Final Results

RNS Number : 6098X
Barclays PLC
23 February 2017
 



Barclays PLC

Results Announcement

 

31 December 2016

 

Table of Contents

Results Announcement

Page

Notes

1

Performance Highlights

2-6

Group Finance Director's Review

7-11

Results by Business

 

• Barclays UK

12-14

• Barclays International

15-17

• Head Office

18

• Barclays Non-Core

• Discontinued Operation - Africa Banking

19-20

21

Quarterly Results Summary

22-24

Quarterly Core Results by Business

Quarterly Discontinued Operation Results

25-29

30

Performance Management

 

• Margins and Balances

31

• Remuneration

32-33

Risk Management

 

• Liquidity

34-37

• Capital

38-44

• Credit Risk

45-49

Statement of Director's Responsibilities

50

Condensed Consolidated Financial Statements

51-55

Financial Statement Notes

56-64

Appendix: Non-IFRS performance measures

65-75

Shareholder Information

76

BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE: +44 (0) 20 7116 1000. COMPANY NO. 48839

Notes

The term Barclays or Group refers to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis compares the year ended 31 December 2016 to the corresponding twelve months of 2015 and balance sheet analysis as at 31 December 2016 with comparatives relating to 31 December 2015. The abbreviations '£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.

Comparatives have been restated to reflect the implementation of the Group business reorganisation. These restatements were detailed in our announcement on 14 April 2016, accessible at home.barclays/results.

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

Notable items as set out on page 5 are considered to be significant items impacting comparability of performance and have been called out for each of the business segments. Results excluding notable items have been included in the appendix.

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

The information in this announcement, which was approved by the Board of Directors on 22 February 2017, does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2016, which included certain information required for the Joint Annual Report on Form 20-F of Barclays PLC and Barclays Bank PLC to the US Securities and Exchange Commission (SEC) and which contained an unqualified audit report under Section 495 of the Companies Act 2006 (which did not make any statements under Section 498 of the Companies Act 2006) have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.

These results will be furnished as a Form 20-F to the SEC as soon as practicable following their publication. Once furnished with the SEC, copies of the Form 20-F will also be available from the Barclays Investor Relations website home.barclays/results and from the SEC's website at www.sec.gov.

Barclays is a frequent issuer in the debt capital markets and regularly meets with investors via formal road-shows and other ad hoc meetings. Consistent with its usual practice, Barclays expects that from time to time over the coming quarter it will meet with investors globally to discuss these results and other matters relating to the Group.

Non-IFRS performance measures

Barclays management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the business' performance between financial periods, and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays' management. However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document, and the most directly comparable IFRS measures.

Forward-looking statements

This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as 'may', 'will', 'seek', 'continue', 'aim', 'anticipate', 'target', 'projected', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', 'achieve' or other words of similar meaning. Examples of forward-looking statements include, among others, statements or guidance regarding the Group's future financial position, income growth, assets, impairment charges, provisions, notable items, business strategy, structural reform, capital, leverage and other regulatory ratios, payment of dividends (including dividend pay-out ratios and expected payment strategies), projected levels of growth in the banking and financial markets, projected costs or savings, original and revised commitments and targets in connection with the strategic cost programme and the Group Strategy Update, rundown of assets and businesses within Barclays Non-Core, sell down of the Group's interest in Barclays Africa Group Limited, estimates of capital expenditures and plans and objectives for future operations, projected employee numbers and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. These may be affected by changes in legislation, the development of standards and interpretations under International Financial Reporting Standards, evolving practices with regard to the interpretation and application of accounting and regulatory standards, the outcome of current and future legal proceedings and regulatory investigations, future levels of conduct provisions, future levels of notable items, the policies and actions of governmental and regulatory authorities, geopolitical risks and the impact of competition. In addition, factors including (but not limited to) the following may have an effect: capital, leverage and other regulatory rules (including with regard to the future structure of the Group) applicable to past, current and future periods; UK, US, Africa, Eurozone and global macroeconomic and business conditions; the effects of continued volatility in credit markets; market related risks such as changes in interest rates and foreign exchange rates; effects of changes in valuation of credit market exposures; changes in valuation of issued securities; volatility in capital markets; changes in credit ratings of any entities within the Group or any securities issued by such entities; the potential for one or more countries exiting the Eurozone; the implications of the results of the 23 June 2016 referendum in the United Kingdom and the disruption that may result in the UK and globally from the withdrawal of the United Kingdom from the European Union; the implementation of the strategic cost programme; and the success of future acquisitions, disposals and other strategic transactions. A number of these influences and factors are beyond the Group's control. As a result, the Group's actual future results, dividend payments, and capital and leverage ratios may differ materially from the plans, goals, expectations and guidance set forth in the Group's forward-looking statements. Additional risks and factors which may impact the Group's future financial condition and performance are identified in our filings with the SEC (including, without limitation, our annual report on form 20-F for the fiscal year ended 31 December 2016), which are available on the SEC's website at www.sec.gov.

Subject to our obligations under the applicable laws and regulations of the United Kingdom and the United States in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward looking statements, whether as a result of new information, future events or otherwise.

 

Performance Highlights

Transatlantic Consumer, Corporate and Investment Bank with Global Reach

Our strategy is on track with good progress in 2016

• Core returns:

• Core business performed well reflecting the benefits of diversification across customers and clients, geographies and products, with a 4% growth in profit before tax excluding notable items1 to £6,436m, delivering a 9.4% return on average allocated tangible equity that was £4bn higher at £41bn

• Return on average allocated tangible equity (RoTE) excluding notable items in Barclays UK was 19.3% and in Barclays International was 8.0%

• Non-Core rundown:

• £22bn reduction in risk weighted assets (RWAs) to £32bn, despite adverse foreign exchange (FX) movements

• Completed the sale of a number of businesses during the year, including the Asia wealth and investment management, and Southern European cards businesses in Q416, and signed the agreement for the sale of the French retail business in the quarter

• Good progress on the accelerated rundown of Non-Core; decision taken to close the unit six months ahead of plan on 30 June 2017 with RWAs expected to be approximately £25bn at this date

• Common Equity Tier 1 (CET1) ratio:

• Profit before tax of £3,230m drove strong organic capital ratio growth with 100bps of CET1 ratio accretion to 12.4%

• In Q416, the CET1 ratio increased 80bps through reduced RWAs, and an increase in reserves, including from the £1.1bn improvement in the deficit of the UK Retirement Fund (UKRF) defined benefit pension scheme

• On track to meeting revised end-state CET1 capital ratio of 150bps to 200bps above the minimum regulatory level

• Core costs:

• Decision taken in Q416, relating to 2016 compensation awards, to more closely align income statement recognition with performance awards and harmonise deferral structures across the Group

• The total incentive awards granted reduced 1% to £1,533m, with the changes to awards resulting in a £395m income statement charge in Q416, of which £390m was in Core. As a result, Core costs for 2016 exceeded the guidance of £13.0bn2 by that amount

• Core cost: income ratio excluding notable items improved from 62% to 61%

• Barclays Africa Group Limited (BAGL) sell down:

• First sale of 12.2% stake completed in May 2016, resulting in a c.10bps benefit to the CET1 ratio

• Separation terms now agreed with BAGL, subject to regulatory approval. These terms include contributions totalling £765m payable over the period through to completion of the next sale of Barclays' stake in BAGL to below 50%

• Remain on track to achieve regulatory deconsolidation, with further sell down subject to regulatory approval. Estimate in excess of 75bps Group CET1 ratio accretion on regulatory deconsolidation based on the 31 December 2016 BAGL share price and ZAR exchange rate

• Holding Company (HoldCo) transition:

• Progressed the transition to HoldCo funding with £12.1bn of issuance and £7.4bn of Operating Company (OpCo) capital and debt repurchased or redeemed

• Moody's upgraded the HoldCo's long-term senior rating one notch to Baa2 on 12 December 2016

 

 

1

Notable items in Core totalled a net loss before tax of £420m (2015: £2,442m), as detailed on page 5. Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document.

2

Guidance excluded litigation and conduct charges and was adjusted for FX at Q316.

 

Group Chief Executive Officer's Review

"A year ago we laid out our intention to accelerate the restructuring of Barclays and refocus our business as a transatlantic, consumer, corporate and investment bank, anchored in London and New York.

 

We have made strong progress against this agenda in 2016.

 

Our Core businesses, Barclays UK and Barclays International, are doing well, with profit before tax excluding notable items up 4% to £6.4bn.

 

Barclays UK produced an impressive RoTE of 19.3% excluding notable items, and continues to deliver market-leading innovation for customers, including voice security, contactless cash, a new direct investing platform, and in airing the first fraud prevention TV ad campaign from a major UK bank.

 

Barclays International delivered a RoTE of 8.0% excluding notable items. We brought further focus to the Corporate and Investment Bank, with income growing 6%, solidifying our position in the bulge bracket. We also saw strong growth in Consumer, Cards and Payments, as income increased 21%, driven by improvements in all key businesses.

 

Combined, the Core RoTE, excluding notable items, was 9.4%.

 

Accelerating the closure of Barclays Non-Core is a key part of realising the potential of Barclays. In 2016 we reduced Non-Core RWAs by £22bn, with £12bn of that reduction coming in the final quarter alone. Today, we are announcing that we will close Non-Core on 30 June 2017, six months earlier than previously targeted.

 

We reduced our ownership of Barclays Africa with an initial sale of 12.2% in May. In the fourth quarter we agreed with local management and submitted to regulators our proposed separation arrangements for Barclays Africa. This is a key milestone before a further reduction in our stake at the appropriate time.

 

The progress on our priorities resulted in organic profit generation which strengthened our CET1 capital ratio by 100 basis points in 2016 to 12.4%. This puts us well on track to meet our end-state target and we are well positioned to absorb headwinds over the next few years. Certain legacy conduct issues remain and we intend to make further progress on them. 

 

In short, we have accomplished a lot in a year, and I am thankful to each and every one of our colleagues who have made this possible. Their efforts mean that, in 2017, we can begin to move on from the restructuring of Barclays, shifting our focus solely to the future, and in particular to how we can generate attractive, sustainable, and distributable returns for our shareholders.

 

This means increasing management focus on Barclays UK and Barclays International, the future of this firm. Together, they encompass a diverse set of market leading consumer and wholesale businesses, giving us growth opportunities across a wide waterfront, and resilience in earnings.

 

And we intend to build these businesses on a foundation of world class operations and technology, where core functions for our Group are standardised across the company, streamlining costs, driving high quality analytics, and hugely improving the experience of our customers and clients, which is key to driving loyalty and long term growth.

 

We are now just months away from completing the restructuring of Barclays, and I am more optimistic than ever for our prospects in 2017, and beyond." 

 

James E Staley, Group Chief Executive Officer

 

Barclays Group results


for the year ended

31.12.16

31.12.15

YoY


£m

£m

% Change

Total income

21,451

22,040

(3)

Credit impairment charges and other provisions

(2,373)

(1,762)

(35)

Net operating income

19,078

20,278

(6)

Operating expenses

(14,565)

(13,723)

(6)

UK bank levy

(410)

(426)

4

Litigation and conduct

(1,363)

(4,387)

69

Total operating expenses

(16,338)

(18,536)

12

Other net income/(expenses)

490

(596)


Profit before tax

3,230

1,146


Tax charge

(993)

(1,149)

14

Profit/(loss) after tax in respect of continuing operations 

2,237

(3)


Profit after tax in respect of discontinued operation1

591

626

(6)

Non-controlling interests in respect of continuing operations

(346)

(348)

1

Non-controlling interests in respect of discontinued operation1

(402)

(324)

(24)

Other equity holders2

(457)

(345)

(32)

Attributable profit/(loss)

1,623

(394)






Performance measures




Return on average tangible shareholders' equity2

3.6%

(0.7%)


Average tangible shareholders' equity (£bn)

48.7

47.7


Cost: income ratio

76%

84%


Loan loss rate (bps)

53

42






Basic earnings/(loss) per share2

10.4p

(1.9p)


Dividend per share

3.0p

6.5p






Balance sheet and capital management




Tangible net asset value per share

290p

275p


Common equity tier 1 ratio

12.4%

11.4%


Common equity tier 1 capital

£45.2bn

£40.7bn


Risk weighted assets

£366bn

£358bn


Leverage ratio

4.6%

4.5%


Fully loaded tier 1 capital

£52.0bn

£46.2bn


Leverage exposure

£1,125bn

£1,028bn






Funding and liquidity




Group liquidity pool

£165bn

£145bn


CRD IV liquidity coverage ratio

131%

133%


Loan: deposit ratio3

83%

86%


 

1

Refer to page 21 for further information on the Africa Banking discontinued operation.

2

The profit after tax attributable to other equity holders of £457m (2015: £345m) is offset by a tax credit recorded in reserves of £128m (2015: £70m). The net amount of £329m (2015: £275m), along with non-controlling interests (NCI) is deducted from profit after tax in order to calculate earnings per share and return on average tangible shareholders' equity.

3

Loan: deposit ratio for Barclays UK, Barclays International and Non-Core, excluding investment banking businesses.

 

Barclays Core and Non-Core

results for the year ended

Barclays Core


Barclays Non-Core

31.12.16

31.12.15

YoY


31.12.16

31.12.15

YoY


£m

£m

% Change


£m

£m

% Change

Total income

22,615

21,428

6


(1,164)

612


Credit impairment charges and other provisions

(2,251)

(1,628)

(38)


(122)

(134)

9

Net operating income/(expenses)

20,364

19,800

3


(1,286)

478


Operating expenses

(13,056)

(11,765)

(11)


(1,509)

(1,958)

23

UK bank levy

(334)

(338)

1


(76)

(88)

14

Litigation and conduct

(1,117)

(3,887)

71


(246)

(500)

51

Total operating expenses

(14,507)

(15,990)

9


(1,831)

(2,546)

28

Other net income/(expenses)

159

(61)



331

(535)


Profit/(loss) before tax

6,016

3,749

60


(2,786)

(2,603)

(7)

Tax (charge)/credit

(1,975)

(1,479)

(34)


982

330


Profit/(loss) after tax 

4,041

2,270

78


(1,804)

(2,273)

21

Non-controlling interests

(297)

(266)

(12)


(49)

(82)

40

Other equity holders

(394)

(282)

(40)


(63)

(63)

-  

Attributable profit/(loss)1

3,350

1,722

95


(1,916)

(2,418)

21









Performance measures








Return on average allocated tangible equity

8.4%

4.8%






Average allocated tangible equity (£bn)1

41.0

36.8



7.8

10.9


Period end allocated tangible equity (£bn)1

43.8

37.8



5.4

8.5


Cost: income ratio

64%

75%



n/m

n/m


Loan loss rate (bps)

58

45



22

23


Basic earnings/(loss) per share contribution

20.5p

10.7p



(11.3p)

(14.4p)


















Capital management








Risk weighted assets1

£334bn

£304bn



£32bn

£54bn


Leverage exposure1

£1,024bn

£879bn

 


£101bn

£149bn










Notable items








Total income








Own credit 

(35)

430



-

-


Gain on disposal of Barclays' share of Visa Europe Limited 

615

-



-

-


Gains on US Lehman acquisition assets  

-

496



-

-


Litigation and conduct








Provisions for UK customer redress 

(1,000)

(2,649)



-

(123)


Provisions for ongoing investigations and litigation including Foreign Exchange 

-

(1,036)



-

(201)


Operating expenses








Gain on valuation of a component of the defined retirement benefit liability  

-

429



-

-


Impairment of goodwill and other assets relating to businesses being disposed

-

-



-

(96)


Other net expenses








Losses on sale relating to the Spanish, Portuguese and Italian businesses

-

(112)



-

(468)


Total notable items

(420)

(2,442)



-

(888)


 

Excluding notable items, the Core return on average allocated tangible equity was 9.4% (2015: 11.2%) and the Core basic earnings per share was 23.1p (2015: 24.9p). Excluding notable items, the Non-Core basic loss per share was 11.3p (2015: 10.2p).

 

1

Attributable profit in respect of the Africa Banking discontinued operation is reported at the Group level only. Allocated tangible equity, RWAs and leverage exposure are reported in Head Office within Core.

 





Year ended

Year ended



31.12.16

31.12.15

YoY

Income by business

£m

£m

% Change

Barclays UK

7,517

7,343

2

Barclays International

14,995

13,747

9

Head Office

103

338

(70)

Barclays Core

22,615

21,428

6

Barclays Non-Core

(1,164)

612


Barclays Group

21,451

22,040

(3)

 

Profit/(loss) before tax by business




Barclays UK

1,738

585


Barclays International

4,211

3,278

28

Head Office

67

(114)


Barclays Core

6,016

3,749

60

Barclays Non-Core

(2,786)

(2,603)

(7)

Barclays Group

3,230

1,146


 

Group Finance Director's Review

2016 reflected the good operational performance of Barclays UK and Barclays International with the benefits of diversification across customers and clients, geographies and products coming through. The Core business generated a RoTE excluding notable items of 9.4% (2015: 11.2%) on a £4bn increased average allocated tangible equity base of £41bn. The Core business also generated positive cost: income jaws and we intend to continue to reduce the Group's structural cost base, targeting a Group cost: income ratio of less than 60% over time. The accelerated Non-Core rundown resulted in a reduction in RWAs of £22bn to £32bn resulting in the decision to close the unit six months ahead of plan on 30 June 2017. Capital ratio progression towards end-state target of 150bps to 200bps above the minimum regulatory level was strong with a CET1 ratio of 12.4% (December 2015: 11.4%), largely reflecting profit generation in the period.

 

Group performance

 

•

Return on average tangible shareholders' equity was 3.6% (2015: (0.7%)) and basic earnings per share was 10.4p (2015: (1.9p))

•

Profit before tax increased to £3,230m (2015: £1,146m). The Group performance reflected good Core results whilst being impacted by the Non-Core loss before tax of £2,786m (2015: £2,603m) and provisions for UK customer redress of £1,000m (2015: £2,772m). The appreciation of average USD and EUR against GBP positively impacted income and adversely affected impairment and operating expenses

•

Total income decreased 3% to £21,451m as Non-Core income reduced £1,776m to a net expense of £1,164m due to the acceleration of the Non-Core rundown, while Core income increased 6% to £22,615m driven by Barclays International

•

Credit impairment charges increased £611m to £2,373m including a £320m charge in Q316 following the management review of the UK and US cards portfolio impairment modelling. This resulted in a 11bps increase in the loan loss rate to 53bps

•

Total operating expenses reduced 12% to £16,338m reflecting lower litigation and conduct charges. This was partially offset by the non-recurrence of the prior year gain of £429m on the valuation of a component of the defined retirement benefit liability, increased structural reform implementation costs, and a £150m charge in Barclays International in Q316, relating to a reduction in the real estate footprint which will generate savings in future periods. Operating expenses also included a £395m additional charge in Q416 relating to 2016 compensation awards

•

The effective tax rate on profit before tax decreased to 30.7% (2015: 100.3%) principally as a result of a reduction in non-deductible charges

•

Profit after tax in respect of continuing operations increased to £2,237m (2015: loss of £3m). Profit after tax in relation to the Africa Banking discontinued operation decreased 6% to £591m as increased credit impairment charges and operating expenses were partially offset by income growth

•

Notable items totalled a net loss before tax of £420m (2015: £3,330m) comprising provisions for UK customer redress of £1,000m (2015: £2,772m), a £615m (2015: £nil) gain on disposal of Barclays' share of Visa Europe Limited and an own credit loss of £35m (2015: gain of £430m)

 

All performance commentary which follows excludes the impact of notable items. Refer to pages 68-71 for a reconciliation of results excluding notable items.

 

 

Core performance

 

•

The Core business generated a RoTE of 9.4% (2015: 11.2%) on an average allocated tangible equity base that was £4bn higher at £41bn, due to Core earnings generation and capital returned from the Non-Core

•

Profit before tax increased 4% to £6,436m reflecting good performance in both Barclays UK and Barclays International, with an improvement in the cost: income ratio to 61% (2015: 62%). This included the benefit of the appreciation of average USD and EUR against GBP

•

Total income increased 7% to £22,035m with Barclays International income increasing 10% to £14,531m, with growth in both Corporate and Investment Bank, and Consumer, Cards and Payments, while Barclays UK income was broadly in line at £7,366m (2015: £7,343m)

•

Credit impairment charges increased 38% to £2,251m resulting in a 13bps increase in the loan loss rate to 58bps, including a £320m charge in Q316 following the management review of the UK and US cards portfolio impairment modelling, and a number of single name exposures

•

Total operating expenses increased 6% to £13,507m, including a £390m charge in Q416 relating to the 2016 compensation awards, increased structural reform implementation costs, and a £150m charge in Barclays International in Q316 relating to a reduction in the real estate footprint

 

 

Barclays UK

 

•

RoTE was 19.3% (2015: 21.1%) as profit before tax decreased 5% to £2,587m driven by an increase in credit impairment charges, partially offset by a reduction in total operating expenses

•

Total income was broadly in line at £7,366m (2015: £7,343m), within which:


-

Personal Banking income increased 1% to £3,762m, Barclaycard Consumer UK income decreased 2% to £2,022m and Wealth, Entrepreneurs & Business Banking (WEBB) income increased 1% to £1,582m


-

Net interest income increased 1% to £6,048m, with the net interest margin increasing 6bps to 3.62% reflecting higher margins on deposits, partially offset by lower mortgage margins

•

Credit impairment charges increased £190m to £896m due to a £200m charge in Q316 following the management review of the cards portfolio impairment modelling. Delinquency trends improved with the 30 and 90 day arrears rates on the cards portfolio reducing to 1.9% (2015: 2.3%) and 0.9% (2015: 1.2%) respectively

•

Total operating expenses reduced 1% to £3,882m reflecting savings realised from strategic cost programmes, relating to restructuring of the branch network and technology improvements, partially offset by structural reform programme implementation costs. The cost: income ratio was stable at 53% (2015: 53%)

 

Barclays International

 

•

RoTE was 8.0% (2015: 9.5%) as profit before tax decreased 3% to £3,747m including the impact of the appreciation of average USD and EUR against GBP. This was driven by increased credit impairment charges and operating expenses, partially offset by strong income growth in Consumer, Cards and Payments and Corporate and Investment Bank

•

Total income increased 10% to £14,531m, including the appreciation of average USD and EUR against GBP, within which:


-

Consumer, Cards and Payments income increased 21% to £3,998m, driven by continued growth across all key businesses


-

Corporate and Investment Bank income increased 6% to £10,533m as Markets income increased 9% to £5,279m, within which Credit increased 44% to £1,185m and Macro increased 9% to £2,304m, partially offset by a 6% reduction in Equities to £1,790m. Banking income increased 3% to £5,249m driven by strong growth in Banking fees, which increased 15% to £2,397m, partially offset by a 12% reduction in Corporate lending to £1,195m. Transactional banking was broadly in line at £1,657m (2015: £1,663m)

•

Credit impairment charges increased 47% to £1,355m, within which Consumer, Cards and Payments impairment increased 51% to £1,095m driven by growth in receivables, a change in portfolio mix and a £120m charge in Q316 following the management review of the cards portfolio impairment modelling. Delinquency trends in Barclaycard US worsened with the 30 and 90 day arrears rates increasing to 2.6% (2015: 2.2%) and 1.3% (2015: 1.1%) respectively. Corporate and Investment Bank impairment increased 31% to £260m primarily from impairment of a number of single name exposures

