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RNS
Barclays PLC   -  BARC   

Final Results

Released 07:00 21-Feb-2019

RNS Number : 6724Q
Barclays PLC
21 February 2019
 

 

Barclays PLC

Results Announcement

 

31 December 2018

 

Table of Contents

 

Results Announcement

Page

Notes

1

Performance Highlights

2-3

Group Chief Executive Officer's Review

4

Group Finance Director's Review

5-7

Results by Business

 

·     Barclays UK

8-10

·     Barclays International

11-14

·     Head Office

15

Quarterly Results Summary

16

Quarterly Results by Business

17-22

Barclays Non-Core Results

23

Discontinued Operation Results

24

Performance Management

 

·     Margins and Balances

25

·     Remuneration

26-27

Risk Management

 

·     Risk Management and Principal Risks

28

·     Credit Risk

29-40

·     Market Risk

41

·     Treasury and Capital Risk

42-51

Statement of Directors' Responsibilities

52

Condensed Consolidated Financial Statements

53-57

Financial Statement Notes

58-63

Appendix: Non-IFRS Performance Measures

64-72

Shareholder Information

73

 

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

 

Notes

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

 

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

 

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

 

The information in this announcement, which was approved by the Board of Directors on 20 February 2019, does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2018, which contain an unqualified audit report under Section 495 of the Companies Act 2006 (which does not make any statements under Section 498 of the Companies Act 2006) will be delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.

 

These results will be furnished as a Form 6-K to the SEC as soon as practicable following their publication. Once furnished with the SEC, copies of these results will also be available from the Barclays Investor Relations website at home.barclays/investor-relations/reports-and-events/annual-reports and from the SEC's website at www.sec.gov.

 

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

 

Non-IFRS performance measures

 

Barclays' management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses' performance between financial periods and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Barclays Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays' management. However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Refer to the appendix on pages 64 to 72 for further information and calculations of non-IFRS performance measures included throughout this document, and the most directly comparable IFRS measures.

 

Forward-looking statements

 

This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Barclays Group. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as 'may', 'will', 'seek', 'continue', 'aim', 'anticipate', 'target', 'projected', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', 'achieve' or other words of similar meaning. Examples of forward-looking statements include, among others, statements or guidance regarding or relating to the Barclays Group's future financial position, income growth, assets, impairment charges, provisions, business strategy, capital, leverage and other regulatory ratios, payment of dividends (including dividend payout ratios and expected payment strategies), projected levels of growth in the banking and financial markets, projected costs or savings, any commitments and targets, estimates of capital expenditures, plans and objectives for future operations, projected employee numbers, IFRS 9 impacts and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. These may be affected by changes in legislation, the development of standards and interpretations under International Financial Reporting Standards including the continuing impact of IFRS 9 implementation, evolving practices with regard to the interpretation and application of accounting and regulatory standards, the outcome of current and future legal proceedings and regulatory investigations, future levels of conduct provisions, the policies and actions of governmental and regulatory authorities, geopolitical risks and the impact of competition. In addition, factors including (but not limited to) the following may have an effect: capital, leverage and other regulatory rules applicable to past, current and future periods; UK, US, Eurozone and global macroeconomic and business conditions; the effects of any volatility in credit markets; market related risks such as changes in interest rates and foreign exchange rates; effects of changes in valuation of credit market exposures; changes in valuation of issued securities; volatility in capital markets; changes in credit ratings of any entities within the Barclays Group or any securities issued by such entities; the potential for one or more countries exiting the Eurozone; instability as a result of the exit by the United Kingdom from the European Union and the disruption that may subsequently result in the UK and globally; and the success of future acquisitions, disposals and other strategic transactions. A number of these influences and factors are beyond the Barclays Group's control. As a result, the Barclays Group's actual future results, dividend payments, and capital and leverage ratios may differ materially from the plans, goals, expectations and guidance set forth in the Barclays Group's forward-looking statements. Additional risks and factors which may impact the Barclays Group's future financial condition and performance are identified in our filings with the SEC (including, without limitation, our Annual Report on Form 20-F for the fiscal year ended 31 December 2018), which are available on the SEC's website at www.sec.gov.

 

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

 

Performance Highlights

 

Improved financial performance with Group return on tangible equity of 8.5% and earnings per share of 21.9p1

 

·

Delivering improving earnings for shareholders

·

Improving operating leverage and investing in medium term growth initiatives with a particular focus on capital light activities with attractive returns

·

Common equity tier 1 (CET1) ratio of 13.2% is at the end-state target of c.13%, with future profit generation supporting both investment and cash returns to shareholders

 

 

Returns1

Group RoTE targets of >9% in 2019 and >10% in 2020

·     Earnings per share (EPS) of 21.9p (2017: negative 3.5p) and Group return on tangible equity (RoTE) of 8.5% (2017: negative 1.2%), with profit before tax (PBT) up 20% to £5.7bn

·     Barclays UK RoTE of 16.7% (2017: 17.8%), as PBT decreased 3% to £2.4bn

·     Barclays International RoTE of 8.7% (2017: 4.4%), as PBT increased 10% to £3.9bn

Cost efficiency

 

Group cost guidance of £13.6-13.9bn1 in 2019, and cost: income ratio of <60% over time

·   Group operating expenses decreased 2% to £13.9bn in line with guidance after excluding a charge for Guaranteed Minimum Pensions (GMP)

·   The cost: income ratio, excluding litigation and conduct charges, improved to 66% (2017: 68%)

·  Creating capacity within the cost base through elimination of legacy costs and productivity savings via Barclays Execution Services (BX) to improve operating leverage and investment in medium term growth initiatives, while delivering a reduction in absolute costs in 2018

Capital and dividends

At end-state CET1 ratio        target of c.13%                  

6.5p total dividend for 2018

·    Generated 140bps of capital from profits, more than offset by 71bps impact from litigation and conduct charges, 53bps from ordinary dividends and Additional Tier 1 (AT1) coupons paid and foreseen, and 33bps from the decision to redeem Preference Shares and Additional Tier 1 (AT1) securities in December 2018

·  Capital returns policy updated - progressive ordinary dividend, supplemented by share buybacks as and when appropriate

 

·

Barclays Group profit before tax was £3.5bn (2017: £3.5bn) which included litigation and conduct charges of £2.2bn (2017: £1.2bn) principally related to a £1.4bn settlement with the US Department of Justice (DoJ) with regard to Residential Mortgage-Backed Securities (RMBS) and charges of £0.4bn (2017: £0.7bn) due to Payment Protection Insurance (PPI) in Q118

·

Excluding litigation and conduct charges, Group profit before tax increased 20% to £5.7bn despite the adverse effect of the 3% depreciation of average USD against GBP. Income was stable and operating expenses reduced 2%. The cost: income ratio improved to 66% (2017: 68%) which included a £140m charge to reflect the estimated increase in pension obligations due to GMP. Credit impairment charges reduced 37% to £1.5bn including updates for consensus-based macroeconomic forecasts in the UK and US during the year and the prudent management of credit risk. This improvement was partially offset by a Q418 £150m specific charge for the impact of the anticipated economic uncertainty in the UK

·

Barclays UK profit before tax increased to £2.0bn (2017: £1.7bn). Excluding litigation and conduct, profit before tax decreased 3% to £2.4bn reflecting a 5% increase in impairment charges, due to a £100m charge for the anticipated economic uncertainty in the UK. Income was stable as lower interest margins were offset by strong balance sheet growth. Expenses increased 1% reflecting continued investment to grow the business and improve future operating efficiency. RoTE excluding litigation and conduct was 16.7% (2017: 17.8%)

·

Barclays International profit before tax increased to £3.8bn (2017: £3.3bn). Income growth in Markets and the Consumer, Cards and Payments business was offset by the non-recurrence of prior year one-offs, from a US asset card sale and a valuation gain on Barclays' preference shares in Visa Inc, and lower Banking income. Credit impairment charges decreased 56% primarily due to single name recoveries, updates for consensus-based macroeconomic forecasts in the UK and US, non-recurrence of single name charges in 2017 and the repositioning of the US cards portfolio towards a lower risk mix. Total operating expenses decreased 2% as continued investments in business growth, talent and technology were offset by lower costs for restructuring and structural reform. RoTE excluding litigation and conduct was 8.7% (2017: 4.4%), with the Corporate and Investment Bank (CIB) and Consumer, Cards and Payments delivering 7.1% and 17.3% (2017: 2.2% and 16.8%) respectively

·

Attributable profit was £1.4bn (2017: loss of £1.9bn). This reflected the non-recurrence of a £2.5bn loss related to the sell down of Barclays Africa Group Limited (BAGL) and a tax charge of £1.1bn compared to a 2017 charge of £2.2bn which included a one-off net charge of £0.9bn due to the re-measurement of US deferred tax assets (DTAs). Basic earnings per share was 9.4p (2017: loss per share of 10.3p) and excluding litigation and conduct was 21.9p (2017: loss per share of 3.5p)

·

Tangible net asset value (TNAV) per share was 262p (December 2017: 276p) as 21.9p of earnings per share, excluding litigation and conduct, was more than offset by the implementation of IFRS 9, impact of litigation and conduct charges, the redemption of Preference Shares and AT1 securities, as well as dividend payments. In Q418 TNAV increased by 2p, the third consecutive quarter of TNAV accretion

 

1

Excluding litigation and conduct, with returns targets based on a Barclays Group CET1 ratio of c.13%.

 

Barclays Group results

 

for the year ended

31.12.18

31.12.17

 

 

£m

£m

% Change

Total income

21,136

21,076

-

Credit impairment charges and other provisions

(1,468)

(2,336)

37

Net operating income

19,668

18,740

5

Operating costs

(13,627)

(13,884)

2

UK bank levy

(269)

(365)

26

 Operating expenses

(13,896)

(14,249)

2

GMP charge

(140)

-

 

Litigation and conduct

(2,207)

(1,207)

(83)

Total operating expenses

(16,243)

(15,456)

(5)

Other net income

69

257

(73)

Profit before tax

3,494

3,541

(1)

Tax charge

(1,122)

(2,240)

50

Profit after tax in respect of continuing operations

2,372

1,301

82

Loss after tax in respect of discontinued operation

-

(2,195)

 

Non-controlling interests in respect of continuing operations

(226)

(249)

9

Non-controlling interests in respect of discontinued operation

-

(140)

 

Other equity instrument holders1

(752)

(639)

(18)

Attributable profit/(loss)

1,394

(1,922)

 

 

 

 

 

Performance measures

 

 

 

Return on average tangible shareholders' equity1

3.6%

(3.6%)

 

Average tangible shareholders' equity (£bn)

 44.1

48.9

 

Cost: income ratio

77%

73%

 

Loan loss rate (bps)2

44

57

 

Basic earnings/(loss) per share1

9.4p

(10.3p)

 

Dividend per share

6.5p

3.0p

 

  

 

 

 

Performance measures excluding litigation and conduct3

 

 

 

Profit before tax

5,701

4,748

20

Attributable profit/(loss)

3,530

(772)

 

Return on average tangible shareholders' equity1

8.5%

(1.2%)

 

Cost: income ratio

66%

68%

 

Basic earnings/(loss) per share1

21.9p

(3.5p)

 

 

 

 

 

Balance sheet and capital management4

£bn

£bn

 

Tangible net asset value per share

262p

276p

 

Common equity tier 1 ratio

13.2%

13.3%

 

Common equity tier 1 capital

41.1

41.6

 

Risk weighted assets

311.9

313.0

 

UK leverage ratio

5.1%

5.1%

 

UK leverage exposure

999

985

 

Average UK leverage ratio5

4.5%

4.9%

 

Average UK leverage exposure5

1,110

1,045

 

 

 

 

 

Funding and liquidity

 

 

 

Group liquidity pool (£bn)

227

220

 

Liquidity coverage ratio

169%

154%

 

Loan: deposit ratio

83%

81%

 

 

 

 

 

 

1

The profit after tax attributable to other equity instrument holders of £752m (2017: £639m) is offset by a tax credit recorded in reserves of £203m (2017: £174m). The net amount of £549m (2017: £465m), along with non-controlling interests, is deducted from profit after tax in order to calculate earnings per share and return on average tangible shareholders' equity.

2

Comparatives calculated based on gross loans and advances at amortised cost prior to the balance sheet presentation change and IAS 39 impairment charge.

3

Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.

4

Capital, RWAs and leverage measures are calculated applying the transitional arrangements of the Capital Requirements Regulation (CRR). This includes IFRS 9 transitional arrangements.

5

The average UK leverage ratio and exposure are for Q4, refer to page 49 for details on the averaging methodology for both 2018 and 2017.

6

The fully loaded CET1 ratio was 12.8%, with £39.8bn of CET1 capital and £311.8bn of Risk Weights Assets (RWA), calculated without applying the transitional arrangements of the CRR.

 

Group Chief Executive Officer's Review

 

"2018 represented a very significant period for Barclays.

 

In the course of the year, having resolved major legacy issues and reduced the drag from low returning businesses, we started to see the earnings potential of the bank, as the strategy we have implemented began to deliver.

 

This was evident in the improved performance across the Group compared to 2017.

 

Excluding litigation and conduct, profits before tax were up by 20% to £5,701m and our Group Return on Tangible Equity was 8.5% for the year - close to our 2019 financial target of greater than 9%.

 

Earnings per share excluding litigation and conduct for the full year was 21.9p. Our CET1 capital ratio of 13.2% is at our target of around 13%, and we have grown tangible book value for three quarters in a row.

 

The progress made on these key measures demonstrates that our plan is working and we have a strong foundation on which to achieve our returns targets for this year and next.

 

The fundamental strength of our Group rests on a diversified, though connected, portfolio of businesses. Barclays is well diversified by geography, by product and by currency between our consumer and wholesale businesses, designed to produce consistent and attractive returns through the economic cycle. The results for 2018 demonstrate this.

 

Our overriding priority for 2019 and 2020 is the attainment of our returns targets. Beyond those we are also focusing on medium term revenue growth opportunities - opportunities which rely on technology rather than capital. Such investment and focus beyond the immediate was simply not a viable option during the many years of reshaping this company. The efficiencies we have driven have created the capacity to invest to strengthen and grow our business within our cost guidance of £13.6-13.9bn for 2019, although we have the ability to flex that investment to a degree to support our RoTE targets if the environment requires us to do so.

 

In 2018, based on our strong capital generation, Barclays restored the dividend to 6.5p and redeemed expensive preference shares dating from the financial crisis. This is excellent progress, but not sufficient.

