REG - Barclays PLC - Annual Final Results
15/02/2023 07:16
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RNS Number : 9336P Barclays PLC 15 February 2023
Barclays PLC
2022 Results Announcement
31 December 2022
Results Announcement Page
Notes 1
Performance Highlights 2
Group Finance Director's Review 6
Results by Business
Barclays UK 8
Barclays International 11
Head Office 16
Quarterly Results Summary 17
Quarterly Results by Business 18
Performance Management
Margins and Balances 24
Remuneration 26
Risk Management
Risk Management and Principal Risks 28
Credit Risk 29
Market Risk 49
Treasury and Capital Risk 50
Statement of Directors' Responsibilities 63
Condensed Consolidated Financial Statements 64
Financial Statement Notes 69
Appendix: Non-IFRS Performance Measures 77
Shareholder Information 84
BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE:
+44 (0) 20 7116 1000. COMPANY NO. 48839.
Notes
The terms Barclays and Group refer to Barclays PLC together with its
subsidiaries. Unless otherwise stated, the income statement analysis compares
the year ended 31 December 2022 to the corresponding 12 months of 2021 and the
three months ended 31 December 2022 to the corresponding three months in 2021
and balance sheet analysis as at 31 December 2022 with comparatives relating
to 31 December 2021. The historical financial information used for the
purposes of such analysis has been restated. Please refer to Supplementary
Information contained herein for further information. The abbreviations '£m'
and '£bn' represent millions and thousands of millions of Pounds Sterling
respectively; the abbreviations '$m' and '$bn' represent millions and
thousands of millions of US Dollars respectively; and the abbreviations '€m'
and '€bn' represent millions and thousands of millions of Euros
respectively.
There are a number of key judgement areas, for example impairment
calculations, which are based on models and which are subject to ongoing
adjustment and modifications. Reported numbers reflect best estimates and
judgements at the given point in time.
Relevant terms that are used in this document but are not defined under
applicable regulatory guidance or International Financial Reporting Standards
(IFRS) are explained in the results glossary, which can be accessed at
home.barclays/investor-relations (http://home.barclays/investor-relations) .
The information in this announcement, which was approved by the Board of
Directors on 14 February 2023, does not comprise statutory accounts within the
meaning of Section 434 of the Companies Act 2006. Statutory accounts for the
year ended 31 December 2022, which contained an unmodified audit report under
Section 495 of the Companies Act 2006 (which did not make any statements under
Section 498 of the Companies Act 2006) have been delivered to the Registrar of
Companies in accordance with Section 441 of the Companies Act 2006.
These results will be furnished on Form 6-K with the US Securities and
Exchange Commission (SEC) as soon as practicable following their publication.
Once furnished with the SEC, a copy of the Form 6-K will be available from the
SEC's website at www.sec.gov (http://www.sec.gov) .
Barclays is a frequent issuer in the debt capital markets and regularly meets
with investors via formal road-shows and other ad hoc meetings. Consistent
with its usual practice, Barclays expects that from time to time over the
coming quarter it will meet with investors globally to discuss these results
and other matters relating to the Group.
Non-IFRS performance measures
Barclays' management believes that the non-IFRS performance measures included
in this document provide valuable information to the readers of the financial
statements as they enable the reader to identify a more consistent basis for
comparing the businesses' performance between financial periods and provide
more detail concerning the elements of performance which the managers of these
businesses are most directly able to influence or are relevant for an
assessment of the Group. They also reflect an important aspect of the way in
which operating targets are defined and performance is monitored by Barclays'
management. However, any non-IFRS performance measures in this document are
not a substitute for IFRS measures and readers should consider the IFRS
measures as well. Refer to the appendix on pages 77 to 83 for further
information and calculations of non-IFRS performance measures included
throughout this document, and the most directly comparable IFRS measures.
Forward-looking statements
This document contains certain forward-looking statements within the meaning
of Section 21E of the US Securities Exchange Act of 1934, as amended, and
Section 27A of the US Securities Act of 1933, as amended, with respect to the
Group. Barclays cautions readers that no forward-looking statement is a
guarantee of future performance and that actual results or other financial
condition or performance measures could differ materially from those contained
in the forward-looking statements. 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. Forward-looking statements can be made in writing but also
may be made verbally by directors, officers and employees of the Group
(including during management presentations) in connection with this document.
Examples of forward-looking statements include, among others, statements or
guidance regarding or relating to the Group's future financial position,
income levels, costs, assets and liabilities, impairment charges, provisions,
capital, leverage and other regulatory ratios, capital distributions
(including dividend policy and share buybacks), return on tangible equity,
projected levels of growth in banking and financial markets, industry trends,
any commitments and targets (including environmental, social and governance
(ESG) commitments and targets), business strategy, plans and objectives for
future operations and other statements that are not historical or current
facts. By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances.
Forward-looking statements speak only as at the date on which they are made.
Forward-looking statements may be affected by a number of factors, including,
without limitation: changes in legislation, regulation and the interpretation
thereof, changes in IFRS and other accounting standards, including practices
with regard to the interpretation and application thereof and emerging and
developing ESG reporting standards; the outcome of current and future legal
proceedings and regulatory investigations; the policies and actions of
governmental and regulatory authorities; the Group's ability along with
governments and other stakeholders to measure, manage and mitigate the impacts
of climate change effectively; environmental, social and geopolitical risks
and incidents and similar events beyond the Group's control; the impact of
competition; capital, leverage and other regulatory rules applicable to past,
current and future periods; UK, US, Eurozone and global macroeconomic and
business conditions, including inflation; volatility in credit and capital
markets; market related risks such as changes in interest rates and foreign
exchange rates; higher or lower asset valuations; changes in credit ratings of
any entity within the Group or any securities issued by it; changes in
counterparty risk; changes in consumer behaviour; the direct and indirect
consequences of the Russia-Ukraine war on European and global macroeconomic
conditions, political stability and financial markets; direct and indirect
impacts of the coronavirus (COVID-19) pandemic; instability as a result of the
UK's exit from the European Union (EU), the effects of the EU-UK Trade and
Cooperation Agreement and any disruption that may subsequently result in the
UK and globally; the risk of cyber-attacks, information or security breaches
or technology failures on the Group's reputation, business or operations; the
Group's ability to access funding; and the success of acquisitions, disposals
and other strategic transactions. A number of these factors are beyond the
Group's control. As a result, the Group's actual financial position, results,
financial and non-financial metrics or performance measures or its ability to
meet commitments and targets may differ materially from the statements or
guidance set forth in the Group's forward-looking statements. Additional risks
and factors which may impact the Group's future financial condition and
performance are identified in Barclays PLC's filings with the SEC (including,
without limitation, Barclays PLC's Annual Report on Form 20-F for the
financial year ended 31 December 2022), which are available on the SEC's
website at www.sec.gov (http://www.sec.gov) .
Subject to Barclays PLC's obligations under the applicable laws and
regulations of any relevant jurisdiction (including, without limitation, the
UK and the US) 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
In 2022 Barclays delivered a profit before tax of £7.0bn and return on
tangible equity (RoTE) of 10.4%, with total capital distributions equivalent
to c.13.4p per share
C. S. Venkatakrishnan, Group Chief Executive, commented
"Barclays performed strongly in 2022. Each business delivered income growth,
with Group income up 14%. We achieved our RoTE target of over 10%, maintained
a strong Common Equity Tier 1 (CET1) capital ratio of 13.9%, and returned
capital to shareholders. We are cautious about global economic conditions, but
continue to see growth opportunities across our businesses through 2023."
Key financial metrics:
Income Cost: income ratio Profit before tax Attributable profit RoTE EPS TNAV per share CET1 ratio Total capital return(1)
FY22 £25.0bn 67% £7.0bn £5.0bn 10.4% 30.8p 295p 13.9% c.13.4p equivalent
Q422 £5.8bn 69% £1.3bn £1.0bn 8.9% 6.5p
Demonstrating execution against our three strategic priorities:
· Deliver next generation digitised consumer financial services: simplifying and
upgrading online banking services - with over 10.5 million Barclays UK mobile
banking app users, and log-ins up 8% year-on-year. c.220k 'Rainy Day Saver'
accounts opened online since launch on 29 September 2022, 41% are new or
re-joining Blue Rewards customers. In the US Consumer Bank, the Gap
portfolio(2) integration onto our platform doubled our US customer base to
over 20 million
· Deliver sustainable growth in the Corporate and Investment Bank (CIB): 114bps
of revenue share gain in Global Markets from 2019-2022(3); second fastest
growth rate across the top 10 global peers. Investment in Financing businesses
delivered more stable, high returning income of £2.9bn in 2022 reflecting a
compound annual growth rate (CAGR) of 16% since 2019
· Capture opportunities as we transition to a low-carbon economy: new expanded
target to facilitate $1 trillion of Sustainable and Transition Financing by
the end of 2030. The Group's Sustainable Impact Capital investment mandate is
now £500m by the end of 2027
2022 Performance highlights(4):
· Group attributable profit of £5.0bn and RoTE of 10.4%, with all operating
divisions delivering double-digit returns
- Excluding the impact of Over-issuance of Securities in the US (Over-issuance
of Securities)(5), RoTE was 11.6%
· Group profit before impairment of £8.2bn, up 9% year-on-year
· Group income of £25.0bn, up 14% year-on-year with broad-based momentum across
our operating divisions and the benefit from FX:
- CIB income increased by 8%; the best full year for both Global Markets and
FICC(6), and strong performance in Transaction banking, more than offsetting
the impact of a reduced fee pool in Investment Banking(7)
- Consumer, Cards and Payments (CC&P) income increased by 35% supported by
higher balances in US cards and Private Bank with turnover growth in Payments
- Barclays UK income increased by 11% primarily driven by the rising rate
environment
· Group operating expenses were £16.7bn, reflecting £1.6bn of litigation and
conduct charges, primarily driven by the Over-issuance of Securities
- Group operating expenses excluding litigation and conduct were £15.1bn, up 6%
year-on-year, reflecting the impact of FX and inflation
· Credit impairment charges were £1.2bn, with a loan loss rate (LLR) of 30bps,
reflecting macroeconomic deterioration, partially offset by the utilisation of
post-model adjustments (PMAs) for macroeconomic uncertainty and the release of
COVID-19 related adjustments informed by refreshed scenarios. Coverage ratios
at the portfolio level remain strong
· CET1 ratio of 13.9% and tangible net asset value (TNAV) per share of 295p
· Capital distributions: total dividend for 2022 of 7.25p per share (2021:
6.0p), including a 5.0p per share 2022 full year dividend. Intend to initiate
a share buyback of up to £0.5bn, bringing the total share buybacks announced
in relation to 2022 to £1.0bn and total capital return equivalent to c.13.4p
per share
1 Includes total dividend for 2022 of 7.25p per share and total share buybacks
announced in relation to 2022 of £1.0bn.
2 The Gap portfolio refers to the Gap Inc. US credit card portfolio.
3 Barclays' calculations using Peer reported financials.
4 2021 financial and capital metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information.
5 Denotes the Over-issuance of Securities under Barclays Bank PLC's (BBPLC) US
shelf registration statements on Form F-3 filed with the SEC in 2018 and 2019.
See page 5 for reconciliation of Barclays' performance excluding the impact of
the Over-issuance of Securities.
6 Period covering 2014-2022. Pre 2014 data was not restated following
re-segmentation in 2016.
7 Data source: Dealogic for the period covering 1 January to 31 December 2022.
Q422 Performance highlights(1):
· Attributable profit was £1.0bn and RoTE was 8.9% with profit before
impairment of £1.8bn, up 29% year-on-year with positive cost: income jaws of
6%
· Group income was £5.8bn, up 12% year-on-year including the benefit from FX,
with strong performances in Barclays UK and CC&P. Within CIB, strong
performances in Global Markets and Transaction banking were more than offset
by reduced income in Investment Banking and Corporate Lending
· Group operating expenses were £4.0bn, up 6% year-on-year, reflecting the
impact of FX, inflation and investment in the business
· Credit impairment charges were £0.5bn with an LLR of 49bps. The deteriorating
macroeconomic forecast resulted in an increased charge, partially offset by
utilising economic uncertainty PMAs
Outlook:
· Returns: targeting RoTE of greater than 10% in 2023
· Income: diversified income streams continue to position the Group well for the
current economic and market environment including higher interest rates. In
2023, Barclays UK net interest margin (NIM) is expected to be greater than
3.20%(2)
· Costs: targeting a cost: income ratio percentage in the low 60s in 2023,
investing for growth whilst progressing towards the Group's medium-term target
of below 60%
· Impairment: expect an LLR of 50-60bps in 2023, based on the current
macroeconomic outlook
· Capital: expect to operate within the CET1 ratio target range of 13-14%
· Capital returns: capital distribution policy incorporates a progressive
ordinary dividend, supplemented with buybacks as appropriate
1 2021 financial and capital metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information.
2 Assumes the UK bank rate peaks at 4.25% in 2023.
Barclays Group results Year ended Three months ended
31.12.22 Restated(1) 31.12.22 Restated(1)
31.12.21 31.12.21
£m £m % Change £m £m % Change
Barclays UK 7,259 6,536 11 1,970 1,699 16
Corporate and Investment Bank 13,368 12,334 8 2,576 2,632 (2)
Consumer, Cards and Payments 4,499 3,331 35 1,286 878 46
Barclays International 17,867 15,665 14 3,862 3,510 10
Head Office (170) (261) 35 (31) (49) 37
Total income 24,956 21,940 14 5,801 5,160 12
Operating costs (14,957) (14,092) (6) (3,748) (3,514) (7)
UK bank levy (176) (170) (4) (176) (170) (4)
Litigation and conduct (1,597) (397) (79) (92) 14
Total operating expenses (16,730) (14,659) (14) (4,003) (3,776) (6)
Other net income 6 260 (98) 10 13 (23)
Profit before impairment 8,232 7,541 9 1,808 1,397 29
Credit impairment (charges)/releases (1,220) 653 (498) 31
Profit before tax 7,012 8,194 (14) 1,310 1,428 (8)
Tax (charge)/credit (1,039) (1,138) 9 33 (104)
Profit after tax 5,973 7,056 (15) 1,343 1,324 1
Non-controlling interests (45) (47) 4 (22) (27) 19
Other equity instrument holders (905) (804) (13) (285) (218) (31)
Attributable profit 5,023 6,205 (19) 1,036 1,079 (4)
Performance measures
Return on average tangible shareholders' equity 10.4% 13.1% 8.9% 9.0%
Average tangible shareholders' equity (£bn) 48.3 47.3 46.7 48.0
Cost: income ratio 67% 67% 69% 73%
Loan loss rate (bps) 30 (18) 49 (3)
Basic earnings per share 30.8p 36.5p 6.5p 6.4p
Dividend per share 7.25p 6.0p
Share buyback announced (£m) 1,000 1,500
Total payout equivalent per share c.13.4p 15.0p
Basic weighted average number of shares (m) 16,333 16,985 (4) 15,828 16,985 (7)
Period end number of shares (m) 15,871 16,752 (5) 15,871 16,752 (5)
As at 31.12.22 As at 30.09.22 Restated
As at 31.12.21(1)
Balance sheet and capital management(2) £bn £bn £bn
Loans and advances at amortised cost 398.8 413.7 361.5
Loans and advances at amortised cost impairment coverage ratio 1.4% 1.4% 1.6%
Total assets 1,513.7 1,726.9 1,384.3
Deposits at amortised cost 545.8 574.4 519.4
Tangible net asset value per share 295p 286p 291p
Common equity tier 1 ratio 13.9% 13.8% 15.1%
Common equity tier 1 capital 46.9 48.6 47.3
Risk weighted assets 336.5 350.8 314.1
UK leverage ratio 5.3% 5.0% 5.2%
UK leverage exposure 1,130.0 1,232.1 1,137.9
Average UK leverage ratio 4.8% 4.8% 4.9%
Average UK leverage exposure 1,281.0 1,259.6 1,229.0
Funding and liquidity
Group liquidity pool (£bn) 318 326 291
Liquidity coverage ratio 165% 151% 168%
Net stable funding ratio(3) 137%
Loan: deposit ratio 73% 72% 70%
1 2021 financial and capital metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information.
2 Refer to pages 54 to 62 for further information on how capital, Risk Weighted
Assets (RWAs) and leverage are calculated.
3 Represents average of the last four spot quarter end positions.
Reconciliation of financial results excluding the impact of the Over-issuance
of Securities
Year ended 31.12.22 Restated(1)
Year ended 31.12.21
Statutory Impact of the Over-issuance of Securities Excluding impact of the Over-issuance of Securities Statutory Impact of the Over-issuance of Securities Excluding impact of the Over-issuance of Securities
£m £m £m £m £m £m % Change
Barclays UK 7,259 - 7,259 6,536 - 6,536 11
Corporate and Investment Bank 13,368 292 13,076 12,334 - 12,334 6
Consumer, Cards and Payments 4,499 - 4,499 3,331 - 3,331 35
Barclays International 17,867 292 17,575 15,665 - 15,665 12
Head Office (170) - (170) (261) - (261) 35
Total income 24,956 292 24,664 21,940 - 21,940 12
Operating costs (14,957) - (14,957) (14,092) - (14,092) (6)
UK bank levy (176) - (176) (170) - (170) (4)
Litigation and conduct (1,597) (966) (631) (397) (220) (177)
Total operating expenses (16,730) (966) (15,764) (14,659) (220) (14,439) (9)
Other net income 6 - 6 260 - 260 (98)
Profit before impairment 8,232 (674) 8,906 7,541 (220) 7,761 15
Credit impairment (charges)/releases (1,220) - (1,220) 653 - 653
Profit before tax 7,012 (674) 7,686 8,194 (220) 8,414 (9)
Attributable profit 5,023 (552) 5,575 6,205 (170) 6,375 (13)
£bn £bn £bn £bn
Average tangible shareholders' equity 48.3 48.3 47.3 47.3
Return on average tangible shareholders' equity 10.4% 11.6% 13.1% 13.5%
Three months ended 31.12.22 Restated(1)
Three months ended 31.12.21
Statutory Impact of the Over-issuance of Securities Excluding impact of the Over-issuance of Securities Statutory Impact of the Over-issuance of Securities Excluding impact of the Over-issuance of Securities
£m £m £m £m £m £m % Change
Barclays UK 1,970 - 1,970 1,699 - 1,699 16
Corporate and Investment Bank 2,576 - 2,576 2,632 - 2,632 (2)
Consumer, Cards and Payments 1,286 - 1,286 878 - 878 46
Barclays International 3,862 - 3,862 3,510 - 3,510 10
Head Office (31) - (31) (49) - (49) 37
Total income 5,801 - 5,801 5,160 - 5,160 12
Operating costs (3,748) - (3,748) (3,514) - (3,514) (7)
UK bank levy (176) - (176) (170) - (170) (4)
Litigation and conduct (79) - (79) (92) (46) (46) (72)
Total operating expenses (4,003) - (4,003) (3,776) (46) (3,730) (7)
Other net income 10 - 10 13 - 13 (23)
Profit before impairment 1,808 - 1,808 1,397 (46) 1,443 25
Credit impairment (charges)/releases (498) - (498) 31 - 31
Profit before tax 1,310 - 1,310 1,428 (46) 1,474 (11)
Attributable profit 1,036 - 1,036 1,079 (38) 1,117 (7)
£bn £bn £bn £bn
Average tangible shareholders' equity 46.7 46.7 48.0 48.0
Return on average tangible shareholders' equity 8.9% 8.9% 9.0% 9.3%
1 2021 financial and capital metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information.
Group Finance Director's Review
2022 Group performance(1)
· Barclays delivered a profit before tax of £7,012m (2021: £8,194m), RoTE of
10.4% (2021: 13.1%) and earnings per share (EPS) of 30.8p (2021: 36.5p)
· The Group has a diverse income profile across businesses and geographies
including a significant presence in the US. The 10% appreciation of average
USD against GBP positively impacted income and profits and adversely impacted
credit impairment charges and total operating expenses
· Group income increased to £24,956m (2021: £21,940m)
- Excluding the income benefit of £292m relating to hedging arrangements to
manage the risks of the rescission offer in relation to the Over-issuance of
Securities, total Group income was £24,664m, up 12% year-on-year
· Group operating expenses increased to £16,730m (2021: £14,659m) mainly due
to higher litigation and conduct charges:
- Group operating expenses excluding litigation and conduct charges increased 6%
to £15,133m, reflecting the impact of inflation and the appreciation of
average USD against GBP
- Litigation and conduct charges were £1,597m (2021: £397m) including £966m
from the Over-issuance of Securities
· Credit impairment charges were £1,220m (2021: £653m net release). The
increase in charges reflect macroeconomic deterioration and a gradual increase
in delinquencies, partially offset by the utilisation of macroeconomic
uncertainty PMAs and the release of COVID-19 related adjustments informed by
refreshed scenarios. Total coverage ratio decreased to 1.4% (December 2021:
1.6%) driven by changes in portfolio mix and write-offs. Coverage levels
remain strong
· The effective tax rate (ETR) was 14.8% (2021: 13.9%). The tax charge included
a £346m re-measurement of the Group's UK deferred tax assets (DTAs) due to
the enactment of legislation to reduce the UK banking surcharge rate.
Excluding this DTAs downward re-measurement, the ETR was 9.9%, reflecting tax
benefits in the current year, primarily arising from tax relief related to
government bonds linked to the high prevailing rate of inflation in 2022, as
well as beneficial adjustments in respect of prior years
· Attributable profit was £5,023m (2021: £6,205m)
· Total assets increased to £1,513.7bn (December 2021: £1,384.3bn) reflecting
higher levels of activity as we supported our clients through a period of
market volatility, growth in customer lending, and appreciation of USD against
GBP
· TNAV per share increased to 295p (December 2021: 291p) with EPS of 30.8p and
currency movements partially offset by net negative reserve movements due to
higher interest rates, primarily in the cash flow hedging reserve
Capital distributions
· Barclays intends to pay a 2022 full year dividend of 5.0p per share, taking
the total dividend for 2022 to 7.25p per share (2021: 6.0p). Barclays also
intends to initiate a share buyback of up to £0.5bn, bringing the total share
buybacks announced in relation to 2022 to £1.0bn and total capital return
equivalent to c.13.4p per share
· Barclays is committed to maintaining an appropriate balance between delivering
attractive total cash returns to shareholders, investment in the business and
maintaining a strong capital position. Barclays pays a progressive ordinary
dividend, taking into account these objectives and the earnings outlook of the
Group. The Board will also continue to supplement the ordinary dividends as
appropriate, including with share buybacks
· Dividends will continue to be paid semi-annually
Group capital and leverage(1)
· The reported CET1 ratio decreased by c.120bps to 13.9% (December 2021: 15.1%)
as RWAs increased by £22.4bn to £336.5bn and CET1 capital decreased by
£0.4bn to £46.9bn
- c.150bps increase from 2022 attributable profit
- c.80bps returned to shareholders including the 2.25p half year dividend paid
in September 2022, £1.5bn of share buybacks announced with FY21 and H122
results and a FY22 dividend accrual
- c.80bps reduction due to the impact of regulatory change on 1 January 2022 as
CET1 capital decreased £1.7bn and RWAs increased £6.6bn
- c.70bps reduction from decreases in the fair value of the bond portfolio
through other comprehensive income and other capital deductions
- c.40bps reduction due to pension contributions, including the accelerated cash
settlement to the UK Retirement Fund (UKRF) of earlier deficit reduction
contributions and deficit reduction payments made in 2022
- A £14.1bn increase in RWAs as a result of foreign exchange movements was
broadly offset by a £2bn increase in the currency translation reserve
· The UK leverage ratio increased to 5.3% (December 2021: 5.2%) primarily due to
a decrease in the leverage exposure of £7.9bn to £1,130.0bn and an increase
in Tier 1 Capital of £0.6bn to £60.1bn
1 2021 financial and capital metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information.
Group funding and liquidity
· The liquidity pool was £318bn (December 2021: £291bn) and the liquidity
coverage ratio (LCR) remained significantly above the 100% regulatory
requirement at 165% (December 2021: 168%), equivalent to a surplus of £117bn
(December 2021: £116bn). The increase in the liquidity pool over the year was
driven by continued deposit growth and an increase in wholesale funding,
partly offset by an increase in business funding consumption. An increase in
net stress outflows and trapped liquidity within Barclays' subsidiaries led to
a modest reduction in the LCR ratio. The Net Stable Funding Ratio (NSFR)
(average of last four quarter ends) was 137%, which represents a £155bn
surplus above the 100% regulatory requirement
· Wholesale funding outstanding, excluding repurchase agreements, was £184.0bn
(December 2021: £167.5bn). The Group issued £15.3bn equivalent of minimum
requirement for own funds and eligible liabilities (MREL) instruments from
Barclays PLC (BPLC) (the Parent company) in 2022. The Group has a strong MREL
position with a ratio of 33.5% of RWAs, which is in excess of the 28.9%
regulatory requirement excluding a confidential, institution specific
Prudential Regulation Authority (PRA) buffer
Other matters
· Over-issuance of Securities: Barclays recognised a net attributable loss of
£0.6bn in 2022 (£nil in Q422, £0.7bn total loss including 2021). This
included a monetary penalty of $200m (£165m(1)) following the resolution of
the SEC's investigation of BPLC and BBPLC relating to the Over-issuance of
Securities
As previously disclosed, Barclays has a contingent liability in relation to
current and potential private civil claims and other potential enforcement
actions relating to the Over-issuance of Securities. For further details see
Restatement of financial statements (Note 1a) in the BPLC 2022 Annual Report
on page 428.
· SEC and Commodity and Futures Trading Commission (CFTC) devices investigation:
in Q322, the SEC and CFTC announced the final settlement terms relating to
their investigations of compliance with record-keeping obligations in
connection with business-related communications over unapproved electronic
messaging platforms. Under these settlements, BBPLC and Barclays Capital Inc.
paid a combined $125m (£103m(1)) civil monetary penalty to the SEC and a $75m
(£62m(1)) civil monetary penalty to the CFTC
· Legacy Loan Portfolio: a customer remediation provision of £282m was
recognised during 2022, relating to a legacy timeshare loan portfolio brokered
by Azure Services Limited and other legacy loan portfolios
· Financial Conduct Authority (FCA) proceedings: a provision of £50m was
recognised in Q322 in relation to the FCA investigation into
disclosure-related matters arising out of BPLC's June and November 2008
capital raisings
· Gap portfolio acquisition: in Q222, Barclays completed the acquisition of a US
credit card portfolio of $3.3bn (£2.7bn(2)) of receivables, in partnership
with Gap Inc.
