0001654954-17-006733.txt : 20170728 0001654954-17-006733.hdr.sgml : 20170728 20170728122917 ACCESSION NUMBER: 0001654954-17-006733 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20170728 FILED AS OF DATE: 20170728 DATE AS OF CHANGE: 20170728 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARCLAYS PLC CENTRAL INDEX KEY: 0000312069 STANDARD INDUSTRIAL CLASSIFICATION: COMMERCIAL BANKS, NEC [6029] IRS NUMBER: 000000000 STATE OF INCORPORATION: X0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09246 FILM NUMBER: 17988891 BUSINESS ADDRESS: STREET 1: 1 CHURCHILL PLACE STREET 2: CANARY WHARF CITY: LONDON STATE: X0 ZIP: E14 5HP BUSINESS PHONE: 00442031340952 MAIL ADDRESS: STREET 1: 1 CHURCHILL PLACE STREET 2: CANARY WHARF CITY: LONDON STATE: X0 ZIP: E14 5HP FORMER COMPANY: FORMER CONFORMED NAME: BARCLAYS BANK PLC DATE OF NAME CHANGE: 19850313 FORMER COMPANY: FORMER CONFORMED NAME: BARCLAYS BANK LTD DATE OF NAME CHANGE: 19820607 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARCLAYS BANK PLC CENTRAL INDEX KEY: 0000312070 STANDARD INDUSTRIAL CLASSIFICATION: COMMERCIAL BANKS, NEC [6029] IRS NUMBER: 000000000 STATE OF INCORPORATION: X0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10257 FILM NUMBER: 17988892 BUSINESS ADDRESS: STREET 1: 1 CHURCHILL PLACE STREET 2: CANARY WHARF CITY: LONDON STATE: X0 ZIP: E14 5HP BUSINESS PHONE: 0044-20-3555-4619 MAIL ADDRESS: STREET 1: 1 CHURCHILL PLACE STREET 2: CANARY WHARF CITY: LONDON STATE: X0 ZIP: E14 5HP FORMER COMPANY: FORMER CONFORMED NAME: BARCLAYS BANK PLC /ENG/ DATE OF NAME CHANGE: 19990402 FORMER COMPANY: FORMER CONFORMED NAME: BARCLAYS BANK INTERNATIONAL LTD DATE OF NAME CHANGE: 19850313 6-K 1 barc_6k.htm HALF YEAR REPORT Blueprint
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
 
FORM 6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
July 28, 2017
 
Barclays PLC and
Barclays Bank PLC
(Names of Registrants)
 
1 Churchill Place
London E14 5HP
England
(Address of Principal Executive Offices)
 
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
 
Form 20-F x Form 40-F
 
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes No x
 
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):
 
This Report is a joint Report on Form 6-K filed by Barclays PLC and Barclays
Bank PLC. All of the issued ordinary share capital of Barclays Bank PLC is
owned by Barclays PLC.
 
This Report comprises:
 
Information given to The London Stock Exchange and furnished pursuant to
General Instruction B to the General Instructions to Form 6-K.
 
 
EXHIBIT INDEX
 
 
 
Half-year Report dated July 28, 2017
 
 
 
 
SIGNATURES
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
BARCLAYS PLC
 
(Registrant)
 
 
 
Date: July 28, 2017
 
 
 
By: /s/ Garth Wright
--------------------------------
 
Garth Wright
 
Assistant Secretary
 
 
 
 
BARCLAYS BANK PLC
 
(Registrant)
 
 
Date: July 28, 2017
 
 
By: /s/ Garth Wright
--------------------------------
 
Garth Wright
 
Assistant Secretary
 
 
 
 
 
 
 
 
Barclays PLC
Results Announcement
 
30 June 2017

 
 
 
 
 
 
 
 
 
 
Table of Contents
 
 
 
 
Results Announcement
Page
Notes
1
Performance Highlights
2-4
Group Chief Executive Officer’s Review
5
Group Finance Director’s Review
6-9
Results by Business
 
● Barclays UK
10-12
● Barclays International
13-15
● Head Office
16
● Barclays Non-Core
17-19
Discontinued Operation Results
20-21
Quarterly Results Summary
22-24
Quarterly Core Results by Business
25-29
Performance Management
 
● Margins and balances
30
Risk Management
 
● Overview
31
● Credit Risk
32-37
● Market Risk
38
● Treasury and Capital Risk
39-49
Statement of Directors’ Responsibilities
50
Independent Review Report to Barclays PLC
51
Condensed Consolidated Financial Statements
52-57
Financial Statement Notes
58-93
Appendix: Non-IFRS Performance Measures
94-98
Shareholder Information
99
 
BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE: +44 (0) 20 7116 1000. COMPANY NO. 48839
 
 
 
Notes
 
The term Barclays or Group refers to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis compares the six months ended 30 June 2017 to the corresponding six months of 2016 and balance sheet analysis as at 30 June 2017 with comparatives relating to 31 December 2016 and 30 June 2016. The abbreviations ‘£m’ and ‘£bn’ represent millions and thousands of millions of Pounds Sterling respectively; the abbreviations ‘$m’ and ‘$bn’ represent millions and thousands of millions of US Dollars respectively; the abbreviations ‘€m’ and ‘€bn’ represent millions and thousands of millions of Euros respectively.
 
There are a number of key judgement areas, for example impairment calculations, which are based on models and which are subject to ongoing adjustment and modifications. Reported numbers reflect best estimates and judgements at the given point in time.
 
Relevant terms that are used in this document but are not defined under applicable regulatory guidance or International Financial Reporting Standards (IFRS) are explained in the results glossary that can be accessed at home.barclays/results.
 
The information in this announcement, which was approved by the Board of Directors on 27 July 2017, does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2016, which included certain information required for the Joint Annual Report on Form 20-F of Barclays PLC and Barclays Bank PLC to the US Securities and Exchange Commission (SEC) and which contained an unqualified audit report under Section 495 of the Companies Act 2006 (which did not make any statements under Section 498 of the Companies Act 2006) have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.
 
These results will be furnished as a Form 6-K to the SEC as soon as practicable following their publication. Once furnished with the SEC, copies of the Form 6-K will also be available from the Barclays Investor Relations website home.barclays/results and from the SEC’s website at www.sec.gov.
 
Barclays is a frequent issuer in the debt capital markets and regularly meets with investors via formal road-shows and other ad hoc meetings. Consistent with its usual practice, Barclays expects that from time to time over the coming quarter it will meet with investors globally to discuss these results and other matters relating to the Group.
 
Non-IFRS performance measures
 
Barclays management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the business’ performance between financial periods, and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays’ management. However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Refer to the appendix on pages 94-98 for further information, reconciliations and calculations of non-IFRS performance measures included throughout this document, and the most directly comparable IFRS measures.
 
 
Forward-looking statements
 
This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as ‘may’, ‘will’, ‘seek’, ‘continue’, ‘aim’, ‘anticipate’, ‘target’, ‘projected’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’, ‘achieve’ or other words of similar meaning. Examples of forward-looking statements include, among others, statements or guidance regarding or relating to the Group’s future financial position, income growth, assets, impairment charges, provisions, notable items, business strategy, structural reform, capital, leverage and other regulatory ratios, payment of dividends (including dividend pay-out ratios and expected payment strategies), projected levels of growth in the banking and financial markets, projected costs or savings, original and revised commitments and targets in connection with the Group Strategy Update, rundown of assets and businesses within Barclays Non-Core, sell down of the Group’s interest in Barclays Africa Group Limited or the impact of any regulatory deconsolidation, estimates of capital expenditures and plans and objectives for future operations, projected employee numbers and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. These may be affected by changes in legislation, the development of standards and interpretations under International Financial Reporting Standards, evolving practices with regard to the interpretation and application of accounting and regulatory standards, the outcome of current and future legal proceedings and regulatory investigations, future levels of conduct provisions, future levels of notable items, the policies and actions of governmental and regulatory authorities, geopolitical risks and the impact of competition. In addition, factors including (but not limited to) the following may have an effect: capital, leverage and other regulatory rules (including with regard to the future structure of the Group) applicable to past, current and future periods; UK, US, Africa, Eurozone and global macroeconomic and business conditions; the effects of continued volatility in credit markets; market related risks such as changes in interest rates and foreign exchange rates; effects of changes in valuation of credit market exposures; changes in valuation of issued securities; volatility in capital markets; changes in credit ratings of any entities within the Group or any securities issued by such entities; the potential for one or more countries exiting the Eurozone; the implications of the exercise by the United Kingdom of Article 50 of the Treaty of Lisbon and the disruption that may result in the UK and globally from the withdrawal of the United Kingdom from the European Union; and the success of future acquisitions, disposals and other strategic transactions. A number of these influences and factors are beyond the Group’s control. As a result, the Group’s actual future results, dividend payments, and capital and leverage ratios may differ materially from the plans, goals, expectations and guidance set forth in the Group’s forward-looking statements. Additional risks and factors which may impact the Group’s future financial condition and performance are identified in our filings with the SEC (including, without limitation, our annual report on form 20-F for the fiscal year ended 31 December 2016), which are available on the SEC’s website at www.sec.gov.
 
 
Subject to our obligations under the applicable laws and regulations of the United Kingdom and the United States in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward looking statements, whether as a result of new information, future events or otherwise.
 
 
 
Performance Highlights
 
 
Transatlantic Consumer, Corporate and Investment Bank with Global Reach
 
Key strategic milestones achieved with the closure of Non-Core on 1 July 2017, selldown in Africa and
 
a CET1 ratio of 13.1% within our end-state target range
 

 
● Returns:
● Group Return on Tangible Equity (RoTE) of (4.6%) (H116: 4.8%). Excluding a loss on the sale of 33.7% of Barclays Africa Group Limited’s (BAGL) issued share capital of £1.4bn, an impairment of Barclays’ holding in BAGL of £1.1bn and charges for Payment Protection Insurance (PPI) of £700m, Group RoTE was 8.1%
● Core RoTE of 7.3% (H116: 12.5%). Excluding charges for PPI, Core delivered a double digit RoTE of 10.4% on an average allocated tangible equity base that was £5bn higher year-on-year
● Non-Core rundown and closure:
● Closure of Non-Core on 1 July 2017 with risk weighted assets of £23bn (December 2016: £32bn), below guidance of approximately £25bn. Residual assets and liabilities are to be reintegrated into the Core
● Materially lower loss before tax of £647m (H116: £1,904m)
● Cost efficiency:
● Group cost: income ratio of 71% (H116: 70%) reflected a significant reduction in Non-Core costs to £284m (H116: £950m) and charges for PPI of £700m (H116: £400m)
● Remain on track to deliver Group cost: income ratio below 60% over time
● Barclays Africa Group Limited (BAGL):
● Sale of 33.7% of BAGL’s issued share capital, resulting in the accounting deconsolidation of BAGL
● 47bps increase in the Group’s Common Equity Tier 1 (CET1) ratio as a result of the sale and reflecting the proportional consolidation of BAGL for regulatory reporting purposes. Estimate a further c.26bps Group CET1 ratio accretion through to regulatory deconsolidation, which is expected, subject to regulatory approval, within the next 18 months
● H117 included an impairment of Barclays’ holding in BAGL of £1.1bn and a loss on the sale of 33.7% of BAGL’s issued share capital of £1.4bn, primarily due to recycling of currency translation reserve losses to the income statement
● Common Equity Tier 1 (CET1) ratio:
● CET1 ratio increased to 13.1% (December 2016: 12.4%) reflecting strong organic capital generation and the benefit of the sale of BAGL, partially offset by charges for PPI, pension contributions and the redemption of USD preference shares
● Holding Company (HoldCo) transition:
● Continued to transition to HoldCo funding with £7.6bn equivalent of issuance
● H117 included the redemption of $1.375bn 7.1% Series 3 USD preference shares
 
 
Improved Group profit before tax driven by reduced Non-Core drag
 
●
 
Group profit before tax increased 13% to £2,341m reflecting materially lower losses in Non-Core of £647m (H116: £1,904m), while Core profit before tax reduced 25% to £2,988m impacted by charges for PPI of £700m (H116: £400m) and the non-recurrence of the £615m gain on disposal of Barclays’ share of Visa Europe Limited in H116
 
●
 
Barclays UK RoTE of 4.6% (H116: 13.6%) and cost: income ratio of 72% (H116: 61%) reflected charges for PPI of £700m (H116: £400m). Net interest margin (NIM) improved 10bps to 3.69%, with net interest income increasing 2% to £3,045m
 
●
 
Barclays International RoTE of 12.4% (H116: 14.3%) reflected RoTE of 28.0% (H116: 50.9%) in Consumer, Cards and Payments and an improved RoTE of 9.7% (H116: 8.4%) in the Corporate and Investment Bank (CIB)
 
●
 
Loss after tax in respect of discontinued operation of £2,195m included an impairment of Barclays’ holding in BAGL of £1,090m and a loss on the sale of 33.7% of BAGL’s issued share capital of £1,435m, primarily due to recycling of currency translation reserve losses to the income statement
 
●
 
Group basic loss per share of (6.6p) (H116: earnings of 6.9p) with earnings per share in respect of continuing operations of 7.1p (H116: 6.0p). Excluding the loss on the sale of 33.7% of BAGL’s issued share capital, the impairment of Barclays’ holding in BAGL and charges for PPI of £700m, earnings per share were 11.8p
 
●
 
Tangible net asset value per share decreased to 284p (December 2016: 290p) as profit from continuing operations was offset by decreases across reserves
 
 
 
Barclays Group results 
 
for the half year ended
30.06.17
30.06.16
YoY
 
£m
£m
% Change
Total income
10,881
11,013
(1)
Credit impairment charges and other provisions
(1,054)
(931)
(13)
Net operating income 
9,827
10,082
(3)
Operating expenses excluding litigation and conduct
(6,989)
(7,172)
3
Litigation and conduct
(743)
(525)
(42)
Operating expenses
(7,732)
(7,697)
-
Other net income/(expenses)
246
(322)
 
Profit before tax
2,341
2,063
13
Tax charge
(778)
(715)
(9)
Profit after tax in respect of continuing operations
1,563
1,348
16
(Loss)/profit after tax in respect of discontinued operation1
(2,195)
311
 
Non-controlling interests in respect of continuing operations
(138)
(186)
26
Non-controlling interests in respect of discontinued operation1
(140)
(155)
10
Other equity holders2
(301)
(208)
(45)
Attributable (loss)/profit
(1,211)
1,110
 
 
 
 
 
Performance measures
 
 
 
Return on average tangible shareholders' equity2
(4.6%)
4.8%
 
Average tangible shareholders' equity (£bn)
49
48
 
Cost: income ratio
71%
70%
 
Loan loss rate (bps)
49
39
 
 
 
 
 
Basic (loss)/earnings per share2
(6.6p)
6.9p
 
Basic earnings per share in respect of continuing operations2
7.1p
6.0p
 
Dividend per share 
1.0p
1.0p
 
 
 
 
 
 
As at
As at
 
Balance sheet and capital management
30.06.17
31.12.16
 
Tangible net asset value per share
284p
290p
 
Common equity tier 1 ratio
13.1%
12.4%
 
Common equity tier 1 capital
£42.8bn
£45.2bn
 
Risk weighted assets
£327bn
£366bn
 
UK leverage ratio (quarterly month end average)3
4.8%
4.5%
 
Fully loaded tier 1 capital (quarterly month end average)3
£52.1bn
£51.6bn
 
UK leverage exposure (quarterly month end average)3
£1,092bn
£1,137bn
 
 
 
 
 
Funding and liquidity
 
 
 
Group liquidity pool
£201bn
£165bn
 
CRD IV liquidity coverage ratio
149%
131%
 
Loan: deposit ratio4
81%
83%
 
 
 
1
Refer to pages 20-21 for further information relating to the Africa Banking discontinued operation. Loss after tax in respect of discontinued operation includes impairment of Barclays’ holding in BAGL of £1,090m and the loss on the sale of 33.7% of BAGL’s issued share capital of £1,435m in H117.
2
The profit after tax attributable to other equity holders of £301m (H116: £208m) is offset by a tax credit recorded in reserves of £82m (H116: £58m). The net amount of £219m (H116: £150m), along with non-controlling interests (NCI) is deducted from profit after tax in order to calculate earnings per share and return on average tangible shareholders’ equity.
3
The UK leverage ratio uses capital and exposure measures based on the average of the last day of each month in the quarter; additionally, the average exposure measure excludes qualifying central bank claims.
4
Loan: deposit ratio for Barclays UK, Barclays International and Non-Core, excluding investment banking businesses.
 
 
Barclays Core and Non-Core results 
Barclays Core
 
Barclays Non-Core
for the half year ended
30.06.17
30.06.16
YoY
 
30.06.17
30.06.16
YoY
 
£m
£m
% Change
 
£m
£m
% Change
Total income
11,411
11,599
(2)
 
(530)
(586)
10
Credit impairment charges and other provisions
(1,024)
(876)
(17)
 
(30)
(55)
45
Net operating income/(expenses)
10,387
10,723
(3)
 
(560)
(641)
13
Operating expenses excluding litigation and conduct
(6,733)
(6,315)
(7)
 
(256)
(857)
70
Litigation and conduct
(715)
(432)
(66)
 
(28)
(93)
70
Operating expenses
(7,448)
(6,747)
(10)
 
(284)
(950)
70
Other net income/(expenses)
49
(9)
 
 
197
(313)
 
Profit/(loss) before tax
2,988
3,967
(25)
 
(647)
(1,904)
66
Tax (charge)/credit
(1,060)
(1,181)
10
 
282
466
(39)
Profit/(loss) after tax
1,928
2,786
(31)
 
(365)
(1,438)
75
Non-controlling interests
(121)
(164)
26
 
(17)
(22)
23
Other equity holders
(264)
(178)
(48)
 
(37)
(30)
(23)
Attributable profit/(loss)1
1,543
2,444
(37)
 
(419)
(1,490)
72
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
Return on average allocated tangible equity
7.3%
12.5%
 
 
 
 
 
Average allocated tangible equity (£bn)1
45
40
 
 
5
8
 
Period end allocated tangible equity (£bn)1
44
41
 
 
4
8
 
Cost: income ratio
65%
58%
 
 
n/m
n/m
 
Loan loss rate (bps)
54
43
 
 
12
15
 
Basic earnings/(loss) per share contribution
9.5p
14.8p
 
 
(2.4p)
(8.8p)
 
 
 
 
 
 
 
 
 
 
As at
As at
 
 
As at
As at
 
Capital management
30.06.17
31.12.16
 
 
30.06.17
31.12.16
 
Risk weighted assets1
£304.6bn
£333.5bn
 
 
£22.8bn
£32.1bn
 
UK leverage exposure (quarterly month end average)1
£997bn
£1,026bn
 
 
£95bn
£111bn
 
 
1
Attributable profit in respect of the Africa Banking discontinued operation is reported at the Group level only. Allocated tangible equity, RWAs and leverage exposure are reported in Head Office within Core.
 
 
 
Half year ended
Half year ended
 
 
30.06.17
30.06.16
YoY
Income by business
£m
£m
% Change
Barclays UK
3,661
3,746
(2)
Barclays International
7,748
7,552
3
Head Office
2
301
(99)
Barclays Core
11,411
11,599
(2)
Barclays Non-Core
(530)
(586)
10
Barclays Group
10,881
11,013
(1)
 
Profit/(loss) before tax by business
 
 
 
Barclays UK
634
1,080
(41)
Barclays International
2,617
2,753
(5)
Head Office
(263)
134
 
Barclays Core
2,988
3,967
(25)
Barclays Non-Core
(647)
(1,904)
66
Barclays Group
2,341
2,063
13

 
Group Chief Executive Officer’s Review
 
 “The second quarter saw us complete two critically important planks of our strategy; both of them ahead of schedule.
 
First, we reduced our majority shareholding in Barclays Africa Group Limited to a level which allows us to apply for regulatory deconsolidation, and we expect to achieve that in 2018. We have permission to apply proportional consolidation to our reduced shareholding, which means that our CET1 ratio stands at 13.1% today, within our end-state target range. We will realise a further c.26bps uplift resulting from the sale.
 
Second, we completed the accelerated rundown of our Non-Core unit to below our target of £25bn in Risk Weighted Assets, allowing us to close it 6 months early and incorporate the residual assets back into the Core.
 
Accomplishing both of these milestones marks an end to the restructuring of the Barclays Group, and brings forward the date when our shareholders can benefit from the full earnings power of this business.
 
That power is evident once again in the performance reported today. At the half year, Group profit before tax increased 13% to £2,341m. Our strong businesses, Barclays UK and Barclays International, posted attractive Returns on Tangible Equity of 20.4% - excluding the provision for PPI - and 12.4% respectively.
 
Our business is now radically simplified, the restructuring is complete, our capital ratio is within our end-state target range, and while we are also working to put conduct issues behind us, we can now focus on what matters most to our shareholders: improving Group returns.
 
We have accordingly established a new target today which is to achieve a greater than 10% Group Return on Tangible Equity over time.
 
Finally we will, at the full year results early next year, provide investors with an updated capital management policy for the Group.”
 
James E Staley, Group Chief Executive Officer
 
 
Group Finance Director’s Review
 
Results for the first half of the year demonstrated significant progress against the Group’s strategy, evidenced by solid underlying Core performance, materially lower losses in Non-Core, the sell down to a target stake in BAGL and further progress on capital. The Core business reported a double digit RoTE of 10.4%, excluding the impact of charges for PPI, on a materially increased average tangible equity base. The closure of Non-Core on 1 July 2017 represented a significant milestone in the restructuring of the bank, with RWAs of £23bn, less than the previous guidance of c.£25bn, and the sale of a 33.7% stake in BAGL resulted in the accounting deconsolidation of the entity. Group H117 results were impacted by a loss on the sale of, and an impairment of Barclays’ holding in, BAGL. The Group’s CET1 ratio benefitted by 47bps from the sale and reflecting the proportional consolidation of BAGL, which, along with underlying organic capital generation, contributed to the capital ratio increasing to 13.1%, within the end-state target range.
 