•

Total operating expenses increased 11% to £9,461m including an additional charge in Q416 relating to the 2016 compensation awards, higher structural reform programme implementation costs, a £150m charge in Q316 to reduce the real estate footprint and increased costs in Consumer, Cards and Payments driven by continued growth. These increases were partially offset by lower litigation and conduct costs

 

Head Office

 

•

Profit before tax was £102m (2015: loss of £380m) reflecting increased net income from treasury operations, structural reform programme implementation costs included in operating expenses in 2015, now included in the businesses, and increased other net income primarily due to recycling of the currency translation reserve to the income statement on completion of the sale of the Southern European cards business

 

Non-Core performance

 

•

Strong performance in the accelerated rundown of Non-Core resulted in RWAs decreasing £22.2bn to £32.1bn, despite the impact of the appreciation of USD and EUR against GBP, driven by a £10bn reduction in Derivatives, a £3bn reduction in Securities and loans, a £4bn reduction in Businesses RWAs and a £4bn reallocation to Head Office of operational risk RWAs associated with exited businesses and assets

•

Loss before tax increased to £2,786m (2015: £1,715m) driven by reduced income and increased losses resulting from continued progress on the rundown of Businesses, Securities and loans, and Derivatives, partially offset by lower operating expenses and an increase in other net income from business disposals

•

Total income reduced £1,776m to a net expense of £1,164m including fair value losses on the Education, Social Housing, and Local Authority (ESHLA) portfolio of £393m (2015: £359m). Excluding these fair value losses, negative income was £771m


-

Businesses income reduced £654m to £485m due to the completion of the sale of a number of income generating businesses


-

Securities and loans income decreased £288m to a net expense of £638m primarily driven by the impact of restructuring the ESHLA Lender Option Borrower Option (LOBO) loan terms in Q216


-

Derivatives income reduced £834m to a net expense of £1,011m primarily reflecting the costs of running down the portfolio

•

Credit impairment charges improved 9% to £122m driven by lower impairment charges in European businesses

•

Total operating expenses improved 14% to £1,831m reflecting cost savings from ceasing certain investment banking activities in a number of countries and the completion of the sale of a number of businesses, partially offset by a c.£200m increase in restructuring charges, which totalled c.£400m

•

Other net income of £331m (2015: net expense of £70m) included gains on the sale of Barclays Risk Analytics and Index Solutions, the Asia wealth and investment management business and the Southern European cards business, partially offset by the loss on sale of the French retail business of £455m

•

The intention is to close Non-Core on 30 June 2017 with approximately £25bn of RWAs

 

Group capital and leverage

 

•

The fully loaded CRD IV CET1 ratio increased to 12.4% (December 2015: 11.4%) reflecting an increase in CET1 capital of £4.5bn to £45.2bn, despite RWAs increasing by £7bn to £366bn


-

The increase in CET1 capital was largely driven by profits of £2.1bn generated in the period, after absorbing the impact of notable items. Other favourable movements included the currency translation reserve as a result of the appreciation of all major currencies against GBP


-

The increase in RWAs was principally due to the appreciation of ZAR, USD and EUR against GBP and business growth, which together more than offset RWA reductions in Non-Core

•

The leverage ratio increased to 4.6% (December 2015: 4.5%) driven by a £5.8bn increase in fully loaded Tier 1 capital to £52.0bn partially offset by an increase in leverage exposure of £97bn to £1,125bn. Total IFRS assets increased 8% to £1,213bn from December 2015 contributing to the 9% increase in leverage exposure


-

The IFRS asset increase was mainly driven by loans and advances and other assets which increased £82bn to £707bn. The increase was primarily due to the appreciation of major currencies against GBP, an increase in liquidity pool assets, and lending growth in Barclays UK and Barclays International. This was partially offset by the rundown and exit of Non-Core assets


-

Net derivative leverage exposure remained broadly flat as an increase in IFRS derivative assets of £19bn to £347bn was offset by an increase in IFRS derivative liabilities resulting in regulatory derivative netting increasing £20bn to £313bn. The increase was mainly within foreign exchange derivatives driven by an increase in trade volumes and appreciation of all major currencies against GBP

•

Tangible net asset value per share increased to 290p (December 2015: 275p) driven by profit generated in the period and net favourable reserve movements

 

Group funding and liquidity

 

•

The Group continued to maintain surpluses to its internal and regulatory requirements. The liquidity pool increased to £165bn (December 2015: £145bn), primarily driven by the appreciation of USD and EUR against GBP and a net increase in deposits and wholesale funding to support business growth. The Liquidity Coverage Ratio (LCR) was 131% (December 2015: 133%), equivalent to a surplus of £39bn (December 2015: £37bn)

•

Wholesale funding outstanding excluding repurchase agreements was £158bn (December 2015: £142bn). The increase was driven by the prudent management of the liquidity position, HoldCo issuance and the appreciation of USD and EUR against GBP. The Group issued £12.1bn equivalent of capital and term senior unsecured debt from the HoldCo of which £8.6bn equivalent and £0.7bn equivalent in public and private senior unsecured debt respectively, and £2.8bn of capital instruments. In the same period £7.4bn of Barclays Bank PLC (OpCo) capital and senior unsecured debt was repurchased or redeemed

•

On 12 December 2016, Moody's upgraded both the HoldCo's and OpCo's long term senior unsecured ratings one notch to Baa2 and A1 respectively. The negative outlooks remained

 

Other matters

 

•

The acquisition of Barclays' share of Visa Europe Limited by Visa Inc. completed on 21 June 2016 resulting in the recognition of a pre-tax gain on disposal of £615m in income in Q216

•

Additional UK customer redress provisions of £1,000m (2015: £2,772m) relating to Payment Protection Insurance (PPI) were recognised. £400m was recognised in Q216 reflecting an updated estimate of costs, primarily relating to ongoing remediation programmes, with £600m recognised in Q316 to reflect the current estimate of the impact of the revised complaints deadline proposed in Financial Conduct Authority (FCA) consultation paper 16/20 issued on 2 August 2016. The remaining PPI provision as at December 2016 was £1,979m (December 2015: £2,106m)

•

In Q216, Barclays redeemed its $1.15bn 7.75% Series 4 Non-Cumulative Callable Dollar Preference Shares. In Q316, Barclays redeemed its $750m 6.625% Series 2 Non-Cumulative Callable Dollar Preference Shares. These redemptions resulted in a 10bps detriment to the CET1 ratio, but will result in an ongoing reduction in preference share dividends payable of $139m per annum

•

On 5 May 2016, Barclays executed the first tranche of the sell down of the Group's interest in BAGL with the sale of 12.2% of BAGL's issued share capital. Following completion of this first tranche, Barclays' holding represents 50.1% of BAGL's issued share capital. Barclays continues to explore opportunities to reduce its shareholding to a level that would permit regulatory deconsolidation. Barclays also continues to work closely with BAGL management on arrangements for operational separation of the two businesses

•

The terms of the transitional services arrangements and related separation payments have been agreed with BAGL and submitted to relevant regulators as part of a request for approval for Barclays to sell down to below a 50% holding. These proposed separation terms include contributions totalling £765m, of which £27.5m was paid in 2016, with the remainder to be paid over the period through to completion of any initial sale of Barclays' stake in BAGL to below 50%. The majority of these funds would be used by BAGL to separate from the Barclays group, including termination of the existing Master Services Agreement, making investments in branding, operations and technology, and covering separation related expenses. In addition, Barclays will contribute an amount equivalent to 1.5% of BAGL's market capitalisation to a new Broad-Based Black Economic Empowerment scheme, equating to approximately £130m at the 31 December 2016 share price and ZAR exchange rate, and expects to incur some additional operating expenses in respect of delivering the separation of the businesses under the transitional services arrangements

•

It is estimated that the selldown of the Group's interest in BAGL to a level that achieves regulatory deconsolidation will result in greater than 75bps accretion to the Group's CET1 ratio, based on the BAGL share price of ZAR168.69 and ZAR exchange rate of 16.78 at 31 December 2016, after taking account of the separation costs referred to above

•

Certain legal proceedings and investigations relating to legacy issues remain outstanding, including a civil complaint filed by the DOJ against Barclays in December 2016 relating to mortgage-backed securities sold between 2005 and 2007 which Barclays is defending. Resolving outstanding legacy issues in an appropriate timeframe will continue to be a priority. Please see note 29 to the financial statements in the Annual Report for details of relevant matters

 

Dividends

 

•

A final dividend for 2016 of 2.0p per share will be paid on 5 April 2017, resulting in a total 3.0p dividend per share for the year

 

Outlook and Guidance

 

•

Barclays today announces the intention to close Non-Core early at 30 June 2017, at which point RWAs are expected to be approximately £25bn. The composition of the assets at that date are expected to consist primarily of residual derivatives, Italian mortgages and the ESHLA portfolio. Further information on the allocation of the residual Non-Core between Barclays UK and Barclays International will be provided on closure

•

Loss before tax in 2017 generated by Non-Core operations is expected to be approximately £1bn, excluding fair value gains or losses on the ESHLA portfolio. A greater proportion of this loss is expected to occur in H117 reflecting continued exit costs

•

The end-state CET1 capital ratio target has been revised to 150-200bps above the minimum regulatory level, providing 400-450bps buffer to the Bank of England stress test systemic reference point

 

Tushar Morzaria, Group Finance Director 

 

Results by Business

 

 Barclays UK

Year ended

Year ended



31.12.16

31.12.15

YoY

Income statement information1

£m

£m

% Change

Net interest income

6,048

5,973

1

Net fee, commission and other income

1,469

1,370

7

Total income

7,517

7,343

2

Credit impairment charges and other provisions

(896)

(706)

(27)

Net operating income

6,621

6,637

-

Operating expenses

(3,792)

(3,464)

(9)

UK bank levy

(48)

(77)

38

Litigation and conduct

(1,042)

(2,511)

59

Total operating expenses

(4,882)

(6,052)

19

Other net expenses

(1)

-


Profit before tax

1,738

585


Attributable profit/(loss)

828

(47)






Balance sheet information




Loans and advances to customers at amortised cost (£bn)

166.4

166.1


Total assets (£bn)

209.6

202.5


Customer deposits (£bn)

189.0

176.8


Risk weighted assets (£bn)

67.5

69.5






Key facts




Average LTV of mortgage portfolio2

48%

49%


Average LTV of new mortgage lending2

63%

64%


Number of branches

1,305

1,362


Barclays mobile banking  customers

5.7m

4.7m


30 day arrears rate - Barclaycard Consumer UK

1.9%

2.3%






Performance measures




Return on average allocated tangible equity

9.6%

(0.3%)


Average allocated tangible equity (£bn)

8.9

9.3


Cost: income ratio

65%

82%


Loan loss rate (bps)

52

42


Loan: deposit ratio

88%

94%


Net interest margin

3.62%

3.56%






Notable items




Total income




Gain on disposal of Barclays' share of Visa Europe Limited

151

-


Litigation and conduct




Provisions for UK customer redress

(1,000)

(2,431)


Operating expenses




Gain on valuation of a component of the defined retirement benefit liability

-

296


Total notable items

(849)

(2,135)

 

Excluding notable items, the Barclays UK return on average allocated tangible equity was 19.3% (2015: 21.1%).

 

1

Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document.

2

Average LTV of mortgage portfolio and new mortgage lending calculated on the balance weighted basis.

 

Analysis of Barclays UK

Year ended

Year ended



31.12.16

31.12.15

YoY

Analysis of total income

£m

£m

% Change

Personal Banking

3,891

3,714

5

Barclaycard Consumer UK

2,022

2,065

(2)

Wealth, Entrepreneurs & Business Banking

1,604

1,564

3

Total income

7,517

7,343

2





Analysis of credit impairment charges and other provisions




Personal Banking

(183)

(194)

6

Barclaycard Consumer UK

(683)

(488)

(40)

Wealth, Entrepreneurs & Business Banking

(30)

(24)

(25)

Total credit impairment charges and other provisions

(896)

(706)

(27)





Analysis of loans and advances to customers at amortised cost (£bn)




Personal Banking

135.0

134.0


Barclaycard Consumer UK

16.5

16.2


Wealth, Entrepreneurs & Business Banking

14.9

15.9


Total loans and advances to customers at amortised cost

166.4

166.1






Analysis of customer deposits (£bn)




Personal Banking

139.3

131.0


Barclaycard Consumer UK

-

-


Wealth, Entrepreneurs & Business Banking

49.7

45.8


Total customer deposits

189.0

176.8


 

2016 compared to 2015

 

 

•

Profit before tax increased £1,153m to £1,738m reflecting lower provisions for UK customer redress. Profit before tax excluding notable items1 decreased 5% to £2,587m driven by an increase in credit impairment charges following the management review of the cards portfolio impairment modelling, partially offset by a reduction in total operating expenses

•

Total income, including a gain on disposal of Barclays' share of Visa Europe Limited recognised in Personal Banking and Wealth, Entrepreneurs & Business Banking (WEBB) increased 2% to £7,517m. Total income excluding notable items was broadly in line at £7,366m (2015: £7,343m), within which:


-

Personal Banking income increased 1% to £3,762m driven by improved deposit margins and balance growth, partially offset by lower mortgage margins


-

Barclaycard Consumer UK income decreased 2% to £2,022m primarily as a result of the European Interchange Fee Regulation, which came into full effect from December 2015, offset by balance growth and gains from debt sales


-

WEBB income increased 1% to £1,582m reflecting improved margins and deposit growth, partially offset by reduced transactional fee income


-

Net interest income increased 1% to £6,048m due to balance growth and deposit pricing initiatives, partially offset by lower mortgage margins


-

Net interest margin increased 6bps to 3.62% reflecting higher margins on deposits, partially offset by lower mortgage margins


-

Net fee, commission and other income decreased 4% to £1,318m due to the impact of the European Interchange Fee Regulation in Barclaycard Consumer UK, which came into full effect from December 2015, and reduced fee and commission income in WEBB

•

Credit impairment charges increased 27% to £896m due to a £200m charge in Q316 following the management review of the cards portfolio impairment modelling. The 30 day and 90 day arrears rates on the cards portfolio improved year-on-year to 1.9% (2015: 2.3%) and 0.9% (2015: 1.2%) respectively

•

Total operating expenses, including provisions for UK customer redress of £1,000m (2015: £2,431m), reduced 19% to £4,882m. Total operating expenses excluding notable items reduced 1% to £3,882m reflecting savings realised from strategic cost programmes, relating to restructuring of the branch network and technology improvements, offset by structural reform programme implementation costs

•

The cost: income ratio excluding notable items was 53% (2015: 53%) and RoTE excluding notable items was 19.3% (2015: 21.1%)

•

Loans and advances to customers were stable at £166.4bn (December 2015: £166.1bn)

•

Total assets increased £7.1bn to £209.6bn primarily reflecting an increase in the allocated liquidity pool

•

Customer deposits increased 7% to £189.0bn primarily driven by higher balances in Personal Banking and WEBB

•

RWAs reduced £2.0bn to £67.5bn primarily driven by changes in the mortgages credit risk model

 

1

Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document.

 

Barclays International

Year ended

Year ended



31.12.16

31.12.15

YoY

Income statement information1

£m

£m

% Change

Net interest income

4,512

4,324

4

Net trading income

4,580

3,782

21

Net fee, commission and other income

5,903

5,641

5

Total income

14,995

13,747

9

Credit impairment charges and other provisions

(1,355)

(922)

(47)

Net operating income

13,640

12,825

6

Operating expenses

(9,129)

(8,029)

(14)

UK bank levy

(284)

(253)

(12)

Litigation and conduct

(48)

(1,310)

96

Total operating expenses

(9,461)

(9,592)

1

Other net income

32

45

(29)

Profit before tax

4,211

3,278

28

Attributable profit

2,412

1,758

37





Balance sheet information




Loans and advances to banks and customers at amortised cost (£bn)2

211.3

184.1


Trading portfolio assets (£bn)

73.2

61.9


Derivative financial instrument assets (£bn)

156.2

111.5


Derivative financial instrument liabilities (£bn)

160.6

119.0


Reverse repurchase agreements and other similar secured lending (£bn)

13.4

24.7


Financial assets designated at fair value (£bn)

62.3

46.8


Total assets (£bn)

648.5

532.2


Customer deposits (£bn)3

216.2

185.6


Risk weighted assets (£bn)

212.7

194.8






Performance measures




Return on average allocated tangible equity

9.8%

7.2%


Average allocated tangible equity (£bn)

25.5

24.9


Cost: income ratio

63%

70%


Loan loss rate (bps)

63

49


Loan: deposit ratio

86%

88%


Net interest margin4

3.98%

3.80%






Notable items




Total income




Gain on disposal of Barclays' share of Visa Europe Limited  

464

-


Gains on US Lehman acquisition assets 

-

496


Litigation and conduct




Provisions for UK customer redress

-

(218)


Provisions for ongoing investigations and litigation including Foreign Exchange 

-

(984)


Operating expenses




Gain on valuation of a component of the defined retirement benefit liability 

-

133


Total notable items

464

(573)

 

Excluding notable items, the Barclays International return on average allocated tangible equity was 8.0% (2015: 9.5%).

 

1

Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document.

2

As at 31 December 2016 loans and advances included £185.9bn (December 2015: £162.6bn) of loans and advances to customers (including settlement balances of £19.5bn (December 2015: £18.5bn) and cash collateral of £30.1bn (December 2015: £24.8bn)), and £25.4bn (December 2015: £21.5bn) of loans and advances to banks (including settlement balances of £1.7bn (December 2015: £1.6bn) and cash collateral of £6.3bn (December 2015: £5.7bn)). Loans and advances to banks and customers in respect of Consumer, Cards and Payments were £39.7bn (December 2015: £32.1bn).

3

As at 31 December 2016 customer deposits included settlement balances of £16.6bn (December 2015: £16.3bn) and cash collateral of £20.8bn (December 2015: £15.9bn).

4

Barclays International margins have been restated to include interest earning lending within the investment banking business.

 

Analysis of Barclays International




Corporate and Investment Bank

Year ended

Year ended


31.12.16

31.12.15

YoY

Income statement information

£m

£m

% Change

Analysis of total income




Credit

1,185

824

44

Equities

1,790

1,912

(6)

Macro

2,304

2,108

9

Markets

5,279

4,844

9

Banking fees

2,397

2,087

15

Corporate lending

1,195

1,361

(12)

Transactional banking

1,657

1,663

-

Banking

5,249

5,111

3

Other

5

495

(99)

Total income

10,533

10,450

1

Credit impairment charges and other provisions

(260)

(199)

(31)

Total operating expenses

(7,624)

(7,929)

4

Profit before tax

2,650

2,322

14





Balance sheet information




Risk weighted assets (£bn)

178.6

167.3






Performance measures




Return on average allocated tangible equity

6.1%

5.4%


Average allocated tangible equity (£bn)

21.9

21.9


 

Excluding notable items, the CIB return on average allocated tangible equity was 6.1% (2015: 8.2%).

 

Consumer, Cards and Payments




Income statement information




Total income

4,462

3,297

35

Credit impairment charges and other provisions

(1,095)

(723)

(51)

Total operating expenses

(1,837)

(1,663)

(10)

Profit before tax

1,561

956

63





Balance sheet information




Loans and advances to banks and customers at amortised cost (£bn)

39.7

32.1


Customer deposits (£bn)

50.0

41.8


Risk weighted assets (£bn)

34.1

27.5






Key facts




30 days arrears rate - Barclaycard US

2.6%

2.2%


Total number of Barclaycard business clients

355,000

341,000


Value of payments processed

£296bn

£271bn






Performance measures




Return on average allocated tangible equity

31.4%

20.2%


Average allocated tangible equity (£bn)

3.6

3.0


 

Excluding notable items, the Consumer, Cards and Payments return on average allocated tangible equity was 19.1% (2015: 18.9%).

 

 2016 compared to 2015

 

•

Profit before tax increased 28% to £4,211m, including the gain on disposal of Barclays' share of Visa Europe Limited. Profit before tax excluding notable items1 decreased 3% to £3,747m driven by an 11% increase in total operating expenses, and a 47% increase in impairment, partially offset by a 10% increase in total income

•

Total income excluding notable items increased 10% to £14,531m, including the appreciation of average USD and EUR against GBP, with Consumer, Cards and Payments income increasing 21% to £3,998m and Corporate and Investment Bank (CIB) income increasing 6% to £10,533m

-

Markets income increased 9% to £5,279m, within which:


-

Credit income increased 44% to £1,185m driven by strong performance in fixed income flow credit which benefitted from increased market volatility and client demand


-

Equities income decreased 6% to £1,790m with lower client activity in Asia and the simplification of the EMEA business, partially offset by improved performance in cash, derivatives and financing in H216


-

Macro income increased 9% to £2,304m driven by increased activity post the EU referendum decision and US elections

-

Banking income increased 3% to £5,249m within which:


-

Banking fees income increased 15% to £2,397m driven by higher debt underwriting and advisory fees, partially offset by lower equity underwriting fees


-

Corporate lending reduced 12% to £1,195m due to losses on fair value hedges and the non-recurrence of one-off work-out gains recognised in Q215


-

Transactional banking was broadly flat at £1,657m (2015: £1,663m) as income from higher deposit balances was offset by margin compression

-

Consumer, Cards and Payments income increased 21% to £3,998m driven by growth across all key businesses and the appreciation of average USD and EUR against GBP

•

Credit impairment charges increased 47% to £1,355m including the appreciation of average USD and EUR against GBP, within which:

-

CIB credit impairment charges increased 31% to £260m driven by the impairment of a number of single name exposures

-

Consumer, Cards and Payments credit impairment charges increased 51% to £1,095m primarily driven by balance growth, a change in portfolio mix and a £120m charge in Q316 following a management review of the cards portfolio impairment modelling

•

Total operating expenses excluding notable items increased 11%, within which:

-

CIB increased 12% to £7,624m. In addition to the appreciation of average USD against GBP this reflected an additional charge in Q416 relating to the 2016 compensation awards, higher restructuring costs, £150m of which related to reducing the real estate footprint in Q316, and higher structural reform programme implementation costs including those relating to the incorporation of the US Intermediate Holding Company (IHC) on 1 July 2016. These increases were partially offset by lower litigation and conduct costs

-

Consumer, Cards and Payments increased 7% to £1,837m due to continued business growth and the appreciation of average USD and EUR against GBP, partially offset by lower restructuring costs

•

The cost: income ratio excluding notable items was 65% (2015: 64%) and RoTE excluding notable items was 8.0% (2015: 9.5%)

•

Loans and advances to banks and customers at amortised cost increased £27.2bn to £211.3bn with CIB increasing £19.7bn to £171.7bn due to increased lending and cash collateral and the appreciation of USD and EUR against GBP. Consumer, Cards and Payments increased £7.6bn to £39.7bn driven by appreciation of USD and EUR against GBP and growth in Barclaycard US, including the acquisition of the JetBlue credit card portfolio

•

Trading portfolio assets increased £11.3bn to £73.2bn due to an increase in client activity and appreciation of major currencies against GBP

•

Derivative financial instrument assets and liabilities increased £44.7bn to £156.2bn and £41.6bn to £160.6bn respectively, due to the appreciation of USD and EUR against GBP and decreases in forward interest rates

•

Financial assets designated at fair value increased £15.5bn to £62.3bn and reverse repurchase agreements and other similar lending decreased £11.3bn to £13.4bn. Since 2015, new reverse repurchase agreements in certain businesses have been designated at fair value to better align to the way the business manages the portfolio's risk and performance. On a net basis reverse repos have increased by £4.2bn as a result of increased matched book trading

•

Customer deposits increased £30.6bn to £216.2bn, with CIB increasing £22.6bn to £166.3bn primarily driven by increases in deposits cash collateral and the appreciation of USD and EUR against GBP. Consumer, Cards and Payments increased £8.2bn to £50.0bn driven by balance growth in Barclaycard US and Private Banking, and the appreciation of USD and EUR against GBP

•

RWAs increased £17.9bn to £212.7bn, due to the appreciation of USD against GBP, and business growth, including the acquisition of the JetBlue credit card portfolio in Consumer, Cards and Payments

 

1

Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document.