 

Going forward the principal calls on future earnings should now be returns to shareholders and investing to grow the business. We will use the strong capital generation of the bank to return a greater proportion of those earnings to shareholders by way of dividends and to supplement those dividends with additional returns, including share buybacks. I am optimistic for our prospects to do more in 2019 and beyond."

 

James E Staley, Group Chief Executive Officer

 

Group Finance Director's Review

 

Results for the year reflected good progress against our strategy. Excluding litigation and conduct charges, the Group return on tangible equity was 8.5% with earnings per share of 21.9p. Stable income and a reduction in operating expenses drove positive jaws and an improved cost: income ratio of 66%, with a 37% improvement in credit impairment charges resulting in a 20% increase in profit before tax despite the 3% depreciation of average USD against GBP.

 

The CET1 ratio of 13.2% is at the end-state target, and Barclays declares a total dividend of 6.5p for 2018.

 

Group performance

 

·

Profit before tax was £3,494m (2017: £3,541m). Excluding litigation and conduct charges, profit before tax increased 20% to £5,701m driven by an improvement in credit impairment charges and a reduction in operating expenses. The 3% depreciation of average USD against GBP adversely impacted profits

·

Total income was £21,136m (2017: £21,076m). Barclays UK income was stable as lower interest margins were offset by strong balance sheet growth. Barclays International income growth in Markets, which increased 9%, was offset by lower Banking income, primarily from a 20% decrease in Corporate lending income reflecting the strategy of redeploying Risk Weighted Assets (RWAs) to higher returning businesses. Consumer, Cards and Payments income growth was offset by the non-recurrence of prior year one-offs, from a US asset card sale and a valuation gain on Barclays' preference shares in Visa Inc. Head Office income was a net expense of £273m (2017: £159m), and the Group benefited from the non-recurrence of negative income associated with the former Non-Core division, which was closed on 1 July 2017

·

Credit impairment charges decreased 37% to £1,468m primarily driven by single name recoveries, updates to consensus-based macroeconomic forecasts in the UK and US during the year, the non-recurrence of single name charges in 2017, portfolio adjustments as IFRS 9 has continued to embed and the prudent management of credit risk, including the impact of repositioning the US cards portfolio towards a lower risk mix. This decrease was partially offset by a Q418 £150m specific charge for the impact of the anticipated economic uncertainty in the UK. The Barclays Group loan loss rate was 44bps (2017: 57bps)

·

Operating expenses of £13,896m (2017: £14,249m) reduced 2% as continued investment to grow the business and improve future operating efficiency was more than offset by elimination of legacy costs, productivity savings and a lower bank levy charge due to a reduction in the levy rate and the impact of prior year adjustments. The cost: income ratio, excluding litigation and conduct, reduced to 66% (2017: 68%)

·

Total operating expenses of £16,243m (2017: £15,456m) included litigation and conduct charges of £2,207m (2017: £1,207m) and a £140m charge for GMP in relation to the equalisation of obligations for members of the Barclays Bank UK Retirement Fund (UKRF). There was no capital impact of the GMP charge as, at 31 December 2018, the UKRF remained in accounting surplus

·

Other net income declined to £69m (2017: £257m) primarily reflecting the non-recurrence of gains on the sales of Barclays' share in VocaLink and a joint venture in Japan in Q217

·

The Group's effective tax rate reduced to 32.1% (2017: 63.3%). The 2017 rate included a one-off net charge due to the re-measurement of DTAs as a result of the reduction in the US federal corporate income tax rate. The underlying effective tax rate was 20.9% (2017: 29.4%), due to the lower US federal corporate income tax rate and the beneficial impact of adjustments to prior periods recognised in 2018

·

The Group's underlying effective tax rate for future periods is expected to be in the low-to mid-20 percents, excluding the impact of the future accounting change that will require tax relief on payments in relation to AT1 instruments to be recognised in the income statement, as opposed to retained earnings

·

Attributable profit was £1,394m (2017: loss of £1,922m). This reflected the non-recurrence of a £2.5bn loss related to the sell down of BAGL and a tax charge of £1,122m compared to a 2017 charge of £2,240m which included a one-off net charge of £0.9bn due to the re-measurement of US DTAs

·

RoTE was 8.5% (2017: negative 1.2%) and earnings per share was 21.9p (2017: loss per share of 3.5p), excluding litigation and conduct. Statutory RoTE was 3.6% (2017: negative 3.6%) and basic earnings per share was 9.4p (2017: loss per share 10.3p)

·

TNAV per share was 262p (December 2017: 276p) as 21.9p of earnings per share, excluding litigation and conduct, was more than offset by the implementation of IFRS 9, impact of litigation and conduct charges, the redemption of Preference Shares and AT1 securities, as well as dividend payments. In Q418 TNAV increased by 2p, the third consecutive quarter of TNAV accretion

 

Group capital and leverage

 

·

Barclays' CET1 ratio ended the year at 13.2% (December 2017: 13.3%), at our end-state target of c.13%

·

CET1 capital decreased £0.5bn to £41.1bn as underlying profit generation of £4.2bn, was more than offset by £2.1bn of litigation and conduct charges, as the bank resolved major legacy matters, £1.7bn for ordinary dividends and AT1 coupons paid and foreseen, and £1.0bn from the redemption of capital instruments

·

RWAs remained broadly stable at £311.9bn (December 2017: £313.0bn). The Group continued to actively manage capital allocation to businesses during the year, including the redeployment of RWAs within CIB to higher returning businesses, while targeting growth in selected consumer businesses in Barclays UK and Consumer, Cards and Payments. Within Barclays UK, the increase in RWAs included the impact of a change in the regulatory methodology for the Education, Social Housing and Local Authority (ESHLA) portfolio which was partly offset by a reduction in Head Office due to the regulatory deconsolidation of BAGL

·

The UK leverage ratio remained flat at 5.1% (December 2017: 5.1%). The UK leverage exposure increased marginally to £999bn (December 2017: £985bn) including securities financing transactions (SFTs), due to the CIB utilising leverage balance sheet more efficiently within high returning financing businesses. The average UK leverage ratio decreased to 4.5% (December 2017: 4.9%)

 

Group funding and liquidity

 

·

The liquidity pool increased to £227bn (December 2017: £220bn) driven largely by net deposit growth across businesses. The liquidity coverage ratio (LCR) increased to 169% (December 2017: 154%), equivalent to a surplus of £90bn (December 2017: £75bn) to the 100% regulatory requirement. Barclays Group also continued to maintain surpluses to its internal liquidity requirements. The strong liquidity position reflects the Barclays Group's prudent approach given the continued macroeconomic uncertainty

·

Barclays Group issued £12.2bn of minimum requirement for own funds and eligible liabilities (MREL) instruments from Barclays PLC (the Parent company) in a range of tenors and currencies. Barclays Group is well advanced in its MREL issuance plans, with a Barclays PLC MREL ratio of 28.1% as at 31 December 2018 relative to an estimated requirement including requisite buffers of 30.0% by 1 January 2022

·

Barclays Bank PLC continued to issue in the shorter-term markets and Barclays Bank UK PLC issued in the shorter-term and secured markets, helping to maintain their stable and diversified funding bases

·

The overall funding structure has improved further - Barclays Group has continued to reduce its reliance on short-term wholesale funding, where the proportion maturing in less than 1 year fell to 30% (December 2017: 31%)

 

Other matters

 

·

In Q118 Barclays reached a settlement with the US DoJ to resolve the civil complaint brought by the DoJ in December 2016 relating to RMBS sold by Barclays between 2005 and 2007. Barclays paid a civil monetary penalty of $2.0bn (£1.4bn)

·

In May 2018 Barclays announced that the Crown Court had dismissed all of the charges that had been brought by the Serious Fraud Office (SFO) against Barclays PLC and Barclays Bank PLC regarding matters which arose in the context of Barclays' capital raisings in 2008. In October 2018, the High Court denied the SFO's application to reinstate the charges, which were consequently dismissed

·

Additional charges of £0.4bn (2017: £0.7bn) relating to PPI were recognised in Q118. The remaining PPI provision as at 31 December 2018 was £0.9bn (December 2017: £1.6bn) to cover claims through to the deadline of 29 August 2019. Management views its current PPI provision as appropriate, but will continue to closely monitor complaint trends and the associated provision adequacy

·

On 1 April 2018 Barclays successfully established its ring-fenced bank, Barclays Bank UK PLC, after receiving approval from the Prudential Regulation Authority (PRA) and the High Court of Justice of England and Wales to implement the ring-fencing transfer scheme under Part VII of the Financial Services Markets Act 2000

·

In Q418 Barclays Bank Ireland PLC (BBI) received confirmation of its extended banking licence as part of Barclays' plans to expand BBI in anticipation of the UK's departure from the EU in March 2019. On 29 January 2019 Barclays received approval from the High Court of Justice of England and Wales for its banking business transfer scheme application under Part VII of the Financial Services and Markets Act 2000

 

Dividends

 

·

A half year dividend of 2.5p per share was paid on 17 September 2018. Barclays declares a full year dividend of 4.0p per share, resulting in a total dividend of 6.5p per share for 2018

·

Barclays understands the importance of delivering attractive cash returns to shareholders. Barclays is therefore committed to maintaining an appropriate balance between total cash returns to shareholders, investment in the business and maintaining a strong capital position. Going forward, Barclays intends to pay a progressive ordinary dividend, taking into account these objectives and the earnings outlook of the Group. It is also the Board's intention to supplement the ordinary dividends with additional cash returns, including share buybacks, to shareholders as and when appropriate

 

Outlook and guidance

 

·

Barclays is on track in the execution of its strategy and continues to target a RoTE1 of greater than 9% for 2019 and greater than 10% for 2020 and operating expenses1 guidance in the range of £13.6-13.9bn for 2019. The Group's 2018 results reflect good progress towards these targets

 

Tushar Morzaria, Group Finance Director

 

1

Excluding litigation and conduct, with returns targets based on a Barclays Group CET1 ratio of c.13%.

 

Results by Business

 

Barclays UK

Year ended

Year ended

 

31.12.18

31.12.17

 

Income statement information

£m

£m

% Change

Net interest income

6,028

6,086

(1)

Net fee, commission and other income

1,355

1,297

4

Total income

7,383

7,383

-

Credit impairment charges and other provisions

(826)

(783)

(5)

Net operating income

6,557

6,600

(1)

Operating costs

(4,075)

(4,030)

(1)

UK bank levy

(46)

(59)

22

Litigation and conduct

(483)

(759)

36

Total operating expenses

(4,604)

(4,848)

5

Other net income/(expenses)

3

(5)

 

Profit before tax

1,956

1,747

12

Attributable profit

1,158

853

36

 

 

 

 

Balance sheet information

£bn

£bn

 

Loans and advances to customers at amortised cost

187.6

183.8

 

Total assets

249.7

237.4

 

Customer deposits at amortised cost

197.3

193.4

 

Loan: deposit ratio

96%

95%

 

Risk weighted assets

75.2

70.9

 

Period end allocated tangible equity

10.2

9.6

 

 

 

 

 

Key facts

 

 

 

Average loan to value of mortgage portfolio

48%

48%

 

Average loan to value of new mortgage lending

65%

64%

 

Number of branches

1,058

1,208

 

Mobile banking active customers

7.3m

6.4m

 

30 day arrears rate - Barclaycard Consumer UK

1.8%

1.8%

 

 

 

 

 

Performance measures

 

 

 

Return on average allocated tangible equity

11.9%

9.8%

 

Average allocated tangible equity (£bn)

10.0

9.1

 

Cost: income ratio

62%

66%

 

Loan loss rate (bps)1

43

42

 

Net interest margin

3.23%

3.49%

 

 

 

 

 

Performance measures excluding litigation and conduct2

£m

£m

 

Profit before tax

2,439

2,506

(3)

Attributable profit

1,630

1,586

3

Return on average allocated tangible equity

16.7%

17.8%

 

Cost: income ratio

56%

55%

 

 

1

Comparatives calculated based on gross loans and advances at amortised cost prior to the balance sheet presentation change and IAS 39 impairment charge.

2

Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays UK

Year ended

Year ended

 

31.12.18

31.12.17

 

Analysis of total income

£m

£m

% Change

Personal Banking1

4,006

4,214

(5)

Barclaycard Consumer UK

2,104

1,977

6

Business Banking1

1,273

1,192

7

Total income

7,383

7,383

-

 

 

 

 

Analysis of credit impairment charges and other provisions

 

 

 

Personal Banking1

(173)

(221)

22

Barclaycard Consumer UK

(590)

(541)

(9)

Business Banking1

(63)

(21)

 

Total credit impairment charges and other provisions

(826)

(783)

(5)

 

 

 

 

Analysis of loans and advances to customers at amortised cost

£bn

£bn

 

Personal Banking1

146.0

141.3

 

Barclaycard Consumer UK

15.3

16.4

 

Business Banking1

26.3

26.1

 

Total loans and advances to customers at amortised cost

187.6

183.8

 

 

 

 

 

Analysis of customer deposits at amortised cost

 

 

 

Personal Banking1

154.0

153.1

 

Barclaycard Consumer UK

-

-

 

Business Banking1

43.3

40.3

 

Total customer deposits at amortised cost

197.3

193.4

 

 

1

In Q218, Wealth was reclassified from Wealth, Entrepreneurs & Business Banking (now named Business Banking) to Personal Banking. Comparatives have been restated.

 

In 2018, Barclays officially stood up Barclays Bank UK PLC as part of structural reform, being the first bank in the UK to become legally ring-fenced. Throughout 2018, Barclays UK has maintained its position in the market as a leader in innovation, investing to transform customer interactions. Building long term, meaningful customer and client relationships continues to deliver sustainable balance sheet growth and returns, within a prudent risk appetite. This is further enhanced by investment to automate and digitise the provision of tailored products and services, meeting customers' needs on their terms.