· Kensington Mortgage Company (KMC) acquisition: in Q222, BPLC announced that
Barclays Bank UK PLC had agreed to acquire UK specialist mortgage lender KMC
and a portfolio of UK mortgages. Regulatory approval has been obtained and the
transaction is now expected to complete in Q123
· Absa Group Limited (Absa) sale: during 2022 Barclays fully disposed of its
shareholding in Absa, raising aggregate gross sale proceeds of ZAR 21.0bn
(c.£1.1bn(3))
· UK Corporation Tax: an increase in the UK Corporation Tax rate from 19% to 25%
was enacted in 2021 and a reduction in the UK banking surcharge from 8% to 3%
was enacted in 2022, both to be effective from 1 April 2023. The future
statutory tax rate applied to UK banking profits will therefore be 28% from 1
April 2023
Group targets
Barclays continues to target the following over the medium-term:
· Returns: RoTE of greater than 10%
· Cost efficiency: cost: income ratio below 60%
· Capital adequacy: CET1 ratio in the range of 13-14%
Anna Cross, Group Finance Director
1 Exchange rate GBP/USD 1.22 as at 30 June 2022.
2 Exchange rate GBP/USD 1.22 as at 17 June 2022.
3 On 21 April 2022, ZAR 10.3bn at exchange rate GBP/ZAR 20.04 and on 1 September
2022, ZAR 10.7bn at exchange rate GBP/ZAR 19.93.
Results by Business
Barclays UK Year ended Three months ended
31.12.22 31.12.21 31.12.22 31.12.21
Income statement information £m £m % Change £m £m % Change
Net interest income 5,893 5,202 13 1,600 1,313 22
Net fee, commission and other income 1,366 1,334 2 370 386 (4)
Total income 7,259 6,536 11 1,970 1,699 16
Operating costs (4,260) (4,357) 2 (1,108) (1,202) 8
UK bank levy (26) (36) 28 (26) (36) 28
Litigation and conduct (41) (37) (11) (13) (5)
Total operating expenses (4,327) (4,430) 2 (1,147) (1,243) 8
Other net income/(expenses) - - 1 (1)
Profit before impairment 2,932 2,106 39 824 455 81
Credit impairment (charges)/releases (286) 365 (157) 59
Profit before tax 2,646 2,471 7 667 514 30
Attributable profit 1,877 1,756 7 474 420 13
Performance measures
Return on average allocated tangible equity 18.7% 17.6% 18.7% 16.8%
Average allocated tangible equity (£bn) 10.0 10.0 10.2 10.0
Cost: income ratio 60% 68% 58% 73%
Loan loss rate (bps) 13 (16) 27 (10)
Net interest margin 2.86% 2.52% 3.10% 2.49%
Key facts
UK mortgage balances (£bn) 162.2 158.1
Mortgage gross lending flow (£bn) 30.3 33.9
Average loan to value of mortgage portfolio(1) 50% 51%
Average loan to value of new mortgage lending(1) 68% 70%
Number of branches 481 666
Mobile banking active customers 10.5m 9.7m
30 day arrears rate - Barclaycard Consumer UK 0.9% 1.0%
Balance sheet information £bn £bn
Loans and advances to customers at amortised cost 205.1 208.8
Total assets 313.2 321.2
Customer deposits at amortised cost 258.0 260.6
Loan: deposit ratio 87% 85%
Risk weighted assets 73.1 72.3
Period end allocated tangible equity 10.1 10.0
1 Average loan to value (LTV) of mortgages is balance weighted and reflects both
residential and buy-to-let (BTL) mortgage portfolios within the Home Loans
portfolio.
Analysis of Barclays UK Year ended Three months ended
31.12.22 31.12.21 31.12.22 31.12.21
Analysis of total income £m £m % Change £m £m % Change
Personal Banking 4,540 3,883 17 1,229 983 25
Barclaycard Consumer UK 1,093 1,250 (13) 269 352 (24)
Business Banking 1,626 1,403 16 472 364 30
Total income 7,259 6,536 11 1,970 1,699 16
Analysis of credit impairment (charges)/releases
Personal Banking (167) 28 (120) 8
Barclaycard Consumer UK 30 404 (93) (12) 114
Business Banking (149) (67) (25) (63) 60
Total credit impairment (charges)/releases (286) 365 (157) 59
Analysis of loans and advances to customers at amortised cost £bn £bn
Personal Banking 169.7 165.4
Barclaycard Consumer UK 9.2 8.7
Business Banking 26.2 34.7
Total loans and advances to customers at amortised cost 205.1 208.8
Analysis of customer deposits at amortised cost
Personal Banking 195.6 196.4
Barclaycard Consumer UK - -
Business Banking 62.4 64.2
Total customer deposits at amortised cost 258.0 260.6
Barclays UK delivered a RoTE of 18.7% (2021: 17.6%) as the transformation into
a next generation, digitised consumer bank drove strong returns and cost
efficiencies, which combined with rising interest rates contributed to a cost:
income ratio of 60% (2021: 68%). Barclays UK continues to support customers
through affordability pressures.
2022 compared to 2021
Income statement
· Profit before tax increased to £2,646m (2021: £2,471m), with benefits from
the rising rate environment in the UK more than offsetting the non-recurrence
of a prior year credit impairment release
· Total income increased 11% to £7,259m. Net interest income increased 13% to
£5,893m with a NIM of 2.86% (2021: 2.52%) primarily driven by the rising
interest rate environment in the UK. Net fee, commission and other income
increased 2% to £1,366m
- Personal Banking income increased 17% to £4,540m, driven by rising interest
rates, partially offset by mortgage margin compression
- Barclaycard Consumer UK income decreased 13% to £1,093m as higher customer
spend volumes were more than offset by lower interest earning lending (IEL)
balances following repayments and ongoing prudent risk management
- Business Banking income increased 16% to £1,626m driven by rising interest
rates alongside improved transaction based revenues, partially offset by lower
government scheme lending income as repayments continue
· Total operating expenses decreased 2% to £4,327m driven by efficiency savings
more than offsetting the impact of inflation
· Credit impairment charges were £286m (2021: £365m net release). The charges
reflect an updated macroeconomic scenario together with a partial return to
more normalised levels of customer behaviour. This is partially offset from
the release of COVID-19 related adjustments as performance stabilises at or
below pre-pandemic levels. As at 31 December 2022, UK cards 30 and 90 day
arrears remain at 0.9% (Q421: 1.0%) and 0.2% (Q421: 0.2%) respectively(1). The
UK cards business is supported by a total coverage ratio of 7.6% (December
2021: 12.8%). The UK cards coverage reflects revised recovery expectations
under the ongoing debt sale program and continued resilience in the underlying
book. PMAs are in place for the anticipated stress arising from the
cost-of-living crisis
Balance sheet
· Loans and advances to customers at amortised cost decreased 2% to £205.1bn as
£4.1bn of mortgage growth was more than offset by a £8.5bn decrease in
Business Banking balances due to the repayment of government scheme lending
and the yield curve impact from rising interest rates on the Education, Social
Housing and Local Authority portfolio carrying value
· Customer deposits at amortised cost remained broadly stable at £258.0bn
(December 2021: £260.6bn), maintaining a strong loan: deposit ratio of 87%
(December 2021: 85%)
· RWAs remained broadly stable at £73.1bn (December 2021: £72.3bn)
1 As at 31 December 2019, UK cards 30 and 90 day arrears were 1.7% and 0.8%
respectively.
Barclays International Year ended Three months ended
31.12.22 Restated(1) 31.12.22 Restated(1)
31.12.21 31.12.21
Income statement information £m £m % Change £m £m % Change
Net interest income 4,927 3,263 51 1,465 955 53
Net trading income 7,709 5,693 35 1,169 789 48
Net fee, commission and other income 5,231 6,709 (22) 1,228 1,766 (30)
Total income 17,867 15,665 14 3,862 3,510 10
Operating costs (10,361) (9,076) (14) (2,543) (2,160) (18)
UK bank levy (133) (134) 1 (133) (134) 1
Litigation and conduct (1,503) (345) (67) (84) 20
Total operating expenses (11,997) (9,555) (26) (2,743) (2,378) (15)
Other net income 28 40 (30) 5 3 67
Profit before impairment 5,898 6,150 (4) 1,124 1,135 (1)
Credit impairment (charges)/releases (933) 288 (328) (23)
Profit before tax 4,965 6,438 (23) 796 1,112 (28)
Attributable profit 3,844 4,647 (17) 625 818 (24)
Performance measures
Return on average allocated tangible equity 10.2% 14.4% 6.4% 9.9%
Average allocated tangible equity (£bn) 37.6 32.4 38.9 32.9
Cost: income ratio 67% 61% 71% 68%
Loan loss rate (bps) 54 (21) 75 7
Net interest margin 5.02 % 4.01 % 5.71% 4.14 %
Balance sheet information £bn £bn
Loans and advances to customers at amortised cost 133.7 106.4
Loans and advances to banks at amortised cost 8.7 8.4
Debt securities at amortised cost 27.2 19.0
Loans and advances at amortised cost 169.6 133.8
Trading portfolio assets 133.8 146.9
Derivative financial instrument assets 301.7 261.5
Financial assets at fair value through the income statement 210.5 188.2
Cash collateral and settlement balances 107.7 88.1
Other assets 258.0 225.6
Total assets 1,181.3 1,044.1
Deposits at amortised cost 287.6 258.8
Derivative financial instrument liabilities 288.9 256.4
Loan: deposit ratio 59% 52 %
Risk weighted assets 254.8 230.9
Period end allocated tangible equity 36.8 33.2
1 2021 financial and capital metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information
Analysis of Barclays International
Corporate and Investment Bank Year ended Three months ended
31.12.22 Restated(1) 31.12.22 Restated(1)
31.12.21 31.12.21
Income statement information £m £m % Change £m £m % Change
Net interest income 1,949 1,351 44 548 432 27
Net trading income 7,733 5,652 37 1,201 774 55
Net fee, commission and other income 3,686 5,331 (31) 827 1,426 (42)
Total income 13,368 12,334 8 2,576 2,632 (2)
Operating costs (7,630) (6,818) (12) (1,796) (1,562) (15)
UK bank levy (126) (128) 2 (126) (128) 2
Litigation and conduct (1,189) (237) (55) (59) 7
Total operating expenses (8,945) (7,183) (25) (1,977) (1,749) (13)
Other net income 2 2 2 1
Profit before impairment 4,425 5,153 (14) 601 884 (32)
Credit impairment (charges)/releases (119) 473 (41) 73
Profit before tax 4,306 5,626 (23) 560 957 (41)
Attributable profit 3,364 4,032 (17) 454 695 (35)
Performance measures
Return on average allocated tangible equity 10.2% 14.3% 5.4% 9.7%
Average allocated tangible equity (£bn) 32.8 28.3 33.7 28.7
Cost: income ratio 67% 58% 77% 66%
Loan loss rate (bps) 9 (47) 13 (29)
Balance sheet information £bn £bn
Loans and advances to customers at amortised cost 90.5 73.4
Loans and advances to banks at amortised cost 8.1 7.6
Debt securities at amortised cost 27.2 19.0
Loans and advances at amortised cost 125.8 100.0
Trading portfolio assets 133.7 146.7
Derivative financial instrument assets 301.6 261.5
Financial assets at fair value through the income statement 210.5 188.1
Cash collateral and settlement balances 106.9 87.2
Other assets 222.6 195.8
Total assets 1,101.1 979.3
Deposits at amortised cost 205.8 189.4
Derivative financial instrument liabilities 288.9 256.4
Risk weighted assets 215.9 200.7
Analysis of total income £m £m % Change £m £m % Change
FICC 5,695 3,448 65 976 546 79
Equities 3,149 2,967 6 440 501 (12)
Global Markets 8,844 6,415 38 1,416 1,047 35
Advisory 768 921 (17) 197 287 (31)
Equity capital markets 166 813 (80) 40 158 (75)
Debt capital markets 1,281 1,925 (33) 243 511 (52)
Investment Banking fees 2,215 3,659 (39) 480 956 (50)
Corporate lending (231) 588 (128) 176
Transaction banking 2,540 1,672 52 808 453 78
Corporate 2,309 2,260 2 680 629 8
Total income 13,368 12,334 8 2,576 2,632 (2)
1 2021 financial and capital metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information
Analysis of Barclays International
Consumer, Cards and Payments Year ended Three months ended
31.12.22 31.12.21 31.12.22 31.12.21
Income statement information £m £m % Change £m £m % Change
Net interest income 2,979 1,912 56 918 522 76
Net fee, commission, trading and other income 1,520 1,419 7 368 356 3
Total income 4,499 3,331 35 1,286 878 46
Operating costs (2,731) (2,258) (21) (747) (598) (25)
UK bank levy (7) (6) (17) (7) (6) (17)
Litigation and conduct (314) (108) (12) (25) 52
Total operating expenses (3,052) (2,372) (29) (766) (629) (22)
Other net income 26 38 (32) 3 2 50
Profit before impairment 1,473 997 48 523 251
Credit impairment charges (814) (185) (287) (96)
Profit before tax 659 812 (19) 236 155 52
Attributable profit 480 615 (22) 171 123 39
Performance measures
Return on average allocated tangible equity 10.0% 15.0% 13.0% 11.7%
Average allocated tangible equity (£bn) 4.8 4.1 5.2 4.2
Cost: income ratio 68% 71% 60% 72%
Loan loss rate (bps) 175 51 245 105
Key facts
US cards 30 day arrears rate 2.2% 1.6%
US cards customer FICO score distribution
<660 11% 10%
>660 89% 90%
Total number of payments clients 395k 380k
Value of payments processed (£bn)(1) 307 277
Balance sheet information £bn £bn
Loans and advances to customers at amortised cost 43.2 33.0
Total assets 80.2 64.8
Deposits at amortised cost 81.8 69.4
Risk weighted assets 38.9 30.2
Analysis of total income £m £m % Change £m £m % Change
International Cards and Consumer Bank 2,913 2,092 39 860 552 56
Private Bank 1,014 781 30 285 200 43
Payments 572 458 25 141 126 12
Total income 4,499 3,331 35 1,286 878 46
1 Includes £296bn (2021: £270bn) of merchant acquiring payments.
Barclays International delivered a RoTE of 10.2% (2021: 14.4%) reflecting the
benefits of income diversification and continued investment in sustainable
growth, partially offset by the net impact of the Over-issuance of Securities
in the CIB. CC&P performance reflected continued income momentum,
investment for growth and a provision for customer remediation costs relating
to legacy loan portfolios.
2022 compared to 2021
Income statement(1)
· Profit before tax decreased 23% to £4,965m with a RoTE of 10.2% (2021:
14.4%), reflecting a RoTE of 10.2% (2021: 14.3%) in CIB and 10.0% (2021:
15.0%) in CC&P
- Excluding the impact of the Over-issuance of Securities, CIB RoTE was 12.0%
· Barclays International has a diverse income profile across businesses and
geographies including a significant presence in the US. The 10% appreciation
of average USD against GBP positively impacted income and profits and
adversely impacted credit impairment charges, total operating expenses and
RWAs
· Total income increased to £17,867m (2021: £15,665m)
- CIB income increased 8% to £13,368m
- Global Markets income increased 38% to £8,844m representing the best full
year for both Global Markets and FICC on a comparable basis(2). FICC income
increased 65% to £5,695m, mainly in macro, reflecting higher levels of
activity as we supported our clients through a period of market volatility.
Equities income of £3,149m (2021: £2,967m) included £292m of income related
to hedging arrangements to manage the risks of the rescission offer in
relation to the Over-issuance of Securities
- Investment Banking fees decreased 39% to £2,215m due to the reduced fee pool,
particularly in Equity and Debt capital markets(3)
- Within Corporate, Transaction banking income increased 52% to £2,540m driven
by improved margins and growth in deposits, and higher fee income. Corporate
lending income reflected fair value losses on leverage finance lending of
c.£335m net of mark to market gains on related hedges, of which c.£85m was
recognised in Q422, and higher costs of hedging and credit protection
- CC&P income increased 35% to £4,499m
- International Cards and Consumer Bank income increased 39% to £2,913m
reflecting higher cards balances, including the Gap portfolio acquisition,
partially offset by higher customer acquisition costs
- Private Bank income increased 30% to £1,014m, reflecting client balance
growth and improved margins partially offset by the non-recurrence of a
property sale gain in the prior year
- Payments income increased 25% to £572m driven by turnover growth from the
easing of lockdown restrictions
· Total operating expenses increased 26% to £11,997m
- CIB total operating expenses increased 25% to £8,945m. Operating expenses
excluding litigation and conduct charges increased 12% to £7,756m driven by
continued investment in talent and technology, and the impact of inflation.
Litigation and conduct charges were £1,189m (2021: £237m) including £966m
from the Over-issuance of Securities and £165m relating to the Devices
Settlements(4)
- CC&P total operating expenses increased 29% to £3,052m. Operating
expenses excluding litigation and conduct charges increased 21% to £2,738m,
including higher investment spend reflecting an increase in marketing and
partnership costs. Litigation and conduct charges were £314m (2021: £108m)
mainly driven by customer remediation costs relating to legacy loan portfolios
· Credit impairment charges were £933m (2021: £288m net release) driven by a
deteriorating macroeconomic forecast
- CIB credit impairment charges of £119m (2021: £473m net release) were driven
by a net increase in modelled impairment and single name charges partially
offset by the benefit of credit protection
- CC&P credit impairment charges increased to £814m (2021: £185m), driven
by higher balances in US cards, including the day one impact of acquiring the
Gap portfolio, macroeconomic deterioration and a gradual increase in
delinquencies, partially offset by the utilisation of economic uncertainty
PMAs and the release of COVID-19 related adjustments informed by refreshed
macroeconomic scenarios. As at 31 December 2022, US cards 30 and 90 day
arrears remain below pre-pandemic levels at 2.2% (Q421: 1.6%) and 1.2% (Q421:
0.8%) respectively(5). The US cards business is supported by a total coverage
ratio of 8.1% (December 2021: 10.6%)
1 2021 financial and capital metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information.
2 Period covering 2014-2016. Pre 2014 data was not restated following
re-segmentation in 2016.
3 Data source: Dealogic for the period covering 1 January to 31 December 2022.
4 Refers to the settlements with the SEC and CFTC in connection with their
investigations of the use of unauthorised devices for business communications.
See Other matters on page 7.
5 As at 31 December 2019, US cards 30 and 90 days arrears were 2.7% and 1.4%
respectively.
Balance sheet
· Loans and advances at amortised cost increased £35.8bn to £169.6bn due to
increased lending to customers across CIB and CC&P, inclusive of the Gap
portfolio acquisition and appreciation of USD against GBP, and increased
investment in debt securities
· Trading portfolio assets decreased £13.1bn to £133.8bn due to a reduction in
equity securities as clients repositioned their demand, partially offset by
increased trading activity in debt securities
· Derivative assets and liabilities increased £40.2bn and £32.5bn respectively
to £301.7bn and £288.9bn driven by market volatility and increased activity
· Financial assets at fair value through the income statement increased £22.3bn
to £210.5bn driven by increased reverse repurchase activity
· Deposits at amortised cost increased £28.8bn to £287.6bn primarily due to
growth in Corporate deposits and an increase in short-term money market
deposits
· RWAs increased to £254.8bn (December 2021: £230.9bn) mainly resulting from
the impact of the appreciation of USD against GBP, regulatory changes and
higher CC&P balances including the Gap portfolio
Head Office Year ended Three months ended
31.12.22 31.12.21 31.12.22 31.12.21
Income statement information £m £m % Change £m £m % Change
Net interest income (248) (392) 37 (324) (38)
Net fee, commission and other income 78 131 (40) 293 (11)
Total income (170) (261) 35 (31) (49) 37
Operating costs (336) (659) 49 (97) (152) 36
UK bank levy (17) - (17) -
Litigation and conduct (53) (15) 1 (3)
Total operating expenses (406) (674) 40 (113) (155) 27
Other net (expenses)/income (22) 220 4 11 (64)
Loss before impairment (598) (715) 16 (140) (193) 27
Credit impairment charges (1) - (13) (5)
Loss before tax (599) (715) 16 (153) (198) 23
Attributable loss (698) (198) (63) (159) 60
Performance measures(1)
Average allocated tangible equity (£bn) 0.7 5.0 (2.4) 5.1
Balance sheet information(1) £bn £bn
Total assets 19.2 19.0
Risk weighted assets 8.6 11.0
Period end allocated tangible equity (0.2) 5.5
2022 compared to 2021
Income statement
· Loss before tax was £599m (2021: £715m)
· Total income was an expense of £170m (2021: £261m) primarily reflecting
treasury items, funding costs on legacy capital instruments and mark-to-market
losses on legacy investments, partially offset by hedge accounting gains.
Additionally, there was a £74m loss on sale arising from disposals of
Barclays' equity stake in Absa, and a £72m interest expense that became
payable to a US tax authority upon the resolution of historical tax issues.
This was partially offset by a gain of £86m from the sale and leaseback of UK
data centres and the receipt of £30m of dividends from Absa prior to disposal
· Total operating expenses reduced to £406m (2021: £674m) reflecting the
non-recurrence of the £266m structural cost action charge taken as part of
the real estate review in June 2021
· Other net income was an expense of £22m (2021: £220m income) driven by a
fair value loss on investments held by the Business Growth Fund in which
Barclays has an associate interest
Balance sheet
· RWAs reduced to £8.6bn (December 2021: £11.0bn) reflecting the disposals of
Barclays' equity stake in Absa in April 2022 and September 2022
1 2021 financial and capital metrics have been restated to reflect the impact of
the Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information.
Quarterly Results Summary
Barclays Group
Q422 Q322 Q222 Q122 Q421(1) Q321(1) Q221(1) Q121
Income statement information £m £m £m £m £m £m £m £m
Net interest income 2,741 3,068 2,422 2,341 2,230 1,940 2,052 1,851
Net fee, commission and other income 3,060 2,883 4,286 4,155 2,930 3,525 3,363 4,049
Total income 5,801 5,951 6,708 6,496 5,160 5,465 5,415 5,900
Operating costs (3,748) (3,939) (3,682) (3,588) (3,514) (3,446) (3,587) (3,545)
UK bank levy (176) - - - (170) - - -
Litigation and conduct (79) 339 (1,334) (523) (92) (129) (143) (33)
Total operating expenses (4,003) (3,600) (5,016) (4,111) (3,776) (3,575) (3,730) (3,578)
Other net income/(expenses) 10 (1) 7 (10) 13 94 21 132
Profit before impairment 1,808 2,350 1,699 2,375 1,397 1,984 1,706 2,454
Credit impairment (charges)/releases (498) (381) (200) (141) 31 (120) 797 (55)
Profit before tax 1,310 1,969 1,499 2,234 1,428 1,864 2,503 2,399
Tax credit/(charge) 33 (249) (209) (614) (104) (292) (246) (496)
Profit after tax 1,343 1,720 1,290 1,620 1,324 1,572 2,257 1,903
Non-controlling interests (22) (2) (20) (1) (27) (1) (15) (4)
Other equity instrument holders (285) (206) (199) (215) (218) (197) (194) (195)
Attributable profit 1,036 1,512 1,071 1,404 1,079 1,374 2,048 1,704
Performance measures
Return on average tangible shareholders' equity 8.9% 12.5% 8.7% 11.5% 9.0% 11.4% 17.6% 14.7%
Average tangible shareholders' equity (£bn) 46.7 48.6 49.0 48.8 48.0 48.3 46.5 46.5
Cost: income ratio 69% 60% 75% 63% 73% 65% 69% 61%
Loan loss rate (bps) 49 36 20 15 (3) 13 (90) 6
Basic earnings per share 6.5p 9.4p 6.4p 8.4p 6.4p 8.0p 11.9p 9.9p
Basic weighted average number of shares (m) 15,828 16,148 16,684 16,682 16,985 17,062 17,140 17,293
Period end number of shares (m) 15,871 15,888 16,531 16,762 16,752 16,851 16,998 17,223
Balance sheet and capital management(2) £bn £bn £bn £bn £bn £bn £bn £bn
Loans and advances to customers at amortised cost 343.3 346.3 337.2 325.8 319.9 313.5 309.2 306.9
Loans and advances to banks at amortised cost 10.0 12.5 12.5 11.4 9.7 10.6 11.0 12.9
Debt securities at amortised cost 45.5 54.8 46.1 34.5 31.8 28.9 28.3 25.9
Loans and advances at amortised cost 398.8 413.7 395.8 371.7 361.5 353.0 348.5 345.8
Loans and advances at amortised cost impairment coverage ratio 1.4% 1.4% 1.4% 1.5% 1.6% 1.7% 1.8% 2.2%
Total assets 1,513.7 1,726.9 1,589.2 1,496.1 1,384.3 1,406.5 1,376.3 1,379.7
Deposits at amortised cost 545.8 574.4 568.7 546.5 519.4 510.2 500.9 498.8
Tangible net asset value per share 295p 286p 297p 294p 291p 286p 280p 267p
Common equity tier 1 ratio 13.9% 13.8% 13.6% 13.8% 15.1% 15.3% 15.0% 14.6%
Common equity tier 1 capital 46.9 48.6 46.7 45.3 47.3 47.2 46.2 45.9
Risk weighted assets 336.5 350.8 344.5 328.8 314.1 307.7 307.4 313.4
UK leverage ratio 5.3% 5.0% 5.1% 5.0% 5.2% 5.1% 5.0% 5.0%
UK leverage exposure 1,130.0 1,232.1 1,151.2 1,123.5 1,137.9 1,162.7 1,154.9 1,145.4
Average UK leverage ratio 4.8% 4.8% 4.7% 4.8% 4.9% 4.9% 4.8% 4.9%
Average UK leverage exposure 1,281.0 1,259.6 1,233.5 1,179.4 1,229.0 1,201.1 1,192.7 1,174.9
Funding and liquidity
Group liquidity pool (£bn) 318 326 343 320 291 293 291 290
Liquidity coverage ratio 165% 151% 156% 159% 168% 161% 162% 161%
Net stable funding ratio(3) 137%
Loan: deposit ratio 73% 72% 70% 68% 70% 69% 70% 69%
1 The comparative capital and financial metrics relating to Q221 - Q421 have
been restated to reflect the impact of the Over-issuance of Securities. See
Basis of preparation on page 55 and Restatement of financial statements (Note
1) on page 69 for more information.
2 Refer to pages 54 to 62 for further information on how capital, RWAs and
leverage are calculated.