 

Head Office

Year ended

Year ended



31.12.16

31.12.15

YoY

Income statement information1

£m

£m

% Change

Net interest income

(183)

(305)

40

Net fee, commission and other income

286

643

(56)

Net operating income

103

338

(70)

Operating expenses

(135)

(272)

50

UK bank levy

(2)

(8)

75

Litigation and conduct

(27)

(66)

59

Total operating expenses

(164)

(346)

53

Other net income/(expenses)

128

(106)


Profit/(loss) before tax

67

(114)


Attributable profit

110

11






Balance sheet information




Total assets (£bn)2

75.2

59.4


Risk weighted assets (£bn)2

53.3

39.7






Performance measures




Average allocated tangible equity (£bn)

6.5

2.6






Notable items




Total income




Own credit

(35)

430


Litigation and conduct




Provisions for ongoing investigations and litigation including Foreign Exchange

-

(52)


Other net expenses




Losses on sale relating to the Spanish, Portuguese and Italian businesses

-

(112)


Total notable items

(35)

266

 

2016 compared to 2015

 

•

Profit before tax was £67m (2015: loss of £114m). Profit before tax excluding notable items1 improved from a loss of £380m to a profit of £102m

•

Net operating income excluding notable items increased to £138m (2015: loss of £92m) primarily due to changes in net income from treasury operations

•

Total operating expenses excluding notable items reduced to £164m (2015: £294m) primarily due to a reduction in structural reform implementation costs now allocated to the businesses

•

Other net income excluding notable items increased to £128m (2015: £6m) primarily due to recycling of the currency translation reserve on the disposal of the Southern European cards business

•

Total assets increased £15.8bn to £75.2bn primarily driven by the appreciation of ZAR against GBP

•

RWAs increased £13.6bn to £53.3bn primarily driven by the appreciation of ZAR against GBP and the reallocation of operational risk RWAs from Non-Core associated with exited businesses and assets

 

1

Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document.

2

Includes Africa Banking assets held for sale of £65.1bn (December 2015: £47.9bn) and risk weighted assets of £ 42.3bn (December 2015: £31.7bn).

 

Barclays Non-Core

Year ended

Year ended



31.12.16

31.12.15

YoY

Income statement information1

£m

£m

% Change

Net interest income

160

615

(74)

Net trading income

(1,703)

(706)


Net fee, commission and other income

379

703

(46)

Total income

(1,164)

612


Credit impairment charges and other provisions

(122)

(134)

9

Net operating (expenses)/income

(1,286)

478


Operating expenses

(1,509)

(1,958)

23

UK bank levy

(76)

(88)

14

Litigation and conduct

(246)

(500)

51

Total operating expenses

(1,831)

(2,546)

28

Other net income/(expenses)

331

(535)


Loss before tax

(2,786)

(2,603)

(7)

Attributable loss

(1,916)

(2,418)

21





Balance sheet information




Loans and advances to banks and customers at amortised cost (£bn)2

51.1

51.8


Derivative financial instrument assets (£bn)

188.7

213.7


Derivative financial instrument liabilities (£bn)

178.6

202.1


Reverse repurchase agreements and other similar secured lending (£bn)

0.1

3.1


Financial assets designated at fair value (£bn)

14.5

21.4


Total assets (£bn)

279.7

325.8


Customer deposits (£bn)3

12.5

20.9


Risk weighted assets (£bn)

32.1

54.3






Performance measures




Average allocated tangible equity (£bn)

7.8

10.9


Period end allocated tangible equity (£bn)

5.4

8.5


Loan loss rate (bps)

22

23






Notable items




Litigation and conduct




Provisions for UK customer redress

-

(123)


Provisions for ongoing investigations and litigation including Foreign Exchange

-

(201)


Operating expenses




Impairment of goodwill and other assets relating to businesses being disposed 

-

(96)


Other net expenses




Losses on sale relating to the Spanish, Portuguese and Italian businesses

-

(468)


Total notable items

-

(888)






Analysis of total income




Businesses

485

1,139

(57)

Securities and loans

(638)

(350)

(82)

Derivatives

(1,011)

(177)


Total income

(1,164)

612


 

1

Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document.

2

As at 31 December 2016 loans and advances included £38.5bn (December 2015: £40.4bn) of loans and advances to customers (including settlement balances of £0.1bn (December 2015: £0.3bn) and cash collateral of £17.3bn (December 2015: £19.0bn)), and £12.6bn (December 2015: £11.4bn) of loans and advances to banks (including settlement balances of £0.1bn (December 2015: £nil) and cash collateral of £12.1bn (December 2015: £10.1bn)).

3

As at 31 December 2016 customer deposits included settlement balances of £0.1bn (December 2015: £0.2bn) and cash collateral of £11.9bn (December 2015: £12.3bn).

 

2016 compared to 2015

 

•

Loss before tax increased to £2,786m (2015: £2,603m). Loss before tax excluding notable items1 increased to £2,786m (2015: £1,715m) driven by reduced income and increased losses resulting from continued progress on the rundown of Derivatives, Businesses and Securities and loans, partially offset by lower operating expenses and higher other net income primarily from business and country exits

•

Total income reduced £1,776m to a net expense of £1,164m

-

Businesses income reduced £654m to £485m due to the impact of lower income following the completion of the sale of a number of income generating businesses and fees paid to Head Office relating to the termination of internal hedging and funding positions no longer required

-

Securities and loans income decreased £288m to a net expense of £638m primarily driven by the impact of restructuring the ESHLA portfolio, the non-recurrence of a £91m provision release relating to a litigation matter in Q115 and portfolio rundown. Fair value losses on the ESHLA portfolio were £393m (2015: £359m)

-

Derivatives income reduced £834m to a net expense of £1,011m principally reflecting the costs of running down the portfolio

•

Credit impairment charges improved 9% to £122m due to lower impairment charges in European businesses

•

Total operating expenses excluding notable items improved 14% to £1,831m reflecting cost savings from ceasing certain investment banking activities in a number of countries and the completion of the sale of a number of businesses, partially offset by a c.£200m increase in restructuring charges, which totalled c.£400m

•

Other net income excluding notable items of £331m (2015: net expense of £70m) included gains on the sale of Barclays Risk Analytics and Index Solutions, the Asia wealth and investment management business and the Southern European cards business, partially offset by the loss on sale of the French retail business of £455m

•

Loans and advances to banks and customers at amortised cost decreased £0.7bn to £51.1bn due to the sale of the Asia wealth and investment management business, and the rundown and exit of historical investment bank assets, partially offset by the recognition of £8bn of ESHLA loans at amortised cost, following the restructure of LOBO loan terms

•

Total assets decreased £46.1bn to £279.7bn due to lower derivative financial instrument assets which decreased £25.0bn to £188.7bn whilst derivative financial instrument liabilities decreased £23.5bn to £178.6bn mainly on continued rundown of the derivative back book

•

Leverage exposure decreased £47bn
to £101bn due to reduced potential future exposure on derivatives and trading portfolio assets

•

RWAs reduced £22.2bn to £32.1bn despite the appreciation of USD and EUR against GBP, including a £10bn reduction in Derivatives, a £3bn reduction in Securities and loans, a £4bn reduction in Businesses RWAs, and a £4bn reallocation of operational risk RWAs to Head Office associated with business disposals and exits

 

1

Refer to the appendix on pages 65-75 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document.

 

Discontinued Operation

 

On 1 March 2016, Barclays announced its intention to sell down the Group's interest in BAGL. This sell down is intended to be to a level which will permit deconsolidation from an accounting and regulatory perspective, subject to shareholder and regulatory approvals as required. On 5 May 2016 Barclays executed the first tranche of the sell down of the Group's interest in BAGL with the sale of 12.2% of BAGL's issued share capital. Following completion of the sale, Barclays' holding represents 50.1% of BAGL's issued share capital.

The terms of the transitional services arrangements and related separation payments have been agreed with BAGL and submitted to relevant regulators as part of a request for approval for Barclays to sell down to below a 50% holding. These proposed separation terms include contributions totalling £765m, of which £27.5m was paid in 2016, with the remainder to be paid over the period through to completion of any initial sale of Barclays' stake in BAGL to below 50%. The majority of these funds would be used by BAGL to separate from the Barclays group, including termination of the existing Master Services Agreement, making investments in branding, operations and technology, and covering separation related expenses. In addition, Barclays will contribute an amount equivalent to 1.5% of BAGL's market capitalisation to a new Broad-Based Black Economic Empowerment scheme, equating to approximately £130m at the 31 December 2016 share price and ZAR exchange rate, and expects to incur some additional operating expenses in respect of delivering the separation of the businesses under the transitional services arrangements.

These proposed contributions have been taken into account in assessing whether any impairment of the BAGL disposal group was required in the Group's balance sheet. No impairment of the BAGL disposal group was required at 31 December 2016, as the market value of BAGL less estimated costs to sell at the prevailing share price and ZAR exchange rate was £8.4bn, which was greater than the carrying asset value of BAGL at that date of £7.3bn, plus the proposed costs of separation referred to above.

The Africa Banking business meets the requirements for presentation as a discontinued operation. As such, these results have been presented as two lines on the face of the Group income statement, representing the profit after tax and non-controlling interest in respect of the discontinued operation. Were the fair value of BAGL, based on its quoted share price, less estimated costs to sell, to fall below the carrying amount of the net assets of BAGL including goodwill on acquisition, a resulting impairment to Barclays' stake in BAGL would also be recognised through these lines.

 

Africa Banking

Year ended

Year ended


31.12.16

31.12.15

YoY

Income statement information

£m

£m

% Change

Net interest income

2,169

1,950

11

Net fee, commission and other income

1,577

1,464

8

Total income

3,746

3,414

10

Credit impairment charges and other provisions

(445)

(353)

(26)

Net operating income

3,301

3,061

8

Operating expenses

(2,345)

(2,091)

(12)

UK bank levy

(65)

(50)

(30)

Total operating expenses

(2,410)

(2,141)

(13)

Other net income

6

7

(14)

Profit before tax

897

927

(3)

Profit after tax 

591

626

(6)

Attributable profit

189

302

(37)





Balance sheet information




Total assets (£bn)1

65.1

47.9


Risk weighted assets (£bn)1

42.3

31.7






Key Facts




Period end - ZAR/£

16.78

23.14


Average - ZAR/£²

20.04

19.57


Barclays Africa Group Limited share price (ZAR)

168.69

143.49


Barclays Africa Group Limited number of shares (m)

848

848

 

1

Africa Banking assets held for sale and RWAs are reported in Head Office within Core.

2

The average rate is derived from daily spot rates during the year.

 

Quarterly Results Summary

 

Barclays Group











Q416

Q316

Q216

Q116


Q415

Q315

Q215

Q115

Income statement information

£m

£m

£m

£m


£m

£m

£m

£m

Net interest income

2,523

2,796

2,530

2,688


2,726

2,692

2,664

2,526

Net fee, commission and other income

2,469

2,650

3,442

2,353


1,722

2,789

3,797

3,124

Total income

4,992

5,446

5,972

5,041


4,448

5,481

6,461

5,650

Credit impairment charges and other provisions

(653)

(789)

(488)

(443)


(554)

(429)

(393)

(386)

Net operating income

4,339

4,657

5,484

4,598


3,894

5,052

6,068

5,264

Operating expenses

(3,812)

(3,581)

(3,425)

(3,747)


(3,547)

(3,552)

(3,557)

(3,067)

UK bank levy

(410)

-

-

-


(426)

-

-

-

Litigation and conduct

(97)

(741)

(447)

(78)


(1,722)

(699)

(927)

(1,039)

Total operating expenses

(4,319)

(4,322)

(3,872)

(3,825)


(5,695)

(4,251)

(4,484)

(4,106)

Other net income/(expenses)

310

502

(342)

20


(274)

(182)

(39)

(101)

Profit/(loss) before tax

330

837

1,270

793


(2,075)

619

1,545

1,057

Tax credit/(charge)

50

(328)

(467)

(248)


(164)

(133)

(324)

(528)

Profit/(loss) after tax in respect of continuing operations

380

509

803

545


(2,239)

486

1,221

529

Profit after tax in respect of discontinued operation

71

209

145

166


101

167

162

196











Attributable to:










Ordinary equity holders of the parent

99

414

677

433


(2,422)

417

1,146

465

Other equity holders

139

110

104

104


107

79

79

80

Non-controlling interests

213

194

167

174


177

157

158

180











Balance sheet information

£bn

£bn

£bn

£bn


£bn

£bn

£bn

£bn

Total assets

1,213.1

1,324.0

1,351.3

1,248.9


1,120.0

1,236.5

1,196.7

1,416.4

Risk weighted assets

365.6

373.4

366.3

363.0


358.4

381.9

376.7

395.9

Leverage exposure

1,125.5

1,185.1

1,155.4

1,082.0


1,027.8

1,140.7

1,139.3

1,254.7











Performance measures










Return on average tangible shareholders' equity

1.1%

3.6%

5.8%

3.8%


(20.1%)

3.6%

9.8%

4.0%

Average tangible shareholders' equity (£bn)

48.9

49.4

48.3

48.3


47.8

47.6

47.2

48.1

Cost: income ratio

87%

79%

65%

76%


128%

78%

69%

73%

Loan loss rate (bps)

58

66

41

40


53

37

35

32

Basic earnings/(loss) per share 

0.8p

2.6p

4.2p

2.7p


(14.4p)

2.6p

7.0p

2.9p











Notable items

£m

£m

£m

£m


£m

£m

£m

£m

Total income










Own credit

46

(264)

292

(109)


(175)

195

282

128

Gain on disposal of Barclays' share of Visa Europe Limited

-

-

615

-


-

-

-

-

Gains on US Lehman acquisition assets

-

-

-

-


-

-

496

-

Litigation and conduct










Provisions for UK customer redress

-

(600)

(400)

-


(1,450)

(290)

(850)

(182)

Provisions for ongoing investigations and litigation including Foreign Exchange

-

-

-

-


(167)

(270)

-

(800)

Operating expenses










Gain on valuation of a component of the defined retirement benefit liability

-

-

-

-


-

-

-

429

Impairment of goodwill and other assets relating to businesses being disposed

-

-

-

-


(96)

-

-

-

Other net expenses










Losses on sale relating to the Spanish, Portuguese and Italian businesses

-

-

-

-


(261)

(201)

-

(118)

Total notable items

46

(864)

507

(109)


(2,149)

(566)

(72)

(543)

 

Excluding notable items, the Q416 Group return on average tangible shareholders' equity was 0.7% (Q415: (1.9%)) and basic earnings/(loss) per share was 0.5p (Q415: (1.3p)).

 

 

 Barclays Core











Q416

Q316

Q216

Q116


Q415

Q315

Q215

Q115

Income statement information

£m

£m

£m

£m


£m

£m

£m

£m

Net interest income

2,577

2,718

2,491

2,591


2,555

2,557

2,510

2,371

Net fee, commission and other income

2,834

2,887

3,825

2,692


1,961

2,708

3,709

3,057

Total income

5,411

5,605

6,316

5,283


4,516

5,265

6,219

5,428

Credit impairment charges and other provisions

(606)

(769)

(462)

(414)


(522)

(388)

(373)

(345)

Net operating income

4,805

4,836

5,854

4,869


3,994

4,877

5,846

5,083

Operating expenses

(3,471)

(3,270)

(3,057)

(3,258)


(2,992)

(3,094)

(3,061)

(2,618)

UK bank levy

(334)

-

-

-


(338)

-

-

-

Litigation and conduct

(46)

(639)

(420)

(12)


(1,634)

(419)

(819)

(1,015)

Total operating expenses

(3,851)

(3,909)

(3,477)

(3,270)


(4,964)

(3,513)

(3,880)

(3,633)

Other net income/(expenses)

164

4

(18)

9


(5)

13

14

(83)

Profit/(loss) before tax

1,118

931

2,359

1,608


(975)

1,377

1,980

1,367

Tax charge

(272)

(522)

(696)

(485)


(92)

(299)

(474)

(614)

Profit/(loss) after tax

846

409

1,663

1,123


(1,067)

1,078

1,506

753

Non-controlling interests

(76)

(57)

(80)

(84)


(81)

(54)

(64)

(68)

Other equity holders

(121)

(95)

(89)

(89)


(92)

(63)

(61)

(65)

Attributable profit/(loss)

649

257

1,494

950


(1,240)

961

1,381

620











Balance sheet information

£bn

£bn

£bn

£bn


£bn

£bn

£bn

£bn

Total assets

933.4

964.3

972.2

883.6


794.2

862.0

830.5

919.4

Risk weighted assets

333.5

329.5

319.6

312.2


304.1

316.3

308.1

318.0











Performance measures










Return on average allocated tangible equity

6.4%

2.7%

15.0%

9.9%


(12.8%)

10.4%

15.5%

7.1%

Average tangible equity (£bn)

42.4

41.8

40.4

39.3


38.1

37.5

35.9

35.6

Cost: income ratio

71%

70%

55%

62%


110%

67%

62%

67%

Loan loss rate (bps)

61

74

45

42


57

39

38

35

Basic earnings/(loss) per share

4.0p

1.7p

9.0p

5.8p


(7.3p)

5.8p

8.4p

3.8p











Notable items

£m

£m

£m

£m


£m

£m

£m

£m

Total income










Own credit

46

(264)

292

(109)


(175)

195

282

128

Gain on disposal of Barclays' share of Visa Europe Limited

-

-

615

-


-

-

-

-

Gains on US Lehman acquisition assets

-

-

-

-


-

-

496

-

Litigation and conduct










Provisions for UK customer redress

-

(600)

(400)

-


(1,392)

(290)

(800)

(167)

Provisions for ongoing investigations and litigation including Foreign Exchange

-

-

-

-


(167)

(69)

-

(800)

Operating expenses










Gain on valuation of a component of the defined retirement benefit liability

-

-

-

-


-

-

-

429

Other net expenses










Losses on sale relating to the Spanish, Portuguese and Italian businesses

-

-

-

-


(15)

-

-

(97)

Total notable items

46

(864)

507

(109)


(1,749)

(164)

(22)

(507)

 

Excluding notable items, the Q416 Core return on average allocated tangible equity was 5.8% (Q415: 6.3%) and the Core basic earnings per share was 3.7p (Q415: 3.6p).

 

Barclays Non-Core











Q416

Q316

Q216

Q116


Q415

Q315

Q215

Q115

Income statement information

£m

£m

£m

£m


£m

£m

£m

£m

Net interest income

(54)

78

40

96


171

135

154

155

Net trading income

(462)

(288)

(463)

(490)


(398)

(124)

(57)

(127)

Net fee, commission and other income

97

51

79

152


159

204

146

194

Total income

(419)

(159)

(344)

(242)


(68)

215

243

222

Credit impairment charges and other provisions

(47)

(20)

(26)

(29)


(32)

(41)

(20)

(41)

Net operating (expenses)/income

(466)

(179)

(370)

(271)


(100)

174

223

181

Operating expenses

(341)

(311)

(368)

(489)


(555)

(458)

(496)

(449)

UK bank levy

(76)

-

-

-


(88)

-

-

-

Litigation and conduct

(51)

(102)

(27)

(66)


(89)

(279)

(108)

(24)

Total operating expenses

(468)

(413)

(395)

(555)


(732)

(737)

(604)

(473)

Other net income/(expenses)

146

498

(324)

11


(268)

(195)

(54)

(18)

Loss before tax

(788)

(94)

(1,089)

(815)


(1,100)

(758)

(435)

(310)

Tax credit/(charge)

322

194

229

237


(72)

166

150

86

(Loss)/profit after tax

(466)

100

(860)

(578)


(1,172)

(592)

(285)

(224)

Non-controlling interests

(14)

(13)

(12)

(10)


(19)

(21)

(21)

(20)

Other equity holders

(18)

(15)

(15)

(15)


(17)

(15)

(18)

(14)

Attributable (loss)/profit

(498)

72

(887)

(603)


(1,208)

(628)

(324)

(258)











Balance sheet information

£bn

£bn

£bn

£bn


£bn

£bn

£bn

£bn

Loans and advances to banks and customers at amortised cost

51.1

58.7

68.5

55.4


51.8

57.1

60.4

73.1

Derivative financial instrument assets

188.7

253.2

262.8

249.7


213.7

243.3

223.9

305.6

Derivative financial instrument liabilities

178.6

243.0

253.4

239.1


202.1

235.0

216.7

299.6

Reverse repurchase agreements and other similar secured lending

0.1

0.1

0.1

0.7


3.1

8.5

16.7

43.7

Financial assets designated at fair value

14.5

15.5

15.4

23.4


21.4

22.8

22.1

25.0

Total assets

279.7

359.8

379.1

365.4


325.8

374.5

366.2

497.0

Customer deposits

12.5

16.0

17.4

19.3


20.9

25.8

27.9

29.9

Risk weighted assets

32.1

43.9

46.7

50.9


54.3

65.6

68.6

77.9











Performance measures










Average allocated tangible equity (£bn)

6.5

7.6

7.9

9.0


9.7

10.2

11.3

12.4

Period end allocated tangible equity (£bn)

5.4

7.2

7.8

8.5


8.5

10.2

10.1

11.7

Loan loss rate (bps)

31

13

14

21


25

27

13

17

Basic (loss)/earnings per share contribution  

(2.9p)

0.5p

(5.2p)

(3.6p)


(7.2p)

(3.7p)

(1.9p)

(1.5p)











Notable items

£m

£m

£m

£m


£m

£m

£m

£m

Litigation and conduct










Provisions for UK customer redress

-

-

-

-


(58)

-

(50)

(15)

Provisions for ongoing investigations and litigation including Foreign Exchange

-

-

-

-


-

(201)

-

-

Operating expenses










Impairment of goodwill and other assets relating to businesses being disposed

-

-

-

-


(96)

-

-

-

Other net expenses










Losses on sale relating to the Spanish, Portuguese and Italian business

-

-

-

-


(246)

(201)

-

(21)

Total notable items

-

-

-

-


(400)

(402)

(50)

(36)











Analysis of total income










Businesses

(73)

181

181

196


229

314

292

304

Securities and loans

161

(34)

(363)

(402)


(195)

(87)

-

(68)

Derivatives

(507)

(306)

(162)

(36)


(102)

(12)

(49)

(14)

Total income

(419)

(159)

(344)

(242)


(68)

215

243

222

 

Excluding notable items, the Non-Core basic loss per share was 2.9p (Q415: 5.1p).