Group performance
 
●
Profit before tax increased 13% to £2,341m, driven by materially reduced losses from the Non-Core which reported a loss before tax of £647m (H116: £1,904m). Core profits decreased 25% to £2,988m, impacted by charges for PPI of £700m (H116: £400m) and the non-recurrence of a £615m gain on disposal of Barclays’ share of Visa Europe Limited in H116. H117 results were also impacted by the appreciation of average USD and EUR against GBP of 12% and 10% respectively, compared to H116, which positively impacted income and adversely affected impairment and operating expenses
●
Total income decreased 1% to £10,881m, reflecting a 2% reduction in income in the Core to £11,411m, predominantly in Head Office, partially offset by a 10% reduction in Non-Core negative income to £530m. Income increased 3% in Barclays International, with growth across both CIB and Consumer, Cards and Payments, though decreased 2% in Barclays UK, impacted by the non-recurrence of a gain on disposal of Barclays’ share of Visa Europe Limited in H116
●
Credit impairment charges increased £123m to £1,054m, driven by a 53% increase in Consumer, Cards and Payments, mainly reflecting a change in portfolio mix, an increase in underlying delinquency trends in US Cards and business growth, partially offset by lower impairment in CIB. As a result, the Group loan loss rate increased 10bps to 49bps
●
Operating expenses were broadly in line at £7,732m (H116: £7,697m), driven by a 10% increase in Core to £7,448m due to charges for PPI, the impact of the change in compensation awards introduced in Q416 and business growth and investment, which more than offset cost efficiencies. Non-Core operating expenses reduced 70% to £284m as the segment continued to be rundown
●
Other net income increased to £246m (H116: £322m expense) reflecting a gain of £109m on the sale of Barclays’ share in VocaLink to MasterCard and a gain of £76m on the sale of a joint venture in Japan. A gain of £189m on the sale of Barclays Bank Egypt was broadly offset by the recycling of £180m of currency translation reserve losses to the income statement
●
Loss after tax in respect of the Africa Banking discontinued operation of £2,195m (H116: profit of £311m) included a £1,090m impairment of Barclays’ holding in BAGL and a £1,435m loss on the sale of 33.7% of BAGL’s issued share capital, primarily due to recycling of currency translation reserve losses to the income statement on accounting deconsolidation
●
RoTE was (4.6%) (H116: 4.8%) and basic loss per share was (6.6p) (H116: earnings of 6.9p). Excluding the impact of the loss on the sale of 33.7% of BAGL’s issued share capital, the impairment of Barclays’ holding in BAGL and charges for PPI RoTE, was 8.1% and earnings per share were 11.8p
 
 
 
Core performance
 
●
The Core business generated an RoTE of 7.3% (H116: 12.5%), though excluding charges for PPI delivered a double digit RoTE of 10.4%
●
Profit before tax decreased 25% to £2,988m mainly due to the impact of charges for PPI of £700m (H116: £400m) and the non-recurrence of the gain on disposal of Barclays’ share of Visa Europe Limited of £615m in H116
●
Total income decreased 2% to £11,411m driven by reduced income in Head Office, primarily due to the non-recurrence of own credit gains in H116, and in Barclays UK, mainly due to the non-recurrence of the gain on disposal of Barclays’ share of Visa Europe Limited. This was partially offset by 3% growth in Barclays International, with growth across both CIB and Consumer, Cards and Payments
●
Credit impairment charges increased 17% to £1,024m, driven by increased impairment in Consumer, Cards and Payments mainly reflecting a change in portfolio mix, an increase in underlying delinquency trends in US Cards and business growth. The Core loan loss rate increased 11bps to 54bps
●
Operating expenses increased 10% to £7,448m driven by charges for PPI, the change in compensation awards introduced in Q416, higher structural reform programme costs and business growth and investment in Consumer, Cards and Payments
●
Other net income of £49m (H116: £9m expense) reflected a gain of £109m on the sale of Barclays’ share in VocaLink to MasterCard and a gain of £76m on the sale of a joint venture in Japan, offset by an expense of £180m on the recycling of the currency translation reserve to the income statement on the sale of Barclays Bank Egypt
 
Barclays UK
 
●
RoTE reduced to 4.6% (H116: 13.6%) with a 41% decrease in profit before tax to £634m due to charges for PPI of £700m (H116: £400m) and the non-recurrence of the £151m gain on disposal of Barclays’ share of Visa Europe Limited in H116
●
Total income decreased 2% to £3,661m driven by the non-recurrence of the £151m gain on disposal of Barclays’ share of Visa Europe Limited in H116 and the impact of the UK base rate reduction in 2016, partially offset by pricing initiatives and deposit growth. The net interest margin increased 10bps to 3.69%
●
Credit impairment charges increased £32m year-on-year to £398m, reflecting higher charge-offs in Personal Banking and the higher recoveries in H116. Underlying delinquency trends reduced year-on-year, with 30 and 90 day arrears rates in UK Cards improving year-on-year to 2.0% (H116: 2.3%) and 0.9% (H116: 1.2%) respectively
●
Operating expenses increased 14% to £2,628m, due to charges for PPI of £700m (H116: £400m), the costs of setting up the ring-fenced bank and investment in cyber resilience and technology, partially offset by cost efficiencies
 
Barclays International
 
●
RoTE of 12.4% (H116: 14.3%) reflected an improved RoTE of 9.7% in CIB (H116: 8.4%) and an RoTE of 28.0% (H116: 50.9%) in Consumer, Cards and Payments
●
Profit before tax decreased 5% to £2,617m driven by an increase in operating expenses and impairment, partially offset by higher income
●
Total income increased 3% to £7,748m, including the appreciation of average USD and EUR against GBP, with growth in both CIB and Consumer, Cards and Payments. CIB income increased 3% to £5,346m driven by higher Banking income, partially offset by a decrease in Macro income, while Consumer, Cards and Payments income increased 2% to £2,402m including growth in US Cards
 
 
●
Credit impairment charges increased 23% to £625m driven by Consumer, Cards and Payments, which increased 53% to £575m, due to a change in portfolio mix, an increase in underlying delinquency trends in US Cards, business growth and the appreciation of average USD and EUR against GBP. CIB credit impairment charges reduced 62% to £50m due to the non-recurrence of oil and gas single name charges in H116
●
Total operating expenses increased 10% to £4,720m, including the appreciation of average USD and EUR against GBP. CIB operating expenses increased 7% to £3,697m reflecting the change in compensation awards introduced in Q416 and higher structural reform programme costs, partially offset by a reduction in restructuring charges and cost efficiencies. Consumer, Cards and Payments operating expenses increased 21% to £1,023m including continued growth and investment
●
Other net income increased to £214m (H116: £19m) reflecting a gain of £109m on the sale of Barclays’ share in VocaLink to MasterCard and a gain of £76m on the sale of a joint venture in Japan
 
Head Office
 
●
Income reduced £299m to £2m, primarily due to the early adoption of the own credit provisions of IFRS 9 and lower net income from treasury operations. Own credit, which was previously recorded in the income statement (H116: gain of £183m) is now recognised within other comprehensive income
●
Loss before tax of £263m (H116: profit of £134m) included an expense of £180m on the recycling of the currency translation reserve to the income statement on the sale of Barclays Bank Egypt
 
Non-Core performance
 
●
Non-Core to close on 1 July 2017, with residual assets and liabilities to be reintegrated into the Core and, as previously guided to, it is expected that risk weighted assets and loss before tax previously associated with Non-Core will continue to reduce in future periods
●
Progress on the rundown continued with RWAs reduced to £22.8bn (December 2016: £32.1bn), below guidance of approximately £25bn, driven by a £5bn reduction in Derivatives, a £2bn reduction in Businesses and a £1bn reduction in Securities and loans
●
Loss before tax decreased to £647m (H116: £1,904m) driven by lower operating expenses, favourable fair value movements on the Education, Social Housing and Local Authority (ESHLA) portfolio, the non-recurrence of impairment associated with the valuation of the French retail business in H116 and a £189m gain on the sale of Barclays Bank Egypt
●
Total income increased £56m to a net expense of £530m driven by increased Securities and loans income primarily due to positive fair value movements on the ESHLA portfolio. This was offset by reduced Derivatives income, reflecting increased cost of exits, and lower Businesses income following the completion of the sale of the Italian retail, Southern European cards and Barclays Bank Egypt businesses
●
Operating expenses improved 70% to £284m reflecting the completion of the sale of several businesses, a reduction in restructuring charges, and lower litigation and conduct charges
●
Other net income increased to £197m (H116: £313m expense) reflecting a £189m gain on sale of Barclays Bank Egypt and the non-recurrence of impairment associated with the valuation of the French retail business in H116
 
 
Group capital and leverage
 
●
 
The fully loaded CET1 ratio increased to 13.1% (December 2016: 12.4%) principally due to a reduction in RWAs of £38.2bn to £327.4bn. CET1 capital decreased £2.4bn to £42.8bn
 
–
 
Profits relating to continuing operations were largely offset by decreases in other qualifying reserves as a result of the redemption of USD preference shares, the separation payments relating to the BAGL disposal and increased pension deductions. CET1 capital further decreased by £1.8bn as a result of BAGL minority interest no longer being included under proportional consolidation
 
–
 
Losses relating to the discontinued operation due to the impairment allocated to the goodwill of Barclays’ holding in BAGL and the recycling of the BAGL currency translation reserve losses to the income statement had no impact on CET1 capital
 
–
 
The decrease in RWAs principally reflected the £27.9bn reduction as a result of the proportional consolidation of BAGL following the selldown of Barclays’ holding, as well as reductions in Non-Core
●
 
The average UK leverage ratio increased to 4.8% (December 2016: 4.5%) driven by an increase in the average fully loaded Tier 1 capital to £52.1bn (December 2016: £51.6bn) and a decrease in the average UK leverage exposure to £1,092bn (December 2016: £1,137bn)
●
 
Tangible net asset value per share decreased to 284p (December 2016: 290p) primarily due to profit after tax excluding additional charges for PPI being more than offset by the redemption of USD preference shares, dividends paid and reduction in reserves including the currency translation and cash flow hedge reserves
 
Group funding and liquidity
 
●
 
The Group continued to maintain surpluses to its internal and regulatory requirements. The liquidity pool increased to £201bn (December 2016: £165bn). The increase in the liquidity pool was driven by a net increase in minimum requirement for own funds and eligible liabilities (MREL) issuance, drawdown from the Bank of England Term Funding Scheme, higher money market balances and deposit growth. The liquidity coverage ratio (LCR) increased to 149% (December 2016: 131%), equivalent to a surplus of £65bn (December 2016: £39bn) to 100%, reflecting our approach to build a conservative liquidity position
●
 
Wholesale funding outstanding excluding repurchase agreements was £163bn (December 2016: £158bn). The Group issued £7.6bn equivalent of capital and term senior unsecured debt from Barclays PLC (HoldCo) of which £4.8bn was in public senior unsecured debt, and £2.8bn in capital instruments. In the same period, £4.7bn of Barclays Bank PLC (OpCo) capital and senior public term instruments either matured or were redeemed, including the $1.375bn 7.1% Series 3 USD preference shares
 
 
Other matters
 
●
 
On 1 June 2017, Barclays sold 286 million ordinary shares of BAGL, representing 33.7% of BAGL’s issued share capital. The sale resulted in the accounting deconsolidation of BAGL from the Barclays Group. Following the sale, BAGL is accounted for as an Available for Sale (AFS) asset in Barclays’ financial statements and is no longer reported as a discontinued operation. The Group’s CET1 ratio increased 47bps as a result of the sale and reflecting the proportional consolidation of BAGL for regulatory reporting purposes
●
 
As at 30 June 2017, Barclays accounted for 139 million ordinary shares in BAGL, representing 16.4% of BAGL’s issued share capital. Barclays had an obligation at this date to contribute 1.5% of BAGL’s ordinary shares or the cash equivalent to a Black Economic Empowerment scheme. At 30 September 2017, Barclays will account for 126 million ordinary shares in BAGL, currently representing 14.9% of BAGL’s issued share capital
●
 
The latest triennial valuation of the UK Retirement Fund (UKRF) with an effective date of 30 September 2016 has been completed and showed a funding deficit of £7.9bn and funding level of 81.5%, versus a £6.0bn funding deficit at the 30 September 2015 update. Amongst other measures, Barclays and the UKRF agreed a recovery plan with revised deficit reduction contributions of £740m in 2017 (of which £620m has been paid in H117), £500m per annum in 2018 to 2020, and £1,000m per annum in 2021 to 2026
●
 
Additional charges of £700m (H116: £400m) relating to PPI were recognised in Q217, primarily to reflect higher than expected complaints flow in the year to date. The remaining PPI provision as at June 2017 was £2,109m (December 2016: £1,979m)
●
 
Certain legal proceedings and investigations relating to legacy issues remain outstanding. Resolving outstanding legacy issues in an appropriate timeframe will continue to be a priority. Please see Note 19 to the financial statements for details of relevant matters
 
Dividends
 
●
 
An interim dividend of 1.0p per share will be paid on 18 September 2017
 
Outlook and financial targets
 
●
 
The Group remains focused on cost efficiency, creating capacity to self-fund investment in our businesses, and continues to target a Group cost: income ratio of less than 60% over time
●
 
Following the closure of the Non-Core segment on 1 July 2017, the Group’s previous returns target of converging Group returns with Core returns is transitioned to a target of achieving a Group RoTE of greater than 10.0% over time, underpinned by a combination of cost focus and redeployment of capital from business lines delivering inadequate returns
●
 
The Group expects the dividend for the full year to total 3.0p per share as previously guided. The Group will update the market on its updated capital management framework including the dividend policy at the full year results in February 2018
 
Tushar Morzaria, Group Finance Director
 
 
Results by Business
 
Barclays UK
Half year ended
Half year ended
 
30.06.17
30.06.16
YoY
Income statement information
£m
£m
% Change
Net interest income
3,045
2,977
2
Net fee, commission and other income
616
769
(20)
Total income
3,661
3,746
(2)
Credit impairment charges and other provisions
(398)
(366)
(9)
Net operating income
3,263
3,380
(3)
Operating expenses excluding litigation and conduct
(1,933)
(1,899)
(2)
Litigation and conduct
(695)
(400)
(74)
Operating expenses
(2,628)
(2,299)
(14)
Other net expenses
(1)
(1)
-
Profit before tax
634
1,080
(41)
Attributable profit
185
608
(70)
 
 
 
 
 
As at 30.06.17
As at 31.12.16
As at 30.06.16
Balance sheet information
£bn
£bn
£bn
Loans and advances to customers at amortised cost
166.6
166.4
166.0
Total assets
203.4
209.6
204.6
Customer deposits
187.4
189.0
181.7
Risk weighted assets
66.1
67.5
67.1
 
 
 
 
 
Half year ended
Half year ended
 
Key facts
30.06.17
30.06.16
 
Average LTV of mortgage portfolio1
47%
47%
 
Average LTV of new mortgage lending1
62%
63%
 
Number of branches
1,295
1,331
 
Barclays mobile banking active customers
5.9m
5.1m
 
30 day arrears rate - Barclaycard Consumer UK
2.0%
2.3%
 
 
 
 
 
Performance measures
 
 
 
Return on average allocated tangible equity
4.6%
13.6%
 
Average allocated tangible equity (£bn)
8.8
9.1
 
Cost: income ratio
72%
61%
 
Loan loss rate (bps)
47
43
 
Loan: deposit ratio
89%
91%
 
Net interest margin
3.69%
3.59%
 
 
1
Average LTV of mortgage portfolio and new mortgage lending calculated on the balance weighted basis.
 
 
Analysis of Barclays UK
Half year ended
Half year ended
 
30.06.17
30.06.16
YoY
Analysis of total income
£m
£m
% Change
Personal Banking
1,877
1,987
(6)
Barclaycard Consumer UK
993
954
4
Wealth, Entrepreneurs & Business Banking
791
805
(2)
Total income
3,661
3,746
(2)
 
 
 
 
Analysis of credit impairment charges and other provisions
 
 
 
Personal Banking
(106)
(86)
(23)
Barclaycard Consumer UK
(272)
(274)
1
Wealth, Entrepreneurs & Business Banking
(20)
(6)
 
Total credit impairment charges and other provisions
(398)
(366)
(9)
 
 
 
 
 
As at 30.06.17
As at 31.12.16
As at 30.06.16
Analysis of loans and advances to customers at amortised cost
£bn
£bn
£bn
Personal Banking
136.5
135.0
134.7
Barclaycard Consumer UK
16.2
16.5
16.2
Wealth, Entrepreneurs & Business Banking
13.9
14.9
15.1
Total loans and advances to customers at amortised cost
166.6
166.4
166.0
 
 
 
 
Analysis of customer deposits
 
 
 
Personal Banking
138.5
139.3
134.8
Barclaycard Consumer UK
-
-
-
Wealth, Entrepreneurs & Business Banking
48.9
49.7
46.9
Total customer deposits
187.4
189.0
181.7

Barclays UK
 
Income statement – H117 compared to H116
 
●
 
Profit before tax decreased 41% to £634m primarily due to charges for PPI of £700m (H116: £400m) and the non-recurrence of the £151m gain on disposal of Barclays’ share in Visa Europe Limited in H116
 
●
 
Total income decreased 2% to £3,661m due to the non-recurrence of the £151m gain on disposal of Barclays’ share of Visa Europe Limited in H116 and the impact of the UK base rate reduction in 2016, partially offset by pricing initiatives and deposit growth
 
–
 
Personal Banking income decreased 6% to £1,877m driven by the non-recurrence of the gain on disposal of Barclays’ share of Visa Europe Limited in H116, the impact of the UK base rate reduction in 2016 and asset margin pressure, partially offset by pricing initiatives and deposit growth
 
 
–
 
Barclaycard Consumer UK income increased 4% to £993m reflecting improved margins
 
–
 
Wealth, Entrepreneurs & Business Banking (WEBB) decreased 2% to £791m due to the non-recurrence of the gain on disposal of Barclays’ share of Visa Europe Limited in H116, partially offset by deposit pricing initiatives and balance growth
 
–
 
Net interest income increased 2% to £3,045m due to deposit pricing initiatives and balance growth
 
  –
 
Net interest margin increased 10bps to 3.69% reflecting higher margins on Personal Banking deposits, partially offset by lower asset margins
 
–
 
Net fee, commission and other income decreased 20% to £616m due to the non-recurrence of the gain on disposal of Barclays’ share of Visa Europe Limited in H116
●
 
Credit impairment charges increased £32m to £398m reflecting higher charge-offs in Personal Banking and higher recoveries in H116. Underlying delinquency trends reduced year-on-year, with 30 day and 90 day arrears rates in UK cards improving year-on-year at 2.0% (H116: 2.3%) and 0.9% (H116: 1.2%) respectively
●
 
Total operating expenses increased 14% to £2,628m due to charges for PPI of £700m (H116: £400m), the costs of setting up the ring-fenced bank and investment in cyber resilience and technology, partially offset by cost efficiencies
 
 
Balance sheet – 30 June 2017 compared to 31 December 2016
 
●
 
Loans and advances to customers were broadly in line at £166.6bn (December 2016: £166.4bn)
●
 
Total assets decreased 3% to £203.4bn primarily due to a reduction in the allocated liquidity pool
●
 
Customer deposits decreased 1% to £187.4bn reflecting the realignment of certain clients between Barclays UK and Barclays International in preparation for structural reform, partially offset by underlying deposit growth
●
 
RWAs reduced to £66.1bn (December 2016: £67.5bn) reflecting the realignment of certain clients between Barclays UK and Barclays International in preparation for structural reform

Barclays International
Half year ended
Half year ended
 
30.06.17
30.06.16
YoY
Income statement information
£m
£m
% Change
Net interest income
2,172
2,111
3
Net trading income
2,221
2,375
(6)
Net fee, commission and other income
3,355
3,066
9
Total income
7,748
7,552
3
Credit impairment charges and other provisions
(625)
(509)
(23)
Net operating income
7,123
7,043
1
Operating expenses excluding litigation and conduct
(4,711)
(4,295)
(10)
Litigation and conduct
(9)
(14)
36
Operating expenses
(4,720)
(4,309)
(10)
Other net income
214
19
 
Profit before tax
2,617
2,753
(5)
Attributable profit
1,656
1,746
(5)
 
 
 
 
 
As at 30.06.17
As at 31.12.16
As at 30.06.16
Balance sheet information
£bn
£bn
£bn
Loans and advances to banks and customers at amortised cost1
204.8
211.3
230.6
Trading portfolio assets
83.3
73.2
68.1
Derivative financial instrument assets
108.4
156.2
181.4
Derivative financial instrument liabilities
116.8
160.6
187.5
Reverse repurchase agreements and other similar secured lending
17.2
13.4
19.7
Financial assets designated at fair value
94.1
62.3
68.3
Total assets
681.6
648.5
679.9
Customer deposits2
230.3
216.2
226.5
Risk weighted assets
212.2
212.7
209.3
 
 
 
 
 
Half year ended
Half year ended
 
Performance measures
30.06.17
30.06.16
 
Return on average allocated tangible equity
12.4%
14.3%
 
Average allocated tangible equity (£bn)
27.5
25.0
 
Cost: income ratio
61%
57%
 
Loan loss rate (bps)
61
44
 
Loan: deposit ratio
80%
90%
 
Net interest margin
4.06%
3.90%
 
 
1
As at 30 June 2017 loans and advances included £183.9bn (December 2016: £185.9bn) of loans and advances to customers (including settlement balances of £31.6bn (December 2016: £19.5bn) and cash collateral of £26.9bn (December 2016: £30.1bn)), and £20.9bn (December 2016: £25.4bn) of loans and advances to banks (including settlement balances of £5.7bn (December 2016: £1.7bn) and cash collateral of £5.4bn (December 2016: £6.3bn)). Loans and advances to banks and customers in respect of Consumer, Cards and Payments were £38.5bn (December 2016: £39.7bn).
2
As at 30 June 2017 customer deposits included settlement balances of £29.4bn (December 2016: £16.6bn) and cash collateral of £16.2bn (December 2016: £20.8bn).
 