3 Represents average of the last four spot quarter end positions.
Quarterly Results by Business
Barclays UK
Q422 Q322 Q222 Q122 Q421 Q321 Q221 Q121
Income statement information £m £m £m £m £m £m £m £m
Net interest income 1,600 1,561 1,393 1,339 1,313 1,303 1,305 1,281
Net fee, commission and other income 370 355 331 310 386 335 318 295
Total income 1,970 1,916 1,724 1,649 1,699 1,638 1,623 1,576
Operating costs (1,108) (1,069) (1,085) (998) (1,202) (1,041) (1,078) (1,036)
UK bank levy (26) - - - (36) - - -
Litigation and conduct (13) (3) (16) (9) (5) (10) (19) (3)
Total operating expenses (1,147) (1,072) (1,101) (1,007) (1,243) (1,051) (1,097) (1,039)
Other net income/(expenses) 1 (1) - - (1) 1 - -
Profit before impairment 824 843 623 642 455 588 526 537
Credit impairment (charges)/releases (157) (81) - (48) 59 (137) 520 (77)
Profit before tax 667 762 623 594 514 451 1,046 460
Attributable profit 474 549 458 396 420 317 721 298
Balance sheet information £bn £bn £bn £bn £bn £bn £bn £bn
Loans and advances to customers at amortised cost 205.1 205.1 205.9 207.3 208.8 208.6 207.8 205.7
Total assets 313.2 316.8 318.8 317.2 321.2 312.1 311.2 309.1
Customer deposits at amortised cost 258.0 261.0 261.5 260.3 260.6 256.8 255.5 247.5
Loan: deposit ratio 87% 86% 85% 85% 85% 86% 87% 88%
Risk weighted assets 73.1 73.2 72.2 72.7 72.3 73.2 72.2 72.7
Period end allocated tangible equity 10.1 10.1 9.9 10.1 10.0 10.0 9.9 10.0
Performance measures
Return on average allocated tangible equity 18.7% 22.1% 18.4% 15.6% 16.8% 12.7% 29.1% 12.0%
Average allocated tangible equity (£bn) 10.2 9.9 10.0 10.1 10.0 10.0 9.9 9.9
Cost: income ratio 58% 56% 64% 61% 73% 64% 68% 66%
Loan loss rate (bps) 27 14 - 9 (10) 24 (93) 14
Net interest margin 3.10% 3.01% 2.71% 2.62% 2.49% 2.49% 2.55% 2.54%
Analysis of Barclays UK Q422 Q322 Q222 Q122 Q421 Q321 Q221 Q121
Analysis of total income £m £m £m £m £m £m £m £m
Personal Banking 1,229 1,212 1,077 1,022 983 990 987 923
Barclaycard Consumer UK 269 283 265 276 352 293 290 315
Business Banking 472 421 382 351 364 355 346 338
Total income 1,970 1,916 1,724 1,649 1,699 1,638 1,623 1,576
Analysis of credit impairment (charges)/releases
Personal Banking (120) (26) (42) 21 8 (30) 72 (22)
Barclaycard Consumer UK (12) 2 84 (44) 114 (108) 434 (36)
Business Banking (25) (57) (42) (25) (63) 1 14 (19)
Total credit impairment (charges)/releases (157) (81) - (48) 59 (137) 520 (77)
Analysis of loans and advances to customers at amortised cost £bn £bn £bn £bn £bn £bn £bn £bn
Personal Banking 169.7 168.7 167.1 166.5 165.4 164.6 162.4 160.4
Barclaycard Consumer UK 9.2 9.0 8.8 8.4 8.7 8.6 8.8 8.7
Business Banking 26.2 27.4 30.0 32.4 34.7 35.4 36.6 36.6
Total loans and advances to customers at amortised cost 205.1 205.1 205.9 207.3 208.8 208.6 207.8 205.7
Analysis of customer deposits at amortised cost
Personal Banking 195.6 197.3 197.0 196.6 196.4 193.3 191.0 186.0
Barclaycard Consumer UK - - - - - - 0.1 0.1
Business Banking 62.4 63.7 64.5 63.7 64.2 63.5 64.4 61.4
Total customer deposits at amortised cost 258.0 261.0 261.5 260.3 260.6 256.8 255.5 247.5
Barclays International
Q422 Q322 Q222 Q122 Q421(1) Q321(1) Q221(1) Q121
Income statement information £m £m £m £m £m £m £m £m
Net interest income 1,465 1,497 1,029 936 955 749 811 748
Net trading income 1,169 1,328 2,766 2,446 789 1,515 1,455 1,934
Net fee, commission and other income 1,228 1,240 1,321 1,442 1,766 1,673 1,553 1,717
Total income 3,862 4,065 5,116 4,824 3,510 3,937 3,819 4,399
Operating costs (2,543) (2,776) (2,537) (2,505) (2,160) (2,310) (2,168) (2,438)
UK bank levy (133) - - - (134) - - -
Litigation and conduct (67) 396 (1,319) (513) (84) (100) (140) (21)
Total operating expenses (2,743) (2,380) (3,856) (3,018) (2,378) (2,410) (2,308) (2,459)
Other net income 5 10 5 8 3 15 13 9
Profit before impairment 1,124 1,695 1,265 1,814 1,135 1,542 1,524 1,949
Credit impairment (charges)/releases (328) (295) (209) (101) (23) 18 271 22
Profit before tax 796 1,400 1,056 1,713 1,112 1,560 1,795 1,971
Attributable profit 625 1,136 783 1,300 818 1,191 1,207 1,431
Balance sheet information £bn £bn £bn £bn £bn £bn £bn £bn
Loans and advances to customers at amortised cost 133.7 137.0 126.7 113.9 106.4 99.9 96.3 97.1
Loans and advances to banks at amortised cost 8.7 11.0 11.3 10.2 8.4 9.4 9.9 12.0
Debt securities at amortised cost 27.2 36.2 29.3 20.7 19.0 16.6 15.7 14.4
Loans and advances at amortised cost 169.6 184.2 167.3 144.8 133.8 125.9 121.9 123.5
Trading portfolio assets 133.8 126.3 126.9 134.1 146.9 144.8 147.1 131.1
Derivative financial instrument assets 301.7 415.7 343.5 288.8 261.5 257.0 255.4 269.4
Financial assets at fair value through the income statement 210.5 244.7 209.3 203.8 188.2 200.5 190.4 197.5
Cash collateral and settlement balances 107.7 163.3 128.5 132.0 88.1 115.9 108.5 109.7
Other assets 258.0 257.2 275.1 255.5 225.6 231.8 223.5 221.7
Total assets 1,181.3 1,391.4 1,250.6 1,159.0 1,044.1 1,075.9 1,046.8 1,052.9
Deposits at amortised cost 287.6 313.2 307.4 286.1 258.8 253.3 245.4 251.2
Derivative financial instrument liabilities 288.9 394.2 321.2 277.2 256.4 252.3 246.9 260.2
Loan: deposit ratio 59% 59% 54% 51% 52% 50% 50% 49%
Risk weighted assets 254.8 269.3 263.8 245.1 230.9 222.7 223.2 230.0
Period end allocated tangible equity 36.8 38.8 38.0 35.6 33.2 31.8 31.8 32.7
Performance measures
Return on average allocated tangible equity 6.4% 11.6% 8.4% 14.8% 9.9% 14.9% 14.9% 17.7%
Average allocated tangible equity (£bn) 38.9 39.1 37.3 35.1 32.9 31.8 32.4 32.3
Cost: income ratio 71% 59% 75% 63% 68% 61% 60% 56%
Loan loss rate (bps) 75 62 49 28 7 (6) (87) (7)
Net interest margin 5.71% 5.58% 4.52% 4.15% 4.14% 4.02% 3.96% 3.92%
1 The comparative capital and financial metrics relating to Q221 - Q421 have
been restated to reflect the impact of the Over-issuance of Securities. See
Basis of preparation on page 55 and Restatement of financial statements (Note
1) on page 69 for more information.
Analysis of Barclays International
Corporate and Investment Bank Q422 Q322 Q222 Q122 Q421(1) Q321(1) Q221(1) Q121
Income statement information £m £m £m £m £m £m £m £m
Net interest income 548 606 410 385 432 279 370 270
Net trading income 1,201 1,344 2,738 2,450 774 1,467 1,494 1,917
Net fee, commission and other income 827 871 885 1,103 1,426 1,383 1,115 1,407
Total income 2,576 2,821 4,033 3,938 2,632 3,129 2,979 3,594
Operating costs (1,796) (2,043) (1,870) (1,921) (1,562) (1,747) (1,623) (1,886)
UK bank levy (126) - - - (128) - - -
Litigation and conduct (55) 498 (1,314) (318) (59) (99) (78) (1)
Total operating expenses (1,977) (1,545) (3,184) (2,239) (1,749) (1,846) (1,701) (1,887)
Other net income 2 - - - 1 - - 1
Profit before impairment 601 1,276 849 1,699 884 1,283 1,278 1,708
Credit impairment (charges)/releases (41) (46) (65) 33 73 128 229 43
Profit before tax 560 1,230 784 1,732 957 1,411 1,507 1,751
Attributable profit 454 1,015 579 1,316 695 1,085 989 1,263
Balance sheet information £bn £bn £bn £bn £bn £bn £bn £bn
Loans and advances to customers at amortised cost 90.5 93.6 86.5 79.5 73.4 68.3 66.3 68.5
Loans and advances to banks at amortised cost 8.1 10.2 10.0 9.4 7.6 8.9 9.0 11.4
Debt securities at amortised cost 27.2 36.2 29.3 20.7 19.0 16.6 15.7 14.4
Loans and advances at amortised cost 125.8 140.0 125.8 109.6 100.0 93.8 91.0 94.3
Trading portfolio assets 133.7 126.1 126.7 134.0 146.7 144.7 147.0 130.9
Derivative financial instruments assets 301.6 415.5 343.4 288.7 261.5 256.9 255.3 269.4
Financial assets at fair value through the income statement 210.5 244.6 209.2 203.8 188.1 200.4 190.3 197.3
Cash collateral and settlement balances 106.9 162.6 127.7 131.2 87.2 115.1 107.7 108.8
Other assets 222.6 220.6 237.2 222.5 195.8 200.4 192.5 190.8
Total assets 1,101.1 1,309.4 1,170.0 1,089.8 979.3 1,011.3 983.8 991.5
Deposits at amortised cost 205.8 229.5 229.5 214.7 189.4 185.8 178.2 185.2
Derivative financial instrument liabilities 288.9 394.2 321.2 277.1 256.4 252.2 246.8 260.2
Risk weighted assets 215.9 230.6 227.6 213.5 200.7 192.5 194.3 201.3
Performance measures
Return on average allocated tangible equity 5.4% 11.9% 7.1% 17.1% 9.7% 15.6% 14.0% 17.9%
Average allocated tangible equity (£bn) 33.7 34.0 32.7 30.8 28.7 27.8 28.4 28.2
Cost: income ratio 77% 55% 79% 57% 66% 59% 57% 53%
Loan loss rate (bps) 13 13 20 (12) (29) (54) (100) (18)
Analysis of total income £m £m £m £m £m £m £m £m
FICC 976 1,546 1,529 1,644 546 803 895 1,204
Equities 440 246 1,411 1,052 501 757 777 932
Global Markets 1,416 1,792 2,940 2,696 1,047 1,560 1,672 2,136
Advisory 197 150 236 185 287 253 218 163
Equity capital markets 40 42 37 47 158 186 226 243
Debt capital markets 243 341 281 416 511 532 429 453
Investment Banking fees 480 533 554 648 956 971 873 859
Corporate lending (128) (181) (47) 125 176 168 38 206
Transaction banking 808 677 586 469 453 430 396 393
Corporate 680 496 539 594 629 598 434 599
Total income 2,576 2,821 4,033 3,938 2,632 3,129 2,979 3,594
1 The comparative capital and financial metrics relating to Q221 - Q421 have
been restated to reflect the impact of the Over-issuance of Securities. See
Basis of preparation on page 55 and Restatement of financial statements (Note
1) on page 69 for more information.
Analysis of Barclays International
Consumer, Cards and Payments Q422 Q322 Q222 Q122 Q421 Q321 Q221 Q121
Income statement information £m £m £m £m £m £m £m £m
Net interest income 918 891 619 551 522 471 441 478
Net fee, commission, trading and other income 368 353 464 335 356 337 399 327
Total income 1,286 1,244 1,083 886 878 808 840 805
Operating costs (747) (733) (667) (584) (598) (563) (545) (552)
UK bank levy (7) - - - (6) - - -
Litigation and conduct (12) (102) (5) (195) (25) (1) (62) (20)
Total operating expenses (766) (835) (672) (779) (629) (564) (607) (572)
Other net income 3 10 5 8 2 15 13 8
Profit before impairment 523 419 416 115 251 259 246 241
Credit impairment (charges)/releases (287) (249) (144) (134) (96) (110) 42 (21)
Profit/(loss) before tax 236 170 272 (19) 155 149 288 220
Attributable profit/(loss) 171 121 204 (16) 123 106 218 168
Balance sheet information £bn £bn £bn £bn £bn £bn £bn £bn
Loans and advances to customers at amortised cost 43.2 43.4 40.2 34.4 33.0 31.6 30.0 28.6
Total assets 80.2 82.0 80.6 69.2 64.8 64.6 63.0 61.4
Deposits at amortised cost 81.8 83.7 77.9 71.4 69.4 67.5 67.2 66.0
Risk weighted assets 38.9 38.7 36.2 31.6 30.2 30.2 29.0 28.8
Performance measures
Return on average allocated tangible equity 13.0% 9.5% 17.8% (1.5)% 11.7% 10.5% 21.8% 16.5%
Average allocated tangible equity (£bn) 5.2 5.1 4.6 4.3 4.2 4.0 4.0 4.1
Cost: income ratio 60% 67% 62% 88% 72% 70% 72% 71%
Loan loss rate (bps) 245 211 132 145 105 127 (49) 27
Analysis of total income £m £m £m £m £m £m £m £m
International Cards and Consumer Bank 860 824 691 538 552 490 517 533
Private Bank 285 270 245 214 200 188 214 179
Payments 141 150 147 134 126 130 109 93
Total income 1,286 1,244 1,083 886 878 808 840 805
Head Office
Q422 Q322 Q222 Q122 Q421 Q321 Q221 Q121
Income statement information £m £m £m £m £m £m £m £m
Net interest income (324) 10 - 66 (38) (112) (64) (178)
Net fee, commission and other income 293 (40) (132) (43) (11) 2 37 103
Total income (31) (30) (132) 23 (49) (110) (27) (75)
Operating costs (97) (94) (60) (85) (152) (95) (341) (71)
UK bank levy (17) - - - - - - -
Litigation and conduct 1 (54) 1 (1) (3) (19) 16 (9)
Total operating expenses (113) (148) (59) (86) (155) (114) (325) (80)
Other net income/(expenses) 4 (10) 2 (18) 11 78 8 123
Loss before impairment (140) (188) (189) (81) (193) (146) (344) (32)
Credit impairment (charges)/releases (13) (5) 9 8 (5) (1) 6 -
Loss before tax (153) (193) (180) (73) (198) (147) (338) (32)
Attributable (loss)/profit (63) (173) (170) (292) (159) (134) 120 (25)
Balance sheet information £bn £bn £bn £bn £bn £bn £bn £bn
Total assets 19.2 18.7 19.8 19.9 19.0 18.5 18.3 17.7
Risk weighted assets(1) 8.6 8.2 8.6 11.0 11.0 11.8 12.0 10.7
Period end allocated tangible equity(1) (0.2) (3.5) 1.1 3.6 5.5 6.3 5.9 3.3
Performance measures(1)
Average allocated tangible equity (£bn) (2.4) (0.4) 1.7 3.6 5.1 6.5 4.2 4.3
1 The comparative capital and financial metrics relating to Q221 - Q421 have
been restated to reflect the impact of the Over-issuance of Securities. See
Basis of preparation on page 55 and Restatement of financial statements (Note
1) on page 69 for more information.
Performance Management
Margins and balances
Year ended 31.12.22 Year ended 31.12.21
Net interest income Average customer assets Net interest margin Net interest income Average customer assets Net interest margin
£m £m % £m £m %
Barclays UK 5,893 205,972 2.86 5,202 206,628 2.52
Corporate and Investment Bank(1) 1,796 56,008 3.21 1,238 47,725 2.59
Consumer, Cards and Payments 2,979 39,193 7.60 1,911 30,805 6.21
Barclays International(1) 4,775 95,201 5.02 3,149 78,530 4.01
Total Barclays UK and Barclays International 10,668 301,173 3.54 8,351 285,158 2.93
Other(2) (96) (278)
Total Barclays Group 10,572 8,073
1 CIB and Barclays International margins include the lending related investment
bank business.
2 Other includes Head Office and the non-lending related investment bank
businesses not included in Barclays International margins.
The Group NIM increased 61bps to 3.54%. Barclays UK NIM increased 34bps to
2.86%, reflecting the impact of higher UK interest rates. Barclays
International NIM increased 101bps to 5.02%. CIB NIM increased 62bps to 3.21%
and CC&P NIM increased 139bps to 7.60%, reflecting the impact of balance
growth and higher interest rates.
The Group's combined product and equity structural hedge notional as at
31 December 2022 was £263bn (31 December 2021: £228bn), with an average
duration of approximately 2.5 years (2021: average duration close to 3 years).
Gross structural hedge contributions of £2,196m (2021: £1,415m) and net
structural hedge contributions of £(1,544)m (2021: £1,187m) are included in
Group net interest income. Gross structural hedge contributions represent the
absolute level of interest earned from the fixed receipts on swaps in the
structural hedge, while the net structural hedge contributions represent the
net interest earned on the difference between the structural hedge rate and
prevailing floating rates.
Quarterly analysis for Barclays UK and Barclays International Net interest income Net interest margin
Average customer assets
Three months ended 31.12.22 £m £m %
Barclays UK 1,600 204,941 3.10
Corporate and Investment Bank 556 59,146 3.73
Consumer, Cards and Payments 918 43,319 8.40
Barclays International(1) 1,474 102,465 5.71
Total Barclays UK and Barclays International 3,074 307,406 3.97
Three months ended 30.09.22
Barclays UK 1,561 205,881 3.01
Corporate and Investment Bank 529 58,891 3.56
Consumer, Cards and Payments 891 42,019 8.41
Barclays International(1) 1,420 100,910 5.58
Total Barclays UK and Barclays International 2,981 306,791 3.85
Three months ended 30.06.22
Barclays UK 1,393 205,834 2.71
Corporate and Investment Bank 397 55,181 2.88
Consumer, Cards and Payments 619 37,190 6.68
Barclays International(1) 1,016 92,371 4.41
Total Barclays UK and Barclays International 2,409 298,205 3.24
Three months ended 31.03.22
Barclays UK 1,339 207,607 2.62
Corporate and Investment Bank 316 50,798 2.52
Consumer, Cards and Payments 551 34,040 6.56
Barclays International(1) 867 84,838 4.15
Total Barclays UK and Barclays International 2,206 292,445 3.06
Three months ended 31.12.21
Barclays UK 1,313 209,064 2.49
Corporate and Investment Bank 326 48,310 2.67
Consumer, Cards and Payments 522 32,934 6.29
Barclays International(1) 848 81,244 4.14
Total Barclays UK and Barclays International 2,161 290,308 2.95
1 Barclays International margins include the lending related investment bank
business.
Remuneration
Deferred bonuses are payable only once an employee meets certain conditions,
including a specified period of future 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. Refer to the Remuneration Report on
pages 197 to 245 of the Barclays PLC Annual Report 2022 for further detail on
remuneration. The table below includes the other elements of compensation and
staff costs.
Year ended 31.12.22 Year ended 31.12.21
£m £m % Change
Incentive awards granted:
Current year bonus 1,241 1,278 3
Deferred bonus 549 667 18
Total incentive awards granted 1,790 1,945 8
Reconciliation of incentive awards granted to income statement charge:
Less: deferred bonuses granted but not charged in current year (388) (457) 15
Add: current year charges for deferred bonuses from previous years 399 280 (43)
Other differences between incentive awards granted and income statement charge 35 (23) 252
Income statement charge for performance costs 1,836 1,745 (5)
Other income statement charges:
Salaries 4,732 4,290 (10)
Social security costs 714 619 (15)
Post-retirement benefits(1) 563 539 (4)
Other compensation costs 504 431 (17)
Total compensation costs(2) 8,349 7,624 (10)
Other resourcing costs
Outsourcing 607 357 (70)
Redundancy and restructuring (7) 296 102
Temporary staff costs 113 109 (4)
Other 190 125 (52)
Total other resourcing costs 903 887 (2)
Total staff costs 9,252 8,511 (9)
Group compensation costs as a % of total income 33.5 34.7
Group staff costs as a % of total income 37.1 38.8
One of the primary considerations for performance costs are Group and business
level returns, alongside other financial and non-financial measures, including
strategic delivery, risk and conduct, aligning colleague, shareholder and
wider stakeholder interests.
1 Post-retirement benefits charge includes £313m (2021: £289m) in respect of
defined contribution schemes and £250m (2021: £250m) in respect of defined
benefit schemes.
2 £604m (2021: £484m) of Group compensation was capitalised as internally
generated software and excluded from the Staff cost disclosed above.
Deferred bonuses have been awarded and are expected to be charged to the
income statement in the years outlined in the table that follows:
Year in which income statement charge is expected to be taken for deferred
bonuses awarded to date(1)
Actual Expected(1, 2)
Year ended Year ended Year ended 2024 and
31.12.21 31.12.22 31.12.23 beyond
£m £m £m £m
Deferred bonuses from 2019 and earlier bonus pools 141 52 50 -
Deferred bonuses from 2020 bonus pool 139 133 55 10
Deferred bonuses from 2021 bonus pool 210 214 165 102
Deferred bonuses from 2022 bonus pool - 161 152 177
Income statement charge for deferred bonuses 490 560 422 289
1 The actual amount charged depends upon whether conditions have been met and
may vary compared with the above expectation.
2 Does not include the impact of grants which will be made in 2023 and beyond.
Charging of deferred bonus profile(1)
Grant date Expected payment date(s)(2) and percentage of the deferred bonus paid Year Income statement charge % profile of 2022 onwards(3,4)
March 2023 2022 33%
2023 31%
March 2024 (33.3%) 2024 21%
March 2025 (33.3%) 2025 13%
March 2026 (33.3%) 2026 2%
1 Represents a typical vesting schedule for deferred awards. Certain awards may
be subject to a 3, 4, 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.
4 Income statement charge profile % disclosed as a percentage of the award
excluding lapse. The percentages have changed from last year due to
introduction of 4 year awards.
Risk Management
Risk management and principal risks
The roles and responsibilities of the business groups, Risk and Compliance in
the management of risk in the Group are defined in the Enterprise Risk
Management Framework. The purpose of the framework is to identify the
principal risks of the Group, the process by which the 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 nine principal risks: credit risk, market risk,
treasury and capital risk, climate risk, operational risk, model risk, conduct
risk, reputation risk and legal risk. Further detail on the Group's principal
risks and previously identified material existing and emerging risks and how
such risks are managed is available in the Barclays PLC Annual Report 2022, or
online at home.barclays/annualreport.
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
The table below presents a stage allocation and business segment analysis of
loans and advances at amortised cost by gross exposure, impairment allowance,
impairment charge and coverage ratio as at 31 December 2022. Also included are
stage allocation of off-balance sheet loan commitments and financial guarantee
contracts by gross exposure, impairment allowance and coverage as at 31
December 2022.
Impairment allowance under IFRS 9 considers both the drawn and the undrawn
counterparty exposure. For retail portfolios, the total impairment allowance
is allocated to gross loans and advances to the extent allowance does not
exceed the drawn exposure and any excess is reported on the liabilities side
of the balance sheet as a provision. For wholesale portfolios, impairment
allowance on undrawn exposure is reported on the liability side of the balance
sheet as a provision.
Gross exposure Impairment allowance Net exposure
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
As at 31.12.22 £m £m £m £m £m £m £m £m £m
Barclays UK 160,424 24,837 2,711 187,972 232 718 485 1,435 186,537
Barclays International 33,735 4,399 1,793 39,927 392 1,200 949 2,541 37,386
Head Office 3,644 252 661 4,557 3 24 359 386 4,171
Total Barclays Group retail 197,803 29,488 5,165 232,456 627 1,942 1,793 4,362 228,094
Barclays UK 34,858 2,954 805 38,617 129 109 96 334 38,283
Barclays International 117,692 14,298 1,098 133,088 301 265 312 878 132,210
Head Office 192 - 18 210 - - 18 18 192
Total Barclays Group wholesale(1) 152,742 17,252 1,921 171,915 430 374 426 1,230 170,685
Total loans and advances at amortised cost 350,545 46,740 7,086 404,371 1,057 2,316 2,219 5,592 398,779
Off-balance sheet loan commitments and financial guarantee contracts(2) 372,945 30,694 1,180 404,819 245 315 23 583 404,236
Total(3) 723,490 77,434 8,266 809,190 1,302 2,631 2,242 6,175 803,015
As at 31.12.22 Year ended 31.12.22
Coverage ratio Loan impairment charge/(release) and loan loss rate
Stage 1 Stage 2 Stage 3 Total Loan impairment charge/(release) Loan loss rate
% % % % £m bps
Barclays UK 0.1 2.9 17.9 0.8 169 9
Barclays International 1.2 27.3 52.9 6.4 763 191
Head Office 0.1 9.5 54.3 8.5 -
Total Barclays Group retail 0.3 6.6 34.7 1.9 932 40
Barclays UK 0.4 3.7 11.9 0.9 106 27
Barclays International 0.3 1.9 28.4 0.7 127 10
Head Office - - 100 8.6 -
Total Barclays Group wholesale(1) 0.3 2.2 22.2 0.7 233 14
Total loans and advances at amortised cost 0.3 5.0 31.3 1.4 1,165 29
Off-balance sheet loan commitments and financial guarantee contracts(2) 0.1 1.0 1.9 0.1 18
Other financial assets subject to impairment(3) 37
Total(4) 0.2 3.4 27.1 0.8 1,220
1 Includes Wealth UK and Private Banking exposures measured on an individual
customer exposure basis and excludes Business Banking exposures, including
lending under the government backed Bounce Back Loan Scheme (BBLS) of £6.6bn
that are managed on a collective basis and reported within Barclays UK Retail.
The net impact is a difference in total exposure of £3.8bn of balances
reported as wholesale loans on page 31 in the Loans and advances at amortised
cost by product disclosure.
2 Excludes loan commitments and financial guarantees of £14.9bn carried at fair
value.
3 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 £180.1bn and impairment allowance of £163m. This comprises
£10m ECL on £178.4bn Stage 1 assets, £9m on £1.5bn Stage 2 fair value
through other comprehensive income assets, cash collateral and settlement
balances and £144m on £149m Stage 3 other assets.
4 The loan loss rate is 30bps after applying the total impairment charge of
£1,220m.