 

Quarterly Core Results by Business

 

 

 Barclays UK











Q416

Q316

Q216

Q116


Q415

Q315

Q215

Q115

Income statement information

£m

£m

£m

£m


£m

£m

£m

£m

Net interest income

1,502

1,569

1,476

1,501


1,509

1,499

1,479

1,486

Net fee, commission and other income

326

374

467

302


325

375

325

345

Total income

1,828

1,943

1,943

1,803


1,834

1,874

1,804

1,831

Credit impairment charges and other provisions

(180)

(350)

(220)

(146)


(219)

(154)

(166)

(167)

Net operating income

1,648

1,593

1,723

1,657


1,615

1,720

1,638

1,664

Operating expenses

(989)

(904)

(947)

(952)


(920)

(925)

(970)

(649)

UK bank levy

(48)

-

-

-


(77)

-

-

-

Litigation and conduct

(28)

(614)

(399)

(1)


(1,466)

(76)

(801)

(168)

Total operating expenses

(1,065)

(1,518)

(1,346)

(953)


(2,463)

(1,001)

(1,771)

(817)

Other net (expenses)/income

-

-

(1)

-


1

1

1

(3)

Profit/(loss) before tax 

583

75

376

704


(847)

720

(132)

844

Attributable profit/(loss)

383

(163)

141

467


(1,078)

541

(174)

664











Balance sheet information

£bn

£bn

£bn

£bn


£bn

£bn

£bn

£bn

Loans and advances to customers at amortised cost

166.4

166.6

166.0

166.2


166.1

166.7

166.1

166.0

Total assets

209.6

209.1

204.6

201.7


202.5

204.1

202.2

199.6

Customer deposits

189.0

185.5

181.7

179.1


176.8

173.4

171.6

168.7

Risk weighted assets

67.5

67.4

67.1

69.7


69.5

71.0

71.7

72.3

Net interest margin

3.56%

3.72%

3.56%

3.62%


3.58%

3.54%

3.54%

3.60%











Performance measures










Return on average allocated tangible equity

18.2%

(7.1%)

6.6%

20.5%


(46.5%)

23.3%

(7.3%)

28.3%

Average allocated tangible equity (£bn)

8.6

8.7

9.0

9.3


9.2

9.3

9.4

9.4

Cost: income ratio

58%

78%

69%

53%


134%

53%

98%

45%

Loan loss rate (bps)

42

82

52

34


51

36

40

40











Notable items

£m

£m

£m

£m


£m

£m

£m

£m

Total income










Gain on disposal of Barclays' share of Visa Europe Limited

-

-

151

-


-

-

-

-

Litigation and conduct










Provisions for UK customer redress

-

(600)

(400)

-


(1,391)

(73)

(800)

(167)

Operating expenses










Gain on valuation of a component of the defined retirement benefit liability

-

-

-

-


-

-

-

296

Total notable items

-

(600)

(249)

-


(1,391)

(73)

(800)

129

 

Excluding notable items, the Q416 Barclays UK return on average allocated tangible equity was 17.1% (Q415: 14.8%).

 

Analysis of Barclays UK











Q416

Q316

Q216

Q116


Q415

Q315

Q215

Q115

Analysis of total income

£m

£m

£m

£m


£m

£m

£m

£m

Personal Banking

934

970

1,068

919


945

938

905

927

Barclaycard Consumer UK

507

561

463

491


505

552

503

505

Wealth, Entrepreneurs & Business Banking

387

412

412

393


384

384

396

399

Total income

1,828

1,943

1,943

1,803


1,834

1,874

1,804

1,831











Analysis of credit impairment charges and other provisions










Personal Banking

(50)

(47)

(44)

(42)


(39)

(36)

(50)

(69)

Barclaycard Consumer UK

(118)

(291)

(169)

(105)


(176)

(111)

(106)

(95)

Wealth, Entrepreneurs & Business Banking

(12)

(12)

(7)

1


(4)

(7)

(10)

(3)

Total credit impairment charges and other provisions

(180)

(350)

(220)

(146)


(219)

(154)

(166)

(167)











Analysis of loans and advances to customers at amortised cost

£bn

£bn

£bn

£bn


£bn

£bn

£bn

£bn

Personal Banking

135.0

135.3

134.7

134.7


134.0

134.5

134.4

134.3

Barclaycard Consumer UK

16.5

16.2

16.2

16.0


16.2

15.9

15.8

15.7

Wealth, Entrepreneurs & Business Banking

14.9

15.1

15.1

15.5


15.9

16.3

15.9

16.0

Total loans and advances to customers at amortised cost

166.4

166.6

166.0

166.2


166.1

166.7

166.1

166.0











Analysis of customer deposits










Personal Banking

139.3

137.2

134.8

132.9


131.0

128.4

126.7

123.4

Barclaycard Consumer UK

-

-

-

-


-

-

-

-

Wealth, Entrepreneurs & Business Banking

49.7

48.3

46.9

46.2


45.8

45.0

44.9

45.3

Total customer deposits

189.0

185.5

181.7

179.1


176.8

173.4

171.6

168.7

 

Barclays International











Q416

Q316

Q216

Q116


Q415

Q315

Q215

Q115

Income statement information

£m

£m

£m

£m


£m

£m

£m

£m

Net interest income

1,046

1,355

1,001

1,110


1,121

1,109

1,077

1,018

Net trading income

1,131

1,074

1,130

1,245


593

817

1,299

1,073

Net fee, commission and other income

1,415

1,422

1,908

1,158


1,254

1,297

1,726

1,363

Total income

3,592

3,851

4,039

3,513


2,968

3,223

4,102

3,454

Credit impairment charges and other provisions

(426)

(420)

(240)

(269)


(303)

(235)

(206)

(178)

Net operating income

3,166

3,431

3,799

3,244


2,665

2,988

3,896

3,276

Operating expenses

(2,497)

(2,337)

(2,074)

(2,221)


(2,007)

(2,059)

(2,027)

(1,936)

UK bank levy

(284)

-

-

-


(253)

-

-

-

Litigation and conduct

(17)

(17)

(10)

(4)


(151)

(302)

(12)

(845)

Total operating expenses

(2,798)

(2,354)

(2,084)

(2,225)


(2,411)

(2,361)

(2,039)

(2,781)

Other net income

5

8

11

8


8

9

13

15

Profit before tax

373

1,085

1,726

1,027


262

636

1,870

510

Attributable profit/(loss)

43

623

1,171

575


(24)

422

1,376

(16)











Balance sheet information

£bn

£bn

£bn

£bn


£bn

£bn

£bn

£bn

Loans and advances to banks and customers at amortised cost

211.3

233.7

230.6

215.9


184.1

220.3

210.5

224.7

Trading portfolio assets

73.2

73.8

68.1

64.3


61.9

72.8

75.3

92.7

Derivative financial instrument assets

156.2

155.6

181.4

150.1


111.5

133.7

116.0

172.8

Derivative financial instrument liabilities

160.6

160.5

187.5

155.4


119.0

142.0

124.8

182.3

Reverse repurchase agreements and other similar secured lending

13.4

17.3

19.7

19.1


24.7

68.0

57.4

57.1

Financial assets designated at fair value

62.3

72.0

68.3

59.6


46.8

5.6

5.6

5.2

Total assets

648.5

681.9

679.9

618.4


532.2

596.1

566.1

656.2

Customer deposits

216.2

224.1

226.5

213.1


185.6

207.0

197.7

206.2

Risk weighted assets

212.7

214.6

209.3

202.2


194.8

204.0

195.4

202.6











Performance measures










Return on average allocated tangible equity

1.0%

10.0%

19.2%

9.5%


(0.2%)

7.0%

22.5%

(0.1%)

Average allocated tangible equity (£bn)

26.6

25.7

24.8

25.1


24.9

24.7

24.7

25.3

Cost: income ratio

78%

61%

52%

63%


81%

73%

50%

81%

Loan loss rate (bps)

78

71

41

50


65

42

38

32

Net interest margin¹

3.91%

4.21%

3.92%

3.78%


3.79%

3.85%

3.86%

3.66%











Notable items

£m

£m

£m

£m


£m

£m

£m

£m

Total income










Gain on disposal of Barclays' share of Visa Europe Limited

-

-

464

-


-

-

-

-

Gains on US Lehman acquisition assets

-

-

-

-


-

-

496

-

Litigation and conduct










Provisions for UK customer redress

-

-

-

-


-

(218)

-

-

Provisions for ongoing investigations and litigation including Foreign Exchange

-

-

-

-


(145)

(39)

-

(800)

Operating expenses










Gain on valuation of a component of the defined retirement benefit liability

-

-

-

-


-

-

-

133

Total notable items

-

-

464

-


(145)

(257)

496

(667)

 

Excluding notable items, the Q416 Barclays International return on average allocated tangible equity was 1.0% (Q415: 3.5%).

 

1

Barclays International margins have been restated to include interest earning lending within the investment banking business.

 

Analysis of Barclays International














Corporate and Investment Bank

Q416

Q316

Q216

Q116


Q415

Q315

Q215

Q115

Income statement information

£m

£m

£m

£m


£m

£m

£m

£m

Analysis of total income










Credit

261

333

269

322


195

191

218

220

Equities

410

461

406

513


319

416

588

589

Macro

505

614

612

573


382

487

582

657

Markets

1,176

1,408

1,287

1,408


896

1,094

1,388

1,466

Banking fees

650

644

622

481


458

501

580

548

Corporate lending

303

284

312

296


312

377

387

285

Transactional banking

401

458

390

408


415

419

416

413

Banking

1,354

1,386

1,324

1,185


1,185

1,297

1,383

1,246

Other

1

1

-

3


16

(17)

495

1

Total income

2,531

2,795

2,611

2,596


2,097

2,374

3,266

2,713

Credit impairment (charges)/ releases and other provisions

(90)

(38)

(37)

(95)


(83)

(75)

(42)

1

Total operating expenses

(2,287)

(1,872)

(1,665)

(1,800)


(1,962)

(1,940)

(1,605)

(2,422)

Profit before tax

155

885

909

701


52

358

1,620

292











Balance sheet information

£bn

£bn

£bn

£bn


£bn

£bn

£bn

£bn

Risk weighted assets

178.6

182.5

178.4

172.6


167.3

177.4

170.0

177.1











Performance measures










Return on average allocated tangible equity

(1.2%)

9.2%

9.5%

7.3%


(2.5%)

4.5%

22.3%

(2.5%)

Average allocated tangible equity (£bn)

22.6

21.9

21.3

21.6


21.8

21.7

21.7

22.3

 

Excluding notable items, the Q416 CIB return on average allocated tangible equity was (1.2%) (Q415: 1.8%).










Consumer, Cards and Payments










Income statement information

£m

£m

£m

£m


£m

£m

£m

£m

Total income

1,061

1,056

1,428

917


871

849

836

741

Credit impairment charges and other provisions

(336)

(382)

(203)

(174)


(219)

(160)

(165)

(179)

Total operating expenses

(511)

(482)

(419)

(425)


(449)

(421)

(434)

(359)

Profit before tax

218

200

817

326


210

278

250

218











Balance sheet information

£bn

£bn

£bn

£bn


£bn

£bn

£bn

£bn

Loans and advances to banks and customers at amortised cost

39.7

36.8

35.4

32.9


32.1

30.6

29.6

29.8

Customer deposits

50.0

48.3

46.9

44.2


41.8

39.8

38.4

40.1

Risk weighted assets

34.1

32.1

30.9

29.6


27.5

26.6

25.4

25.5











Performance measures










Return on average allocated tangible equity

13.2%

14.8%

77.9%

23.4%


15.3%

24.7%

23.4%

17.5%

Average allocated tangible equity (£bn)

4.0

3.7

3.5

3.4


3.2

3.1

3.0

3.0

 

Excluding notable items, the Q416 Consumer, Cards and Payments return on average allocated tangible equity was 13.2% (Q415: 15.7%).

 

Head Office











Q416

Q316

Q216

Q116


Q415

Q315

Q215

Q115

Income statement information

£m

£m

£m

£m


£m

£m

£m

£m

Net interest income

29

(206)

14

(20)


(75)

(51)

(46)

(133)

Net fee, commission and other income

(38)

17

320

(13)


(210)

220

358

275

Total income

(9)

(189)

334

(33)


(285)

169

312

142

Credit impairment releases/(charges) and other provisions 

-

1

(2)

1


-

1

(1)

-

Net operating (expenses)/income

(9)

(188)

332

(32)


(285)

170

311

142

Operating expenses

15

(29)

(36)

(85)


(64)

(110)

(64)

(34)

UK bank levy

(2)

-

-

-


(8)

-

-

-

Litigation and conduct

(1)

(8)

(11)

(7)


(17)

(42)

(6)

(1)

Total operating expenses

12

(37)

(47)

(92)


(89)

(152)

(70)

(35)

Other net income/(expenses)

159

(4)

(28)

1


(14)

2

1

(95)

Profit/(loss) before tax

162

(229)

257

(123)


(388)

20

242

12

Attributable profit/(loss)

223

(203)

182

(92)


(140)

(1)

180

(28)











Balance sheet information

£bn

£bn

£bn

£bn


£bn

£bn

£bn

£bn

Total assets1

75.2

73.3

87.7

63.4


59.4

61.8

62.2

63.6

Risk weighted assets1

53.3

47.5

43.2

40.3


39.7

41.3

41.0

43.1











Performance measures










Average allocated tangible equity (£bn)

7.2

7.4

6.6

5.0


3.9

3.4

1.8

0.9











Notable items

£m

£m

£m

£m


£m

£m

£m

£m

Total income










Own credit

46

(264)

292

(109)


(175)

195

282

128

Litigation and conduct










Provisions for ongoing investigations and litigation including Foreign Exchange

-

-

-

-


(23)

(29)

-

-

Other net expenses










Losses on sale relating to the Spanish, Portuguese and Italian businesses

-

-

-

-


(15)

-

-

(97)

Total notable items

46

(264)

292

(109)


(213)

166

282

31

 

1

Includes Africa Banking assets held for sale and RWAs.

 

Quarterly Discontinued Operation Results

 

Africa Banking











Q416

Q316

Q216

Q116


Q415

Q315

Q215

Q115

Income statement information

£m

£m

£m

£m


£m

£m

£m

£m

Net interest income

626

561

502

480


468

471

506

505

Net fee, commission and other income

441

421

377

338


346

351

364

403

Total income

1,067

982

879

818


814

822

870

908

Credit impairment charges and other provisions

(105)

(96)

(133)

(111)


(93)

(66)

(103)

(91)

Net operating income

962

886

746

707


721

756

767

817

Operating expenses

(727)

(598)

(543)

(477)


(501)

(515)

(536)

(539)

UK bank levy

(65)

-

-

-


(50)

-

-

-

Total operating expenses

(792)

(598)

(543)

(477)


(551)

(515)

(536)

(539)

Other net income

2

2

1

1


3

1

1

2

Profit before tax

172

290

204

231


173

242

232

280

Profit after tax

71

209

145

166


101

167

162

196

Attributable (loss)/profit

(52)

85

70

86


25

85

88

104











Balance sheet information

£bn

£bn

£bn

£bn


£bn

£bn

£bn

£bn

Total assets¹

65.1

61.1

56.0

52.7


47.9

50.2

52.2

55.9

Risk weighted assets¹

42.3

39.9

36.1

33.9


31.7

33.8

34.4

37.3

 

1

Africa Banking assets held for sale and RWAs are reported in Head Office within Core.

 

Performance Management

 

 

Margins and balances








Year ended 31.12.16

Year ended 31.12.15


Net interest income

Average customer assets

Net interest margin

Net interest income

Average customer assets

Net interest margin


£m

£m

%

£m

£m

%

Barclays UK

6,048

167,233

3.62

5,973

167,599

3.56

Barclays International1

4,275

107,333

3.98

3,841

101,164

3.80

Total Barclays UK and Barclays International

10,323

274,566

3.76

9,814

268,763

3.65

Other2

214



794



Total net interest income

10,537



10,608



 

1

Barclays International margins have been restated to include interest earning lending within the investment banking business.

2

Other includes Head Office, Barclays Non-Core and non-lending related investment banking balances.

 

•

Total Barclays UK and Barclays International net interest income increased 6% to £10.3bn due to:


-

An increase in average customer assets to £274.6bn (2015: £268.8bn) with growth in Barclays International, while Barclays UK remained stable


-

Net interest margin increased 11bps to 3.76% primarily due to growth in interest earning lending within the cards portfolio of Barclays International and higher margins on deposits in Barclays UK

•

Group net interest income decreased to £10.5bn (2015: £10.6bn) including net structural hedge contributions of £1.5bn (2015: £1.4bn)

•

Net interest margin by business reflects movements in the Group's internal funding rates which are based on the cost to the Group of alternative funding in wholesale markets. The internal funding rate prices intra-group funding and liquidity to appropriately give credit to businesses with net surplus liquidity and to charge those businesses in need of alternative funding at a rate that is driven by prevailing market rates and includes a term premium

 

Quarterly analysis for Barclays UK and Barclays International

Three months ended 31.12.16


Net interest income

Average customer assets

Net interest margin


£m

£m

%

Barclays UK

1,502

167,935

3.56

Barclays International1

1,110

112,936

3.91

Total Barclays UK and Barclays International

2,612

280,871

3.70






Three months ended 30.09.16

Barclays UK

1,569

167,713

3.72

Barclays International1

1,149

108,571

4.21

Total Barclays UK and Barclays International

2,718

276,284

3.91






Three months ended 30.06.16

Barclays UK

1,476

166,891

3.56

Barclays International1

1,021

104,707

3.92

Total Barclays UK and Barclays International

2,497

271,598

3.70






Three months ended 31.03.16

Barclays UK

1,501

166,727

3.62

Barclays International1

995

105,994

3.78

Total Barclays UK and Barclays International

2,496

272,721

3.68






Three months ended 31.12.15

Barclays UK

1,509

167,405

3.58

Barclays International1

991

103,844

3.79

Total Barclays UK and Barclays International

2,500

271,249

3.66

 

1

Barclays International margins have been restated to include interest earning lending within the investment banking business.

 

Remuneration

 

Deferred awards are payable only once an employee meets certain conditions, including a specified period of service. This creates a timing difference between the communication of the bonus pool and the charges that are recognised in the income statement which are reconciled in the table below to show the charge for performance costs. For 2016 awards, there have been changes in the proportion of bonuses which are deferred, to harmonise deferral structures across the Group, and to more closely align the incentive awards granted with the income statement charge, as illustrated below. The combined effect of these changes is to accelerate the rate at which the awards are recognised in the income statement, resulting in an increase in the charge for 2016 of £395m. There is expected to be a lesser effect in 2017 and 2018 as these changes take full effect. See page 104 of the Remuneration Report and Note 8 in the Annual Report for additional information on the changes. The table also shows the other elements of compensation and staff costs. 

 

Barclays Group


Year ended

Year ended



31.12.16

31.12.15



£m

£m

% Change

Incentive awards granted  




Current year bonus

1,018

788

(29)

Deferred bonus

441

665

34

Commissions and other incentives1

74

91

19

Total incentive awards granted

1,533

1,544

1

Reconciliation of incentive awards granted to income statement charge:




Less: deferred bonuses granted but not charged in current year

(300)

(665)

55

Add: current year charges for deferred bonuses from previous years 

690

856

19

Other differences between incentive awards granted and income statement charge

(26)

26


Income statement charge for performance costs  

1,897

1,761

(8)





Other income statement charges:




Salaries

4,121

4,183

1

Social security costs

589

587

-

Post retirement benefits2

486

494

2

Other compensation costs

352

276

(28)

Total compensation costs3

7,445

7,301

(2)

 




Other resourcing costs4

1,978

1,981

-

 




Total staff costs

9,423

9,282

(2)





Group compensation as % of income excluding notable items5

35.7

34.6


 

For further detail on remuneration refer to the Remuneration Report on pages 99-133 of the Annual Report.

 

1

Amounts previously included in 2015 as commitments are now included in current year bonus and deferred bonus for consistency with 2016.

2

2015 post retirement benefits exclude the impact of a £429m gain on valuation of a component of the defined benefit liability.  Including the gain would result in compensation: income ratio of 32.5%.

3

In addition, £212m of Group compensation (2015: £236m) was capitalised as internally generated software.

4

Other resourcing costs include outsourcing, redundancy and restructuring costs and other temporary staff costs.

5

Core compensation as a percentage of income excluding notable items was 31.2% (2015: 31.3%) and CIB compensation as a percentage of income excluding notable items was 41.9% (2015: 39.5%), including the impact of the change in the 2016 compensation awards.

 

 

 

Deferred bonuses have been awarded and are expected to be charged to the income statement in the years outlined in the table that follows:

 

Year in which income statement charge is expected to be taken for deferred bonuses awarded to date1


Actual


Expected2


Year ended

Year ended


Year ended

2018 and


31.12.15

31.12.16


31.12.17

beyond

Barclays Group

£m

£m


£m

£m

Deferred bonuses from 2013 and earlier bonus pools

402

110


14

-

Deferred bonuses from 2014 bonus pool

454

191


80

12

Deferred bonuses from 2015 bonus pool


389


175

86

Deferred bonuses from 2016 bonus pool


141


135

133

Income statement charge for deferred bonuses

856

831


404

231







 

1

The actual amount charged depends upon whether conditions have been met and will vary compared with the above expectation.

2

Does not include the impact of grants which will be made in 2017 and beyond.

 

Change in charging of deferred bonus profile 

 

Grant date

Expected payment date(s)1  


Income statement charge profile



Year

Post-2016 awards

Pre-2016 awards

March 2017


2016

33% 

0% 



2017

33% 

48% 


March 2018 (33.3%)

2018

22%

35%


March 2019 (33.3%)

2019

10%

15%


 March 2020 (33.3%)

2020

2%

2%

 

1

Certain awards may be subject to an additional holding period.

2

The income statement charge is based on the period over which conditions are met.

 

Liquidity

 

Overview

The Group has a comprehensive Key Risk Control Framework for managing the Group's liquidity risk. The Liquidity Framework meets the PRA's standards and is designed to ensure the Group maintains liquidity resources that are sufficient in amount and quality, and a funding profile that is appropriate to meet the liquidity risk appetite. The Liquidity Framework is delivered via a combination of policy formation, review and governance, analysis, stress testing, limit setting and monitoring.

While Barclays has a comprehensive framework for managing the Group's liquidity risks, liquidity risk is managed separately at Barclays Africa Group Limited (BAGL) due to local currency and funding requirements. Unless stated otherwise, all disclosures in this section exclude BAGL and they are reported on a stand-alone basis. Adjusting for local requirements, BAGL liquidity risk is managed on a consistent basis to Barclays Group.

Liquidity stress testing

Barclays manages the Group's liquidity position against the Group's internally defined Liquidity Risk Appetite (LRA) and regulatory metrics such as CRD IV Liquidity Coverage Ratio (LCR). As at December 2016, the Group held eligible liquid assets well in excess of 100% of net stress outflows for both the 30 day Barclays-specific LRA and the LCR. 