 

2018 compared to 2017

 

Income statement

 

·

RoTE excluding litigation and conduct was 16.7% (2017: 17.8%) reflecting the continuing strength of Barclays UK business. Including litigation and conduct charges of £483m (2017: £759m), RoTE increased to 11.9% (2017: 9.8%)

·

Total income was stable at £7,383m (2017: £7,383m) as lower interest margins were offset by strong balance sheet growth in secured lending and customer deposits

 

-

Personal Banking income decreased 5% to £4,006m as continued momentum in mortgage lending and growth in customer deposits was more than offset by the non-recurrence of an update to effective interest rate modelling in Q417, a valuation gain on Barclays' preference shares in Visa Inc. in Q117 and the realignment of clients from Barclays UK to Barclays International as part of structural reform

 

-

Barclaycard Consumer UK income increased 6% to £2,104m reflecting a focus on sustainable growth and the non-recurrence of remediation provisioning in H217

 

-

Business Banking income increased 7% to £1,273m driven by strong deposit growth and the realignment of clients from Barclays International to Barclays UK as part of structural reform

 

-

Net interest margin decreased 26bps to 3.23% reflecting growth in secured lending at lower margins and the integration of the ESHLA portfolio

·

Credit impairment charges increased 5% to £826m primarily due to a Q418 £100m specific charge for the impact of the anticipated economic uncertainty in the UK. This was partially offset by improved consensus-based macroeconomic forecasts during the year and the continued prudent management of credit risk reflected in the broadly stable 30 and 90 day arrears rates in UK cards of 1.8% (2017: 1.8%) and 0.9% (2017: 0.8%) respectively

·

Operating expenses excluding litigation and conduct increased 1% to £4,121m as continued investment to grow the business, including digitisation of the bank and improvements to future operating efficiency, were partially offset by cost efficiencies and lower costs of setting up the ring-fenced bank. The cost: income ratio excluding litigation and conduct was 56% (2017: 55%)

 

Balance sheet

 

·

Loans and advances to customers at amortised cost increased 2% to £187.6bn reflecting £4.6bn of mortgage growth

·

Total assets increased 5% to £249.7bn reflecting increases in the liquidity pool including the transfer of treasury assets from Head Office and loans and advances to customers

·

Customer deposits at amortised cost increased 2% to £197.3bn as strong deposit growth was partially offset by the net realignment of clients between Barclays UK and Barclays International as part of structural reform

·

RWAs increased to £75.2bn (December 2017: £70.9bn) primarily due to growth in mortgages and UK cards, and regulatory methodology changes for the ESHLA portfolio

 

Barclays International

Year ended

Year ended

 

31.12.18

31.12.17

 

Income statement information

£m

£m

% Change

Net interest income

3,815

4,307

(11)

Net trading income

4,450

3,971

12

Net fee, commission and other income

5,761

6,104

(6)

Total income

14,026

14,382

(2)

Credit impairment charges and other provisions

(658)

(1,506)

56

Net operating income

13,368

12,876

4

Operating costs

(9,324)

(9,321)

-

UK bank levy

(210)

(265)

21

Litigation and conduct

(127)

(269)

53

Total operating expenses

(9,661)

(9,855)

2

Other net income

68

254

(73)

Profit before tax

3,775

3,275

15

Attributable profit

2,441

847

 

 

 

 

 

Balance sheet information

£bn

£bn

 

Loans and advances at amortised cost

127.2

126.8

 

Trading portfolio assets

104.0

113.0

 

Derivative financial instrument assets

222.1

236.2

 

Derivative financial instrument liabilities

219.6

237.8

 

Financial assets at fair value through the income statement

144.7

104.1

 

Total assets

862.1

856.1

 

Deposits at amortised cost

197.2

187.3

 

Loan: deposit ratio

65%

68%

 

Risk weighted assets

210.7

210.3

 

Period end allocated tangible equity

29.9

27.5

 

 

 

 

 

Performance measures

 

 

 

Return on average allocated tangible equity

8.4%

3.4%

 

Average allocated tangible equity (£bn)

31.0

28.1

 

Cost: income ratio

69%

69%

 

Loan loss rate (bps)1

50

75

 

Net interest margin

4.11%

4.16%

 

 

 

 

 

Performance measures excluding litigation and conduct2

£m

£m

 

Profit before tax

3,902

3,544

10

Attributable profit

2,547

1,107

 

Return on average allocated tangible equity

8.7%

4.4%

 

Cost: income ratio

68%

67%

 

 

1

Comparatives calculated based on gross loans and advances at amortised cost prior to the balance sheet presentation change and IAS 39 impairment charge.

2

Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International

 

 

 

Corporate and Investment Bank

Year ended

Year ended

 

31.12.18

31.12.17

 

Income statement information

£m

£m

% Change

FICC1

2,863

2,875

-

Equities

2,037

1,629

25

Markets

4,900

4,504

9

Banking fees

2,531

2,612

(3)

Corporate lending

878

1,093

(20)

Transaction banking

1,627

1,629

-

Banking

5,036

5,334

(6)

Other

(171)

40

 

Total income

9,765

9,878

(1)

Credit impairment releases/(charges) and other provisions

150

(213)

 

Net operating income

9,915

9,665

3

Operating expenses

(7,281)

(7,475)

3

Litigation and conduct

(68)

(267)

75

Total operating expenses

(7,349)

(7,742)

5

Other net income

27

133

(80)

Profit before tax

2,593

2,056

26

 

 

 

 

Balance sheet information

£bn

£bn

 

Loans and advances at amortised cost

86.4

88.2

 

Deposits at amortised cost

136.3

128.0

 

Risk weighted assets

170.9

176.2

 

 

 

 

 

Performance measures

 

 

 

Return on average allocated tangible equity

6.9%

1.1%

 

Average allocated tangible equity (£bn)

26.0

24.0

 

 

 

 

 

Performance measures excluding litigation and conduct2

£m

£m

 

Profit before tax

2,661

2,323

15

Return on average allocated tangible equity

7.1%

2.2%

 

 

1

Fixed income, currencies and commodities (FICC) is composed of Credit and Macro income.

2     

Refer to pages 64 to 72 for more information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International

 

 

 

Consumer, Cards and Payments

Year ended

Year ended

 

31.12.18

31.12.17

 

Income statement information

£m

£m

% Change

Total income

4,261

4,504

(5)

Credit impairment charges and other provisions

(808)

(1,293)

38

Net operating income

3,453

3,211

8

Operating expenses

(2,253)

(2,111)

(7)

Litigation and conduct

(59)

(2)

 

Total operating expenses

(2,312)

(2,113)

(9)

Other net income

41

121

(66)

Profit before tax

1,182

1,219

(3)

 

 

 

 

Balance sheet information

£bn

£bn

 

Loans and advances at amortised cost

40.8

38.6

 

Deposits at amortised cost

60.9

59.3

 

Risk weighted assets

39.8

34.1

 

 

 

 

 

Key facts

 

 

 

30 day arrears rate - Barclaycard US 

2.7%

2.6%

 

Total number of Barclaycard business clients 

374,000

 366,000

 

Value of payments processed (£bn)

344

322

 

 

 

 

 

Performance measures

 

 

 

Return on average allocated tangible equity

16.5%

16.7%

 

Average allocated tangible equity (£bn)

5.0

4.2

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

 

Profit before tax

1,241

1,221

2

Return on average allocated tangible equity

17.3%

16.8%

 

 

1

Refer to pages 64 to 72 for more information and calculations of performance measures excluding litigation and conduct.

 

In 2018, Barclays International made good progress on executing our strategy and improving returns, delivering underlying growth in Consumer, Cards & Payments; a strong performance in Markets, where the global ranking improved one place; and a record year for Advisory within Banking. This progress gives confidence that by continuing to build out the businesses through targeted deployment of financial resources and investments in talent and technology, growth can be accelerated towards achieving increased returns.

 

2018 compared to 2017

 

Income statement

 

·

Profit before tax increased 10% to £3,902m achieving a RoTE of 8.7% (2017: 4.4%), reflecting improved returns in both CIB of 7.1% (2017: 2.2%) and Consumer, Cards and Payments of 17.3% (2017: 16.8%) excluding litigation and conduct

·

The 3% depreciation of average USD against GBP adversely impacted profits and income, and positively impacted credit impairment charges and operating expenses

·

Total income was £14,026m (2017: £14,382m)

 

-

CIB income of £9,765m decreased 1% as Markets income increased 9% to £4,900m, reflecting gains in market share1, offset by a decrease in Banking income of 6% to £5,036m

 

 

-

FICC income was stable at £2,863m (2017: £2,875m) with significant share gains despite a challenging environment

 

 

-

Equities income increased 25% to £2,037m becoming one of the highest growing Equities franchises relative to peers, substantially improving our global ranking. This was driven by strength in derivatives and continued growth in the equity financing franchise through increased client balances, together with technology investment, which resulted in higher  electronic revenues

 

 

-

Banking fee income decreased 3% to £2,531m as Barclays maintained its highest rank and global fee share in 4 years, including a record year in Advisory, which was more than offset by debt and equity underwriting fees being down across the industry

 

 

-

Corporate lending income reduced 20% to £878m reflecting the strategy of redeploying RWAs within the CIB towards higher returning business and the transfer of clients between Barclays UK and Barclays International as part of structural reform

 

 

-

Transaction banking income was stable at £1,627m (2017: £1,629m) as strong and targeted growth in deposits was offset by the transfer of clients between Barclays UK and Barclays International as part of structural reform

 

-

Consumer, Cards and Payments income decreased 5% to £4,261m. Excluding material one-off items in both 2017 and 2018, related to US cards portfolio sales and revaluation of Barclays preference shares in Visa Inc, underlying income increased due to growth in US cards

·

Credit impairment charges decreased 56% to £658m

 

-

CIB credit impairment charges decreased to a release of £150m (2017: charge of £213m) primarily due to single name recoveries, improved consensus-based macroeconomic forecasts during the year, the non-recurrence of single name charges in 2017 and the prudent management of credit risk, partially offset by a Q418 £50m specific charge for the anticipated economic uncertainty in the UK

 

-

Consumer, Cards and Payments credit impairment charges decreased 38% to £808m reflecting the non-recurrence of a £168m charge in Q317 relating to deferred consideration from the Q117 asset sale in US cards, improved consensus-based macroeconomic forecasts in the US and the impact of repositioning the US cards portfolio towards a lower risk mix

·

Total operating expenses decreased 2% to £9,661m as continued investments in business growth, talent and technology were offset by lower restructuring and structural reform costs, and a reduced impact from the change in compensation awards introduced in Q416

·

Other net income decreased to £68m (2017: £254m) due to the non-recurrence of a gain of £109m on the sale of Barclays' share in VocaLink to MasterCard and a gain of £76m on the sale of a joint venture in Japan in Q217

·

Attributable profit increased to £2,441m (2017: £847m) as 2017 was impacted by the one-off tax charge due to the re-measurement of US DTAs

 

Balance sheet

 

·

Loans and advances at amortised cost remained broadly flat at £127.2bn (December 2017: £126.8bn)

·

Derivative financial instrument assets and liabilities decreased £14.1bn to £222.1bn and £18.2bn to £219.6bn respectively, due to a decrease in interest rate derivatives, driven by an increase in major interest rate forward curves, and the adoption of daily settlement under the London Clearing House (LCH) rules, partially offset by increased foreign exchange and equity derivative volumes

·

Financial assets at fair value through the income statement increased £40.6bn to £144.7bn primarily due to the impact of the transition to IFRS 9 and increased reverse repurchase agreements activity

·

Total assets increased £6.0bn to £862.1bn including the transfer of treasury assets from Head Office

·

Deposits at amortised cost increased £9.9bn to £197.2bn, due to the integration of treasury liabilities from Head Office and a strong and targeted increase in deposits

·

RWAs were in line at £210.7bn (December 2017: £210.3bn) as reductions in CIB were offset by increased lending in Consumer, Cards & Payments

 

1

All Markets ranks and shares: Coalition, FY18 Preliminary Competitor Analysis based on the Coalition Index and Barclays' internal business structure.

 

Head Office

Year ended

Year ended

 

31.12.18

31.12.17

 

Income statement information

£m

£m

% Change

Net interest income

(781)

(435)

(80)

Net fee, commission and other income

508

276

84

Total income

(273)

(159)

(72)

Credit impairment releases/(charges) and other provisions

16

(17)

 

Net operating income

(257)

(176)

(46)

Operating costs

(228)

(277)

18

UK bank levy

(13)

(41)

68

GMP charge

(140)

-

 

Litigation and conduct

(1,597)

(151)

 

Total operating expenses

(1,978)

(469)

 

Other net expenses

(2)

(189)

99

Loss before tax

(2,237)

(834)

 

Attributable loss

(2,205)

(868)

 

 

 

 

 

Balance sheet information

£bn

£bn

 

Total assets

21.5

39.7

 

Risk weighted assets

26.0

31.8

 

Period end allocated tangible equity

4.9

10.0

 

 

 

 

 

Performance measures

 

 

 

Average allocated tangible equity (£bn)

3.1

9.3

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

 

Loss before tax

(640)

(683)

6

Attributable loss

(647)

(731)

11

 

1

Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.

 

2018 compared to 2017

 

Income statement

 

·

Loss before tax excluding litigation and conduct was £640m (2017: £683m). Including litigation and conduct charges of £1,597m (2017: £151m) primarily related to the £1,420m settlement with the US DoJ relating to RMBS, loss before tax was £2,237m (2017: £834m)

·

Total income was an expense of £273m (2017: £159m) reflecting legacy capital instrument funding costs of £351m and hedge accounting expenses. This was partially offset by a one-off gain of £155m from the settlement of receivables relating to the Lehman Brothers acquisition in Q218, lower net expenses from treasury operations, higher Absa Group Limited dividend income and mark-to-market gains on legacy investments

·

Operating expenses excluding litigation and conduct and a GMP charge, reduced to £241m (2017: £318m) driven by lower costs associated with legacy Non-Core assets and businesses, and reduced bank levy. Total operating expenses of £1,978m (2017: £469m) included litigation and conduct charges of £1,597m (2017: £151m) and a £140m charge for GMP in relation to the equalisation of obligations for members of the Barclays Bank UKRF

·

Other net expenses were £2m (2017: £189m) due to non-recurrence of a £180m expense in Q217 on the recycling of the currency translation reserve to the income statement on the sale of Barclays Bank Egypt

 

Balance sheet

 

·

Total assets decreased to £21.5bn (December 2017: £39.7bn) reflecting the transfer of treasury assets to Barclays UK and Barclays International as part of structural reform

·

RWAs decreased to £26.0bn (December 2017: £31.8bn) reflecting the net reduction due to BAGL regulatory deconsolidation

 

Quarterly Results Summary

 

Barclays Group

 

 

 

 

 

 

 

 

 

 

Q418

Q318

Q218

Q118

 

Q417

Q317

Q2171

Q1171

Income statement information

£m

£m

£m

£m

 

£m

£m

£m

£m

Net interest income

2,296

2,388

2,190

2,188

 

2,272

2,475

2,579

2,519

Net fee, commission and other income

2,777

2,741

3,386

3,170

 

2,750

2,698

2,479

3,304

Total income

5,073

5,129

5,576

5,358

 

5,022

5,173

5,058

5,823

Credit impairment charges and other provisions

(643)

(254)

(283)

(288)

 

(573)

(709)

(527)

(527)

Net operating income

4,430

4,875

5,293

5,070

 