Gross exposure Impairment allowance Net exposure
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
As at 31.12.21 £m £m £m £m £m £m £m £m £m
Barclays UK 160,695 22,779 2,915 186,389 261 949 728 1,938 184,451
Barclays International 25,981 2,691 1,566 30,238 603 795 858 2,256 27,982
Head Office 3,735 429 705 4,869 2 36 347 385 4,484
Total Barclays Group retail 190,411 25,899 5,186 221,496 866 1,780 1,933 4,579 216,917
Barclays UK 35,571 1,917 969 38,457 153 43 111 307 38,150
Barclays International 92,341 13,275 1,059 106,675 187 192 458 837 105,838
Head Office 542 2 21 565 - - 19 19 546
Total Barclays Group wholesale(1) 128,454 15,194 2,049 145,697 340 235 588 1,163 144,534
Total loans and advances at amortised cost 318,865 41,093 7,235 367,193 1,206 2,015 2,521 5,742 361,451
Off-balance sheet loan commitments and financial guarantee contracts(2) 312,142 34,815 1,298 348,255 217 302 23 542 347,713
Total(3) 631,007 75,908 8,533 715,448 1,423 2,317 2,544 6,284 709,164
As at 31.12.21 Year ended 31.12.21
Coverage ratio Loan impairment charge/(release) and loan loss rate
Stage 1 Stage 2 Stage 3 Total Loan impairment charge/(release) Loan loss rate
% % % % £m bps
Barclays UK 0.2 4.2 25.0 1.0 (227) -
Barclays International 2.3 29.5 54.8 7.5 181 60
Head Office 0.1 8.4 49.2 7.9 - -
Total Barclays Group retail 0.5 6.9 37.3 2.1 (46) -
Barclays UK 0.4 2.2 11.5 0.8 122 32
Barclays International 0.2 1.4 43.2 0.8 (197) -
Head Office - - 90.5 3.4 - -
Total Barclays Group wholesale(1) 0.3 1.5 28.7 0.8 (75) -
Total loans and advances at amortised cost 0.4 4.9 34.8 1.6 (121) -
Off-balance sheet loan commitments and financial guarantee contracts(2) 0.1 0.9 1.8 0.2 (514)
Other financial assets subject to impairment(3) (18)
Total 0.2 3.1 29.8 0.9 (653)
1 Includes Wealth and Private Banking exposures measured on an individual basis,
and excludes Business Banking exposures, including BBLS of £9.4bn that are
managed on a collective basis and reported within Barclays UK Retail. The net
impact is a difference in total exposure of £6.0bn of balances reported as
wholesale loans on page 31 in the Loans and advances at amortised cost by
product disclosure.
2 Excludes loan commitments and financial guarantees of £18.8bn carried at fair
value.
3 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 £155.2bn and impairment allowance of £114m. This comprises
£6m ECL on £154.9bn Stage 1 assets, £1m on £157m Stage 2 fair value
through other comprehensive income assets, other assets and cash collateral
and settlement balances and £107m on £110m Stage 3 other assets.
Loans and advances at amortised cost by product
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 31.12.22 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 153,672 15,990 1,684 526 18,200 2,414 174,286
Credit cards, unsecured loans and other retail lending 44,175 7,126 397 576 8,099 2,122 54,396
Wholesale loans 152,698 20,194 150 97 20,441 2,550 175,689
Total 350,545 43,310 2,231 1,199 46,740 7,086 404,371
Impairment allowance
Home loans 29 53 11 9 73 414 516
Credit cards, unsecured loans and other retail lending 582 1,483 129 220 1,832 1,278 3,692
Wholesale loans 446 403 6 2 411 527 1,384
Total 1,057 1,939 146 231 2,316 2,219 5,592
Net exposure
Home loans 153,643 15,937 1,673 517 18,127 2,000 173,770
Credit cards, unsecured loans and other retail lending 43,593 5,643 268 356 6,267 844 50,704
Wholesale loans 152,252 19,791 144 95 20,030 2,023 174,305
Total 349,488 41,371 2,085 968 44,424 4,867 398,779
Coverage ratio % % % % % % %
Home loans - 0.3 0.7 1.7 0.4 17.1 0.3
Credit cards, unsecured loans and other retail lending 1.3 20.8 32.5 38.2 22.6 60.2 6.8
Wholesale loans 0.3 2.0 4.0 2.1 2.0 20.7 0.8
Total 0.3 4.5 6.5 19.3 5.0 31.3 1.4
As at 31.12.21
Gross exposure £m £m £m £m £m £m £m
Home loans 148,058 17,133 1,660 707 19,500 2,122 169,680
Credit cards, unsecured loans and other retail lending 37,840 5,102 300 248 5,650 2,332 45,822
Wholesale loans 132,967 15,246 306 391 15,943 2,781 151,691
Total 318,865 37,481 2,266 1,346 41,093 7,235 367,193
Impairment allowance
Home loans 19 46 6 7 59 397 475
Credit cards, unsecured loans and other retail lending 824 1,493 85 123 1,701 1,504 4,029
Wholesale loans 363 248 4 3 255 620 1,238
Total 1,206 1,787 95 133 2,015 2,521 5,742
Net exposure
Home loans 148,039 17,087 1,654 700 19,441 1,725 169,205
Credit cards, unsecured loans and other retail lending 37,016 3,609 215 125 3,949 828 41,793
Wholesale loans 132,604 14,998 302 388 15,688 2,161 150,453
Total 317,659 35,694 2,171 1,213 39,078 4,714 361,451
Coverage ratio % % % % % % %
Home loans - 0.3 0.4 1.0 0.3 18.7 0.3
Credit cards, unsecured loans and other retail lending 2.2 29.3 28.3 49.6 30.1 64.5 8.8
Wholesale loans 0.3 1.6 1.3 0.8 1.6 22.3 0.8
Total 0.4 4.8 4.2 9.9 4.9 34.8 1.6
Loans and advances at amortised cost by selected sectors
The table below presents a breakdown of drawn exposure and impairment
allowance for loans and advances at amortised cost with stage allocation for
selected industry sectors within the wholesale loans portfolio. As the nature
of macroeconomic uncertainty has evolved from the COVID-19 pandemic towards
high inflation, supply chain constraints and consumer demand headwinds, so has
the selected population under management focus. The credit risk industry
concentration disclosure in the analysis of the concentration of credit risk
section represents all the industry categories and the below only covers a
subset of that table.
The gross loans and advances to selected sectors has decreased during the
year. The increased provision is informed by the current macroeconomic outlook
and underlying portfolio performance. The wholesale portfolio also benefits
from a hedge protection programme that enables effective risk management
against credit losses. An additional £115m (December 2021: £123m) impairment
allowance has been applied to the undrawn exposures not included in the table
below.
Gross exposure Impairment allowance
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
As at 31.12.22 £m £m £m £m £m £m £m £m
Autos 881 194 31 1,106 6 5 6 17
Consumer manufacture 3,845 1,729 199 5,773 45 41 46 132
Discretionary retail and wholesale 5,143 1,711 249 7,103 41 37 51 129
Hospitality and leisure 3,902 1,316 429 5,647 40 31 70 141
Passenger travel 744 267 51 1,062 9 7 13 29
Real estate 13,042 3,049 499 16,590 91 66 123 280
Steel and aluminium manufacturers 486 85 18 589 7 1 8 16
Total 28,043 8,351 1,476 37,870 239 188 317 744
Total of wholesale exposures (%) 18% 41% 58% 22% 54% 46% 60% 54%
Gross exposure Impairment allowance
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
As at 31.12.21 £m £m £m £m £m £m £m £m
Autos 656 295 2 953 3 3 - 6
Consumer manufacture 3,904 1,304 211 5,419 18 22 43 83
Discretionary retail and wholesale 5,413 1,197 230 6,840 47 20 54 121
Hospitality and leisure 4,348 1,613 384 6,345 28 33 44 105
Passenger travel 856 285 143 1,284 30 8 40 78
Real estate 13,620 3,314 518 17,452 65 53 93 211
Steel and aluminium manufacturers 415 75 6 496 2 3 1 6
Total 29,212 8,083 1,494 38,789 193 142 275 610
Total of wholesale exposures (%) 22% 51% 54% 26% 53% 56% 44% 49%
Exposure to UK Commercial Real Estate (CRE) of £9.7bn (2021: £10bn(1))
remained stable and was predominantly in Stage 1 at 81% (2021: 78%). The loan
portfolio was well collateralised, hence a low coverage of 1.1% (ECL:
£0.1bn). Exposure at Stage 3 was 2% (2021: 3%) with a coverage ratio of 12%
(2021: 18%).
However, UK CRE has been included within selected sector scoping as the
broader real estate sector remains under pressure due to pricing and
affordability concerns, as well as construction input costs and supply chain
issues adding to the uncertainty, in particular across non-investment grade
exposures.
The coverage ratio for selected sectors has increased from 1.6% as at 31
December 2021 to 2.0% as at 31 December 2022. Non-default coverage ratio has
increased from 0.9% as at 31 December 2021 to 1.2% as at 31 December 2022.
1 From 2022, Barclays has enhanced the process of identifying UK CRE exposures.
Movement in gross exposures and impairment allowance including provisions for
loan commitments and financial guarantees
The following tables present a reconciliation of the opening to the closing
balance of the exposure and impairment allowance. An explanation of the
methodology used to determine credit impairment provisions is included in the
Barclays PLC Annual Report 2022. Transfers between stages in the table have
been reflected as if they had taken place at the beginning of the year. The
movements are measured over a 12-month period.
Loans and advances at amortised cost
Stage 1 Stage 2 Stage 3 Total
Gross exposure ECL Gross exposure ECL Gross exposure ECL Gross exposure ECL
Home loans £m £m £m £m £m £m £m £m
As at 1 January 2022 148,058 19 19,500 59 2,122 397 169,680 475
Transfers from Stage 1 to Stage 2 (8,747) (1) 8,747 1 - - - -
Transfers from Stage 2 to Stage 1 7,489 24 (7,489) (24) - - - -
Transfers to Stage 3 (400) - (725) (6) 1,125 6 - -
Transfers from Stage 3 32 1 229 4 (261) (5) - -
Business activity in the period(1) 30,028 10 1,142 7 6 - 31,176 17
Refinements to models used for calculation - - - - - - - -
Net drawdowns, repayments, net re-measurement and movement due to exposure and (8,846) (22) (1,081) 36 (125) 52 (10,052) 66
risk parameter changes
Final repayments(2) (13,942) (2) (2,123) (4) (426) (9) (16,491) (15)
Disposals - - - - - - - -
Write-offs(3) - - - - (27) (27) (27) (27)
As at 31 December 2022(4) 153,672 29 18,200 73 2,414 414 174,286 516
Credit cards, unsecured loans and other retail lending
As at 1 January 2022 37,840 824 5,650 1,701 2,332 1,504 45,822 4,029
Transfers from Stage 1 to Stage 2 (3,474) (80) 3,474 80 - - - -
Transfers from Stage 2 to Stage 1 1,941 489 (1,941) (489) - - - -
Transfers to Stage 3 (649) (20) (707) (307) 1,356 327 - -
Transfers from Stage 3 87 33 25 13 (112) (46) - -
Business activity in the period(1) 11,339 177 769 186 157 126 12,265 489
Refinements to models used for calculation(5) - 86 - (45) - 96 - 137
Net drawdowns, repayments, net re-measurement and movement due to exposure and 1,246 (887) 1,199 736 179 787 2,624 636
risk parameter changes
Final repayments(2) (3,996) (36) (341) (32) (228) (60) (4,565) (128)
Disposals(6) (159) (4) (29) (11) (275) (169) (463) (184)
Write-offs(3) - - - - (1,287) (1,287) (1,287) (1,287)
As at 31 December 2022(4) 44,175 582 8,099 1,832 2,122 1,278 54,396 3,692
1 Business activity in the period does not include additional drawdowns on the
existing facility which are reported under 'Net drawdowns, repayments, net
re-measurement and movements due to exposure and risk parameter changes'.
Business activity reported within Credit cards, unsecured loans and other
retail lending portfolio includes Gap portfolio acquisition in US cards of
£2.7bn.
2 Final repayments include repayment from the facility closed during the year
whereas partial repayments from existing facility are reported under 'Net
drawdowns, repayments, net remeasurement and movements due to exposure and
risk parameter changes'.
3 In 2022, gross write-offs amounted to £1,620m (2021: £1,836m). In Q422,
£329m of balances with de minimis recovery expectations were written-off in
line with policy in UK Cards and Unsecured Loans. Post write-off recoveries
amounted to £64m (2021: £66m). Net write-offs represent gross write-offs
less post write-off recoveries and amounted to £1,556m (2021: £1,770m).
4 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 £180.1bn (December 21: £155.2bn) and an impairment
allowance of £163m (December 21: £114m). This comprises £10m ECL (December
21: £6m) on £178.4bn Stage 1 assets (December 21: £154.9bn), £9m (December
21: £1m) on £1.5bn Stage 2 fair value through other comprehensive income
assets, other assets and cash collateral and settlement balances (December 21:
£157m) and £144m (December 21: £107m) on £149m Stage 3 other assets
(December 21: £110m).
5 Refinements to models used for calculation reported within Credit cards,
unsecured loans and other retail lending portfolio include a £0.3bn movement
in US Cards and £(0.2)bn movement in UK Cards. These reflect model
enhancements made during the year. Barclays continually review the output of
models to determine accuracy of the ECL calculation including review of model
monitoring, external benchmarking and experience of model operation over an
extended period of time. This ensures that the models used continue to reflect
the risks inherent across the businesses.
6 The £0.5bn disposals reported within Credit cards, unsecured loans and other
retail lending portfolio includes £0.2bn sale of NFL portfolio within US
Cards and £0.3bn of debt sales undertaken during the year.
Loans and advances at amortised cost
Stage 1 Stage 2 Stage 3 Total
Gross exposure ECL Gross exposure ECL Gross exposure ECL Gross exposure ECL
Wholesale loans £m £m £m £m £m £m £m £m
As at 1 January 2022 132,967 363 15,943 255 2,781 620 151,691 1,238
Transfers from Stage 1 to Stage 2 (9,488) (67) 9,488 67 - - - -
Transfers from Stage 2 to Stage 1 5,258 55 (5,258) (55) - - - -
Transfers to Stage 3 (1,480) (6) (684) (11) 2,164 17 - -
Transfers from Stage 3 204 21 339 28 (543) (49) - -
Business activity in the period(1) 40,490 83 4,104 86 239 30 44,833 199
Refinements to models used for calculation(2) - (64) - (66) - (374) - (504)
Net drawdowns, repayments, net re-measurement and movement due to exposure and 12,799 103 352 154 (1,504) 693 11,647 950
risk parameter changes(3)
Final repayments(4) (26,540) (42) (3,812) (47) (232) (57) (30,584) (146)
Disposals(5) (1,512) - (31) - (49) (47) (1,592) (47)
Write-offs(6) - - - - (306) (306) (306) (306)
As at 31 December 2022(7) 152,698 446 20,441 411 2,550 527 175,689 1,384
Reconciliation of ECL movement to impairment charge/(release) for the period
Stage 1 Stage 2 Stage 3 Total
£m £m £m £m
Home loans 10 14 44 68
Credit cards, unsecured loans and other retail lending (238) 142 1,230 1,134
Wholesale loans 83 156 260 499
ECL movement excluding assets derecognised due to disposals and write-offs (145) 312 1,534 1,701
ECL movement on loan commitments and other financial guarantees 28 13 - 41
ECL movement on other financial assets(7) 4 8 37 49
Recoveries and reimbursements(8) (122) (63) (78) (263)
Total exchange and other adjustments(9) (308)
Total income statement charge for the period 1,220
1 Business activity in the period does not include additional drawdowns on the
existing facility which are reported under 'Net drawdowns, repayments, net
re-measurement and movements due to exposure and risk parameter changes'.
2 Refinements to models used for calculation reported within Wholesale loans
include a £(0.5)bn movement in Business Banking. This relates to an update in
the underlying ECL model that now fully recognises the 100% government
guarantee against Barclays Bounce Back Loans exposure.
3 'Net drawdowns, repayments, net re-measurement and movements due to exposure
and risk parameter changes' reported within Wholesale loans also include
assets of £1.3bn de-recognised due to payment received on defaulted loans
from government guarantees issued under government's Bounce Back Loans Scheme.
4 Final repayments include repayment from the facilities closed during the year
whereas partial repayments from existing facility are reported under 'Net
drawdowns, repayments, net remeasurement and movements due to exposure and
risk parameter changes'.
5 The £1.6bn disposals reported within Wholesale loans includes sale of debt
securities as part of Group Treasury Operations.
6 In 2022, gross write-offs amounted to £1,620m (2021: £1,836m). In Q422,
£329m of balances with de minimis recovery expectations were written-off in
line with policy in UK Cards and Unsecured Loans. Post write-off recoveries
amounted to £64m (2021: £66m). Net write-offs represent gross write-offs
less post write-off recoveries and amounted to £1,556m (2021: £1,770m).
7 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 £180.1bn (December 21: £155.2bn) and impairment allowance
of £163m (December 21: £114m). This comprises £10m ECL (December 21: £6m)
on £178.4bn stage 1 assets (December 21: £154.9bn), £9m (December 21: £1m)
on £1.5bn stage 2 fair value through other comprehensive income assets, other
assets and cash collateral and settlement balances (December 21: £157m) and
£144m (December 21: £107m) on £149m stage 3 other assets (December 21:
£110m).
8 Recoveries and reimbursements includes £199m (2021 loss: £306m) for
reimbursements expected to be received under the arrangement where Group has
entered into financial guarantee contracts which provide credit protection
over certain loan assets with third parties and cash recoveries of previously
written off amounts of £64m (FY21: £66m).
9 Exchange and other adjustments includes foreign exchange and interest and fees
in suspense.
Loan commitments and financial guarantees
Stage 1 Stage 2 Stage 3 Total
Gross ECL Gross ECL Gross ECL Gross ECL
exposure exposure exposure exposure
Home loans £m £m £m £m £m £m £m £m
As at 1 January 2022 10,833 - 532 - 3 - 11,368 -
Net transfers between stages 8 - (17) - 9 - - -
Business activity in the period 8,034 - - - - - 8,034 -
Net drawdowns, repayments, net re-measurement and movement due to exposure and (6,793) - (21) - (6) - (6,820) -
risk parameter changes
Limit management and final repayments (368) - (44) - - - (412) -
As at 31 December 2022 11,714 - 450 - 6 - 12,170 -
Credit cards, unsecured loans and other retail lending
As at 1 January 2022 122,819 50 5,718 61 218 20 128,755 131
Net transfers between stages (3,390) 47 3,050 (42) 340 (5) - -
Business activity in the period 38,204 25 451 27 14 2 38,669 54
Net drawdowns, repayments, net re-measurement and movement due to exposure and 9,633 (54) (1,949) 67 (151) 5 7,533 18
risk parameter changes
Limit management and final repayments (8,212) (7) (503) (23) (89) (2) (8,804) (32)
As at 31 December 2022 159,054 61 6,767 90 332 20 166,153 171
Wholesale loans
As at 1 January 2022 178,490 167 28,565 241 1,077 3 208,132 411
Net transfers between stages 5,826 60 (5,759) (64) (67) 4 - -
Business activity in the period 43,683 28 4,233 54 15 - 47,931 82
Net drawdowns, repayments, net re-measurement and movement due to exposure and 28,353 (42) 5,953 59 138 (2) 34,444 15
risk parameter changes
Limit management and final repayments (54,175) (29) (9,515) (65) (321) (2) (64,011) (96)
As at 31 December 2022 202,177 184 23,477 225 842 3 226,496 412
Management adjustments to models for impairment
Management adjustments to impairment models are applied in order to factor in
certain conditions or changes in policy that are not fully incorporated into
the impairment models, or to reflect additional facts and circumstances at the
period end. Management adjustments are reviewed and incorporated into future
model development where applicable.
Management adjustments are captured through "Economic uncertainty" and "Other"
adjustments presented by product below:
Management adjustments to models for impairment allowance presented by
product(1)
Impairment allowance pre management adjustments(2) Economic uncertainty adjustments Other adjustments Management adjustments Total impairment allowance(3) Proportion of Management adjustments to total impairment allowance
(a) (b) (a+b)
As at 31 December 2022 £m £m £m £m £m %
Home loans 427 4 85 89 516 17.2
Credit cards, unsecured loans and other retail lending 3,543 118 202 320 3,863 8.3
Wholesale loans 1,680 195 (79) 116 1,796 6.5
Total 5,650 317 208 525 6,175 8.5
As at 31 December 2021 £m £m £m £m £m %
Home loans 372 72 31 103 475 21.7
Credit cards, unsecured loans and other retail lending 2,798 1,217 145 1,362 4,160 32.7
Wholesale loans 1,628 403 (382) 21 1,649 1.3
Total 4,798 1,692 (206) 1,486 6,284 23.6
Economic uncertainty adjustments presented by stage
Stage 1 Stage 2 Stage 3 Total
As at 31 December 2022 £m £m £m £m
Home loans 1 3 - 4
Credit cards, unsecured loans and other retail lending 24 93 1 118
Wholesale loans 181 14 - 195
Total 206 110 1 317
As at 31 December 2021 £m £m £m £m
Home loans 5 35 32 72
Credit cards, unsecured loans and other retail lending 403 803 11 1,217
Wholesale loans 333 70 - 403
Total 741 908 43 1,692
1 Positive values reflect an increase in impairment allowance and negative
values reflect a reduction in the impairment allowance.
2 Includes £4.8bn (December 2021: £4.2bn) of modelled ECL, £0.4bn (December
2021: £0.5bn) of individually assessed impairments and £0.5bn (December
2021: £0.1bn) ECL from non-modelled exposures.
3 Total impairment allowance consists of ECL stock on drawn and undrawn
exposure.
Economic uncertainty adjustments
Models have been developed with data from non-inflationary periods
establishing a relationship between input variables and customer delinquency
based on past behaviour. Additionally, models are trying to interpret
significant rates of change in macroeconomic variables and applying these to
stable probability of default (PD) levels. As such there is a risk that the
modelled output fails to capture the appropriate response to changes in
macroeconomic variables and rising costs with modelled impairment provisions
impacted by uncertainty.
This uncertainty continues to be captured in two ways. Firstly, customer
uncertainty: the identification of customers and clients who may be more
vulnerable to economic instability; and secondly, model uncertainty: to
capture the impact from model limitations and sensitivities to specific
macroeconomic parameters which are applied at a portfolio level.
In 2022, previously established economic uncertainty adjustments have been
partially released, informed by some normalisation of customer behaviour,
refreshed scenarios and a rebuild of certain models to better capture the
macroeconomic outlook.
The balance as at 31 December 2022 is £317m (December 2021: £1,692m) and
includes:
Customer and client uncertainty provisions of £423m (December 2021: £1,508m)
includes:
· Credit cards, unsecured loans and other retail lending includes an adjustment
of £118m (December 2021: £1,203m) which has been applied to customers and
clients considered most vulnerable to affordability pressures. This adjustment
is predominantly held in Stage 2 in line with customer risk profiles.
The reduction is informed by the release of COVID-19 related adjustments as
credit performance stabilises at or below pre-pandemic levels which is
reflected in the models, and a rebuild of certain models to better capture the
macroeconomic outlook.
· Wholesale loans: £301m (FY21: £305m) includes an adjustment of £205m for
exposures considered most at risk from inflationary concerns, supply chain
constraints and consumer demand headwinds. The adjustment involves applying
Stage 2 coverage rates to Stage 1 exposures assessed as most vulnerable.
Sectors in scope are presented in the selected sectors disclosure on page 32.
The remaining adjustment includes £92m to reflect possible cross default risk
on Barclays' lending in respect of clients who have taken bounce back loans.
Model uncertainty provisions of £(106)m (December 2021: £184m) includes:
· Wholesale loans: £(106)m (December 2021: £98m) includes an adjustment to
correct for the deterioration in wholesale PDs impacted by model
over-sensitivity to certain macroeconomic variables. In 2021, this adjustment
was held at £98m driven by an unintuitive model output from certain Q421
macroeconomic variables.
· Management adjustments of £72m within home loans in 2021 primarily comprised
of a now retired adjustment, reflecting the non-linearity of the UK mortgages
portfolio in order to generate a more appropriate level of predicted results.
Other adjustments
Other adjustments are operational in nature and are expected to remain in
place until they can be reflected in the underlying models. These adjustments
result from data limitations and model performance related issues identified
through model monitoring and other established governance processes.
Other adjustments of £208m (December 2021: £(206)m) includes:
· Home loans: £85m (December 2021: £31m) primarily includes adjustments for
model performance informed by model monitoring and an adjustment for the
adoption of the new definition of default under the Capital Requirements
Regulation.
· Credit cards, unsecured loans and other retail lending: £202m (December 2021:
£145m) primarily includes an adjustment for adoption of the new definition of
default under the Capital Requirements Regulation and an adjustment to the
qualitative measures used in identification of high-risk account management
(HRAM) accounts for US cards, partially offset by a recalibration of Loss
Given Default (LGD) to reflect revised recovery expectations.
The £145m adjustments held in December 2021 primarily included adjustments
for model performance informed by model monitoring, partially offset by an
adjustment for reclassification of loans and advances from Stage 2 to Stage 1
in credit cards. The reclassification followed a review of back-testing
results which indicated that accuracy of origination probability of default
characteristics require management adjustment. These adjustments are no longer
required due to model enhancements made during the year.
· Wholesale loans: £(79)m (December 2021: £(382)m): includes adjustments for
model performance informed by model monitoring.
Management adjustments of £(382)m within wholesale loans in 2021 consisted of
an adjustment of £(380)m applied on bounce back loans to reverse out the
modelled charge which did not consider the government guarantee. This
adjustment is no longer needed due to model enhancements made during the year.
Measurement uncertainty
Scenarios used to calculate the Group's ECL charge were refreshed in Q422 with
the Baseline scenario reflecting the latest consensus macroeconomic forecasts
available at the time of the scenario refresh. In the Baseline scenario,
further deterioration in major economies, as inflation pressures continue to
squeeze household income, along with significant monetary policy tightening
contribute to lower growth prospects. UK GDP is expected to continue falling
into 2023 and the US economy dips into mild recession in 2023. Slight
increases in the UK and US unemployment rates are expected, peaking at 4.9% in
Q423 and 4.7% in Q124 respectively. Central banks continue raising interest
rates, peaking during 2023, and consumer price inflation eases over 2023.
In the Downside 2 scenario, inflation continues to accelerate amid increasing
gas and oil prices and persistent supply-chain pressures as a result of the
Russia-Ukraine conflict. Central banks are forced to raise interest rates
sharply with the UK bank rate reaching 8% and the US federal funds rate
peaking at 7%. Unemployment peaks at 8.5% in the UK and 8.6% in the US. Given
already stretched valuations, the sharp increase in borrowing costs sees house
prices decrease significantly. In the Upside 2 scenario, lower energy prices
add downward pressure on prices globally, while recovering labour force
participation limits wage growth. As a result of easing inflation, central
banks lower interest rates to support the economic recovery.
The methodology for estimating scenario probability weights involves
simulating a range of future paths for UK and US GDP using historical data
with the five scenarios mapped against the distribution of these future paths.
