1st Quarter Results

RNS Number : 1575M
Barclays PLC
26 April 2018
 

Barclays PLC

Q1 2018 Results Announcement

 

31 March 2018

 

Performance Highlights

 

Double digit returns across Barclays UK and Barclays International, and resolution of

a significant legacy litigation matter

 

•

Returns:

•

Attributable profit was £1.2bn, excluding litigation and conduct charges of £2.0bn principally relating to a £1.4bn settlement with the United States Department of Justice (DoJ) relating to Residential Mortgage-Backed Securities (RMBS) and additional charges of £400m relating to Payment Protection Insurance (PPI)

•

Group Return on Tangible Equity (RoTE) was 11.0% (Q117: 2.0%), excluding litigation and conduct, with double digit returns in both Barclays UK and Barclays International

•

Group RoTE targets of greater than 9% in 2019 and greater than 10% in 2020, excluding litigation and conduct and based on a Group Common Equity Tier 1 (CET1) ratio of c.13%

•

Cost efficiency:

•

Group operating expenses decreased 6% to £3.4bn, resulting in a cost: income ratio of 63% (Q117: 62%), excluding litigation and conduct of £2.0bn (Q117: £28m)

•

Guidance for Group operating expenses of £13.6-13.9bn in 2019, excluding litigation and conduct

•

Capital and dividends:

•

CET1 ratio declined to 12.7% (December 2017: 13.3%), as organic capital generation from profits was more than offset by a 61bps impact from litigation and conduct charges, and a £4.9bn increase in risk weighted assets (RWAs)

•

Final dividend of 2.0p per share for 2017 was paid on 5 April 2018

•

Reiterated intention to pay a dividend of 6.5p per share for 2018, subject to regulatory approvals

 

 

 

 

•

Group loss before tax was £236m (Q117: profit of £1,682m). Excluding litigation and conduct, profit before tax increased 1% to £1,725m driven by a 45% improvement in credit impairment charges, primarily reflecting single name recoveries in wholesale and the improved macroeconomic forecasts in the US, and a 6% reduction in operating expenses, partially offset by an 8% decline in income. Results were impacted by the 12% depreciation of average USD against GBP


-

Barclays UK RoTE was negative 1.1% (Q117: positive 21.6%). Excluding litigation and conduct, RoTE was 15.7% (Q117: 21.5%) as profit before tax decreased to £581m (Q117: £704m) reflecting 3% lower income, a 5% increase in operating expenses due to increased investment and a 13% increase in credit impairment charges


-

Barclays International RoTE was 13.4% (Q117: 12.5%), with double digit returns in both the Corporate and Investment Bank (CIB) and Consumer, Cards and Payments. Profit before tax increased 4% to £1,413m driven by a 73% decrease in credit impairment charges and a 5% reduction in operating expenses, while income declined 8%

•

Attributable loss was £764m (Q117: profit of £190m), including litigation and conduct charges, and basic loss per share was 4.2p (Q117: earnings per share of 1.3p). Excluding litigation and conduct, earnings per share was 7.1p (Q117: 1.5p)

•

Tangible net asset value per share decreased to 251p (December 2017: 276p) primarily due to the impact of the implementation of IFRS 9, litigation and conduct charges in the quarter, and adverse movements across the currency translation and cash flow hedging reserves

 

James E Staley, Group Chief Executive Officer, said:

 

"This has been a significant quarter for Barclays, one in which we have shown that our new operating model and our portfolio of diversified, profitable businesses are capable of producing improved returns for shareholders.

 

Our transatlantic wholesale and consumer bank has produced a Group Return on Tangible Equity (RoTE) of 11.0%, excluding litigation and conduct, with both Barclays UK and Barclays International delivering double digit returns. 

 

Demonstrating the benefits of diversification, lower revenues in our UK businesses, driven by one-offs, were offset by a stronger performance in Barclays International, particularly in the Corporate and Investment Bank, which reported profit before tax up 49% and a RoTE of 13.0%.

 

The first quarter is typically a strong one of course, but this performance does increase confidence in our capacity to meet our Group RoTE targets of greater than 9% in 2019, and greater than 10% in 2020, excluding litigation and conduct and based on a Group CET1 ratio of c.13%.

 

This quarter we also reached an agreement with the US Department of Justice to resolve issues related to the sale of Residential Mortgage-Backed Securities between 2005 and 2007. While the penalty was substantial, this settlement represents a major milestone for Barclays, putting behind us a significant decade-old legacy matter.

 

The settlement with the US Department of Justice, together with additional charges relating to PPI, reduced our CET1 ratio by around 60bps to 12.7%, but given the earnings power of the Group, and our strong record in capital management, we are confident that we will get back to around 13% in good time.

 

It remains our intention to pay a dividend for 2018 of 6.5p, and we look forward to returning an increasing amount of capital to shareholders, both through the annual dividend, and via other means of return, such as buybacks, going forward."

 

James E Staley

Group Chief Executive Officer

 

Barclays Group results




for the three months ended

31.03.18

31.03.17



£m

£m

% Change

Total income

5,358

5,823

(8)

Credit impairment charges and other provisions

(288)

(527)

45

Net operating income

5,070

5,296

(4)

Operating expenses excluding litigation and conduct

(3,364)

(3,591)

6

Litigation and conduct1

(1,961)

(28)


Operating expenses

(5,325)

(3,619)

(47)

Other net income

19

5


(Loss)/profit before tax

(236)

1,682


Tax charge

(304)

(473)

36

(Loss)/profit after tax in respect of continuing operations 

(540)

1,209


Loss after tax in respect of discontinued operation

-

(658)


Non-controlling interests in respect of continuing operations

(53)

(79)

33

Non-controlling interests in respect of discontinued operation

-

(143)


Other equity instrument holders2

(171)

(139)

(23)

Attributable (loss)/profit

(764)

190






Performance measures




Return on average tangible shareholders' equity2

(6.5%)

1.8%


Average tangible shareholders' equity (£bn)

44.2

49.4


Cost: income ratio

99%

62%


Loan loss rate (bps)

36

47


Basic (loss)/earnings per share2

(4.2p)

1.3p


Basic (loss)/earnings per share in respect of continuing operations2

(4.2p)

6.1p


  




Performance measures excluding litigation and conduct1




Profit before tax

1,725

1,710

1

Attributable profit

1,166

209


Return on average tangible shareholders' equity2

11.0%

2.0%


Cost: income ratio

63%

62%


Basic earnings per share2

7.1p

1.5p







As at

As at

As at

Balance sheet and capital management3

31.03.18

31.12.17

31.03.17

Tangible net asset value per share

251p

276p

292p

Common equity tier 1 ratio

12.7%

13.3%

12.5%

Common equity tier 1 capital (£bn)

40.2

41.6

44.9

Risk weighted assets (£bn)

317.9

313.0

360.9

Average UK leverage ratio4

4.6%

4.9%

4.6%

Average tier 1 capital4 (£bn)

50.0

51.2

52.3

Average UK leverage exposure4 (£bn)

1,090

1,045

1,130





Funding and liquidity




Group liquidity pool (£bn)

207

220

185

CRD IV liquidity coverage ratio

147%

154%

140%

Loan: deposit ratio5

84%

81%

85%

 

1

Refer to pages 29-33 for further information and calculations of performance measures excluding litigation and conduct.

2

The profit after tax attributable to other equity instrument holders of £171m (Q117: £139m) is offset by a tax credit recorded in reserves of £46m (Q117: £38m). The net amount of £125m (Q117: £101m), along with non-controlling interests, is deducted from profit after tax in order to calculate earnings per share and return on average tangible shareholders' equity.

3

Capital, RWAs and leverage measures are calculated applying the IFRS 9 transitional arrangements under Article 473a of the CRR. For more information refer to the Barclays PLC Pillar 3 Report Q1 2018, located at home.barclays/results.

4

The average UK leverage ratio uses capital based on the last day of each month in the quarter and an exposure measure based on each day in the quarter. The comparatives for the average UK leverage exposure were calculated based on the last day of each month in the quarter. Both exclude qualifying central bank claims from the leverage exposure. The UK leverage ratio was 4.8% (December 2017: 5.1%).

5

Loan: deposit ratio is calculated as loans and advances at amortised cost divided by deposits at amortised cost. Comparatives have been restated based on this approach.

 

Group Finance Director's Review

 

In the first quarter of 2018, both Barclays UK and Barclays International delivered double digit returns, driving a Group RoTE of 11.0% excluding litigation and conduct. While Group statutory profits and capital were impacted by the settlement with the US DoJ regarding RMBS and additional charges relating to PPI, this marked an important step towards resolving significant outstanding legacy litigation and conduct matters. Additionally, on 1 April 2018 Barclays successfully established its ring-fenced bank, Barclays Bank UK PLC (BBUKPLC), nine months ahead of the regulatory deadline. Together with the extensive restructuring completed last year, Barclays is now well-positioned to deliver strong earnings going forward and remains confident of achieving its returns and cost targets. Barclays reiterated the intention to pay a 6.5p dividend for 2018, subject to regulatory approvals.

 

Group performance

 

•

RoTE was 11.0% (Q117: 2.0%) and earnings per share was 7.1p (Q117: 1.5p), excluding litigation and conduct

•

Loss before tax of £236m (Q117: profit of £1,682m) included litigation and conduct charges of £1,961m (Q117: £28m), principally reflecting the £1.4bn settlement relating to RMBS and additional charges of £400m relating to PPI. Excluding these items, profit before tax increased 1% to £1,725m driven by a 45% decrease in credit impairment charges and a 6% reduction in operating expenses, partially offset by an 8% reduction in income. The 12% depreciation of average USD against GBP adversely impacted profits and income, and positively affected credit impairment charges and operating expenses

•

Total income decreased to £5,358m (Q117: £5,823m) driven by a £330m decrease in Barclays International, primarily due to the non-recurrence of a £192m gain relating to an asset sale in US Cards and a £74m valuation gain on Barclays' preference shares in Visa Inc. in Q117, and a £156m decrease in Head Office

•

Credit impairment charges decreased 45% to £288m primarily reflecting single name recoveries in wholesale and the improved macroeconomic forecasts in the US. Impairment declined 73% in Barclays International and increased 13% in Barclays UK. The Group loan loss rate decreased 11bps to 36bps

•

Operating expenses of £5,325m (Q117: £3,619m) included litigation and conduct charges of £1,961m (Q117: £28m), excluding which, Group operating expenses decreased 6% to £3,364m. This was driven by a 6% reduction in Barclays International and the non-recurrence of costs associated with the former Non-Core division. The cost: income ratio, excluding litigation and conduct, was 63% (Q117: 62%)

 

Barclays UK

 

•

RoTE declined to negative 1.1% (Q117: positive 21.6%) due to additional charges of £400m (Q117: £nil) relating to PPI. Excluding litigation and conduct charges, RoTE was 15.7% (Q117: 21.5%) as profit before tax decreased 17% to £581m

•

Total income decreased 3% to £1,788m reflecting the non-recurrence of a valuation gain on Barclays' preference shares in Visa Inc. in Q117 and customer remediation provisions

 

-

Personal Banking income decreased 6% to £889m driven by the non-recurrence of the Visa gain and a customer remediation provision

 

-

Barclaycard Consumer UK income increased 6% to £527m

 

-

Wealth, Entrepreneurs & Business Banking (WEBB) income decreased 7% to £372m driven by a customer remediation provision

•

Net interest margin decreased 42bps to 3.27% reflecting the integration of the Education, Social Housing and Local Authority (ESHLA) portfolio