 
Analysis of Barclays International
 
 
 
 
Half year ended
Half year ended
 
Corporate and Investment Bank
30.06.17
30.06.16
YoY
Income statement information
£m
£m
% Change
Analysis of total income
 
 
 
Credit
695
591
18
Equities
917
919
-
Macro
946
1,185
(20)
Markets
2,558
2,695
(5)
Banking fees
1,400
1,103
27
Corporate lending
547
608
(10)
Transactional banking
802
798
1
Banking
2,749
2,509
10
Other
39
3
 
Total income
5,346
5,207
3
Credit impairment charges and other provisions
(50)
(132)
62
Operating expenses
(3,697)
(3,465)
(7)
Other net income
116
-
 
Profit before tax
1,715
1,610
7
 
 
 
 
 
As at 30.06.17
As at 31.12.16
As at 30.06.16
Balance sheet information
£bn
£bn
£bn
Risk weighted assets
178.9
178.6
178.4
 
 
 
 
 
Half year ended
Half year ended
 
Performance measures
30.06.17
30.06.16
 
Return on average allocated tangible equity
9.7%
8.4%
 
Average allocated tangible equity (£bn)
23.3
21.5
 
 
 
 
 
 
Half year ended
Half year ended
 
Consumer, Cards and Payments
30.06.17
30.06.16
YoY
Income statement information
£m
£m
% Change
Total income
2,402
2,345
2
Credit impairment charges and other provisions
(575)
(377)
(53)
Operating expenses
(1,023)
(844)
(21)
Other net income
98
19
 
Profit before tax
902
1,143
(21)
 
 
 
 
 
As at 30.06.17
As at 31.12.16
As at 30.06.16
Balance sheet information
£bn
£bn
£bn
Loans and advances to banks and customers at amortised cost
38.5
39.7
35.4
Customer deposits
57.3
50.0
46.9
Risk weighted assets
33.3
34.1
30.9
 
 
 
 
 
Half year ended
Half year ended
 
Key facts
30.06.17
30.06.16
 
30 day arrears rates – Barclaycard US
2.2%
                    2.2%
 
Total number of Barclaycard business clients
364,000
                   350,000
 
Value of payments processed
£157bn
                £141bn
 
 
 
 
 
Performance measures
 
 
 
Return on average allocated tangible equity
28.0%
50.9%
 
Average allocated tangible equity (£bn)
4.2
3.5
 

Barclays International
 
Income statement – H117 compared to H116
 
●
 
Profit before tax decreased 5% to £2,617m driven by a 10% increase in total operating expenses and a 23% increase in impairment, partially offset by a 3% increase in total income
●
 
Total income increased 3% to £7,748m, including the appreciation of average USD and EUR against GBP, as CIB income increased 3% to £5,346m and Consumer, Cards and Payments income increased 2% to £2,402m
–
 
Markets income decreased 5% to £2,558m
 
–
 
Credit income increased 18% to £695m driven by improved performance in the European business and increased municipals income
 
 
–
 
Equities income was broadly in line at £917m (H116: £919m) driven by lower US equity derivatives revenue, offset by improved performance in cash equities and equity financing
 
 
–
 
Macro income decreased 20% to £946m driven by lower market volatility in rates and the impact of exiting energy-related commodities
 
–
 
Banking income increased 10% to £2,749m
 
 
–
 
Banking fees income increased 27% to £1,400m, driven by higher debt underwriting, equity underwriting and advisory fees, with fee share up in all products
 
 
–
 
Corporate lending reduced 10% to £547m primarily due to higher losses on fair value hedges, a reduction in work-out gains and reduced balances
 
 
–
 
Transactional banking income increased 1% to £802m as higher deposit balances were partially offset by margin compression in a low base rate environment
 
–
 
Consumer, Cards and Payments income increased 2% to £2,402m driven by continued growth, a gain of £192m relating to an asset sale in US cards and a valuation gain on Barclays’ preference shares in Visa Inc. of £74m, partially offset by the non-recurrence of the gain on the disposal of Barclays’ share of Visa Europe Limited of £464m in H116
 
●
 
Credit impairment charges increased 23% to £625m including the appreciation of average USD and EUR against GBP
–
 
CIB credit impairment charges reduced 62% to £50m due to the non-recurrence of oil and gas single name charges in H116
 
–
 
Consumer, Cards and Payments credit impairment charges increased 53% to £575m primarily driven by a change in portfolio mix, an increase in underlying delinquency trends in US cards and business growth. 30 and 90 days arrears rates within US Cards were broadly stable at 2.2% (H116: 2.2%) and 1.1% (H116: 1.0%) respectively, including a benefit from the Q117 asset sale in US cards
 
●
 
Total operating expenses increased 10% to £4,720m, including the appreciation of average USD and EUR against GBP
–
 
CIB increased 7% to £3,697m reflecting the change in compensation awards introduced in Q416 and higher structural reform programme costs, partially offset by a reduction in restructuring charges and cost efficiencies
 
–
 
Consumer, Cards and Payments increased 21% to £1,023m including continued growth and investment, primarily within the US Cards and merchant acquiring businesses
 
●
 
Other net income increased to £214m (H116: £19m) due to a gain of £109m on the sale of Barclays’ share in VocaLink to MasterCard and a gain of £76m on the sale of a joint venture in Japan
 
 
 
Balance sheet – 30 June 2017 compared to 31 December 2016
 
●
 
Loans and advances to banks and customers at amortised cost decreased £6.5bn to £204.8bn with CIB decreasing £5.3bn to £166.3bn due to a reduction in lending and cash collateral, partially offset by an increase in settlement balances. Consumer, Cards and Payments decreased £1.2bn to £38.5bn due to an asset sale in US cards in Q117, partially
offset by the realignment of certain clients from Barclays UK to Barclays International in preparation for structural reform
●
 
Trading portfolio assets increased £10.1bn to £83.3bn due to increased activity
●
 
Derivative financial instrument assets and liabilities decreased £47.8bn to £108.4bn and £43.8bn to £116.8bn respectively, reflecting the adoption of the Chicago Mercantile Exchange (CME) rulebook change to daily settlement and an increase in major interest rate forward curves and depreciation of USD against GBP
●
 
Reverse repurchase agreements and other similar lending increased £3.8bn to £17.2bn primarily due to increased trading desks’ funding requirements
●
 
Financial assets designated at fair value increased £31.8bn to £94.1bn primarily due to increased matched book trading and trading desks’ funding requirements
●
 
Customer deposits increased £14.1bn to £230.3bn, with CIB increasing £6.8bn to £173.0bn primarily driven by an increase in settlement balances, partially offset by a decrease in cash collateral and corporate deposits. Consumer, Cards and Payments increased £7.3bn to £57.3bn driven by the realignment of certain clients from Barclays UK to
Barclays International in preparation for structural reform
●
 
RWAs remained broadly in line at £212.2bn (December 2016: £212.7bn) driven by a reduction due to the depreciation of USD against GBP, an asset sale in US cards in Q117 and credit quality improvement, offset by increased trading portfolio and securities financing transaction volumes
 
Head Office
Half year ended
Half year ended
 
30.06.17
30.06.16
YoY
Income statement information
£m
£m
% Change
Net interest income
(7)
(6)
(17)
Net fee, commission and other income
9
307
(97)
Total income
2
301
(99)
Credit impairment charges and other provisions
(1)
(1)
-
Net operating income
1
300
 
Operating expenses excluding litigation and conduct
(89)
(121)
26
Litigation and conduct
(11)
(18)
39
Operating expenses
(100)
(139)
                          28
Other net expenses
(164)
(27)
 
(Loss)/profit before tax
(263)
134
 
Attributable (loss)/profit
(298)
90
 
 
 
 
 
 
As at 30.06.17
As at 31.12.16
As at 30.06.16
Balance sheet information
£bn
£bn
£bn
Total assets
17.3
75.2
87.7
Risk weighted assets1
26.2
53.3
43.2
 
 
 
 
 
Half year ended
Half year ended
 
 
30.06.17
30.06.16
 
Performance measures
£bn
£bn
 
Average allocated tangible equity
8.2
5.8
 
 
1
Includes Africa Banking risk weighted assets of £9.8bn (December 2016: £42.3bn).
 
 
Head Office
 
Income statement – H117 compared to H116
 
●
Loss before tax was £263m (H116: profit of £134m)
●
Total income reduced £299m to £2m following the early adoption of the own credit provisions of IFRS 9 on 1 January 2017 and lower net income from treasury operations. Own credit, which was previously recorded in the income statement (H116: gain of £183m), is now recognised within other comprehensive income
●
Other net expenses increased to £164m (H116: £27m) driven by an expense of £180m on the recycling of the currency translation reserve to the income statement on the sale of Barclays Bank Egypt
 
Balance sheet – 30 June 2017 compared to 31 December 2016
 
●
Total assets decreased to £17.3bn (December 2016: £75.2bn) primarily due to the sale of 33.7% of BAGL’s issued share capital resulting in the accounting deconsolidation of BAGL from the Barclays Group
●
RWAs decreased to £26.2bn (December 2016: £53.3bn) reflecting a £27.9bn reduction as a result of the proportional consolidation of BAGL
 
 
Barclays Non-Core
Half year ended
Half year ended
 
30.06.17
30.06.16
YoY
Income statement information
£m
£m
% Change
Net interest income
(112)
136
 
Net trading income
(488)
(953)
49
Net fee, commission and other income
70
231
(70)
Total income
(530)
(586)
10
Credit impairment charges and other provisions
(30)
(55)
45
Net operating expenses
(560)
(641)
13
Operating expenses excluding litigation and conduct
(256)
(857)
70
Litigation and conduct
(28)
(93)
70
Operating expenses
(284)
(950)
70
Other net income/(expenses)
197
(313)
 
Loss before tax
(647)
(1,904)
66
Attributable loss
(419)
(1,490)
72
 
 
 
 
 
As at 30.06.17
As at 31.12.16
As at 30.06.16
Balance sheet information
£bn
£bn
£bn
Loans and advances to banks and customers at amortised cost1
48.3
51.1
68.5
Derivative financial instrument assets
150.3
188.7
262.8
Derivative financial instrument liabilities
143.0
178.6
253.4
Reverse repurchase agreements and other similar secured lending
-
0.1
0.1
Financial assets designated at fair value
12.1
14.5
15.4
Total assets
233.0
279.7
379.1
Customer deposits2
11.8
12.5
17.4
Risk weighted assets
22.8
32.1
46.7
 
 
 
 
 
Half year ended
Half year ended
 
Performance measures
30.06.17
30.06.16
 
Average allocated tangible equity (£bn)
4.9
8.5
 
Period end allocated tangible equity (£bn)
4.0
7.8
 
Loan loss rate (bps)
12
15
 
 
 
 
 
 
 
 
YoY
Analysis of total income
£m
£m
% Change
Businesses
10
377
(97)
Securities and loans
43
(765)
 
Derivatives
(583)
(198)
 
Total income
(530)
(586)
10
 
1
As at 30 June 2017 loans and advances included £37.1bn (December 2016: £38.5bn) of loans and advances to customers (including settlement balances of £nil (December 2016: £0.1bn) and cash collateral of £15.3bn (December 2016: £17.3bn)), and £11.2bn (December 2016: £12.6bn) of loans and advances to banks (including settlement balances of £nil (December 2016: £0.1bn) and cash collateral of £10.9bn (December 2016: £12.1bn)).
2
As at 30 June 2017 customer deposits included settlement balances of £nil (December 2016 £0.1bn) and cash collateral of £11.4bn (December 2016: £11.9bn).

Barclays Non-Core
 
Income statement – H117 compared to H116
 
●
 
Loss before tax reduced to £647m (H116: £1,904m) driven by lower operating expenses, favourable fair value movements on the ESHLA portfolio, the non-recurrence of impairment associated with the valuation of the French retail business in H116 and a gain on the sale of Barclays Bank Egypt
●
 
Total income increased £56m to a net expense of £530m
–
 
Businesses income reduced to £10m (H116: £377m) primarily due to the completion of the sale of the Italian retail, Southern European cards and Barclays Bank Egypt businesses
–
 
Securities and loans income increased £808m to net income of £43m primarily driven by fair value gains of £44m (H116: £424m expense) on the ESHLA portfolio and the non-recurrence of the £182m loss associated with the restructure of the ESHLA portfolio loan terms in H116
–
 
Derivatives income reduced £385m to an expense of £583m reflecting losses on the rundown of the portfolio
●
 
Credit impairment charges improved 45% to £30m due to higher recoveries across Europe and investment banking activities
 
●
 
Total operating expenses improved 70% to £284m reflecting the completion of the sale of several businesses, a reduction in restructuring charges, and lower litigation and conduct charges
 
●
 
Other net income of £197m (H116: £313m expense) included a £189m gain on the sale of Barclays Bank Egypt. H116 included a £372m impairment associated with the valuation of the French retail business
 
 
Balance sheet – 30 June 2017 compared to 31 December 2016
 
 
●
 
Loans and advances to banks and customers at amortised cost decreased 5% to £48.3bn due to a decrease in cash collateral assets, partially offset by the reclassification of £1.5bn of ESHLA loans now recognised at amortised cost, following the restructuring of certain loans within the portfolio
 
●
 
Derivative financial instrument assets and liabilities decreased 20% to £150.3bn and 20% to £143.0bn respectively, due to the continued rundown of the derivative back book and an increase in major interest rate forward curves
 
●
 
Customer deposits decreased 6% to £11.8bn due to a decrease in cash collateral
 
●
 
Total assets decreased 17% to £233.0bn due to lower derivative financial instrument assets
 
●
 
RWAs reduced £9.3bn to £22.8bn including a £5bn reduction in Derivatives, a £2bn reduction in Businesses and a £1bn reduction in Securities and loans
 

Barclays Non-Core closure and reintegration into Core
 
●
 
The Non-Core segment was closed on 1 July 2017 with the residual assets and liabilities, and prospective financial performance to be reintegrated into Barclays UK, Barclays International and Head Office. Financial results up until 30 June 2017 will continue to be reflected in the Non-Core
–
 
As at 30 June 2017 Non-Core RWAs were £22.8bn. It is estimated that c.£3.5bn will be reintegrated with Barclays UK comprising of ESHLA loans excluding higher education, c.£8.8bn will be reintegrated with Barclays International, primarily relating to derivatives and ESHLA higher education, and c.£10.5bn will be reintegrated with Head Office, primarily relating to Italian mortgages and operational risk
●
 
Guidance of a Non-Core loss before tax for 2017 of approximately £1bn is unchanged, with a loss before tax of approximately £300-400m in H217. The H217 loss before tax is anticipated to be split c.10% to Barclays UK, c.40% to Barclays International and c.50% to Head Office
●
 
As previously guided to, it is expected that risk weighted assets and loss before tax previously associated with Non-Core will continue to reduce in future periods
 
 
 
 
Moves to
Balance sheet information (£bn)1
Barclays Non-Core
Barclays UK
Barclays International
Head Office
Loans and advances to banks and customers at amortised cost
48.3
10.1
28.9
9.3
Derivative financial instrument assets
150.3
-
150.3
-
Derivative financial instrument liabilities
143.0
-
143.0
-
Financial assets designated at fair value
12.1
8.2
3.2
0.7
Total assets
233.0
18.3
200.3
14.4
Customer deposits
11.8
-
11.7
0.1
Risk weighted assets
22.8
3.5
8.8
10.5
Period end allocated tangible equity
4.0
0.7
1.6
1.7
 
1
Estimated allocation based on 30.06.17 balance sheet.
 
 
Discontinued Operation Results
 
Disposal of the shares in BAGL
 
On 1 March 2016, Barclays announced its intention to reduce the Group’s 62.3% interest in BAGL to a level which would permit Barclays to deconsolidate BAGL from a regulatory perspective and, prior to that, from an accounting perspective. From this date, BAGL was treated as a discontinued operation. On 5 May 2016, Barclays sold 12.2% of the Group’s interest in BAGL, reducing Barclays’ interest to 50.1% of BAGL’s issued share capital.
 
In December 2016, Barclays agreed the terms of the transitional services arrangements and separation payments of £0.7bn, as announced in Barclays’ 2016 Annual Report.
 
Following receipt of the required regulatory approvals, on 1 June 2017 Barclays sold 286 million ordinary shares of BAGL, representing 33.7% of BAGL’s issued share capital, of which 7.0% is allocated to the Public Investment Corporation (PIC) who is expected to take receipt of the shares following the necessary regulatory approvals. Following the sale, as at 30 June 2017 Barclays accounted for 139 million ordinary shares in BAGL, representing 16.4% of BAGL’s issued share capital. An amount of £1,141m was recognised on the balance sheet at the date of disposal, representing the fair value.
 
Additionally, as at 30 June 2017 Barclays had an obligation to contribute 1.5% of BAGL’s ordinary shares or the cash equivalent to a Black Economic Empowerment (BEE) scheme. As at 30 September 2017, Barclays will account for 126 million ordinary shares in BAGL, currently representing 14.9% of BAGL’s issued share capital. A liability for the obligation to the BEE scheme of £105m is reflected on the balance sheet.
 
Financial performance
 
The discontinued operation reported a loss before tax of £2,041m in H117, representing (i) a profit before tax on Africa Banking operations for five months to 31 May 2017, excluding impairment of Barclays' holding in BAGL and loss on sale of BAGL, of £484m, (ii) a £60m loss on sale of the 33.7% share of BAGL’s issued share capital on 1 June 2017, (iii) a £1,375m loss on recycling of Other Comprehensive Income reserves of which £1,377m relates to the currency translation reserve, owing to the weakening of the ZAR since initial consolidation of BAGL in 2005, and (iv) a £1,090m impairment of Barclays’ holding in BAGL, predominantly allocated to acquisition goodwill. The recycling of the currency translation reserve and the impairment of Barclays’ holding in BAGL allocated to acquisition goodwill had no effect on the Group’s tangible net asset value or CET1 ratio.
 
Accounting and regulatory treatment
 
The sale of 33.7% of BAGL’s issued share capital resulted in the accounting deconsolidation of BAGL from the Barclays Group, as of 1 June 2017. Barclays’ holding in BAGL technically met the requirements to be treated as an Associate, the subsequent revision of its governance rights in July 2017 means that it is treated as an Available for Sale (AFS) asset. Given the immateriality of the differences between the accounting treatments since 1 June it has been determined that it would be appropriate to treat this holding as an AFS asset since 1 June 2017. BAGL is consequently no longer reported as a discontinued operation and the retained investment will be reported in the Head Office segment. Barclays’ share of BAGL’s dividend will be recognised in the Group’s income statement when the right to receive the dividend has been established, and changes in fair value of the asset will be recognised in the AFS reserve.
 
 
For regulatory reporting purposes, BAGL is treated at 30 June 2017 on a proportional consolidated basis based on a holding of 23.4%. The Group’s CET1 ratio increased 47bps as a result of the sale and reflecting the proportional consolidation of BAGL. Barclays expects to proportionally consolidate BAGL in H217 based on a holding of 14.9%, following the contribution of 1.5% of BAGL’s issued share capital to a BEE scheme and the expected delivery of 7.0% of BAGL’s issued share capital to PIC. Subject to regulatory approval, Barclays expects to fully deconsolidate BAGL from a regulatory perspective within 18 months. The estimated future accretion to the Group’s CET1 ratio is c.26bps in aggregate.
 
Africa Banking
 
 
 
 
Half year ended
Half year ended
 
30.06.17
30.06.16
YoY
Income statement information¹
£m
£m
% Change
Net interest income
1,024
982
4
Net fee, commission and other income
762
715
7
Total income
1,786
1,697
5
Credit impairment charges and other provisions
(177)
(244)
27
Net operating income
1,609
1,453
11
Operating expenses excluding impairment of Barclays' holding in BAGL
(1,130)
(1,020)
(11)
Other net income excluding loss on sale of BAGL
5
2
 
Profit before tax excluding impairment of Barclays' holding in BAGL and loss on sale of BAGL
484
435
11
Impairment of Barclays' holding in BAGL
(1,090)
-
 
Loss on sale of BAGL
(1,435)
-
 
(Loss)/profit before tax
(2,041)
435
 
Tax charge
(154)
(124)
(24)
(Loss)/profit after tax
(2,195)
311
 
Attributable (loss)/profit
(2,335)
156
 
 
 
 
 
 
As at 30.06.17
As at 31.12.16
As at 30.06.16
Balance sheet information
£bn
£bn
£bn
Total assets
-
65.1
56.0
Risk weighted assets2
9.8
42.3
36.1
 
1
The H117 Africa Banking income statement represents five months of results as a discontinued operation to 31 May 2017.
2
Africa Banking (excluding Egypt and Zimbabwe) RWAs are reported in Head Office within Core.
 