4,449

4,464

4,531

5,296

Operating costs

(3,624)

(3,329)

(3,310)

(3,364)

 

(3,621)

(3,274)

(3,398)

(3,591)

UK bank levy

(269)

-

-

-

 

(365)

-

-

-

Operating expenses

(3,893)

(3,329)

(3,310)

(3,364)

 

(3,986)

(3,274)

(3,398)

(3,591)

GMP charge

(140)

-

-

-

 

-

-

-

-

Litigation and conduct

(60)

(105)

(81)

(1,961)

 

(383)

(81)

(715)

(28)

Total operating expenses

(4,093)

(3,434)

(3,391)

(5,325)

 

(4,369)

(3,355)

(4,113)

(3,619)

Other net income/(expenses)

37

20

(7)

19

 

13

(2)

241

5

Profit/(loss) before tax

374

1,461

1,895

(236)

 

93

1,107

659

1,682

Tax charge

(145)

(240)

(433)

(304)

 

(1,138)

(324)

(305)

(473)

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

229

1,221

1,462

(540)

 

(1,045)

783

354

1,209

Loss after tax in respect of discontinued operation

-

-

-

-

 

-

-

(1,537)

(658)

 

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

 

Ordinary equity holders of the parent

(76)

1,002

1,232

(764)

 

(1,294)

583

(1,401)

190

Other equity instrument holders

230

176

175

171

 

181

157

162

139

Non-controlling interests in respect of continuing operations

75

43

55

53

 

68

43

59

79

Non-controlling interests in respect of discontinued operation

-

-

-

-

 

-

-

(3)

143

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

Total assets

1,133.3

1,170.8

1,149.6

1,142.2

 

1,133.2

1,149.3

1,135.3

1,203.8

Tangible net asset value per share

262p

260p

259p

251p

 

276p

281p

284p

292p

Risk weighted assets

311.9

316.2

319.3

317.9

 

313.0

324.3

327.4

360.9

Average UK leverage exposure

1,110.0

1,119.0

1,081.8

1,089.9

 

1,044.6

1,035.1

1,092.2

1,130.4

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

Return on average tangible shareholders' equity

(0.1%)

9.4%

11.8%

(6.5%)

 

(10.3%)

5.1%

(11.0%)

1.8%

Average tangible shareholders' equity (£bn)

44.3

44.6

43.5

44.2

 

48.1

48.9

49.3

49.4

Cost: income ratio

81%

67%

61%

99%

 

87%

65%

81%

62%

Loan loss rate (bps)2

77

30

35

36

 

56

66

49

47

Basic (loss)/earnings per share 

(0.1p)

6.1p

7.5p

(4.2p)

 

(7.3p)

3.7p

(8.0p)

1.3p

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct3

£m

£m

£m

£m

 

£m

£m

£m

£m

Profit before tax

434

1,566

1,976

1,725

 

476

1,188

1,374

1,710

Attributable (loss)/profit

(14)

1,087

1,291

1,166

 

(943)

660

(698)

209

Return on average tangible shareholders' equity

0.4%

10.2%

12.3%

11.0%

 

(7.4%)

5.7%

(5.3%)

2.0%

Cost: income ratio

79%

65%

59%

63%

 

79%

63%

67%

62%

Basic earnings/(loss) per share

0.3p

6.6p

7.8p

7.1p

 

(5.3p)

4.1p

(3.8p)

1.5p

 

1

Results included Barclays Non-Core and the Africa Banking discontinued operation; refer to pages 23 to 24 for further detail.

2

Comparatives calculated based on gross loans and advances at amortised cost prior to the balance sheet presentation change and IAS 39 impairment   charge.

3

Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.

 

Quarterly Results by Business

 

Barclays UK

 

 

 

 

 

 

 

 

 

 

Q418

Q318

Q218

Q118

 

Q417

Q317

Q217

Q117

Income statement information

£m

£m

£m

£m

 

£m

£m

£m

£m

Net interest income

1,513

1,529

1,493

1,493

 

1,540

1,501

1,534

1,511

Net fee, commission and other income

350

367

343

295

 

330

351

286

330

Total income

1,863

1,896

1,836

1,788

 

1,870

1,852

1,820

1,841

Credit impairment charges and other provisions

(296)

(115)

(214)

(201)

 

(184)

(201)

(220)

(178)

Net operating income

1,567

1,781

1,622

1,587

 

1,686

1,651

1,600

1,663

Operating costs

(1,114)

(988)

(968)

(1,005)

 

(1,117)

(980)

(974)

(959)

UK bank levy

(46)

-

-

-

 

(59)

-

-

-

Litigation and conduct

(15)

(54)

(3)

(411)

 

(53)

(11)

(699)

4

Total operating expenses

(1,175)

(1,042)

(971)

(1,416)

 

(1,229)

(991)

(1,673)

(955)

Other net (expenses)/income

(2)

1

5

(1)

 

(5)

1

(1)

-

Profit/(loss) before tax 

390

740

656

170

 

452

661

(74)

708

Attributable profit/(loss)

232

500

464

(38)

 

245

423

(285)

470

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

Loans and advances to customers at amortised cost

187.6

186.7

185.3

184.3

 

183.8

182.2

166.6

164.5

Total assets

249.7

252.0

245.9

235.2

 

237.4

230.4

203.4

203.0

Customer deposits at amortised cost

197.3

195.8

194.3

192.0

 

193.4

189.3

187.4

184.4

Loan: deposit ratio

96%

96%

96%

96%

 

95%

97%

89%

90%

Risk weighted assets

75.2

74.8

75.0

72.5

 

70.9

70.0

66.1

66.3

Period end allocated tangible equity

10.2

10.1

10.2

9.8

 

9.6

9.5

8.6

8.8

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity

9.6%

20.1%

18.8%

(1.1%)

 

10.7%

18.4%

(12.7%)

21.6%

Average allocated tangible equity (£bn)

10.1

10.1

10.1

9.8

 

9.6

9.4

8.7

8.9

Cost: income ratio

63%

55%

53%

79%

 

66%

54%

92%

52%

Loan loss rate (bps)1

61

24

45

43

 

39

43

52

43

Net interest margin

3.20%

3.22%

3.22%

3.27%

 

3.32%

3.28%

3.70%

3.69%

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct2

£m

£m

£m

£m

 

£m

£m

£m

£m

Profit before tax

405

794

659

581

 

505

672

625

704

Attributable profit

244

548

465

373

 

282

431

406

467

Return on average allocated tangible equity

10.1%

22.0%

18.8%

15.7%

 

12.3%

18.7%

19.1%

21.5%

Cost: income ratio

62%

52%

53%

56%

 

63%

53%

54%

52%

 

1

Comparatives calculated based on gross loans and advances at amortised cost prior to the balance sheet presentation change and IAS 39 impairment charge.

2     

Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays UK

Q418

Q318

Q218

Q118

 

Q417

Q317

Q217

Q117

Analysis of total income

£m

£m

£m

£m

 

£m

£m

£m

£m

Personal Banking1

998

1,021

1,015

972

 

1,116

1,022

1,033

1,043

Barclaycard Consumer UK

522

551

504

527

 

445

539

495

498

Business Banking1

343

324

317

289

 

309

291

292

300

Total income

1,863

1,896

1,836

1,788

 

1,870

1,852

1,820

1,841

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Personal Banking1

(44)

(8)

(49)

(72)

 

(56)

(57)

(60)

(48)

Barclaycard Consumer UK

(250)

(88)

(139)

(113)

 

(124)

(145)

(149)

(123)

Business Banking1

(2)

(19)

(26)

(16)

 

(4)

1

(11)

(7)

Total credit impairment charges and other provisions

(296)

(115)

(214)

(201)

 

(184)

(201)

(220)

(178)

 

 

 

 

 

 

 

 

 

 

Analysis of loans and advances to customers at amortised cost

£bn

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

Personal Banking1

146.0

145.4

143.6

142.1

 

141.3

140.4

138.6

136.6

Barclaycard Consumer UK

15.3

15.3

15.2

15.2

 

16.4

16.3

16.2

16.1

Business Banking1

26.3

26.0

26.5

27.0

 

26.1

25.5

11.8

11.8

Total loans and advances to customers at amortised cost

187.6

186.7

185.3

184.3

 

183.8

182.2

166.6

164.5

 

 

 

 

 

 

 

 

 

 

Analysis of customer deposits at amortised cost

 

 

 

 

 

 

 

 

 

Personal Banking1

154.0

153.4

152.9

151.9

 

153.1

152.1

151.1

149.2

Barclaycard Consumer UK

-

-

-

-

 

-

-

-

-

Business Banking1

43.3

42.4

41.4

40.1

 

40.3

37.2

36.3

35.2

Total customer deposits at amortised cost

197.3

195.8

194.3

192.0

 

193.4

189.3

187.4

184.4

 

1

In Q218, Wealth was reclassified from Wealth, Entrepreneurs & Business Banking (now named Business Banking) to Personal Banking. Comparatives have been restated.

 

Barclays International

 

 

 

 

 

 

 

 

 

 

Q418

Q318

Q218

Q118

 

Q417

Q317

Q217

Q117

Income statement information

£m

£m

£m

£m

 

£m

£m

£m

£m

Net interest income

984

965

853

1,013

 

987

1,148

1,060

1,112

Net trading income

837

1,103

1,094

1,416

 

935

815

1,039

1,182

Net fee, commission and other income

1,400

1,222

1,760

1,379

 

1,397

1,352

1,511

1,844

Total income

3,221

3,290

3,707

3,808

 

3,319

3,315

3,610

4,138

Credit impairment charges and other provisions

(354)

(143)

(68)

(93)

 

(386)

(495)

(279)

(346)

Net operating income

2,867

3,147

3,639

3,715

 

2,933

2,820

3,331

3,792

Operating costs

(2,441)

(2,277)

(2,306)

(2,300)

 

(2,428)

(2,182)

(2,276)

(2,435)

UK bank levy

(210)

-

-

-

 

(265)

-

-

-

Litigation and conduct

(33)

(32)

(47)

(15)

 

(255)

(5)

4

(13)

Total operating expenses

(2,684)

(2,309)

(2,353)

(2,315)

 

(2,948)

(2,187)

(2,272)

(2,448)

Other net income

32

12

11

13

 

21

19

202

12

Profit before tax

215

850

1,297

1,413

 

6

652

1,261

1,356

Attributable (loss)/profit

(72)

650

890

973

 

(1,168)

359

819

837

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

Loans and advances at amortised cost

127.2

132.4

125.5

117.5

 

126.8

134.4

135.2

145.5

Trading portfolio assets

104.0

124.6

116.5

114.9

 

113.0

91.2

83.3

83.0

Derivative financial instrument assets

222.1

214.8

228.2

214.1

 

236.2

242.8

108.4

105.3

Derivative financial instrument liabilities

219.6

213.7

224.9

210.8

 

237.8

242.9

116.8

112.8

Financial assets at fair value through the income statement

144.7

147.8

141.2

150.6

 

104.1

103.7

94.1

81.3

Total assets

862.1

900.2

886.5

866.6

 

856.1

867.1

681.6

677.2

Deposits at amortised cost

197.2

200.3

191.0

167.2

 

187.3

191.9

192.0

189.4

Loan: deposit ratio

65%

66%

66%

70%

 

68%

70%

70%

77%

Risk weighted assets

210.7

214.6

218.0

214.2

 

210.3

218.2

212.2

214.3

Period end allocated tangible equity

29.9

30.2

30.5

30.0

 

27.5

28.0

26.8

27.1

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity

(0.3%)

8.8%

11.8%

13.4%

 

(15.9%)

5.4%

12.4%

12.5%

Average allocated tangible equity (£bn)

31.3

31.1

31.4

30.1

 

28.5

28.9

27.4

27.7

Cost: income ratio

83%

70%

63%

61%

 

89%

66%

63%

59%

Loan loss rate (bps)1

107

41

22

31

 

76

88

54

62

Net interest margin

3.98%

3.87%

4.03%

4.57%

 

4.31%

4.21%

4.07%

4.06%

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct2

£m

£m

£m

£m

 

£m

£m

£m

£m

Profit before tax

248

882

1,344

1,428

 

261

657

1,257

1,369

Attributable (loss)/profit

(38)

676

924

985

 

(918)

363

816

846

Return on average allocated tangible equity

0.2%

9.2%

12.2%

13.6%

 

(12.4%)

5.5%

12.3%

12.6%

Cost: income ratio

82%

69%

62%

60%

 

81%

66%

63%

59%

 

1

Comparatives calculated based on gross loans and advances at amortised cost prior to the balance sheet presentation change and IAS 39 impairment charge.

2

Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Investment Bank

Q418

Q318

Q218

Q118

 

Q417

Q317

Q217

Q117

Income statement information

£m

£m

£m

£m

 

£m

£m

£m

£m

FICC

570

688

736

869

 

607

627

752

889

Equities

375

471

601

590

 

362

350

455

462

Markets

945

1,159

1,337

1,459

 

969

977

1,207

1,351

Banking fees

625

519

704

683

 

605

607

674

726

Corporate lending

243

197

198

240

 

269

277

278

269

Transaction banking

412

416

385

414

 

408

419

404

398

Banking

1,280

1,132

1,287

1,337

 

1,282

1,303

1,356

1,393

Other

(74)

(56)

(44)

3

 

1

-

1

38

Total income

2,151

2,235

2,580

2,799

 

2,252

2,280

2,564

2,782

Credit impairment (charges)/releases and other provisions

(35)

3

23

159

 

(127)

(36)

1

(51)

Net operating income

2,116

2,238

2,603

2,958

 

2,125

2,244

2,565

2,731

Operating expenses

(2,023)

(1,712)

(1,773)

(1,773)

 

(2,129)

(1,656)

(1,760)

(1,930)

Litigation and conduct

(23)

(32)

-

(13)

 

(255)

(5)

4

(11)

Total operating expenses

(2,046)

(1,744)

(1,773)

(1,786)

 

(2,384)

(1,661)

(1,756)

(1,941)

Other net income

15

4

5

3

 

7

10

116

-

Profit/(loss) before tax

85

498

835

1,175

 

(252)

593

925

790

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

Loans and advances at amortised cost

86.4

93.3

87.8

81.3

 

88.2

95.4

96.7

106.8

Deposits at amortised cost

136.3

137.6

130.3

107.6

 

128.0

133.4

134.1

131.0

Risk weighted assets

170.9

175.9

180.4

181.3

 

176.2

185.2

178.9

180.6

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity

(1.3%)

6.6%

9.1%

13.0%

 

(20.2%)

5.9%

11.1%

8.2%

Average allocated tangible equity (£bn)

26.0

25.9

26.4

25.6

 

24.3

24.8

23.3

23.5

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

£m

£m

 

£m

£m

£m

£m

Profit before tax

108

530

835

1,188

 

3

598

921

801

Return on average allocated tangible equity

(0.9%)

7.0%

9.1%

13.2%

 

(16.1%)

6.0%

11.1%

8.3%

 

1

Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.