•

Credit impairment charges increased 13% to £201m driven by increased impairment in Personal Banking and a single name case in WEBB, however 30 and 90 day arrears rates in UK cards remained flat at 2.0% (Q117: 2.0%) and 0.9% (Q117: 0.9%), respectively

•

Operating expenses excluding litigation and conduct increased 5% to £1,005m due to continued investment in digitising the bank, resulting in a cost: income ratio of 56% (Q117: 52%)

•

RWAs increased to £72.5bn (December 2017: £70.9bn) predominantly as a result of IFRS 9 implementation and asset transfers in preparation for structural reform

 

Barclays International

 

•

Profit before tax increased 4% to £1,413m resulting in a RoTE of 13.4% (Q117: 12.5%), reflecting double digit returns in both CIB and Consumer, Cards and Payments of 13.0% (Q117: 8.2%) and 15.6% (Q117: 36.4%), respectively

•

The 12% depreciation of average USD against GBP adversely impacted profits and income, and positively affected credit impairment charges and operating expenses

•

Total income decreased 8% to £3,808m


-

CIB income increased 1% to £2,799m as Markets income increased 8% to £1,459m, partially offset by a decrease in Banking income of 4% to £1,337m



-

FICC income decreased 2% to £869m as a strong performance in foreign exchange was offset by a decline in credit



-

Equities income increased 28% to £590m reflecting an improved performance in derivatives as a result of increased client activity and market volatility, and a strong performance in equity financing



-

Banking fee income decreased 6% to £683m from a strong Q117. Global fee share increased across all products compared to Q417 and FY17



-

Corporate lending declined 11% to £240m driven by the reallocation of RWAs within CIB and lower lending balances due to the realignment of clients between Barclays UK and Barclays International in preparation for structural reform, partially offset by lower losses on fair value hedges



-

Transaction banking increased 4% to £414m driven by higher average deposit balances


-

Consumer, Cards and Payments income decreased 26% to £1,009m driven by the non-recurrence of a £192m gain relating to an asset sale in US Cards and a £74m valuation gain on Barclays' preference shares in Visa Inc. in Q117. Excluding these items, income declined 7% reflecting the impact of repositioning the US Cards portfolio towards a lower risk mix, partially offset by underlying growth in US Cards

•

Credit impairment charges decreased 73% to £93m


-

CIB credit impairment charges decreased to a release of £159m (Q117: charge of £51m) primarily due to write-backs and updated macroeconomic forecasts


-

Consumer, Cards and Payments credit impairment charges decreased 15% to £252m due to the impact of repositioning the US Cards portfolio towards a lower risk mix and the improved macroeconomic forecasts in the US, partially offset by increased delinquency rates in US Cards. 30 and 90 day arrears rates within US Cards increased to 2.6% (Q117: 2.3%) and 1.4% (Q117: 1.2%), respectively

•

Operating expenses decreased 5% to £2,315m


-

CIB operating expenses decreased 8% to £1,786m driven by the reduction of restructuring and structural reform costs, and the reduced impact of the change in compensation awards introduced in Q416


-

Consumer, Cards and Payments operating expenses increased 4% to £529m reflecting continued growth and investment

•

RWAs increased to £214.2bn (December 2017: £210.3bn) due to increased trading activity

 

Head Office

 

•

Loss before tax was £1,819m (Q117: £141m)

•

Total income reduced to an expense of £238m (Q117: expense of £82m) reflecting certain legacy capital instrument funding costs now charged to Head Office of £88m in Q118, hedge accounting and an increased net expense from treasury operations

•

Operating expenses increased to £1,594m (Q117: £59m) reflecting an increase in litigation and conduct charges, including the settlement relating to RMBS, and costs associated with former Non-Core assets and businesses which were integrated on 1 July 2017. Excluding litigation and conduct charges, operating expenses were £59m (Q117: £49m)

•

RWAs decreased to £31.2bn (December 2017: £31.8bn)

 

Group capital and leverage

 

•

The CET1 ratio decreased to 12.7% (December 2017: 13.3%) due to a decrease in CET1 capital of £1.3bn to £40.2bn and an increase in RWAs of £4.9bn to £317.9bn


-

Organic capital generation from profits of £1.3bn were more than offset by litigation and conduct charges, including £1.4bn from the settlement relating to RMBS and additional charges of £0.4bn relating to PPI


-

The implementation of IFRS 9 on 1 January 2018 resulted in a net increase in CET1 capital as the £2.2bn decrease in shareholders' equity on initial adoption was more than offset by the application of transitional relief of £1.3bn and the removal of the £1.2bn excess of expected loss over impairment capital deduction


-

The increase in RWAs was principally due to business growth in investment banking businesses, offset by the depreciation of period end USD against GBP

·

The average UK leverage ratio decreased to 4.6% (December 2017: 4.9%) primarily driven by increased exposures due to securities financing transactions and trading portfolio assets trading activity, as well as the decrease in capital

•

Tangible net asset value per share decreased to 251p (December 2017: 276p) primarily due to the impact of the implementation of IFRS 9, litigation and conduct charges in the quarter, and adverse movements across the currency translation and cash flow hedging reserves

 

Group funding and liquidity

 

•

The Group continued to maintain surpluses to its internal and regulatory requirements. The liquidity pool decreased to £207bn (December 2017: £220bn) driven largely by the deployment of funding to support business growth. The liquidity coverage ratio decreased to 147% (December 2017: 154%), equivalent to a surplus of £65bn (December 2017: £75bn) to the 100% requirement

•

Wholesale funding outstanding excluding repurchase agreements was £147bn (December 2017: £144bn). The Group issued £2.4bn equivalent of term senior unsecured debt from Barclays PLC and £2.1bn from Barclays Bank PLC (BBPLC). In the same period, £0.7bn of Barclays PLC senior unsecured debt and £2.2bn of BBPLC subordinated debt were either called or matured

 

Other matters

 

·

In Q118 Barclays reached a settlement with the US Department of Justice (DoJ) to resolve the civil complaint brought by the DoJ in December 2016 relating to Residential Mortgage-Backed Securities (RMBS) sold by Barclays between 2005 and 2007. Barclays has agreed to pay a civil monetary penalty of $2,000m (£1,420m), which was recognised in Q118

·

Additional charges of £400m (Q117: £nil) relating to PPI were recognised mainly as a result of continued higher complaints flow in Q118. The remaining PPI provision as at 31 March 2018 was £1.7bn (December 2017: £1.6bn) to cover claims through to the deadline of 29 August 2019. Management views its current PPI provision as appropriate, but will continue to closely monitor complaint trends and the associated provision adequacy

 

Structural reform

 

·

On 9 March 2018 Barclays was granted approval from the Prudential Regulation Authority (PRA) and the High Court of Justice of England and Wales to implement the "ring-fencing" of Barclays' day-to-day banking services using a legal process called a Ring-Fencing Transfer Scheme (the "Scheme") under Part VII of the Financial Services Markets Act 2000. Barclays implemented the Scheme and established BBUKPLC on 1 April 2018

·

Illustrative, unaudited pro-forma financials as at 31 December 2017 for BBUKPLC and BBPLC have been published and are available at home.barclays/annualreport. More information can be found at home.barclays/about-barclays/ring-fencing-explained

 

IFRS 9 Financial Instruments

 

•

Barclays adopted IFRS 9 Financial Instruments from 1 January 2018, replacing IAS 39 Financial Instruments: Recognition and Measurement. As a result, shareholders' equity decreased by £2.2bn post-tax, equating to a reduction in tangible net asset value of 13p per share as at 31 March 2018. Barclays elected to apply transitional arrangements, as outlined in Capital Requirements Regulation (CRR) Article 473a. For further detail, please refer to the Barclays PLC IFRS 9 Transition Note that can be found at home.barclays/results

•

IFRS 9 requires the recognition of impairment earlier in the lifecycle of a product having considered forward-looking information. As a result, measurement involves more complex judgement with impairment likely to be more volatile as the economic outlook changes. Management continues to closely monitor observed trends

 

Tushar Morzaria, Group Finance Director

 

Quarterly Results Summary

 

Barclays Group












Q118


Q417

Q317

Q2171

Q1171


Q4161

Q3161

Q2161

Income statement information

£m


£m

£m

£m

£m


£m

£m

£m

Net interest income

2,188


2,272

2,475

2,579

2,519


2,523

2,796

2,530

Net fee, commission and other income

3,170


2,750

2,698

2,479

3,304


2,469

2,650

3,442

Total income

5,358


5,022

5,173

5,058

5,823


4,992

5,446

5,972

Credit impairment charges and other provisions

(288)


(573)

(709)

(527)

(527)


(653)

(789)

(488)

Net operating income

5,070


4,449

4,464

4,531

5,296


4,339

4,657

5,484

Operating expenses excluding UK bank levy and litigation and conduct

(3,364)


(3,621)

(3,274)

(3,398)

(3,591)


(3,812)

(3,581)

(3,425)

UK bank levy

-


(365)

-

-

-


(410)

-

-

Litigation and conduct2

(1,961)


(383)

(81)

(715)

(28)


(97)

(741)

(447)

Operating expenses

(5,325)


(4,369)

(3,355)

(4,113)

(3,619)


(4,319)

(4,322)

(3,872)

Other net income/(expenses)

19


13

(2)

241

5


310

502

(342)

(Loss)/profit before tax

(236)


93

1,107

659

1,682


330

837

1,270

Tax (charge)/credit

(304)


(1,138)

(324)

(305)

(473)


50

(328)

(467)

(Loss)/profit after tax in respect of continuing operations

(540)


(1,045)

783

354

1,209


380

509

803

(Loss)/profit after tax in respect of discontinued operation

-


-

-

(1,537)

(658)


71

209

145












Attributable to:











Ordinary equity holders of the parent

(764)


(1,294)

583

(1,401)

190


99

414

677

Other equity instrument holders

171


181

157

162

139


139

110

104

Non-controlling interests in respect of continuing operations

53


68

43

59

79


90

70

92

Non-controlling interests in respect of discontinued operation

-


-

-

(3)

143


123

124

75












Balance sheet information

£bn


£bn

£bn

£bn

£bn


£bn

£bn

£bn

Total assets

1,142.2


1,133.2

1,149.3

1,135.3

1,203.8


1,213.1

1,324.0

1,351.3

Risk weighted assets

317.9


313.0

324.3

327.4

360.9


365.6

373.4

366.3

Average UK leverage exposure

1,089.9


1,044.6

1,035.1

1,092.2

1,130.4


1,137.3

n/a

n/a












Performance measures











Return on average tangible shareholders' equity

(6.5%)


(10.3%)

5.1%

(11.0%)

1.8%


1.1%

3.6%

5.8%

Average tangible shareholders' equity (£bn)

44.2


48.1

48.9

49.3

49.4


48.9

49.4

48.3

Cost: income ratio

99%


87%

65%

81%

62%


87%

79%

65%

Loan loss rate (bps)

36


56

66

49

47


58

66

41

Basic (loss)/earnings per share 

(4.2p)


(7.3p)

3.7p

(8.0p)

1.3p


0.8p

2.6p

4.2p

Basic (loss)/earnings per share in respect of continuing operations

(4.2p)


(7.3p)

3.7p

1.0p

6.1p


1.1p

2.1p

3.8p












Performance measures excluding litigation and conduct2

£m


£m

£m

£m

£m


£m

£m

£m

Profit before tax

1,725


476

1,188

1,374

1,710


427

1,578

1,717

Attributable profit/(loss)

1,166


(943)

660

(698)

209


151

1,140

1,124

Return on average tangible shareholders' equity

11.0%


(7.4%)

5.7%

(5.3%)

2.0%


1.6%

9.5%

9.5%

Cost: income ratio

63%


79%

63%

67%

62%


85%

66%

57%

Basic earnings/(loss) per share

7.1p


(5.3p)

4.1p

(3.8p)

1.5p


1.1p

6.9p

6.8p

 

1

Results include Barclays Non-Core and the Africa Banking discontinued operation; refer to pages 27-28 for further detail.