 
 
Q217
Q117
 
Q416
Q316
Q216
Q116
 
Q415
Q315
Income statement information1
£m
£m
 
£m
£m
£m
£m
 
£m
£m
Net interest income
407
617
 
626
561
502
480
 
468
471
Net fee, commission and other income
297
465
 
441
421
377
338
 
346
351
Total income
704
1,082
 
1,067
982
879
818
 
814
822
Credit impairment charges and other provisions 
(71)
(106)
 
(105)
(96)
(133)
(111)
 
(93)
(66)
Net operating income 
633
976
 
962
886
746
707
 
721
756
Operating expenses excluding UK bank levy and impairment of Barclays' holding in BAGL
(477)
(653)
 
(727)
(598)
(543)
(477)
 
(501)
(515)
UK bank levy 
-
-
 
(65)
-
-
-
 
(50)
-
Other net income excluding loss on sale of BAGL
3
2
 
2
2
1
1
 
3
1
Profit before tax excluding impairment of Barclays' holding in BAGL and loss on sale of BAGL
159
325
 
172
290
204
231
 
173
242
Impairment of Barclays' holding in BAGL
(206)
(884)
 
-
-
-
-
 
-
-
Loss on sale of BAGL
(1,435)
-
 
-
-
-
-
 
-
-
(Loss)/profit before tax
(1,482)
(559)
 
172
290
204
231
 
173
242
(Loss)/profit after tax
(1,537)
(658)
 
71
209
145
166
 
101
167
Attributable (loss)/profit
(1,534)
(801)
 
(52)
85
70
86
 
25
85
 
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
 
£bn
£bn
£bn
£bn
 
£bn
£bn
Total assets
-
66.0
 
65.1
61.1
56.0
52.7
 
47.9
50.2
Risk weighted assets
9.8
41.3
 
42.3
39.9
36.1
33.9
 
31.7
33.8
 
1
The Q217 Africa Banking income statement represents two months of results as a discontinued operation to 31 May 2017.
 
 
Quarterly Results Summary
 
Barclays Group
 
 
 
 
 
 
 
 
 
 
 
Q217
Q117
 
Q416
Q316
Q216
Q116
 
Q415
Q315
Income statement information
£m
£m
 
£m
£m
£m
£m
 
£m
£m
Net interest income
2,579
2,519
 
2,523
2,796
2,530
2,688
 
2,726
2,692
Net fee, commission and other income
2,479
3,304
 
2,469
2,650
3,442
2,353
 
1,722
2,789
Total income
5,058
5,823
 
4,992
5,446
5,972
5,041
 
4,448
5,481
Credit impairment charges and other provisions 
(527)
(527)
 
(653)
(789)
(488)
(443)
 
(554)
(429)
Net operating income 
4,531
5,296
 
4,339
4,657
5,484
4,598
 
3,894
5,052
Operating expenses excluding UK bank levy and litigation and conduct
(3,398)
(3,591)
 
(3,812)
(3,581)
(3,425)
(3,747)
 
(3,547)
(3,552)
UK bank levy 
-
-
 
(410)
-
-
-
 
(426)
-
Litigation and conduct
(715)
(28)
 
(97)
(741)
(447)
(78)
 
(1,722)
(699)
Operating expenses
(4,113)
(3,619)
 
(4,319)
(4,322)
(3,872)
(3,825)
 
(5,695)
(4,251)
Other net income/(expenses)
241
5
 
310
502
(342)
20
 
(274)
(182)
Profit/(loss) before tax
659
1,682
 
330
837
1,270
793
 
(2,075)
619
Tax (charge)/credit
(305)
(473)
 
50
(328)
(467)
(248)
 
(164)
(133)
Profit/(loss) after tax in respect of continuing operations
354
1,209
 
380
509
803
545
 
(2,239)
486
(Loss)/profit after tax in respect of discontinued operation
(1,537)
(658)
 
71
209
145
166
 
101
167
 
 
 
 
 
 
 
 
 
 
 
Attributable to:
 
 
 
 
 
 
 
 
 
 
Ordinary equity holders of the parent
(1,401)
190
 
99
414
677
433
 
(2,422)
417
Other equity holders
162
139
 
139
110
104
104
 
107
79
Non-controlling interests
56
222
 
213
194
167
174
 
177
157
 
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
 
£bn
£bn
£bn
£bn
 
£bn
£bn
Total assets
1,135.3
1,203.8
 
1,213.1
1,324.0
1,351.3
1,248.9
 
1,120.0
1,236.5
Risk weighted assets
327.4
360.9
 
365.6
373.4
366.3
363.0
 
358.4
381.9
CRR leverage exposure
1,122.1
1,196.9
 
1,125.5
1,185.1
1,155.4
1,082.0
 
1,027.8
1,140.7
 
 
 
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
 
 
 
Return on average tangible shareholders' equity
(11.0%)
1.8%
 
1.1%
3.6%
5.8%
3.8%
 
(20.1%)
3.6%
Average tangible shareholders' equity (£bn)
49.3
49.4
 
48.9
49.4
48.3
48.3
 
47.8
47.6
Cost: income ratio 
81%
62%
 
87%
79%
65%
76%
 
128%
78%
Loan loss rate (bps)
49
47
 
58
66
41
40
 
53
37
Basic (loss)/earnings per share
(8.0p)
1.3p
 
0.8p
2.6p
4.2p
2.7p
 
(14.4p)
2.6p
Basic earnings/(loss) per share in respect of continuing operations
1.0p
6.1p
 
1.1p
2.1p
3.8p
2.2p
 
(14.4p)
2.1p
 
 
Barclays Core
 
 
 
 
 
 
 
 
 
 
 
Q217
Q117
 
Q416
Q316
Q216
Q116
 
Q415
Q315
Income statement information
£m
£m
 
£m
£m
£m
£m
 
£m
£m
Net interest income
2,702
2,508
 
2,577
2,718
2,491
2,591
 
2,555
2,557
Net fee, commission and other income
2,812
3,389
 
2,834
2,887
3,825
2,692
 
1,961
2,708
Total income
5,514
5,897
 
5,411
5,605
6,316
5,283
 
4,516
5,265
Credit impairment charges and other provisions 
(500)
(524)
 
(606)
(769)
(462)
(414)
 
(522)
(388)
Net operating income 
5,014
5,373
 
4,805
4,836
5,854
4,869
 
3,994
4,877
Operating expenses excluding UK bank levy and litigation and conduct
(3,290)
(3,443)
 
(3,471)
(3,270)
(3,057)
(3,258)
 
(2,992)
(3,094)
UK bank levy 
-
-
 
(334)
-
-
-
 
(338)
-
Litigation and conduct
(696)
(19)
 
(46)
(639)
(420)
(12)
 
(1,634)
(419)
Operating expenses
(3,986)
(3,462)
 
(3,851)
(3,909)
(3,477)
(3,270)
 
(4,964)
(3,513)
Other net income/(expenses)
37
12
 
164
4
(18)
9
 
(5)
13
Profit/(loss) before tax
1,065
1,923
 
1,118
931
2,359
1,608
 
(975)
1,377
Tax charge
(512)
(548)
 
(272)
(522)
(696)
(485)
 
(92)
(299)
Profit/(loss) after tax
553
1,375
 
846
409
1,663
1,123
 
(1,067)
1,078
Non-controlling interests
(51)
(70)
 
(76)
(57)
(80)
(84)
 
(81)
(54)
Other equity holders
(143)
(121)
 
(121)
(95)
(89)
(89)
 
(92)
(63)
Attributable profit/(loss)
359
1,184
 
649
257
1,494
950
 
(1,240)
961
 
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
 
£bn
£bn
£bn
£bn
 
£bn
£bn
Total assets
902.3
954.7
 
933.4
964.3
972.2
883.6
 
794.2
862.0
Risk weighted assets
304.6
333.5
 
333.5
329.5
319.6
312.2
 
304.1
316.3
 
 
 
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
3.6%
11.0%
 
6.4%
2.7%
15.0%
9.9%
 
(12.8%)
10.4%
Average allocated tangible equity (£bn)
44.9
44.2
 
42.4
41.8
40.4
39.3
 
38.1
37.5
Cost: income ratio 
72%
59%
 
71%
70%
55%
62%
 
110%
67%
Loan loss rate (bps)
52
53
 
61
74
45
42
 
57
39
Basic earnings/(loss) per share contribution
2.3p
7.2p
 
4.0p
1.7p
9.0p
5.8p
 
(7.3p)
5.8p
 
 
Barclays Non-Core
 
 
 
 
 
 
 
 
 
 
 
Q217
Q117
 
Q416
Q316
Q216
Q116
 
Q415
Q315
Income statement information
£m
£m
 
£m
£m
£m
£m
 
£m
£m
Net interest income
(123)
11
 
(54)
78
40
96
 
171
135
Net trading income
(411)
(77)
 
(462)
(288)
(463)
(490)
 
(398)
(124)
Net fee, commission and other income
78
(8)
 
97
51
79
152
 
159
204
Total income
(456)
(74)
 
(419)
(159)
(344)
(242)
 
(68)
215
Credit impairment charges and other provisions 
(27)
(3)
 
(47)
(20)
(26)
(29)
 
(32)
(41)
Net operating (expenses)/income 
(483)
(77)
 
(466)
(179)
(370)
(271)
 
(100)
174
Operating expenses excluding UK bank levy and litigation and conduct
(108)
(148)
 
(341)
(311)
(368)
(489)
 
(555)
(458)
UK bank levy 
-
-
 
(76)
-
-
-
 
(88)
-
Litigation and conduct
(19)
(9)
 
(51)
(102)
(27)
(66)
 
(89)
(279)
Operating expenses
(127)
(157)
 
(468)
(413)
(395)
(555)
 
(732)
(737)
Other net income/(expenses)
204
(7)
 
146
498
(324)
11
 
(268)
(195)
Loss before tax
(406)
(241)
 
(788)
(94)
(1,089)
(815)
 
(1,100)
(758)
Tax credit/(charge)
207
75
 
322
194
229
237
 
(72)
166
(Loss)/profit after tax
(199)
(166)
 
(466)
100
(860)
(578)
 
(1,172)
(592)
Non-controlling interests
(8)
(9)
 
(14)
(13)
(12)
(10)
 
(19)
(21)
Other equity holders
(19)
(18)
 
(18)
(15)
(15)
(15)
 
(17)
(15)
Attributable (loss)/profit
(226)
(193)
 
(498)
72
(887)
(603)
 
(1,208)
(628)
 
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
 
£bn
£bn
£bn
£bn
 
£bn
£bn
Loans and advances to banks and customers at amortised cost
48.3
49.5
 
51.1
58.7
68.5
55.4
 
51.8
57.1
Derivative financial instrument assets
150.3
164.2
 
188.7
253.2
262.8
249.7
 
213.7
243.3
Derivative financial instrument liabilities
143.0
155.3
 
178.6
243.0
253.4
239.1
 
202.1
235.0
Reverse repurchase agreements and other similar secured lending
-
-
 
0.1
0.1
0.1
0.7
 
3.1
8.5
Financial assets designated at fair value
12.1
13.4
 
14.5
15.5
15.4
23.4
 
21.4
22.8
Total assets
233.0
249.1
 
279.7
359.8
379.1
365.4
 
325.8
374.5
Customer deposits
11.8
12.9
 
12.5
16.0
17.4
19.3
 
20.9
25.8
Risk weighted assets
22.8
27.4
 
32.1
43.9
46.7
50.9
 
54.3
65.6
 
 
 
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
 
 
 
Average allocated tangible equity (£bn)
4.5
5.2
 
6.5
7.6
7.9
9.0
 
9.7
10.2
Period end allocated tangible equity (£bn)
4.0
4.8
 
5.4
7.2
7.8
8.5
 
8.5
10.2
Loan loss rate (bps)
22
2
 
31
13
14
21
 
25
27
Basic (loss)/earnings per share contribution
(1.3p)
(1.1p)
 
(2.9p)
0.5p
(5.2p)
(3.6p)
 
(7.2p)
(3.7p)
 
 
 
 
 
 
 
 
 
 
 
Analysis of total income
£m
£m
 
£m
£m
£m
£m
 
£m
£m
Businesses
(41)
51
 
(73)
181
181
196
 
229
314
Securities and loans
(25)
68
 
161
(34)
(363)
(402)
 
(195)
(87)
Derivatives
(390)
(193)
 
(507)
(306)
(162)
(36)
 
(102)
(12)
Total income
(456)
(74)
 
(419)
(159)
(344)
(242)
 
(68)
215
 
 
Quarterly Core Results by Business
 
Barclays UK
 
 
 
 
 
 
 
 
 
 
 
Q217
Q117
 
Q416
Q316
Q216
Q116
 
Q415
Q315
Income statement information
£m
£m
 
£m
£m
£m
£m
 
£m
£m
Net interest income
1,534
1,511
 
1,502
1,569
1,476
1,501
 
1,509
1,499
Net fee, commission and other income
286
330
 
326
374
467
302
 
325
375
Total income
1,820
1,841
 
1,828
1,943
1,943
1,803
 
1,834
1,874
Credit impairment charges and other provisions 
(220)
(178)
 
(180)
(350)
(220)
(146)
 
(219)
(154)
Net operating income 
1,600
1,663
 
1,648
1,593
1,723
1,657
 
1,615
1,720
Operating expenses excluding UK bank levy and litigation and conduct
(974)
(959)
 
(989)
(904)
(947)
(952)
 
(920)
(925)
UK bank levy 
-
-
 
(48)
-
-
-
 
(77)
-
Litigation and conduct
(699)
4
 
(28)
(614)
(399)
(1)
 
(1,466)
(76)
Operating expenses
(1,673)
(955)
 
(1,065)
(1,518)
(1,346)
(953)
 
(2,463)
(1,001)
Other net (expenses)/income
(1)
-
 
-
-
(1)
-
 
1
1
(Loss)/profit before tax
(74)
708
 
583
75
376
704
 
(847)
720
Attributable (loss)/profit
(285)
470
 
383
(163)
141
467
 
(1,078)
541
 
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
 
£bn
£bn
£bn
£bn
 
£bn
£bn
Loans and advances to customers at amortised cost
166.6
164.5
 
166.4
166.6
166.0
166.2
 
166.1
166.7
Total assets
203.4
203.0
 
209.6
209.1
204.6
201.7
 
202.5
204.1
Customer deposits
187.4
184.4
 
189.0
185.5
181.7
179.1
 
176.8
173.4
Risk weighted assets
66.1
66.3
 
67.5
67.4
67.1
69.7
 
69.5
71.0
 
 
 
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
(12.7%)
21.6%
 
18.2%
(7.1%)
6.6%
20.5%
 
(46.5%)
23.3%
Average allocated tangible equity (£bn)
8.7
8.9
 
8.6
8.7
9.0
9.3
 
9.2
9.3
Cost: income ratio 
92%
52%
 
58%
78%
69%
53%
 
134%
53%
Loan loss rate (bps)
52
43
 
42
82
52
34
 
51
36
Net interest margin
3.70%
3.69%
 
3.56%
3.72%
3.56%
3.62%
 
3.58%
3.54%
 
 
Analysis of Barclays UK
 
 
 
 
 
 
 
 
 
 
 
Q217
Q117
 
Q416
Q316
Q216
Q116
 
Q415
Q315
Analysis of total income
£m
£m
 
£m
£m
£m
£m
 
£m
£m
Personal Banking
933
944
 
934
970
1,068
919
 
945
938
Barclaycard Consumer UK
495
498
 
507
561
463
491
 
505
552
Wealth, Entrepreneurs & Business Banking
392
399
 
387
412
412
393
 
384
384
Total income
1,820
1,841
 
1,828
1,943
1,943
1,803
 
1,834
1,874
 
 
 
 
 
 
 
 
 
 
 
Analysis of credit impairment charges and other provisions
 
 
 
 
 
 
 
 
 
 
Personal Banking
(56)
(50)
 
(50)
(47)
(44)
(42)
 
(39)
(36)
Barclaycard Consumer UK
(149)
(123)
 
(118)
(291)
(169)
(105)
 
(176)
(111)
Wealth, Entrepreneurs & Business Banking
(15)
(5)
 
(12)
(12)
(7)
1
 
(4)
(7)
Total credit impairment charges and other provisions
(220)
(178)
 
(180)
(350)
(220)
(146)
 
(219)
(154)
 
 
 
 
 
 
 
 
 
 
 
Analysis of loans and advances to customers at amortised cost
£bn
£bn
 
£bn
£bn
£bn
£bn
 
£bn
£bn
Personal Banking
136.5
134.4
 
135.0
135.3
134.7
134.7
 
134.0
134.5
Barclaycard Consumer UK
16.2
16.1
 
16.5
16.2
16.2
16.0
 
16.2
15.9
Wealth, Entrepreneurs & Business Banking
13.9
14.0
 
14.9
15.1
15.1
15.5
 
15.9
16.3
Total loans and advances to customers at amortised cost
166.6
164.5
 
166.4
166.6
166.0
166.2
 
166.1
166.7
 
 
 
 
 
 
 
 
 
 
 
Analysis of customer deposits
 
 
 
 
 
 
 
 
 
 
Personal Banking
138.5
137.3
 
139.3
137.2
134.8
132.9
 
131.0
128.4
Barclaycard Consumer UK
-
-
 
-
-
-
-
 
-
-
Wealth, Entrepreneurs & Business Banking
48.9
47.1
 
49.7
48.3
46.9
46.2
 
45.8
45.0
Total customer deposits
187.4
184.4
 
189.0
185.5
181.7
179.1
 
176.8
173.4
 
 
Barclays International
 
 
 
 
 
 
 
 
 
 
 
Q217
Q117
 
Q416
Q316
Q216
Q116
 
Q415
Q315
Income statement information
£m
£m
 
£m
£m
£m
£m
 
£m
£m
Net interest income
1,060
1,112
 
1,046
1,355
1,001
1,110
 
1,121
1,109
Net trading income
1,039
1,182
 
1,131
1,074
1,130
1,245
 
593
817
Net fee, commission and other income
1,511
1,844
 
1,415
1,422
1,908
1,158
 
1,254
1,297
Total income
3,610
4,138
 
3,592
3,851
4,039
3,513
 
2,968
3,223
Credit impairment charges and other provisions 
(279)
(346)
 
(426)
(420)
(240)
(269)
 
(303)
(235)
Net operating income 
3,331
3,792
 
3,166
3,431
3,799
3,244
 
2,665
2,988
Operating expenses excluding UK bank levy and litigation and conduct
(2,276)
(2,435)
 
(2,497)
(2,337)
(2,074)
(2,221)
 
(2,007)
(2,059)
UK bank levy 
-
-
 
(284)
-
-
-
 
(253)
-
Litigation and conduct
4
(13)
 
(17)
(17)
(10)
(4)
 
(151)
(302)
Operating expenses
(2,272)
(2,448)
 
(2,798)
(2,354)
(2,084)
(2,225)
 
(2,411)
(2,361)
Other net income
202
12
 
5
8
11
8
 
8
9
Profit before tax
1,261
1,356
 
373
1,085
1,726
1,027
 
262
636
Attributable profit/(loss)
819
837
 
43
623
1,171
575
 
(24)
422
 
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
 
£bn
£bn
£bn
£bn
 
£bn
£bn
Loans and advances to banks and customers at amortised cost
204.8
226.1
 
211.3
233.7
230.6
215.9
 
184.1
220.3
Trading portfolio assets
83.3
83.0
 
73.2
73.8
68.1
64.3
 
61.9
72.8
Derivative financial instrument assets
108.4
105.3
 
156.2
155.6
181.4
150.1
 
111.5
133.7
Derivative financial instrument liabilities
116.8
112.8
 
160.6
160.5
187.5
155.4
 
119.0
142.0
Reverse repurchase agreements and other similar secured lending
17.2
17.6
 
13.4
17.3
19.7
19.1
 
24.7
68.0
Financial assets designated at fair value
94.1
81.3
 
62.3
72.0
68.3
59.6
 
46.8
5.6
Total assets
681.6
677.2
 
648.5
681.9
679.9
618.4
 
532.2
596.1
Customer deposits
230.3
241.0
 
216.2
224.1
226.5
213.1
 
185.6
207.0
Risk weighted assets
212.2
214.3
 
212.7
214.6
209.3
202.2
 
194.8
204.0
 
 
 
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
12.4%
12.5%
 
1.0%
10.0%
19.2%
9.5%
 
(0.2%)
7.0%
Average allocated tangible equity (£bn)
27.4
27.7
 
26.6
25.7
24.8
25.1
 
24.9
24.7
Cost: income ratio 
63%
59%
 
78%
61%
52%
63%
 
81%
73%
Loan loss rate (bps)
54
62
 
78
71
41
50
 
65
42
Net interest margin
4.07%
4.06%
 
3.91%
4.21%
3.92%
3.78%
 
3.79%
3.85%
 
 
Analysis of Barclays International
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate and Investment Bank
Q217
Q117
 
Q416
Q316
Q216
Q116
 
Q415
Q315
Income statement information
£m
£m
 
£m
£m
£m
£m
 
£m
£m
Analysis of total income
 
 
 
 
 
 
 
 
 
 
Credit
296
399
 
261
333
269
322
 
195
191
Equities
455
462
 
410
461
406
513
 
319
416
Macro
456
490
 
505
614
612
573
 
382
487
Markets
1,207
1,351
 
1,176
1,408
1,287
1,408
 
896
1,094
Banking fees
674
726
 
650
644
622
481
 
458
501
Corporate lending
278
269
 
303
284
312
296
 
312
377
Transactional banking
404
398
 
401
458
390
408
 
415
419
Banking
1,356
1,393
 
1,354
1,386
1,324
1,185
 
1,185
1,297
Other
1
38
 
1
1
-
3
 
16
(17)
Total income
2,564
2,782
 
2,531
2,795
2,611
2,596
 
2,097
2,374
Credit impairment releases/(charges) and other provisions
1
(51)
 
(90)
(38)
(37)
(95)
 
(83)
(75)
Operating expenses
(1,756)
(1,941)
 
(2,287)
(1,872)
(1,665)
(1,800)
 
(1,962)
(1,940)
Other net income
116
-
 
1
-
-
-
 
-
(1)
Profit before tax
925
790
 
155
885
909
701
 
52
358
 
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
 
£bn
£bn
£bn
£bn
 
£bn
£bn
Risk weighted assets
178.9
180.6
 
178.6
182.5
178.4
172.6
 
167.3
177.4
 
 
 
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
11.1%
8.2%
 
(1.2%)
9.2%
9.5%
7.3%
 
(2.5%)
4.5%
Average allocated tangible equity (£bn)
23.3
23.5
 
22.6
21.9
21.3
21.6
 
21.8
21.7
 
 
 
 
 
 
 
 
 
 
 
Consumer, Cards and Payments
 
 
 
 
 
 
 
 
 
 
Income statement information
£m
£m
 
£m
£m
£m
£m
 
£m
£m
Total income
1,046
1,356
 
1,061
1,056
1,428
917
 
871
849
Credit impairment charges and other provisions
(280)
(295)
 
(336)
(382)
(203)
(174)
 
(219)
(160)
Operating expenses
(516)
(507)
 
(511)
(482)
(419)
(425)
 
(449)
(421)
Other net income
86
12
 
4
8
11
8
 
8
10
Profit before tax
336
566
 
218
200
817
326
 
210
278
 
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
 
£bn
£bn
£bn
£bn
 
£bn
£bn
Loans and advances to banks and customers at amortised cost
38.5
38.7
 
39.7
36.8
35.4
32.9
 
32.1
30.6
Customer deposits
57.3
57.6
 
50.0
48.3
46.9
44.2
 
41.8
39.8
Risk weighted assets
33.3
33.7
 
34.1
32.1
30.9
29.6
 
27.5
26.6
 
 
 
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
19.4%
36.4%
 
13.2%
14.8%
77.9%
23.4%
 
15.3%
24.7%
Average allocated tangible equity (£bn)
4.1
4.2
 
4.0
3.7
3.5
3.4
 
3.2
3.1
 
 
Head Office
 
 
 
 
 
 
 
 
 
 
 
Q217
Q117
 
Q416
Q316
Q216
Q116
 
Q415
Q315
Income statement information
£m
£m
 
£m
£m
£m
£m
 
£m
£m
Net interest income
108
(115)
 
29
(206)
14
(20)
 
(75)
(51)
Net fee, commission and other income1
(24)
33
 
(38)
17
320
(13)
 
(210)
220
Total income
84
(82)
 
(9)
(189)
334
(33)
 
(285)
169
Credit impairment (charges)/releases and other provisions
(1)
-
 
-
1
(2)
1
 
-
1
Net operating income/(expenses)
83
(82)
 
(9)
(188)
332
(32)
 
(285)
170
Operating expenses excluding UK bank levy and litigation and conduct
(40)
(49)
 
15
(29)
(36)
(85)
 
(64)
(110)
UK bank levy 
-
-
 
(2)
-
-
-
 
(8)
-
Litigation and conduct
(1)
(10)
 
(1)
(8)
(11)
(7)
 
(17)
(42)
Operating expenses
(41)
(59)
 
12
(37)
(47)
(92)
 
(89)
(152)
Other net (expenses)/income
(164)
-
 
159
(4)
(28)
1
 
(14)
2
(Loss)/profit before tax
(122)
(141)
 
162
(229)
257
(123)
 
(388)
20
Attributable (loss)/profit
(175)
(123)
 
223
(203)
182
(92)
 
(140)
(1)
 
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
 
£bn
£bn
£bn
£bn
 
£bn
£bn
Total assets
17.3
74.5
 
75.2
73.3
87.7
63.4
 
59.4
61.8
Risk weighted assets2
26.2
52.9
 
53.3
47.5
43.2
40.3
 
39.7
41.3
 
 
 
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
 
 
 
Average allocated tangible equity (£bn)
8.8
7.6
 
7.2
7.4
6.6
5.0
 
3.9
3.4
 
1
Following the early adoption of the own credit provisions of IFRS 9 on 1 January 2017, own credit, which was previously reported in Net fee, commission and other income is now recognised within other comprehensive income from Q117.
2
Includes Africa Banking RWAs.
 