 

Analysis of Barclays International

 

 

 

 

 

 

 

 

 

 

 

 

Consumer, Cards and Payments

Q418

Q318

Q218

Q118

 

Q417

Q317

Q217

Q117

Income statement information

£m

£m

£m

£m

 

£m

£m

£m

£m

Total income

1,070

1,055

1,127

1,009

 

1,067

1,035

1,046

1,356

Credit impairment charges and other provisions

(319)

(146)

(91)

(252)

 

(259)

(459)

(280)

(295)

Net operating income

751

909

1,036

757

 

808

576

766

1,061

Operating expenses

(628)

(565)

(533)

(527)

 

(564)

(526)

(516)

(505)

Litigation and conduct

(10)

-

(47)

(2)

 

-

-

-

(2)

Total operating expenses

(638)

(565)

(580)

(529)

 

(564)

(526)

(516)

(507)

Other net income

17

8

6

10

 

14

9

86

12

Profit before tax

130

352

462

238

 

258

59

336

566

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

Loans and advances at amortised cost

40.8

39.1

37.7

36.2

 

38.6

39.0

38.5

38.7

Deposits at amortised cost

60.9

62.7

60.7

59.6

 

59.3

58.5

57.9

58.4

Risk weighted assets

39.8

38.7

37.6

32.9

 

34.1

33.0

33.3

33.7

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

Return on average allocated tangible equity

4.8%

19.8%

26.2%

15.6%

 

8.9%

2.2%

19.4%

36.4%

Average allocated tangible equity (£bn)

5.3

5.2

5.0

4.5

 

4.2

4.2

4.1

4.2

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

£m

£m

 

£m

£m

£m

£m

Profit before tax

140

352

509

240

 

258

59

336

568

Return on average allocated tangible equity

5.4%

19.9%

28.9%

15.7%

 

9.0%

2.2%

19.4%

36.5%

 

1

Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.

 

Head Office

 

 

 

 

 

 

 

 

 

 

Q418

Q318

Q218

Q118

 

Q417

Q317

Q217

Q117

Income statement information

£m

£m

£m

£m

 

£m

£m

£m

£m

Net interest income

(201)

(106)

(156)

(318)

 

(254)

(174)

108

(115)

Net fee, commission and other income

190

49

189

80

 

87

180

(24)

33

Total income

(11)

(57)

33

(238)

 

(167)

6

84

(82)

Credit impairment releases/(charges) and other provisions 

7

4

(1)

6

 

(3)

(13)

(1)

-

Net operating (expenses)/income

(4)

(53)

32

(232)

 

(170)

(7)

83

(82)

Operating costs

(69)

(64)

(36)

(59)

 

(76)

(112)

(40)

(49)

UK bank levy

(13)

-

-

-

 

(41)

-

-

-

GMP charge

(140)

-

-

-

 

-

-

-

-

Litigation and conduct

(12)

(19)

(31)

(1,535)

 

(75)

(65)

(1)

(10)

Total operating expenses

(234)

(83)

(67)

(1,594)

 

(192)

(177)

(41)

(59)

Other net income/(expenses)

7

7

(23)

7

 

(3)

(22)

(164)

-

Loss before tax

(231)

(129)

(58)

(1,819)

 

(365)

(206)

(122)

(141)

Attributable loss

(236)

(148)

(122)

(1,699)

 

(371)

(199)

(175)

(123)

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

Total assets

21.5

18.6

17.2

40.4

 

39.7

51.7

17.3

74.5

Risk weighted assets

26.0

26.8

26.3

31.2

 

31.8

36.1

26.2

52.9

Period end allocated tangible equity

4.9

4.2

3.6

3.0

 

10.0

10.4

9.0

8.8

 

 

 

 

 

 

 

 

 

 

Performance measures

 

 

 

 

 

 

 

 

 

Average allocated tangible equity (£bn)

2.9

3.4

2.0

4.3

 

10.0

10.5

8.8

7.6

 

 

 

 

 

 

 

 

 

 

Performance measures excluding litigation and conduct1

£m

£m

£m

£m

 

£m

£m

£m

£m

Loss before tax

(219)

(110)

(27)

(284)

 

(290)

(141)

(121)

(131)

Attributable loss

(220)

(137)

(98)

(192)

 

(307)

(134)

(174)

(116)

 

1

Refer to pages 64 to 72 for further information and calculations of performance measures excluding litigation and conduct.

 

Barclays Non-Core Results

 

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

 

Barclays Non-Core

Year ended

Year ended

 

31.12.18

31.12.17

Income statement information

£m

£m

Net interest income

-

(112)

Net trading income

-

(488)

Net fee, commission and other income

-

70

Total income

-

(530)

Credit impairment charges and other provisions

-

(30)

Net operating expenses

-

(560)

Operating expenses

-

(256)

Litigation and conduct

-

(28)

Total operating expenses

-

(284)

Other net income

-

197

Loss before tax

-

(647)

Attributable loss

-

(419)

 

 

 

 

 

Q418

Q318

Q218

Q118

 

Q417

Q317

Q217

Q117

Income statement information

£m

£m

£m

£m

 

£m

£m

£m

£m

Net interest income

-

-

-

-

 

-

-

(123)

11

Net trading income

-

-

-

-

 

-

-

(411)

(77)

Net fee, commission and other income

-

-

-

-

 

-

-

78

(8)

Total income

-

-

-

-

 

-

-

(456)

(74)

Credit impairment charges and other provisions

-

-

-

-

 

-

-

(27)

(3)

Net operating expenses

-

-

-

-

 

-

-

(483)

(77)

Operating expenses

-

-

-

-

 

-

-

(108)

(148)

Litigation and conduct

-

-

-

-

 

-

-

(19)

(9)

Total operating expenses

-

-

-

-

 

-

-

(127)

(157)

Other net income/(expenses)

-

-

-

-

 

-

-

204

(7)

Loss before tax

-

-

-

-

 

-

-

(406)

(241)

Tax credit

-

-

-

-

 

-

-

207

75

Loss after tax

-

-

-

-

 

-

-

(199)

(166)

Non-controlling interests

-

-

-

-

 

-

-

(8)

(9)

Other equity instrument holders

-

-

-

-

 

-

-

(19)

(18)

Attributable loss

-

-

-

-

 

-

-

(226)

(193)

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

Loans and advances to banks and customers at amortised cost

-

-

-

-

 

-

-

48.3

49.5

Derivative financial instrument assets

-

-

-

-

 

-

-

150.3

164.2

Derivative financial instrument liabilities

-

-

-

-

 

-

-

143.0

155.3

Financial assets designated at fair value

-

-

-

-

 

-

-

12.1

13.4

Total assets

-

-

-

-

 

-

-

233.0

249.1

Customer deposits

-

-

-

-

 

-

-

11.8

12.9

Risk weighted assets

-

-

-

-

 

-

-

22.8

27.4

 

Discontinued Operation Results

 

Following the reduction of the Barclays Group's interest in BAGL in 2017, Barclays' remaining holding of 14.9%, for the full year 2018 is reported as a financial asset at fair value through other comprehensive income in the Head Office segment, with Barclays' share of Absa Group Limited's dividend recognised in the Head Office income statement.

 

Africa Banking

Year ended

Year ended

31.12.18

31.12.171

Income statement information

£m

£m

Net interest income

-

1,024

Net fee, commission and other income

-

762

Total income

-

1,786

Credit impairment charges and other provisions

-

(177)

Net operating income

-

1,609

Operating expenses excluding impairment of Barclays' holding in BAGL

-

(1,130)

Other net income excluding loss on sale of BAGL

-

5

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

-

484

Impairment of Barclays' holding in BAGL

-

(1,090)

Loss on sale of BAGL

-

(1,435)

Loss before tax

-

(2,041)

Tax charge

-

(154)

Loss after tax

-

(2,195)

Attributable loss

-

(2,335)

 

1

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

 

 

Q418

Q318

Q218

Q118

 

Q417

Q317

Q2171

Q117

Income statement information

£m

£m

£m

£m

 

£m

£m

£m

£m

Net interest income

-

-

-

-

 

-

-

407

617

Net fee, commission and other income

-

-

-

-

 

-

-

297

465

Total income

-

-

-

-

 

-

-

704

1,082

Credit impairment charges and other provisions

-

-

-

-

 

-

-

(71)

(106)

Net operating income

-

-

-

-

 

-

-

633

976

Operating expenses excluding impairment of Barclays' holding in BAGL

-

-

-

-

 

-

-

(477)

(653)

Other net income excluding loss on sale of BAGL

-

-

-

-

 

-

-

3

2

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

-

-

-

-

 

-

-

159

325

Impairment of Barclays' holding in BAGL

-

-

-

-

 

-

-

(206)

(884)

Loss on sale of BAGL

-

-

-

-

 

-

-

(1,435)

-

Loss before tax

-

-

-

-

 

-

-

(1,482)

(559)

Loss after tax

-

-

-

-

 

-

-

(1,537)

(658)

Attributable loss

-

-

-

-

 

-

-

(1,534)

(801)

 

 

 

 

 

 

 

 

 

 

Balance sheet information

£bn

£bn

£bn

£bn

 

£bn

£bn

£bn

£bn

Total assets

-

-

-

-

 

-

-

-

66.0

Risk weighted assets

-

-

-

-

 

-

-

9.8

41.3

 

1

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

 

Performance Management

Margins and balances

 

 

 

 

 

 

 

Year ended 31.12.18

Year ended 31.12.17

 

Net interest income

Average customer assets

Net interest margin

Net interest income

Average customer assets

Net interest margin

 

£m

£m

%

£m

£m

%

Barclays UK

6,028

186,881

3.23

6,086

174,484

 3.49

Barclays International1

3,966

96,434

4.11

4,326

104,039

 4.16

Total Barclays UK and Barclays International

9,994

283,315

3.53

10,412

278,523

 3.74

Other2

(932)

 

 

(567)

 

 

Total Barclays Group

9,062

 

 

9,845

 

 

 

1

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

2

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

 

Net interest margin decreased 21bps to 3.53% primarily reflecting the full year impact of the integration of ESHLA portfolio on 1 July 2017, the mix shift given growth in secured lending and the recategorisation of certain treasury income following ring-fencing (from net interest income to non-interest income). Barclays Group net interest income decreased 8% to £9.1bn including gross structural hedge contributions of £1.7bn (2017: £1.7bn).

 

Quarterly analysis for Barclays UK and Barclays International

Net interest income

Average customer assets

Net interest margin1

Three months ended 31.12.18

£m

£m

%

Barclays UK

 1,513

 187,813

 3.20

Barclays International2

 994

 99,137

 3.98

Total Barclays UK and Barclays International

 2,507

 286,950

 3.47

 

 

 

 

Three months ended 30.09.18

 

 

 

Barclays UK

1,529

188,239

3.22

Barclays International2

945

96,785

3.87

Total Barclays UK and Barclays International

2,474

285,024

3.44

 

 

 

 

Three months ended 30.06.18

 

 

 

Barclays UK

1,493

186,053

3.22

Barclays International2

962

95,728

4.03

Total Barclays UK and Barclays International

2,455

281,781

3.49

 

 

 

 

Three months ended 31.03.18

 

 

 

Barclays UK

1,493

185,351

3.27

Barclays International2

1,065

94,530

4.57

Total Barclays UK and Barclays International

2,558

279,881

3.71

 

 

 

 

Three months ended 31.12.17

 

 

 

Barclays UK

1,540

184,058

3.32

Barclays International2

1,071

98,500

4.31

Total Barclays UK and Barclays International

2,611

282,558

3.67

 

1

The Group's treasury results are reported directly within Barclays UK and Barclays International following ring-fencing, resulting in gains and losses made on certain activities being recognised as Other income. These amounts had previously been included in Net interest income and the Net interest margin through transfer pricing.

2

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

 

Remuneration

 

Deferred bonuses are payable only once an employee meets certain conditions, including a specified period of service. This creates a timing difference between the communication of the bonus pool and the charges that are recognised in the income statement which are reconciled in the table below to show the charge for performance costs. In 2016, there was a change in the proportion of bonuses which were deferred, to harmonise deferral structures across the Group, and amendments to the deferred bonuses, which accelerated the rate at which these are charged in the income statement, as illustrated on page 27. The combined effect of these changes was to increase the charge for 2016 by £395m, with lesser effects in 2017 and 2018. The changes were designed to more closely align the incentive awards granted with the income statement charge. Refer to the Remuneration Report on pages 99 - 126 of the Barclays PLC Annual Report for further detail on remuneration. The table below includes the other elements of compensation and staff costs.

 

 

Year ended

Year ended

 

 

31.12.18

31.12.17

 

 

£m

£m

% Change

Incentive awards granted:

 

 

 

Current year bonus

1,067

990

(8)

Deferred bonus

515

442

(17)

Commissions and other incentives

67

74

9

Total incentive awards granted

1,649

1,506

(9)

 

 

 

 

Reconciliation of incentive awards granted to income statement charge:

 

 

 

Less: deferred bonuses granted but not charged in current year

(359)

(302)

(19)

Add: current year charges for deferred bonuses from previous years

299

457

35

Other differences between incentive awards granted and income statement charge

(33)

29

231

Income statement charge for performance costs

1,556

1,690

8

 

 

 

 

Other income statement charges:

 

 

 

Salaries

4,200

3,982

(5)

Social security costs

558

580

4

Post-retirement benefits

619

493

(26)

Other compensation costs

413

378

(9)

Total compensation costs1

7,346

7,123

(3)

 

 

 

 

Other resourcing costs2

1,283

1,437

11

 

 

 

 

Total staff costs

8,629

8,560

(1)

 

 

 

 

Group compensation as % of income3,4

34.1

33.8

 

Group staff costs as % of income4

40.2

40.6

 

 

1

In addition, Group compensation of £296m (2017: £312m) was capitalised as internally generated software.

2

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

3

Within the Corporate and Investment Bank, front office compensation as a percentage of total income was 25.6% (2017: 25.5%).

4

Excludes £140m relating to a GMP charge within Post-retirement benefits.