2

Refer to pages 29-33 for further information and calculations of performance measures excluding litigation and conduct.

 

Quarterly Results by Business

 

Barclays UK












Q118


Q417

Q317

Q217

Q117


Q416

Q316

Q216

Income statement information

£m


£m

£m

£m

£m


£m

£m

£m

Net interest income

1,493


1,540

1,501

1,534

1,511


1,502

1,569

1,476

Net fee, commission and other income

295


330

351

286

330


326

374

467

Total income

1,788


1,870

1,852

1,820

1,841


1,828

1,943

1,943

Credit impairment charges and other provisions

(201)


(184)

(201)

(220)

(178)


(180)

(350)

(220)

Net operating income

1,587


1,686

1,651

1,600

1,663


1,648

1,593

1,723

Operating expenses excluding UK bank levy and litigation and conduct

(1,005)


(1,117)

(980)

(974)

(959)


(989)

(904)

(947)

UK bank levy

-


(59)

-

-

-


(48)

-

-

Litigation and conduct1

(411)


(53)

(11)

(699)

4


(28)

(614)

(399)

Operating expenses

(1,416)


(1,229)

(991)

(1,673)

(955)


(1,065)

(1,518)

(1,346)

Other net (expenses)/income

(1)


(5)

1

(1)

-


-

-

(1)

Profit/(loss) before tax 

170


452

661

(74)

708


583

75

376

Attributable (loss)/profit

(38)


245

423

(285)

470


383

(163)

141












Balance sheet information

£bn


£bn

£bn

£bn

£bn


£bn

£bn

£bn

Loans and advances to customers at amortised cost

184.3


183.8

182.2

166.6

164.5


166.4

166.6

166.0

Total assets

235.2


237.4

230.4

203.4

203.0


209.6

209.1

204.6

Customer deposits at amortised cost

192.0


193.4

189.3

187.4

184.4


189.0

185.5

181.7

Loan: deposit ratio2

96%


95%

97%

89%

90%


89%

91%

92%

Risk weighted assets

72.5


70.9

70.0

66.1

66.3


67.5

67.4

67.1

Period end allocated tangible equity

9.8


9.6

9.5

8.6

8.8


8.5

8.5

8.6












Performance measures











Return on average allocated tangible equity

(1.1%)


10.7%

18.4%

(12.7%)

21.6%


18.2%

(7.1%)

6.6%

Average allocated tangible equity (£bn)

9.8


9.6

9.4

8.7

8.9


8.6

8.7

9.0

Cost: income ratio

79%


66%

54%

92%

52%


58%

78%

69%

Loan loss rate (bps)

43


39

43

52

43


42

82

52

Net interest margin

3.27%


3.32%

3.28%

3.70%

3.69%


3.56%

3.72%

3.56%












Performance measures excluding litigation and conduct1

£m


£m

£m

£m

£m


£m

£m

£m

Profit before tax 

581


505

672

625

704


611

689

775

Attributable profit

373


282

431

406

467


380

464

551

Return on average allocated tangible equity

15.7%


12.3%

18.7%

19.1%

21.5%


18.0%

21.6%

24.9%

Cost: income ratio

56%


63%

53%

54%

52%


57%

47%

49%

 

1

Refer to pages 29-33 for further information and calculations of performance measures excluding litigation and conduct.

2

Loan: deposit ratio is calculated as loans and advances to customers at amortised cost and loans and advances to banks at amortised cost of £0.4bn (Q417: £0.5bn), divided by customer deposits at amortised cost and deposits from banks at amortised cost of £nil (Q417: £nil). Comparatives have been restated to include loans and advances to banks at amortised cost and deposits from banks at amortised cost.

 

Analysis of Barclays UK












Q118


Q417

Q317

Q217

Q117


Q416

Q316

Q216

Analysis of total income

£m


£m

£m

£m

£m


£m

£m

£m

Personal Banking

889


1,020

926

933

944


934

970

1,068

Barclaycard Consumer UK

527


445

539

495

498


507

561

463

Wealth, Entrepreneurs & Business Banking

372


405

387

392

399


387

412

412

Total income

1,788


1,870

1,852

1,820

1,841


1,828

1,943

1,943












Analysis of credit impairment (charges)/releases and other provisions











Personal Banking

(76)


(56)

(60)

(56)

(50)


(50)

(47)

(44)

Barclaycard Consumer UK

(113)


(124)

(145)

(149)

(123)


(118)

(291)

(169)

Wealth, Entrepreneurs & Business Banking

(12)


(4)

4

(15)

(5)


(12)

(12)

(7)

Total credit impairment charges and other provisions

(201)


(184)

(201)

(220)

(178)


(180)

(350)

(220)












Analysis of loans and advances to customers at amortised cost

£bn


£bn

£bn

£bn

£bn


£bn

£bn

£bn

Personal Banking

140.5


139.8

138.4

136.5

134.4


135.0

135.3

134.7

Barclaycard Consumer UK

15.2


16.4

16.3

16.2

16.1


16.5

16.2

16.2

Wealth, Entrepreneurs & Business Banking

28.6


27.6

27.5

13.9

14.0


14.9

15.1

15.1

Total loans and advances to customers at amortised cost

184.3


183.8

182.2

166.6

164.5


166.4

166.6

166.0












Analysis of customer deposits at

amortised cost











Personal Banking

141.4


141.1

140.1

138.5

137.3


139.3

137.2

134.8

Barclaycard Consumer UK

-


-

-

-

-


-

-

-

Wealth, Entrepreneurs & Business Banking

50.6


52.3

49.2

48.9

47.1


49.7

48.3

46.9

Total customer deposits at amortised cost

192.0


193.4

189.3

187.4

184.4


189.0

185.5

181.7

 

Barclays International












Q118


Q417

Q317

Q217

Q117


Q416

Q316

Q216

Income statement information

£m


£m

£m

£m

£m


£m

£m

£m

Net interest income

1,013


987

1,148

1,060

1,112


1,046

1,355

1,001

Net trading income

1,416


935

815

1,039

1,182


1,131

1,074

1,130

Net fee, commission and other income

1,379


1,397

1,352

1,511

1,844


1,415

1,422

1,908

Total income

3,808


3,319

3,315

3,610

4,138


3,592

3,851

4,039

Credit impairment charges and other provisions

(93)


(386)

(495)

(279)

(346)


(426)

(420)

(240)

Net operating income

3,715


2,933

2,820

3,331

3,792


3,166

3,431

3,799

Operating expenses excluding UK bank levy and litigation and conduct

(2,300)


(2,428)

(2,182)

(2,276)

(2,435)


(2,497)

(2,337)

(2,074)

UK bank levy

-


(265)

-

-

-


(284)

-

-

Litigation and conduct1

(15)


(255)

(5)

4

(13)


(17)

(17)

(10)

Operating expenses

(2,315)


(2,948)

(2,187)

(2,272)

(2,448)


(2,798)

(2,354)

(2,084)

Other net income

13


21

19

202

12


5

8

11

Profit before tax

1,413


6

652

1,261

1,356


373

1,085

1,726

Attributable profit/(loss)

973


(1,168)

359

819

837


43

623

1,171












Balance sheet information

£bn


£bn

£bn

£bn

£bn


£bn

£bn

£bn

Loans and advances at amortised cost2

117.5


126.8

134.4

135.2

145.5


153.7

152.7

149.4

Trading portfolio assets

114.9


113.0

91.2

83.3

83.0


73.2

73.8

68.1

Derivative financial instrument assets

214.1


236.2

242.8

108.4

105.3


156.2

155.6

181.4

Derivative financial instrument liabilities

210.8


237.8

242.9

116.8

112.8


160.6

160.5

187.5

Reverse repurchase agreements and other similar secured lending

0.4


12.4

15.5

17.2

17.6


13.4

17.3

19.7

Financial assets at fair value through the income statement

150.6


104.1

103.7

94.1

81.3


62.3

72.0

68.3

Total assets

866.6


856.1

867.1

681.6

677.2


648.5

681.9

679.9

Deposits at amortised cost2

167.2


187.3

191.9

192.0

189.4


184.7

175.7

175.0

Loan: deposit ratio3

70%


68%

70%

70%

77%


83%

87%

85%

Risk weighted assets

214.2


210.3

218.2

212.2

214.3


212.7

214.6

209.3

Period end allocated tangible equity

30.0


27.5

28.0

26.8

27.1


25.6

25.9

25.3












Performance measures











Return on average allocated tangible equity

13.4%


(15.9%)

5.4%

12.4%

12.5%


1.0%

10.0%

19.2%

Average allocated tangible equity (£bn)

30.1


28.5

28.9

27.4

27.7


26.6

25.7

24.8

Cost: income ratio

61%


89%

66%

63%

59%


78%

61%

52%

Loan loss rate (bps)

31


76

88

54

62


78

71

41

Net interest margin

4.57%


4.31%

4.21%

4.07%

4.06%


3.91%

4.21%

3.92%












Performance measures excluding litigation and conduct1

£m


£m

£m

£m

£m


£m

£m

£m

Profit before tax

1,428


261

657

1,257

1,369


390

1,102

1,736

Attributable profit/(loss)

985


(918)

363

816

846


57

640

1,181

Return on average allocated tangible equity

13.6%


(12.4%)

5.5%

12.3%

12.6%


1.2%

10.3%

19.3%

Cost: income ratio

60%


81%

66%

63%

59%


77%

61%

51%

 

1

Refer to pages 29-33 for further information and calculations of performance measures excluding litigation and conduct.

2

Loans and advances at amortised cost have been restated to exclude cash collateral and settlement balances. Deposits at amortised cost have been restated to include deposits from banks and customers at amortised cost, and exclude cash collateral and settlement balances.

3

Loan: deposit ratio is calculated as loans and advances at amortised cost divided by deposits at amortised cost. Comparatives have been restated based on this approach.

