9,245) (8,222) Tangible shareholders' equity attributable to ordinary shareholders of the parent 49,179 46,283 m m Shares in issue 16,963 16,805 p p Tangible net asset value per share 290 275 1 2016 includes goodwill and intangibles in relation to Africa Banking.
Shareholder Information
Results timetable(1) Date Ex-dividend date 2 March 2017 Dividend Record date 3 March 2017 Scrip reference share price set and made available to shareholders 9 March 2017 Cut off time of 4.30 pm (London time) for the receipt of Mandate Forms or Revocation Forms (as applicable) 17 March 2017 Dividend Payment date /first day of dealing in New Shares 5 April 2017 Q1 2017 Results 28 April 2017 For qualifying US and Canadian resident ADR holders, the final dividend of 2.0p per ordinary share becomes 8.0p per ADS (representing four shares). The ex-dividend, dividend record and dividend payment dates for ADR holders are as shown above. Year ended Year ended % Change(3) Exchange rates(2) 31.12.16 31.12.15 31.12.15 ======================================== ========== ========== =========== Period end - USD/GBP 1.23 1.48 (17%) Average - USD/GBP 1.36 1.53 (11%) 3 Month Average - USD/GBP 1.24 1.52 (18%) Period end - EUR/GBP 1.17 1.36 (14%) Average - EUR/GBP 1.23 1.38 (11%)
3 Month Average - EUR/GBP 1.15 1.39 (17%) Period end - ZAR/GBP 16.78 23.14 (27%) Average - ZAR/GBP 20.04 19.57 2% 3 Month Average - ZAR/GBP 17.29 21.56 (20%) Share price data 31.12.16 31.12.15 ======================================== ========== ========== ----------- Barclays PLC (p) 223.45 218.90 Barclays PLC number of shares (m) 16,963 16,805 Barclays Africa Group Limited (formerly Absa Group Limited) (ZAR) 168.69 143.49 Barclays Africa Group Limited (formerly Absa Group Limited) number of shares (m) 848 848 For further information please contact Investor relations Media relations ===================================================================== ====================================== Kathryn McLeland +44 (0) 20 7116 Thomas Hoskin +44 (0) 20 7116 4755 4943 More information on Barclays can be found on our website: www.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 www.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.
This information is provided by RNS
The company news service from the London Stock Exchange
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