 

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

 

Expected1,2

 

Year ended

Year ended

 

Year ended

2020 and

 

31.12.17

31.12.18

 

31.12.19

beyond

 

£m

£m

 

£m

£m

Deferred bonuses from 2015 and earlier bonus pools

298

82

 

9

-

Deferred bonuses from 2016 bonus pool

159

87

 

40

7

Deferred bonuses from 2017 bonus pool

140

130

 

67

41

Deferred bonuses from 2018 bonus pool

-

156

 

164

114

Income statement charge for deferred bonuses

597

455

 

280

162

 

1

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

2

Does not include the impact of grants which will be made in 2019 and beyond.

 

Charging of deferred bonus profile1

 

 

 

Income statement charge profile3

Grant date

Expected payment

date(s)2    

Year

2018

 awards

Pre-2016 awards

March 2019

 

2018

35%

0%

 

 

2019

34%

48%

 

March 2020 (33.3%)

2020

21%

35%

 

March 2021 (33.3%)

2021

9%

15%

 

March 2022 (33.3%)

2022

1%

2%

 

1

Represents a typical vesting schedule for deferred awards. Certain awards may be subject to 5- or 7-year deferral in line with regulatory requirements.

2

Share awards may be subject to an additional holding period.

3

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

 

Risk Management

 

Risk management and Principal Risks

 

The roles and responsibilities of the business groups, Risk and Compliance, in the management of risk in Barclays Group are defined in the Enterprise Risk Management Framework. The purpose of the framework is to identify the principal risks of Barclays Group, the process by which Barclays Group sets its appetite for these risks in its business activities, and the consequent limits which it places on related risk taking. The framework identifies eight principal risks: credit risk; market risk; treasury and capital risk; operational risk; conduct risk; reputation risk; model risk; and legal risk. Further detail on these risks and how they are managed is available in the Barclays PLC Annual Report 2018 or online at home.barclays/investor-relations/reports-and-events/annual-reports.

 

The following section gives an overview of credit risk, market risk, and treasury and capital risk for the period.

 

Credit Risk

 

Loans and advances at amortised cost by stage (audited)

 

The table below presents an analysis of loans and advances at amortised cost by gross exposure, impairment allowance, impairment charge and coverage ratio by stage allocation and business segment as at 31 December 2018. Also included are off-balance sheet loan commitments and financial guarantee contracts by gross exposure, and impairment allowance and coverage ratio by stage allocation as at 31 December 2018. Barclays does not hold any material purchased or originated credit impaired assets as at year-end.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross exposure

 

Impairment allowance

Net exposure

 

Stage 1

Stage 2

Stage 3

Total

 

Stage 1

Stage 2

Stage 3

Total

As at 31.12.18

£m

£m

£m

£m

 

£m

£m

£m

£m

£m

Barclays UK

134,911

25,279

3,040

163,230

 

183

1,389

1,152

2,724

160,506

Barclays International

26,714

4,634

1,830

33,178

 

352

965

1,315

2,632

30,546

Head Office

6,510

636

938

8,084

 

9

47

306

362

7,722

Total Barclays Group retail

168,135

30,549

5,808

204,492

 

544

2,401

2,773

5,718

198,774

Barclays UK

22,824

4,144

1,272

28,240

 

16

70

117

203

28,037

Barclays International

87,344

8,754

1,382

97,480

 

128

244

439

811

96,669

Head Office

2,923

-

41

2,964

 

-

-

38

38

2,926

Total Barclays Group wholesale

113,091

12,898

2,695

128,684

 

144

314

594

1,052

127,632

Total loans and advances at amortised cost

281,226

43,447

8,503

333,176

 

688

2,715

3,367

6,770

326,406

Off-balance sheet loan commitments and financial guarantee contracts1

309,989

22,126

684

332,799

 

99

150

22

271

332,528

Total2

591,215

65,573

9,187

665,975

 

787

2,865

3,389

7,041

658,934

 

 

 

 

 

 

 

 

 

 

 

 

As at 31.12.18

 

Year ended 31.12.18

 

 

Coverage ratio

 

Loan impairment charge and loan loss rate

 

 

Stage 1

Stage 2

Stage 3

Total

 

Loan impairment charge

Loan loss rate

 

 

%

%

%

%

 

£m

bps

 

Barclays UK

0.1

5.5

37.9

1.7

 

830

51

 

Barclays International

1.3

20.8

71.9

7.9

 

844

254

 

Head Office

0.1

7.4

32.6

4.5

 

15

19

 

Total Barclays Group retail

0.3

7.9

47.7

2.8

 

1,689

83

 

Barclays UK

0.1

1.7

9.2

0.7

 

74

26

 

Barclays International

0.1

2.8

31.8

0.8

 

(142)

-

 

Head Office

-

-

92.7

1.3

 

(31)

-

 

Total Barclays Group wholesale

0.1

2.4

22.0

0.8

 

(99)

-

 

Total loans and advances at amortised cost

0.2

6.2

39.6

2.0

 

1,590

48

 

Off-balance sheet loan commitments and financial guarantee contracts1

-

0.7

3.2

0.1

 

 

(125)

 

 

 

Other financial assets subject to impairment

 

 

 

 

 

 

3

 

 

 

Total

0.1

4.4

36.9

1.1

 

 

1,468

 

 

 

 

1

Excludes loan commitments and financial guarantees of £11.7bn carried at fair value.

2

Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income, and other assets. These have a total gross exposure of £129.9bn and impairment allowance of £12m. This comprises £10m ECL on £129.3bn stage 1 assets and £2m on £0.6bn stage 2 fair value through other comprehensive income assets.

 

 

Gross exposure

 

Impairment allowance

Net exposure

 

Stage 1

Stage 2

Stage 3

Total

 

Stage 1

Stage 2

Stage 3

Total

As at 01.01.18

£m

£m

£m

£m

 

£m

£m

£m

£m

£m

Barclays UK

129,837

25,798

3,152

158,787

 

142

1,310

1,142

2,594

156,193

Barclays International

22,427

7,051

1,466

30,944

 

292

1,298

1,080

2,670

28,274

Head Office

6,498

1,596

952

9,046

 

8

62

294

364

8,682

Total Barclays Group retail

158,762

34,445

5,570

198,777

 

442

2,670

2,516

5,628

193,149

Barclays UK

22,835

3,880

1,092

27,807

 

25

88

114

227

27,580

Barclays International

75,331

11,128

2,345

88,804

 

139

349

694

1,182

87,622

Head Office

8,689

139

74

8,902

 

2

5

58

65

8,837

Total Barclays Group wholesale

106,855

15,147

3,511

125,513

 

166

442

866

1,474

124,039

Total loans and advances at amortised cost

265,617

49,592

9,081

324,290

 

608

3,112

3,382

7,102

317,188

Off-balance sheet loan commitments and financial guarantee contracts1

275,364

38,867

1,442

315,673

 

133

259

28

420

315,253

Total2

540,981

88,459

10,523

639,963

 

741

3,371

3,410

7,522

632,441

 

 

 

 

 

 

 

 

 

 

 

 

Coverage ratio

 

 

 

 

 

 

 

Stage 1

Stage 2

Stage 3

Total

 

 

 

 

 

 

As at 01.01.18

%

%

%

%

 

 

 

 

 

 

Barclays UK

0.1

5.1

36.2

1.6

 

 

 

 

 

 

Barclays International

1.3

18.4

73.7

8.6

 

 

 

 

 

 

Head Office

0.1

3.9

30.9

4.0

 

 

 

 

 

 

Total Barclays Group retail

0.3

7.8

45.2

2.8

 

 

 

 

 

 

Barclays UK

0.1

2.3

10.4

0.8

 

 

 

 

 

 

Barclays International

0.2

3.1

29.6

1.3

 

 

 

 

 

 

Head Office

-

3.6

78.4

0.7

 

 

 

 

 

 

Total Barclays Group wholesale

0.2

2.9

24.7

1.2

 

 

 

 

 

 

Total loans and advances at amortised cost

0.2

6.3

37.2

2.2

 

 

 

 

 

 

Off-balance sheet loan commitments and financial guarantee contracts1

 

 

 

0.1

 

 

 

 

 

 

-

0.7

1.9

 

 

 

Total

0.1

3.8

32.4

1.2

 

 

 

 

 

 

 

1

Excludes loan commitments and financial guarantees of £18.9bn carried at fair value.   

2

Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income, and other assets. These have a total gross exposure of £128.1bn and impairment allowance of £9m.  

 

Loans and advances at amortised cost by product (audited)

 

The table below presents a breakdown of loans and advances at amortised cost and the impairment allowance with stage allocation by asset classification.

 

 

 

Stage 2

 

 

As at 31.12.18

Stage 1

Not past due

<=30 days past due

>30 days past due

Total

Stage 3

Total

Gross exposure

£m

£m

£m

£m

£m

£m

£m

Home loans

130,066

15,672

1,672

862

18,206

2,476

150,748

Credit cards, unsecured loans and other retail lending

45,785

11,262

530

437

12,229

3,760

61,774

Corporate loans

105,375

12,177

360

475

13,012

2,267

120,654

Total

281,226

39,111

2,562

1,774

43,447

8,503

333,176

 

 

 

 

 

 

 

 

Impairment allowance

 

 

 

 

 

 

 

Home loans

31

56

13

13

82

351

464

Credit cards, unsecured loans and other retail lending

528

1,895

169

240

2,304

2,511

5,343

Corporate loans

129

300

16

13

329

505

963

Total

688

2,251

198

266

2,715

3,367

6,770

 

 

 

 

 

 

 

 

Net exposure

 

 

 

 

 

 

 

Home loans

130,035

15,616

1,659

849

18,124

2,125

150,284

Credit cards, unsecured loans and other retail lending

45,257

9,367

361

197

9,925

1,249

56,431

Corporate loans

105,246

11,877

344

462

12,683

1,762

119,691

Total

280,538

36,860

2,364

1,508

40,732

5,136

326,406

 

 

 

 

 

 

 

 

Coverage ratio

%

%

%

%

%

%

%

Home loans

-

0.4

0.8

1.5

0.5

14.2

0.3

Credit cards, unsecured loans and other retail lending

1.2

16.8

31.9

54.9

18.8

66.8

8.6

Corporate loans

0.1

2.5

4.4

2.7

2.5

22.3

0.8

Total

0.2

5.8

7.7

15.0

6.2

39.6

2.0

 

 

 

 

 

 

 

 

As at 01.01.18

 

 

 

 

 

 

 

Gross exposure

£m

£m

£m

£m

£m

£m

£m

Home loans

125,224

17,108

1,612

604

19,324

2,425

146,973

Credit cards, unsecured loans and other retail lending

40,482

13,562

702

502

14,766

3,544

58,792

Corporate loans

99,911

14,534

407

561

15,502

3,112

118,525

Total

265,617

45,204

2,721

1,667

49,592

9,081

324,290

 

 

 

 

 

 

 

 

Impairment allowance

 

 

 

 

 

 

 

Home loans

38

77

10

13

100

326

464

Credit cards, unsecured loans and other retail lending

441

2,086

203

245

2,534

2,291

5,266

Corporate loans

129

444

22

12

478

765

1,372

Total

608

2,607

235

270

3,112

3,382

7,102

 

 

 

 

 

 

 

 

Net exposure

 

 

 

 

 

 

 

Home loans

125,186

17,031

1,602

591

19,224

2,099

146,509

Credit cards, unsecured loans and other retail lending

40,041

11,476

499

257

12,232

1,253

53,526

Corporate loans

99,782

14,090

385

549

15,024

2,347

117,153

Total

265,009

42,597

2,486

1,397

46,480

5,699

317,188

 

 

 

 

 

 

 

 

Coverage ratio

%

%

%

%

%

%

%

Home loans

-

0.5

0.6

2.2

0.5

13.4

0.3

Credit cards, unsecured loans and other retail lending

1.1

15.4

28.9

48.8

17.2

64.6

9.0

Corporate loans

0.1

3.1

5.4

2.1

3.1

24.6

1.2

Total

0.2

5.8

8.6

16.2

6.3

37.2

2.2

 

The overall coverage ratio reduced from 2.2% to 2.0% driven predominantly by the reduction of Stage 3 single name exposures within Corporate loans.

 

The credit card, unsecured loans and other retail lending coverage ratio decreased to 8.6% from 9.0% due to the increase in Stage 1 balances which carry lower levels of ECL, with the Stage 2 increase including an adjustment for the anticipated UK economic uncertainty.

 

There are relatively low coverage ratios for Stage 3 Home loans and Corporate loans reflecting the secured nature of these exposures.

 

Movement in gross exposures and impairment allowance including provisions for loan commitments and financial guarantees (audited)

 

The following tables present a reconciliation of the opening to the closing balance of the exposure and impairment allowance. Explanation of the terms: 12-month ECL, lifetime ECL and credit-impaired are included in the Barclays Group Annual Report 2018 on page 273.

 

Gross exposure for loans and advances at amortised cost (audited)

 

 

 

 

 

 

Stage 1

Stage 2

Stage 3

Total

 

£m

£m

£m

£m

As at 1 January 2018

265,617

49,592

9,081

324,290

Net transfers between stages

1,385

(3,602)

2,217

-

Business activity in the year

74,419

2,680

374

77,473

- of which: Barclays UK

29,467

1,493

326

31,286

- of which: Barclays International

42,346

1,164

44

43,554

Net drawdowns and repayments

(13,140)

136

162

(12,842)

- of which: Barclays UK

(10,269)

(980)

(322)

(11,571)

- of which: Barclays International

(1,305)

1,348

561

604

Final repayments

(41,946)

(5,359)

(1,071)

(48,376)

- of which: Barclays UK

(11,728)

(1,753)

(478)

(13,959)

- of which: Barclays International

(29,421)

(3,520)

(549)

(33,490)

Disposals

(5,109)

-

(369)

(5,478)

Write-offs

-

-

(1,891)

(1,891)

As at 31 December 20181

281,226

43,447

8,503

333,176

 

 

 

 

 

 

 

 

 

 

Impairment allowance on loans and advances at amortised cost (audited)

 

 

 

 

 

Stage 1

Stage 2

Stage 3

Total

 

£m

£m

£m

£m

As at 1 January 2018

608

3,112

3,382

7,102

Net transfers between stages

798

(1,182)

384

-

Business activity in the year

223

173

95

491

Net re-measurement and movement due to exposure and risk parameter changes

(865)

638

1,918

1,691

UK economic uncertainty adjustment

-

150

-

150

Final repayments

(76)

(176)

(152)

(404)

Disposals

-

-

(369)

(369)

Write-offs

-

-

(1,891)

(1,891)

As at 31 December 20181

688

2,715

3,367

6,770

 

 

 

 

 

Reconciliation of ECL movement to impairment charge/(release) for the period

 

 

 

 

ECL movement excluding assets derecognised due to disposals and write-offs

 

 

 

1,928

Net recoveries post write-offs

 

 

 

(195)

Exchange and other adjustments

 

 

 

(143)

Impairment release on loan commitments and financial guarantees2

 

 

 

(125)

Impairment charge on other financial assets1

 

 

 

3

Income statement charge/(release) for the period

 

 

 

1,468

 

1

Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £129.9bn (1 January 2018: £128.1bn) and impairment allowance of £12m (1 January 2018: £9m). This comprises £10m ECL on £129.3bn Stage 1 assets and £2m on £0.6bn Stage 2 fair value through other comprehensive income assets.