 

Compliance with internal and regulatory stress tests

Barclays' LRA (30 day Barclays specific requirement)1, 2

CRD IV:

LCR2


£bn

£bn

Eligible liquidity buffer

173

166

Net stress outflows

(144)

(127)

Surplus

29

39




Liquidity pool as a percentage of anticipated net outflows as at 31 December 2016

120%

131%

Liquidity pool as a percentage of anticipated net outflows as at 31 December 2015

131%

133%

 

Barclays plans to maintain its surplus at an adequate level to the internal and regulatory stress requirements, whilst considering risks to market funding conditions and its liquidity position. The continuous reassessment of these risks may lead to actions being taken with respect to sizing of the liquidity pool.

 

1

Of the three stress scenarios monitored as part of the LRA, the 30 day Barclays specific scenario results in the lowest ratio at 120% (2015 131%). This compares to 134% (2015: 144%) under the 90 day market-wide scenario and 144% (2015: 133%) under the 30 day combined scenario.

2

Includes BAGL.

 

Liquidity pool

Liquidity pool

Liquidity pool of which

CRD IV  LCR-eligible

Liquidity pool


31.12.16

Cash

Level 1

Level 2A

31.12.15


£bn

£bn

£bn

£bn

£bn

Cash and deposits with central banks1

103

101



48







Government bonds2






AAA to AA-

34


34



A+ to A-

3


3



BBB+ to BBB-

1


1



Other LCR Ineligible Government bonds

1





Total Government bonds

39


38


75







Other






Government Guaranteed Issuers, PSEs and GSEs

12


9

3


International Organisations and MDBs

6


7



Covered bonds

1


1



Corporate bonds






Other

4





Total other

23


17

3

22







Total as at 31 December 2016

165

101

55

3


Total as at 31 December 2015

145

45

87

8


 

1

Of which over 98% (2015: over 97%) was placed with the  Bank of England, US Federal Reserve, European Central Bank, Bank of Japan and Swiss National Bank.

2

Of which over 90% (2015: over 92%) are comprised of UK, US, Japanese, French, German, Danish, Swiss and Dutch securities.

 

The Group liquidity pool was £165bn at 31 December 2016 (2015: £145bn). During 2016, the month-end liquidity pool ranged from £132bn to £175bn (2015: £142bn to £168bn), and the month-end average balance was £153bn (2015: £155bn). The liquidity pool is held unencumbered and is not used to support payment or clearing requirements.

Barclays manages the liquidity pool on a centralised basis. As at 31 December 2016, 91% (2015: 94%) of the liquidity pool was located in Barclays Bank PLC and was available to meet liquidity needs across the Barclays Group. The residual liquidity pool is held predominantly within Barclays Capital Inc (BCI). The portion of the liquidity pool outside of Barclays Bank PLC is held against entity-specific stressed outflows and regulatory requirements.

 

Deposit funding

 

As at 31.12.16

As at 31.12.15


Loans and advances to customers

Customer deposits

Loan to deposit ratio

Loan to deposit ratio

Funding of loans and advances to customers

£bn

£bn

%

%

Barclays UK

167

189



Barclays International

98

152



Non-Core

19

-



Total Barclays UK, Barclays International and Non-Core1

284

341

83%

86%






Barclays International, Head Office and Non-Core2

109

82



Total

393

423

93%

95%

 

Total Barclays UK, Barclays International and Non-Core1 are largely funded by customer deposits. The loan to deposit ratio for these businesses was 83% (2015: 86%). The customer deposits in excess of loans and advances are primarily used to fund liquidity buffer requirements for these businesses. The loan to deposit ratio for the Group is 93% (2015: 95%).

As at 31 December 2016, £139bn (2015: £129bn) of total customer deposits were insured through the UK Financial Services Compensation Scheme and other similar schemes. In addition to these customer deposits, there were £4bn (2015: £4bn) of other liabilities insured or guaranteed by governments.

 

1

Excluding investment banking businesses.

2

Including investment banking businesses.

 

Wholesale Funding

 

Composition of wholesale funding1

The Group's total wholesale funding outstanding (excluding repurchase agreements) was £158bn (2015: £142bn). £70bn (2015: £54bn) of wholesale funding matures in less than one year, of which £22bn (2015: £14bn) relates to term funding.

Outstanding wholesale funding comprised of £26bn (2015: £25bn) of secured funding and £132bn (2015: £117bn) of unsecured funding.

 

Maturity profile of wholesale funding2











<1

month

1-3 months

3-6 months

6-12 months

<1

year

1-2 years

2-3 years

3-4 years

4-5 years

>5 years

Total


£bn

£bn

£bn

£bn

£bn

£bn

£bn

£bn

£bn

£bn

£bn

Barclays PLC












Senior unsecured (public benchmark)

-

-

-

-

-

0.9

1.6

1.1

4.5

7.9

16.0

Senior unsecured (privately placed)

-

-

-

-

-

0.1

 -  

 -  

0.2

0.5

0.8

Subordinated liabilities

-

-

-

-

-

 -  

 -  

1.1

 -  

2.7

3.8

Barclays Bank PLC












Deposits from banks

9.2

4.3

1.7

1.1

16.3

0.2

-  

0.3

-  

-  

16.8

Certificates of deposit and commercial paper

0.3

5.2

5.6

10.9

22.0

0.7

1.1

0.5

0.5

0.3

25.1

Asset backed commercial paper

3.7

3.1

0.7

-  

7.5

-  

-  

-  

-  

-  

7.5

Senior unsecured (public benchmark)

1.7

0.6

1.6

-  

3.9

-  

2.7

0.7

0.7

1.1

9.1

Senior unsecured (privately placed)3

0.6

1.5

3.6

3.5

9.2

7.3

5.5

3.2

1.6

10.0

36.8

Covered bonds

-  

1.8

1.6

1.5

4.9

1.0

1.8

-  

1.0

3.7

12.4

Asset backed securities

-  

0.6

1.0

0.6

2.2

0.7

1.4

0.4

-  

0.7

5.4

Subordinated liabilities

-  

-  

-  

1.3

1.3

3.2

0.1

1.0

5.5

8.5

19.6

Other4

1.1

0.2

0.6

1.1

3.0

0.2

0.2

0.3

0.1

0.7

4.5

Total as at 31 December 2016

16.6

17.3

16.4

20.0

70.3

14.3

14.4

8.6

14.1

36.1

157.8

Of which secured

3.7

5.6

3.4

2.3

15.0

1.8

3.2

0.4

1.0

4.4

25.8

Of which unsecured

12.9

11.7

13.0

17.7

55.3

12.5

11.2

8.2

13.1

31.7

132.0

Total as at 31 December 2015

15.8

15.3

8.6

13.8

53.5

16.5

12.6

13.7

8.3

37.3

141.9

Of which secured

4.2

3.9

1.6

0.3

10.0

5.1

2.4

2.8

0.5

4.5

25.3

Of which unsecured

11.6

11.4

7.0

13.5

43.5

11.4

10.2

10.9

7.8

32.8

116.6

 

1

The composition of wholesale funds comprises the balance sheet reported Deposits from Banks, Financial liabilities at Fair Value, Debt Securities in Issue and Subordinated Liabilities, excluding cash collateral and settlement balances and collateral swaps. Included within deposits from banks are £4.5bn of liabilities drawn in the European Central Bank's facilities.

2

Term funding maturities comprise public benchmark and privately placed senior unsecured notes, covered bonds/asset-backed securities (ABS) and subordinated debt where the original maturity of the instrument was more than 1 year.

3

Includes structured notes of £30.8bn, £7.7bn of which matures within one year.

4

Primarily comprised of fair value deposits £3bn and secured financing transactions of physical gold £0.5bn.

 

Term financing

In preparation for a Single Point of Entry resolution model, Barclays has made good progress on the issuance of debt capital and term senior unsecured funding from Barclays PLC, the holding company, replacing maturing debt in Barclays Bank PLC.

 

The Group issued £12.1bn equivalent of capital and senior unsecured debt from the holding company of which £8.6bn equivalent and £0.7bn equivalent in public and private senior unsecured debt respectively, and £2.8bn of capital instruments. In the same period £7.4bn of Barclays Bank PLC capital and senior unsecured debt was bought back or called.

The Group has £21.2bn1 of term funding maturing in 2017 and £13.2bn in 2018.

The Group expects to continue to issue public wholesale debt in 2017, in order to maintain a stable and diverse funding base by type, currency and distribution channel.

 

1

Includes £0.2bn bilateral secured funding.

 

Credit ratings

 

In addition to monitoring and managing key metrics related to the financial strength of the Group, Barclays also solicits independent credit ratings by Standard & Poor's (S&P), Moody's, Fitch and Rating and Investment Information (R&I). These ratings assess the creditworthiness of the Group, its subsidiaries and branches and are based on reviews of a broad range of business and financial attributes including risk management processes and procedures, capital strength, earnings, funding, asset quality, liquidity, accounting and governance.

 

As at 31 December 2016

Standard & Poor's

Moody's

Fitch

Barclays Bank PLC




Long-term

A- (Negative)

A1 (Negative)

A (Stable)

Short-term

A-2

P-1

F1

Stand-alone rating1

bbb+

baa2

a

Barclays PLC




Long-term

BBB (Negative)

Baa2 (Negative)

A (Stable)

Short-term

A-2

P-3

F1

 

1

Refers to Standard & Poor's Stand-Alone Credit Profile (SACP), Moody's Baseline Credit Assessment (BCA) and Fitch's Viability Rating (VR).

 

During the year, Barclays' ratings outlooks for Moody's and S&P were changed to Negative from Stable following the outcome of the EU referendum in June 2016. The rating actions were part of a wider set of actions which saw the two agencies place several UK banks on negative outlooks whilst affirming the ratings. The ratings continue to carry a stable outlook with Fitch.

 

In December 2016 Moody's upgraded senior long term ratings for both Barclays Bank PLC and Barclays PLC by one notch reflecting the continued build-up of loss absorbing capacity at Barclays PLC which would provide additional protection for Barclays Bank PLC's depositors and senior unsecured creditors, and Barclays PLC's senior unsecured creditors in a failure scenario. The negative outlooks assigned in June remained in place as the rating agency's assessment of Barclays' standalone credit strength was unaffected by the rating action.

 

S&P and Fitch affirmed Barclays' ratings in July and December 2016 respectively as part of their periodic reviews.

 

Barclays also solicits issuer ratings from R&I for local issuances purposes in Japan and the ratings of A- for Barclays PLC and A for Barclays Bank PLC were affirmed in July 2016 with stable outlooks.

 

 

Capital

 

CRD IV capital

 

Barclays' current regulatory requirement is to meet a fully loaded CRD IV CET1 ratio comprising the required 4.5% minimum CET1 ratio and, phased in from 2016, a Combined Buffer Requirement.  This currently comprises a Capital Conservation Buffer (CCB) of 2.5% and a Globally Systemically Important Institution (G-SII) buffer determined by the PRA in line with guidance from the Financial Stability Board (FSB). Both buffers are subject to phased implementation, the CCB is phased in at 25% per annum with 0.625% applicable for 2016.  The G-SII buffer for 2016 and 2017 has been set at 2% and is also phased in at 25% per annum with 0.5% applicable for 2016 and 1% for 2017.  On 21 November 2016 the FSB confirmed that the G-SII buffer for 2018 will be 1.5% with 1.1% applicable for 2018 and taking full effect from 2019 onwards.

 

Also forming part of the Combined Buffer Requirement is a Counter-Cyclical Capital Buffer (CCyB) and a Systemic Risk Buffer (SRB).   On 30 November 2016 the Financial Policy Committee (FPC) reaffirmed that it expects to maintain a CCyB of 0% on UK exposures until at least June 2017. Other national authorities also determine the appropriate CCyBs that should be applied to exposures in their jurisdiction. During 2016, CCyBs started to apply for Barclays' exposures to other jurisdictions; however based on current exposures these are not material.  No SRB has been set to date.

 

In addition, Barclays' Pillar 2A requirement as per the PRA's Individual Capital Guidance (ICG) for 2016 based on a point in time assessment was 3.9% of which 56% needs to be met in CET1 form, equating to approximately 2.2% of RWAs.  The Pillar 2A requirement is subject to at least annual review and for 2017 Barclays' Pillar 2A add-on will be 4.0%, with approximately 2.3% of RWAs needing to be met in CET1 form.  All capital, RWA and leverage calculations reflect Barclays' interpretation of the current rules.

 

As at 31 December 2016, Barclays' CET1 ratio was 12.4% which exceeds the 2016 transitional minimum requirement of 7.8% including the minimum 4.5% CET1 ratio requirement, 2.2% of Pillar 2A, a 0.625% CCB buffer, a 0.5% G-SII buffer and a 0% CCyB. 

 

Capital ratios

As at

As at

As at

31.12.16

30.09.16

31.12.15

Fully loaded CET11,2

12.4%

11.6%

11.4%

PRA Transitional Tier 13,4

15.6%

14.8%

14.7%

PRA Transitional Total Capital3,4

19.6%

18.8%

18.6%

  




Capital resources

£m

£m

£m

Shareholders' equity (excluding non-controlling interests) per the balance sheet

64,873

63,929

59,810

Less: other equity instruments (recognised as AT1 capital)

(6,449)

(6,442)

(5,305)

Adjustment to retained earnings for foreseeable dividends

(388)

(276)

(631)

Minority interests (amount allowed in consolidated CET1)

1,825

1,695

950





Other regulatory adjustments and deductions:




Additional value adjustments (PVA)

(1,571)

(1,742)

(1,602)

Goodwill and intangible assets

(9,054)

(8,847)

(8,234)

Deferred tax assets that rely on future profitability excluding temporary differences

(494)

(623)

(855)

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

(2,104)

(2,952)

(1,231)

Excess of expected losses over impairment

(1,294)

(1,272)

(1,365)

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

86

72

127

Defined-benefit pension fund assets

(38)

(40)

(689)

Direct and indirect holdings by an institution of own CET1 instruments

(50)

(50)

(57)

Deferred tax assets arising from temporary differences (amount above 10% threshold)

(183)

(49)

-

Other regulatory adjustments

45

(226)

(177)

Fully loaded CET1 capital

45,204

43,177

40,741

  




Additional Tier 1 (AT1) capital




Capital instruments and related share premium accounts

6,449

6,442

5,305

Qualifying AT1 capital (including minority interests) issued by subsidiaries

5,445

5,658

6,718

Other regulatory adjustments and deductions

(130)

(130)

(130)

Transitional AT1 capital5

11,764

11,970

11,893

PRA Transitional Tier 1 capital

56,968

55,147

52,634

  




Tier 2 (T2) capital




Capital instruments and related share premium accounts

3,769

3,631

1,757

Qualifying T2 capital (including minority interests) issued by subsidiaries

11,366

11,664

12,389

Other regulatory adjustments and deductions

(257)

(254)

(253)

PRA Transitional total regulatory capital

71,846

70,188

66,527

 

1

The transitional regulatory adjustments to CET1 capital are no longer applicable resulting in CET1 capital on a fully loaded basis being equal to that on a transitional basis.

2

The CRD IV CET1 ratio (FSA October 2012 transitional statement) as applicable to Barclays' Tier 2 Contingent Capital Notes was 13.7% based on £50bn of transitional CRD IV CET1 capital and £366bn of RWAs.

3

The PRA transitional capital is based on the PRA Rulebook and accompanying supervisory statements.

4

As at 31 December 2016, Barclays' fully loaded Tier 1 capital was £51,993m, and the fully loaded Tier 1 ratio was 14.2%. Fully loaded total regulatory capital was £67,772m and the fully loaded total capital ratio was 18.5%. The fully loaded Tier 1 capital and total capital measures are calculated without applying the transitional provisions set out in CRD IV and assessing compliance of AT1 and T2 instruments against the relevant criteria in CRD IV.

5

Of the £11.8bn transitional AT1 capital, fully loaded AT1 capital used for the leverage ratio comprises the £6.4bn capital instruments and related share premium accounts, £0.5bn qualifying minority interests and £0.1bn capital deductions.  It excludes legacy Tier 1 capital instruments issued by subsidiaries that are subject to grandfathering.

 

Movement in CET1 capital

Three months ended

Year ended


31.12.16

31.12.16


£m

£m

Opening CET1 capital

43,177

40,741




Profit for the period attributable to equity holders

238

2,080

Own credit

14

(41)

Dividends paid and foreseen

(212)

(843)

Increase in retained regulatory capital generated from earnings

40

1,196




Net impact of share schemes

330

535

Available for sale reserves

(91)

(391)

Currency translation reserves

637

3,674

Other reserves

3

(778)

Increase in other qualifying reserves

879

3,040




Retirement benefit reserve

768

(988)

Defined-benefit pension fund asset deduction

2

651

Net impact of pensions

770

(337)




Minority interests

130

875

Additional value adjustments (PVA)

171

31

Goodwill and intangible assets

(207)

(820)

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

129

361

Excess of expected loss over impairment

(22)

71

Direct and indirect holdings by an institution of own CET1 instruments

-  

7

Deferred tax assets arising from temporary differences (amount above 10% threshold)

(134)

(183)

Other regulatory adjustments

271

222

Increase in regulatory capital due to adjustments and deductions

338

564




Closing CET1 capital

45,204

45,204

 

•

The CET1 ratio improved to 12.4% (December 2015: 11.4%) primarily driven by an increase in CET1 capital of £4.5bn to £45.2bn primarily as a result of profits of £2.1bn generated in the year, after absorbing the impact of notable items.  Regulatory capital generated from earnings after absorbing the impact of own credit and dividends paid and foreseen increased CET1 capital by £1.2bn.  Other significant movements in the year were:


-

A £3.0bn increase in other qualifying reserves including a £3.7bn increase in the currency translation reserves as USD, EUR and ZAR strengthened against GBP; partially offset by a £0.4bn decrease as a result of preference share redemptions and a £0.4bn decrease in AFS reserves


-

A £0.3bn decrease, net of tax, as a result of movements relating to pensions.  There was a £1.0bn decrease in the retirement benefit reserve largely within the UKRF, which is the Groups main pension scheme, moving from a £0.8bn surplus in December 2015 to a £27m deficit in December 2016.  The decrease in reserves was partially offset by the removal of a £0.7bn capital deduction for the UKRF asset in December 2015


-

A £0.9bn increase in minority interests following the sale of 12.2% of BAGL's issued share capital was partially offset by £0.3bn higher capital deductions

•

Transitional AT1 capital remained largely flat in the period as redemptions and repurchases of £1.3bn of CRD IV end point non-qualifying preference shares, Tier One Notes and Reserve Capital Instruments were offset by the issuance of $1.5bn of qualifying AT1 capital instruments

 

Risk weighted assets (RWAs) by risk type and business


Credit risk


Counterparty credit risk


Market risk


Operational risk

Total RWAs


Std

IRB


Std

IRB

Settlement Risk

CVA


Std

IMA




As at 31.12.16

£m

£m


£m

£m

£m

£m


£m

£m


£m

£m

Barclays UK

5,592

49,591


47

-

-

-


-

-


12,293

67,523

Barclays International

53,201

82,327


13,515

13,706

30

3,581


9,343

9,460


27,538

212,701

Head Office1

9,048

27,122


77

1,157

-

927


482

2,323


12,156

53,292

Barclays Core

67,841

159,040


13,639

14,863

30

4,508


9,825

11,783


51,987

333,516

Barclays Non-Core

4,714

9,945


1,043

6,081

37

2,235


477

2,928


4,673

32,133

Barclays Group

72,555

168,985


14,682

20,944

67

6,743


10,302

14,711


56,660

365,649















As at 30.09.16









Barclays UK

5,886

49,183


9

-

-

39


-

-


12,293

67,410

Barclays International

51,498

82,020


14,201

13,945

82

4,931


11,485

8,900


27,538

214,600

Head Office1

8,527

25,174


43

1,088

-

844


580

2,560


8,685

47,501

Barclays Core

65,911

156,377


14,253

15,033

82

5,814


12,065

11,460


48,516

329,511

Barclays Non-Core

7,009

11,037


1,740

7,435

2

4,287


695

3,526


8,144

43,875

Barclays Group

72,920

167,414


15,993

22,468

84

10,101


12,760

14,986


56,660

373,386















As at 31.12.15









Barclays UK

6,562

50,763


26

-

-

-


-

-


12,174

69,525

Barclays International

45,892

77,275


10,463

11,055

516

3,406


8,373

10,196


27,657

194,833

Head Office1

8,291

20,156


54

538

8

382


399

1,903


8,003

39,734

Barclays Core

60,745

148,194


10,543

11,593

524

3,788


8,772

12,099


47,834

304,092

Barclays Non-Core

8,704

12,797


1,653

9,430

1

7,480


1,714

3,679


8,826

54,284

Barclays Group

69,449

160,991


12,196

21,023

525

11,268


10,486

15,778


56,660

358,376

 

1

Includes Africa Banking discontinued operation.

 

Movement analysis of risk weighted assets









Credit risk

Counterparty credit risk

Market risk

Operational risk

Total RWAs


£bn

£bn

£bn

£bn

£bn

As at 01.01.16

230.4

45.0

26.3

56.7

358.4

Book size

0.8

1.2

(0.6)

-

1.4

Acquisitions and disposals

(6.4)

(0.2)

-

-

(6.6)

Book quality

(0.5)

(0.4)

0.6

-

(0.3)

Model updates

(2.9)

(2.0)

(0.3)

-

(5.2)

Methodology and policy

1.1

(1.2)

(1.0)

-

(1.1)

Foreign exchange movements1

19.0

-

-

-

19.0

As at 31.12.16

241.5

42.4

25.0

56.7

365.6

 

1

Foreign exchange movement does not include FX for modelled counterparty risk or modelled market risk.

 

RWAs increased £7.2bn to £365.6bn, due to:

 

•

Book size increased RWAs by £1.4bn primarily due to an increase in trading activity in Barclays International and business growth in corporate and consumer lending partially offset by securitisation transactions

•

Acquisitions and disposals decreased RWAs by £6.6bn primarily due to the rundown of Non-Core portfolios, including the sale of Portuguese and Italian businesses

•

Model updates decreased RWAs by £5.2bn primarily driven by changes in the mortgages credit risk model in Barclays UK

•

Methodology and Policy decreased RWAs by £1.1bn primarily driven by the effect of collateral modelling for mismatched FX collateral on average CVA and a new treatment for sovereign exposures, partly offset by modelled wholesale recalibration

•

Foreign exchange movements increased RWAs by £19.0bn primarily driven by the appreciation of ZAR, USD and EUR against GBP

 

Leverage ratio and exposures

 

Effective 1 January 2016, Barclays is required to disclose a leverage ratio and an average leverage ratio applicable to the Group:

 

•

The leverage ratio is consistent with the December 2015 method of calculation and has been included in the table below.  The calculation uses the end point CRR definition of Tier 1 capital for the numerator and the CRR definition of leverage exposure.  The current expected minimum fully loaded requirement is 3%, but this could be impacted by the Basel Consultation on the Leverage Framework


•

The average leverage ratio as outlined by the PRA Supervisory Statement SS45/15 and the updated PRA rulebook is calculated as the capital measure divided by the exposure measure, where the capital and exposure measure is based on the average of the last day of each month in the quarter.  The expected end point minimum requirement is 3.5% comprising of the 3% minimum requirement, a fully phased in G-SII additional leverage ratio buffer (G-SII ALRB) and a countercyclical leverage ratio buffer (CCLB).  The minimum requirement is on a phased basis in line with the CET1 G-SII buffer which results in a minimum requirement of 3.175% at 31 December 2016

 

At 31 December 2016, Barclays' leverage ratio was 4.6% (December 2015: 4.5%) and the average leverage ratio was 4.3%, which exceeds the transitional minimum requirement for Barclays of 3.175% and expected end point minimum requirement of 3.5%.