 
Performance Management
 
Margins and balances
 
 
 
 
 
 
 
 
Half year ended 30.06.17
 
Half year ended 30.06.16
 
Net interest income
Average customer assets
Net interest margin
 
Net interest income
Average customer assets
Net interest margin
 
£m
£m
%
 
£m
£m
%
Barclays UK
3,045
166,200
3.69
 
2,977
166,944
3.59
Barclays International1
2,185
108,486
4.06
 
2,016
103,934
3.90
Total Barclays UK and Barclays International
5,230
274,686
3.84
 
4,993
270,878
3.71
Other2
(132)
 
 
 
225
 
 
Total net interest income
5,098
 
 
 
5,218
 
 
 
1
Barclays International margins include interest earning lending balances within the investment banking business.
2
Other includes Head Office, Barclays Non-Core and non-lending related investment banking balances.
 
Total Barclays UK and Barclays International net interest income increased 5% to £5,230m due to:
 
●
 
An increase in average customer assets to £274.7bn (H116: £270.9bn) predominantly driven by growth in Barclays International
●
 
Net interest margin increased 13bps to 3.84% primarily driven by higher margins on Personal Banking and Consumer, Cards and Payments deposits, partially offset by lower asset margins. Group net interest income decreased 2% to £5.1bn including net structural hedge contributions of £0.7bn (H116: £0.7bn)
 
Net interest margin by business reflects movements in the Group’s internal funding rates which are based on the cost to the Group of alternative funding in wholesale markets. The internal funding rate prices intra-group funding and liquidity to appropriately give credit to businesses with net surplus liquidity and to charge those businesses in need of alternative
funding at a rate that is driven by prevailing market rates and includes a term premium.
 
 
Quarterly analysis for Barclays UK and Barclays International
 
 
 
 
Three months ended 30.06.17
 
Net interest income
Average customer assets
Net interest margin
 
£m
£m
%
Barclays UK
1,534
166,345
3.70
Barclays International1
1,064
104,899
4.07
Total Barclays UK and Barclays International
2,598
271,244
3.84
 
 
 
 
 
Three months ended 31.03.17
Barclays UK
1,511
166,065
3.69
Barclays International1
1,121
112,060
4.06
Total Barclays UK and Barclays International
2,632
278,125
3.84
 
 
 
 
 
Three months ended 31.12.16
Barclays UK
1,502
167,935
3.56
Barclays International1
1,110
112,936
3.91
Total Barclays UK and Barclays International
2,612
280,871
3.70
 
 
 
 
 
Three months ended 30.09.16
Barclays UK
1,569
167,713
3.72
Barclays International1
1,149
108,571
4.21
Total Barclays UK and Barclays International
2,718
276,284
3.91
 
 
 
 
 
Three months ended 30.06.16
Barclays UK
1,476
166,891
3.56
Barclays International1
1,021
104,707
3.92
Total Barclays UK and Barclays International
2,497
271,598
3.70
 
1
Barclays International margins include interest earning lending balances within the investment banking business.
 
 
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 firm are defined in the Enterprise Risk Management Framework. The purpose of the framework is to identify the principal risks of the firm, the process by which the firm sets its appetite for these risks in its business activities, and the consequent limits which it places on related risk taking. The framework identifies eight Principal Risks: Credit Risk; Market Risk; Treasury and Capital Risk; Operational Risk; Conduct Risk; Reputation Risk; Model Risk; and Legal Risk. Further detail on these risks and how they are managed is available in the 2016 Annual Report or online at home.barclays.com/annualreport. There have been no significant changes to these principal risks in the period nor are any expected for the remaining six months of the financial year.
 
The following section gives an overview of Credit Risk, Market Risk and Treasury and Capital Risk for the period.
 
Credit Risk
 
Analysis of loans and advances to customers and banks
 
Loans and advances at amortised cost net of impairment allowances, by industry sector and geography
 
 
 
 
 
 
 
 
United Kingdom
Europe
Americas
Africa and Middle East
Asia
Total
As at 30.06.17
£m
£m
£m
£m
£m
£m
Banks
7,337
14,454
9,256
2,183
3,878
37,108
Other financial institutions
28,590
20,985
41,978
401
5,027
96,981
Home loans
131,962
11,659
578
382
125
144,706
Cards, unsecured loans and other personal lending
29,082
4,263
20,541
372
93
54,351
Construction and property
21,613
1,014
1,546
133
122
24,428
Other
48,346
8,297
9,680
1,005
2,210
69,538
Net loans and advances to customers and banks
266,930
60,672
83,579
4,476
11,455
427,112
Impairment allowance
2,678
562
1,184
102
30
4,556
Gross loans and advances to customers and banks
269,608
61,234
84,763
4,578
11,485
431,668
 
 
 
 
 
 
 
Loans and advances at fair value
10,239
984
1,195
-
6
12,424
 
 
 
 
 
 
 
As at 31.12.16
 
 
 
 
 
 
Banks
7,458
12,674
16,894
1,778
4,447
43,251
Other financial institutions
22,209
19,800
45,189
425
4,189
91,812
Home loans
131,801
11,918
594
354
98
144,765
Cards, unsecured loans and other personal lending
29,606
4,003
22,513
493
114
56,729
Construction and property
21,276
1,042
1,669
89
125
24,201
Other
48,860
10,287
11,080
1,728
3,322
75,277
Net loans and advances to customers and banks
261,210
59,724
97,939
4,867
12,295
436,035
Impairment allowance
2,544
686
1,247
89
54
4,620
Gross loans and advances to customers and banks
263,754
60,410
99,186
4,956
12,349
440,655
 
 
 
 
 
 
 
Loans and advances at fair value
9,130
772
525
27
65
10,519
 
 
Analysis of retail and wholesale loans and advances and impairment
 
 
 
Gross loans and advances
Impairment allowance
Loans and advances net of impairment
Credit
risk loans
CRLs % of gross loans and advances
Loan impairment charges1
Loan loss rates
As at 30.06.17
£m
£m
£m
£m
%
£m
bps
Barclays UK
155,040
1,585
153,455
1,980
1.3
380
49
Barclays International
30,801
1,505
29,296
1,247
4.0
578
378
Barclays Core
185,841
3,090
182,751
3,227
1.7
958
104
Barclays Non-Core
9,804
285
9,519
716
7.3
30
62
Total Group retail
195,645
3,375
192,270
3,943
2.0
988
102
 
 
 
 
 
 
 
 
Barclays UK
15,126
307
14,819
616
4.1
19
25
Barclays International
176,233
718
175,515
1,227
0.7
46
5
Head Office
5,702
-
5,702
-
-
-
-
Barclays Core
197,061
1,025
196,036
1,843
0.9
65
7
Barclays Non-Core
38,962
156
38,806
273
0.7
(1)
(1)
Total Group wholesale
236,023
1,181
234,842
2,116
0.9
64
5
 
 
 
 
 
 
 
 
Total loans and advances at amortised cost
431,668
4,556
427,112
6,059
1.4
1,052
49
 
 
 
 
 
 
 
 
Traded loans
3,942
n/a
3,942
n/a
 
 
 
Loans and advances designated at fair value
12,424
n/a
12,424
n/a
 
 
 
Loans and advances held at fair value
16,366
n/a
16,366
n/a
 
 
 
 
 
 
 
 
 
 
 
Total loans and advances
448,034
4,556
443,478
6,059
 
 
 
 
 
 
 
 
 
 
 
As at 31.12.16
 
 
 
 
 
 
 
Barclays UK
155,729
1,519
154,210
2,044
1.3
866
56
Barclays International
33,485
1,492
31,993
1,249
3.7
1,085
324
Barclays Core
189,214
3,011
186,203
3,293
1.7
1,951
103
Barclays Non-Core
10,319
385
9,934
838
8.1
102
99
Total Group retail
199,533
3,396
196,137
4,131
2.1
2,053
103
 
 
 
 
 
 
 
 
Barclays UK
15,204
282
14,922
591
3.9
30
20
Barclays International
180,102
748
179,354
1,470
0.8
258
14
Head Office
4,410
-
4,410
-
-
-
-
Barclays Core
199,716
1,030
198,686
2,061
1.0
288
14
Barclays Non-Core
41,406
194
41,212
299
0.7
11
3
Total Group wholesale
241,122
1,224
239,898
2,360
1.0
299
12
 
 
 
 
 
 
 
 
Total loans and advances at amortised cost
440,655
4,620
436,035
6,491
1.5
2,352
53
 
 
 
 
 
 
 
 
Traded loans
2,975
n/a
2,975
n/a
 
 
 
Loans and advances designated at fair value
10,519
n/a
10,519
n/a
 
 
 
Loans and advances held at fair value
13,494
n/a
13,494
n/a
 
 
 
 
 
 
 
 
 
 
 
Total loans and advances
454,149
4,620
449,529
6,491
 
 
 
 
1
Excluding impairment charges on available for sale investments and reverse repurchase agreements. H117 impairment charges represent 6 months charge, whereas December 2016 impairment charges represent 12 months charge.
 
Total loans and advances decreased £6bn to £448bn driven by a decrease in lending to banks and customers, partially offset by an increase in net settlement and cash collateral balances.
 
Credit risk loans (CRLs) and the ratio of CRLs to gross loans and advances decreased £0.4bn to £6.1bn and 0.1% to 1.4% respectively.

Analysis of forbearance programmes
 
 
Balances
 
Impairment allowance
 
Allowance coverage
 
As at
As at
 
As at
As at
 
As at
As at
 
30.06.17
31.12.16
 
30.06.17
31.12.16
 
30.06.17
31.12.16
 
£m
£m
 
£m
£m
 
%
%
Barclays UK
841
926
 
197
237
 
23.4
25.6
Barclays International
218
243
 
84
57
 
38.5
23.5
Barclays Core
1,059
1,169
 
281
294
 
26.5
25.1
Barclays Non-Core
201
211
 
11
9
 
5.5
4.3
Total retail
1,260
1,380
 
292
303
 
23.2
22.0
 
 
 
 
 
 
 
 
 
Barclays UK
590
589
 
57
62
 
9.7
10.5
Barclays International
2,399
2,044
 
300
257
 
12.5
12.6
Barclays Core
2,989
2,633
 
357
319
 
11.9
12.1
Barclays Non-Core
201
269
 
54
50
 
26.9
18.5
Total wholesale
3,190
2,902
 
411
369
 
12.9
12.7
 
 
 
 
 
 
 
 
 
Group total
4,450
4,282
 
703
672
 
15.8
15.7
 
Retail balances decreased 9% to £1.3bn primarily due to continued improvement in the residential mortgage and Barclaycard portfolios within Barclays UK.
 
●
 
Barclays UK: Forbearance balances decreased 9% to £841m following a continued improvement in mortgage and card portfolios driven by the benign economic environment
●
 
Barclays International: Balances decreased primarily in US cards due to stricter forbearance criteria whereas impairment allowance increased as a result of a strengthened impairment methodology
 
Wholesale balances increased 10% to £3.2bn primarily due to an increase in forborne balances in Barclays International slightly offset by a reduction in Barclays Non-Core portfolios.
 
●
 
Barclays UK: Forbearance balances remained stable at £590m (December 2016 : £589m)
●
 
Barclays International: Balances increased £355m to £2.4bn as consistent forbearance methodologies were introduced across CIB

 
Analysis of specific portfolios and asset types
 
Secured home loans
 
The UK home loan portfolio primarily comprises first lien mortgages and accounts for 99%1 (2016: 98%) of total home loans in the Group’s retail core portfolios.
 
Home loans principal portfolios2
 
 
 
Barclays UK
 
As at
As at
 
30.06.17
31.12.16
Gross loans and advances (£m)
128,966
129,136
>90 day arrears, excluding recovery book (%)
0.2
0.2
Non-performing proportion of outstanding balances (%)
0.5
0.6
Annualised gross charge-off rates (%)
0.2
0.3
Recovery book proportion of outstanding balances (%)
0.3
0.4
Recovery book impairment coverage ratio (%)
9.8
9.1
 
1
Remaining balance represents Wealth portfolio.
2
Gross loans and advances include loans and advances to customers and banks. Risk metrics based on exposures to customers only.
 
Barclays UK: Arrears and charge-off rates remained stable reflecting the continuing low base rate environment. The recovery book impairment coverage ratio increased as a result of a reduction in the recovery book without a corresponding release in the impairment provision. Balance weighted LTV reduced to 47.4% (2016: 47.7%) as average house prices increased. This increase also contributed to a 4% reduction in home loans with LTV >100% to £229m (2016: £239m)
 
Within the UK home loans portfolio:
 
 
●
 
Owner-occupied interest-only home loans comprised 29.5% (2016: 30.8%) of total balances. The average balance weighted LTV on these loans reduced to 40.7% (2016: 41.7%) as house prices improved across core regions and >90 day arrears was stable at 0.2% (2016: 0.2%)
 
●
 
Buy-to-let (BTL) home loans comprised 9.8% (2016: 9.1%) of total balances with the increase driven by strong performance in this segment. The average balance weighted LTV increased marginally to 52.9% (2016: 52.6%) while the >90 day arrears remained stable at 0.1% (2016: 0.1%)
 
 
Home loans principal portfolios-distribution of balances by LTV1
 
Distribution of balances
 
Impairment coverage ratio
 
Non-performing proportion of outstanding balances
 
Non-performing balances impairment coverage ratio
 
Recovery book proportion of outstanding balances
 
Recovery book impairment coverage ratio
As at
30.06.17
31.12.16
 
30.06.17
31.12.16
 
30.06.17
31.12.16
 
30.06.17
31.12.16
 
30.06.17
31.12.16
 
30.06.17
31.12.16
Barclays UK
%
%
 
%
%
 
%
%
 
%
%
 
%
%
 
%
%
<=75%
91.5
91.8
 
0.1
0.1
 
0.5
0.6
 
4.0
4.2
 
0.3
0.4
 
6.1
5.9
>75% and <=80%
4.0
3.5
 
0.2
0.2
 
0.6
0.6
 
16.9
17.1
 
0.4
0.4
 
23.2
22.1
>80% and <=85%
2.3
2.1
 
0.2
0.2
 
0.6
0.8
 
15.8
20.4
 
0.4
0.6
 
20.3
25.0
>85% and <=90%
1.2
1.3
 
0.3
0.3
 
0.7
0.7
 
25.4
23.0
 
0.5
0.6
 
32.6
25.4
>90% and <=95%
0.6
0.8
 
0.4
0.4
 
1.0
1.1
 
30.8
28.3
 
0.8
0.8
 
35.1
33.7
>95% and <=100%
0.2
0.3
 
1.0
0.7
 
2.6
1.9
 
29.7
23.4
 
1.9
1.5
 
36.5
27.0
>100%
0.2
0.2
 
3.7
3.1
 
6.5
5.7
 
41.0
38.6
 
5.5
5.0
 
45.6
40.9
 
1
Portfolio marked to market based on the most updated valuation including recovery book balances. Updated valuations reflect the application of the latest house price index available as at 30 June 2017.
 
 
Home loans principal portfolios - average LTV
 
 
 
Barclays UK
 
As at
As at
 
30.06.17
31.12.16
Portfolio marked to market LTV:
 
 
Balance weighted (%)
47.4
47.7
Valuation weighted (%)
35.2
35.6
For > 100% LTVs:
 
 
Balances (£m)
229
239
Marked to market collateral (£m)
203
210
Average LTV: balance weighted (%)
124.8
118.4
Average LTV: valuation weighted (%)
117.6
113.1
% of balances in recovery book
5.5
5.0
 
Home loans principal portfolios - new lending
 
 
 
Barclays UK
 
Half year
Half year
 
ended
ended
 
30.06.17
30.06.16
New home loan bookings (£m)
10,025
9,990  
New home loans proportion above 85% LTV (%)
4.7
8.7
Average LTV on new home loans: balance weighted (%)
62.4
63.2
Average LTV on new home loans: valuation weighted (%)
54.6
54.8
 
Barclays UK: New lending remained stable at £10.0bn (H116: £10.0bn). The decrease in mortgages with LTV > 85% to 4.7% (H116 8.7%) reflects an increased focus on remortgage business, which is typically lower LTV, and the closure of the Help to Buy 2 scheme that supported owner occupied home purchase loans where maximum LTV was 95%.
 
 
Credit cards and unsecured loans
 
The principal portfolios listed below accounted for 92% (2016: 94%) of the Group’s total credit cards and unsecured loans.
 
Principal portfolios
 
Gross loans and advances1
30 day
arrears, excluding recovery book
90 day
arrears, excluding recovery book
Annualised gross
charge-off
rates
Recovery book
proportion of
outstanding balances
Recovery book impairment coverage ratio
As at 30.06.17
£m
%
%
%
%
%
Barclays UK
 
 
 
 
 
 
UK cards2
17,528
2.0
0.9
5.0
3.7
83.6
UK personal loans
6,254
2.2
1.0
3.5
4.7
78.6
Barclays International
 
 
 
 
 
 
US cards2
21,413
2.2
1.1
5.3
2.9
84.4
Barclays Partner Finance
3,857
1.4
0.5
2.7
2.4
81.0
Germany cards
1,912
2.9
1.1
3.7
2.7
79.8
 
 
 
 
 
 
 
As at 31.12.16
 
 
 
 
 
 
Barclays UK
 
 
 
 
 
 
UK cards2
17,833
1.9
0.9
5.5
3.0
83.8
UK personal loans
6,076
2.1
0.9
3.1
4.7
77.2
Barclays International
 
 
 
 
 
 
US cards2
23,915
2.6
1.3
4.5
2.4
83.6
Barclays Partner Finance
4,041
1.5
0.6
2.5
2.6
81.5
Germany cards
1,812
2.6
1.0
3.7
2.7
79.0
 
1
Gross loans and advances include loans and advances to customers and banks. Risk metrics based on exposures to customers.
2
For UK and US cards, outstanding recovery book balances for acquired portfolios recognised at fair value (which have no related impairment allowance) have been excluded from the recovery book impairment coverage ratio. Losses have been recognised where related to additional spend from acquired accounts in the period post acquisition.
 
 
UK cards: In 2017, both early and late stage arrears remained broadly stable. Charge-off rates reduced in the first half of 2017 following the non-recurrence of one-off accelerated charge-offs. However, recovery book proportion of outstanding balances was higher due to accelerated charge-off of certain forbearance plans since the beginning of the year.
 
US cards: Arrears rates improved principally due to a one-off portfolio sale. The higher charge-off rate is a result of accelerating the timeframe in which settlements and bankrupt clients are charged off to align with US industry standards. The increase in impairment coverage ratio for recovery book was due to a model enhancement providing a more accurate representation of future recovery expectations.
 
 
Market Risk
 
Analysis of management VaR
 
 
●
 
The table below shows the total management VaR on a diversified basis by risk factor. Total management VaR includes all trading positions in CIB, Non-Core and Head Office and it is calculated with one day holding period
●
 
Limits are applied against each risk factor VaR as well as total Management VaR, which are then cascaded further by risk managers to each business
 
Management VaR (95%) by asset class1
 
 
 
 
 
 
 
 
 
Half year ended
30.06.17
 
31.12.16
 
30.06.16
 
Average
High2
Low2
 
Average
High2
Low2
 
Average
High2
Low2
 
£m
£m
£m
 
£m
£m
£m
 
£m
£m
£m
Credit risk
13
18
10
 
16
24
13
 
15
23
9
Interest rate risk
7
15
4
 
8
13
5
 
6
10
4
Equity risk
8
14
4
 
7
11
4
 
6
10
4
Basis risk
5
6
4
 
6
9
5
 
5
6
3
Spread risk
4
6
3
 
4
5
3
 
3
5
2
Foreign exchange risk
3
5
2
 
3
5
2
 
3
4
2
Commodity risk
2
3
1
 
2
3
2
 
2
4
1
Inflation risk
2
4
1
 
2
3
2
 
2
3
2
Diversification effect
(24)
- 
-
 
(26)
-
-
 
(22)
-
-
Total management VaR
20
26
17
 
22
29
15
 
20
29
13
 
1
Including BAGL.
2
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 total management VaR decreased 9% to £20m. Credit Risk VaR reduced by 19% to £13m primarily driven by reduction in counterparty risk trading as Barclays CDS spread tightened and a decrease in loan commitment hedging.
 
Treasury and Capital Risk
 
The Group has a comprehensive Key Risk Control Framework for managing the Group’s liquidity risk. The Liquidity Framework meets the PRA’s standards and is designed to ensure the Group maintains liquidity resources that are sufficient in amount and quality, and a funding profile that is appropriate to meet the liquidity risk appetite. The Liquidity Framework is delivered via a combination of policy formation, review and governance, analysis, stress testing, limit setting and monitoring.
 
Funding and liquidity
 
Whilst Barclays has a comprehensive framework for managing the Group’s liquidity risks, liquidity risk is managed separately at Barclays Africa Group Limited (BAGL) due to local currency and funding requirements. All liquidity related disclosures treat BAGL on a fully deconsolidated basis.
 
Liquidity stress testing
 
Barclays manages the Group’s liquidity position against the Group’s internally defined Liquidity Risk Appetite (LRA) and regulatory metrics such as CRD IV Liquidity Coverage Ratio (LCR). As at June 2017, the Group held eligible liquid assets well in excess of 100% of net stress outflows for both the 30 day Barclays-specific LRA and the LCR.
 
Compliance with internal and regulatory stress tests
Barclays' LRA (30 day Barclays specific requirement)1
CRD IV
LCR2
 
£bn
£bn
Eligible liquidity buffer
201
199
Net stress outflows
(129)
(134)
Surplus
71
65
 
 
 
Liquidity pool as a percentage of anticipated net outflows as at 30 June 2017
155%
149%
Liquidity pool as a percentage of anticipated net outflows as at 31 December 2016
120%
131%
 
1
Of the three stress scenarios monitored as part of the LRA, the 30 day Barclays specific scenario results in the lowest ratio at 155% (December 2016: 120%). This compares to 177% (December 2016: 134%) under the 90 day market-wide scenario and 190% (December 2016: 144%) under the 30 day combined scenario.
 
Barclays manages the Group’s liquidity position against the Group’s internally defined Liquidity Risk Appetite (LRA) and regulatory metrics, such as CRD IV Liquidity Coverage Ratio (LCR). As at 30 June 2017, the Group held eligible liquid assets significantly in excess of 100% of net stress outflows for both the 30 day Barclays-specific LRA and the LCR.
 
LRA buffer duration as of 30 June 2017 was observed at in excess of 90 days (December 2016: in excess of 90 days).
 