2     

Impairment release of £125m on loan commitments and financial guarantees represents a reduction in impairment allowance of £149m partially offset by exchange and other adjustments of £24m.

 

Gross exposure on loans and advances at amortised cost has increased by £8.9bn in 2018 driven by Stage 1 increases due to:

 

·

Growth in Barclays UK Home Loans portfolio of £4.6bn

·

Increased lending in Portfolio Management, Equity derivatives and Equity financing in Barclays International of £6.6bn

·

Balance sheet growth and currency exchange movements in US Cards of £2.5bn

·

New securities for the liquidity asset buffer in the UK Service Company of £2.3bn and £1.0bn in Barclays International, offset by the disposal of a long dated liquidity buffer portfolio of UK gilts totalling £5.1bn, reduction in Corporate lending of £2.5bn and continued repayments on Italian Mortgages of £1.0bn

 

Net transfers between stages represents the movements of positions from, for example, Stage 1 to Stage 2 following a Significant Increase in Credit Risk (SICR) or to Stage 3 as positions move into default. Equally, improvement in credit quality will result in positions moving to lower stages. These are the primary driver for the changes in impairment allowance and the income statement charge. The improvement in PDs and macroeconomic variables during 2018 resulted in net exposures moving from Stage 2 into Stage 1. The transfers into Stage 3 was from defaulted assets moving mainly from Stage 2.

 

Disposals includes the sale of a long dated liquidity buffer portfolio of UK gilts and debt sale activity.Write-offs represent the gross asset write-down during the period.

 

The impairment allowance decreased by £332m in the period. This is due to a net reduction in Barclays International predominantly from write-offs and a positive impact of macroeconomic variables changes during the year, offset by a £150m charge in UK Cards and UK Corporate loans from anticipated economic uncertainty in the UK. Credit quality across wholesale portfolios and underlying arrears rates in the retail portfolio have been relatively stable over the period.

 

Gross exposure for loan commitments and financial guarantees (audited)

 

 

Stage 1

Stage 2

Stage 3

Total

 

£m

£m

£m

£m

As at 1 January 2018

275,364

38,867

1,442

315,673

Net transfers between stages

13,521

(13,552)

31

-

Business activity in the year

65,404

811

-

66,215

Net drawdowns and repayments

(14,491)

4,298

(473)

(10,666)

Final repayments

(29,809)

(8,298)

(316)

(38,423)

As at 31 December 2018

309,989

22,126

684

332,799

 

 

 

 

 

 

 

 

 

 

Impairment allowance on loan commitments and financial guarantees (audited)

 

 

Stage 1

Stage 2

Stage 3

Total

 

£m

£m

£m

£m

As at 1 January 2018

133

259

28

420

Net transfers between stages

42

(43)

1

-

Business activity in the year

18

-

-

18

Net re-measurement and movement due to exposure and risk parameter changes

(79)

(22)

44

(57)

Final repayments

(15)

(44)

(51)

(110)

As at 31 December 2018

99

150

22

271

 

Stage 2 decomposition1

 

 

 

Net exposure

Impairment allowance

As at 31.12.18

£m

 £m

Quantitative test

28,159

2,506

Qualitative test

12,023

183

30 dpd backstop

550

26

Total Stage 2

40,732

2,715

 

1

Where balances satisfy more than one of the above three criteria for determining a significant increase in credit risk, the corresponding net exposure and ECL has been assigned in order of categories presented.

 

Stage 2 exposures are predominantly identified using quantitative tests where the lifetime PD has deteriorated more than a pre-determined amount since origination. This is augmented by inclusion of accounts meeting the designated high risk criteria (including watchlist) for the portfolio under the qualitative test. A small number of other accounts (1% of impairment allowances and 1% of net exposure) are included in Stage 2. These accounts are not otherwise identified by the quantitative or qualitative tests but are more than 30 days past due. The percentage triggered by this backstop criteria is a measure of the effectiveness of the Stage 2 criteria in identifying deterioration prior to delinquency.

 

For further detail on the three criteria for determining a significant increase in credit risk required for Stage 2 classification, refer to Note 7 on page 273 of the Barclays PLC Annual Report 2018.

 

Measurement uncertainty and sensitivity analysis

 

The measurement of ECL involves increased complexity and judgement, including estimation of probabilities of default (PD), loss given default (LGD), a range of unbiased future economic scenarios, estimation of expected lives, estimation of exposures at default (EAD) and assessing significant increases in credit risk. Impairment charges will tend to be more volatile than under IAS 39 and will be recognised earlier. Unsecured products with longer expected lives, such as revolving credit cards, are the most impacted.

 

Barclays Group uses a five-scenario model to calculate ECL. An external consensus forecast is assembled from key sources, including HM Treasury, Bloomberg and the Urban Land Institute, which forms the baseline scenario. In addition, two adverse scenarios (Downside 1 and Downside 2) and two favourable scenarios (Upside 1 and Upside 2) are derived, with associated probability weightings. The adverse scenarios are calibrated to a similar severity to internal stress tests, whilst also considering IFRS 9 specific sensitivities and non-linearity. Downside 2 is benchmarked to the Bank of England's annual cyclical scenarios and to the most severe scenario from Moody's inventory, but is not designed to be the same. The favourable scenarios are calibrated to be symmetric to the adverse scenarios, subject to a ceiling calibrated to relevant recent favourable benchmark scenarios. The scenarios include six economic core variables, (GDP, unemployment and House Price Index (HPI) in both the UK and US markets), and expanded variables using statistical models based on historical correlations. All five scenarios converge to a steady state after eight years.

 

Scenario Weights (audited)

 

The methodology for estimating probability weights for each of the scenarios involves a comparison of the distribution of key historic UK and US macroeconomic variables against the forecast paths of the five scenarios. The methodology works such that the baseline (reflecting current consensus outlook) has the highest weight and the weights of adverse and favourable scenarios depend on the deviation from the baseline; the further from the baseline, the smaller the weight. The probability weights of the scenarios as of 31 December 2018 are shown below. A single set of five scenarios is used across all portfolios and all five weights are normalised to equate to 100%. The same scenarios and weights that are used in the estimation of expected credit losses are also used for Barclays internal planning purposes. The impacts across the portfolios are different because of the sensitivities of each of the portfolios to specific macroeconomic variables, for example, mortgages are highly sensitive to house prices and base rates, credit cards and unsecured consumer loans are highly sensitive to unemployment.

 

The table below shows the core macroeconomic variables for each scenario and the respective scenario weights.

 

Scenario probability weighting

 

 

 

 

 

 

Upside 2

Upside 1

Baseline

Downside 1

Downside 2

As at 31 December 2018

 %

 %

 %

 %

 %

Scenario probability weighting

9

24

41

23

3

 

Macroeconomic variables

 

 

 

 

 

 

Upside 2

Upside 1

Baseline

Downside 1

Downside 2

As at 31 December 2018

 %

 %

 %

 %

 %

UK GDP1

4.5

3.1

1.7

0.3

(4.1)

UK unemployment2

3.4

3.9

4.3

5.7

8.8

UK HPI3

46.4

32.6

3.2

(0.5)

(32.1)

US GDP1

4.8

3.7

2.1

0.4

(3.3)

US unemployment2

3.0

3.4

3.7

5.2

8.4

US HPI3

36.9

30.2

4.1

-

(17.4)

 

1

Highest annual growth in Upside scenarios; 5-year average in Baseline; lowest annual growth in Downside scenarios.

2

Lowest point in Upside scenarios; 5-year average in Baseline; highest point in Downside scenarios.

3

5-year cumulative growth in Upside scenarios; 5-year average in Baseline; cumulative fall (peak-to-trough) in Downside scenarios.

 

Over the year, the macroeconomic baseline variables improved in the US, notably HPI. The UK macroeconomic baseline variables improved slightly overall.

 

ECL sensitivity analysis to UK economic forecasts for key principal portfolios

 

The table below shows the estimated ECL impact on key principal portfolios for both a positive growth (Upward scenario) and a downturn (Downward scenario) of UK consensus macroeconomic variables. The inputs for the Downward scenario have been modelled by replacing the Baseline macroeconomic variables by the Downside 1 variables (with no changes to US and other non-UK macroeconomic variables, as highlighted below). Similarly, the Upward scenario uses Upside 1 UK macroeconomic variables for the Baseline scenario. The Downside 2, Downside 1, Upside 1 and Upside 2 macroeconomic variables are held constant but the probability weights have been re-calibrated.

 

Barclays impairment as at 31 December 2018 includes an adjustment of £150m representing a charge for the estimated impact of anticipated economic uncertainty in the UK. This adjustment was estimated broadly on the output of the UK Downward scenario below.

 

Scenario probability weighting

 

 

 

 

 

 

Upside 2

Upside 1

Baseline

Downside 1

Downside 2

 

 %

 %

 %

 %

 %

UK Upward scenario

18

33

36

11

2

UK Downward scenario

8

18

40

28

6

 

Macroeconomic variables

 

 

 

 

 

 

Upside 2

Upside 1

Baseline

Downside 1

Downside 2

As at 31.12.18

 %

 %

 %

 %

 %

UK Upward scenario

 

 

 

 

 

UK GDP

4.5

3.1

3.1

0.3

(4.1)

UK unemployment

3.4

3.9

3.9

5.7

8.8

UK HPI

46.4

32.6

32.6

(0.5)

(32.1)

US GDP

4.8

3.7

2.1

0.4

(3.3)

US unemployment

3.0

3.4

3.7

5.2

8.4

US HPI

36.9

30.2

4.1

-

(17.4)

UK Downward scenario

 

 

 

 

 

UK GDP

4.5

3.1

0.3

0.3

(4.1)

UK unemployment

3.4

3.9

5.7

5.7

8.8

UK HPI

46.4

32.6

(0.5)

(0.5)

(32.1)

US GDP

4.8

3.7

2.1

0.4

(3.3)

US unemployment

3.0

3.4

3.7

5.2

8.4

US HPI

36.9

30.2

4.1

-

(17.4)

 

Sensitivity to UK economic forecasts

 

 

 

 

 

 

 

 

 

Stage 1

Stage 2

Stage 3

Total

Gross exposure (£m)

∆ UK Upward scenario

∆ UK Downward scenario

∆ UK Upward scenario

∆ UK Downward scenario

∆ UK Upward scenario

∆ UK Downward scenario

∆ UK Upward scenario

∆ UK Downward scenario

Home loans

506

(889)

(506)

889

-

-

-

-

Credit cards, unsecured loans and other retail lending

294

(252)

(294)

252

-

-

-

-

Corporate loans

79

(13)

(79)

13

-

-

-

-

 

 

 

 

 

 

 

 

 

ECL (£m)

 

 

 

 

 

 

 

 

Home loans

-

-

(3)

6

(1)

2

(4)

8

Credit cards, unsecured loans and other retail lending

(4)

4

(102)

104

(15)

15

(121)

123

Corporate loans

1

7

(4)

13

(46)

28

(49)

48

 

Home loans: Total ECL increases by £8m in the Downward scenario, driven by the increase in the probability weight attributed to the Downside 2 scenario. This represents a greater likelihood of the UK economy entering into a severe downturn than under the current consensus.

 

Credit cards, unsecured loans and other retail lending: Total ECL decreases by £121m in the Upward scenario driven by £294m of balance migration as assets transition from Stage 2 to Stage 1 and lower coverage on Stage 2 assets driven by the more favourable consensus forecast. Total ECL increases by £123m in the Downward scenario, mainly driven by the UK cards portfolio.

 

Corporate loans: Total ECL decreases by £49m in the Upward scenario predominately driven by more favourable recovery outcomes for large single names in Stage 3. The Downward scenario results in total ECL impact of £48m, driven by higher coverage in Stage 2 and less favourable recovery outcomes for large single names in Stage 3.

 

ECL sensitivity analysis to US economic forecasts for key principal portfolios

 

The table below shows the estimated ECL impact on key principal portfolios for both a positive growth (Upward scenario) and a downturn (Downward scenario) of US consensus macroeconomic variables. The inputs for the Downward scenario have been modelled by replacing the Baseline macroeconomic variables by the Downside 1 variables (with no changes to UK and other non-US macroeconomic variables, as highlighted below). Similarly, the Upward scenario uses Upside 1 US macroeconomic variables for the Baseline scenario. The Downside 2, Downside 1, Upside 1 and Upside 2 macroeconomic variables are held constant but the probability weights have been re-calibrated.

 

Scenario probability weighting

 

 

 

 

 

 

Upside 2

Upside 1

Baseline

Downside 1

Downside 2

 

 %

 %

 %

 %

 %

US Upward scenario

18

33

36

11

2

US Downward scenario

5

14

40

34

7

 

Macroeconomic variables for US Downward scenario

 

 

 

 

 

 

Upside 2

Upside 1

Baseline

Downside 1

Downside 2

As at 31 December 2018

 %

 %

 %

 %

 %

US Upward scenario

 

 

 

 

 

UK GDP

4.5

3.1

1.7

0.3

(4.1)

UK unemployment

3.4

3.9

4.3

5.7

8.8

UK HPI

46.4

32.6

3.2

(0.5)

(32.1)

US GDP

4.8

3.7

3.7

0.4

(3.3)

US unemployment

3.0

3.4

3.4

5.2

8.4

US HPI

36.9

30.2

30.2

-

(17.4)

US Downward scenario

 

 

 

 

 

UK GDP

4.5

3.1

1.7

0.3

(4.1)

UK unemployment

3.4

3.9

4.3

5.7

8.8

UK HPI

46.4

32.6

3.2

(0.5)

(32.1)

US GDP

4.8

3.7

0.4

0.4

(3.3)

US unemployment

3.0

3.4

5.2

5.2

8.4

US HPI

36.9

30.2

-

-

(17.4)

 

Sensitivity to US economic forecasts

 

 

 

 

 

 

 

 

 

Stage 1

Stage 2

Stage 3

Total

Gross exposure (£m)

∆ US Upward scenario

∆ US Downward scenario

∆ US Upward scenario

∆ US Downward scenario

∆ US Upward scenario

∆ US Downward scenario

∆ US Upward scenario

∆ US Downward scenario

Credit cards, unsecured loans and other retail lending

214

(312)

(214)

312

-

-

-

-

Corporate loans

83

(46)

(83)

46

-

-

-

-

 

 

 

 

 

 

 

 

 

ECL (£m)

 

 

 

 

 

 

 

 

Credit cards, unsecured loans and other retail lending

(4)

6

(76)

144

(6)

7

(86)

157

Corporate loans

(3)

10

(15)

34

(35)

54

(53)

98

 

Credit cards, unsecured loans and other retail lending: Total ECL decreases by £86m in Upward scenario driven by £214m of balance migration as assets transition from Stage 2 to Stage 1 and lower coverage on Stage 2 assets driven by the more favourable consensus forecast. Total ECL impact of £157m in Downward scenario, greater than the Upward scenario, driven by non-linearity effects and the relative severity of the Downward scenario.