 

In August 2016, the PRA implemented the FPC's recommendation to allow firms to exclude qualifying central bank claims from the calculation of the leverage exposure measure, as long as these are matched by deposits denominated in the same currency, subject to firms obtaining permission from the PRA.  This change in reporting requirements is effective 1 April 2017 and will result in a modification to the calculation of the exposure measure for the purpose of calculating the UK leverage ratio.  At 31 December 2016, Barclays' reported leverage ratio and average leverage ratio disclosed below is unaffected by this announcement as firms are required to disclose based on the existing rules.  The impact of the PRA rule modification would have resulted in an average leverage ratio of 4.5% and a leverage ratio at 31 December 2016 of 5.0%.

 

As at

31.12.16

As at

30.09.16

As at

 31.12.15


£bn

£bn

£bn

Accounting assets




Derivative financial instruments

347

410

328

Cash collateral

67

74

62

Reverse repurchase agreements and other similar secured lending

13

17

28

Financial assets designated at fair value1

79

94

77

Loans and advances and other assets

707

729

625

Total IFRS assets

1,213

1,324

1,120





Regulatory consolidation adjustments

(6)

(8)

(10)





Derivatives adjustments




Derivatives netting

(313)

(373)

(293)

Adjustments to cash collateral

(50)

(59)

(46)

Net written credit protection

12

20

15

Potential Future Exposure (PFE) on derivatives

136

143

129

Total derivatives adjustments

(215)

 (269)

(195)





Securities financing transactions (SFTs) adjustments

29

36

16





Regulatory deductions and other adjustments

(15)

 (16)

(14)

Weighted off-balance sheet commitments

119

118

111

Total leverage exposure

1,125

1,185

1,028





Fully loaded CET 1 capital

45.2

43.2

40.7

Fully loaded AT1 capital

6.8

6.8

5.4

Fully loaded Tier 1 capital

52.0

49.9

46.2





Leverage ratio

4.6%

4.2%

4.5%

 

1

Included within financial assets designated at fair value are reverse repurchase agreements designated at fair value of £63bn (2015: £50bn).

 

The leverage ratio increased to 4.6% (December 2015: 4.5%) primarily driven by a £5.8bn increase in fully loaded Tier 1 capital to £52.0bn (December 2015: £46.2bn), partially offset by an increase in the leverage exposure of £97bn to £1,125bn (December 2015: £1,028bn):

 

•

The IFRS asset increase was mainly driven by loans and advances and other assets which increased £82bn to £707bn. The increase was primarily due to the appreciation of major currencies against GBP, an increase in liquidity pool assets and lending growth in Barclays UK and Barclays International. This was partially offset by the rundown and exit of Non-Core assets

•

SFT adjustments increased by £13bn to £29bn, primarily as a result of a change in treatment of securities pre-positioned for use against undrawn central bank lending facilities

•

PFE on derivatives increased by £7bn to £136bn primarily driven by the appreciation of major currencies against GBP, partially offset by compression activity, sale of positions and maturity of trades

•

Weighted off balance sheet commitments increased by £8bn to £119bn primarily driven by the appreciation of major currencies against GBP

 

The average leverage exposure measure for Q416 was £1,206bn resulting in an average leverage ratio of 4.3%. The CET1 capital held against the 0.175% transitional G-SII ALRB was £2bn. The impact of the CCLB is currently nil. 

 

The difference between the average leverage ratio and the leverage ratio was primarily driven by higher positions in October and November within trading portfolio assets, reverse repurchase agreements and settlements balances.

 

Credit Risk

 

Analysis of retail and wholesale loans and advances and impairment












Gross

loans and advances

Impairment allowance

Loans and advances     net of impairment

Credit

Risk Loans

CRLs % of gross loans and advances

Loan impairment charges1

Loan loss rates

As at 31.12.16

£m

£m

£m

£m

%

£m

bps

Barclays UK

155,729

1,519

154,210

2,044

1.3

866

56

Barclays International

33,485

1,492

31,993

1,249

3.7

1,085

324

Barclays Core

189,214

3,011

186,203

3,293

1.7

1,951

103

Barclays Non-Core

10,319

385

9,934

838

8.1

102

99

Total Group retail

199,533

3,396

196,137

4,131

2.1

2,053

103









Barclays UK

15,204

282

14,922

591

3.9

30

20

Barclays International

180,102

748

179,354

1,470

0.8

258

14

Head Office

4,410

-

4,410

-

-

-

-

Barclays Core

199,716

1,030

198,686

2,061

1.0

288

14

Barclays Non-Core

41,406

194

41,212

299

0.7

11

3

Total Group wholesale

241,122

1,224

239,898

2,360

1.0

299

12









Total loans and advances at amortised cost

440,655

4,620

436,035

6,491

1.5

2,352

53









Traded loans

2,975

n/a

2,975

n/a




Loans and advances designated at fair value

10,519

n/a

10,519

n/a




Loans and advances held at fair value

13,494

n/a

13,494

n/a












Total loans and advances

454,149

4,620

449,529

6,491












As at 31.12.15








Barclays UK

153,539

1,556

151,983

2,238

1.5

682

44

Barclays International

26,041

897

25,144

863

3.3

714

274

Barclays Core

179,580

2,453

177,127

3,101

1.7

1,396

78

Barclays Non-Core

12,588

464

12,124

936

7.4

139

110

Total Group retail

192,168

2,917

189,251

4,037

2.1

1,535

80









Barclays UK

16,400

312

16,088

637

3.9

24

15

Barclays International

159,776

617

159,159

1,330

0.8

201

13

Head Office

5,767

-

5,767

-

-

-

-

Barclays Core

181,943

929

181,014

1,967

1.1

225

12

Barclays Non-Core

39,979

336

39,643

441

1.1

(16)

(4)

Total Group wholesale

221,922

1,265

220,657

2,408

1.1

209

9









Total loans and advances at amortised cost

414,090

4,182

409,908

6,445

1.6

1,744

42









BAGL loans and advances at amortised cost

31,397

739

30,658

1,372












Traded loans

2,474

n/a

2,474

n/a




Loans and advances designated at fair value

17,913

n/a

17,913

n/a




Loans and advances held at fair value

20,387

n/a

20,387

n/a












Total loans and advances

465,874

4,921

460,953

7,817




 

1

Excluding impairment charges on available for sale investments and reverse repurchase agreements.

 

Total loans and advances decreased by £12bn to £450bn driven by a £31bn decrease due to the reclassification of BAGL balances to held for sale and £9bn from the exit of other assets in Non-Core. This was offset by lending of £20bn driven by volume growth and foreign currency movements due to the appreciation of average USD and EUR against GBP. There was also a net £9bn increase in settlement and cash collateral balances.

Credit risk loans (CRLs) and the ratio of CRLs to gross loans and advances excluding BAGL balances now held for sale remained stable at £6.5bn (2015: £6.4bn) and 1.5% (2015: 1.6%) respectively.

Loan impairment charges increased £0.6bn to £2.4bn primarily due to increased charges following the management review of impairment modelling for UK and US cards portfolios and the impairment of a number of single name exposures. Overall, this resulted in a 11bps increase in the loan loss rate to 53bps.

 

Analysis of potential credit risk loans (PCRLs), potential problem loans (PPLs) and coverage ratios

 


CRLs


PPLs


PCRLs


As at

As at


As at

As at


As at

As at


31.12.16

31.12.15


31.12.16

31.12.15


31.12.16

31.12.15


£m

£m


£m

£m


£m

£m

Barclays UK

2,044

2,238


310

382


2,354

2,620

Barclays International

1,249

863


192

117


1,441

980

Barclays Core

3,293

3,101


502

499


3,795

3,600

Barclays Non-Core

838

936


11

26


849

962

Total retail

4,131

4,037


513

525


4,644

4,562










Barclays UK

591

637


94

127


685

764

Barclays International

1,470

1,330


1,530

877


3,000

2,207

Barclays Core

2,061

1,967


1,624

1,004


3,685

2,971

Barclays Non-Core

299

441


59

122


358

563

Total wholesale

2,360

2,408


1,683

1,126


4,043

3,534










Total retail and wholesale

6,491

6,445


2,196

1,651


8,687

8,096

 BAGL

-

1,372


-

399


-

1,771

Group total

6,491

7,817


2,196

2,050


8,687

9,867











Impairment allowance


CRL coverage


PCRL coverage


As at

As at


As at

As at


As at

As at


31.12.16

31.12.15


31.12.16

31.12.15


31.12.16

31.12.15


£m

£m


%

%


%

%

Barclays UK

1,519

1,556


74.3

69.5


64.5

59.4

Barclays International

1,492

897


119.5

103.9


103.5

91.5

Barclays Core

3,011

2,453


91.4

79.1


79.3

68.1

Barclays Non-Core

385

464


45.9

49.6


45.3

48.2

Total retail

3,396

2,917


82.2

72.3


73.1

63.9










Barclays UK

282

312


47.7

49.0


41.2

40.8

Barclays International

748

617


50.9

46.4


24.9

28.0

Barclays Core

1,030

929


50.0

47.2


28.0

31.3

Barclays Non-Core

194

336


64.9

76.2


54.2

59.7

Total wholesale

1,224

1,265


51.9

52.5


30.3

35.8










Total retail and wholesale

4,620

4,182


71.2

64.9


53.2

51.7

 BAGL

-

739


-

53.9


-

41.7

Group total

4,620

4,921


71.2

63.0


53.2

49.9

 

•

Excluding BAGL balances, CRLs remained stable at £6.5bn (2015: £6.4bn) with the Group's CRL coverage ratio increasing to 71% (2015: 65%) mainly within retail portfolios

•

The CRL coverage ratio for retail portfolios increased to 82% (2015: 72%) primarily due to increased impairment allowances following the management review of impairment modelling of the UK and US cards portfolio

•

PPLs increased to £2.2bn (2015: £1.7bn) primarily within Barclays International wholesale portfolios. The increase was driven by exposures within the Corporate and Investment Bank across a number of industries

 

Analysis of specific portfolios and asset types

This section provides an analysis of principal portfolios and businesses in the retail and wholesale segments. In particular, home loans, credit cards, overdrafts and unsecured loans are covered for retail segments. In addition, this section details exposures to UK commercial real estate.

Secured home loans

The UK home loans portfolio comprises first lien home loans and accounts for 98%1 (2015: 98%) of the Group's core home loan balances and 91% (2015: £90%) of the Group's total home loan balances. Italy home loans accounts for 100% (2015: 91%) of the Group's Non-Core home loan balances and 7% (2015:  7%) of the Group's total home loan balances.

 

Home loans principal portfolios2







 





Barclays UK




As at

31.12.16

As at

31.12.15

Gross loans and advances (£m)





129,136

127,750

>90 day arrears, excluding recovery book (%)





0.2

0.2

Non-performing proportion of outstanding balances (%)





0.6

0.7

Annualised gross charge-off rates (%)





0.3

0.3

Recovery book proportion of outstanding balances (%)





0.4

0.4

Recovery book impairment coverage ratio (%)





9.1

10.1

 

1

Remaining balance includes wealth portfolio.

2

Gross loans and advances include loans and advances to customers and banks. Risk metrics based on exposures to customers only.

 

Barclays UK: Portfolio performance remained steady reflecting the continuing low base rate environment, house price appreciation and steady economic conditions. Non-performing proportion of outstanding balances and recovery book impairment coverage reduced due to a reduction in repossession stock.

 

Within the UK home loans portfolio:

 

•

owner-occupied interest-only home loans comprised 31%  (2015: 32%) of total balances. The average balance weighted LTV on these loans reduced to 41.7% (2015: 44.7%) as house prices have improved across core regions, and >90 day arrears excluding recovery book remained  steady at  0.2% (2015: 0.2%)

•

buy-to-let home loans comprised 9% (2015: 9% ) of total balances. The average balance weighted LTV reduced to 52.6% (2015: 54.6%), and >90 day arrears excluding recovery book reduced to 0.1% (2015: 0.2%)

 

Credit cards and unsecured loans

The principal portfolios listed below accounted for 94% (2015: 92%) of the Group's total credit cards and unsecured loans.

 

Credit cards and unsecured loans Principal Portfolios


Gross loans and advances1

30 day arrears, excluding recovery book

90 day arrears, excluding recovery book

Annualised gross charge-off rates

Recovery book proportion of outstanding balances

Recovery book impairment coverage ratio

As at 31 December 2016

£m

%

%

%

%

%

Barclays UK







    UK cards2

17,833

1.9

0.9

5.5

3.0

83.8

    UK personal loans

6,076

2.1

0.9

3.1

4.7

77.2

Barclays International







    US cards2

23,915

2.6

1.3

4.5

2.4

83.6

    Barclays Partner Finance

4,041

1.5

0.6

2.5

2.6

81.5

    Germany cards

1,812

2.6

1.0

3.7

2.7

79.0

As at 31 December 2015

  Barclays UK

    UK cards2

18,502

2.3

1.2

5.2

3.6

82.6

    UK personal loans

5,476

1.9

0.8

3.0

7.5

73.9

Barclays International







    US cards2

16,699

2.2

1.1

3.9

2.0

84.8

    Barclays Partner Finance3

3,986

1.5

0.6

2.4

2.5

82.2

    Germany cards

1,419

2.3

1.0

3.8

2.7

81.2

 

1

Includes loans and advances to customers and banks. Risk metrics based on exposures to customers.

2

For UK and US cards, outstanding recovery book balances for acquired portfolios recognised at fair value (which have no related impairment allowance) have been excluded from the recovery book impairment coverage ratio. Losses have been recognised where related to additional spend from acquired accounts in the period post acquisition.

3

2015 recovery book coverage ratio has been restated from 85.2% to 82.2% to reflect more granular allocation of management adjustments to the recovery book.

 

UK cards: Gross loans and advances decreased 4% to £17.8bn primarily due to reduced loans and advances to banks.  Annualised gross charge-off rates increased due to accelerated asset sales in the latter half of the year and accelerated charge off of informal arrangement stock. The recovery book impairment coverage ratio increased, reflecting the impact of increased flow into charge-off.

UK personal loans: 30 day arrears increased to 2.1% (2015: 1.9%) and 90 day arrears increased to 0.9% (2015: 0.8%) driven by portfolio growth and an increased level of operational delinquency from new customer acquisitions. The recovery book proportion of outstanding balances reduced to 4.7% (2015: 7.5%) due to an asset sale that also resulted in an increase in the recovery book impairment coverage ratio to 77.2% (2015: 73.9%).

US cards: Gross loans and advances increased 43% to £23.9bn due to portfolio growth, new acquisitions and the appreciation of USD against GBP. Increased arrears and charge-off rates were driven by a change in portfolio mix, volume growth and the appreciation of average USD against GBP.

Barclays Partner Finance: Portfolio arrears and charge-off rates remained broadly steady during 2016. 

Germany cards: Loans and advances were 28% higher mainly due to a combination of the appreciation of EUR against GBP and portfolio growth. 90 day arrears and charge off rates remained stable, while the recovery book coverage ratio reduced slightly reflecting favourable recovery expectations.

 

Exposure to UK commercial real estate (CRE)

The UK CRE portfolio includes property investment, development, trading and house builders but excludes social housing and contractors.

 

UK CRE summary1



As at 31.12.16

As at 31.12.15

UK CRE loans and advances (£m)



11,227

10,690

Past due balances (£m)



83

152

Balances past due as % of UK CRE balances (%)



0.7

1.4

Impairment allowances (£m)



58

79

Past due coverage ratio (%)



69.9

52.0

Total collateral (£m)



23,225

21,858






For the year ended



31.12.16

31.12.15

Impairment (credit)/charge (£m)



(2)

3

 

1

Based on the most recent valuation assessment. 2015 year end numbers have been restated following closer alignment of industry classifications between corporate banking and business lending.

 

Maturity analysis of exposure to UK CRE


Contractual maturity of UK CRE loans and advances at amortised cost



Past due balances

Not more than six months

Over six months but not more than one year

Over one year but not more than two years

Over two years but not more than five years

Over five years but not more than ten years

Over ten years

Total loans and advances


£m

£m

£m

£m

£m

£m

£m

£m

As at 31 December 2016

83

774

668

1,200

6,318

700

1,484

11,227










As at 31 December 2015

152

784

744

929

5,678

852

1,551

10,690

 

Total exposure to UK commercial real estate rose moderately from £10.7bn to £11.2bn primarily in medium term deals. Past due balances fell to £83m from £152m due to favourable recovery activity and selective approach to new deals in this sector.

 

UK CRE LTV analysis






Balances

Balances as

proportion of total


31.12.16

31.12.15

31.12.16

31.12.15


£m

£m

%

%

Group





<=75%

7,884

7,208

70

68

>75% and <=100%

102

244

1

2

>100% and <=125%

15

109

-

1

>125%

60

18

1

-

Unassessed balances1

2,286

2,370

20

22

Unsecured balances2

880

741

8

7

Total

11,227

10,690

100

100

 

1

Corporate banking balances under £1m.

2

Unsecured balances primarily relate to working capital facilities agreed to CRE companies.

 

Statement of Directors' Responsibilities

 

Each of the Directors (the names of whom are set out below) confirm that:

 

•

to the best of their knowledge, the condensed consolidated financial statements (set out on pages 51 to 55), which have been prepared in accordance with the IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole. The condensed consolidated financial statements should be read in conjunction with the annual financial statements as included in the Annual Report for the year ended 2016; and


•

to the best of their knowledge, the management information (set out on pages 1 to 49) includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. This management information should be read in conjunction with the principal risks and uncertainties included in the Annual Report for the year ended 2016.

 

Signed on behalf of the Board by

 

James E Staley

Group Chief Executive


Tushar Morzaria

Group Finance Director

 

Barclays PLC Board of Directors:

 

Chairman

John McFarlane

Executive Directors

James E Staley (Group Chief Executive)

Tushar Morzaria (Group Finance Director)

 

Non-executive Directors

Mike Ashley

Tim Breedon CBE

Mary Francis

Crawford Gillies

Sir Gerry Grimstone

Reuben Jeffery III

Dambisa Moyo

Diane de Saint Victor

Diane Schueneman

Stephen Thieke

 

 

Condensed Consolidated Financial Statements

 

 Condensed Consolidated Income Statement (audited)



Year ended

Year ended



31.12.16

31.12.15

Continuing operations

Notes1

£m

£m

Net interest income


10,537

10,608

Net fee and commission income


6,768

6,859

Net trading income


2,768

3,426

Net investment income


1,324

1,097

Other income


54

50

Total income


21,451

22,040

Credit impairment charges and other provisions


(2,373)

(1,762)

Net operating income


19,078

20,278





Staff costs


(9,423)

(8,853)

Administration and general expenses


(6,915)

(9,683)

Operating expenses


(16,338)

(18,536)





Profit/(loss) on disposal of undertakings and share of results of associates and joint ventures


490

(596)

Profit before tax


3,230

1,146

Tax

2

(993)

(1,149)

Profit/(loss) after tax in respect of continuing operations


2,237

(3)

Profit after tax in respect of discontinued operation


591

626

Profit after tax


2,828

623





Attributable to:




Ordinary equity holders of the parent


1,623

(394)

Other equity holders

10

457

345

Total equity holders


2,080

(49)





Profit attributable to non-controlling interests in respect of continuing operations

3

346

348

Profit attributable to non-controlling interests in respect of discontinued operation

3

402

324

Profit after tax


2,828

623





Earnings per share




Basic earnings/(loss) per ordinary share2

4

10.4

(1.9)

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


9.3

(3.7)

Basic earnings per ordinary share in respect of discontinued operations


1.1

1.8

Diluted earnings/(loss) per ordinary share2


10.3

(1.9)

 

1

For notes to the Financial Statements see pages 56 to 64.

2

The profit after tax attributable to other equity holders of £457m (2015: £345m) is offset by a tax credit recorded in reserves of £128m (2015: £70m). The net amount of £329m (2015: £275m), along with NCI, is deducted from profit after tax in order to calculate earnings per share.

 

Condensed consolidated statement of comprehensive income






Year ended

Year ended



31.12.16

31.12.15

Continuing operations

Notes1

£m

£m

Profit after tax


2,828

623

Profit/(loss) after tax in respect of continuing operations


2,237

(3)

Profit after tax in respect of discontinued operation


591

626

Other comprehensive income/(loss) that may be recycled to profit or loss:




Currency translation reserve

11

3,024

748

Available for sale reserve

11

(387)

(229)

Cash flow hedge reserve

11

798

(493)

Other


13

20

Total comprehensive income that may be recycled to profit or loss


3,448

46





Other comprehensive (loss)/income not recycled to profit or loss:




Retirement benefit remeasurements


(980)

916





Other comprehensive income for the period


2,468

962

Total comprehensive income for the year, net of tax from continuing operations


4,705

959

Total comprehensive income/(loss) for the year, net of tax from discontinued operation


2,111

(722)

Total comprehensive income for the period


6,816

237





Attributable to:




Equity holders of the parent


5,233

45

Non-controlling interests


1,583

192

Total comprehensive income for the period


6,816

237

 

1

For notes to the Financial Statements see pages 56 to 64.

 

Condensed consolidated balance sheet (audited)






As at

As at



31.12.16

31.12.15

Assets

Notes1

£m

£m

Cash and balances at central banks


102,353

49,711

Items in the course of collection from other banks


1,467

1,011

Trading portfolio assets


80,240

77,348

Financial assets designated at fair value


78,608

76,830

Derivative financial instruments


346,626

327,709

Financial investments


63,317

90,267

Loans and advances to banks


43,251

41,349

Loans and advances to customers


392,784

399,217

Reverse repurchase agreements and other similar secured lending


13,454

28,187

Current and deferred tax assets


5,430

4,910

Prepayments, accrued income and other assets


2,893

3,010

Investments in associates and joint ventures


684

573

Goodwill and intangible assets


7,726

8,222

Property, plant and equipment


2,825

3,468

Retirement benefit assets

8

14

836

Assets included in disposal groups classified as held for sale

1

71,454

7,364

Total assets


1,213,126

1,120,012





Liabilities




Deposits from banks


48,214

47,080

Items in the course of collection due to other banks


636

1,013

Customer accounts


423,178

418,242

Repurchase agreements and other similar secured borrowing


19,760

25,035

Trading portfolio liabilities


34,687

33,967

Financial liabilities designated at fair value


96,031

91,745

Derivative financial instruments


340,487

324,252

Debt securities in issue2


75,932

69,150

Subordinated liabilities


23,383

21,467

Accruals, deferred income and other liabilities


8,871

10,610

Current and deferred tax liabilities


766

1,025

Provisions 

7

4,134

4,142

Retirement benefit liabilities

8

390

423

Liabilities included in disposal groups classified as held for sale

1

65,292

5,997

Total liabilities


1,141,761

1,054,148





Equity




Called up share capital and share premium

9

21,842

21,586

Other reserves

11

6,051

1,898

Retained earnings


30,531

31,021

Shareholders' equity attributable to ordinary shareholders of the parent


58,424

54,505

Other equity instruments

10

6,449

5,305

Total equity excluding non-controlling interests


64,873

59,810

Non-controlling interests

3

6,492

6,054

Total equity


71,365

65,864

 

1

For notes to the Financial Statements see pages 56 to 64.