 
Composition of the Group liquidity pool
 
 
Liquidity pool
Liquidity pool of which interim CRD IV LCR-eligible
Liquidity pool
 
 
30.06.17
Cash
Level 1
Level 2A
31.12.16
 
 
£bn
£bn
£bn
£bn
£bn
Cash and deposits with central banks1
 
146
141
-
-
103
 
 
 
 
 
 
 
Government bonds
 
 
 
 
 
 
AAA to AA-
 
39
-
39
-
34
A+ to A-
 
-
-
-
-
3
BBB+ to BBB-
 
1
-
1
-
1
Other LCR Ineligible government bonds
 
-
-
-
-
1
Total government bonds
 
40
-
40
-
39
 
 
 
 
 
 
 
Other
 
 
 
 
 
 
Government Guaranteed Issuers, PSEs and GSEs
 
8
-
7
1
12
International Organisations and MDBs
 
5
-
5
-
6
Covered bonds
 
1
-
1
-
1
Other
 
1
-
-
-
4
Total other
 
15
-
13
1
23
 
 
 
 
 
 
 
Total as at 30 June 2017
 
201
141
53
1
 
Total as at 31 December 2016
 
165
101
55
3
 
 
1
Of which over 98% (December 2016: over 98%) was placed with the Bank of England, US Federal Reserve, European Central Bank, Bank of Japan and Swiss National Bank.
 
 
Barclays manages the liquidity pool on a centralised basis. The liquidity pool is held unencumbered and is not used to support payment or clearing requirements. As at 30 June 2017, 94% (December 2016: 91%) of the liquidity pool was located in Barclays Bank PLC and was available to meet liquidity needs across the Barclays Group. The residual liquidity pool is held predominantly within Barclays Capital Inc. The portion of the liquidity pool outside of Barclays Bank PLC is held primarily against entity-specific stressed outflows and regulatory requirements.
 
 
Deposit funding
 
 
 
 
 
 
As at 30.06.17
 
As at 31.12.16
Funding of loans and advances to customers
Loans and advances to customers
Customer deposits
Loan to deposit ratio
 
Loan to deposit ratio
 
£bn
£bn
%
 
%
Barclays UK
167
187
 
 
 
Barclays International1
94
159
 
 
 
Non-Core1
20
-
 
 
 
Total retail and corporate funding1
281
346
81%
 
83%
 
 
 
 
 
 
Barclays International and Head Office2
109
91
 
 
 
Total
390
437
89%
 
93%
 
1
Excluding the investment banking businesses.
2
Including the investment banking businesses.
 
Barclays UK and Barclays International (excluding the investment banking balances) are largely funded by customer deposits. The loan to deposit ratio for these businesses was 81% (December 2016: 83%).
 
The loan to deposit ratio for the Group was 89% (December 2016: 93%).
 
Wholesale funding
 
Funding of other assets as at 30 June 2017
Assets
£bn
 
Liabilities
£bn
Trading portfolio assets
56
 
Repurchase agreements
121
Reverse repurchase agreements
65
 
 
 
 
 
 
 
 
Reverse repurchase agreements
40
 
Trading portfolio liabilities
40
 
 
 
 
 
Derivative financial instruments
260
 
Derivative financial instruments
261
 
 
 
 
 
Liquidity pool1
136
 
Less than 1 year wholesale debt
72
Other assets2
95
 
Greater than 1 year wholesale debt and equity
158
 
1
The portion of the liquidity pool estimated to be funded by wholesale funds.
2
Predominantly available for sale investments, trading portfolio assets, financial assets designated at fair value and loans and advances to banks.
 
Repurchase agreements fund reverse repurchase agreements and trading portfolio assets. Trading portfolio liabilities are settled by the remainder of reverse 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 once netted against cash collateral received and paid.
 
Wholesale debt, along with the surplus of customer deposits to loans and advances to customers, is used to fund the liquidity pool. Term wholesale debt and equity largely fund other assets.
 
Composition of wholesale funding1
 
As the Group progresses to a Single Point of Entry resolution model, Barclays continues to issue debt capital and term senior unsecured funding from Barclays PLC, the holding company, replacing maturing debt in Barclays Bank PLC.
 
Maturity profile of wholesale funding
 
 
 
 
 
 
 
 
<1
month
1-3 months
3-6 months
6-12 months
<1
year
1-2 years
2-3 years
3-4 years
4-5 years
>5
years
Total
 
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Barclays PLC
 
 
 
 
 
 
 
 
 
 
 
Senior unsecured (public benchmark)
 -
 -
 -
0.8
0.8
0.1
2.3
2.8
4.5
9.9
20.4
Senior unsecured (privately placed)
 -
 -
 -
 -
 -
0.1
 -
0.1
0.1
0.5
0.8
Subordinated liabilities
 -
 -
 -
 -
 -
 -
 -
1.1
 -
4.2
5.3
Barclays Bank PLC
 
 
 
 
 
 
 
 
 
 
 
Deposits from banks
10.6
5.6
1.0
0.8
18.0
0.1
 -
0.2
 -
 -
18.3
Certificates of deposit and commercial paper
0.6
6.4
10.4
8.5
25.9
0.7
0.9
0.5
0.4
0.1
28.5
Asset backed commercial paper
2.7
3.4
1.4
0.2
7.7
 -
 -
 -
 -
 -
7.7
Senior unsecured (public benchmark)
 -
 -
 -
 -
 -
1.4
1.9
0.6
0.1
1.1
5.1
Senior unsecured (privately placed)2
1.0
1.6
1.7
5.2
9.5
7.8
5.8
2.0
2.3
12.1
39.5
Covered bonds
 -
1.5
 -
1.0
2.5
 -
2.8
1.0
2.4
1.3
10.0
Asset backed securities
 -
 -
0.6
0.7
1.3
0.6
2.3
 -
0.1
1.3
5.6
Subordinated liabilities
 -
 -
1.2
3.1
4.3
 -
 -
5.9
1.4
7.0
18.6
Other3
1.3
0.5
0.1
0.3
2.2
0.2
0.1
0.2
 -
0.5
3.2
Total as at 30 June 2017
16.2
19.0
16.4
20.6
72.2
11.0
16.1
14.4
11.3
38.0
163.0
Of which secured
2.7
4.9
2.0
2.0
11.6
0.6
5.1
1.0
2.5
2.6
23.4
Of which unsecured
13.5
14.1
14.4
18.6
60.6
10.4
11.0
13.4
8.8
35.4
139.6
Total as at 31 December 2016
16.6
17.3
16.4
20.0
70.3
14.3
14.4
8.6
14.1
36.1
157.8
Of which secured
3.7
5.6
3.4
2.3
15.0
1.8
3.2
0.4
1.0
4.4
25.8
Of which unsecured
12.9
11.7
13.0
17.7
55.3
12.5
11.2
8.2
13.1
31.7
132.0
 
1
The composition of wholesale funds comprises the balance sheet reported Deposits from Banks, Financial liabilities at Fair Value, Debt Securities in Issue and Subordinated Liabilities, excluding cash collateral and settlement balances. It does not include participation in the Bank of England’s Term Funding Scheme.
2
Includes structured notes of £30.1bn, £8.2bn of which matures within one year.
3
Primarily comprised of fair value deposits £2.1bn and secured financing of physical gold £0.3bn.
 
Outstanding wholesale funding includes £40.3bn (December 2016: £37.6bn) of privately placed senior unsecured notes in issue. These notes are issued through a variety of distribution channels including intermediaries and private banks. Although not a requirement, the liquidity pool exceeded wholesale funding maturing in less than one year by £128.8bn
(December 2016: £94.7bn).
 
Term financing
 
The Group issued £7.6bn equivalent of capital and term senior unsecured debt from Barclays PLC (HoldCo) of which £4.8bn was in public senior unsecured debt and £2.8bn was in capital instruments. In the same period, £4.7bn of Barclays Bank PLC (OpCo) capital and senior public term instruments either matured or were redeemed, including the $1.375bn 7.1% Series 3 USD preference shares.
 
In addition, Barclays has £8.6bn of term funding maturing in the remainder of 2017 and £11.2bn in 2018.
 
 
The Group expects to continue issuing public wholesale debt in 2017 from Barclays PLC, in order to ensure compliance with new prospective loss absorbency requirements and maintain a stable and diverse funding base by type, currency and distribution channel.
 
Credit ratings
 
In addition to monitoring and managing key metrics related to the financial strength of the Group, Barclays also solicits independent credit ratings by Standard & Poor’s (S&P), Moody’s, Fitch and Rating and Investment Information (R&I). These ratings assess the creditworthiness of the Group, its subsidiaries and branches, and are based on reviews of a broad range of business and financial attributes including risk management processes and procedures, capital strength, earnings, funding, asset quality, liquidity, accounting and governance.
 
Barclays Bank PLC
Standard & Poor's
Moody's
Fitch
Long-term
A- (Negative)
A1 (Negative)
A (Stable)
Short-term
A-2
P-1
F1
Standalone rating1
bbb+
baa2
a
 
 
 
 
Barclays PLC
Standard & Poor's
Moody's
Fitch
Long-term
BBB (Negative)
Baa2 (Negative)
A (Stable)
Short-term
A-2
P-3
F1
 
1
Refers to Standard & Poor’s Stand-Alone Credit Profile (SACP), Moody’s Baseline Credit Assessment (BCA) and Fitch’s Viability Rating (VR).
 
As at 30 June 2017, all solicited ratings with all agencies remained unchanged since 31 December 2016. S&P affirmed Barclays’ ratings in May 2017 as part of their periodic review.
 
Barclays’ ratings outlooks for Moody’s and S&P remain negative following the outcome of the EU referendum in June 2016, which were part of a wider review which saw the two agencies place several UK banks on negative outlooks whilst affirming the ratings. The ratings continue to carry a stable outlook with Fitch.
 
Barclays also solicits issuer ratings from R&I for local issuances purposes in Japan and the ratings of A for Barclays Bank PLC and A- for Barclays PLC and were affirmed in July 2017 with stable outlooks.
 
 
51
 
CRD IV capital
 
Barclays’ current regulatory requirement is to meet a fully loaded CET1 ratio comprising the required 4.5% Pillar 1 minimum CET1 requirement and, phased in from 2016, a Combined Buffer Requirement. This currently comprises a Capital Conservation Buffer (CCB) and a Global Systemically Important Institution (G-SII) buffer determined by the PRA in line with guidance from the Financial Stability Board (FSB). Both buffers are subject to phased implementation at 25% per annum from 2016 with full effect from 2019. The CCB has been set at 2.5% with 1.25% applicable for 2017. The G-SII buffer for 2017 has been set at 2% with 1% applicable for 2017. On 21 November 2016 the FSB confirmed that the G-SII buffer for 2018 will be 1.5% with 1.1% applicable for 2018.
 
The Combined Buffer Requirement also includes a Counter-Cyclical Capital Buffer (CCyB) and a Systemic Risk Buffer (SRB). On 27 June 2017 the Financial Policy Committee (FPC) increased the UK CCyB rate from 0% to 0.5% applicable from 27 June 2018. Other national authorities also determine the appropriate CCyBs that should be applied to exposures in their jurisdiction. CCyBs have started to apply for Barclays’ exposures to other jurisdictions; however based on current exposures these are not material. No SRB has been set to date.
 
In addition, Barclays’ Pillar 2A requirement as per the PRA’s Individual Capital Guidance (ICG) for 2017 based on a point in time assessment is 4.2% of which 56% needs to be met in CET1 form, equating to approximately 2.3% of RWAs. The Pillar 2A requirement is subject to at least annual review.
 
For regulatory reporting purposes, BAGL is treated on a proportional consolidated basis based on a Barclays’ holding in BAGL of 23.4%.
 
As at 30 June 2017 Barclays’ CET1 ratio was 13.1% which exceeds the 2017 transitional minimum requirement of 9.1% including the minimum 4.5% CET1 ratio requirement, 2.3% of Pillar 2A, a 1.25% CCB buffer, a 1% G-SII buffer and a 0% CCyB.
 
 
Capital ratios 
As at
As at
As at
30.06.17
31.03.17
31.12.16
Fully loaded CET11,2
13.1%
12.5%
12.4%
PRA Transitional Tier 13,4
16.6%
15.8%
15.6%
PRA Transitional Total Capital3,4
20.7%
19.6%
19.6%
 
 
 
 
Capital resources 
£m
£m
£m
Shareholders' equity (excluding non-controlling interests) per the balance sheet
63,866
65,536
64,873
Less: other equity instruments (recognised as AT1 capital)
(7,694)
(7,690)
(6,449)
Adjustment to retained earnings for foreseeable dividends
(303)
(519)
(388)
 
 
 
 
Minority interests (amount allowed in consolidated CET1)
-
1,864
1,825
 
 
 
 
Other regulatory adjustments and deductions:
 
 
 
Additional value adjustments (PVA)
(1,494)
(1,618)
(1,571)
Goodwill and intangible assets
(7,756)
(8,142)
(9,054)
Deferred tax assets that rely on future profitability excluding temporary differences
(346)
(421)
(494)
Fair value reserves related to gains or losses on cash flow hedges
(1,576)
(1,956)
(2,104)
Excess of expected losses over impairment
(1,179)
(1,286)
(1,294)
Gains or losses on liabilities at fair value resulting from own credit
58
(28)
86
Defined-benefit pension fund assets
(542)
(753)
(38)
Direct and indirect holdings by an institution of own CET1 instruments
(50)
(50)
(50)
Deferred tax assets arising from temporary differences (amount above 10% threshold)
(115)
(39)
(183)
Other regulatory adjustments
(35)
40
45
Fully loaded CET1 capital 
42,834
44,938
45,204
 
 
 
 
Additional Tier 1 (AT1) capital
 
 
 
Capital instruments and related share premium accounts
7,694
7,690
6,449
Qualifying AT1 capital (including minority interests) issued by subsidiaries
3,843
4,576
5,445
Other regulatory adjustments and deductions
(130)
(131)
(130)
Transitional AT1 capital5
11,407
12,135
11,764
PRA Transitional Tier 1 capital
54,241
57,073
56,968
 
 
 
 
Tier 2 (T2) capital
 
 
 
Capital instruments and related share premium accounts
5,198
3,724
3,769
Qualifying T2 capital (including minority interests) issued by subsidiaries
8,486
10,153
11,366
Other regulatory adjustments and deductions
(252)
(257)
(257)
PRA Transitional total regulatory capital
67,673
70,693
71,846
 
1
The transitional regulatory adjustments to CET1 capital are no longer applicable resulting in CET1 capital on a fully loaded basis being equal to that on a transitional basis.
2
The CRD IV CET1 ratio (FSA October 2012 transitional statement) as applicable to Barclays’ Tier 2 Contingent Capital Notes was 13.7% based on £44.8bn of transitional CRD IV CET1 capital and £327bn of RWAs.
3
The PRA transitional capital is based on the PRA Rulebook and accompanying supervisory statements.
4
As at 30 June 2017, Barclays’ fully loaded Tier 1 capital was £50,398m, and the fully loaded Tier 1 ratio was 15.4%. Fully loaded total regulatory capital was £64,709m and the fully loaded total capital ratio was 19.8%. The fully loaded Tier 1 capital and total capital measures are calculated without applying the transitional provisions set out in CRD IV and assessing compliance of AT1 and T2 instruments against the relevant criteria in CRD IV.
5
Of the £11.4bn transitional AT1 capital, fully loaded AT1 capital used for the leverage ratio comprises the £7.7bn capital instruments and related share premium accounts and £0.1bn capital deductions. It excludes legacy Tier 1 capital instruments issued by subsidiaries that are subject to grandfathering.
 
 
Movement in CET1 capital
Three months
Half year
ended
ended
30.06.17
30.06.17
£m
£m
Opening CET1 capital
44,938
45,204
 
 
 
Loss for the period attributable to equity holders
(1,239)
(910)
Own credit relating to derivative liabilities
64
79
Dividends paid and foreseen
(241)
(473)
Decrease in retained regulatory capital generated from earnings
(1,416)
(1,304)
 
 
 
Net impact of share schemes
272
(163)
Available for sale reserves
(7)
58
Currency translation reserves
947
705
Other reserves
(372)
(934)
Increase/(decrease) in other qualifying reserves
840
(334)
 
 
 
Retirement benefit reserve
(416)
(29)
Defined-benefit pension fund asset deduction
211
(504)
Net impact of pensions
(205)
(533)
 
 
 
Minority interests
(1,864)
(1,825)
Additional value adjustments (PVA)
124
77
Goodwill and intangible assets
386
1,298
Deferred tax assets that rely on future profitability excluding those arising from temporary differences
75
148
Excess of expected loss over impairment
107
115
Deferred tax assets arising from temporary differences (amount above 10% threshold)
(76)
68
Other regulatory adjustments
(75)
(80)
Decrease in regulatory capital due to adjustments and deductions
(1,323)
(199)
 
 
 
Closing CET1 capital
42,834
42,834
 
CET1 capital decreased £2.4bn to £42.8bn (December 2016: £45.2bn) due to the following:
 
●
 
A £0.9bn loss for the period attributable to equity holders. £1.4bn profit after tax in respect of continuing operations was more than offset by losses in discontinued operation of £2.3bn. These losses, resulting from the impairment of Barclays’ holding in BAGL allocated to goodwill and the recycling of BAGL currency translation reserve losses to the income statement, had no impact on CET1 capital with offsetting movements in the goodwill and intangible assets deduction and other qualifying reserves
●
 
A £0.5bn decrease for dividends paid and foreseen
●
 
A £0.7bn increase in the currency translation reserve largely due to the £1.4bn recycling of losses in BAGL to the income statement which were offset by a £0.6bn decrease due to the appreciation of GBP against USD and JPY
●
 
A £0.9bn decrease in other qualifying reserves which included a £0.5bn decrease as a result of USD preference share redemptions, and £0.4bn separation payments in relation to the partial BAGL disposal
●
 
A £0.5bn decrease net of tax as a result of movements relating to pensions. The pension asset capital deduction increased due to the UKRF, which is the Group’s main pension scheme, moving from a small deficit in December 2016 to a £0.7bn surplus largely due to contributions in the period
●
 
A £1.8bn decrease due to BAGL minority interests which are no longer eligible under proportional consolidation
●
 
A £1.3bn increase due to the goodwill and a decrease in the intangible assets deduction largely as a result of the impairment of Barclays’ holding in BAGL allocated to goodwill
 
 
Risk weighted assets (RWAs) by risk type and business
 
Credit risk
 
Counterparty credit risk
 
 
Market risk
 
Operational risk
Total RWAs
 
Std
IRB
 
Std
IRB
Settle-ment Risk
CVA
 
Std
IMA
 
 
 
As at 30.06.17
£m
£m
 
£m
£m
£m
£m
 
£m
£m
 
£m
£m
Barclays UK
3,768
49,979
 
3
-
-
31
 
-
-
 
12,338
66,119
Barclays International
49,382
81,109
 
15,456
13,962
32
2,205
 
11,100
11,460
 
27,538
212,244
Head Office1
2,612
7,891
 
68
535
-
207
 
146
1,876
 
12,871
26,206
Barclays Core
55,762
138,979
 
15,527
14,497
32
2,443
 
11,246
13,336
 
52,747
304,569
Barclays Non-Core
2,627
9,102
 
874
4,072
-
590
 
294
1,373
 
3,913
22,845
Barclays Group
58,389
148,081
 
16,401
18,569
32
3,033
 
11,540
14,709
 
56,660
327,414
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As at 31.03.17
 
 
 
 
 
 
 
 
 
 
 
 
 
Barclays UK
4,629
49,330
 
-
-
1
43
 
-
-
 
12,338
66,341
Barclays International
50,609
83,643
 
15,942
14,007
77
2,251
 
10,481
9,716
 
27,538
214,264
Head Office1
9,182
25,660
 
99
1,040
-
851
 
567
2,716
 
12,746
52,861
Barclays Core
64,420
158,633
 
16,041
15,047
78
3,145
 
11,048
12,432
 
52,622
333,466
Barclays Non-Core
4,036
9,396
 
1,034
5,106
-
638
 
337
2,827
 
4,038
27,412
Barclays Group
68,456
168,029
 
17,075
20,153
78
3,783
 
11,385
15,259
 
56,660
360,878
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As at 31.12.16
 
 
 
 
 
 
 
 
 
 
 
 
 
Barclays UK
5,592
49,591
 
47
-
-
-
 
-
-
 
12,293
67,523
Barclays International
53,201
82,327
 
13,515
13,706
30
3,581
 
9,343
9,460
 
27,538
212,701
Head Office1
9,048
27,122
 
77
1,157
-
927
 
482
2,323
 
12,156
53,292
Barclays Core
67,841
159,040
 
13,639
14,863
30
4,508
 
9,825
11,783
 
51,987
333,516
Barclays Non-Core
4,714
9,945
 
1,043
6,081
37
2,235
 
477
2,928
 
4,673
32,133
Barclays Group
72,555
168,985
 
14,682
20,944
67
6,743
 
10,302
14,711
 
56,660
365,649
 
 
 
Movement analysis of RWAs
 
Credit risk
Counterparty credit risk
Market risk
Operational risk
Total RWAs
 
£bn
£bn
£bn
£bn
£bn
As at 01.01.17
241.5
42.4
25.0
56.7
365.6
Book size
(2.1)
(2.6)
2.8
-
(1.9)
Acquisitions and disposals
(27.7)
(1.3)
(1.5)
-
(30.5)
Book quality
(1.3)
0.1
0.1
-
(1.1)
Model updates
(1.4)
-
-
-
(1.4)
Methodology and policy
0.1
(0.6)
(0.2)
-
(0.7)
Foreign exchange movements2
(2.6)
-
-
-
(2.6)
As at 30.06.17
206.5
38.0
26.2
56.7
327.4
 
 
1
Includes Africa Banking RWAs.
2
Foreign exchange movement does not include FX for counterparty risk or market risk.
 
RWAs decreased £38.2bn to £327.4bn, primarily driven by a £27.9bn reduction as a result of the proportional consolidation of BAGL, as well as portfolio rundowns and disposals in Non-Core.
 
Leverage ratio and exposures
 
Barclays is subject to a leverage ratio requirement that is implemented on a phased basis, with a transitional requirement of 3.4% as at 30 June 2017; this comprises of the 3% minimum requirement, a transitional G-SII additional leverage ratio buffer (G-SII ALRB) and a countercyclical leverage ratio buffer (CCLB). Based on both future and proposed requirements the expected end point leverage requirement is 4.0%. Additionally, the CRR fully loaded leverage requirement is currently expected at 3%, although this may be impacted by the Basel Consultation on the Leverage Framework.
 
 
Barclays is required to disclose a UK leverage ratio which is based on capital and exposure measures on the last day of the quarter; as well as an average UK leverage ratio based on the last day of each month in the quarter. Both approaches exclude qualifying cash at central banks from the calculation of leverage exposure. There is also a CRR leverage ratio disclosure requirement, which is based on the end point CRR definition of Tier 1 capital and the CRR definition of leverage exposure.
 