 

Analysis of Barclays International






















Corporate and Investment Bank

Q118


Q417

Q317

Q217

Q117


Q416

Q316

Q216

Income statement information

£m


£m

£m

£m

£m


£m

£m

£m

FICC1

869


607

627

752

889


766

947

881

Equities

590


362

350

455

462


410

461

406

Markets

1,459


969

977

1,207

1,351


1,176

1,408

1,287

Banking fees

683


605

607

674

726


650

644

622

Corporate lending

240


269

277

278

269


303

284

312

Transaction banking

414


408

419

404

398


401

458

390

Banking

1,337


1,282

1,303

1,356

1,393


1,354

1,386

1,324

Other

3


1

-

1

38


1

1

-

Total income

2,799


2,252

2,280

2,564

2,782


2,531

2,795

2,611

Credit impairment releases/(charges) and other provisions

159


(127)

(36)

1

(51)


(90)

(38)

(37)

Operating expenses

(1,786)


(2,384)

(1,661)

(1,756)

(1,941)


(2,287)

(1,872)

(1,665)

Other net income

3


7

10

116

-


1

-

-

Profit/(loss) before tax

1,175


(252)

593

925

790


155

885

909












Balance sheet information

£bn


£bn

£bn

£bn

£bn


£bn

£bn

£bn

Loans and advances at amortised cost2

81.3


88.2

95.4

96.7

106.8


114.0

115.9

114.0

Deposits at amortised cost2

107.6


128.0

133.4

134.1

131.0


134.0

126.7

127.4

Risk weighted assets

181.3


176.2

185.2

178.9

180.6


178.6

182.5

178.4












Performance measures











Return on average allocated tangible equity

13.0%


(20.2%)

5.9%

11.1%

8.2%


(1.2%)

9.2%

9.5%

Average allocated tangible equity (£bn)

25.6


24.3

24.8

23.3

23.5


22.6

21.9

21.3












Consumer, Cards and Payments











Income statement information

£m


£m

£m

£m

£m


£m

£m

£m

Total income

1,009


1,067

1,035

1,046

1,356


1,061

1,056

1,428

Credit impairment charges and other provisions

(252)


(259)

(459)

(280)

(295)


(336)

(382)

(203)

Operating expenses

(529)


(564)

(526)

(516)

(507)


(511)

(482)

(419)

Other net income

10


14

9

86

12


4

8

11

Profit before tax

238


258

59

336

566


218

200

817












Balance sheet information

£bn


£bn

£bn

£bn

£bn


£bn

£bn

£bn

Loans and advances at amortised cost2

36.2


38.6

39.0

38.5

38.7


39.7

36.8

35.4

Deposits at amortised cost2

59.6


59.3

58.5

57.9

58.4


50.7

49.0

47.6

Risk weighted assets

32.9


34.1

 33.0

 33.3

 33.7


 34.1

 32.1

 30.9












Performance measures











Return on average allocated tangible equity

15.6%


8.9%

2.2%

19.4%

36.4%


13.2%

14.8%

77.9%

Average allocated tangible equity (£bn)

4.5


4.2

 4.2

 4.1

 4.2


 4.0

 3.7

 3.5

 

1

Fixed income, currencies and commodities (FICC) is composed of Credit and Macro income which were previously reported separately.

2

Loans and advances at amortised cost have been restated to exclude cash collateral and settlement balances. Deposits at amortised cost have been restated to include deposits from banks and customers at amortised cost, and exclude cash collateral and settlement balances.

 

Head Office












Q118


Q417

Q317

Q217

Q117


Q416

Q316

Q216

Income statement information

£m


£m

£m

£m

£m


£m

£m

£m

Net interest income

(318)


(254)

(174)

108

(115)


29

(206)

14

Net fee, commission and other income1

80


87

180

(24)

33


(38)

17

320

Total income

(238)


(167)

6

84

(82)


(9)

(189)

334

Credit impairment releases/(charges) and other provisions 

6


(3)

(13)

(1)

-


-

1

(2)

Net operating (expenses)/income

(232)


(170)

(7)

83

(82)


(9)

(188)

332

Operating expenses excluding UK bank levy and litigation and conduct

(59)


(76)

(112)

(40)

(49)


15

(29)

(36)

UK bank levy

-


(41)

-

-

-


(2)

-

-

Litigation and conduct2

(1,535)


(75)

(65)

(1)

(10)


(1)

(8)

(11)

Operating expenses

(1,594)


(192)

(177)

(41)

(59)


12

(37)

(47)

Other net income/(expenses)

7


(3)

(22)

(164)

-


159

(4)

(28)

(Loss)/profit before tax

(1,819)


(365)

(206)

(122)

(141)


162

(229)

257

Attributable (loss)/profit

(1,699)


(371)

(199)

(175)

(123)


223

(203)

182












Balance sheet information

£bn


£bn

£bn

£bn

£bn


£bn

£bn

£bn

Total assets

40.4


39.7

 51.7

 17.3

 74.5


 75.2

 73.3

 87.7

Risk weighted assets3

31.2


31.8

 36.1

26.2

52.9


53.3

 47.5

 43.2

Period end allocated tangible equity

3.0


10.0

 10.4

9.0

8.8


9.7

 6.9

 7.1












Performance measures











Average allocated tangible equity (£bn)

4.3


10.0

 10.5

 8.8

 7.6


 7.2

 7.4

 6.6












Performance measures excluding litigation and conduct2

£m


£m

£m

£m

£m


£m

£m

£m

(Loss)/profit before tax

(284)


(290)

(141)

(121)

(131)


163

(221)

268

Attributable (loss)/profit

(192)


(307)

(134)

(174)

(116)


224

(195)

189

 

1

Following the early adoption of the own credit provisions of IFRS 9 on 1 January 2017, own credit, which was previously reported in net fee, commission and other income, is recognised within other comprehensive income from Q117.

2

Refer to pages 29-33 for further information and calculations of performance measures excluding litigation and conduct.

3

Includes Africa Banking RWAs of £6.4bn (December 2017: £6.4bn).

 

Performance Management

 

Margins and balances









Three months ended 31.03.18


Three months ended 31.03.17


Net interest income

Average customer assets

Net interest margin


Net interest income

Average customer assets

Net interest margin


£m

£m

%


£m

£m

%

Barclays UK

 1,493

 185,351

3.27


 1,511

 166,065

3.69

Barclays International1

 1,065

 94,530

4.57


 1,121

 112,060

4.06

Total Barclays UK and Barclays International

 2,558

 279,881

3.71


 2,632

 278,125

3.84

Other2

(370)




(113)



Total Barclays Group3

 2,188




 2,519



 

1

Barclays International margins include interest earning lending balances within the investment banking business.

2

Other includes Head Office and non-interest earning lending balances within the investment banking business. Barclays Non-Core is included in the comparative period.

3

Group net interest income includes net structural hedge contributions of £0.2bn (Q117: £0.4bn).

 

Quarterly analysis for Barclays UK and Barclays International




Net interest income

Average customer assets

Net interest margin

Three months ended 31.12.17

£m

£m

%

Barclays UK

 1,540

 184,058

3.32

Barclays International1

 1,071

 98,500

4.31

Total Barclays UK and Barclays International

 2,611

 282,558

3.67





Three months ended 30.09.17




Barclays UK

 1,501

 181,419

3.28

Barclays International1

 1,070

 100,828

4.21

Total Barclays UK and Barclays International

 2,571

 282,247

3.61





Three months ended 30.06.17




Barclays UK

 1,534

 166,345

3.70

Barclays International1

 1,064

 104,899

4.07

Total Barclays UK and Barclays International

 2,598

 271,244

3.84





Three months ended 31.03.17




Barclays UK

 1,511

 166,065

3.69

Barclays International1

 1,121

 112,060

4.06

Total Barclays UK and Barclays International

 2,632

 278,125

3.84

 

1

Barclays International margins include interest earning lending balances within the investment banking business.

 

Credit Risk

 

Financial instruments subject to impairment


As at 31.03.18


As at 01.01.181


Gross exposure2

Impairment allowance2

Net exposure


Gross exposure2

Impairment allowance2

Net exposure


£m

£m

£m


£m

£m

£m

Home loans

147,514

468

147,046


146,973

464

146,509

Cards, unsecured loans and other retail lending

56,548

5,279

51,269


58,792

5,266

53,526

Corporate loans

121,928

1,158

120,770


118,525

1,378

117,147

Loans and advances at amortised cost

325,990

6,905

319,085


324,290

7,108

317,182

Off-balance sheet loan commitments and financial guarantee contracts

331,720

252

331,468


334,573

420

334,153

Total

657,710

7,157

650,553


658,863

7,528

651,335

 

1

Comparatives are as at 1 January 2018 to reflect the adoption of IFRS 9 from this date. 

2

Excludes gross exposure of £63.7bn (1 January 2018: £53.2bn) and impairment allowance of £4m (1 January 2018: £3m) on financial assets at fair value through other comprehensive income.

 

Analysis of loans and advances at amortised cost and off-balance sheet exposures

 

As at 31.03.18


Three months ended 31.03.18


Gross exposure

Impairment allowance

Net

 exposure

Coverage

 ratio


Impairment charge1

Loan loss

rate


£m

£m

£m

%


£m

bps

Barclays UK

159,349

2,709

156,640

1.7


180

46

Barclays International

29,277

2,583

26,694

8.8


251

348

Head Office

8,626

362

8,264

4.2


9

42

Total Group retail

197,252

5,654

191,598

2.9


440

90

Barclays UK

28,279

231

28,048

0.8


21

30

Barclays International

91,722

964

90,758

1.1


(158)

(70)

Head Office

8,737

56

8,681

0.6


(16)

(74)

Total Group wholesale

128,738

1,251

127,487

1.0


(153)

(48)

Total loans and advances at amortised cost

325,990

6,905

319,085

2.1


287

36

Off-balance sheet loan commitments and financial guarantee contracts

331,720

252

331,468

0.1




Total

657,710

7,157

650,553

1.1













As at 01.01.182





Gross exposure

Impairment allowance

Net

 exposure

Coverage

 ratio





£m

£m

£m

%




Barclays UK

158,787

2,594

156,193

1.6




Barclays International

30,944

2,676

28,268

8.6




Head Office

9,046

364

8,682

4.0




Total Group retail

198,777

5,634

193,143

2.8




Barclays UK

27,807

227

27,580

0.8




Barclays International

88,804

1,182

87,622

1.3




Head Office

8,902

65

8,837

0.7




Total Group wholesale

125,513

1,474

124,039

1.2




Total loans and advances at amortised cost

324,290

7,108

317,182

2.2




Off-balance sheet loan commitments and financial guarantee contracts

334,573

420

334,153

0.1




Total

658,863

7,528

651,335

1.1




 

1

Includes impairment charges on loans and advances at amortised cost, and off-balance sheet loan commitments and financial guarantee contracts. Excludes impairment charge of £1m on financial assets at fair value through other comprehensive income.

2

Comparatives are as at 1 January 2018 to reflect the adoption of IFRS 9 from this date.

 

Treasury and Capital Risk

 

Capital ratios

As at

As at

31.03.18

31.12.17

CET11

12.7%

13.3%

Tier 1 (T1)

16.4%

17.2%

Total capital

20.3%

21.5%

  



Capital resources

£m

£m

Total equity excluding non-controlling interests per the balance sheet

 59,519

63,905

Less: other equity instruments (recognised as additional tier 1 (AT1) capital)

(8,941)

(8,941)

Adjustment to retained earnings for foreseeable dividends

(664)

(392)




Other regulatory adjustments and deductions:



Additional value adjustments (PVA)

(1,365)

(1,385)

Goodwill and intangible assets

(7,858)

(7,908)

Deferred tax assets that rely on future profitability excluding temporary differences

(525)

(593)

Fair value reserves related to gains or losses on cash flow hedges

(709)

(1,161)

Excess of expected losses over impairment

-

(1,239)

Gains or losses on liabilities at fair value resulting from own credit

120

83

Defined benefit pension fund assets

(565)

(732)

Direct and indirect holdings by an institution of own CET1 instruments

(50)

(50)

Adjustment under IFRS 9 transitional arrangements

1,314

-

Other regulatory adjustments

(30)

(22)

CET1 capital1

40,246

41,565




AT1 capital2



Capital instruments and related share premium accounts

8,941

8,941

Qualifying AT1 capital (including minority interests) issued by subsidiaries

3,053

3,538

Other regulatory adjustments and deductions

(130)

(130)

AT1 capital

11,864

12,349




T1 capital

52,110

53,914

  



Tier 2 (T2) capital2



Capital instruments and related share premium accounts

6,293

6,472

Qualifying T2 capital (including minority interests) issued by subsidiaries

6,253

7,040

Credit risk adjustments (excess of impairment over expected losses)

143

-

Other regulatory adjustments and deductions

(251)

(251)

Total regulatory capital

64,548

67,175




Total RWAs1

317,946

313,033

 

1

CET1 capital and RWAs are calculated applying the IFRS 9 transitional arrangements under Article 473a of the CRR. For more information refer to the Barclays PLC Pillar 3 Report Q1 2018, located at home.barclays/results.