2

Debt securities in issue include covered bonds of £12.4bn (2015: £12.3bn).

 

Condensed consolidated statement of changes in equity (audited)










Called up share capital and share premium1

Other equity instruments1

Other reserves1

Retained earnings

Total

Non-controlling interests2

Total

equity

Year ended 31.12.16

£m

£m

£m

£m

£m

£m

£m

Balance as at 1 January 2016

21,586

5,305

1,898

31,021

59,810

6,054

65,864

Profit after tax

-

457

-

1,434

1,891

346

2,237

Other comprehensive profit after tax for the period

-

-

3,433

(968)

2,465

3

2,468

Total comprehensive income net of tax from continuing operations

-

457

3,433

466

4,356

349

4,705

Total comprehensive income net of tax from discontinued operation

-

-

694

183

877

1,234

2,111

Total comprehensive income for the year

-

457

4,127

649

5,233

1,583

6,816

Issue of shares

256

-

-

668

924

-

924

Issue and exchange of equity instruments

-

1,132

-

-

1,132

-

1,132

Dividends

-

-

-

(757)

(757)

(575)

(1,332)

Coupons paid on other equity instruments

-

(457)

-

128

(329)

-

(329)

Redemption of preference shares

-

-

-

(417)

(417)

(1,170)

(1,587)

Treasury shares

-

-

26

(415)

(389)

-

(389)

Net equity impact of partial BAGL disposal

-

-

-

(349)

(349)

601

252

Other movements

-

12

-

3

15

(1)

14

Balance as at 31 December 2016

21,842

6,449

6,051

30,531

64,873

6,492

71,365

















Year ended 31.12.15








Balance as at 1 January 2015

20,809

4,322

2,724

31,712

59,567

6,391

65,958

Profit after tax

-

345

-

(696)

(351)

348

(3)

Other comprehensive profit after tax for the period

-

-

25

936

961

1

962

Total comprehensive income net of tax from continuing operations

-

345

25

240

610

349

959

Total comprehensive income net of tax from discontinued operation

-

-

(867)

302

(565)

(157)

(722)

Total comprehensive income for the year

-

345

(842)

542

45

192

237

Issue of shares

777

-

-

571

1,348

-

1,348

Issue and exchange of equity instruments

-

995

-

-

995

-

995

Dividends

-

-

-

(1,081)

(1,081)

(552)

(1,633)

Coupons paid on other equity instruments

-

(345)

-

70

(275)

-

(275)

Treasury shares

-

-

16

(755)

(739)

-

(739)

Other movements

-

(12)

-

(38)

(50)

23

(27)

Balance as at 31 December 2015

21,586

5,305

1,898

31,021

59,810

6,054

65,864

 

1

Details of share capital, other equity instruments and other reserves are shown on pages 63 and 64.

2

Details of non-controlling interests are shown on page 59.

 

Condensed consolidated cash flow statement (audited)



Year ended

Year ended



31.12.16

31.12.15



£m

£m

Profit before tax


3,230

1,146

Adjustment for non-cash items


(15,355)

7,060

Changes in operating assets and liabilities


24,191

8,798

Corporate income tax paid


(780)

(1,670)

Net cash from operating activities


11,286

15,334

Net cash from investing activities


36,707

(6,551)

Net cash from financing activities


(1,317)

(574)

Net cash from discontinued operations


405

(1,821)

Effect of exchange rates on cash and cash equivalents


10,473

1,689

Net increase in cash and cash equivalents


57,554

8,077

Cash and cash equivalents at beginning of the period


86,556

78,479

Cash and cash equivalents at end of the period


144,110

86,556

Financial Statement Notes

1. Assets included in disposal groups classified as held for sale and associated liabilities

 

On 1 March 2016, Barclays announced its intention to reduce the Group's 62.3% interest in BAGL. This reduction is intended to be to a level which will permit deconsolidation from an accounting and regulatory perspective, for which approval was granted by shareholders at the Group's general meeting held on 28 April 2016. On 5 May 2016 Barclays sold 12.2% of the Group's interest in BAGL resulting in a transfer to non-controlling interests of £601m. Following this sale, Barclays' interest represents 50.1% of BAGL's share capital.  The BAGL disposal group includes all assets and liabilities of BAGL and its subsidiaries as well as Group balances associated with BAGL and expected contributions that will form part of the sale. 

 

No impairment for BAGL has been recognised under IFRS 5 as at 31 December 2016. Impairment under IFRS 5 is calculated as the difference between fair value less disposal costs and the carrying value of the disposal group. The fair value is determined by reference to the quoted market price for BAGL and the foreign exchange rate for ZAR/GBP as at 31 December 2016, less the expected contributions on page 57. The fair value less disposal costs and expected contributions exceeds the net asset value at 31 December 2016.

Barclays continues to explore potential options for further disposal of its shares in BAGL during the course of 2017.

 

Assets included in disposal groups classified as held for sale




BAGL

Other

Total

Total


2016

2016

2016

2015


£m

£m

£m

£m

Cash and balances at central banks

2,689

241

2,930

21

Items in the course of collection from other banks

549

21

570

24

Trading portfolio assets

3,044

40

3,084

-

Financial assets designated at fair value

5,546

1,438

6,984

696

Derivative financial instruments

1,992

-

1,992

-

Financial investments

4,995

2,742

7,737

1,230

Loans and advances to banks

1,184

482

1,666

74

Loans and advances to customers

41,793

1,711

43,504

5,513

Prepayments, accrued income and other assets

637

59

696

47

Investments in associates and joint ventures

63

24

87

10

Property, plant and equipment

902

52

954

128

Goodwill

965

32

997

-

Intangible assets

554

16

570

43

Current and deferred tax assets

124

25

149

22

Retirement benefit assets

33

-

33

-

Total

65,070

6,883

71,953

7,808

Balance of impairment unallocated under IFRS 5


(499)

(499)

(444)

Total assets classified as held for sale

65,070

6,384

71,454

7,364






Liabilities included in disposal groups classified as held for sale




BAGL

Other

Total

Total


2016

2016

2016

2015


£m

£m

£m

£m

Deposits from banks

2,113

36

2,149

-

Items in the course of collection due to banks

350

23

373

74

Customer accounts

39,331

3,100

42,431

4,000

Repurchase agreements and other similar secured borrowing

597

-

597

-

Trading portfolio liabilities

388

-

388

-

Financial liabilities designated at fair value

3,748

3,577

7,325

346

Derivative financial instruments

1,610

1

1,611

3

Debt securities in issue

7,997

-

7,997

1,474

Subordinated liabilities

934

-

934

-

Accruals, deferred income and other liabilities

1,061

119

1,180

39

Provisions

52

51

103

34

Current and deferred tax liabilities

154

8

162

(6)

Retirement benefit liabilities

26

16

42

33

Total liabilities classified as held for sale

58,361

6,931

65,292

5,997






Net assets/(liabilities) classified as held for sale1

6,709

(547)

6,162

1,367

Expected contributions to BAGL2,3

866

-

866

-

Disposal group post contribution

7,575

(547)

7,028

1,367

 

1

The carrying value of the disposal group is stated after the elimination of internal balances between Barclays and BAGL of £595m. Internal balances have been considered in determining the carrying value of BAGL (of £7.3bn before the planned contributions in respect of BAGL) for the purposes of measuring the disposal group at the lower of carrying amount and fair value less costs to sell.

2

In December 2016, Barclays finalised proposals regarding planned contributions to the BAGL group relating to the reimbursement of certain expenses as well as contributions for investment to support separation activities. The cash and cash equivalents to make these planned contributions is included within the perimeter of the disposal group, also for the purposes of measuring the disposal group at the lower of carrying amount and fair value less costs to sell. The planned contributions are reported within Cash and balances at central banks in the Group's consolidated balance sheet.

3

In December 2016, Barclays reimbursed BAGL for expenses incurred for an amount of £28m. This amount is excluded from the proposed overall potential reimbursement and contribution figure of £866m.

 

The BAGL disposal group meets the requirements for presentation as a discontinued operation.  As such, the results, which have been presented as the profit after tax and non-controlling interest in respect of the discontinued operation on the face of the Group income statement, are analysed in the income statement below.

 

BAGL group income statement




As at

31.12.16

As at

31.12.15

For the year ended 31 December

£m

£m

Net interest income

2,169

1,950

Net fee and commission income

1,072

1,033

Net trading income

281

197

Net investment income

45

41

Other income

179

193

Total income

3,746

3,414

Credit impairment charges and other provisions

(445)

(353)

Net operating income

3,301

3,061

Staff costs

(1,186)

(1,107)

Administration and general expenses

(653)

(545)

Depreciation of property, plant and equipment

(513)

(442)

Amortisation of intangible assets

(58)

(47)

Operating expenses

(2,410)

(2,141)

Share of post-tax results of associates and joint ventures

6

7

Profit before tax

897

927

Taxation

(306)

(301)

Profit after tax

591

626




Attributable to:



Equity holders of the parent

189

302

Non-controlling interests

402

324

Profit after tax

591

626

 

Other comprehensive income relating to discontinued operations is as follows:







2016

2015

For the year ended 31 December

£m

£m

Available for sale assets

(9)

(22)

Currency translation reserves

1,451

(1,223)

Cash flow hedge reserves

89

(101)

Other comprehensive income, net of tax from discontinued operations

1,531

(1,346)

 

 



The cash flows attributed to the discontinued operations are as follows:

 




2016

2015

For the year ended 31 December

£m

£m

Net cash flows from operating activities

1,164

794

Net cash flows from investing activities

(691)

(1,883)

Net cash flows from financing activities

(105)

133

Effect of exchange rates on cash and cash equivalents

37

(865)

Net increase/(decrease) in cash and cash equivalents

405

(1,821)

 

2.   Tax

The 2016 tax charge of £993m (2015: £1,149m), represented an effective tax rate of 30.7% (2015: 100.3%). The effective tax rate is higher than the UK statutory rate of 20% (2015: 20.25%) primarily due to profits earned outside the UK being taxed at higher local statutory tax rates.  In addition the effective tax rate is affected by provisions for UK customer redress being non-deductible for tax purposes, non-creditable taxes and non-deductible expenses including UK bank levy.  These factors, which have each increased the effective tax rate, are partially offset by the impact of non-taxable gains and income, including those arising from divestments, and adjustments in respect of prior years.

 

The deferred tax asset of £4,869m (2015: £4,495m) mainly relates to amounts in the US.

 

  

Assets


Liabilities


As at 31.12.16

As at 31.12.15


As at 31.12.16

As at 31.12.15

Current and deferred tax assets and liabilities

£m

£m


£m

£m

Current tax

561

415


(737)

(903)

Deferred tax

4,869

4,495


(29)

(122)

Total

5,430

4,910


(766)

(1,025)

 

As at 31.12.16

As at 31.12.15

Deferred tax assets and liabilities

£m

£m

Intermediate Holding Company (IHC) - US tax group

2,207

2,049

Barclays Bank PLC (US branch) - US tax group

1,766

1,569

Barclays PLC - UK tax group

575

411

Other

321

466

Deferred tax asset

4,869

4,495

Deferred tax liability

(29)

(122)

Net deferred tax

4,840

4,373




Analysis of net deferred tax



Temporary differences

4,337

3,471

Tax losses

503

902

Net deferred tax

4,840

4,373




3.    Non-controlling interests



 



Year ended 31.12.16

Year ended 31.12.15


Year ended 31.12.16

Year ended 31.12.15


£m

£m


£m

£m

Barclays Bank PLC Issued:






- Preference shares

340

343


2,698

3,654

- Upper Tier 2 instruments

3

2


272

486

Barclays Africa Group Limited

402

324


3,507

1,902

Other non-controlling interests

3

3


15

12

Total

748

672


6,492

6,054

 

 

Equity attributable to non-controlling interests increased by £438m to £6,492m in December 2016 driven by the sale of 12.2% of the Group's stake in BAGL increasing the non-controlling interest from 37.6% to 49.9% and the appreciation of ZAR against GBP. These increases were partially offset by the redemption of preference shares issued by Barclays Bank PLC.

 

 4.   Earnings per share

 

As at

As at

 

31.12.16

31.12.15

 

£m

£m

Profit/(loss) attributable to ordinary equity holders of the parent from continuing and discontinued operations

1,623

(394)

Tax credit on profit after tax attributable to other equity holders

128

70

Total profit/(loss) attributable to ordinary equity holders of the parent from continuing and discontinued operations

1,751

(324)

Continuing operations



Profit/(loss) attributable to ordinary equity holders of the parent from continuing operations

1,434

(696)

Tax credit on profit after tax attributable to other equity holders

128

70

Profit/(loss) attributable to equity holders of the parent from continuing operations

1,562

(626)

Discontinued operation



Profit attributable to ordinary equity holders of the parent from discontinued operation

189

302

Dilutive impact of convertible options from discontinued operation

(1)

-

Profit attributable to equity holders of the parent from discontinued operations including dilutive impact on convertible options

188

302

Profit/(loss) attributable to equity holders of the parent from continuing and discontinued operations including dilutive impact on convertible options

1,750

(324)





As at

As at


31.12.16

31.12.15


£m

£m

Basic weighted average number of shares in issue

16,860

16,687

Number of potential ordinary shares

184

367

Diluted weighted average number of shares

17,044

17,054


p

p

Basic earnings per ordinary share1

10.4

(1.9)

Basic earnings per ordinary share from continuing operations1

9.3

(3.7)

Basic earnings per ordinary share from discontinued operation

1.1

1.8

Diluted earnings per ordinary share1

10.3

(1.9)

Diluted earnings per ordinary share from continuing operations1

9.2

(3.7)

Diluted earnings per ordinary share from discontinued operation

1.1

1.8

 

1

The profit after tax attributable to other equity holders of £457m (2015: £345m) is offset by a tax credit recorded in reserves of £128m (2015: £70m).  The net amount of £329m (2015: £275m), along with NCI, is deducted from profit after tax in order to calculate earnings per share.

 

5.   Dividends on Ordinary Shares

 

It is Barclays' policy to declare and pay dividends on a semi-annual basis. A final dividend in respect of 2016 of 2.0p per ordinary share will be paid on 5 April 2017 to shareholders on the Share Register on 3 March 2017 and accounted for as a distribution of retained earnings in the year ending 31 December 2017. The financial statements for 2016 include the following dividends paid during the year:

 

Year ended 31.12.16


Year ended 31.12.15


Per share

Total


Per share

Total

Dividends paid during the period

p

£m


p

£m

Final dividend paid during period

3.5

588


3.5

578

Interim dividends paid during period

1.0

169


3.0

503

Total

4.5

757


6.5

1,081

 

6.   Fair value of assets and liabilities

 

The following table shows the Group's assets and liabilities that are held at fair value disaggregated by valuation technique (fair value hierarchy) and balance sheet classification:

 

Assets and liabilities held at fair value

Valuation technique using


Quoted market prices (Level 1)

Observable inputs (Level 2)

Significant unobservable inputs (Level 3)

Total


£m

£m

£m

£m

As at 31 December 2016





Trading portfolio assets

41,550

36,625

2,065

80,240

Financial assets designated at fair value

4,031

64,630

9,947

78,608

Derivative financial assets

5,261

332,819

8,546

346,626

Available for sale investments

21,218

36,551

372

58,141

Investment property

-

-

81

81

Assets included in disposal groups classified as held for sale1

6,754

8,511

6,009

21,274

Total assets

78,814

479,136

27,020

584,970






Trading portfolio liabilities

(20,205)

(14,475)

(7)

(34,687)

Financial liabilities designated at fair value

(70)

(95,121)

(840)

(96,031)

Derivative financial liabilities

(5,051)

(328,265)

(7,171)

(340,487)

Liabilities included in disposal groups classified as held for sale1

(397)

(5,224)

(6,201)

(11,822)

Total liabilities

(25,723)

(443,085)

(14,219)

(483,027)






As at 31 December 2015





Trading portfolio assets

36,676

35,725

4,947

77,348

Financial assets designated at fair value

6,163

52,909

17,758

76,830

Derivative financial assets

6,342

315,949

5,418

327,709

Available for sale investments

42,552

46,693

1,022

90,267

Investment property

-

-

140

140

Assets included in disposal groups classified as held for sale1

26

8

7,330

7,364

Total assets

91,759

451,284

36,615

579,658






Trading portfolio liabilities

(23,978)

(9,989)

-

(33,967)

Financial liabilities designated at fair value

(240)

(90,203)

(1,302)

(91,745)

Derivative financial liabilities

(5,450)

(314,033)

(4,769)

(324,252)

Liabilities included in disposal groups classified as held for sale1

(1,024)

(802)

(4,171)

(5,997)

Total liabilities

(30,692)

(415,027)

(10,242)

(455,961)

 

1

Disposal groups held for sale and measured at fair value less cost to sell are non-recurring fair value instruments and therefore included in the fair value table. For disposal groups that are measured at the carrying amount, only items measured at fair value are included in the table above.

 

7.   Provisions

As at

As at


31.12.16

31.12.15


£m

£m

UK customer redress:



Payment Protection Insurance redress

1,979

2,106

Other customer redress

712

896

Legal, competition & regulatory matters

455

489

Redundancy and restructuring

206

186

Undrawn contractually committed facilities and guarantees

67

60

Onerous contracts

385

141

Sundry provisions

330

264

Total

4,134

4,142

 

 

 

Payment Protection Insurance Redress

As at 31 December 2016, Barclays had recognised cumulative provisions totalling £8.44bn (31 December 2015: £7.44bn) against the cost of Payment Protection Insurance (PPI) redress and associated processing costs with utilisation of £6.46bn (31 December 2015: £5.33bn), leaving a residual provision of £1.98bn (31 December 2015: £2.11bn).

Through to 31 December 2016, 1.8m (31 December 2015: 1.6m) customer initiated claims1 had been received and processed. The volume of claims received during 2016 decreased 8%2 from 2015. This rate of decline was slower than previously recorded but in line with expectations.

The current provision reflects the estimate of costs of PPI redress primarily relating to customer initiated complaints and on-going remediation programmes. This also includes liabilities managed by third parties arising from portfolios previously sold where Barclays remains liable.

As at 31 December 2016, the provision of £1.98bn represents Barclays' best estimate of expected PPI redress reflecting the revised complaints deadline proposed in Financial Conduct Authority (FCA) consultation paper 16/20 issued on 2 August 2016. However, it is possible the eventual outcome may differ from the current estimate. We will continue to review the adequacy of provision level in respect of the on-going level of complaints.

The PPI provision is calculated using a number of key assumptions which continue to involve significant management judgement and modelling:

 

•

Customer initiated claim volumes - claims received but not yet processed plus an estimate of future claims initiated by customers where the volume is anticipated to cease after H119

•

Average claim redress - the expected average payment to customers for upheld claims based on the type and age of the policy/policies

•

Processing cost per claim - the cost to Barclays of assessing and processing each valid claim

 

These assumptions remain subjective, in particular due to the uncertainty associated with future claims levels, which include complaints driven by Claims Management Company (CMC) activity.

The current provision represents Barclays' revised best estimate of all future expected costs of PPI redress based on information available at year end.

 

The following table details actual data through to 31 December 2016, key forecast assumptions used in the provision calculation and a sensitivity analysis illustrating the impact on the provision if the future expected assumptions prove too high or too low.

 

1

Total claims received directly by Barclays to date, including those received via CMCs but excluding those for which no PPI policy exists and excluding responses to proactive mailing.

2

Gross volumes received including no PPI.

 

Cumulative actual

 

Sensitivity analysis increase/

decrease

Assumption

   to 31.12.16

Future expected

in provision

Customer initiated claims received and processed1

1,840k

650k

50k = £100m

Average uphold rate per claim2

87%

83%

1% = £15m

Average redress per valid claim3

£2,137

£1,950

£100 = £74m

Processing cost per claim4

£410

£350

50k = £17m

 

1

Total claims received directly by Barclays to date, including those received via CMCs but excluding those for which no PPI policy exists and excluding responses to proactive mailing.

2

Average uphold rate per customer initiated claims received directly by Barclays and proactive mailings, excluding those for which no PPI policy exists.

3

Average redress stated on a per policy basis for future customer initiated complaints received directly by Barclays and proactive mailings.

4

Processing cost per claim on an upheld complaints basis, includes direct staff costs and associated overheads.

 

8.   Retirement Benefits

 

 As at 31 December 2016, the Group's IAS 19 (Revised) pension deficit across all schemes was £0.4bn (2015: £0.4bn surplus). The UK Retirement Fund (UKRF), which is the Group's main scheme, had a deficit of £0.03bn (2015: £0.8bn surplus).

The movement for the UKRF is mainly due to a decrease in discount rate to 2.62% (2015: 3.82%), and an increase in inflation rate to 3.35% (2015: 3.05%) partially offset by deficit contributions, updated mortality assumptions based on scheme experience, and higher than assumed returns on plan assets.

The triennial funding valuation of the UKRF is currently underway with an effective date of 30 September 2016. Contribution requirements, including any deficit recovery plans, are expected to be agreed between the Bank and Trustee by the end of 2017. In these discussions, the Bank and the Trustee are taking into account the impact of the Structural Reform Programme.

The 2013 valuation was completed in 2014 with an effective date of 30 September 2013. The funding deficit at that date was calculated to be £3.6bn. Under the agreed recovery plan, deficit contributions of £300m were paid in 2016, with further deficit contributions of £740m payable each year between 2017 and 2021. Up to £500m of the 2021 deficit contributions is payable in 2017 if the funding deficit remains over £2.6bn. These deficit contributions are in addition to the regular contributions to meet the Group's share of the cost of benefits accruing over each year.

In non-valuation years the Scheme Actuary prepares an annual update of the funding position. The latest annual update was carried out as at 30 September 2015 and showed a deficit of £6.0bn.

9.  Called Up Share Capital

 

Called up share capital comprises 16,963m (2015: 16,805m) ordinary shares of 25p each. The increase was due to the issuance of 116m (2015: 253m) shares under employee share schemes and a further 42m (2015: 54m) issued as part of the Barclays PLC Scrip Dividend Programme.  

 

10.  Other Equity Instruments

Other Equity Instruments of £6,449m (2015: £5,305m) include AT1 securities issued by Barclays PLC. In 2016 there was one issuance of CRD IV end point qualifying AT1 capital instruments, with a principal amount of £1.1bn (2015: £1.0bn)

The AT1 securities are perpetual securities with no fixed maturity and are structured to qualify as AT1 instruments under CRD IV. All AT1 securities will be converted into ordinary shares of Barclays PLC, at a pre-determined price, should the fully loaded CET1 ratio of Barclays PLC fall below 7.0%.

11. Other Reserves

 

As at

As at


31.12.16

31.12.15


£m

£m

Currency translation reserves

3,051

(623)

Available for sale reserves

(74)

317

Cash flow hedges reserves

2,105

1,261

Other

969

943

Total other reserves

6,051

1,898

 

Currency Translation Reserve

As at 31 December 2016 there was a credit balance of £3,051m (2015: £623m debit) in the currency translation reserve. The increase in the credit balance of £3,674m (2015: £41m debit) principally reflected the strengthening of all major currencies against GBP. The currency translation reserve movement associated with non-controlling interests was a £801m credit (2015: £435m debit) reflecting the strengthening of ZAR against GBP.