 
At 30 June 2017, Barclays’ UK leverage ratio was 5.0% (December 2016: 5.0%) and the average UK leverage ratio was 4.8% (December 2016: 4.5%), which exceeds the transitional leverage requirement for Barclays of 3.4%, and expected end point leverage requirement of 4.0%. The CRR leverage ratio was 4.5% (December 2016: 4.6%).
 
UK leverage ratio
As at 30.06.17
As at 31.03.17
As at 31.12.16
£bn
£bn
£bn
Average UK leverage exposure
1,092
1,130
1,137
Fully loaded Tier 1 capital (quarterly month end average)
52.1
52.3
51.6
Average UK leverage ratio
4.8%
4.6%
4.5%
UK leverage ratio
5.0%
4.8%
5.0%
 
 
 
 
 
CRR leverage ratio
 
 
 
Accounting assets
 
 
 
Derivative financial instruments
260
271
347
Cash collateral
58
60
67
Reverse repurchase agreements and other similar secured lending
17
18
13
Financial assets designated at fair value1
107
96
79
Loans and advances and other assets
693
759
707
Total IFRS assets
1,135
1,204
1,213
 
 
 
 
Regulatory consolidation adjustments
10
(4)
(6)
 
 
 
 
Derivatives adjustments
 
 
 
Derivatives netting
(235)
(244)
(313)
Adjustments to cash collateral
(47)
(51)
(50)
Net written credit protection
12
13
12
Potential Future Exposure (PFE) on derivatives
127
137
136
Total derivatives adjustments
(143)
(145)
(215)
 
 
 
 
Securities financing transactions (SFTs) adjustments
24
35
29
 
 
 
 
Regulatory deductions and other adjustments
(13)
(14)
(15)
Weighted off-balance sheet commitments
109
121
119
CRR leverage exposure
1,122
1,197
1,125
Fully loaded CET 1 capital
42.8
44.9
45.2
Fully loaded AT1 capital
7.6
8.0
6.8
Fully loaded Tier 1 capital
50.4
53.0
52.0
 
 
 
 
CRR leverage ratio
4.5%
4.4%
4.6%
 
1
Included within financial assets designated at fair value reverse repurchase agreements designated at fair value of £88bn (December 2016: £63bn).
 
 
The average UK leverage exposure as at 30 June 2017, which excludes qualifying central bank claims, was £1,092bn (December 2016: £1,137bn), resulting in an average UK leverage ratio of 4.8% (December 2016: 4.5%). The CET1 capital held against the 0.35% transitional G-SII ALRB was £3.5bn. The impact of CCLB is currently nil.
 
The CRR leverage ratio decreased to 4.5% (December 2016: 4.6%) primarily driven by a £1.6bn decrease in fully loaded Tier 1 capital to £50.4bn (December 2016: £52.0bn):
 
●
 
Loans and advances and other assets decreased by £14bn to £693bn. This was driven primarily by a £67bn decrease in assets held for sale mainly due to the disposal of Barclays’ holding in BAGL; £44bn increase in cash and balances at central banks mainly due to an increase in the cash contributions to the Group liquidity pool; £17bn increase in settlement balances; £17bn decrease in lending for Barclays International and a £10bn increase in trading portfolio assets due to client activity
●
 
Reverse repurchase agreements increased £29bn to £105bn, primarily due to an increase in matched book trading
●
 
Net derivative leverage exposures, excluding net written credit protection and PFE on derivatives, decreased £15bn to £36bn due to a decrease in cash collateral and a reduction in IFRS derivatives mainly due to decrease in interest rate derivatives, continued rundown of Non-Core assets and decrease in foreign exchange derivatives
●
 
Regulatory consolidation adjustments increased £16bn to £10bn primarily due to the proportional consolidation of BAGL for regulatory purposes
●
 
Potential future exposure on derivatives decreased £9bn to £127bn primarily due to portfolio rundown in Non-Core
 
The difference between the average UK leverage ratio and the CRR leverage ratio was primarily driven by the exemption of qualifying central bank claims partially offset by higher positions for April and May within assets held for sale prior to the BAGL disposal, trading portfolio assets and settlement balances.
 
Additional Barclays’ regulatory disclosures prepared in accordance with the EBA Guidelines on materiality, proprietary and confidentiality and on disclosure frequency under Articles 432(1), 432(2) and 433 of Regulation (EU) No 575/2013 (EBA/GL/2014/14) and EBA Guidelines on disclosure requirements under Part Eight of Regulation (EU) No 575/2013 will be disclosed on 25th August 2017, available at home.barclays/results.
 
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 interim financial statements set out on pages 52 to 57 have been prepared in accordance with International Accounting Standard 34, ‘Interim Financial Reporting’, as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by Disclosure and Transparency Rules 4.2.7R and 4.2.8R namely:
 
●
 
an indication of important events that have occurred during the six months ended 30 June 2017 and their impact on the condensed consolidated interim financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year
●
 
any related party transactions in the six months ended 30 June 2017 that have materially affected the financial position or performance of Barclays during that period and any changes in the related party transactions described in the last Annual Report that could have a material effect on the financial position or performance of Barclays in the six months ended 30 June 2017.
 
 
Signed on behalf of the Board by
 
James E Staley                Tushar Morzaria  
Group Chief Executive     Group Finance Director
 
Barclays PLC Board of Directors:
 
Chairman
John McFarlane
Executive Directors
James E Staley (Group Chief Executive)
Tushar Morzaria (Group Finance Director)
 
Non-executive Directors
Mike Ashley
Tim Breedon CBE
Sir Ian Cheshire
Mary Francis CBE
Crawford Gillies
Sir Gerry Grimstone
Reuben Jeffery III
Dambisa Moyo
Diane Schueneman
 
 
Independent Review Report to Barclays PLC
 
Independent review report to Barclays PLC
 
Conclusion
 
We have been engaged by the company to review the condensed set of financial statements in the Results Announcement for the six months ended 30 June 2017 which comprises:
 
 
●
the condensed consolidated income statement and condensed consolidated statement of comprehensive income for the period then ended;
 
●
the condensed consolidated balance sheet as at 30 June 2017;
 
●
the condensed consolidated statement of changes in equity for the period then ended;
 
●
the condensed consolidated cash flow statement for the period then ended; and
 
●
the related explanatory notes.
 
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Results Announcement for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the Disclosure Guidance and Transparency Rules (“the DTR”) of the UK’s Financial Conduct Authority (“the UK FCA”).
 
Scope of review
 
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. We read the other information contained in the Results Announcement and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
 
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
 
Directors’ responsibilities
 
The Results Announcement is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Results Announcement in accordance with the DTR of the UK FCA.
 
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as adopted by the EU. The directors are responsible for preparing the condensed set of financial statements included in the Results Announcement in accordance with IAS 34 as adopted by the EU.
 
Our responsibility
 
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the Results Announcement based on our review.
 
The purpose of our review work and to whom we owe our responsibilities
 
This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the DTR of the UK FCA. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.
 
KPMG LLP
Chartered Accountants
15 Canada Square
London, E14 5GL
 
27 July 2017
 
 
Condensed Consolidated Financial Statements
 
 Condensed consolidated income statement (unaudited)
 
 
Half year ended
Half year ended
 
 
30.06.17
30.06.16
Continuing operations
Notes1
£m
£m
Net interest income
 
5,098
5,218
Net fee and commission income
 
3,550
3,299
Net trading income
 
1,667
1,545
Net investment income
 
528
914
Other income
 
38
37
Total income
 
10,881
11,013
Credit impairment charges and other provisions
 
(1,054)
(931)
Net operating income
 
9,827
10,082
 
 
 
 
Staff costs
2
(4,460)
(4,601)
Administration and general expenses
3
(3,272)
(3,096)
Operating expenses
 
(7,732)
(7,697)
 
 
 
 
Profit/(loss) on disposal of undertakings and share of results of associates and joint ventures
 
246
(322)
Profit before tax
 
2,341
2,063
Tax
5
(778)
(715)
Profit after tax in respect of continuing operations
 
1,563
1,348
(Loss)/profit after tax in respect of discontinued operation
4
(2,195)
311
(Loss)/profit after tax
 
(632)
1,659
 
 
 
 
Attributable to:
 
 
 
Ordinary equity holders of the parent
 
(1,211)
1,110
Other equity holders2
 
301
208
Total equity holders2
 
(910)
1,318
 
 
 
 
Profit attributable to non-controlling interests in respect of continuing operations
6
138
186
Profit attributable to non-controlling interests in respect of discontinued operation
6
140
155
(Loss)/profit after tax
 
(632)
1,659
 
 
 
 
Earnings per share
 
p
p
Basic (loss)/earnings per ordinary share2
7
(6.6)
6.9
Basic earnings per ordinary share in respect of continuing operations
7
7.1
6.0
Basic (loss)/earnings per ordinary share in respect of discontinued operation
7
(13.7)
0.9
Diluted (loss)/earnings per ordinary share2
7
(6.5)
6.8
Diluted earnings per ordinary share in respect of continuing operations
7
7.0
5.9
 
1
For notes to the Financial Statements see pages 58 to 93.
2
The profit after tax attributable to other equity holders of £301m (H116: £208m) is offset by a tax credit recorded in reserves of £82m (H116: £58m). The net amount of £219m (H116: £150m), along with non-controlling interests (NCI) is deducted from profit after tax in order to calculate earnings per share and return on average shareholders’
equity.
 
 
 
Condensed consolidated statement of comprehensive income (unaudited)
 
 
 
 
 
 
Half year ended
Half year ended
 
 
30.06.17
30.06.16
 
Notes1
£m
£m
(Loss)/profit after tax
 
(632)
1,659
Profit after tax in respect of continuing operations
 
1,563
1,348
(Loss)/profit after tax in respect of discontinued operation
 
(2,195)
311
 
 
 
 
Other comprehensive (loss)/income that may be recycled to profit or loss from continuing operations:
 
Currency translation reserve
17
(635)
1,789
Available for sale reserve
17
69
(311)
Cash flow hedge reserve
17
(531)
1,747
Other
 
15
(2)
Other comprehensive (loss)/income that may be recycled to profit or loss from continuing operations
 
(1,082)
3,223
 
 
 
 
Other comprehensive loss not recycled to profit or loss from continuing operations:
 
Retirement benefit measurements
14
(29)
(759)
Own credit2
 
22
-
Other comprehensive loss not recycled to profit or loss from continuing operations
 
(7)
(759)
 
 
 
 
Other comprehensive (loss)/income for the period from continuing operations
 
(1,089)
2,464
 
 
 
 
Other comprehensive income for the period from discontinued operation
 
1,301
985
 
 
 
 
Total comprehensive (loss)/income for the period:
 
 
 
Total comprehensive income for the period, net of tax from continuing operations
 
474
3,812
Total comprehensive (loss)/income for the period, net of tax from discontinued operation
 
(894)
1,296
Total comprehensive (loss)/income for the period
 
(420)
5,108
 
 
 
 
Attributable to:
 
 
 
Equity holders of the parent
 
(666)
4,358
Non-controlling interests
 
246
750
Total comprehensive (loss)/income for the period
 
(420)
5,108
 
1
For notes to the Financial Statements see pages 58 to 93.
2
As a result of the early adoption of the own credit provisions of IFRS 9 on 1 January 2017, own credit which was previously recorded in the income statement is now recognised within other comprehensive income. The cumulative unrealised own credit net loss of £175m has therefore been reclassified from retained earnings to a separate own
credit reserve, within Other reserves. During H117 a £22m gain on own credit has been booked in the reserve.
 
 
 
Condensed consolidated balance sheet (unaudited)
 
 
As at
As at
 
 
30.06.17
31.12.16
Assets
Notes1
£m
£m
Cash and balances at central banks
 
146,063
102,353
Items in the course of collection from other banks
 
1,226
1,467
Trading portfolio assets
 
90,698
80,240
Financial assets designated at fair value
 
107,197
78,608
Derivative financial instruments
10
259,851
346,626
Financial investments
9
61,771
63,317
Loans and advances to banks
 
37,108
43,251
Loans and advances to customers
 
390,004
392,784
Reverse repurchase agreements and other similar secured lending
 
17,209
13,454
Current and deferred tax assets
5
4,901
5,430
Prepayments, accrued income and other assets
 
3,072
2,893
Investments in associates and joint ventures
 
715
684
Goodwill and intangible assets
 
7,724
7,726
Property, plant and equipment
 
2,749
2,825
Retirement benefit assets
14
709
14
Assets included in disposal groups classified as held for sale
4
4,319
71,454
Total assets
 
1,135,316
1,213,126
 
 
 
 
Liabilities
 
 
 
Deposits from banks
 
48,887
48,214
Items in the course of collection due to other banks
 
778
636
Customer accounts
 
436,863
423,178
Repurchase agreements and other similar secured borrowing
 
38,578
19,760
Trading portfolio liabilities
 
40,470
34,687
Financial liabilities designated at fair value
 
125,348
96,031
Derivative financial instruments
10
260,765
340,487
Debt securities in issue2
 
76,664
75,932
Subordinated liabilities
12
23,879
23,383
Accruals, deferred income and other liabilities
 
6,533
8,871
Current and deferred tax liabilities
5
371
766
Provisions
13
3,930
4,134
Retirement benefit liabilities
14
329
390
Liabilities included in disposal groups classified as held for sale
4
5,658
65,292
Total liabilities
 
1,069,053
1,141,761
 
 
 
 
Equity
 
 
 
Called up share capital and share premium
15
21,998
21,842
Other reserves
17
6,148
6,051
Retained earnings
 
28,026
30,531
Shareholders' equity attributable to ordinary shareholders of parent
 
56,172
58,424
Other equity instruments
16
7,694
6,449
Total equity excluding non-controlling interests
 
63,866
64,873
Non-controlling interests
6
2,397
6,492
Total equity
 
66,263
71,365
Total liabilities and equity
 
1,135,316
1,213,126
 
1
For notes to the Financial Statements see pages 58 to 93.
2
Debt securities in issue include covered bonds of £10.0bn (December 2016: £12.4bn).
 
 
 
Condensed consolidated statement of changes in equity (unaudited)
 
Called up share capital and share premium1
Other equity instruments1
Other reserves1
Retained earnings
Total
Non-controlling interests2
Total equity
Half year ended 30.06.17
£m
£m
£m
£m
£m
£m
£m
Balance as at 31 December 2016
21,842
6,449
6,051
30,531
64,873
6,492
71,365
Effects of changes in accounting policies3
-
-
(175)
175
-
-
-
Balance as at 1 January 2017
21,842
6,449
5,876
30,706
64,873
6,492
71,365
Profit after tax
-
301
-
1,124
1,425
138
1,563
Currency translation movements
-
-
(634)
-
(634)
(1)
(635)
Available for sale investments
-
-
69
-
69
-
69
Cash flow hedges
-
-
(531)
-
(531)
-
(531)
Retirement benefit remeasurements
-
-
-
(29)
(29)
-
(29)
Own credit
-
-
22
-
22
-
22
Other
-
-
-
15
15
-
15
Total comprehensive income net of tax from continuing operations
-
301
(1,074)
1,110
337
137
474
Total comprehensive income net of tax from discontinued operation
-
-
1,332
(2,335)
(1,003)
109
(894)
Total comprehensive income for the period
-
301
258
(1,225)
(666)
246
(420)
Issue of new ordinary shares
107
-
-
-
107
-
107
Issue of shares under employee share schemes
49
-
-
284
333
-
333
Issue and exchange of other equity instruments
-
1,245
-
-
1,245
-
1,245
Coupons paid on other equity instruments
-
(301)
-
82
(219)
-
(219)
Redemption of preference shares
-
-
-
(473)
(473)
(657)
(1,130)
Treasury shares
-
-
14
(617)
(603)
-
(603)
Dividends paid
-
-
-
(339)
(339)
(307)
(646)
Net equity impact of partial BAGL disposal
-
-
-
(359)
(359)
(3,443)
(3,802)
Other movements
-
-
-
(33)
(33)
66
33
Balance as at 30 June 2017
21,998
7,694
6,148
28,026
63,866
2,397
66,263
 
 
 
 
 
 
 
 
Half year ended 31.12.16
 
 
 
 
 
 
 
Balance as at 1 July 2016
21,763
5,314
5,695
30,082
62,854
6,566
69,420
Profit after tax
-
249
-
480
729
160
889
Currency translation movements
-
-
1,234
-
1,234
1
1,235
Available for sale investments
-
-
(76)
-
(76)
-
(76)
Cash flow hedges
-
-
(949)
-
(949)
-
(949)
Retirement benefit remeasurements
-
-
-
(221)
(221)
-
(221)
Other
-
-
-
15
15
-
15
Total comprehensive income net of tax from continuing operations
-
249
209
274
732
161
893
Total comprehensive income net of tax from discontinued operation
-
-
116
27
143
672
815
Total comprehensive income for the period
-
249
325
301
875
833
1,708
Issue of new ordinary shares
40
-
-
-
40
-
40
Issue of shares under employee share schemes
39
-
-
442
481
-
481
Issue and exchange of other equity instruments
-
1,132
-
-
1,132
-
1,132
Coupons paid on other equity instruments
-
(249)
-
70
(179)
-
(179)
Redemption of preference shares
-
-
-
(164)
(164)
(620)
(784)
Treasury shares
-
-
31
(31)
-
-
-
Dividends paid
-
-
-
(169)
(169)
(295)
(464)
Net equity impact of partial BAGL disposal
-
-
-
-
-
-
-
Other movements
-
3
-
-
3
8
11
Balance as at 31 December 2016
21,842
6,449
6,051
30,531
64,873
6,492
71,365
 
1
        Details of Called up share capital and share premium, Other equity instruments and Other reserves are shown on pages 78 to 79.
2
Details of Non-controlling interests are shown on page 63.
3
As a result of the early adoption of the own credit provisions of IFRS 9 on 1 January 2017, own credit which was previously recorded in the income statement is now recognised within other comprehensive income. The cumulative unrealised own credit net loss of £175m has therefore been reclassified from retained earnings to a separate own
credit reserve, within Other reserves. During H117 a £22m gain on own credit has been booked in the reserve.
 
 
Condensed consolidated statement of changes in equity (unaudited)
 
Called up share capital and share premium1
Other equity instruments1
Other reserves1
Retained earnings
Total
Non-controlling interests2
Total equity
Half year ended 30.06.16
£m
£m
£m
£m
£m
£m
£m
Balance as at 1 January 2016
21,586
5,305
1,898
31,021
59,810
6,054
65,864
Profit after tax
-
208
-
954
1,162
186
1,348
Currency translation movements
-
-
1,788
-
1,788
1
1,789
Available for sale investments
-
-
(311)
-
(311)
-
(311)
Cash flow hedges
-
-
1,747
-
1,747
-
1,747
Retirement benefit remeasurements
-
-
-
(759)
(759)
-
(759)
Other
-
-
-
(3)
(3)
1
(2)
Total comprehensive income net of tax from continuing operations
-
208
3,224
192
3,624
188
3,812
Total comprehensive income net of tax from discontinued operation
-
-
578
156
734
562
1,296
Total comprehensive income for the period
-
208
3,802
348
4,358
750
5,108
Issue of new ordinary shares
28
-
-
-
28
-
28
Issue of shares under employee share schemes
149
-
-
226
375
-
375
Coupons paid on other equity instruments
-
(208)
-
58
(150)
-
(150)
Redemption of preference shares
-
-
-
(253)
(253)
(550)
(803)
Treasury shares
-
-
(5)
(384)
(389)
-
(389)
Dividends paid
-
-
-
(588)
(588)
(280)
(868)
Net equity impact of partial BAGL disposal
-
-
-
(349)
(349)
601
252
Other movements
-
9
-
3
12
(9)
3
Balance as at 30 June 2016
21,763
5,314
5,695
30,082
62,854
6,566
69,420
 
 
 
 
 
 
 
 
 
1
Details of Called up share capital and share premium, Other equity instruments and Other reserves are shown on pages 78 to 79.
2
Details of Non-controlling interests are shown on page 63.
 
 
Condensed consolidated cash flow statement (unaudited)
 
 
 
 
 
Half year ended
Half year ended
 
 
30.06.17
30.06.16
 
Notes1
£m
£m
Continuing operations
 
 
 
Profit before tax
 
             2,341
            2,063
Adjustment for non-cash items
 
           1,041
         (8,913)
Changes in operating assets and liabilities
 
          32,088
          25,129
Corporate income tax paid
 
           (530)
           (394)
Net cash from operating activities
 
         34,940
         17,885
Net cash from investing activities
 
            2,043
         14,376
Net cash from financing activities
 
              287
        (1,709)
Effect of exchange rates on cash and cash equivalents
 
        (1,092)
            6,897
Net increase in cash and cash equivalents from continuing operations
 
         36,178
         37,449
Net cash from discontinued operation
4
                101
              371
Net increase in cash and cash equivalents
 
         36,279
        37,820
Cash and cash equivalents at beginning of the period
 
        144,110
        86,556
Cash and cash equivalents at end of the period
 
       180,389
      124,376
 
1
For notes to the Financial Statements see pages 58 to 93.
 
 
Financial Statement Notes
 
1. Basis of preparation
 
These condensed consolidated interim financial statements for the six months ended 30 June 2017 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, ‘Interim Financial Reporting’, as published by the IASB and adopted by the European Union. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2016, which have been prepared in accordance with IFRSs as adopted by the European Union.
 
The accounting policies and methods of computation used in these condensed consolidated interim financial statements are the same as those used in the Barclays 2016 Annual Report, except for the option in IFRS 9 to recognise changes in own credit in other comprehensive income, which Barclays has applied from 1 January 2017 as detailed in Note 17. This will have no effect on net assets, and any changes due to own credit in prior periods have not been restated. Any realised and unrealised amounts recognised in other comprehensive income will not be reclassified to the income statement in future periods.
 
Future accounting developments
 
IFRS 9 – Financial instruments
 
IFRS 9 Financial Instruments which will replace IAS 39 Financial Instruments: Recognition and Measurement is effective for periods beginning on or after 1 January 2018 and was endorsed by the EU in November 2016. IFRS 9, in particular the impairment requirements, will lead to significant changes in the accounting for financial instruments. Barclays will not restate comparatives on initial application of IFRS 9 on 1 January 2018 but will provide detailed transition disclosures in accordance with the amended requirements of IFRS 7.
 
Barclays has a jointly accountable Risk and Finance IFRS 9 implementation programme with representation from all impacted departments.
 
In respect of the impairment and classification and measurement implementation programmes for financial assets, work has continued to prepare for adoption on 1 January 2018, with the focus during 2017 on quantifying impact, model validation and finalising processes, governance and controls.
 