2

AT1 and T2 capital are calculated applying the grandfathering of CRR non-compliant capital instruments. For further information on the relevant ratio for AT1 securities refer to the Barclays PLC Pillar 3 Report Q1 2018.

 

Movement in CET1 capital

Three months

ended

31.03.18

£m

Opening CET1 capital

41,565



Effects of changes in accounting policies

(2,150)



Loss for the period attributable to equity holders

(593)

Own credit relating to derivative liabilities

(19)

Dividends paid and foreseen

(397)

Decrease in retained regulatory capital generated from earnings

(1,009)



Net impact of share schemes

(330)

Fair value through other comprehensive income reserve

64

Currency translation reserve

(602)

Other reserves

23

Decrease in other qualifying reserves

(845)



Pension re-measurements within reserves

(165)

Defined benefit pension fund asset deduction

167

Net impact of pensions

2



Additional value adjustments (PVA)

20

Goodwill and intangible assets

50

Deferred tax assets that rely on future profitability excluding those arising from temporary differences

68

Excess of expected loss over impairment

1,239

Adjustment under IFRS 9 transitional arrangements

1,314

Other regulatory adjustments

(8)

Increase in regulatory capital due to adjustments and deductions

2,683



Closing CET1 capital

40,246

 

CET1 capital decreased £1.3bn to £40.2bn due to the following significant movements:

 

•

A £0.6bn loss for the period attributable to equity holders as organic capital generation from profits of £1.3bn was more than offset by litigation and conduct charges, which included a £1.4bn settlement relating to RMBS

•

A £0.4bn decrease due to dividends paid and foreseen

•

A £0.3bn decrease largely due to the purchase of share awards

•

A £0.6bn decrease in the currency translation reserve driven by the depreciation of period end USD against GBP

 

The implementation of IFRS 9 resulted in a net increase in CET1 capital as the initial decrease in shareholders' equity of £2.2bn on implementation was more than offset by the transitional relief of £1.3bn and the removal of £1.2bn of regulatory deduction for the excess of expected loss over impairment.

 

The UK Retirement Fund, which is the Group's main pension scheme, was in an IAS 19 surplus position of £0.7bn (December 2017: £1.0bn). As a surplus position is deducted from capital, and as no deficit reduction contributions were made in the quarter, there was no impact from pensions on the CET1 ratio in the quarter.

 

 Risk weighted assets (RWAs) by risk type and business


Credit risk


Counterparty credit risk


Market risk


Operational risk

Total RWAs


Std

IRB


Std

IRB

Settlement risk

CVA


Std

IMA




As at 31.03.18

£m

£m


£m

£m

£m

£m


£m

£m


£m

£m

Barclays UK

3,245

57,113


-

-

-

-


-

-


12,167

72,525

Barclays International

47,546

71,889


17,818

16,999

72

2,491


16,117

13,583


27,708

214,223

Head Office1

2,827

8,995


109

506

-

230


102

1,644


16,785

31,198

Barclays Group

53,618

137,997


17,927

17,505

72

2,721


16,219

15,227


56,660

317,946















As at 31.12.17









Barclays UK

3,811

54,955


-

-

-

-


-

-


12,167

70,933

Barclays International

49,058

69,520


17,000

17,243

101

2,776


13,313

13,547


27,708

210,266

Head Office1

2,907

9,766


65

633

-

225


88

1,365


16,785

31,834

Barclays Group

55,776

134,241


17,065

17,876

101

3,001


13,401

14,912


56,660

313,033

 

1

Includes Africa Banking RWAs.

 

Movement analysis of RWAs


Credit risk

Counterparty credit risk

Market risk

Operational risk

Total RWAs

Three months ended 31.03.18

£bn

£bn

£bn

£bn

£bn

Opening RWAs

190.0

38.0

28.3

56.7

313.0

Book size

3.9

1.2

2.8

-

7.9

Acquisitions and disposals

-

-

-

-

-

Book quality

(0.7)

(0.2)

-

-

(0.9)

Model updates

(0.6)

-

-

-

(0.6)

Methodology and policy

0.9

(0.7)

0.3

-

0.5

Foreign exchange movements1

(1.9)

-

-

-

(1.9)

Closing RWAs

191.6

38.3

31.4

56.7

317.9

 

1

Foreign exchange movement does not include foreign exchange for counterparty credit risk or market risk.

 

RWAs increased £4.9bn to £317.9bn:

 

•

Book size increased RWAs £7.9bn primarily as a result of business growth, and increased derivatives portfolio and securities financing transaction trading activity in investment banking businesses

•

Foreign exchange movements decreased RWAs £1.9bn primarily due to the depreciation of period end USD against GBP

 

Leverage ratio and exposures

 

Barclays is subject to a UK leverage ratio requirement that is implemented on a phased basis, with a transitional requirement of 3.6% as at 31 March 2018; this comprises the 3.25% minimum requirement, a transitional G-SII additional leverage ratio buffer (G-SII ALRB) of 0.39% and a countercyclical leverage ratio buffer (CCLB) which is currently nil. Although the leverage ratio is expressed in terms of tier 1 capital, 75% of the minimum requirement, equating to 2.4375%, needs to be met with CET1 capital. In addition, the G-SII ALRB and CCLB must be covered solely with CET1 capital. The CET1 capital held against the 0.39% transitional G-SII ALRB was £4.1bn. The fully loaded UK leverage requirement is expected to be 4.0%.

 

From Q118, following the end of the transitional period, Barclays is required to disclose an average UK leverage ratio which is based on capital on the last day of each month in the quarter and an exposure measure for each day in the quarter. During the transitional period, the exposure measure was based on the last day of each month in the quarter. Barclays is also required to disclose a UK leverage ratio based on capital and exposure on the last day of the quarter. Both approaches exclude qualifying claims on central banks from the leverage exposures.

 

As at

31.03.18

As at

31.12.17

Leverage ratios

£bn

£bn

Average tier 1 capital1

50.0

51.2

Average UK leverage exposure2,3

1,090

1,045

Average UK leverage ratio

4.6%

4.9%

UK leverage ratio

4.8%

5.1%




CET1 capital

40.2

41.6

AT1 capital

8.8

8.8

Tier 1 capital1

49.1

50.4




Leverage exposure



Accounting assets



Derivative financial instruments

215

238

Derivative cash collateral

52

53

Securities financing transactions

128

113

Loans and advances and other assets

747

729

Total IFRS assets

1,142

1,133




Regulatory consolidation adjustments

8

8




Derivatives adjustments



Derivatives netting

(195)

(217)

Adjustments to cash collateral

(34)

(42)

Net written credit protection

18

14

Potential future exposure (PFE) on derivatives

121

120

Total derivatives adjustments

(90)

(125)




Securities financing transactions (SFTs) adjustments

20

19




Regulatory deductions and other adjustments

(10)

(13)




Weighted off-balance sheet commitments

101

103




Qualifying central bank claims

(140)

(140)




UK leverage exposure3

1,031

985

 

1

The tier 1 capital is calculated in line with the PRA Handbook, which excludes grandfathered AT1 instruments allowed under CRR.

2

The average UK leverage exposure as at 31 December 2017 was calculated based on the last day of each month in the quarter.

3

Capital and leverage measures are calculated applying the IFRS 9 transitional arrangements under Article 473a of the CRR. For more information refer to the Barclays PLC Pillar 3 Report Q1 2018, located at home.barclays/results.

 

The average UK leverage ratio decreased to 4.6% (December 2017: 4.9%) partially driven by the change to the daily exposure measure. Average UK leverage exposures increased due to higher trading activity in SFTs and trading portfolio assets. Tier 1 capital decreased, primarily due to settlement of litigation and conduct charges.

 

The UK leverage ratio decreased to 4.8% (December 2017: 5.1%) due to a decrease in the tier 1 capital to £49.1bn (December 2017: £50.4bn) primarily driven by £2.0bn of litigation and conduct charges and an increase in UK leverage exposure to £1,031bn (December 2017: £985bn).

 

•

Loans and advances and other assets increased £18bn to £747bn primarily driven by a £11bn increase in holdings of government securities and a £10bn increase in settlement balances, offset by a £14bn decrease in cash and balances at central banks held as part of the Group liquidity pool

•

SFTs increased £15bn to £128bn primarily driven by matched book trading activity

•

Net derivative leverage exposures, excluding net written credit protection and PFE on derivatives, increased £6bn to £38bn primarily driven by reduced collateral netting

 

The difference between the average UK leverage ratio and the UK leverage ratio was primarily driven by lower SFTs, trading portfolio assets and settlement exposures at quarter end.  

 

Barclays is also required to disclose a CRR leverage ratio. This is included in the additional Barclays regulatory disclosures, prepared in accordance with European Banking Authority (EBA) guidelines on disclosure requirements under Part Eight of Regulation (EU) No 575/2013 (see Barclays PLC Pillar 3 Report Q1 2018), which will be disclosed on 26 April 2018, available at home.barclays/results.

 

Minimum requirement for own funds and eligible liabilities (MREL) 

 

Under the Bank of England's statement of policy on MREL, the Bank of England will set MREL for UK Global Systemically Important Banks (G-SIBs) as necessary to implement the total loss-absorbing capacity (TLAC) standard. Institution or group-specific MREL requirements will depend on the preferred resolution strategy for that institution or group.

 

The MREL requirements will be phased in from 1 January 2019 and will be fully implemented by 1 January 2022, at which time G-SIBs with resolution entities incorporated in the UK, including Barclays, will be required to meet an MREL equivalent to the higher of either: (i) two times the sum of its Pillar 1 and Pillar 2A requirements or; (ii) the higher of two times its leverage ratio or 6.75% of leverage exposures. However, the PRA will review the MREL calibration by the end of 2020, including assessing the proposal for Pillar 2A recapitalisation which may drive a different 1 January 2022 MREL requirement than currently proposed. In addition, it is proposed that CET1 capital cannot be counted towards both MREL and the combined buffer requirement (CBR), meaning that the CBR will effectively be applied above both the Pillar 1 and Pillar 2A requirements relating to own funds and MREL.

 

Barclays' indicative MREL requirement is currently expected to be 29.1% of RWAs from 1 January 2022 consisting of the following components:

 

·

Loss absorption and recapitalisation amounts consisting of 8% Pillar 1 and 4.3% Pillar 2A buffers

·

Regulatory buffers including a 1.5% G-SII buffer, 2.5% CCB and 0.5% from the planned introduction of a 1% CCyB for the UK1

 

MREL ratios and position






MREL ratios

As at

31.03.18

As at

31.12.17

CET1 capital2

12.7%

13.3%

AT1 capital instruments and related share premium accounts

2.8%

2.9%

T2 capital instruments and related share premium accounts

2.0%

2.1%

Term senior unsecured funding

7.2%

6.8%

Total Barclays PLC (the Parent company) MREL ratio

24.7%

25.0%

Qualifying AT1 capital (including minority interests) issued by subsidiaries3

0.9%

1.1%

Qualifying T2 capital (including minority interests) issued by subsidiaries3

1.9%

2.2%

Total MREL ratio including eligible BBPLC instruments

27.5%

28.2%




MREL position

£m

£m

CET1 capital2

40,246

41,565

AT1 capital instruments and related share premium accounts

8,941

8,941

T2 capital instruments and related share premium accounts

6,293

6,472

Term senior unsecured funding

22,921

21,166

Total Barclays PLC (the Parent company) MREL position

78,401

78,144

Qualifying AT1 capital (including minority interests) issued by subsidiaries3

2,923

3,408

Qualifying T2 capital (including minority interests) issued by subsidiaries3

6,145

6,789

Total MREL position including eligible BBPLC instruments

87,469

88,341




Total RWAs2

317,946

313,033

 

1

2022 requirements subject to Bank of England review by the end of 2020.