The median is centred around the Baseline with scenarios further from the
Baseline attracting a lower weighting before the five weights are normalised
to total 100%. The increase in the Downside weightings and the decrease in the
Upside weightings reflected the deteriorating economic outlook which moved the
Baseline UK/US GDP paths closer to the Downside scenarios. For further details
see page 41.
The economic uncertainty adjustments of £0.3bn (2021: £1.7bn) have been
applied as overlays to the modelled ECL output. These adjustments consist of a
customer and client uncertainty provision of £0.4bn (2021: £1.5bn) which has
been applied to customers and clients considered most vulnerable to
affordability pressures, and a model uncertainty adjustment of £(0.1)bn
(2021: £0.2bn). For further details see page 36.
The tables below show the key macroeconomic variables used in the five
scenarios (5 year annual paths), the probability weights applied to each
scenario.
Baseline average macroeconomic variables used in the calculation of ECL
2022 2023 2024 2025 2026
As at 31.12.22 % % % % %
UK GDP(1) 3.3 (0.8) 0.9 1.8 1.9
UK unemployment(2) 3.7 4.5 4.4 4.1 4.2
UK HPI(3) 8.4 (4.7) (1.7) 2.2 2.2
UK bank rate 1.8 4.4 4.1 3.8 3.4
US GDP(1) 1.8 0.5 1.2 1.5 1.5
US unemployment(4) 3.7 4.3 4.7 4.7 4.7
US HPI(5) 11.2 1.8 1.5 2.3 2.4
US federal funds rate 2.1 4.8 3.6 3.1 3.0
2021 2022 2023 2024 2025
As at 31.12.21 % % % % %
UK GDP(1) 6.2 4.9 2.3 1.9 1.7
UK unemployment(2) 4.8 4.7 4.5 4.3 4.2
UK HPI(3) 4.7 1.0 1.9 1.9 2.3
UK bank rate 0.1 0.8 1.0 1.0 0.8
US GDP(1) 5.5 3.9 2.6 2.4 2.4
US unemployment(4) 5.5 4.2 3.6 3.6 3.6
US HPI(5) 11.8 4.5 5.2 4.9 5.0
US federal funds rate 0.2 0.3 0.9 1.2 1.3
1 Average Real GDP seasonally adjusted change in year.
2 Average UK unemployment rate 16-year+.
3 Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to
prior year end.
4 Average US civilian unemployment rate 16-year+.
5 Change in year end US HPI = FHFA House Price Index, relative to prior year
end.
Downside 2 average economic variables used in the calculation of ECL
2022 2023 2024 2025 2026
As at 31.12.22 % % % % %
UK GDP(1) 3.3 (3.4) (3.8) 2.0 2.3
UK unemployment(2) 3.7 6.0 8.4 8.0 7.4
UK HPI(3) 8.4 (18.3) (18.8) (7.7) 8.2
UK bank rate 1.8 7.3 7.9 6.6 5.5
US GDP(1) 1.8 (2.7) (3.4) 2.0 2.6
US unemployment(4) 3.7 6.0 8.5 8.1 7.1
US HPI(5) 11.2 (3.1) (4.0) (1.9) 4.8
US federal funds rate 2.1 6.6 6.9 5.8 4.6
2021 2022 2023 2024 2025
As at 31.12.21 % % % % %
UK GDP(1) 6.2 0.2 (4.0) 2.8 4.3
UK unemployment(2) 4.8 7.2 9.0 7.6 6.3
UK HPI(3) 4.7 (14.3) (21.8) 11.9 15.2
UK bank rate 0.1 2.2 3.9 3.1 2.2
US GDP(1) 5.5 (0.8) (3.5) 2.5 3.2
US unemployment(4) 5.5 6.4 9.1 8.1 6.4
US HPI(5) 11.8 (6.6) (9.0) 5.9 6.7
US federal funds rate 0.2 2.1 3.4 2.6 2.0
1 Average Real GDP seasonally adjusted change in year.
2 Average UK unemployment rate 16-year+.
3 Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to
prior year end.
4 Average US civilian unemployment rate 16-year+.
5 Change in year end US HPI = FHFA House Price Index, relative to prior year
end.
Downside 1 average economic variables used in the calculation of ECL
2022 2023 2024 2025 2026
As at 31.12.22 % % % % %
UK GDP(1) 3.3 (2.1) (1.5) 1.9 2.1
UK unemployment(2) 3.7 5.2 6.4 6.0 5.8
UK HPI(3) 8.4 (11.7) (10.6) (2.8) 5.2
UK bank rate 1.8 5.9 6.1 5.3 4.6
US GDP(1) 1.8 (1.1) (1.1) 1.7 2.1
US unemployment(4) 3.7 5.1 6.6 6.4 5.9
US HPI(5) 11.2 (0.7) (1.3) 0.2 3.6
US federal funds rate 2.1 5.8 5.4 4.4 3.9
2021 2022 2023 2024 2025
As at 31.12.21 % % % % %
UK GDP(1) 6.2 2.8 (0.7) 2.3 2.9
UK unemployment(2) 4.8 6.2 6.8 6.0 5.3
UK HPI(3) 4.7 (6.8) (10.5) 6.9 8.6
UK bank rate 0.1 1.6 2.7 2.3 1.6
US GDP(1) 5.5 1.6 (0.4) 2.4 2.7
US unemployment(4) 5.5 5.4 6.6 6.1 5.2
US HPI(5) 11.8 (1.2) (2.1) 4.8 5.2
US federal funds rate 0.2 1.3 2.3 2.1 1.8
1 Average Real GDP seasonally adjusted change in year.
2 Average UK unemployment rate 16-year+.
3 Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to
prior year end.
4 Average US civilian unemployment rate 16-year+.
5 Change in year end US HPI = FHFA House Price Index, relative to prior year
end.
Upside 2 average economic variables used in the calculation of ECL
2022 2023 2024 2025 2026
As at 31.12.22 % % % % %
UK GDP(1) 3.3 2.8 3.7 2.9 2.4
UK unemployment(2) 3.7 3.5 3.4 3.4 3.4
UK HPI(3) 8.4 8.7 7.5 4.4 4.2
UK bank rate 1.8 3.1 2.6 2.5 2.5
US GDP(1) 1.8 3.3 3.5 2.8 2.8
US unemployment(4) 3.7 3.3 3.3 3.3 3.3
US HPI(5) 11.2 5.8 5.1 4.5 4.5
US federal funds rate 2.1 3.6 2.9 2.8 2.8
2021 2022 2023 2024 2025
As at 31.12.21 % % % % %
UK GDP(1) 6.2 7.2 4.0 2.7 2.1
UK unemployment(2) 4.8 4.5 4.1 4.0 4.0
UK HPI(3) 4.7 8.5 9.0 5.2 4.2
UK bank rate 0.1 0.2 0.5 0.5 0.3
US GDP(1) 5.5 5.3 4.1 3.5 3.4
US unemployment(4) 5.5 3.9 3.4 3.3 3.3
US HPI(5) 11.8 10.6 8.5 7.2 6.6
US federal funds rate 0.2 0.3 0.4 0.7 1.0
1 Average Real GDP seasonally adjusted change in year.
2 Average UK unemployment rate 16-year+.
3 Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to
prior year end.
4 Average US civilian unemployment rate 16-year+.
5 Change in year end US HPI = FHFA House Price Index, relative to prior year
end.
Upside 1 average economic variables used in the calculation of ECL
2022 2023 2024 2025 2026
As at 31.12.22 % % % % %
UK GDP(1) 3.3 1.0 2.3 2.4 2.1
UK unemployment(2) 3.7 4.0 3.9 3.8 3.8
UK HPI(3) 8.4 1.8 2.9 3.3 3.2
UK bank rate 1.8 3.5 3.3 3.0 2.8
US GDP(1) 1.8 1.9 2.3 2.2 2.2
US unemployment(4) 3.7 3.8 4.0 4.0 4.0
US HPI(5) 11.2 3.8 3.3 3.4 3.4
US federal funds rate 2.1 3.9 3.4 3.0 3.0
2021 2022 2023 2024 2025
As at 31.12.21 % % % % %
UK GDP(1) 6.2 6.0 3.1 2.3 1.9
UK unemployment(2) 4.8 4.6 4.3 4.2 4.1
UK HPI(3) 4.7 5.0 5.0 3.9 3.3
UK bank rate 0.1 0.6 0.8 0.8 0.5
US GDP(1) 5.5 4.6 3.4 2.9 2.9
US unemployment(4) 5.5 4.0 3.5 3.5 3.5
US HPI(5) 11.8 8.3 7.0 6.0 5.7
US federal funds rate 0.2 0.3 0.6 1.0 1.1
1 Average Real GDP seasonally adjusted change in year.
2 Average UK unemployment rate 16-year+.
3 Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to
prior year end.
4 Average US civilian unemployment rate 16-year+.
5 Change in year end US HPI = FHFA House Price Index, relative to prior year
end.
Scenario probability weighting(1)
Upside 2 Upside 1 Baseline Downside 1 Downside 2
% % % % %
As at 31.12.22
Scenario probability weighting 10.9 23.1 39.4 17.6 9.0
As at 31.12.21
Scenario probability weighting 20.9 27.2 30.1 14.8 7.0
1 For further details on changes to scenario weights please see page 38.
Specific bases show the most extreme position of each variable in the context
of the downside/upside scenarios, for example, the highest unemployment for
downside scenarios, average unemployment for baseline scenarios and lowest
unemployment for upside scenarios. GDP and HPI downside and upside scenario
data represents the lowest and highest cumulative position relative to the
start point, in the 20 quarter period.
Macroeconomic variables (specific bases)(1)
Upside 2 Upside 1 Baseline Downside 1 Downside 2
As at 31.12.22 % % % % %
UK GDP(2) 13.9 9.4 1.4 (3.2) (6.8)
UK unemployment(3) 3.4 3.6 4.2 6.6 8.5
UK HPI(4) 37.8 21.0 1.2 (17.9) (35.0)
UK bank rate 0.5 0.5 3.5 6.3 8.0
US GDP(2) 14.1 9.6 1.3 (2.5) (6.3)
US unemployment(3) 3.3 3.6 4.4 6.7 8.6
US HPI(4) 35.0 27.5 3.8 3.7 0.2
US federal funds rate 0.1 0.1 3.3 6.0 7.0
Upside 2 Upside 1 Baseline Downside 1 Downside 2
As at 31.12.21 % % % % %
UK GDP(2) 21.4 18.3 3.4 (1.6) (1.6)
UK unemployment(3) 4.0 4.1 4.5 7.0 9.2
UK HPI(4) 35.7 23.8 2.4 (12.7) (29.9)
UK bank rate 0.1 0.1 0.7 2.8 4.0
US GDP(2) 22.8 19.6 3.4 1.5 (1.3)
US unemployment(3) 3.3 3.5 4.1 6.8 9.5
US HPI(4) 53.3 45.2 6.2 2.2 (5.0)
US federal funds rate 0.1 0.1 0.8 2.3 3.5
1 UK GDP = Real GDP growth seasonally adjusted; UK unemployment = UK
unemployment rate 16-year+; UK HI = Halifax All Houses, All Buyers Index; US
GDP = Real GDP growth seasonally adjusted; US unemployment = US civilian
unemployment rate 16-year+; US HPI = FHFA House Price Index. 20 quarter period
starts from Q122 (2021: Q121).
2 Maximum growth relative to Q421 (2021: Q420), based on 20 quarter period in
Upside scenarios; 5-year yearly average CAGR in Baseline; minimum growth
relative to Q421 (2021: Q420), based on 20 quarter period in Downside
scenarios.
3 Lowest quarter in 20 quarter period in Upside scenarios; 5-year average in
Baseline; highest quarter 20 quarter period in Downside scenarios.
4 Maximum growth relative to Q421 (2021: Q420), based on 20 quarter period in
Upside scenarios; 5-year quarter end CAGR in Baseline; minimum growth relative
to Q421 (2021: Q420), based on 20 quarter period in Downside scenarios.
Average basis represents the average quarterly value of variables in the 20
quarter period with GDP and HPI based on yearly average and quarterly CAGRs
respectively.
Macroeconomic variables (5-year averages)(1)
Upside 2 Upside 1 Baseline Downside 1 Downside 2
As at 31.12.22 % % % % %
UK GDP(2) 3.0 2.2 1.4 0.7 -
UK unemployment(3) 3.5 3.8 4.2 5.4 6.7
UK HPI(4) 6.6 3.9 1.2 (2.6) (6.4)
UK bank rate 2.5 2.9 3.5 4.7 5.8
US GDP(2) 2.9 2.1 1.3 0.7 -
US unemployment(3) 3.4 3.9 4.4 5.5 6.7
US HPI(4) 6.2 5.0 3.8 2.5 1.2
US federal funds rate 2.8 3.1 3.3 4.3 5.2
Upside 2 Upside 1 Baseline Downside 1 Downside 2
As at 31.12.21 % % % % %
UK GDP(2) 4.4 3.9 3.4 2.7 1.8
UK unemployment(3) 4.3 4.4 4.5 5.8 7.0
UK HPI(4) 6.3 4.4 2.4 0.3 (2.0)
UK bank rate 0.3 0.5 0.7 1.7 2.3
US GDP(2) 4.4 3.9 3.4 2.4 1.3
US unemployment(3) 3.9 4.0 4.1 5.7 7.1
US HPI(4) 8.9 7.7 6.2 3.6 1.4
US federal funds rate 0.5 0.6 0.8 1.5 2.1
1 UK GDP = Real GDP growth seasonally adjusted; UK unemployment = UK
unemployment rate 16-year+; UK HPI = Halifax All Houses, All Buyers Index; US
GDP = Real GDP growth seasonally adjusted; US unemployment = US civilian
unemployment rate 16-year+; US HPI = FHFA House Price Index.
2 5-year yearly average CAGR, starting 2021 (2021: 2020).
3 5-year average. Period based on 20 quarters from Q122 (2021: Q121).
4 5-year quarter end CAGR, starting Q421 (2021: Q420).
ECL under 100% weighted scenarios for modelled portfolios
The table below shows the modelled ECL assuming each of the five modelled
scenarios are 100% weighted with the dispersion of results around the
Baseline, highlighting the impact on exposure and ECL across the scenarios.
Model exposure uses exposure at default (EAD) values and is not directly
comparable to gross exposure used in prior disclosures.
Scenarios
As at 31 December 2022 Weighted(1) Upside 2 Upside 1 Baseline Downside 1 Downside 2
Stage 1 Model Exposure (£m)
Home loans 144,701 147,754 146,873 145,322 142,599 138,619
Credit cards, unsecured loans and other retail lending(2, 3) 81,329 81,772 81,457 81,171 80,921 80,529
Wholesale loans 186,838 194,970 192,218 188,746 181,247 167,848
Stage 1 Model ECL (£m)
Home loans 7 3 3 4 9 30
Credit cards, unsecured loans and other retail lending 592 562 579 594 604 610
Wholesale loans 325 245 274 308 382 431
Stage 1 Coverage (%)
Home loans - - - - - -
Credit cards, unsecured loans and other retail lending 0.7 0.7 0.7 0.7 0.7 0.8
Wholesale loans 0.2 0.1 0.1 0.2 0.2 0.3
Stage 2 Model Exposure (£m)
Home loans 18,723 15,670 16,551 18,102 20,825 24,805
Credit cards, unsecured loans and other retail lending(2, 3) 9,414 8,131 8,817 9,535 10,377 11,456
Wholesale loans 25,634 17,503 20,255 23,726 31,226 44,624
Stage 2 Model ECL (£m)
Home loans 33 15 18 23 45 151
Credit cards, unsecured loans and other retail lending 1,786 1,487 1,629 1,785 2,004 2,274
Wholesale loans 603 392 463 562 809 1,288
Stage 2 Coverage (%)
Home loans 0.2 0.1 0.1 0.1 0.2 0.6
Credit cards, unsecured loans and other retail lending 19.0 18.3 18.5 18.7 19.3 19.8
Wholesale loans 2.4 2.2 2.3 2.4 2.6 2.9
Stage 3 Model Exposure (£m)(4)
Home loans 1,553 1,553 1,553 1,553 1,553 1,553
Credit cards, unsecured loans and other retail lending 1,606 1,606 1,606 1,606 1,606 1,606
Wholesale loans 2,855 2,855 2,855 2,855 2,855 2,855
Stage 3 Model ECL (£m)
Home loans 332 311 317 323 347 405
Credit cards, unsecured loans and other retail lending 1,033 1,011 1,023 1,034 1,048 1,059
Wholesale loans(5) 49 45 47 49 57 64
Stage 3 Coverage (%)
Home loans 21.4 20.0 20.4 20.8 22.3 26.1
Credit cards, unsecured loans and other retail lending 64.3 63.0 63.7 64.4 65.3 65.9
Wholesale loans(5) 1.7 1.6 1.6 1.7 2.0 2.2
Total Model ECL (£m)
Home loans 372 329 338 350 401 586
Credit cards, unsecured loans and other retail lending 3,411 3,060 3,231 3,413 3,656 3,943
Wholesale loans(5) 977 682 784 919 1,248 1,783
Total Model ECL 4,760 4,071 4,353 4,682 5,305 6,312
Reconciliation to total ECL £m
Total weighted model ECL 4,760
ECL from individually assessed impairments(5) 434
ECL from non-modelled exposures and others 456
ECL from post model management adjustments 525
Of which: ECL from economic uncertainty adjustments 317
Total ECL 6,175
1 Model exposures are allocated to a stage based on an individual scenario
rather than a probability-weighted approach as required for Barclays reported
impairment allowances. As a result, it is not possible to back solve the final
reported weighted ECL from individual scenarios given balances may be assigned
to a different stage dependent on the scenario.
2 For Credit cards, unsecured loans and other retail lending, the model exposure
movement between stages 1 and 2 across scenarios differs due to additional
impacts from the undrawn exposure.
3 For Credit cards, unsecured loans and other retail lending, the dispersion of
results around Baseline has narrowed following model enhancements made during
the year.
4 Model exposures allocated to Stage 3 does not change in any of the scenarios
as the transition criteria relies only on an observable evidence of default as
at 31 December 2022 and not on macroeconomic scenario.
5 Material wholesale loan defaults are individually assessed across different
recovery strategies. As a result, ECL of £434m is reported as an individually
assessed impairment in the reconciliation table.
The use of five scenarios with associated weightings results in a total
weighted ECL uplift from the Baseline ECL of 1.7%.
Home loans: Total weighted ECL of £372m represents a 6.3% increase over the
Baseline ECL (£350m) with coverage ratios remaining steady across the Upside
scenarios, Baseline and Downside 1 scenario. Under the Downside 2 scenario,
total ECL increases to £586m driven by a significant fall in UK HPI to
(18.3)% in 2023 reflecting the non-linearity of the UK portfolio.
Credit cards, unsecured loans and other retail lending: Total weighted ECL of
£3,411m is aligned to the Baseline ECL (£3,413m). The impact of the
deteriorated Baseline scenario relative to the severity of the downside
scenarios is greater than the impact of the higher weights applied to the
Downside scenarios when compared to 2021. This results in a convergence
between Baseline and Weighted ECL in 2022. Total ECL increases to £3,943m
under the Downside 2 scenario, driven by the significant increase in UK
unemployment rate to 6.0% and US unemployment rate to 6.0% in 2023.
Wholesale loans: Total weighted ECL of £977m represents an 6.3% increase over
the Baseline ECL (£919m). Total ECL increases to £1,783m under Downside 2
scenario, driven by a significant decrease in UK GDP to (3.4)% and US GDP to
(2.7)% in 2023.
Scenarios
As at 31 December 2021 Weighted(1) Upside 2 Upside 1 Baseline Downside 1 Downside 2
Stage 1 Model Exposure (£m)
Home loans 137,279 139,117 138,424 137,563 135,544 133,042
Credit cards, unsecured loans and other retail lending(2, 3) 56,783 54,758 55,771 56,821 57,698 55,315
Wholesale loans 174,249 177,453 176,774 175,451 169,814 161,998
Stage 1 Model ECL (£m)
Home loans 4 2 2 3 6 14
Credit cards, unsecured loans and other retail lending 324 266 272 279 350 418
Wholesale loans 290 240 262 286 327 350
Stage 1 Coverage (%)
Home loans - - - - - -
Credit cards, unsecured loans and other retail lending 0.6 0.5 0.5 0.5 0.6 0.8
Wholesale loans 0.2 0.1 0.1 0.2 0.2 0.2
Stage 2 Model Exposure (£m)
Home loans 22,915 21,076 21,769 22,631 24,649 27,151
Credit cards, unsecured loans and other retail lending(2, 3) 7,500 6,447 6,757 7,084 10,689 18,452
Wholesale loans 32,256 29,052 29,732 31,054 36,692 44,507
Stage 2 Model ECL (£m)
Home loans 15 10 11 12 22 47
Credit cards, unsecured loans and other retail lending 1,114 925 988 1,058 1,497 3,295
Wholesale loans 572 431 467 528 851 1,510
Stage 2 Coverage (%)
Home loans 0.1 - 0.1 0.1 0.1 0.2
Credit cards, unsecured loans and other retail lending 14.9 14.3 14.6 14.9 14.0 17.9
Wholesale loans 1.8 1.5 1.6 1.7 2.3 3.4
Stage 3 Model Exposure (£m)(4)
Home loans 1,724 1,724 1,724 1,724 1,724 1,724
Credit cards, unsecured loans and other retail lending 1,922 1,922 1,922 1,922 1,922 1,922
Wholesale loans 1,811 1,811 1,811 1,811 1,811 1,811
Stage 3 Model ECL (£m)
Home loans 303 292 295 299 320 346
Credit cards, unsecured loans and other retail lending 1,255 1,236 1,245 1,255 1,277 1,297
Wholesale loans(5) 323 321 322 323 326 332
Stage 3 Coverage (%)
Home loans 17.6 16.9 17.1 17.3 18.6 20.1
Credit cards, unsecured loans and other retail lending 65.3 64.3 64.8 65.3 66.4 67.5
Wholesale loans(5) 17.8 17.7 17.8 17.8 18.0 18.3
Total Model ECL (£m)
Home loans 322 304 308 314 348 407
Credit cards, unsecured loans and other retail lending 2,693 2,427 2,505 2,592 3,124 5,010
Wholesale loans(5) 1,185 992 1,051 1,137 1,504 2,192
Total Model ECL 4,200 3,723 3,864 4,043 4,976 7,609
Reconciliation to total ECL £m
Total model ECL 4,200
ECL from individually assessed impairments(5) 524
ECL from non-modelled exposures and others 74
ECL from post model management adjustments(6) 1,486
Of which: ECL from economic uncertainty adjustments 1,692
Total ECL 6,284
1 Model exposures are allocated to a stage based on an individual scenario
rather than a probability-weighted approach, as required for Barclays reported
impairment allowances. As a result, it is not possible to back solve the final
reported weighted ECL from individual scenarios given balances may be assigned
to a different stage dependent on the scenario.
2 For Credit cards, unsecured loans and other retail lending, the model exposure
movement between stages 1 and 2 across scenarios differs due to additional
impacts from the undrawn exposure.
3 In 2021, Loans & Advances at amortised cost were used as model exposure
for the International Consumer Bank within this disclosure. The process was
revised in 2022 to incorporate Exposure at Default (EAD) with no impact to
ECL. This has been represented in prior year comparatives.
4 Model exposures allocated to Stage 3 does not change in any of the scenarios
as the transition criteria relies only on an observable evidence of default as
at 31 December 2021 and not on macroeconomic scenario.
5 Material wholesale loan defaults are individually assessed across different
recovery strategies. As a result, ECL of £524m is reported as an individually
assessed impairment in the reconciliation table.
6 Post Model Adjustments include negative adjustments reflecting operational
post model adjustments.
Analysis of specific portfolios and asset types
Secured home loans
The UK home loan portfolio primarily comprises first lien mortgages and
accounts for 93% (December 2021: 93%) of the Group's total home loans balance.
Barclays UK
Home loans principal portfolios As at 31.12.22 As at 31.12.21
Gross loans and advances (£m) 162,380 158,192
90 day arrears rate, excluding recovery book (%) 0.1 0.1
Annualised gross charge-off rates - 180 days past due (%) 0.5 0.5
Recovery book proportion of outstanding balances (%) 0.5 0.6
Recovery book impairment coverage ratio (%) 5.2 4.2
Average marked to market LTV
Balance weighted % 50.4 50.7
Valuation weighted % 37.3 37.5
New lending Year ended 31.12.22 Year ended 31.12.21
New home loan bookings (£m) 30,307 33,945
New home loan proportion > 90% LTV (%) 2.8 1.9
Average LTV on new home loans: balance weighted (%) 68.1 69.5
Average LTV on new home loans: valuation weighted (%) 59.6 61.9
Home loans principal portfolios - distribution of balances by LTV(1)
Distribution of balances Distribution of impairment allowance Coverage ratio
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Barclays UK % % % % % % % % % % % %
As at 31.12.22
<=75% 78.8 10.5 0.8 90.1 10.2 30.8 33.2 74.2 - 0.2 2.9 0.1
>75% and <=90% 8.8 0.5 - 9.3 3.9 9.7 5.2 18.8 - 1.4 30.8 0.1
>90% and <=100% 0.6 - - 0.6 0.3 0.3 2.4 3.0 - 1.5 85.0 0.4
>100% - - - - 0.1 0.6 3.3 4.0 0.4 21.4 64.9 13.1
As at 31.12.21
<=75% 77.2 11.3 0.7 89.2 8.3 17.7 31.9 57.9 - 0.1 2.4 -
>75% and <=90% 9.3 0.6 - 9.9 4.8 10.7 11.7 27.2 - 1.0 22.6 0.1
>90% and <=100% 0.9 - - 0.9 0.9 1.0 2.9 4.8 0.1 1.9 87.5 0.3
>100% - - - - 0.2 1.0 8.9 10.1 0.4 6.4 100.0 14.1
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 2022.
New lending in 2022 was £30.3bn, a reduction of 11% on 2021. This was mainly
driven by economic conditions that resulted in general mortgage market
suppression, including higher mortgage payments as rates continued to rise and
increased cost of living factors in line with inflation.
Head Office: Italian home loans and advances at amortised cost reduced to
£4.5bn (2021: £4.7bn) and continue to run-off since new bookings ceased in
2016. The portfolio is secured on residential property with an average balance
weighted mark to market LTV of 58.8% (2021: 60.4%). 90 day arrears decreased
to 1.2% (2021: 1.3%), gross charge-off rates increased to 0.6% (2021: 0.3%)
due to a combination of affordability stress related to rising inflation and
interest rates, and the particularly low rate observed in 2021 due to the
COVID portfolio improvements.
