Blueprint
 
 
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549
 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
February 23, 2017
 
Barclays PLC and

Barclays Bank PLC
(Names of Registrants)
 
 1 Churchill Place

London E14 5HP
England
(Address of Principal Executive Offices)

 
Indicate by check mark whether the registrant files or will file annual reports
Under cover of Form 20-F or Form 40-F.

 
Form 20-F x           Form 40-F

 
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 
Yes           No x

 
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):

 
This Report is a joint Report on Form 6-K filed by Barclays PLC and Barclays
Bank PLC. All of the issued ordinary share capital of Barclays Bank PLC is
owned by Barclays PLC.

 
This Report comprises:

 
Information given to The London Stock Exchange and furnished pursuant to
General Instruction B to the General Instructions to Form 6-K.

 
 
 
EXHIBIT INDEX
 
Final Results dated 23 February 2017 
 
 


 
 



SIGNATURES
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
 
 
BARCLAYS PLC
(Registrant)

 
Date: February 23, 2017
 
 
By: /s/ Marie Smith
----------------------
Marie Smith
Assistant Secretary
 
 
 
 
 
BARCLAYS BANK PLC
(Registrant)



Date: February 23, 2017
 
 
By: /s/ Marie Smith
----------------------
Marie Smith
Assistant Secretary
 
 
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
disposalgroup, 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
 
 
 
 
Profit attributable to non-controlling interest
 
Equity attributable to non-controlling interest
 
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.