2

CET1 capital and RWAs are calculated applying IFRS 9 transitional arrangements under Article 473a of the CRR.

3

Includes other AT1 capital regulatory adjustments and deductions of £130m (December 2017: £130m) and T2 credit risk adjustments and other regulatory adjustments and deductions of £108m (December 2017: £251m).

 

Condensed Consolidated Financial Statements

 

Consolidated summary income statement




Three months ended

Three months ended


31.03.18

31.03.17


£m

£m

Total income

5,358

5,823

Credit impairment charges and other provisions

(288)

(527)

Net operating income

5,070

5,296

Operating expenses excluding litigation and conduct

(3,364)

(3,591)

Litigation and conduct

(1,961)

(28)

Operating expenses

(5,325)

(3,619)

Other net income

19

5

(Loss)/profit before tax

(236)

1,682

Tax charge

(304)

(473)

(Loss)/profit after tax in respect of continuing operations

(540)

1,209

Loss after tax in respect of discontinued operation

-

(658)

(Loss)/profit after tax

(540)

551




Attributable to:



Ordinary equity holders of the parent

(764)

190

Other equity instrument holders1

171

139

Total equity holders

(593)

329

Non-controlling interests in respect of continuing operations

53

79

Non-controlling interests in respect of discontinued operation

-

143

(Loss)/profit after tax

(540)

551




Earnings per share



Basic (loss)/earnings per ordinary share1

(4.2p)

1.3p

Basic (loss)/earnings per ordinary share in respect of continuing operations1

(4.2p)

6.1p

Basic loss per ordinary share in respect of discontinued operation

-

(4.8p)

 

1

The profit after tax attributable to other equity instrument holders of £171m (Q117: £139m) is offset by a tax credit recorded in reserves of £46m (Q117: £38m). The net amount of £125m (Q117: £101m), along with non-controlling interests, is deducted from profit after tax in order to calculate earnings per share and return on average tangible shareholders' equity.

 

Consolidated summary balance sheet




As at

As at


31.03.18

01.01.181

Assets

£m

£m

Cash and balances at central banks

157,332

171,082

Cash collateral and settlement balances

86,714

74,779

Loans and advances at amortised cost

319,085

317,182

Reverse repurchase agreements and other similar secured lending

1,082

597

Trading portfolio assets

115,819

114,173

Financial assets at fair value through the income statement

160,341

140,211

Derivative financial instruments

215,215

237,669

Financial assets at fair value through other comprehensive income

63,745

53,241

Investments in associates and joint ventures

700

699

Goodwill and intangible assets

7,806

7,849

Current tax assets

506

482

Deferred tax assets

4,196

4,084

Other assets

8,702

8,200

Assets included in disposal groups classified as held for sale

957

1,193

Total assets

1,142,200

1,131,441




Liabilities



Deposits at amortised cost

381,326

379,841

Cash collateral and settlement balances

74,113

65,925

Repurchase agreements and other similar secured borrowing

18,610

15,053

Debt securities in issue

79,035

73,314

Subordinated liabilities

21,004

23,826

Trading portfolio liabilities

45,333

37,351

Financial liabilities designated at fair value

234,287

220,083

Derivative financial instruments

211,800

238,345

Current tax liabilities

787

586

Deferred tax liabilities

41

44

Other liabilities

14,234

13,207

Total liabilities

1,080,570

1,067,575




Equity



Called up share capital and share premium

22,061

22,045

Other reserves

4,201

5,247

Retained earnings

24,316

25,522

Shareholders' equity attributable to ordinary shareholders of the parent

50,578

52,814

Other equity instruments

8,941

8,941

Total equity excluding non-controlling interests

59,519

61,755

Non-controlling interests

2,111

2,111

Total equity

61,630

63,866




Total liabilities and equity

1,142,200

1,131,441

 

1

Barclays introduced changes to the balance sheet presentation as a result of the adoption of new accounting policies on 1 January 2018. The comparatives are presented under the new accounting policies to aid comparability. A reconciliation of the statutory balance sheet as at 31 December 2017 to 1 January 2018 is on pages 24-25.

 

Consolidated statement of changes in equity


 

Called up share capital and share premium

Other equity instruments

Other reserves

Retained earnings

Total

Non-controlling interests

Total

equity

Three months ended 31.03.18

£m

£m

£m

£m

£m

£m

£m

Balance as at 31 December 2017

22,045

8,941

5,383

27,536

63,905

2,111

66,016

Effects of changes in accounting policies1

-

-

(136)

(2,014)

(2,150)

-

(2,150)

Balance as at 1 January 2018

22,045

8,941

5,247

25,522

61,755

2,111

63,866

Profit after tax

-

171

-

(764)

(593)

53

(540)

Other comprehensive profit after tax for the period

-

-

(1,046)

(158)

(1,204)

-

(1,204)

Total comprehensive income for the period

-

171

(1,046)

(922)

(1,797)

53

(1,744)

Issue of shares under employee share schemes

16

-

-

132

148

-

148

Coupons paid on other equity instruments

-

(171)

-

46

(125)

-

(125)

Treasury shares

-

-

-

(478)

(478)

-

(478)

Dividends

-

-

-

-

-

(52)

(52)

Other movements

-

-

-

16

16

(1)

15

Balance as at 31 March 2018

22,061

8,941

4,201

24,316

59,519

2,111

61,630

 

As at

As at


31.03.18

01.01.181

Other reserves

£m

£m

Currency translation reserve

2,452

3,054

Fair value through other comprehensive income reserve

292

228

Cash flow hedging reserve

709

1,161

Own credit reserve

(235)

(179)

Other reserves and treasury shares

983

983

Total other reserves

4,201

5,247

 

1

Barclays introduced changes to the balance sheet presentation as a result of the adoption of new accounting policies on 1 January 2018. The comparatives are presented under the new accounting policies to aid comparability. A reconciliation of the statutory balance sheet as at 31 December 2017 to 1 January 2018 is on pages 24-25.

 

Balance sheet movements

 

The table below presents the impact of the changes to balance sheet presentation, the transition to IFRS 15 and the transition to IFRS 9 on the Group's balance sheet, showing separately the changes arising from reclassification and any associated remeasurement, and the impact of increased impairment.

 

As at 31.12.17

Balance sheet presentation and IFRS 15

IFRS 9 classification and measurement

IFRS 9 impairment change

As at

01.01.18

Assets

£m

£m

£m

£m

£m

Cash and balances at central banks

-

-

-

171,082

Items in the course of collection from other banks

2,153

(2,153)

-

-

-

Loans and advances to banks

35,663

(35,663)

-

-

-

Loans and advances to customers

365,552

(365,552)

-

-

-

Cash collateral and settlement balances

-

77,168

(2,389)

-

74,779

Loans and advances at amortised cost

-

329,157

(9,467)

(2,508)

317,182

Reverse repurchase agreements and other similar secured lending

12,546

-

(11,949)

-

597

Trading portfolio assets

113,760

-

413

-

114,173

Financial assets designated at fair value

116,281

(116,281)

-

-

-

Financial assets at fair value through the income statement1

-

116,281

23,930

-

140,211

Derivative financial instruments

237,669

-

-

-

237,669

Financial investments

58,916

(57,415)

(1,501)

-

-

Financial assets at fair value through other comprehensive income

-

52,305

936

-

53,241

Investments in associates and joint ventures2

718

-

(19)

-

699

Goodwill and intangible assets

7,849

-

-

-

7,849

Current tax assets

482

-

-

-

482

Deferred tax assets

3,457

(22)

-

649

4,084

Prepayments, accrued income and other assets

5,927

(5,927)

-

-

-

Other assets

-

8,169

31

-

8,200

Assets included in disposal groups classified as held for sale

1,193

-

-

-

1,193

Total assets

67

(15)

(1,859)

1,131,441







Liabilities






Deposits from banks

(37,723)

-

-

-

Deposits at amortised cost

-

398,701

(18,860)

-

379,841

Items in the course of collection due to other banks

446

(446)

-

-

-

Customer accounts

429,121

(429,121)

-

-

-

Cash collateral and settlement balances

-

68,143

(2,218)

-

65,925

Repurchase agreements and other similar secured borrowing

40,338

-

(25,285)

-

15,053

Debt securities in issue

73,314

-

-

-

73,314

Subordinated liabilities

23,826

-

-

-

23,826

Trading portfolio liabilities

37,351

-

-

-

37,351

Financial liabilities designated at fair value

173,718

-

46,365

-

220,083

Derivative financial instruments

238,345

-

-

-

238,345

Current tax liabilities

586

-

-

-

586

Deferred tax liabilities

44

-

-

-

44

Accruals, deferred income and other liabilities

12,420

(12,420)

-

-

-

Other liabilities

-

12,866

-

341

13,207

Total liabilities

-

2

341

1,067,575







Equity






Called up share capital and share premium

-

-

-

22,045

Other reserves

5,383

-

(139)

3

5,247

Retained earnings

27,536

67

122

(2,203)

25,522

Shareholders' equity attributable to ordinary shareholders of the

parent

67

(17)

(2,200)

52,814

Other equity instruments

8,941

-

-

-

8,941

Total equity excluding non-controlling interests

63,905

67

(17)

(2,200)

61,755

Non-controlling interests

2,111

-

-

-

2,111

Total equity

67

(17)

(2,200)

63,866







Total liabilities and equity

67

(15)

(1,859)

1,131,441

 

1

Financial assets at fair value through the income statement includes both designated and mandatory fair value assets.

2

The impact of IFRS 9 on the Group's share of profit and loss from joint ventures is shown in the classification and measurement column.

 

Balance sheet presentation and IFRS 15

 

The following changes to the balance sheet have been introduced:

 

·

"Items in the course of collection from other banks" and "prepayments, accrued income and other assets" are reported in "other assets". Equally, "items in the course of collection due to other banks" and "accruals, deferred income and other liabilities" are reported in "other liabilities"

·

"Loans and advances to banks" and "loans and advances to customers" have been disaggregated to "loans and advances at amortised cost" and "cash collateral and settlement balances". Equally, "deposits from banks" and "customer accounts" have been disaggregated to "deposits at amortised cost" and "cash collateral and settlement balances"

·

"Financial assets designated at fair value" have moved to "financial assets at fair value through the income statement" on adoption of IFRS 9

·

The majority of "available for sale assets" have moved to "financial assets at fair value through other comprehensive income" from "financial investments" on adoption of IFRS 9. In addition, "held to maturity assets" have moved to "loans and advances at amortised cost"

·

On adoption of IFRS 15, a transition adjustment of £67m has been recognised through retained earnings

 

IFRS 9 classification and measurement

 

This column represents the changes to the balance sheet from classification and measurement. The net effect is a decrease in shareholders' equity of £17m, with no significant offsetting movements. The classification changes include the transfer of certain Barclays International Prime Services and Equities positions from an amortised cost to a fair value approach. 