Credit cards, unsecured loans and other retail lending
The principal portfolios listed below accounted for 85% (December 2021: 82%)
of the 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 write-off rate Annualised net write-off rate
As at 31.12.22 £m % % % %
Barclays UK
UK cards 9,939 0.9 0.2 3.7 3.6
UK personal loans 4,023 1.4 0.6 4.1 3.8
Barclays Partner Finance 2,612 0.5 0.2 0.7 0.7
Barclays International
US cards 25,554 2.2 1.2 2.4 2.3
Germany consumer lending 4,269 1.7 0.7 0.7 0.6
As at 31.12.21
Barclays UK
UK cards 9,933 1.0 0.2 4.1 4.0
UK personal loans 4,011 1.5 0.7 3.5 3.2
Barclays Partner Finance 2,471 0.4 0.2 1.4 1.4
Barclays International
US cards 17,779 1.6 0.8 4.3 4.2
Germany consumer lending 3,559 1.5 0.7 0.9 0.8
UK cards: 30 day arrears rate reduced marginally to 0.9% (Q421: 1.0%) and 90
day arrears rate remained stable at 0.2% (Q421: 0.2%), whilst total exposure
was stable at £9.9bn. Both the gross and net write off rates decreased by
0.4% due to reduced debt sales and monthly delinquency flows.
UK personal loans: 30 and 90 day arrears rates have reduced marginally to 1.4%
(Q421: 1.5%) and 0.6% (Q421: 0.7%) respectively, whilst total exposure was
stable at £4.0bn. Both the annualised gross and net write off rates increased
by 0.6% due to increased regular debt sales.
Barclays Partner Finance: 30 day arrears rate increased slightly to 0.5%
(Q421: 0.4%) and 90 day arrears rate remained stable at 0.2% (Q421: 0.2%),
reflecting marginally higher entry rates with stable flows through the
delinquency cycles. Total exposure grew by £0.1bn to £2.6bn (December 2021:
£2.5bn) as a result of increased sales. Both the annualised gross and net
write off rates decreased by 0.7% as a result of the reducing delinquent stock
and subsequent flow into recoveries.
US cards: Balances increased due to the acquisition of the Gap portfolio in
June 2022, movement in the USD/GBP exchange rate and core portfolio growth. 30
and 90 day arrears rates increased to 2.2% (Q421: 1.6%) and 1.2% (Q421: 0.8%)
due to the partial normalisation of customer behaviour and the acquisition of
the Gap portfolio, though rates remain below pre-pandemic levels. Write-off
rates decreased reflecting portfolio growth and the impact of lower charge
offs in 2021 due to the benefit of government support schemes.
Germany consumer lending: 30 day arrears rate increased to 1.7% (Q421: 1.5%)
due to increased macroeconomic uncertainty in Europe, though the rate was
consistent with pre-pandemic levels.
Market Risk
Analysis of management value at risk (VaR)
The table below shows the total management VaR on a diversified basis by asset
class. Total management VaR includes all trading positions in Barclays Bank
Group and it is calculated with a one-day holding period. VaR limits are
applied to total management VaR and by asset class. Additionally, the market
risk management function applies VaR sub-limits to material businesses and
trading desks.
Management VaR (95%) by asset class
Year ended 31.12.22 Year ended 31.12.21
Average High Low Average High Low
£m £m £m £m £m £m
Credit risk 25 71 8 14 30 7
Interest rate risk 13 23 4 7 15 4
Equity risk 10 29 4 9 29 4
Basis risk 12 24 4 6 10 3
Spread risk 7 11 3 4 6 3
Foreign exchange risk 8 25 2 4 16 1
Commodity risk - 1 - - 1 -
Inflation risk 6 17 3 3 5 2
Diversification effect(1) (45) n/a n/a (28) n/a n/a
Total management VaR 36 73 13 19 36 6
1 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. Historical
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.
Average management VaR increased 89% to £36m (2021: £19m) driven by higher
market volatility. The Russia-Ukraine conflict and elevated inflation
increased volatility across all asset classes as central banks increased base
rates, equity markets declined, and credit spreads widened during this period.
The Global Markets business maintained a generally short and defensive risk
profile (i.e. positioned to gain as the market sells off) for most of 2022.
VaR increased in Q4 2022 from an increase in funded, fair-value leverage loan
exposure in Investment Banking. Risk taking remained within agreed risk
appetite limits at all times in 2022.
Treasury and Capital Risk
The Group has established a comprehensive set of policies, standards and
controls for managing its liquidity risk; together these set out the
requirements for Barclays' liquidity risk framework. The liquidity risk
framework meets the PRA standards and enables Barclays to maintain liquidity
resources that are sufficient in amount and quality, and a funding profile
that is appropriate to meet the Group's Liquidity Risk Appetite. The liquidity
risk framework is delivered via a combination of policy formation, review and
challenge, governance, analysis, stress testing, limit setting and monitoring.
Liquidity risk stress testing
The internal liquidity stress test measures the potential contractual and
contingent stress outflows under a range of scenarios, which are then used to
determine the size of the liquidity pool that is immediately available to meet
anticipated outflows if a stress occurs. The short-term scenarios include 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 event. The Group also runs a long-term liquidity stress test, which
measures the anticipated outflows over a 12 month market-wide scenario
The LCR requirement takes into account the relative stability of different
sources of funding and potential incremental funding requirements in a stress.
The LCR is designed to promote short-term resilience of a bank's liquidity
risk profile by holding sufficient high quality liquid assets to survive an
acute stress scenario lasting for 30 days.
As at 31 December 2022, the Group held eligible liquid assets in excess of
100% of net stress outflows to its internal and external regulatory
requirements.
Liquidity coverage ratio
As at 31.12.22 As at 31.12.21
£bn £bn
Eligible liquidity buffer 295 285
Net stress outflows (178) (169)
Surplus 117 116
Liquidity coverage ratio 165% 168%
Net Stable Funding Ratio
The external NSFR metric requires banks to maintain a stable funding profile
taking into account both on and certain off balance sheet exposures over a
medium to long term period. The ratio is defined as the Available Stable
Funding (capital and certain liabilities which are treated as stable sources
of funding) relative to the Required Stable Funding (assets on balance sheet
and certain off balance sheet exposures). The NSFR (average of last four
quarter ends) as at 31 December 2022 was 137%, which was a surplus above
requirements of £155bn.
Net Stable Funding Ratio(1) As at
31.12.22
£bn
Total Available Stable Funding 576
Total Required Stable Funding 421
Surplus 155
Net Stable Funding Ratio 137%
1 Represents average of the last four spot quarter end positions.
As part of the liquidity risk appetite, Barclays establishes minimum LCR, NSFR
and internal liquidity stress test limits. The Group plans to maintain its
surplus to the internal and regulatory requirements at an efficient level.
Risks to market funding conditions, the Group's liquidity position and funding
profile are assessed continuously, and actions are taken to manage the size of
the liquidity pool and the funding profile as appropriate.
Composition of the Group liquidity pool
LCR eligible(1) High Quality Liquid Assets (HQLA) Liquidity pool
Cash Level 1 Level 2A Level 2B Total 2022 2021
£bn £bn £bn £bn £bn £bn £bn
Cash and deposits with central banks(2) 248 - - - 248 263 245
Government bonds(3)
AAA to AA- - 21 10 - 31 39 26
A+ to A- - 1 2 - 3 3 2
BBB+ to BBB- - - - - - - -
Total government bonds - 22 12 - 34 42 28
Other
Government Guaranteed Issuers, PSEs and GSEs - 5 1 - 6 6 6
International Organisations and MDBs - 2 - - 2 2 5
Covered bonds - 2 2 - 4 5 6
Other - - - 1 1 - 1
Total other - 9 3 1 13 13 18
Total as at 31 December 2022 248 31 15 1 295 318
Total as at 31 December 2021 243 37 3 2 285 291
1 The LCR eligible HQLA is adjusted for operational restrictions upon
consolidation under Article 8 of the Liquidity Coverage Ratio section of the
PRA rulebook (CRR) such as trapped liquidity within Barclays subsidiaries. It
also reflects differences in eligibility of assets between the LCR and
Barclays' Liquidity Pool.
2 Includes cash held at central banks and surplus cash at central banks related
to payment schemes. Over 99% (December 2021: over 99%) was placed with the
Bank of England, US Federal Reserve, European Central Bank, Bank of Japan and
Swiss National Bank.
3 Of which over 79% (December 2021: over 82%) comprised UK, US, French, German,
Japanese, Swiss and Dutch securities.
The Group liquidity pool increased to £318bn as at December 2022 (December
2021: £291bn) driven by continued deposit growth and an increase in wholesale
funding, which were partly offset by an increase in business funding
consumption and trapped liquidity within Barclays' subsidiaries. During 2022,
the month-end liquidity pool ranged from £309bn to £359bn (2021: £290bn to
£337bn), and the month-end average balance was £331bn (2021: £303bn). 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 2022, 60% (December 2021: 58%) of the liquidity pool was
located in Barclays Bank PLC, 25% (December 2021: 30%) in Barclays Bank UK PLC
and 9% (December 2021: 7%) in Barclays Bank Ireland 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 residual portion of the liquidity
pool is restricted due to local regulatory requirements or operational
restrictions, it is assumed to be unavailable to the rest of the Group in
calculating the LCR.
The composition of the pool is subject to limits and controls set by the
respective entity Boards and independent liquidity risk, credit risk and
market risk functions. In addition, the investment of the liquidity pool is
monitored for concentration by issuer, currency and asset type. Given returns
generated by these highly liquid assets, the risk and reward profile is
continuously managed.
Deposit funding
As at 31.12..22 As at 31.12.21
Loans and advances at amortised cost Deposits at amortised cost Loan: deposit ratio(1) Loan: deposit ratio(1)
Funding of loans and advances £bn £bn % %
Barclays UK 225 258 87 85
Barclays International 170 288 59 52
Head Office 4 -
Barclays Group 399 546 73 70
1 The loan: deposit ratio is calculated as loans and advances at amortised cost
divided by deposits at amortised cost.
Funding structure and funding relationships
The basis for liquidity risk management is a funding structure that reduces
the probability of a liquidity stress leading to an inability to meet funding
obligations as they fall due. The Group's overall funding strategy is to
develop a diversified funding base (geographically, by type and by
counterparty) and maintain access to a variety of alternative funding sources,
to provide protection against unexpected fluctuations, while minimising the
cost of funding.
Within this, the Group aims to align the sources and uses of funding. As such,
retail and corporate loans and advances are largely funded by deposits in the
relevant entities, with the surplus primarily funding the liquidity pool. The
majority of reverse repurchase agreements are matched by repurchase
agreements. Derivative liabilities and assets are largely matched. A
substantial proportion of balance sheet derivative positions qualify for
counterparty netting and the remaining portions are largely offset when netted
against cash collateral received and paid. Wholesale debt and equity is used
to fund residual assets.
These funding relationships as at 31 December 2022 are summarised below:
Restated(1)
As at 31.12.22 As at 31.12.21 As at 31.12.22 As at 31.12.21
Assets £bn £bn Liabilities and equity £bn £bn
Loans and advances at amortised cost(2) 385 358 Deposits at amortised cost 546 519
Group liquidity pool 318 291 <1 Year wholesale funding 73 67
>1 Year wholesale funding 111 101
Reverse repurchase agreements, trading portfolio assets, cash collateral and 412 388 Repurchase agreements, trading portfolio liabilities, cash collateral and 370 330
settlement balances settlement balances
Derivative financial instruments 302 263 Derivative financial instruments 290 257
Other assets(3) 97 84 Other liabilities 55 40
Equity 69 70
Total assets 1,514 1,384 Total liabilities and equity 1,514 1,384
1 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Restatement of financial statements (Note 1)
on page 69 for more information. The contractual maturity profile of Senior
unsecured (privately placed) has been restated to reflect the impact of the
Over-issuance of Securities.
2 Adjusted for liquidity pool debt securities reported at amortised cost of
£14bn (December 2021: £3bn).
3 Other assets include fair value assets that are not part of reverse repurchase
agreements or trading portfolio assets, and other asset categories.
Composition of wholesale funding
Wholesale funding outstanding (excluding repurchase agreements) was £184.0bn
(December 2021: £167.5bn). In 2022, the Group issued £15.3bn of MREL
eligible instruments from Barclays PLC (the Parent company) in a range of
tenors and currencies.
Our operating companies also access wholesale funding markets to maintain
their stable and diversified funding bases. Barclays Bank PLC continued to
issue in the shorter-term and medium-term notes markets. In addition, Barclays
Bank UK PLC continued to issue in the shorter-term markets and maintains
active secured funding programmes.
Wholesale funding of £72.5bn (December 2021: £66.7bn(1)) matures in less
than one year, representing 39% (December 2021: 40%(1)) of total wholesale
funding outstanding. This includes £15.0bn (December 2021: £24.9bn(1))
related to term funding(2).
Maturity profile of wholesale funding(2,3)
<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) - - 0.2 1.7 1.9 5.8 5.6 8.3 4.5 18.0 44.1
Senior unsecured (privately placed) - - - 0.2 0.2 0.1 - - - 1.0 1.3
Subordinated liabilities - - - - - 1.0 - 1.6 - 7.0 9.6
Barclays Bank PLC (including subsidiaries)
Certificates of deposit and commercial paper 0.3 17.7 12.8 11.0 41.8 1.5 0.6 0.1 - - 44.0
Asset backed commercial paper 3.6 6.6 0.8 - 11.0 - - - - - 11.0
Senior unsecured (public benchmark) - - - - - 1.0 - - - - 1.0
Senior unsecured (privately placed)(4) 1.2 2.1 2.1 5.1 10.5 11.0 9.9 3.7 4.2 19.1 58.4
Asset backed securities - 0.1 - 0.2 0.3 1.8 0.7 0.5 0.5 1.2 5.0
Subordinated liabilities - - - 0.3 0.3 0.2 0.1 0.3 - 0.7 1.6
Barclays Bank UK PLC (including subsidiaries)
Certificates of deposit and commercial paper 4.7 - - - 4.7 - - - - - 4.7
Senior unsecured (public benchmark) - - - - - - - - - 0.1 0.1
Covered Bonds 1.3 - 0.5 - 1.8 - - - 0.5 0.9 3.2
Total as at 31 December 2022 11.1 26.5 16.4 18.5 72.5 22.4 16.9 14.5 9.7 48.0 184.0
Of which secured 4.9 6.7 1.3 0.2 13.1 1.8 0.7 0.5 1.0 2.1 19.2
Of which unsecured 6.2 19.8 15.1 18.3 59.4 20.6 16.2 14.0 8.7 45.9 164.8
Total as at 31 December 2021(1) 14.1 21.7 15.5 15.4 66.7 15.4 15.1 9.9 11.4 49.0 167.5
Of which secured 2.4 6.4 0.6 0.5 9.9 1.9 2.0 0.1 0.3 2.4 16.6
Of which unsecured 11.7 15.3 14.9 14.9 56.8 13.5 13.1 9.8 11.1 46.6 150.9
1 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Restatement of financial statements (Note 1)
on page 69 for more information. The contractual maturity profile of financial
liabilities designated at fair value has been restated to reflect the impact
of the Over-issuance of Securities. Securities issued by BBPLC in excess of
the maximum aggregate offering price registered under Barclays Bank PLC's 2019
F-3 and Barclays Bank PLC's predecessor shelf registration statement on Form
F-3 filed in 2018 (Predecessor Shelf) with a value of £6,997m have been
classified as "on demand".
2 The composition of wholesale funds comprises the balance sheet reported
financial liabilities at fair value, debt securities in issue and subordinated
liabilities. It does not include participation in the central bank facilities
reported within repurchase agreements and other similar secured borrowing.
3 Term funding comprises public benchmark and privately placed senior unsecured
notes, covered bonds, asset-backed securities and subordinated debt where the
original maturity of the instrument is more than 1 year.
4 Includes structured notes of £48.4bn, of which £9.4bn matures within one
year.
Regulatory minimum requirements
Capital
The Group's Overall Capital Requirement for CET1 is 11.3% comprising a 4.5%
Pillar 1 minimum, a 2.5% Capital Conservation Buffer (CCB), a 1.5% Global
Systemically Important Institution (G-SII) buffer, a 2.4% Pillar 2A
requirement and a 0.4% Countercyclical Capital Buffer (CCyB).
The Group's CCyB is based on the buffer rate applicable for each jurisdiction
in which the Group has exposures. On 13 December 2021, the Financial Policy
Committee (FPC) announced the re-introduction of a CCyB rate of 1% for UK
exposures with effect from 13 December 2022. The buffer rates set by other
national authorities for non-UK exposures are not currently material. Overall,
this results in a 0.4% CCyB for the Group. On 5 July 2022, the FPC announced
that the UK CCyB rate will be increased from 1% to 2% with effect from 5 July
2023.
The Group's updated Pillar 2A requirement as per the PRA's Individual Capital
requirement is 4.3% of which at least 56.25% needs to be met with CET1
capital, equating to 2.4% of RWAs. The Pillar 2A requirement, based on a point
in time assessment, has been set as a proportion of RWAs and is subject to at
least annual review.
The Group's CET1 target ratio of 13-14% takes into account headroom above
requirements which includes a confidential institution-specific PRA buffer.
The Group remains above its minimum capital regulatory requirements including
the PRA buffer.
Leverage
The Group is subject to a UK leverage ratio requirement of 4.0%. This
comprises the 3.25% minimum requirement, a G-SII additional leverage ratio
buffer (G-SII ALRB) of 0.53% and a countercyclical leverage ratio buffer
(CCLB) of 0.2%. Although the leverage ratio is expressed in terms of Tier 1
(T1) capital, 75% of the minimum requirement, equating to 2.4375%, needs to be
met with CET1 capital. In addition, the G-SII ALRB and CCLB must be covered
solely with CET1 capital. The CET1 capital held against the 0.53% G-SII ALRB
was £5.9bn and against the 0.2% CCLB was £2.3bn.
The Group is also required to disclose an average UK leverage ratio which is
based on capital on the last day of each month in the quarter and an exposure
measure for each day in the quarter.
MREL
The Group is required to meet the higher of: (i) two times the sum of 8%
Pillar 1 and 4.3% Pillar 2A equating to 24.5% of RWAs; and (ii) 6.75% of
leverage exposures. In addition, the higher of regulatory capital and leverage
buffers apply. CET1 capital cannot be counted towards both MREL and the
buffers, meaning that the buffers, including the above mentioned confidential
institution-specific PRA buffer, will effectively be applied above MREL
requirements.
Significant regulatory updates in the period
Capital and RWAs
On 1 January 2022, the PRA's implementation of Basel III standards took effect
including the re-introduction of the 100% CET1 capital deduction for
qualifying software intangible assets and the introduction of the Standardised
Approach for Counterparty Credit Risk (SA-CCR) which replaces the Current
Exposure Method for Standardised derivative exposures as a more risk sensitive
approach. In addition, the PRA also implemented IRB roadmap changes which
includes revisions to the criteria for definition of default, probability of
default and loss given default estimation to ensure supervisory consistency
and increase transparency of IRB models.
On 30 November 2022, the PRA published its consultation paper 'Implementation
of the Basel 3.1 standards', which covers the remaining parts of the Basel III
standards to be implemented in the UK. Changes are expected to come in to
force from 1 January 2025, other than those areas subject to transitional
provisions. Barclays currently expects the impact on RWAs on 1 January 2025 to
be at the lower end of the prior 5-10% RWA inflation guidance. The PRA is
currently consulting on the rule changes, and there will be a review of the
Pillar 2A framework in 2024 which may offset some of the impact.
Leverage
From 1 January 2022, UK banks became subject to a single UK leverage ratio
requirement meaning that the CRR leverage ratio no longer applies. Under the
revised UK leverage ratio framework, central bank claims have been excluded
from the UK leverage exposure measure where they are matched by qualifying
liabilities (rather than deposits).
In the disclosures that follow, references to CRR, as amended by CRR II, mean
the capital regulatory requirements, as they form part of domestic law by
virtue of the European Union (Withdrawal) Act 2018, as amended.
Impact of Over-issuance of Securities in the US
Basis of preparation
In March 2022, the Group became aware that Barclays Bank PLC had issued
securities materially in excess of the amount it had registered with the SEC
under Barclays Bank PLC's 2019 F-3. Subsequently, the Group became aware that
securities had also been issued in excess of the amount it had registered with
the SEC under the Predecessor Shelf. The securities issued in excess of the
registered amount included structured products and exchange traded notes. As
these securities were not issued in compliance with the Securities Act, a
right of rescission arose for certain purchasers of the securities. A portion
of the costs associated with the right of rescission was attributable to the
financial statements for the year ended 31 December 2021, resulting in the
restatement of the 2021 figures in the disclosures below.
Prior to the restatement, litigation and conduct charges in the income
statement in relation to 2021 were underreported by £220m (pre-tax). This
resulted in a CET1 capital decrease of £170m from £47,497m to £47,327m.
Both the transitional and fully loaded CET1 ratios remained unchanged at 15.1%
and 14.7% respectively. The T1 ratio moved from 19.2% to 19.1% and the total
capital ratio moved from 22.3% to 22.2%.
The leverage exposure increased £1.9bn to recognise on a regulatory basis,
the potential commitment relating to the rescission offer. This resulted in
the UK leverage ratio moving from 5.3% to 5.2% whilst the average UK leverage
ratio remained unchanged at 4.9%.
Total own funds and eligible liabilities decreased £0.2bn to £108bn, which
was in excess of a restated requirement to hold £94bn of own funds and
eligible liabilities.
Restated(1)
Capital ratios(2,3) As at 31.12.22 As at 30.09.22 As at 31.12.21
CET1 13.9% 13.8% 15.1%
T1 17.9% 17.6% 19.1%
Total regulatory capital 20.8% 20.3% 22.2%
Capital resources £m £m £m
Total equity excluding non-controlling interests per the balance sheet 68,292 67,034 69,052
Less: other equity instruments (recognised as AT1 capital) (13,284) (13,270) (12,259)
Adjustment to retained earnings for foreseeable ordinary share dividends (787) (494) (666)
Adjustment to retained earnings for foreseeable repurchase of shares - (9) -
Adjustment to retained earnings for foreseeable other equity coupons (37) (82) (32)
Other regulatory adjustments and deductions
Additional value adjustments (PVA) (1,726) (1,850) (1,585)
Goodwill and intangible assets (8,224) (8,356) (6,804)
Deferred tax assets that rely on future profitability excluding temporary (1,500) (1,034) (1,028)
differences
Fair value reserves related to gains or losses on cash flow hedges 7,237 9,451 852
Excess of expected losses over impairment (119) (7) -
Gains or losses on liabilities at fair value resulting from own credit (620) (773) 892
Defined benefit pension fund assets (3,430) (3,162) (2,619)
Direct and indirect holdings by an institution of own CET1 instruments (20) (20) (50)
Adjustment under IFRS 9 transitional arrangements 700 759 1,229
Other regulatory adjustments 396 387 345
CET1 capital 46,878 48,574 47,327
AT1 capital
Capital instruments and related share premium accounts 13,284 13,270 12,259
Qualifying AT1 capital (including minority interests) issued by subsidiaries - - 637
Other regulatory adjustments and deductions (60) (60) (80)
AT1 capital 13,224 13,210 12,816
T1 capital 60,102 61,784 60,143
T2 capital
Capital instruments and related share premium accounts 9,000 8,524 8,713
Qualifying T2 capital (including minority interests) issued by subsidiaries 1,095 1,176 1,113
Credit risk adjustments (excess of impairment over expected losses) 35 - 73
Other regulatory adjustments and deductions (160) (160) (160)
Total regulatory capital 70,072 71,324 69,882
Total RWAs 336,518 350,774 314,136
1 Capital metrics as at 31 December 2021 have been restated to reflect the
impact of the Over-issuance of Securities. See Basis of preparation on page 55
for more information. The transitional CET1 ratio remains unchanged at 15.1%.
2 CET1, T1 and T2 capital, and RWAs are calculated applying the transitional
arrangements of the CRR as amended by CRR II. This includes IFRS 9
transitional arrangements and the grandfathering of CRR II non-compliant
capital instruments. December 2021 comparatives include the grandfathering of
CRR non-compliant capital instruments.
3 The fully loaded CET1 ratio, as is relevant for assessing against the
conversion trigger in Barclays PLC AT1 securities, was 13.7%, with £46.2bn of
CET1 capital and £336.3bn of RWAs calculated without applying the
transitional arrangements of the CRR as amended by CRR II.
Movement in CET1 capital Three months ended 31.12.22 Twelve months ended 31.12.22
£m £m
Opening CET1 capital(1) 48,574 47,327
Profit for the period attributable to equity holders 1,321 5,928
Own credit relating to derivative liabilities 90 (85)
Ordinary share dividends paid and foreseen (293) (1,149)
Purchased and foreseeable share repurchase - (1,500)
Other equity coupons paid and foreseen (240) (910)
Increase in retained regulatory capital generated from earnings 878 2,284
Net impact of share schemes 99 108
Fair value through other comprehensive income reserve (26) (1,277)
Currency translation reserve (1,401) 2,032
Other reserves (4) 138
(Decrease)/increase in other qualifying reserves (1,332) 1,001
Pension remeasurements within reserves (606) (281)
Defined benefit pension fund asset deduction (268) (811)
Net impact of pensions (874) (1,092)
Additional value adjustments (PVA) 124 (141)
Goodwill and intangible assets 132 (1,420)
Deferred tax assets that rely on future profitability excluding those arising (466) (472)
from temporary differences
Excess of expected loss over impairment (112) (119)
Direct and indirect holdings by an institution of own CET1 instruments - 30
Adjustment under IFRS 9 transitional arrangements (59) (529)
Other regulatory adjustments 13 9
(Decrease) in regulatory capital due to adjustments and deductions (368) (2,642)
Closing CET1 capital 46,878 46,878
1 Opening balance as at 1 January 2022 has been restated to reflect the impact
of the Over-issuance of Securities. See Basis of preparation on page 55 for
more information
CET1 capital decreased £0.4bn to £46.9bn (December 2021: £47.3bn).
CET1 capital decreased by £1.7bn as a result of regulatory changes that took
effect from 1 January 2022 including the re-introduction of the 100% CET1
capital deduction for qualifying software intangible assets and a reduction in
IFRS9 transitional relief due to the relief applied to the pre-2020 impairment
charge reducing to 25% in 2022 from 50% in 2021 and the relief applied to the
post-2020 impairment charge reducing to 75% in 2022 from 100% in 2021.