During the year a £101m net gain (2015: £65m net loss) from recycling of the currency translation reserve was recognised in the income statement.

Available for Sale Reserve

As at 31 December 2016 there was a debit balance of £74m (2015: £317m credit) in the available for sale reserve.  The decrease of £391m (2015: £245m decrease) was primarily due to a £2,192m gain from changes in fair value of Government Bonds, predominantly held in the liquidity pool.  This was more than offset by £1,677m of losses from related hedging and £912m of net gains transferred to net profit, mainly due to £615m sale of Visa Europe Limited by Visa Inc.  A tax charge of £28m was recognised in the period relating to these items.

Cash Flow Hedging Reserve

As at 31 December 2016, there was a credit balance of £2,105m (2015: £1,261m credit) in the cash flow hedging reserve. The increase of £844m (2015: £556m decrease) principally reflected a £1,595m increase in the fair value of interest rate swaps held for hedging purposes as interest rate forward curves decreased, partially offset by £450m gains recycled to the income statement in line with when the hedged item affects profit or loss and tax charge of £326m. This tax charge reflects the introduction of the new surcharge of 8% that applies to bank's UK profits with effect from January 2016, in addition to the standard UK corporation tax of 20%.

 

Other Reserves and Treasury Shares

As at 31 December 2016 there was a credit balance of £969m (2015: £943m credit) in other reserves and treasury shares. The increase principally reflected £166m (2015: £618m) transferred from treasury shares reflecting the vesting of deferred share based payments, partially offset by £140m (2015: £602m) net purchases of treasury shares held for the purposes of employee share schemes.

 

 

Appendix: Non-IFRS performance measures

 

The Barclays management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the business' performance between financial periods, and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of Barclays PLC and its subsidiaries (the Group). They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays' management.

Non-IFRS and IFRS performance measures may also be presented on an excluding notable items basis. Notable items are considered to be significant items impacting comparability of performance.

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

 

Non-IFRS performance measures glossary

 

Measure

Definition

Barclays Core

Barclays Core includes Barclays UK, Barclays International and Head Office. A reconciliation of Core statutory results and results excluding notable items is included on page 67.

 

Return on average tangible shareholders' equity

 

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 pages 72 and 73.

 

Return on average allocated tangible shareholders' equity

 

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 pages 72 and 73.

 

Period end allocated tangible equity

Allocated tangible equity is calculated as 11.5% of CRD IV fully loaded risk weighted assets for each business, adjusted for CRD IV fully loaded capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office tangible equity represents the difference between the Group's tangible equity and the amounts allocated to businesses.

 

Average tangible shareholders' equity

Calculated as the average of the monthly period end tangible shareholders' equity during the period.

 

 

 

Average allocated tangible shareholders' equity

Calculated as the average of the monthly period end allocated tangible shareholders' equity during the period.

 

 

Cost: income ratio

Total operating expenses divided by total income.

 

Basic earnings/(loss) per share contribution (Barclays Core and Non-Core)

 

The calculation is consistent with the IFRS measure and applied to the Barclays Core and Non-Core: statutory profit after tax attributable to ordinary shareholders, including an adjustment for the tax credit in reserves in respect of other equity instruments, divided by the Group basic weighted average number of shares. The components of the calculation have been included on page 74.

 

 

Non-IFRS performance measures glossary (continued)

 

Measure

Definition

Loan loss rate

 

Is quoted in basis points and represents total loan impairment divided by gross loans and advances to customers and banks held at amortised cost at the balance sheet date.

 

Loan: deposit ratio

 

Loans and advances divided by customer accounts calculated for Barclays UK, Barclays International and Non-Core, excluding investment banking businesses. This excludes particular liabilities issued by the retail businesses that have characteristics comparable to retail deposits (for example structured Certificates of Deposit and retail bonds), which are included within debt securities in issue.

 

Notable items

 

Notable items are considered to be significant items impacting comparability of performance and are shown for each of the business segments. A reconciliation between statutory results and results excluding notable items is included on pages 68 to 71 including relevant performance measures.

 

Net interest margin

 

Net interest income divided by the sum of average customer assets. The components of the calculation have been included on page 31.

 

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 75.

 

 

 

Barclays Core reconciliation

for the year ended

31.12.16

31.12.15

Barclays UK

Barclays International

Head Office

Barclays

Core

Barclays UK

Barclays International

Head Office

Barclays

Core

£m

£m

£m

£m

£m

£m

£m

£m

Total income

7,517

14,995

103

22,615

7,343

13,747

338

21,428

Credit impairment charges and other provisions

(896)

(1,355)

-

(2,251)

(706)

(922)

-

(1,628)

Net operating income

6,621

13,640

103

20,364

6,637

12,825

338

19,800

Operating expenses

(3,792)

(9,129)

(135)

(13,056)

(3,464)

(8,029)

(272)

(11,765)

UK bank levy

(48)

(284)

(2)

(334)

(77)

(253)

(8)

(338)

Litigation and conduct

(1,042)

(48)

(27)

(1,117)

(2,511)

(1,310)

(66)

(3,887)

Total operating expenses

(4,882)

(9,461)

(164)

(14,507)

(6,052)

(9,592)

(346)

(15,990)

Other net (expenses)/income

(1)

32

128

159

-

45

(106)

(61)

Profit/(loss) before tax

1,738

4,211

67

6,016

585

3,278

(114)

3,749

Attributable profit/(loss)

828

2,412

110

3,350

(47)

1,758

11

1,722










Average allocated tangible equity (£bn)

8.9

25.5

6.5

41.0

9.3

24.9

2.6

36.8

Risk weighted assets (£bn)

67.5

212.7

53.3

333.5

69.5

194.8

39.7

304.1










Notable items









Total income









Own credit 

-

-

(35)

(35)

-

-

430

430

Gain on disposal of Barclays' share of Visa Europe Limited 

151

464

-

615

-

-

-

-

Gains on US Lehman acquisition assets  

-

-

-

-

-

496

-

496

Litigation and conduct









Provisions for UK customer redress 

(1,000)

-

-

(1,000)

(2,431)

(218)

-

(2,649)

Provisions for ongoing investigations and litigation including Foreign Exchange 

-

-

-

-

-

(984)

(52)

(1,036)

Operating expenses

 

 

 


 

 

 


Gain on valuation of a component of the defined retirement benefit liability  

-

-

-

-

296

133

-

429

Other net expenses

 

 

 


 

 

 


Losses on sale relating to the Spanish, Portuguese and Italian businesses

-

-

-

-

-

-

(112)

(112)

Total notable items

(849)

464

(35)

(420)

(2,135)

(573)

266

(2,442)










 Results excluding notable items







Total income

7,366

14,531

138

22,035

7,343

13,251

(92)

20,502

Credit impairment charges and other provisions

(896)

(1,355)

-

(2,251)

(706)

(922)

-

(1,628)

Net operating income/ (expenses)

6,470

13,176

138

19,784

6,637

12,329

(92)

18,874

Operating expenses

(3,792)

(9,129)

(135)

(13,056)

(3,760)

(8,162)

(272)

(12,194)

UK bank levy

(48)

(284)

(2)

(334)

(77)

(253)

(8)

(338)

Litigation and conduct

(42)

(48)

(27)

(117)

(80)

(108)

(14)

(202)

Total operating expenses

(3,882)

(9,461)

(164)

(13,507)

(3,917)

(8,523)

(294)

(12,734)

Other net (expenses)/income

(1)

32

128

159

-

45

6

51

Profit/(loss) before tax

2,587

3,747

102

6,436

2,720

3,851

(380)

6,191

Attributable profit/(loss)

1,685

1,961

135

3,781

1,961

2,320

(176)

4,105

 

Results excluding notable items







Barclays Core

Statutory results

Notable items1

Results excluding notable items

Statutory results

Notable items1

Results excluding notable items

Results excluding notable items

for the year ended

31.12.16

31.12.15

YoY

% Change

Income statement information

£m

£m

£m

£m

£m

£m

Net interest income

10,377

-

10,377

9,993

-

9,993

4

Net fee, commission and other income

12,238

580

11,658

11,435

926

10,509

11

Total income

22,615

580

22,035

21,428

926

20,502

7

Credit impairment charges and other provisions

(2,251)

-

(2,251)

(1,628)

-

(1,628)

(38)

Net operating income

20,364

580

19,784

19,800

926

18,874

5

Operating expenses

(13,056)

-

(13,056)

(11,765)

429

(12,194)

(7)

UK bank levy

(334)

-

(334)

(338)

-

(338)

1

Total operating expenses excluding litigation and conduct

(13,390)

-

(13,390)

(12,103)

429

(12,532)

(7)

Litigation and conduct

(1,117)

(1,000)

(117)

(3,887)

(3,685)

(202)

42

Total operating expenses

(14,507)

(1,000)

(13,507)

(15,990)

(3,256)

(12,734)

(6)

Other net income/(expenses)

159

-

159

(61)

(112)

51


Profit before tax

6,016

(420)

6,436

3,749

(2,442)

6,191

4

Attributable profit/(loss)

3,350

(431)

3,781

1,722

(2,383)

4,105

(8)









Performance measures








Return on average allocated tangible equity

8.4%


9.4%

4.8%


11.2%


Cost: income ratio

64%


61%

75%


62%


















Barclays Non-Core








Income statement information








Net interest income

160

-

160

615

-

615

(74)

Net trading income

(1,703)

-

(1,703)

(706)

-

(706)


Net fee, commission and other income

379

-

379

703

-

703

(46)

Total income

(1,164)

-

(1,164)

612

-

612


Credit impairment charges and other provisions

(122)

-

(122)

(134)

-

(134)

9

Net operating (expenses)/income

(1,286)

-

(1,286)

478

-

478


Operating expenses

(1,509)

-

(1,509)

(1,958)

(99)

(1,859)

19

UK bank levy

(76)

-

(76)

(88)

-

(88)

14

Litigation and conduct

(246)

-

(246)

(500)

(324)

(176)

(40)

Total operating expenses

(1,831)

-

(1,831)

(2,546)

(423)

(2,123)

14

Other net income/(expenses)

331

-

331

(535)

(465)

(70)


Loss before tax

(2,786)

-

(2,786)

(2,603)

(888)

(1,715)

(62)

Attributable loss

(1,916)

-

(1,916)

(2,418)

(707)

(1,711)

(12)

 

1

Refer to page 5 for a breakdown of notable items.

 

Results excluding notable items







Barclays UK

Statutory results

Notable items1

Results excluding notable items

Statutory results

Notable items1

Results excluding notable items

Results excluding notable items

for the year ended

31.12.16

31.12.15

YoY

% Change

Income statement information

£m

£m

£m

£m

£m

£m

Net interest income

6,048

-

6,048

5,973

-

5,973

1

Net fee, commission and other income

1,469

151

1,318

1,370

-

1,370

(4)

Total income

7,517

151

7,366

7,343

-

7,343

-

Credit impairment charges and other provisions

(896)

-

(896)

(706)

-

(706)

(27)

Net operating income

6,621

151

6,470

6,637

-

6,637

(3)

Operating expenses

(3,792)

-

(3,792)

(3,464)

296

(3,760)

(1)

UK bank levy

(48)

-

(48)

(77)

-

(77)

38

Litigation and conduct

(1,042)

(1,000)

(42)

(2,511)

(2,431)

(80)

48

Total operating expenses

(4,882)

(1,000)

(3,882)

(6,052)

(2,135)

(3,917)

1

Other net expenses

(1)

-

(1)

-

-

-

-

Profit before tax

1,738

(849)

2,587

585

(2,135)

2,720

(5)

Attributable profit

828

(857)

1,685

(47)

(2,008)

1,961

(14)








Performance measures







Return on average allocated tangible equity

9.6%


19.3%

(0.3%)


21.1%

Cost: income ratio

65%


53%

82%


53%








Analysis of total income







Personal Banking

           3,891

129

3,762

           3,714

-

       3,714

1

Barclaycard Consumer UK

           2,022

-

2,022

          2,065

-

          2,065

(2)

Wealth, Entrepreneurs & Business Banking

          1,604

22

1,582

         1,564

-

         1,564

1

Total income

7,517

151

7,366

7,343

-

7,343

-

 

1

Refer to page 12 for a breakdown of notable items.

 

Results excluding notable items







Barclays International

Statutory results

Notable items1

Results excluding notable items

Statutory results

Notable items1

Results excluding notable items

Results excluding notable items

for the year ended

31.12.16

31.12.15

YoY

% Change

Income statement information

£m

£m

£m

£m

£m

£m

Net interest income

4,512

-

4,512

4,324

-

4,324

4

Net trading income

4,580

-

4,580

3,782

-

3,782

21

Net fee, commission and other income

5,903

464

5,439

5,641

496

5,145

6

Total income

14,995

464

14,531

13,747

496

13,251

10

Credit impairment charges and other provisions

(1,355)

-

(1,355)

(922)

-

(922)

(47)

Net operating income

13,640

464

13,176

12,825

496

12,329

7

Operating expenses

(9,129)

-

(9,129)

(8,029)

133

(8,162)

(12)

UK bank levy

(284)

-

(284)

(253)

-

(253)

(12)

Litigation and conduct

(48)

-

(48)

(1,310)

(1,202)

(108)

56

Total operating expenses

(9,461)

-

(9,461)

(9,592)

(1,069)

(8,523)

(11)

Other net income

32

-

32

45

-

45

(29)

Profit before tax

4,211

464

3,747

3,278

(573)

3,851

(3)

Attributable profit

2,412

451

1,961

1,758

(562)

2,320

(15)








Performance measures







Return on average allocated tangible equity

           9.8%


8.0%

7.2%


9.5%

Cost: income ratio

           63%


65%

70%


64%








Analysis of Barclays International














Corporate and Investment Bank







Income statement information







Total income

10,533

-

10,533

10,450

496

9,954

6

Credit impairment charges and other provisions

(260)

-

(260)

(199)

-

(199)

(31)

Total operating expenses

(7,624)

-

(7,624)

(7,929)

(1,124)

(6,805)

(12)

Profit before tax

2,650

-

2,650

2,322

(628)

2,950

(10)








Performance measures







Return on average allocated tangible equity

       6.1%


       6.1%

       5.4%


       8.2%









Consumer, Cards and Payments







Income statement information







Total income

4,462

464

3,998

3,297

-

3,297

21

Credit impairment charges and other provisions

(1,095)

-

(1,095)

(723)

-

(723)

(51)

Total operating expenses

(1,837)

-

(1,837)

(1,663)

55

(1,718)

(7)

Profit before tax

1,561

464

1,097

956

55

901

22








Performance measures







Return on average allocated tangible equity

       31.4%


       19.1%

      20.2%


       18.9%


 

1

Refer to page 15 for a breakdown of notable items.

 

Results excluding notable items







Head Office

Statutory results

Notable items1

Results excluding notable items

Statutory results

Notable items1

Results excluding notable items

Results excluding notable items

for the year ended

31.12.16

31.12.15

YoY

% Change

Income statement information

£m

£m

£m

£m

£m

£m

Net interest income

(183)

-

(183)

(305)

-

(305)

40

Net fee, commission and other income

286

(35)

321

643

430

213

51

Net operating income

103

(35)

138

338

430

(92)


Operating expenses

(135)

-

(135)

(272)

-

(272)

50

UK bank levy

(2)

-

(2)

(8)

-

(8)

75

Litigation and conduct

(27)

-

(27)

(66)

(52)

(14)

(93)

Total operating expenses

(164)

-

(164)

(346)

(52)

(294)

44

Other net income/(expenses)

128

-

128

(106)

(112)

6


Profit/(loss) before tax

67

(35)

102

(114)

266

(380)


Attributable profit/(loss)

110

(25)

135

11

187

(176)


 

1

Refer to page 18 for a breakdown of notable items.

 

Returns

Return on average allocated tangible equity is calculated as profit for the period attributable to ordinary equity holders of the parent (adjusted for the tax credit recorded in reserves in respect of interest payments on other equity instruments) divided by average allocated tangible equity for the period as appropriate, excluding non-controlling and other equity interests for businesses. Allocated tangible equity has been calculated as 11.5% of CRD IV fully loaded risk weighted assets for each business, adjusted for CRD IV fully loaded capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office average tangible equity represents the difference between the Group's average tangible equity and the amounts allocated to businesses.




Year ended

Year ended


31.12.16

31.12.15

Attributable profit

£m

£m

Barclays UK

828

(47)

Barclays International

2,412

1,758

Head Office

110

11

Barclays Core

3,350

1,722

Barclays Non-Core

(1,916)

(2,418)

Africa Banking discontinued operation

189

302

Barclays Group

1,623

(394)




Tax credit in respect of interest payments on other equity instruments



Barclays UK

29

14

Barclays International

83

42

Head Office

(1)

-

Barclays Core

111

56

Barclays Non-Core

17

14

Africa Banking discontinued operation

-

-

Barclays Group

128

70




Profit/(loss) attributable to ordinary equity holders of the parent



Barclays UK

857

(33)

Barclays International

2,495

1,800

Head Office

109

11

Barclays Core

3,461

1,778

Barclays Non-Core

(1,899)

(2,405)

 Africa Banking discontinued operation

                          189

302

Barclays Group

1,751

(324)




Average allocated tangible equity

£bn

£bn

Barclays UK

8.9

9.3

Barclays International

25.5

24.9

Head Office1

6.5

2.6

Barclays Core

41.0

36.8

Barclays Non-Core

7.8

10.9

Barclays Group

48.7

47.7




Return on average allocated tangible equity

%

%

Barclays UK

9.6%

(0.3%)

Barclays International

9.8%

7.2%

Barclays Core

8.4%

4.8%




Barclays Group

3.6%

(0.7%)




 

1

Includes the Africa Banking discontinued operation.

 

Returns excluding notable items

Year ended

31.12.16

Year ended

31.12.15

Attributable profit excluding notable items

£m

£m

Barclays UK

1,685

1,961

Barclays International

1,961

2,320

Head Office

135

(176)

Barclays Core

3,781

4,105

Barclays Non-Core

(1,916)

(1,711)

Africa Banking discontinued operation

189

302

Barclays Group

2,054

2,696




Tax credit in respect of interest payments on other equity instruments



Barclays UK

29

14

Barclays International

83

42

Head Office

(1)

-

Barclays Core

111

56

Barclays Non-Core

17

14

Africa Banking discontinued operation

-

-

Barclays Group

128

70




Profit/(loss) attributable to ordinary equity holders of the parent excluding notable items



Barclays UK

1,714

1,975

Barclays International

2,044

2,362

Head Office

133

(176)

Barclays Core

3,891

4,161

Barclays Non-Core

(1,899)

(1,697)

 Africa Banking discontinued operation

                                  189

                                  302

Barclays Group

2,182

2,766




Average allocated tangible equity excluding notable items

£bn

£bn

Barclays UK

8.9

9.3

Barclays International

25.5

24.9

Head Office1,2

6.8

2.9

Barclays Core

41.3

37.2

Barclays Non-Core

7.8

10.9

Barclays Group

49.0

48.1




Return on average allocated tangible equity excluding notable items

%

%

Barclays UK

19.3%

21.1%

Barclays International

8.0%

9.5%

Barclays Core

9.4%

11.2%




 Barclays Group

4.4%

5.8%

 

1

Includes the Africa Banking discontinued operation.

2

Excludes the cumulative post-tax impact of own credit.

 

Earnings per share

Year ended

Year ended


31.12.16

31.12.15

Profit/(loss) attributable to ordinary equity holders of the parent1

£m

£m

Barclays Core

3,461

1,778

Barclays Non-Core

(1,899)

(2,405)

 Africa Banking discontinued operation

189

                                  302

Barclays Group2

1,751

(324)





m

m

Basic weighted average number of shares

16,860

16,683




Basic earnings per ordinary share

p

p

Barclays Core contribution

20.5

10.7

Barclays Non-Core contribution

(11.3)

(14.4)




Barclays Group

10.4

(1.9)




Earnings per share excluding notable items

 

Profit/(loss) attributable to ordinary equity holders of the parent excluding notable items1

£m

£m

Barclays Core

3,891

4,161

Barclays Non-Core

(1,899)

(1,697)

 Africa Banking discontinued operation

                                  189

                                  302

Barclays Group2

2,182

2,766




Basic earnings per ordinary share excluding notable items

p

p

Barclays Core contribution

23.1

24.9

Barclays Non-Core contribution

(11.3)

(10.2)




Barclays Group

12.9

16.6

 

1

Profit for the period attributable to ordinary equity holders of the parent includes the tax credit recorded in reserves in respect of interest payments on other equity instruments. The tax credit of £128m (2015: £70m) is allocated to businesses in proportion to the allocation of the payments in relation to the other equity instruments.

2

Includes the Africa Banking discontinued operation.

 

Tangible net asset value

Year ended

31.12.16

Year ended

31.12.15


£m

£m

Total equity excluding non-controlling interests

64,873

59,810

Other equity instruments

(6,449)

(5,305)

Goodwill and intangibles1

(9,245)

(8,222)

Tangible shareholders' equity attributable to ordinary shareholders of the parent

49,179

46,283





m

m

Shares in issue

16,963

16,805





p

p

Tangible net asset value per share

290

275

 

1

2016 includes goodwill and intangibles in relation to Africa Banking.

 

Shareholder Information

Results timetable1

Date

Ex-dividend date

2 March 2017

Dividend Record date

3 March 2017

Scrip reference share price set and made available to shareholders

9 March 2017

Cut off time of 4.30 pm (London time) for the receipt of Mandate Forms or Revocation Forms (as applicable)

17 March 2017

Dividend Payment date /first day of dealing in New Shares

5 April 2017

Q1 2017 Results

28 April 2017



For qualifying US and Canadian resident ADR holders, the final dividend of 2.0p per ordinary share becomes 8.0p per ADS (representing four shares). The ex-dividend, dividend record and dividend payment dates for ADR holders are as shown above.

 

Year ended

Year ended

% Change3

Exchange rates2

31.12.16

31.12.15

31.12.15

Period end - USD/GBP

1.23

1.48

(17%)

Average - USD/GBP

1.36

1.53

(11%)

3 Month Average - USD/GBP

1.24

1.52

(18%)

Period end - EUR/GBP

1.17

1.36

(14%)

Average - EUR/GBP

1.23

1.38

(11%)

3 Month Average - EUR/GBP

1.15

1.39

(17%)

Period end - ZAR/GBP

16.78

23.14

(27%)

Average - ZAR/GBP

20.04

19.57

2%

3 Month Average - ZAR/GBP

17.29

21.56

(20%)





Share price data

31.12.16

31.12.15


Barclays PLC (p)

223.45

218.90


Barclays PLC number of shares (m)

16,963

16,805


Barclays Africa Group Limited (formerly Absa Group Limited) (ZAR)

168.69

143.49


Barclays Africa Group Limited (formerly Absa Group Limited) number of shares (m)

848

848


 




For further information please contact








Investor relations

Media relations

Kathryn McLeland +44 (0) 20 7116 4943

Thomas Hoskin +44 (0) 20 7116 4755





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






Registered office




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





Registrar




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

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




 

1

Note that these dates are provisional and subject to change. Any changes to the Scrip Dividend Programme dates will be made available at www.home.barclays/dividends.

2

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

3

The change is the impact to GBP reported information.

4

Lines open 8.30am to 5.30pm UK time, Monday to Friday, excluding UK public holidays.

 


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