 

IFRS 9 impairment change

 

Additional impairment from the adoption of IFRS 9 is shown in the impairment change column. The increase in impairment results in the recognition of a deferred tax asset that will amortise to current tax over time. The post-tax impact is a reduction in shareholders' equity of £2.2bn. Impairment allowance under IFRS 9 considers both the drawn and the undrawn counterparty exposure. For retail portfolios, the total impairment allowance is allocated to the drawn exposure to the extent that the allowance does not exceed the exposure. Any excess is reported on the liability side of the balance sheet as a provision. For wholesale portfolios the impairment allowance on the undrawn exposure is reported on the liability side of the balance sheet as a provision.

 

For further details, refer to the Barclays PLC IFRS 9 Transition Note at home.barclays/results.

 

Barclays PLC Parent Company

 

Summary balance sheet




As at

As at


31.03.18

31.12.17

Assets

£m

£m

Loans and advances to subsidiaries

23,381

23,970

Financial assets at fair value through the income statement

4,564

4,782

Derivative financial instruments

93

161

Investment in subsidiaries

40,854

39,354

Other assets

288

202

Total assets

69,180

68,469




Liabilities



Deposits at amortised cost

495

500

Debt securities in issue

23,120

22,110

Subordinated liabilities

6,360

6,501

Other liabilities

191

153

Total liabilities

30,166

29,264




Equity



Called up share capital and share premium

22,061

22,045

Other equity instruments

8,943

8,943

Other reserves

394

480

Retained earnings

7,616

7,737

Total equity

39,014

39,205




Total liabilities and equity

69,180

68,469

 

Investment in subsidiaries

 

The investment in subsidiaries of £40,854m (December 2017: £39,354m) predominately represents investments made into BBPLC, including £8,986m (December 2017: £8,986m) of AT1 securities.

 

Loans and advances to subsidiaries, subordinated liabilities and debt securities in issue

 

For the three months ended 31 March 2018, Barclays PLC issued £1,500m and €1,055m of Fixed Rate Senior Notes included within the debt securities in issue balance of £23,120m (December 2017: £22,110m). Barclays PLC did not issue any subordinated liabilities in the period.

 

Other reserves

 

As a result of the adoption of IFRS 9 on 1 January 2018, the available for sale reserve of £86m has been transferred to retained earnings.

 

Management of internal investments, loans and advances

 

Barclays PLC retains the discretion to manage the nature of its internal investments in subsidiaries according to their regulatory and business needs. Barclays PLC may invest capital and funding in BBPLC and other Group subsidiaries such as the Group Service Company, the US Intermediate Holding Company (IHC) and the UK ring-fenced bank. In October 2017, the Bank of England published a consultation on "Internal MREL" and following that consultation a final statement of policy is expected to be published in H118. Accordingly, during the course of 2018 Barclays expects to restructure certain investments in subsidiaries, including to subordinate internal MREL beneath operating liabilities, to the extent required to achieve compliance with internal MREL requirements which are expected to be in effect from 1 January 2019.

 

Barclays Non-Core Quarterly Results

 

The Barclays Non-Core segment was closed on 1 July 2017 with the residual assets and liabilities reintegrated into, and associated financial performance subsequently reported in, Barclays UK, Barclays International and Head Office. Financial results up until 30 June 2017 are reflected in the Barclays Non-Core segment within the Group's results.

 

Barclays Non-Core












Q118


Q417

Q317

Q217

Q117


Q416

Q316

Q216

Income statement information

£m


£m

£m

£m

£m


£m

£m

£m

Net interest income

-


-

-

(123)

11


(54)

78

40

Net trading income

-


-

-

(411)

(77)


(462)

(288)

(463)

Net fee, commission and other income

-


-

-

78

(8)


97

51

79

Total income

-


-

-

(456)

(74)


(419)

(159)

(344)

Credit impairment charges and other provisions

-


-

-

(27)

(3)


(47)

(20)

(26)

Net operating expenses

-


-

-

(483)

(77)


(466)

(179)

(370)

Operating expenses excluding UK bank levy and litigation and conduct

-


-

-

(108)

(148)


(341)

(311)

(368)

UK bank levy

-


-

-

-

-


(76)

-

-

Litigation and conduct

-


-

-

(19)

(9)


(51)

(102)

(27)

Operating expenses

-


-

-

(127)

(157)


(468)

(413)

(395)

Other net income/(expenses)

-


-

-

204

(7)


146

498

(324)

Loss before tax

-


-

-

(406)

(241)


(788)

(94)

(1,089)

Tax credit

-


-

-

207

75


322

194

229

(Loss)/profit after tax

-


-

-

(199)

(166)


(466)

100

(860)

Non-controlling interests

-


-

-

(8)

(9)


(14)

(13)

(12)

Other equity instrument holders

-


-

-

(19)

(18)


(18)

(15)

(15)

Attributable (loss)/profit

-


-

-

(226)

(193)


(498)

72

(887)












Balance sheet information

£bn


£bn

£bn

£bn

£bn


£bn

£bn

£bn

Loans and advances to banks and customers at amortised cost

-


-

 -  

 48.3

 49.5


 51.1

 58.7

 68.5

Derivative financial instrument assets

-


-

 -  

 150.3

 164.2


 188.7

 253.2

 262.8

Derivative financial instrument liabilities

-


-

 -  

 143.0

 155.3


 178.6

 243.0

 253.4

Reverse repurchase agreements and other similar secured lending

-


-

 -  

 -  

 -  


 0.1

 0.1

 0.1

Financial assets designated at fair value

-


-

 -  

 12.1

 13.4


 14.5

 15.5

 15.4

Total assets

-


-

 -  

 233.0

 249.1


 279.7

 359.8

 379.1

Customer deposits

-


-

 -  

 11.8

 12.9


 12.5

 16.0

 17.4

Risk weighted assets

-


-

 -  

22.8

 27.4


 32.1

 43.9

 46.7

 

Discontinued Operation Quarterly Results

 

Following the reduction of the Group's interest in BAGL in 2017, Barclays' remaining holding of 14.9%, as at Q118, is reported as a financial asset at fair value through other comprehensive income in the Head Office segment, with Barclays' share of BAGL's dividend recognised in the Head Office income statement.

 

For regulatory reporting purposes, BAGL is treated on a proportional consolidated basis. Subject to regulatory approval, Barclays expects to fully deconsolidate BAGL from a regulatory perspective by the end of 2018.

 

Africa Banking












Q118


Q417

Q317

Q2171

Q117


Q416

Q316

Q216

Income statement information

£m


£m

£m

£m

£m


£m

£m

£m

Net interest income

-


-

-

407

617


626

561

502

Net fee, commission and other income

-


-

-

297

465


441

421

377

Total income

-


-

-

704

1,082


1,067

982

879

Credit impairment charges and other provisions

-


-

-

(71)

(106)


(105)

(96)

(133)

Net operating income

-


-

-

633

976


962

886

746

Operating expenses excluding UK bank levy and impairment of Barclays' holding in BAGL

-


-

-

(477)

(653)


(727)

(598)

(543)

UK bank levy

-


-

-

-

-


(65)

-

-

Other net income excluding loss on sale of BAGL

-


-

-

3

2


2

2

1

Profit before tax excluding impairment of Barclays' holding in BAGL and loss on sale of BAGL

-


-

-

159

325


172

290

204

Impairment of Barclays' holding in BAGL

-


-

-

(206)

(884)


-

-

-

Loss on sale of BAGL

-


-

-

(1,435)

-


-

-

-

(Loss)/profit before tax

-


-

-

(1,482)

(559)


172

290

204

(Loss)/profit after tax

-


-

-

(1,537)

(658)


71

209

145

Attributable (loss)/profit

-


-

-

(1,534)

(801)


(52)

85

70












Balance sheet information

£bn


£bn

£bn

£bn

£bn


£bn

£bn

£bn

Total assets

-


 -  

 -  

 -  

 66.0


 65.1

 61.1

 56.0

Risk weighted assets2

-


-

 -  

 9.8

 41.3


 42.3

 39.9

 36.1

 

1

The Q217 Africa Banking income statement represents two months of results as a discontinued operation to 31 May 2017.

2

RWAs at 31 March 2018 of £6.4bn (December 2017: £6.4bn) are reported in Head Office.

 

Appendix: Non-IFRS Performance Measures

 

Barclays' management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses' performance between financial periods, and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of 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.

Any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well.

 

Non-IFRS performance measures glossary

 

Measure

Definition

Loan: deposit ratio

Loans and advances at amortised cost divided by deposits at amortised cost.

Period end allocated tangible equity

Allocated tangible equity is calculated as 13.0% (2017: 12.0%) of risk weighted assets for each business, adjusted for capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office allocated tangible equity represents the difference between the Group's tangible shareholders' equity and the amounts allocated to businesses.

Average tangible shareholders' equity

Calculated as the average of the previous month's period end tangible equity and the current month's period end tangible equity. The average tangible shareholders' equity for the period is the average of the monthly averages within that period.

Average allocated tangible equity

Calculated as the average of the previous month's period end allocated tangible equity and the current month's period end allocated tangible equity. The average allocated tangible equity for the period is the average of the monthly averages within that period.

Return on average tangible shareholders' equity

Annualised statutory profit after tax attributable to ordinary shareholders, including an adjustment for the tax credit in reserves in respect of other equity instruments, as a proportion of average shareholders' equity excluding non-controlling interests and other equity instruments adjusted for the deduction of intangible assets and goodwill. The components of the calculation have been included on page 30.

Return on average allocated tangible equity

Annualised statutory profit after tax attributable to ordinary shareholders, including an adjustment for the tax credit in reserves in respect of other equity instruments, as a proportion of average allocated tangible equity. The components of the calculation have been included on page 30.

Cost: income ratio

Operating expenses divided by total income.

Loan loss rate

Quoted in basis points and represents total annualised impairment charges divided by gross loans and advances held at amortised cost at the balance sheet date. The components of the calculation have been included on page 14.

Net interest margin

Annualised net interest income divided by the sum of average customer assets. The components of the calculation have been included on page 13.

Tangible net asset value per share

Calculated by dividing shareholders' equity, excluding non-controlling interests and other equity instruments, less goodwill and intangible assets, by the number of issued ordinary shares. The components of the calculation have been included on page 34.

Performance measures excluding litigation and conduct

Calculated by excluding litigation and conduct charges from performance measures. The components of the calculations have been included on pages 31-33.

 

Returns

 

Return on average tangible equity is calculated as annualised 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 tangible equity for the period, excluding non-controlling and other equity interests for businesses. Allocated tangible equity has been calculated as 13.0% (2017: 12.0%) of RWAs for each business, adjusted for capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office average allocated tangible equity represents the difference between the Group's average tangible shareholders' equity and the amounts allocated to businesses.

 

Attributable (loss)/profit

Tax credit in respect of interest payments on other equity instruments

(Loss)/profit attributable to ordinary equity holders of the parent


Average tangible equity


Return on average tangible equity

Three months ended 31.03.18

£m

£m

£m


£bn


%

Barclays UK

(38)

12

(26)


9.8


(1.1)

    Corporate and Investment Bank

805

29

834


25.6


13.0

    Consumer, Cards and Payments

168

5

173


4.5


15.6

Barclays International

973

34

1,007


30.1


13.4

Head Office

(1,699)

-

(1,699)


4.3


n/m

Barclays Group

(764)

46

(718)


44.2


(6.5)









Three months ended 31.03.17








Barclays UK

470

9

479


8.9


21.6

    Corporate and Investment Bank

460

23

483


23.5


8.2

    Consumer, Cards and Payments

377

4

381


4.2


36.4

Barclays International

837

27

864


27.7


12.5

Head Office1

(123)

(3)

(126)


7.6


n/m

Barclays Non-Core

(193)

5

(188)


5.2


n/m

Africa Banking discontinued operation1

(801)

-

(801)


n/m


n/m

Barclays Group

190

38

228


49.4


1.8

1

Average allocated tangible equity for Africa Banking is included within Head Office.