£5.9bn of capital generated from profit, after absorbing the £0.6bn net of
tax impact of the Over-issuance of Securities, was partially offset by
distributions of £3.5bn comprising:
· £1.5bn of total buybacks including the £1bn buyback announced with FY21
results and the £0.5bn buyback announced with H122 results
· £1.1bn of ordinary share dividends paid and foreseen reflecting the £0.4bn
half year 2022 dividend paid and a £0.8bn accrual towards a full year 2022
dividend
· £0.9bn of equity coupons paid and foreseen
Other significant movements in the period were:
· £1.3bn reduction from decreases in the fair value of the bond portfolio
through other comprehensive income
· £2.0bn increase in the currency translation reserve driven by the
appreciation of period end USD against GBP
· £1.1bn decrease due to the net impact of pensions primarily as a result of
the accelerated cash settlement to the UKRF of earlier deficit reduction
contributions as well as deficit reduction payments made in 2022
RWAs by risk type and business
Credit risk Counterparty credit risk Market Risk Operational risk Total RWAs
STD IRB STD IRB Settlement Risk CVA STD IMA
As at 31.12.22 £m £m £m £m £m £m £m £m £m £m
Barclays UK 6,836 54,752 167 - - 72 233 - 11,023 73,083
Corporate and Investment Bank 35,738 75,413 16,814 21,449 80 3,093 13,716 22,497 27,064 215,864
Consumer, Cards and Payments 27,882 3,773 214 46 - 61 - 388 6,559 38,923
Barclays International 63,620 79,186 17,028 21,495 80 3,154 13,716 22,885 33,623 254,787
Head Office 2,636 6,843 - - - - - - (831) 8,648
Barclays Group 73,092 140,781 17,195 21,495 80 3,226 13,949 22,885 43,815 336,518
As at 30.09.22
Barclays UK 6,487 55,121 246 - - 84 256 - 11,047 73,241
Corporate and Investment Bank 38,886 75,561 20,115 24,735 446 3,111 15,596 26,879 25,296 230,625
Consumer, Cards and Payments 28,180 3,597 279 35 - 69 - 104 6,424 38,688
Barclays International 67,066 79,158 20,394 24,770 446 3,180 15,596 26,983 31,720 269,313
Head Office 2,785 6,431 - - - - - - (996) 8,220
Barclays Group 76,338 140,710 20,640 24,770 446 3,264 15,852 26,983 41,771 350,774
As at 31.12.21
Barclays UK 7,195 53,408 426 - - 138 100 - 11,022 72,289
Corporate and Investment Bank 29,420 64,416 15,223 19,238 105 2,289 17,306 27,308 25,359 200,664
Consumer, Cards and Payments 20,770 2,749 215 18 - 21 - 57 6,391 30,221
Barclays International 50,190 67,165 15,438 19,256 105 2,310 17,306 27,365 31,750 230,885
Head Office 4,733 7,254 - - - - - - (1,025) 10,962
Barclays Group 62,118 127,827 15,864 19,256 105 2,448 17,406 27,365 41,747 314,136
Movement analysis of RWAs Credit risk Counterparty credit risk Market risk Operational risk Total RWAs
£m £m £m £m £m
Opening RWAs (as at 31.12.21) 189,945 37,673 44,771 41,747 314,136
Book size 15,371 (3,254) (9,707) 2,068 4,478
Acquisitions and disposals (1,187) - - - (1,187)
Book quality (2,236) 1,320 - - (916)
Model updates - - - - -
Methodology and policy 2,961 2,952 - - 5,913
Foreign exchange movements(1) 9,019 3,305 1,770 - 14,094
Total RWA movements 23,928 4,323 (7,937) 2,068 22,382
Closing RWAs (as at 31.12.22) 213,873 41,996 36,834 43,815 336,518
1 Foreign exchange movements does not include the impact of foreign exchange for
modelled market risk or operational risk.
Overall RWAs increased £22.4bn to £336.5bn (December 2021: £314.1bn)
Credit risk RWAs increased £23.9bn:
· A £15.4bn increase in book size primarily driven by an increase in lending
activities across CIB, CC&P and growth in mortgages within Barclays UK
· A £1.2bn decrease in acquisitions and disposals primarily driven by the
disposal of Barclays' equity stake in Absa, offset by Gap portfolio
acquisition
· A £2.2bn decrease in RWAs due to book quality primarily driven by the benefit
in mortgages from an increase in the HPI, partially offset by movements in
risk parameters primarily within Barclays UK
· A £3.0bn increase in methodology and policy primarily as a result of
regulatory changes relating to implementation of IRB roadmap changes,
partially offset by the reversal of the software intangibles benefit
· A £9.0bn increase in FX primarily due to appreciation of USD against GBP
Counterparty Credit risk RWAs increased £4.3bn:
· A £3.3bn decrease in book size primarily driven by derivative mark-to-market
movements
· A £1.3bn increase in RWAs due to book quality primarily driven by movements
in risk parameters within CIB
· A £3.0bn increase in methodology and policy as a result of regulatory changes
relating to the introduction of SA-CCR
· A £3.3bn increase in FX primarily due to appreciation of USD against GBP
Market risk RWAs decreased £7.9bn:
· A £9.7bn decrease in book size primarily driven by a £6.7bn in Stressed
Value at Risk (SVaR) model adjustment as a result of changes in portfolio
composition, a £2.3bn decrease due to client and trading activities and a
£0.7bn reduction in Structural FX
· A £1.8bn increase in FX primarily due to appreciation of USD against GBP
Operational risk RWAs increased £2.1bn:
· A £2.1bn increase in book size primarily driven by the inclusion of higher
2022 CIB income compared to 2019
Restated(1)
Leverage ratios(2,3) As at 31.12.22 As at 30.09.22 As at 31.12.21
£m £m £m
Average UK leverage ratio 4.8% 4.8% 4.9%
Average T1 capital 60,865 60,651 59,739
Average UK leverage exposure 1,280,972 1,259,648 1,229,041
UK leverage ratio 5.3% 5.0% 5.2%
CET1 capital 46,878 48,574 47,327
AT1 capital 13,224 13,210 12,179
T1 capital 60,102 61,784 59,506
UK leverage exposure 1,129,973 1,232,105 1,137,904
UK leverage exposure
Accounting assets
Derivative financial instruments 302,380 416,908 262,572
Derivative cash collateral 69,048 90,948 58,177
Securities financing transactions (SFTs) 189,637 224,978 170,853
Loans and advances and other assets 952,634 994,065 892,683
Total IFRS assets 1,513,699 1,726,899 1,384,285
Regulatory consolidation adjustments (8,278) (6,598) (3,665)
Derivatives adjustments
Derivatives netting (256,309) (347,999) (236,881)
Adjustments to collateral (52,715) (76,083) (50,929)
Net written credit protection 16,190 26,838 15,509
Potential future exposure (PFE) on derivatives 84,168 84,597 137,291
Total derivatives adjustments (208,666) (312,647) (135,010)
SFTs adjustments 24,203 30,477 24,544
Regulatory deductions and other adjustments (21,447) (21,582) (20,219)
Weighted off-balance sheet commitments 124,169 135,222 115,047
Qualifying central bank claims (272,321) (267,792) (210,134)
Settlement netting (21,386) (51,874) (16,944)
UK leverage exposure 1,129,973 1,232,105 1,137,904
1 Capital and leverage metrics as at 31 December 2021 have been restated to
reflect the impact of the Over-issuance of Securities. See Basis of
preparation on page 55 for further details.
2 Capital and leverage measures are calculated applying the transitional
arrangements of the CRR as amended by CRR II.
3 Fully loaded average UK leverage ratio was 4.7%, with £60.1bn of T1 capital
and £1,280.2bn of leverage exposure. Fully loaded UK leverage ratio was 5.3%,
with £59.4bn of T1 capital and £1,129.3bn of leverage exposure. Fully loaded
UK leverage ratios are calculated without applying the transitional
arrangements of the CRR as amended by CRR II.
The UK leverage ratio increased to 5.3% (December 2021: 5.2%) primarily due to
a £7.9bn decrease in the leverage exposure and a £0.6bn increase in Tier 1
capital. The UK leverage exposure decreased to £1,130.0bn (December 2021:
£1,137.9bn) largely due to the following movements:
· £53.1bn decrease in PFE on derivatives largely driven by increased netting
eligibility due to the introduction of SA-CCR
· £42.0bn decrease in cash at central banks net of the qualifying central bank
claims exemption primarily due to the matching of allowable liabilities rather
than deposits introduced under the UK leverage ratio framework and a decrease
in Swiss Franc cash assets
· £33.0bn increase in loans and advances and other assets (excluding cash and
settlement balances which are subject to regulatory exemptions) primarily due
to increased lending
· £29.5bn increase in derivative financial instruments post additional
regulatory netting and adjustments for cash collateral primarily driven by
market volatility, increased activity in CIB and the application of a 1.4
multiplier introduced under SA-CCR
· £18.4bn increase in SFTs primarily driven by increased reverse repurchase
activity in CIB
The average UK leverage ratio decreased to 4.8% (December 2021: 4.9%) due to a
£51.9bn increase in average leverage exposure partially offset by a £1.1bn
increase in average T1 capital. The average UK leverage exposure increased to
£1,281.0bn (December 2021: £1,229.0bn) mainly driven by increased activity
during the year that was partially offset by the impact of regulatory changes
that came into effect from 1 January 2022 under the UK leverage ratio
framework.
MREL
MREL requirements including buffers(1,2,3,4) Total requirement (£m) based on Requirement as a percentage of:
Restated(1) Restated(1)
As at 31.12.22 As at 30.09.22 As at 31.12.21 As at 31.12.22 As at 30.09.22 As at 31.12.21
Requirement based on RWAs (minimum requirement) 97,387 99,596 77,302 28.9% 28.4% 24.6%
Requirement based on UK leverage exposure(4) 91,213 97,243 93,975 8.1% 7.9% 6.9%
Restated(1)
Own funds and eligible liabilities(1,3) As at 31.12.22 As at 30.09.22 As at 31.12.21
£m £m £m
CET1 capital 46,878 48,574 47,327
AT1 capital instruments and related share premium accounts(5) 13,224 13,210 12,179
T2 capital instruments and related share premium accounts(5) 8,875 8,364 8,626
Eligible liabilities 43,851 41,744 39,889
Total Barclays PLC (the Parent company) own funds and eligible liabilities 112,828 111,892 108,021
Total RWAs 336,518 350,774 314,136
Total UK leverage exposure(4) 1,129,973 1,232,105 1,356,191
Restated(1)
Own funds and eligible liabilities ratios as a percentage of:(1) As at 31.12.22 As at 30.09.22 As at 31.12.21
Total RWAs 33.5% 31.9% 34.4%
Total UK leverage exposure(4) 10.0% 9.1% 8.0%
As at 31 December 2022, Barclays PLC (the Parent company) held £112.8bn of
own funds and eligible liabilities equating to 33.5% of RWAs. This was in
excess of the Group's MREL requirement, excluding the PRA buffer, to hold
£97.4bn of own funds and eligible liabilities equating to 28.9% of RWAs. The
Group remains above its MREL regulatory requirement including the PRA buffer.
1 Capital and leverage metrics as at 31 December 2021 have been restated to
reflect the impact of the Over-issuance of Securities. See Basis of
preparation on page 55 for further details.
2 Minimum requirement excludes the confidential institution-specific PRA buffer.
3 CET1, T1 and T2 capital, and RWAs are calculated applying the transitional
arrangements of the CRR as amended by CRR II including IFRS 9 transitional
arrangements.
4 As at 31 December 2021, MREL requirements were on a CRR leverage basis which,
from 1 January 2022, was no longer applicable for UK banks.
5 Includes other AT1 capital regulatory adjustments and deductions of £60m
(December 2021: £80m), and other T2 credit risk adjustments and deductions of
£125m (December 2021: £87m).
Statement of Directors' Responsibilities
Each of the Directors (the names of whom are set out below) confirm that:
· to the best of their knowledge, the condensed consolidated financial
statements (set out on pages 64 to 68), which have been prepared in accordance
with (a) UK-adopted international accounting standards; and (b) International
Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB), including interpretations issued by the IFRS
Interpretations Committee, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole. The condensed
consolidated financial statements should be read in conjunction with the
annual financial statements as included in the Annual Report for the year
ended 31 December 2022; and
· to the best of their knowledge, the management information (set out on pages 1
to 62) includes a fair review of the development and performance of the
business and the position of the Company and the undertakings included in the
consolidation taken as a whole, together with a description of the principal
risks and uncertainties that they face. This management information should be
read in conjunction with the principal risks and uncertainties included in the
Annual Report for the year ended 31 December 2022.
Signed on 14 February 2023 on behalf of the Board by
C.S. Venkatakrishnan Anna Cross
Group Chief Executive Group Finance Director
Barclays PLC Board of Directors
Chairman Executive Directors Non-Executive Directors
Nigel Higgins C.S. Venkatakrishnan Mike Ashley
Anna Cross Robert Berry
Tim Breedon CBE
Mohamed A. El-Erian
Dawn Fitzpatrick
Mary Francis CBE
Crawford Gillies
Brian Gilvary
Marc Moses
Diane Schueneman
Julia Wilson
Condensed Consolidated Financial Statements
Condensed consolidated income statement
Restated(2)
Notes(1) Year ended 31.12.22 Year ended 31.12.21
£m £m
Interest and similar income 19,096 11,240
Interest and similar expense (8,524) (3,167)
Net interest income 10,572 8,073
Fee and commission income 9,637 9,880
Fee and commission expense (3,038) (2,206)
Net fee and commission income 6,599 7,674
Net trading income 8,049 5,794
Net investment income (434) 311
Other income 170 88
Total income 24,956 21,940
Staff costs (9,252) (8,511)
Infrastructure, administration and general expenses (5,881) (5,751)
Litigation and conduct (1,597) (397)
Operating expenses (16,730) (14,659)
Share of post-tax results of associates and joint ventures 6 260
Profit before impairment 8,232 7,541
Credit impairment (charges)/releases (1,220) 653
Profit before tax 7,012 8,194
Tax charge 2 (1,039) (1,138)
Profit after tax 5,973 7,056
Attributable to:
Equity holders of the parent 5,023 6,205
Other equity instrument holders 905 804
Total equity holders of the parent 5,928 7,009
Non-controlling interests 3 45 47
Profit after tax 5,973 7,056
Earnings per share p p
Basic earnings per ordinary share 4 30.8 36.5
Diluted earnings per ordinary share 4 29.8 35.6
1 For Notes to the Financial Statements see pages 69 to 76.
2 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Restatement of financial statements (Note 1)
on page 69 for more information.
Condensed consolidated statement of comprehensive income
Restated(2)
Year ended 31.12.22 Year ended 31.12.21
Notes(1) £m £m
Profit after tax 5,973 7,056
Other comprehensive income/(loss) that may be recycled to profit or loss:(3)
Currency translation reserve 12 2,032 (131)
Fair value through other comprehensive income reserve 12 (1,421) (429)
Cash flow hedging reserve 12 (6,382) (2,428)
Other comprehensive loss that may be recycled to profit (5,771) (2,988)
Other comprehensive income/(loss) not recycled to profit or loss:(3)
Retirement benefit remeasurements 9 (281) 643
Fair value through other comprehensive income reserve 12 228 141
Own credit 12 1,463 (14)
Other comprehensive income not recycled to profit 1,410 770
Other comprehensive loss for the period (4,361) (2,218)
Total comprehensive income for the period 1,612 4,838
Attributable to:
Equity holders of the parent 1,567 4,791
Non-controlling interests 45 47
Total comprehensive income for the period 1,612 4,838
1 For Notes to the Financial Statements see pages 69 to 76.
2 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Restatement of financial statements (Note 1)
on page 69 for more information.
3 Reported net of tax.
Condensed consolidated balance sheet
Restated(2)
As at 31.12.22 As at 31.12.21
Assets Notes(1) £m £m
Cash and balances at central banks 256,351 238,574
Cash collateral and settlement balances 112,597 92,542
Loans and advances at amortised cost 398,779 361,451
Reverse repurchase agreements and other similar secured lending 776 3,227
Trading portfolio assets 133,813 147,035
Financial assets at fair value through the income statement 213,568 191,972
Derivative financial instruments 302,380 262,572
Financial assets at fair value through other comprehensive income 65,062 61,753
Investments in associates and joint ventures 922 999
Goodwill and intangible assets 8,239 8,061
Property, plant and equipment 3,616 3,555
Current tax assets 385 261
Deferred tax assets 2 6,991 4,619
Retirement benefit assets 9 4,743 3,879
Other assets 5,477 3,785
Total assets 1,513,699 1,384,285
Liabilities
Deposits at amortised cost 545,782 519,433
Cash collateral and settlement balances 96,927 79,371
Repurchase agreements and other similar secured borrowing 27,052 28,352
Debt securities in issue 112,881 98,867
Subordinated Liabilities 7 11,423 12,759
Trading portfolio liabilities 72,924 54,169
Financial liabilities designated at fair value 271,637 250,960
Derivative financial instruments 289,620 256,883
Current tax liabilities 580 689
Deferred tax liabilities 2 16 37
Retirement benefit liabilities 9 264 311
Other liabilities 13,789 10,505
Provisions 8 1,544 1,908
Total liabilities 1,444,439 1,314,244
Equity
Called up share capital and share premium 10 4,373 4,536
Other reserves 12 (2,192) 1,770
Retained earnings 52,827 50,487
Shareholders' equity attributable to ordinary shareholders of the parent 55,008 56,793
Other equity instruments 11 13,284 12,259
Total equity excluding non-controlling interests 68,292 69,052
Non-controlling interests 3 968 989
Total equity 69,260 70,041
Total liabilities and equity 1,513,699 1,384,285
1 For Notes to the Financial Statements see pages 69 to 76.
2 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Restatement of financial statements (Note 1)
on page 69 for more information.
Condensed consolidated statement of changes in equity
Called up share capital and share premium Other equity instruments Other reserves Restated(1) Restated(1) Non-controlling interests Restated(1)
( ) ( )
Retained earnings Total equity
Total
Year ended 31.12.2022 £m £m £m £m £m £m £m
Balance as at 1 January 2022 4,536 12,259 1,770 50,487 69,052 989 70,041
Profit after tax - 905 - 5,023 5,928 45 5,973
Retirement benefit remeasurements - - - (281) (281) - (281)
Other comprehensive profit after tax for the year - - (4,080) - (4,080) - (4,080)
Total comprehensive income for the period - 905 (4,080) 4,742 1,567 45 1,612
Employee share schemes and hedging thereof 70 - - 476 546 - 546
Issue and redemption of other equity instruments - 1,032 - 28 1,060 (20) 1,040
Other equity instruments coupon paid - (905) - - (905) - (905)
Disposal of Absa holding - - (84) 84 - - -
Vesting of employee share schemes - - 5 (485) (480) - (480)
Dividends paid - - - (1,028) (1,028) (45) (1,073)
Repurchase of shares (233) - 233 (1,508) (1,508) - (1,508)
Own credit realisation - - (36) 36 - - -
Other movements - (7) - (5) (12) (1) (13)
Balance as at 31 December 2022 4,373 13,284 (2,192) 52,827 68,292 968 69,260
Year ended 31.12.2021
Balance as at 1 January 2021 4,637 11,172 4,461 45,527 65,797 1,085 66,882
Profit after tax - 804 - 6,205 7,009 47 7,056
Retirement benefit remeasurements - - - 643 643 - 643
Other comprehensive profit after tax for the year - - (2,861) - (2,861) - (2,861)
Total comprehensive income for the period - 804 (2,861) 6,848 4,791 47 4,838
Employee share schemes and hedging thereof 60 - - 235 295 - 295
Issue and redemption of other equity instruments - 1,078 - 6 1,084 (75) 1,009
Other equity instruments coupon paid - (804) - - (804) - (804)
Vesting of employee share schemes - - 1 (410) (409) - (409)
Dividends paid - - - (512) (512) (44) (556)
Repurchase of shares (161) - 161 (1,200) (1,200) - (1,200)
Other movements - 9 8 (7) 10 (24) (14)
Balance as at 31 December 2021 4,536 12,259 1,770 50,487 69,052 989 70,041
1 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Restatement of financial statements (Note 1)
on page 69 for more information.
Condensed consolidated cash flow statement
Restated(1)
Year ended 31.12.22 Year ended 31.12.21
£m £m
Profit before tax 7,012 8,194
Adjustment for non-cash items (8,514) 5,023
Net increase in loans and advances at amortised cost (24,949) (10,728)
Net increase in deposits at amortised cost 26,349 38,397
Net increase in debt securities in issue 9,210 18,131
Changes in other operating assets and liabilities 21,811 (8,763)
Corporate income tax paid (688) (1,335)
Net cash from operating activities 30,231 48,919
Net cash from investing activities (21,673) 4,270
Net cash from financing activities 696 107
Effect of exchange rates on cash and cash equivalents 10,330 (4,232)
Net increase in cash and cash equivalents 19,584 49,064
Cash and cash equivalents at beginning of the period 259,206 210,142
Cash and cash equivalents at end of the period 278,790 259,206
1 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Restatement of financial statements (Note 1)
on page 69 for more information.
Financial Statement Notes
1. Basis of preparation
Restatement of financial statements
The comparatives in these condensed consolidated financial statements for the
year ended 31 December 2022 (the financial statements) have been restated to
reflect both a provision and contingent liability disclosure in respect of the
impact of an over-issuance of securities (the Over-issuance of Securities) in
excess of the maximum aggregate offering price registered under Barclays Bank
PLC's shelf registration statement on Form F-3, as declared effective by the
SEC in August 2019 (2019 F-3) and Barclays Bank PLC's Predecessor Shelf.
Due to an SEC settlement order in 2017, at the time the 2019 F-3 was filed and
the Predecessor Shelf was amended, Barclays Bank PLC had ceased to be a
"well-known seasoned issuer" (or WKSI) and had become an "ineligible issuer",
as defined in Rule 405 under the Securities Act of 1933, as amended
(Securities Act), thus being required to register upfront a fixed amount of
securities with the SEC.
In March 2022, Barclays Bank PLC became aware that it had issued securities in
the US materially in excess of the amount it had registered with the SEC under
the 2019 F-3. Subsequently, Barclays Bank PLC became aware that securities had
also been issued in excess of the amount it had registered with the SEC under
the Predecessor Shelf. The securities that were issued in this period included
structured notes and exchange traded notes (ETNs). Certain offers and sales of
these securities were not made in compliance with the Securities Act, giving
rise to rights of rescission for certain purchasers of the securities. Under
Section 12(a)(1) of the Securities Act, certain purchasers of unregistered
securities have a right to recover, upon the tender of such security, the
consideration paid for such security with interest, less the amount of any
income received, or damages if the purchaser sold the securities at a loss
(the Rescission Price). As a result, Barclays Bank PLC made a rescission offer
to eligible purchasers of the relevant affected securities at the Rescission
Price (the Rescission Offer).
A portion of the costs associated with the rights of rescission of certain
investors was attributable to Barclays PLC's financial statements for the year
ended 31 December 2021. Accordingly, the comparatives in these financial
statements have been restated. The restatement impacts the consolidated income
statement, the consolidated statement of comprehensive income, the
consolidated balance sheet, the consolidated statement of changes in equity,
and the consolidated cash flow statement for the year ended 31 December 2021,
as well as quarterly financial information that is presented within this
document.
The table below reflects each of the consolidated financial statement line
items that were affected by the restatement:
Impact on the condensed consolidated income statement As reported Restatement As restated
Year ended 31.12.21 £m £m £m
Litigation and conduct (177) (220) (397)
Operating expenses (14,439) (220) (14,659)
Profit before tax 8,414 (220) 8,194
Taxation (1,188) 50 (1,138)
Profit after tax 7,226 (170) 7,056
Impact on the condensed consolidated statement of comprehensive income
Year ended 31.12.21 £m £m £m
Profit after tax 7,226 (170) 7,056
Total comprehensive income for the period 5,008 (170) 4,838
Impact on the condensed consolidated cash flow statement
Year ended 31.12.21 £m £m £m
Profit before tax 8,414 (220) 8,194
Adjustment for non-cash items 4,803 220 5,023
Impact on the condensed consolidated balance sheet
As at 31.12.21 £m £m £m
Current tax liabilities 739 (50) 689
Provisions 1,688 220 1,908
Total liabilities 1,314,074 170 1,314,244
Retained earnings 50,657 (170) 50,487
Total equity 70,211 (170) 70,041
2. Tax
The tax charge for 2022 was £1,039m (restated(1) 2021: £1,138m),
representing an effective tax rate (ETR) of 14.8% (restated(1) 2021: 13.9%).
The ETR for 2022 includes a charge recognised for the re-measurement of the
Group's UK deferred tax assets (DTAs) due to the enactment of legislation in
Q122 to reduce the UK banking surcharge rate being from 8% to 3% effective
from 1 April 2023. The ETR excluding the impact of this downward
re-measurement of UK DTAs was 9.9%, reflecting the impact of tax benefits
arising in the current year, primarily arising from tax relief related to
government bonds linked to the high prevailing rate of inflation in 2022, as
well as beneficial adjustments in respect of prior years. Included in the 2022
tax charge is a credit of £244m (2021: £212m) in respect of payments made on
AT1 instruments that are classified as equity for accounting purposes. The
2021 ETR included a benefit recognised for the re-measurement of the Group's
UK DTAs as a result of the enactment of legislation to increase the UK
Corporation Tax rate to 25% effective from 1 April 2023.
The re-measurement of UK DTAs has resulted in the Group's DTAs decreasing by
£318m with a tax charge in the income statement of £346m and a tax credit
within other comprehensive income of £28m.
In its Autumn Statement held in November 2022, the UK Government confirmed
that, as currently enacted, the banking surcharge rate will be reduced from 8%
to 3% from 1 April 2023. UK deferred tax assets as at 31 December 2022 are
measured at this rate, having been remeasured when the 3% rate was
substantively enacted in 2022. The statutory tax rate applicable to banks' UK
profits will therefore be 28% (comprising a rate of 25% for Corporation Tax
and of 3% for banking surcharge)from 1 April 2023.
The OECD and G20 Inclusive Framework on Base Erosion and Profit Shifting
announced plans to introduce a global minimum tax rate of 15% and the OECD
issued model rules in 2021. During 2022 further OECD guidance has been
released and draft legislation to implement the global minimum tax regime has
been published by the UK Government. The UK Government has stated that it
intends to enact legislation in 2023 to apply for accounting periods beginning
on or after 31 December 2023. The Group has reviewed the published OECD
model rules and further guidance along with the draft UK legislation and has
been assessing the expected impact ahead of the implementation of the new
regime. The Group will review further guidance as well as new legislation
expected to be released by governments implementing this new tax regime and
continue to assess the potential impact.
In the USA, the Inflation Reduction Act was enacted in August 2022. The Act
does not include changes to the US corporate income tax rate or to US
international tax provisions included in the previously proposed Build Back
Better Act but does introduce a corporate alternative minimum tax on adjusted
financial statements income, effective from 1 January 2023. Further
regulations and guidance are expected to be published in 2023, however the
Group's preliminary view is that the alternative minimum tax is not expected
to materially increase the Group's effective tax rate. The Group will review
future guidance when it is published and continue to monitor other legislative
developments and assess the potential impact.