 

Corporate loans: Total ECL increases by £98m in the Downward scenario driven by a less favourable recovery outcome for one large single name in Stage 3, where Barclays estimated additional losses of £39m in addition to the loss estimated under the Baseline scenario, and higher coverage in Stage 2 assets driven by the less favourable consensus forecast. There is a greater impact on coverage ratios (Stage 2 in particular) than the UK scenarios driven largely by the underlying portfolio quality, with the US portfolio possessing a higher proportion of unsecured leveraged lending.

 

Analysis of specific portfolios and asset types

 

Secured home loans

 

The UK home loan portfolio comprises first lien home loans and accounts for 91% (December 2017: 90%) of Barclays Group's total home loans balances.

 

Home loans principal portfolios

 

 

Barclays UK

 

 

As at

31.12.18

As at

31.12.17

Gross loans and advances (£m)

 

 

136,517

132,132

30-day arrears rate, excluding recovery book (%)

 

 

0.4

0.4

90-day arrears rate, excluding recovery book (%)

 

 

0.1

0.1

Annualised gross charge-off rates - 180 days past due (%)

 

 

0.3

0.2

Recovery book proportion of outstanding balances (%)

 

 

0.2

0.3

Recovery book impairment coverage ratio (%)

 

 

7.1

11.2

 

 

 

 

 

Average marked to market LTV

 

 

 

 

Balance weighted (%)

 

 

48.9

47.6

Valuation weighted (%)

 

 

35.8

35.2

 

 

 

 

 

For >100% LTVs

 

 

 

 

Balances (£m)

 

 

147

215

Marked to market collateral (£m)

 

 

130

188

Balances in recovery book (%)

 

 

5.5

5.9

 

 

 

 

 

New lending

 

 

Year ended 31.12.18

Year ended 31.12.17

New home loan bookings (£m)

 

 

23,008

22,665

New home loans proportion > 90% LTV (%)

 

 

1.8

2.1

Average LTV on new home loans: balance weighted (%)

 

 

65.4

63.8

Average LTV on new home loans: valuation weighted (%)

 

 

57.4

56.0

 

Home loans principal portfolios - distribution of balances by LTV1

As at 31.12.18

 

Distribution of balances

Distribution of impairment allowance

Coverage ratio

Barclays UK

%

%

%

<=75%

90.6

50.9

-

>75% and <=90%

8.6

22.1

0.1

>90% and <=100%

0.7

7.7

0.5

>100%

0.1

19.3

10.8

 

1

Portfolio marked to market based on the most updated valuation including recovery book balances. Updated valuations reflect the application of the latest HPI available as at 31 December 2018.

 

Despite the proposed UK withdrawal from the European Union creating large levels of uncertainty in the housing market and competitor pricing putting pressure on new flow, portfolio stock has increased year on year. However, delinquencies remain very low and stable and recovery stock has reduced. Recovery book coverage rate reduced to 7.1% (2017:11.2%) reflecting the new impairment methodology following the transition to IFRS 9.

 

The reduction in home loans that have LTV >100% to £147m (2017: £215m) was driven by increases in HPI through the second half of the year.

 

Owner-occupied interest-only home loans comprised 26% (December 2017: 28%) of total balances. The average balance weighted LTV on these loans decreased to 38.8% (December 2017: 39.7%). The 90 day arrears rate excluding recovery book remained steady at 0.3% (December 2017: 0.3%).

 

Buy to Let (BTL) home loans comprised 12% (2017: 11%) of total balances. The average balance weighted LTV increased to 55.4% (2017: 53.7%) driven by the volume of new business written. Whilst the average balance weighted LTV of new business remained stable during 2018, it is higher than for the existing book and increased the total book average figure as a result. This increase was partially offset by increases in house prices applied during the second half of the year with positive movements in HPI reported. The BTL 90-day arrears rate excluding recovery book remained steady at 0.1% (2017: 0.1%).

 

Italian home loans and advances at amortised cost reduced to £7.9bn (1 January 2018: £8.8bn) and continues to run-off since new bookings ceased in 2016. The portfolio is secured on residential property with an average balance weighted marked to market LTV of 61.8% (2017: 61.0%). 90 day arrears and gross charge-off rates remained stable at 1.4% (2017: 1.4%) and 0.8% (2017: 0.8%) respectively.

 

Credit cards, unsecured loans and other retail lending

 

The principal portfolios listed below accounted for 87% (2017: 87%) of Barclays Group's total credit cards, unsecured loans and other retail lending.

 

Principal portfolios

Gross exposure

30 day arrears rate, excluding recovery book

90 day arrears rate, excluding recovery book

Annualised gross charge-off rate

As at 31.12.18

£m

%

%

%

Barclays UK

 

 

 

 

UK cards

17,285

1.8

0.9

4.7

UK personal loans

6,335

2.3

1.1

3.7

Barclays International

 

 

 

 

US cards

22,178

2.7

1.4

5.7

Barclays partner finance

4,216

1.1

0.4

2.3

Germany consumer lending

3,545

1.9

0.8

2.9

 

 

 

 

 

As at 31.12.17

 

 

 

 

Barclays UK

 

 

 

 

UK cards

17,686

1.8

0.8

5.0

UK personal loans

6,255

2.5

1.2

3.3

Barclays International

 

 

 

 

US cards

21,350

2.6

1.3

5.0

Barclays partner finance

3,814

1.3

0.5

2.6

Germany consumer lending

3,384

2.3

1.0

3.2

 

UK cards: 30 and 90 day arrears rates remained stable. The annualised gross charge-off rate reduced to 4.7% (2017: 5.0%) as a result of charge-offs returning to stabilised levels in 2018 following one-off accelerated charge-offs in 2017.

 

UK personal loans: 30 and 90 day arrears rates reduced slightly, whilst the annualised charge-off rate increased. These movements were as a result of accounts remaining in collections longer than expected during 2017 being moved to charge-off following resolution of collections performance issues.

 

US cards: The annualised gross charge-off rate increased to 5.7% (2017: 5.0%) broadly in line with trends across the industry and change in portfolio mix reflecting a one-off asset sale benefiting 2017.

 

Barclays partner finance: 30 and 90 day arrears rates reduced driven by improved quality of new business and better arrears management.

 

Germany consumer lending: Arrears and charge-off rates reduced due to improved performance in collections along with booking lower risk business.

 

Market Risk

 

Analysis of management value at risk (VaR)

 

The table below shows the total management VaR on a diversified basis by risk factor. Total management VaR includes all trading positions in CIB and Head Office.

 

Limits are applied against each risk factor VaR as well as total management VaR, which are then cascaded further by risk managers to each business.

 

Management VaR (95%) by asset class1

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended 31.12.18

 

Year ended 31.12.17

 

Average

High2

Low2

 

Average

High2

Low2

 

£m

£m

£m

 

£m

£m

£m

Credit risk

11

16

8

 

12

18

8

Interest rate risk

8

19

3

 

8

15

4

Equity risk

7

14

4

 

8

14

4

Basis risk

6

8

4

 

5

6

3

Spread risk

6

9

3

 

5

8

3

Foreign exchange risk

3

7

2

 

3

7

2

Commodity risk

1

2

-

 

2

3

1

Inflation risk

3

4

2

 

2

4

1

Diversification effect2

(24)

n/a

n/a

 

(26)

n/a

n/a

Total management VaR

21

27

15

 

19

26

14

 

1

Excludes BAGL from 23 July 2018.

2

Diversification effects recognise that forecast losses from different assets or businesses are unlikely to occur concurrently, hence the expected aggregate loss is lower than the sum of the expected losses from each area. Historic correlations between losses are taken into account in making these assessments. The high and low VaR figures reported for each category did not necessarily occur on the same day as the high and low VaR reported as a whole. Consequently, a diversification effect balance for the high and low VaR figures would not be meaningful and is therefore omitted from the above table.

 

Management VaR remained relatively stable year on year. The marginal increase in average management VaR in 2018 was due to a higher volatility environment compared to 2017.

Treasury and Capital Risk

 

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

 

Liquidity risk stress testing

 

As at 31 December 2018, the Barclays Group held eligible liquid assets in excess of 100% of net stress outflows to its internal and external regulatory requirements. The short term stress scenarios comprise a 30-day Barclays specific stress event, a 90-day market-wide stress event and a 30-day combined scenario consisting of both a Barclays specific and market-wide stress.

 

Liquidity Coverage Ratio

As at 31.12.18

As at 31.12.17

 

£bn

£bn

Eligible liquidity buffer

219

215

Net stress outflows

(129)

(140)

Surplus

90

75

Liquidity coverage ratio

169%

154%

 

The Barclays Group plans to maintain its surplus to the internal and regulatory stress requirements at an efficient level, while considering risks to market funding conditions and its liquidity position. The continuous reassessment of these risks may lead to execution of appropriate actions to resize the liquidity pool.

 

Composition of the Group liquidity pool

 

 

As at 31.12.18

As at 31.12.17

 

 

Liquidity pool

Liquidity pool of which interim 

CRD IV LCR-eligible3

Liquidity pool

 

 

Cash

Level 1

Level 2A

 

 

£bn

£bn

£bn

£bn

£bn

Cash and deposits with central banks1

 

181

176

-

-

173

 

 

 

 

 

 

 

Government bonds2

 

 

 

 

 

 

AAA to AA-

 

27

-

23

-

31

BBB+ to BBB-

 

4

-

4

-

2

Other LCR ineligible government bonds

 

1

-

-

-

1

Total government bonds

 

32

-

27

-

34

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

Government guaranteed issuers, PSEs and GSEs

 

6

-

5

1

6

International organisations and MDBs

 

5

-

5

-

4

Covered bonds

 

3

-

3

-

2

Other

 

-

-

-

-

1

Total other

 

14

-

13

1

13

 

 

 

 

 

 

 

Total as at 31 December 2018

 

227

176

40

1

 

Total as at 31 December 2017

 

220

169

43

2

 

 

1

Of which over 99% (December 2017: over 99%) was placed with the Bank of England, US Federal Reserve, European Central Bank, Bank of Japan and Swiss National Bank.

2

Of which over 71% (December 2017: over 84%) comprised of UK, US, French, German, Swiss and Dutch securities.

3

The LCR eligible liquidity pool is adjusted for trapped liquidity and other regulatory deductions. It also incorporates other CRD IV qualifying assets that are not eligible under Barclays' internal risk appetite.

 

The Barclays Group liquidity pool was £227bn as at 31 December 2018 (December 2017: £220bn). During 2018, the month-end liquidity pool ranged from £207bn to £243bn (December 2017: £165bn to £232bn), and the month-end average balance was £225bn (December 2017: £202bn). The liquidity pool is held unencumbered and is not used to support payment or clearing requirements. Such requirements are treated as part of our regular business funding. The liquidity pool is intended to offset stress outflows, and comprises the above cash and unencumbered assets.

 

As at 31 December 2018, 90% (December 2017: 93%) of the liquidity pool was located in Barclays Bank PLC and Barclays Bank UK PLC. The residual portion of the liquidity pool is held outside of these entities, predominantly in US subsidiaries, to meet entity-specific stress outflows and local regulatory requirements. To the extent the use of this portion of the liquidity pool is restricted due to regulatory requirements, it is assumed to be unavailable to the rest of the Barclays Group in calculating the LCR.

 

Deposit funding

As at 31.12.18

 

As at 31.12.17

 

Loans and advances at amortised cost

Deposits at amortised cost

Loan: deposit ratio1

 

Loan: deposit ratio1

Funding of loans and advances

£bn

£bn

%

 

%

Barclays UK

189

197

96%

 

95%

Barclays International

127

197

65%

 

68%

Head Office

11

-

 

 

 

Barclays Group

326

395

83%

 

81%

 

1

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

 

Composition of wholesale funding

 

Wholesale funding outstanding (excluding repurchase agreements) was £154bn (December 2017: £144bn). In 2018, Barclays Group issued £12.2bn of MREL eligible instruments from Barclays PLC (the Parent company) in a range of different tenors and currencies.

 

Barclays Bank PLC continued to issue in the shorter-term markets and Barclays Bank UK PLC issued in the shorter-term and secured markets, helping to maintain their stable and diversified funding bases.

 

Barclays Group has continued to reduce its reliance on short-term wholesale funding, where the proportion maturing in less than 1 year fell to 30% (December 2017: 31%). Wholesale funding of £46.7bn (December 2017: £44.9bn) matures in less than one year, of which £19.1bn (December 2017: £13.8bn)2 relates to term funding. Although not a requirement, the liquidity pool exceeded wholesale funding maturing in less than one year by £180bn (December 2017: £175bn).

 

Maturity profile of wholesale funding1,2

 

 

 

 

 

 

 

 

<1

1-3

3-6

6-12

<1

1-2

2-3

3-4

4-5

>5

 

 

month

months

months

months

year

years

years

years

years

years

Total

 

£bn

£bn

£bn

£bn

£bn

£bn

£bn

£bn

£bn

£bn

£bn

Barclays PLC (the Parent company)

 

 

 

 

 

 

 

 

 

 

 

Senior unsecured (public benchmark)

-

-

-

1.6

1.6

1.1

4.4

1.3

6.7

16.3

31.4

Senior unsecured (privately placed)

-

-

-

-

-

-

0.2

-

0.2

0.5

0.9

Subordinated liabilities

-

-

-

-

-

-

-

-

-

6.8

6.8

Barclays Bank PLC (including

 

 

 

 

 

 

 

 

 

 

 

subsidiaries)

 

 

 

 

 

 

 

 

 

 

 

Certificates of deposit and commercial paper

0.1

7.8

3.5

8.0

1