 

Performance measures excluding litigation and conduct

 

Barclays Group












Q118


Q417

Q317

Q217

Q117


Q416

Q316

Q216

Profit before tax

£m


£m

£m

£m

£m


£m

£m

£m

(Loss)/profit before tax

(236)


93

1,107

659

1,682


330

837

1,270

Impact of litigation and conduct

1,961


383

81

715

28


97

741

447

Profit before tax excluding litigation and conduct

1,725


476

1,188

1,374

1,710


427

1,578

1,717












Profit attributable to ordinary equity holders of the parent











Attributable (loss)/profit

(764)


(1,294)

583

(1,401)

190


99

414

677

Impact of litigation and conduct1

1,930


351

77

703

19


52

726

447

Attributable profit/(loss) excluding litigation and conduct

1,166


(943)

660

(698)

209


151

1,140

1,124

Tax credit in respect of interest payments on other equity instruments

46


49

43

44

38


39

31

29

Profit/(loss) attributable to ordinary equity holders of the parent excluding litigation and conduct

1,212


(894)

703

(654)

247


190

1,171

1,153












Return on average tangible shareholders' equity











Average tangible shareholders' equity (£bn)

44.2


48.1

48.9

49.3

49.4


48.9

49.4

48.3












Return on average tangible shareholders' equity excluding litigation and conduct

11.0%


(7.4%)

5.7%

(5.3%)

2.0%


1.6%

9.5%

9.5%












Basic earnings per ordinary share











Basic weighted average number of shares (m)

17,037


16,996

16,994

16,989

16,924


16,860

16,866

16,859












Basic earnings/(loss) per ordinary share excluding litigation and conduct

7.1p


(5.3p)

4.1p

(3.8p)

1.5p


1.1p

6.9p

6.8p












Cost: income ratio











Operating expenses

(5,325)


(4,369)

(3,355)

(4,113)

(3,619)


(4,319)

(4,322)

(3,872)

Impact of litigation and conduct

1,961


383

81

715

28


97

741

447

Operating expenses excluding litigation and conduct

(3,364)


(3,986)

(3,274)

(3,398)

(3,591)


(4,222)

(3,581)

(3,425)












Total income

5,358


5,022

5,173

5,058

5,823


4,992

5,446

5,972












Cost: income ratio excluding litigation and conduct

63%


79%

63%

67%

62%


85%

66%

57%

 

1

Represents the post-tax impact.

 

Barclays UK












Q118


Q417

Q317

Q217

Q117


Q416

Q316

Q216

Profit before tax

£m


£m

£m

£m

£m


£m

£m

£m

Profit/(loss) before tax

170


452

661

(74)

708


583

75

376

Impact of litigation and conduct

411


53

11

699

(4)


28

614

399

Profit before tax excluding litigation and conduct

581


505

672

625

704


611

689

775












Profit attributable to ordinary equity holders of the parent











Attributable (loss)/profit

(38)


245

423

(285)

470


383

(163)

141

Impact of litigation and conduct1

411


37

8

691

(3)


(3)

627

410

Attributable profit excluding litigation and conduct

373


282

431

406

467


380

464

551

Tax credit in respect of interest payments on other equity instruments

12


13

9

9

9


7

7

8

Profit attributable to ordinary equity holders of the parent excluding litigation and conduct

385


295

440

415

476


387

471

559












Return on average allocated tangible equity











Average allocated tangible equity (£bn)

9.8


9.6

9.4

8.7

8.9


8.6

8.7

9.0












Return on average allocated tangible equity excluding litigation and conduct

15.7%


12.3%

18.7%

19.1%

21.5%


18.0%

21.6%

24.9%












Cost: income ratio











Operating expenses

(1,416)


(1,229)

(991)

(1,673)

(955)


(1,065)

(1,518)

(1,346)

Impact of litigation and conduct

411


53

11

699

(4)


28

614

399

Operating expenses excluding litigation and conduct

(1,005)


(1,176)

(980)

(974)

(959)


(1,037)

(904)

(947)












Total income

1,788


1,870

1,852

1,820

1,841


1,828

1,943

1,943












Cost: income ratio excluding litigation and conduct

56%


63%

53%

54%

52%


57%

47%

49%

 

1

Represents the post-tax impact.

 

Barclays International












Q118


Q417

Q317

Q217

Q117


Q416

Q316

Q216

Profit before tax

£m


£m

£m

£m

£m


£m

£m

£m

Profit before tax

1,413


6

652

1,261

1,356


373

1,085

1,726

Impact of litigation and conduct

15


255

5

(4)

13


17

17

10

Profit before tax excluding litigation and conduct

1,428


261

657

1,257

1,369


390

1,102

1,736












Profit attributable to ordinary equity holders of the parent











Attributable profit/(loss)

973


(1,168)

359

819

837


43

623

1,171

Impact of litigation and conduct1

12


250

4

(3)

9


14

17

10

Attributable profit/(loss) excluding litigation and conduct

985


(918)

363

816

846


57

640

1,181

Tax credit in respect of interest payments on other equity instruments

34


34

32

27

27


23

20

19

Profit/(loss) attributable to ordinary equity holders of the parent excluding litigation and conduct

1,019


(884)

395

843

873


80

660

1,200












Return on average allocated tangible equity











Average allocated tangible equity (£bn)

30.1


28.5

28.9

27.4

27.7


26.6

25.7

24.8












Return on average allocated tangible equity excluding litigation and conduct

13.6%


(12.4%)

5.5%

12.3%

12.6%


1.2%

10.3%

19.3%












Cost: income ratio











Operating expenses

(2,315)


(2,948)

(2,187)

(2,272)

(2,448)


(2,798)

(2,354)

(2,084)

Impact of litigation and conduct

15


255

5

(4)

13


17

17

10

Operating expenses excluding litigation and conduct

(2,300)


(2,693)

(2,182)

(2,276)

(2,435)


(2,781)

(2,337)

(2,074)












Total income

3,808


3,319

3,315

3,610

4,138


3,592

3,851

4,039












Cost: income ratio excluding litigation and conduct

60%


81%

66%

63%

59%


77%

61%

51%

 

Head Office






















Profit before tax











(Loss)/profit before tax

(1,819)


(365)

(206)

(122)

(141)


162

(229)

257

Impact of litigation and conduct

1,535


75

65

1

10


1

8

11

(Loss)/profit before tax excluding litigation and conduct

(284)


(290)

(141)

(121)

(131)


163

(221)

268












Profit attributable to ordinary equity holders of the parent











Attributable (loss)/profit

(1,699)


(371)

(199)

(175)

(123)


223

(203)

182

Impact of litigation and conduct1

1,507


64

65

1

7


1

8

7

Attributable (loss)/profit excluding litigation and conduct

(192)


(307)

(134)

(174)

(116)


224

(195)

189

 

1

Represents the post-tax impact.

 

Tangible net asset value

As at

As at

As at


31.03.18

31.12.17

31.03.17


£m

£m

£m

Total equity excluding non-controlling interests

59,519

63,905

65,536

Other equity instruments

(8,941)

(8,941)

(7,690)

Goodwill and intangibles1

(7,806)

(7,849)

(8,328)

Tangible shareholders' equity attributable to ordinary shareholders of the parent

42,772

47,115

49,518






m

m

m

Shares in issue

17,069

17,060

16,980






p

p

p

Tangible net asset value per share

251

276

292

 

1

Comparative figure as at March 2017 included goodwill and intangibles in relation to Africa Banking.

 

Shareholder Information

 

Results timetable1

Date

2018 Interim Results Announcement

2 August 2018

 





% Change3

Exchange rates2

31.03.18

31.12.17

31.03.17


31.12.17

31.03.17

Period end - USD/GBP

1.40

1.35

1.25


4%

12%

3 month average - USD/GBP

1.39

1.33

1.24


5%

12%

Period end - EUR/GBP

1.14

1.13

1.17


1%

(3%)

3 month average - EUR/GBP

1.13

1.13

1.16


-

(3%)








Share price data







Barclays PLC (p)

206.50

203.10

225.10




Barclays PLC number of shares (m)

17,069

17,060

16,980











For further information please contact














Investor relations

Media relations



Kathryn McLeland +44 (0) 20 7116 4943

Thomas Hoskin +44 (0) 20 7116 4755










More information on Barclays can be found on our website: home.barclays.










Registered office







1 Churchill Place, London, E14 5HP, United Kingdom. Tel: +44 (0) 20 7116 1000. Company number: 48839.








Registrar







Equiniti, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom.

Tel: 0371 384 20554 from the UK or +44 (0) 121 415 7004 from overseas.

 

1

Note that this date is provisional and subject to change.

2

The average rates shown above are derived from daily spot rates during the year. 

3

The change is the impact to GBP reported information.

4

Lines open 8.30am to 5.30pm (UK time), Monday to Friday, excluding UK public holidays in England and Wales.

 

Notes

 

The terms Barclays or Group refer to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis compares the three months ended 31 March 2018 to the corresponding three months of 2017 and balance sheet analysis as at 31 March 2018 with comparatives relating to 31 December 2017 and 31 March 2017. The abbreviations '£m' and '£bn' represent millions and thousands of millions of Pounds Sterling respectively; the abbreviations '$m' and '$bn' represent millions and thousands of millions of US Dollars respectively; and the abbreviations '€m' and '€bn' represent millions and thousands of millions of Euros respectively.

 

There are a number of key judgement areas, for example impairment calculations, which are based on models and which are subject to ongoing adjustment and modifications. Reported numbers reflect best estimates and judgements at the given point in time.

 

Relevant terms that are used in this document but are not defined under applicable regulatory guidance or International Financial Reporting Standards (IFRS) are explained in the results glossary that can be accessed at home.barclays/results.

 

The information in this announcement, which was approved by the Board of Directors on 25 April 2018, does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2017, 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 6-K to the SEC as soon as practicable following their publication. Once furnished with the SEC, copies of the Form 6-K will also be available from the Barclays Investor Relations website at 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 businesses' performance between financial periods, and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays' management. However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Refer to pages 29-34 for further information and calculations of non-IFRS performance measures included throughout this document, and the most directly comparable IFRS measures.

 

Forward-looking statements

 

This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as 'may', 'will', 'seek', 'continue', 'aim', 'anticipate', 'target', 'projected', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', 'achieve' or other words of similar meaning. Examples of forward-looking statements include, among others, statements or guidance regarding or relating to the Group's future financial position, income growth, assets, impairment charges, provisions, business strategy, structural reform, capital, leverage and other regulatory ratios, payment of dividends (including dividend payout ratios and expected payment strategies), projected levels of growth in the banking and financial markets, projected costs or savings, any commitments and targets and the impact of any regulatory deconsolidation resulting from the 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, IFRS 9 impacts and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. These may be affected by changes in legislation, the development of standards and interpretations under International Financial Reporting Standards including the implementation of IFRS 9, evolving practices with regard to the interpretation and application of accounting and regulatory standards, the outcome of current and future legal proceedings and regulatory investigations, future levels of conduct provisions, the policies and actions of governmental and regulatory authorities, geopolitical risks and the impact of competition. In addition, factors including (but not limited to) the following may have an effect: capital, leverage and other regulatory rules (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 exercise by the United Kingdom of Article 50 of the Treaty of Lisbon and the disruption that may result in the UK and globally from the withdrawal of the United Kingdom from the European Union 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 2017), 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.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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