1 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Restatement of financial statements (Note 1)
on page 69 for more information.
As at 31.12.22 As at 31.12.21
Deferred tax assets and liabilities £m £m
UK 4,925 2,183
USA 1,576 2,006
Other territories 490 430
Deferred tax assets 6,991 4,619
Deferred tax liabilities (16) (37)
Analysis of deferred tax assets
Temporary differences 5,345 3,399
Tax losses 1,646 1,220
Deferred tax assets 6,991 4,619
3. Non-controlling interests
Profit attributable to Equity attributable to
non-controlling interests non-controlling interests
Year ended 31.12.22 Year ended 31.12.21 As at 31.12.22 As at 31.12.21
£m £m £m £m
Barclays Bank PLC issued:
- Preference shares 31 27 529 529
- Upper T2 instruments 14 17 438 458
Other non-controlling interests - 3 1 2
Total 45 47 968 989
4. Earnings per share
Restated(1)
Year ended 31.12.22 Year ended 31.12.21
£m £m
Profit attributable to ordinary equity holders of the parent 5,023 6,205
m m
Basic weighted average number of shares in issue 16,333 16,985
Number of potential ordinary shares 534 435
Diluted weighted average number of shares 16,867 17,420
p p
Basic earnings per ordinary share 30.8 36.5
Diluted earnings per ordinary share 29.8 35.6
1 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Restatement of financial statements (Note 1)
on page 69 for more information.
5. Dividends on ordinary shares
It is Barclays' policy to declare and pay dividends on a semi-annual basis.
The 2022 full year dividend of 5.0p per ordinary share will be paid on 31
March 2023 to the shareholders on the Share Registrar on 24 February 2023. A
half year dividend for 2022 of 2.25p (H121: 2.0p) per ordinary share was paid
on 16 September 2022.
Year ended 31.12.22 Year ended 31.12.21
Per share Total Per share Total
Dividends paid during the period p £m p £m
Full year dividend paid during period 4.00 664 1.00 173
Interim dividend paid during the period 2.25 364 2.00 339
Total dividend 6.25 1,028 3.00 512
The Directors have confirmed their intention initiate a share buyback of up to
£0.5bn after the balance sheet date. The share buyback is expected to
commence in the first quarter of 2023. The financial statements for the year
ended 31 December 2022 do not reflect the impact of the proposed share
buyback, which will be accounted for as and when shares are repurchased by the
Company.
6. Fair value of financial instruments
This section should be read in conjunction with Note 17, Fair value of
financial instruments of the Barclays PLC Annual Report 2022 which provides
more detail about accounting policies adopted, valuation methodologies used in
calculating fair value and the valuation control framework which governs
oversight of valuations. There have been no changes in the accounting policies
adopted or the valuation methodologies used.
Valuation
The following table shows the Group's assets and liabilities that are held at
fair value disaggregated by valuation technique (fair value hierarchy) and
balance sheet classification:
Valuation technique using
Quoted market prices Observable inputs Significant unobservable inputs
(Level 1) (Level 2) (Level 3) Total
As at 31.12.22 £m £m £m £m
Trading portfolio assets 62,478 64,855 6,480 133,813
Financial assets at fair value through the income statement 5,720 198,723 9,125 213,568
Derivative financial instruments 10,054 287,152 5,174 302,380
Financial assets at fair value through other comprehensive income 20,704 44,347 11 65,062
Investment property - - 5 5
Total assets 98,956 595,077 20,795 714,828
Trading portfolio liabilities (44,128) (28,740) (56) (72,924)
Financial liabilities designated at fair value (133) (270,454) (1,050) (271,637)
Derivative financial instruments (10,823) (272,434) (6,363) (289,620)
Total liabilities (55,084) (571,628) (7,469) (634,181)
As at 31.12.21
Trading portfolio assets 80,926 63,828 2,281 147,035
Financial assets at fair value through the income statement 5,093 177,167 9,712 191,972
Derivative financial instruments 6,150 252,412 4,010 262,572
Financial assets at fair value through other comprehensive income 22,009 39,706 38 61,753
Investment property - - 7 7
Total assets 114,178 533,113 16,048 663,339
Trading portfolio liabilities (27,529) (26,613) (27) (54,169)
Financial liabilities designated at fair value (174) (250,376) (410) (250,960)
Derivative financial instruments (6,571) (244,253) (6,059) (256,883)
Total liabilities (34,274) (521,242) (6,496) (562,012)
7. Subordinated liabilities
Year ended 31.12.22 Year ended 31.12.21
£m £m
Opening balance as at 1 January 12,759 16,341
Issuances 1,477 1,890
Redemptions (2,679) (4,807)
Other (134) (665)
Closing balance 11,423 12,759
Issuances of £1,477m comprise £1,000m GBP 8.407% Fixed Rate Resetting
Subordinated Callable Notes issued externally by Barclays PLC and £317m USD
Floating Rate Notes, £89m ZAR Floating Rate Notes, £42m EUR Floating Rate
Notes and £29m JPY Floating Rate Notes issued externally by Barclays
subsidiaries.
Redemptions of £2,679m comprise £2,349m notes issued externally by Barclays
Bank PLC, £175m USD Floating Rate Notes, £88m USD Fixed Rate Notes issued
externally by Barclays subsidiaries and £67m GBP Undated Subordinated Loan
Notes (secured) issued externally by a Barclays securitisation special purpose
vehicle (SPV). £2,349m notes issued externally by Barclays Bank PLC comprise
£1,275m USD 7.625% Fixed Rate Contingent Capital Notes, £838m EUR 6.625%
Fixed Rate Subordinated Notes, £147m USD 6.86% Callable Perpetual Core Tier
One Notes, £42m EUR Subordinated Floating Rate Notes, £35m GBP 5.330%
Step-up Callable Perpetual Reserve Capital Instruments and £12m GBP 6%
Callable Perpetual Core Tier One Notes.
Other movements predominantly comprise foreign exchange movements and fair
value hedge adjustments.
8. Provisions
Restated(1)
As at 31.12.22 As at 31.12.21
£m £m
Customer redress 378 530
Legal, competition and regulatory matters 159 226
Redundancy and restructuring 136 326
Undrawn contractually committed facilities and guarantees 583 542
Onerous contracts - 5
Sundry provisions 288 279
Total 1,544 1,908
1 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Restatement of financial statements (Note 1)
on page 69 for more information.
9. Retirement benefits
As at 31 December 2022, the Group's IAS 19 net pension surplus across all
schemes was £4.5bn (December 2021: £3.6bn). The UK Retirement Fund (UKRF),
which is the Group's main scheme, had an IAS 19 net pension surplus of £4.7bn
(December 2021: £3.8bn). The movement for the UKRF was driven by payment of
£294m deficit reduction contributions and the unwind of senior fixed rate
notes (covered below), partially offset by higher than expected inflation.
UKRF funding valuations
The latest triennial actuarial valuation of the UKRF with an effective date of
30 September 2022 has been completed. The valuation showed a funding surplus
of £2bn and a funding level of 108% (2021 update: £0.6bn surplus, funding
level 102%). The improvement was mainly due to £294m deficit reduction
contributions, changes to views on life expectancy, and inflationary returns
on assets relative to liabilities being better than expected.
As the UKRF has a funding surplus the 2023 deficit reduction contribution
(£286m), agreed as part of the 2019 triennial actuarial valuation, is no
longer required, and no recovery plan is needed.
During 2019 and 2020, the UKRF subscribed for non-transferable listed senior
fixed rate notes for £1.25bn issued by entities consolidated within the Group
under IFRS 10. As a result of these transactions, the CET1 impact of the 2019
and 2020 deficit contributions was deferred until 2023, 2024 and 2025 upon
maturity of the notes. Barclays unwound these transactions in December 2022.
This resulted in a c.30bps reduction to the CET1 ratio being accelerated to Q4
2022 from 2023, 2024 and 2025.
10. Called up share capital
Ordinary share capital Share premium Total share capital and share premium
Year ended 31.12.22 £m £m £m
Opening balance as at 1 January 4,188 348 4,536
Issue of shares under employee share schemes 13 57 70
Repurchase of shares (233) - (233)
Closing balance 3,968 405 4,373
Called up share capital comprises 15,871m (December 2021: 16,752m) ordinary
shares of 25p each. The decrease is mainly due to the repurchase of 931m
shares as part of the share buybacks conducted in 2022, partially offset by an
increase due to the issuance of shares under employee share schemes.
11. Other equity instruments
Year ended 31.12.22 Year ended 31.12.21
£m £m
Opening balance as at 1 January 12,259 11,172
Issuances 3,158 1,078
Redemptions (2,126) -
Securities held by the Group (7) 9
Closing balance 13,284 12,259
Other equity instruments of £13,284m (December 2021: £12,259m) comprise AT1
securities issued by Barclays PLC. There were three issuances and two
redemptions in the period.
The AT1 securities are perpetual securities with no fixed maturity and are
structured to qualify as AT1 instruments under prevailing capital rules
applicable as at the relevant issue date. AT1 securities are undated and are
redeemable, at the option of Barclays PLC, in whole on (i) the initial call
date, or on any fifth anniversary after the initial call date or (ii) any day
falling in a named period ending on the initial reset date, or on any fifth
anniversary after the initial reset date. In addition, the AT1 securities are
redeemable, at the option of Barclays PLC, in whole in the event of certain
changes in the tax or regulatory treatment of the securities. Any redemptions
require the prior consent of the PRA.
All Barclays PLC AT1 securities will be converted into ordinary shares of
Barclays PLC, at a pre-determined price, should the fully loaded CET1 ratio of
the Group fall below 7%.
12. Other reserves
As at 31.12.22 As at 31.12.21
£m £m
Currency translation reserve 4,772 2,740
Fair value through other comprehensive income reserve (1,560) (283)
Cash flow hedging reserve (7,235) (853)
Own credit reserve 467 (960)
Other reserves and treasury shares 1,364 1,126
Total (2,192) 1,770
Currency translation reserve
The currency translation reserve represents the cumulative gains and losses on
the retranslation of the Group's net investment in foreign operations, net of
the effects of hedging.
As at 31 December 2022, there was a credit balance of £4,772m (December 2021:
£2,740m credit) in the currency translation reserve. The £2,032m credit
movement principally reflects the weakening of GBP against USD during the
period.
Fair value through other comprehensive income reserve
The fair value through other comprehensive income reserve represents the
changes in the fair value of fair value through other comprehensive income
investments since initial recognition.
As at 31 December 2022, there was a debit balance of £1,560m (December 2021:
£283m debit) in the reserve. The movement in the year of £1,277m is
principally driven by a loss of £1,836m from the decrease in fair value of
bonds(net of hedges) due to increasing bond yields, a net loss of £111m
transferred to the income statement, gains of £84m transferred to retained
earnings on sale of 14.90% equity stake in Absa Group Limited offset by a tax
credit of £523m.
Cash flow hedging reserve
The cash flow hedging reserve represents the cumulative gains and losses on
effective cash flow hedging instruments that will be recycled to the income
statement when the hedged transactions affect profit or loss.
As at 31 December 2022, there was a debit balance of £7,235m (December 2021:
£853m debit) in the cash flow hedging reserve. The decrease of £6,382m
principally reflects a £9,052m decrease in the fair value of interest rate
swaps held for hedging purposes as major interest rate forward curves
increased. This is partially offset by a tax credit of £2,331m and £339m of
losses transferred to the income statement.
Own credit reserve
The own credit reserve reflects the cumulative own credit gains and losses on
financial liabilities at fair value. Amounts in the own credit reserve are not
recycled to profit or loss in future periods.
As at 31 December 2022, there was a credit balance of £467m (December 2021:
£960m debit) in the own credit reserve. The movement of £1,427m principally
reflects a £2,091m gain from the widening of Barclays' funding spreads
partially offset by a tax charge of £616m.
Other reserves and treasury shares
Other reserves relate to redeemed ordinary and preference shares issued by the
Group. Treasury shares relate to Barclays PLC shares held principally in
relation to the Group's various share schemes.
As at 31 December 2022, there was a credit balance of £1,364m (December 2021:
£1,126m credit) in other reserves and treasury shares. This is driven by an
increase of £233m due to the repurchase of 931m shares as part of the share
buybacks conducted in 2022 and a £5m movement in the treasury shares balance
held in relation to employee share schemes.
Appendix: Non-IFRS Performance Measures
The Group's management believes that the non-IFRS performance measures
included in this document provide valuable information to the readers of the
financial statements as they enable the reader to identify a more consistent
basis for comparing the businesses' performance between financial periods, and
provide more detail concerning the elements of performance which the managers
of these businesses are most directly able to influence or are relevant for an
assessment of the Group. They also reflect an important aspect of the way in
which operating targets are defined and performance is monitored by
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.
Non-IFRS performance measures glossary
Measure Definition
Loan: deposit ratio Loans and advances at amortised cost divided by deposits at amortised cost.
The components of the calculation have been included on page 52.
Period end allocated tangible equity Allocated tangible equity is calculated as 13.5% (2021: 13.5%) of RWAs for
each business, adjusted for capital deductions, excluding goodwill and
intangible assets, reflecting the assumptions the Group uses for capital
planning purposes. Head Office allocated tangible equity represents the
difference between the Group's tangible shareholders' equity and the amounts
allocated to businesses.
Average tangible shareholders' equity Calculated as the average of the previous month's period end tangible equity
and the current month's period end tangible equity. The average tangible
shareholders' equity for the period is the average of the monthly averages
within that period.
Average allocated tangible equity Calculated as the average of the previous month's period end allocated
tangible equity and the current month's period end allocated tangible equity.
The average allocated tangible equity for the period is the average of the
monthly averages within that period.
Return on average tangible shareholders' equity Statutory profit after tax attributable to ordinary equity holders of the
parent, as a proportion of average shareholders' equity excluding
non-controlling interests and other equity instruments adjusted for the
deduction of intangible assets and goodwill. The components of the
calculation have been included on pages 78 to 80.
Return on average allocated tangible equity Statutory profit after tax attributable to ordinary equity holders of the
parent, as a proportion of average allocated tangible equity. The components
of the calculation have been included on pages 78 to 81.
Operating expenses excluding litigation and conduct A measure of total operating expenses excluding litigation and conduct
charges.
Operating costs A measure of total operating expenses excluding litigation and conduct charges
and UK bank levy.
Cost: income ratio Total operating expenses divided by total income.
Loan loss rate Quoted in basis points and represents total impairment charges divided by
gross loans and advances held at amortised cost at the balance sheet date. The
components of the calculation have been included on page 29.
Net interest margin Net interest income divided by the sum of average customer assets. The
components of the calculation have been included on page 24.
Tangible net asset value per share Calculated by dividing shareholders' equity, excluding non-controlling
interests and other equity instruments, less goodwill and intangible assets,
by the number of issued ordinary shares. The components of the calculation
have been included on page 82.
Performance measures excluding the impact of the Over-issuance of Securities Calculated by excluding the impact of the Over-issuance of Securities from
performance measures. The components of the calculations have been included on
page 79.
Profit before impairment Calculated by excluding credit impairment charges or releases from profit
before tax.
Returns
Return on average tangible equity is calculated as profit after tax
attributable to ordinary equity holders of the parent as a proportion of
average tangible equity, excluding non-controlling and other equity interests
for businesses. Allocated tangible equity has been calculated as 13.5% (2021:
13.5%) of RWAs for each business, adjusted for capital deductions, excluding
goodwill and intangible assets, reflecting the assumptions the Group uses for
capital planning purposes. Head Office average allocated tangible equity
represents the difference between the Group's average tangible shareholders'
equity and the amounts allocated to businesses.
Profit/(loss) attributable to ordinary equity holders of the parent Average tangible equity Return on average tangible equity
For the year ended 31.12.22 £m £bn %
Barclays UK 1,877 10.0 18.7
Corporate and Investment Bank 3,364 32.8 10.2
Consumer, Cards and Payments 480 4.8 10.0
Barclays International 3,844 37.6 10.2
Head Office (698) 0.7 n/m
Barclays Group 5,023 48.3 10.4
For the year ended 31.12.21(1)
Barclays UK 1,756 10.0 17.6
Corporate and Investment Bank 4,032 28.3 14.3
Consumer, Cards and Payments 615 4.1 15.0
Barclays International 4,647 32.4 14.4
Head Office (198) 5.0 n/m
Barclays Group 6,205 47.3 13.1
1 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information.
Year ended 31.12.22
Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Barclays Group
Return on average tangible shareholders' equity £m £m £m £m £m £m
Attributable profit/(loss) 1,877 3,364 480 3,844 (698) 5,023
£bn £bn £bn £bn £bn £bn
Average shareholders' equity 13.6 32.8 5.7 38.5 4.3 56.4
Average goodwill and intangibles (3.6) - (0.9) (0.9) (3.6) (8.1)
Average tangible shareholders' equity 10.0 32.8 4.8 37.6 0.7 48.3
Return on average tangible shareholders' equity 18.7% 10.2% 10.0% 10.2% n/m 10.4%
Year ended 31.12.21(1)
Barclays UK Corporate and Investment Bank Consumer, Cards and Payments Barclays International Head Office Barclays Group
Return on average tangible shareholders' equity £m £m £m £m £m £m
Attributable profit/(loss) 1,756 4,032 615 4,647 (198) 6,205
£bn £bn £bn £bn £bn £bn
Average shareholders' equity 13.6 28.3 4.8 33.1 8.7 55.4
Average goodwill and intangibles (3.6) - (0.7) (0.7) (3.7) (8.1)
Average tangible shareholders' equity 10.0 28.3 4.1 32.4 5.0 47.3
Return on average tangible shareholders' equity 17.6% 14.3% 15.0% 14.4% n/m 13.1%
Performance measures excluding the impact of the Over-issuance of Securities
Corporate and Investment Bank
Attributable profit excluding the impact of the Over-issuance of Securities Year ended
31.12.22
£m
Attributable profit 3,364
Post-tax impact of the Over-issuance of Securities (552)
Attributable profit excluding the impact of the Over-issuance of Securities 3,916
Return on average allocated tangible equity £bn
Average allocated tangible equity 32.8
The impact of the Over-issuance of Securities 0.3
Average allocated tangible equity adjusted for the impact of the Over-issuance 32.5
of Securities
Return on average allocated tangible equity 10.2%
The impact of the Over-issuance of Securities (1.8)%
Return on average allocated tangible equity excluding the impact of the 12.0%
Over-issuance of Securities
1 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information.
Barclays Group
Return on average tangible shareholders' equity Q422 Q322 Q222 Q122 Q421(1) Q321(1) Q221(1) Q121
£m £m £m £m £m £m £m £m
Attributable profit 1,036 1,512 1,071 1,404 1,079 1,374 2,048 1,704
£bn £bn £bn £bn £bn £bn £bn £bn
Average shareholders' equity 54.9 56.8 57.1 56.9 56.1 56.5 54.4 54.4
Average goodwill and intangibles (8.2) (8.2) (8.1) (8.1) (8.1) (8.2) (7.9) (7.9)
Average tangible shareholders' equity 46.7 48.6 49.0 48.8 48.0 48.3 46.5 46.5
Return on average tangible shareholders' equity 8.9% 12.5% 8.7% 11.5% 9.0% 11.4% 17.6% 14.7%
Barclays UK
Return on average allocated tangible equity Q422 Q322 Q222 Q122 Q421 Q321 Q221 Q121
£m £m £m £m £m £m £m £m
Attributable profit 474 549 458 396 420 317 721 298
£bn £bn £bn £bn £bn £bn £bn £bn
Average allocated equity 13.7 13.5 13.6 13.7 13.6 13.6 13.5 13.5
Average goodwill and intangibles (3.5) (3.6) (3.6) (3.6) (3.6) (3.6) (3.6) (3.6)
Average allocated tangible equity 10.2 9.9 10.0 10.1 10.0 10.0 9.9 9.9
Return on average allocated tangible equity 18.7% 22.1% 18.4% 15.6% 16.8% 12.7% 29.1% 12.0%
1 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information.
Barclays International
Return on average allocated tangible equity Q422 Q322 Q222 Q122 Q421(1) Q321(1) Q221(1) Q121
£m £m £m £m £m £m £m £m
Attributable profit 625 1,136 783 1,300 818 1,191 1,207 1,431
£bn £bn £bn £bn £bn £bn £bn £bn
Average allocated equity 39.9 40.1 38.2 36.0 33.8 32.7 33.0 32.8
Average goodwill and intangibles (1.0) (1.0) (0.9) (0.9) (0.9) (0.9) (0.6) (0.5)
Average allocated tangible equity 38.9 39.1 37.3 35.1 32.9 31.8 32.4 32.3
Return on average allocated tangible equity 6.4% 11.6% 8.4% 14.8% 9.9% 14.9% 14.9% 17.7%
Corporate and Investment Bank
Return on average allocated tangible equity Q422 Q322 Q222 Q122 Q421(1) Q321(1) Q221(1) Q121
£m £m £m £m £m £m £m £m
Attributable profit 454 1,015 579 1,316 695 1,085 989 1,263
£bn £bn £bn £bn £bn £bn £bn £bn
Average allocated equity 33.7 34.0 32.7 30.8 28.7 27.8 28.4 28.2
Average goodwill and intangibles - - - - - - - -
Average allocated tangible equity 33.7 34.0 32.7 30.8 28.7 27.8 28.4 28.2
Return on average allocated tangible equity 5.4% 11.9% 7.1% 17.1% 9.7% 15.6% 14.0% 17.9%
Consumer, Cards and Payments
Return on average allocated tangible equity Q422 Q322 Q222 Q122 Q421 Q321 Q221 Q121
£m £m £m £m £m £m £m £m
Attributable profit/(loss) 171 121 204 (16) 123 106 218 168
£bn £bn £bn £bn £bn £bn £bn £bn
Average allocated equity 6.2 6.1 5.5 5.2 5.1 4.9 4.6 4.6
Average goodwill and intangibles (1.0) (1.0) (0.9) (0.9) (0.9) (0.9) (0.6) (0.5)
Average allocated tangible equity 5.2 5.1 4.6 4.3 4.2 4.0 4.0 4.1
Return on average allocated tangible equity 13.0% 9.5% 17.8% (1.5)% 11.7% 10.5% 21.8% 16.5%
1 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information.
Tangible net asset value per share As at 31.12.22 Restated(1)
As at 31.12.21
£m £m
Total equity excluding non-controlling interests 68,292 69,052
Other equity instruments (13,284) (12,259)
Goodwill and intangibles (8,239) (8,061)
Tangible shareholders' equity attributable to ordinary shareholders of the 46,769 48,732
parent
m m
Shares in issue 15,871 16,752
p p
Tangible net asset value per share 295 291
1 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information.
Notable Items
Year ended 31.12.22 Th
re
e
mo
nt
hs
en
de
d
31
.1
2.
22
£m Profit before tax Attributable profit Profit before tax Attributable profit
Statutory 7,012 5,023 1,310 1,036
Net impact from the Over-issuance of Securities (674) (552) - -
Customer remediation costs on legacy loan portfolio (282) (228) - -
Settlements in principle in respect of industry-wide devices investigations by (165) (165) - -
SEC and CFTC
Other litigation and conduct (184) (167) (79) (70)
Re-measurement of UK DTAs - (346) - -
Excluding the impact of notable items 8,317 6,481 1,389 1,106
Year ended 31.12.21 Three months ended 31.12.21
£m Profit before tax Attributable profit Profit before tax Attributable profit
Statutory(1) 8,194 6,205 1,428 1,079
Net impact from the Over-issuance of Securities (220) (170) (46) (38)
Structural cost action - June 2021 real estate review (266) (203) - -
Other litigation and conduct (177) (136) (46) (29)
Re-measurement of UK DTAs - 462 - 60
Excluding the impact of notable items 8,857 6,252 1,520 1,086
The Group's management believes that the non-IFRS financial measures excluding
notable items, included in the table above, provide valuable information to
enable users of the financial statements to assess the performance of the
Group. The notable items are separately identified within the Group's results
disclosures which, when excluded from Barclays' statutory financials, provide
an underlying profit and loss performance of the Group and enables consistent
comparison of performance from one period to another.
These non-IFRS financial measures excluding notable items are included as a
reference point only and are not incorporated within any of the key financial
metrics used in our Group Targets, which are measured on a statutory basis.
1 2021 financial metrics have been restated to reflect the impact of the
Over-issuance of Securities. See Basis of preparation on page 55 and
Restatement of financial statements (Note 1) on page 69 for more information.
Shareholder Information
Results timetable(1) Date
Ex-dividend date 23 February 2023
Dividend record date 24 February 2023
Cut off time of 5:00pm (UK time) for the receipt of Dividend Re-investment 10 March 2023
Programme (DRIP) Application Form Mandate
Dividend payment date 31 March 2023
Q1 2023 Results Announcement 27 April 2023
For qualifying US and Canadian resident ADR holders, the 2022 full year
dividend of 5.0p per ordinary share becomes 20.0p per ADS (representing four
shares). The ex-dividend, dividend record and dividend payment dates for ADR
holders are as shown above
Year ended Year ended
Exchange rates(2) 31.12.22 31.12.21 % Change(3)
Period end - USD/GBP 1.21 1.35 (10)%
YTD average - USD/GBP 1.24 1.38 (10)%
3 month average - USD/GBP 1.17 1.35 (13)%
Period end - EUR/GBP 1.13 1.19 (5)%
YTD average - EUR/GBP 1.17 1.16 1%
3 month average - EUR/GBP 1.15 1.18 (3)%
Share price data
Barclays PLC (p) 158.52 187.00
Barclays PLC number of shares (m) 15,871 16,752
For further information please contact
Investor relations Media relations
Chris Manners +44 (0) 20 7773 2136 Tom Hoskin +44 (0) 20 7116 4755
More information on Barclays can be found on our website: home.barclays
Registered office
1 Churchill Place, London, E14 5HP, United Kingdom. Tel: +44 (0) 20 7116 1000.
Company number: 48839.
Registrar
Equiniti, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United
Kingdom.
Tel: 0371 384 2055(4) from the UK or +44 121 415 7004 from overseas.
American Depositary Receipts (ADRs)
EQ Shareowner Services
P.O. Box 64504
St. Paul, MN 55164-0854
United States of America
shareowneronline.com
Toll Free Number: +1 800-990-1135
Outside the US +1 651-453-2128
Delivery of ADR certificates and overnight mail
EQ Shareowner Services, 1110 Centre Pointe Curve, Suite 101, Mendota Heights,
MN 55120-4100, USA.
1 Note that these dates are provisional and subject to change.
2 The average rates shown above are derived from daily spot rates during the
year.
3 The change is the impact to GBP reported information.
4 Lines open 8.30am to 5.30pm (UK time), Monday to Friday, excluding UK public
holidays in England and Wales.
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