As permitted by IFRS 9, Barclays will continue applying the IAS 39 hedge accounting requirements but will provide the new hedge accounting disclosures required by the amended IFRS 7.
 
Since the publication of the 2016 Annual Report, the IASB has issued an Exposure Draft potentially impacting financial assets with prepayment features with negative compensation. Such prepayment features are present in some fixed rate corporate and investment bank loans. If such loans are concluded to be measured at fair value through profit or loss, the potential impact on opening equity and profit or loss would depend on their fair values compared to their carrying amounts, and the future changes in fair value. The IASB is currently considering comments received on the proposals.
 
Barclays will disclose the financial impact estimates when the implementation programme, validation and testing is further advanced, which is expected to be no later than the Barclays Annual Report 2017.
 
For further information on this and other new standards refer to the Barclays 2016 Annual Report.
 
Going concern
Having reassessed the principal risks, the directors considered it appropriate to adopt the going concern basis of accounting in preparing the interim financial information.
 
2.  Staff costs
 
 
Half year ended
Half year ended
 
30.06.17
30.06.16
Compensation costs
£m
£m
Current year bonus charges
558
393
Deferred bonus charge
340
369
Commissions and other incentives1
58
35
Performance costs
956
797
Salaries
1,968
2,056
Social security costs
297
303
Post-retirement benefits
253
245
Other compensation costs
189
179
Total compensation costs
3,663
3,580
 
 
 
Other resourcing costs
 
 
Outsourcing
579
460
Redundancy and restructuring
23
266
Temporary staff costs
167
250
Other
28
45
Total other resourcing costs
797
1,021
 
 
 
Total staff costs
4,460
4,601
 
 
 
Group compensation as % of income
37
36
 
1
Amounts previously included in 2016 as commitments are now included in current and deferred bonus charges for consistency with 2017.
 
Total staff costs decreased 3% to £4,460m, principally reflecting:
 
●
 
A decrease in other resourcing costs of 22% to £797m mainly due to a decrease in redundancy and restructuring costs following the non-recurrence of costs relating to strategic initiatives within the CIB in the previous year
●
 
An increase in Group performance costs of 20% to £956m due to changes in the granting of incentives awards to more closely align to the income statement charge as announced in the Barclays 2016 Results Announcement
 
No awards have yet been granted in relation to the 2017 bonus pool as decisions regarding incentive awards are not taken by the Remuneration Committee until the performance for the full year can be assessed. The current year bonus charge for the first six months represents an accrual for estimated costs in accordance with accounting requirements.
 
3.  Administration and general expenses
 
 
Half year
ended
Half year
ended
 
30.06.17
30.06.16
 
£m
£m
Infrastructure costs
 
 
Property and equipment
671
562
Depreciation of property, plant and equipment
228
242
Operating lease rentals
198
235
Amortisation of intangible assets
342
301
Impairment of property, equipment and intangible assets
23
82
Total infrastructure costs
1,462
1,422
 
 
 
Other costs
 
 
Consultancy, legal and professional fees
535
539
Subscriptions, publications, stationery and communications
284
333
Marketing, advertising and sponsorship
189
207
Travel and accommodation
74
68
Charges for PPI
700
400
Other administration and general expenses
28
127
Total other costs
1,810
1,674
 
 
 
Total administration and general expenses
3,272
3,096
 
 
 
 
4. Held for sale assets and discontinued operation
 
The Group applies IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.
 
On 1 March 2016, Barclays announced its intention to reduce the Group’s 62.3% interest in BAGL. On 5 May 2016, Barclays sold 12.2% of the Group’s interest in BAGL. On 1 June 2017, Barclays reduced its shareholding by a further 33.7%. As a result, Barclays accounts for a holding of 16.4% with an obligation to contribute to a BEE scheme leaving a residual holding of 14.9%. This resulted in accounting deconsolidation of BAGL from the Group as of 1 June 2017, with the holding recognised as an available for sale investment valued at £1,146m in Barclays’ financial statements.
 
Prior to the sale of shares on 1 June 2017, impairment of £1,090m was recognised under IFRS 5 against the net assets of BAGL. Impairment under IFRS 5 is calculated as the difference between fair value less disposal costs and the carrying value of the disposal group. The fair value is determined by reference to the quoted market price for BAGL and the opening foreign exchange rate for ZAR/GBP as at 1 June 2017. Payments of £0.7bn have been made following execution of separation agreements and the completion of the sale. As at 30 June 2017, a liability for the obligation to the BEE scheme of £105m is reflected on the balance sheet.
 
The remaining balance in held for sale predominantly relates to the disposal of the French retail and Zimbabwean businesses which are intended for disposal early in the second half of 2017.
 
 
 
As at
As at
 
30.06.17
31.12.16
Assets included in disposal groups classified as held for sale
£m
£m
Cash and balances at central banks
204
2,930
Items in the course of collection from other banks
17
570
Trading portfolio assets
-
3,084
Financial assets designated at fair value
1,365
6,984
Derivative financial instruments
-
1,992
Financial investments
1,915
7,737
Loans and advances to banks
172
1,666
Loans and advances to customers
1,020
43,504
Current and deferred tax assets
2
149
Prepayments, accrued income and other assets
8
696
Investments in associates and joint ventures
11
87
Goodwill and intangible assets
3
1,567
Property, plant and equipment
41
954
Retirement benefit assets
-
33
Total
4,758
71,953
Balance of impairment unallocated under IFRS 5
(439)
(499)
Total assets classified as held for sale
4,319
71,454
 
 
 
Liabilities included in disposal groups classified as held for sale
 
 
Deposits from banks
18
2,149
Items in the course of collection due to other banks
24
373
Customer accounts
2,477
42,431
Repurchase agreements and other similar secured borrowing
-
597
Trading portfolio liabilities
-
388
Financial liabilities designated at fair value
3,013
7,325
Derivative financial instruments
-
1,611
Debt securities in issue
-
7,997
Subordinated liabilities
-
934
Accruals, deferred income and other liabilities
79
1,180
Current and deferred tax liabilities
-
162
Provisions
14
103
Retirement benefit liabilities
33
42
Total liabilities classified as held for sale
5,658
65,292
 
 
 
Net (liabilities)/assets classified as held for sale
(1,339)
6,162
Expected contribution to BAGL
-
866
Disposal group post contribution
(1,339)
7,028
 
Prior to the sale of shares on 1 June 2017, BAGL met the requirements for presentation as a discontinued operation. As such, the results, which have been presented as the profit after tax and non-controlling interest in respect of the discontinued operation on the face of the Group income statement, are analysed in the income statement below. The income statement, statement of other comprehensive income and cash flow statement below represent five months of results as a discontinued operation to 31 May 2017, compared to the half year ended 30 June 2016.
 
 
Half year ended
Half year ended
Barclays Africa disposal group income statement
30.06.17
30.06.16
 
£m
£m
Net interest income
1,024
982
Net fee and commission income
522
479
Net trading income
149
130
Net investment income
30
21
Net premiums from insurance contracts
161
164
Other income
(16)
8
Total income
1,870
1,784
Net claims and benefits incurred on insurance contracts
(84)
(87)
Total income net of insurance claims
1,786
1,697
Credit impairment charges and other provisions
(177)
(244)
Net operating income
1,609
1,453
 
 
 
Staff costs
(586)
(522)
Administration and general expenses1
(1,634)
(498)
Operating expenses
(2,220)
(1,020)
 
 
 
Share of post-tax results of associates and joint ventures
5
2
(Loss)/profit before tax
(606)
435
Tax
(154)
(124)
(Loss)/profit after tax
(760)
311
 
 
 
Attributable to:
 
 
Equity holders of the parent
(900)
156
Non-controlling interests
140
155
(Loss)/profit after tax2
(760)
311
 
1
Includes impairment of £1,090m (H116: £nil).
2
Total loss in respect of the discontinued operation was £2,195m which includes £60m loss on sale and £1,375m loss on recycling of other comprehensive loss on reserves.
 
 
 
Half year ended
Half year ended
Statement of other comprehensive income from discontinued operation
30.06.17
30.06.16
 
£m
£m
Available for sale assets
(3)
1
Currency translation reserves
(38)
534
Cash flow hedge reserves
19
43
Other comprehensive (loss)/income, net of tax from discontinued operation
(22)
578
 
 
 
 
 
Half year ended
Half year ended
Cash flows from discontinued operation
30.06.17
30.06.16
 
£m
£m
Net cash flows from operating activities
540
(507)
Net cash flows from investing activities
(245)
459
Net cash flows from financing activities
 (165)
(108)
Effect of exchange rates on cash and cash equivalents
(29)
527
Net increase in cash and cash equivalents
101
371
 
5. Tax
 
 
Assets
 
Liabilities
 
As at
30.06.17
As at
31.12.16
 
As at
30.06.17
As at
31.12.16
Current and deferred tax assets and liabilities
£m
£m
 
£m
£m
Current tax
411
561
 
(324)
(737)
Deferred tax
4,490
4,869
 
(47)
(29)
Total
4,901
5,430
 
(371)
(766)
 
The deferred tax asset of £4,490m (December 2016: £4,869m) includes £3,658m (December 2016: £3,973m) related to amounts in the US, with the majority of the remaining £832m (December 2016: £896m) related to amounts in the UK. Of the total deferred tax asset, £362m (December 2016: £503m) related to tax losses and £4,128m (December 2016: £4,366m) related to temporary differences.  
 
The tax charge for H117 was £778m (H116: £715m), representing an effective tax rate of 33.2% (H116: 34.7%). The effective tax rate is higher than the UK statutory tax rate of 19.25% (2016: 20%) primarily due to profits outside the UK taxed at higher local statutory tax rates, charges for PPI being non-deductible for tax purposes, the tax surcharge of 8% that applies to banks’ UK profits, non-deductible expenses and non-creditable taxes. These factors, which have each increased the effective tax rate, are partially offset by the impact of non-taxable gains and income.
 
6.  Non-controlling interests
 
 
Profit attributable to non-controlling interests
 
Equity attributable to non-controlling interests
 
Half year ended
Half year ended
 
As at
As at
 
30.06.17
30.06.16
 
30.06.17
31.12.16
 
£m
£m
 
£m
£m
Barclays Bank PLC Issued:
 
 
 
 
 
- Preference shares
134
182
 
2,041
2,698
- Upper Tier 2 instruments
2
2
 
272
272
Barclays Africa Group Limited
140
155
 
-
3,507
Other non-controlling interests
2
2
 
84
15
Total
278
341
 
2,397
6,492
 
Equity attributable to non-controlling interests decreased by £4,095m to £2,397m as at 30 June 2017 driven by Barclays’ sale of 33.7% of BAGL’s issued share capital, which resulted in accounting deconsolidation of BAGL from the Group, and by the redemption of $1.375bn Barclays Bank PLC 7.1% Series 3 non-cumulative callable preference shares on 15 March 2017.
 
 
7.  Earnings per share
 
Half year ended
Half year ended
 
30.06.17
30.06.16
 
£m
£m
(Loss)/profit attributable to ordinary equity holders of the parent from continuing and discontinued operations
(1,211)
1,110
Tax credit on profit after tax attributable to other equity holders
82
58
Total (loss)/profit attributable to ordinary equity holders of the parent from continuing and discontinued operations
(1,129)
1,168
 
 
 
Continuing operations
 
 
Profit attributable to ordinary equity holders of the parent from continuing operations
1,124
954
Tax credit on profit after tax attributable to other equity holders
82
58
Profit attributable to equity holders of the parent from continuing operations
1,206
1,012
 
 
 
Discontinued operation
 
 
(Loss)/profit attributable to ordinary equity holders of the parent from discontinued operation
(2,335)
156
Dilutive impact of convertible options from discontinued operation
-
(2)
(Loss)/profit attributable to equity holders of the parent from discontinued operation including dilutive impact on convertible options
(2,335)
154
 
 
 
(Loss)/profit attributable to equity holders of the parent from continuing and discontinued operations including dilutive impact on convertible options
(1,129)
1,166
 
 
 
 
Half year ended
Half year ended
 
30.06.17
30.06.16
 
m
m
Basic weighted average number of shares in issue
16,989
16,859
Number of potential ordinary shares
304
182
Diluted weighted average number of shares
17,293
17,041
 
 
 
 
p
p
Basic (loss)/earnings per ordinary share1
(6.6)
6.9
Basic earnings per ordinary share in respect of continuing operations
7.1
6.0
Basic (loss)/earnings per ordinary share in respect of discontinued operation
(13.7)
0.9
Diluted (loss)/earnings per ordinary share
(6.5)
6.8
Diluted earnings per ordinary share in respect of continuing operations
7.0
5.9
Diluted (loss)/earnings per ordinary share in respect of discontinued operation
(13.5)
0.9
 
1
The profit after tax attributable to other equity holders of £301m (H116: £208m) is offset by a tax credit recorded in reserves of £82m (H116: £58m). The net amount of £219m (H116: £150m), along with non-controlling interests (NCI) is deducted from profit after tax in order to calculate earnings per share.
 
8.  Dividends on ordinary shares
 
It is Barclays’ policy to declare and pay dividends on a semi-annual basis. An interim dividend for 2017 of 1.0p (H116: 1.0p) per ordinary share will be paid on 18 September 2017 to shareholders on the Share Register on 11 August 2017.
 
 
Half year ended 30.06.17
Half year ended 30.06.16
 
Per share
Total
Per share
Total
Dividends paid during the period
p
£m
p
£m
Final dividend paid during period
2.0
339
3.5
588
 
For qualifying US and Canadian resident ADR holders, the interim dividend of 1.0p per ordinary share becomes 4.0p per ADS (representing four shares). The ADR depositary will post the interim dividend on 18 September 2017 to ADR holders on the record at close of business on 11 August 2017.
 
9.  Financial investments
 
 
As at
As at
 
30.06.17
31.12.16
 
£m
£m
Available for sale debt securities and other eligible bills
55,082
57,703
Available for sale equity securities
1,547
438
Held to maturity debt securities
5,142
5,176
Financial investments
61,771
63,317
 
 
10.  Derivative financial instruments
 
 
 
 
 
Contract Notional
Amount
 
Fair Value
 
 
Assets
Liabilities
As at 30.06.17
£m
 
£m
£m
Foreign exchange derivatives
4,619,552
 
61,638
(61,512)
Interest rate derivatives
32,817,795
 
167,317
(159,504)
Credit derivatives
889,924
 
15,338
(14,452)
Equity and stock index and commodity derivatives
883,443
 
15,125
(24,280)
Derivative assets/(liabilities) held for trading
39,210,714
 
259,418
(259,748)
 
 
 
 
 
Derivatives in hedge accounting relationships
 
 
 
 
Derivatives designated as cash flow hedges
172,316
 
195
(35)
Derivatives designated as fair value hedges
111,170
 
198
(963)
Derivatives designated as hedges of net investments
3,227
 
40
(19)
Derivative assets/(liabilities) designated in hedge accounting relationships
286,713
 
433
(1,017)
 
 
 
 
 
Total recognised derivative assets/(liabilities)
39,497,427
 
259,851
(260,765)
 
 
 
 
 
As at 31.12.16
 
 
 
 
Foreign exchange derivatives
4,229,796
 
79,260
(78,248)
Interest rate derivatives
30,011,026
 
228,133
(219,298)
Credit derivatives
947,800
 
16,273
(15,085)
Equity and stock index and commodity derivatives
997,198
 
21,958
(27,015)
Derivative assets/(liabilities) held for trading
36,185,820
 
345,624
(339,646)
 
 
 
 
 
Derivatives in hedge accounting relationships
 
 
 
 
Derivatives designated as cash flow hedges
188,863
 
669
(33)
Derivatives designated as fair value hedges
141,575
 
301
(744)
Derivatives designated as hedges of net investments
6,086
 
32
(64)
Derivative assets/(liabilities) designated in hedge accounting relationships
336,524
 
1,002
(841)
 
 
 
 
 
Total recognised derivative assets/(liabilities)
36,522,344
 
346,626
(340,487)
 
 
 
 
 
 
Derivative assets decreased by £87bn to £260bn primarily due to interest rate derivatives reflecting the adoption of a CME rulebook change to daily settlement, continued rundown of the Non-Core derivative back book and an increase in major interest rate forward curves and foreign exchange derivatives due to depreciation of USD against GBP as at the reporting date.
 
The IFRS netting posted against derivative assets was £13bn including £1bn of cash collateral netted (December 2016: £12bn including £1bn cash collateral netted) and £12bn for liabilities (December 2016: £11bn) with no cash collateral netted. Derivative asset exposures would be £238bn (December 2016: £315bn) lower than reported under IFRS if netting were permitted for assets and liabilities with the same counterparty or for which the Group holds cash collateral of £34bn (December 2016: £42bn). Similarly, derivative liabilities would be £238bn (December 2016: £317bn) lower reflecting counterparty netting and cash collateral placed of £34bn (December 2016: £44bn). In addition, non cash collateral of £6bn (December 2016: £8bn) was held in respect of derivative assets and £2bn (December 2016: £4bn) was placed in respect of derivative liabilities. Collateral amounts are limited to net on balance sheet exposure so as to not include over-collateralisation.
 
Of the £34bn cash collateral held, £22bn (December 2016: £27bn) was included in deposits from banks and £12bn (December 2016: £15bn), was included in customer accounts. Of the £34bn cash collateral placed, £15bn (December 2016: £18bn) was included in loans and advances to banks and £19bn (December 2016: £26bn) was included in loans and advances to customers.
 
11. Fair value of financial instruments
 
This section should be read in conjunction with Note 18 Fair value of financial instruments of the 2016 Annual Report, 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 30.06.17
£m
£m
£m
 
£m
Trading portfolio assets
45,457
42,996
2,245
 
90,698
Financial assets designated at fair value
5,641
92,495
9,061
 
107,197
Derivative financial assets
3,850
248,129
7,872
 
259,851
Available for sale investments
25,324
30,957
348
 
56,629
Investment property
-
-
141
 
141
Assets included in disposal groups classified as held for sale1
-
-
4,319
 
4,319
Total assets
80,272
414,577
23,986
 
518,835
 
 
 
 
 
 
Trading portfolio liabilities
(25,352)
(15,108)
(10)
 
(40,470)
Financial liabilities designated at fair value
(67)
(124,598)
(683)
 
(125,348)
Derivative financial liabilities
(3,270)
(250,621)
(6,874)
 
(260,765)
Liabilities included in disposal groups classified as held for sale1
-
-
(5,658)
 
(5,658)
Total liabilities
(28,689)
(390,327)
(13,225)
 
(432,241)
 
 
 
 
 
 
As at 31.12.16
 
 
 
 
 
Trading portfolio assets
41,550
36,625
2,065
 
80,240
Financial assets designated at fair value
4,031
64,630
9,947
 
78,608
Derivative financial assets
5,261
332,819
8,546
 
346,626
Available for sale investments
21,218
36,551
372
 
58,141
Investment property
-
-
81
 
81
Assets included in disposal groups classified as held for sale1
6,754
8,511
6,009
 
21,274
Total assets
78,814
479,136
27,020
 
584,970
 
 
 
 
 
 
Trading portfolio liabilities
(20,205)
(14,475)
(7)
 
(34,687)
Financial liabilities designated at fair value
(70)
(95,121)
(840)
 
(96,031)
Derivative financial liabilities
(5,051)
(328,265)
(7,171)
 
(340,487)
Liabilities included in disposal groups classified as held for sale1
(397)
(5,224)
(6,201)
 
(11,822)
Total liabilities
(25,723)
(443,085)
(14,219)
 
(483,027)
 
 
 
 
 
 
 
1
Disposal groups held for sale and measured at fair value less cost to sell are included in the fair value table. For disposal groups measured at carrying amount, the underlying financial assets and liabilities measured at fair value are included in the fair value disclosures on pages 67 to 74 and items measured at amortised costs are included on page 75.
 
The following table shows the Group’s assets and liabilities that are held at fair value disaggregated by valuation technique (fair value hierarchy) and product type:
 
 
Assets
Liabilities
 
Valuation technique using
Valuation technique using
 
Quoted
market prices
(Level 1)
Observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Quoted
market prices
(Level 1)
Observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
As at 30.06.17
£m
£m
£m
£m
£m
£m
Interest rate derivatives
-
162,322
5,389
-
(156,153)
(4,349)
Foreign exchange derivatives
-
61,556
122
-
(61,424)
(107)
Credit derivatives
-
14,041
1,297
-
(14,175)
(277)
Equity derivatives
3,133
7,859
1,059
(2,568)
(16,179)
(2,141)
Commodity derivatives
717
2,351
5
(702)
(2,690)
-
Government and government sponsored debt
35,575
50,426
40
(13,822)
(10,411)
-
Corporate debt
-
10,759
963
(14)
(1,169)
(10)
Certificates of deposit, commercial paper and other money market instruments
-
1,517
-
-
(6,439)
(257)
Reverse repurchase and repurchase agreements
-
88,273
-
-
(82,581)
-
Non-asset backed loans
-
6,116
7,392
-
-
-
Asset backed securities
-
2,098
486
-
(348)
-
Commercial real estate loans
-
-
1,127
-
-
-
Issued debt
-
-
-
-
(37,764)
(227)
Equity cash products
40,770
6,266
130
(11,516)
(681)
-
Funds and fund linked products
-
615
202
-
(113)
(9)
Private equity investments
10
-
796
-
(17)
(15)
Assets and liabilities held for sale
-
-
4,319
-
-
(5,658)
Other1
67
378
659
(67)
(183)
(175)
Total
80,272
414,577
23,986
(28,689)
(390,327)
(13,225)
 
 
 
 
 
 
 
As at 31.12.16
 
 
 
 
 
 
Interest rate derivatives
-
222,892
5,759
-
(215,213)
(4,860)
Foreign exchange derivatives
-
79,612
132
-
(78,263)
(51)
Credit derivatives
-
14,662
1,611
-
(14,844)
(241)
Equity derivatives
4,210
11,842
1,037
(4,058)
(15,808)
(2,007)
Commodity derivatives
1,052
3,809
8
(991)
(4,138)
(13)
Government and government sponsored debt
31,203
49,834
3
(12,761)
(11,454)
-
Corporate debt
46
11,921
969
(27)
(1,907)
(5)
Certificates of deposit, commercial paper and other money market instruments
-
994
-
-
(6,936)
(319)
Reverse repurchase and repurchase agreements
-
63,162
-
-
(55,710)
-
Non-asset backed loans
-
2,888
8,767
-
-
-
Asset backed securities
-
1,956
515
-
(256)
-
Commercial real estate loans
-
-
442
-
-
-
Issued debt
-
-
-
-
(31,973)
(298)
Equity cash products
35,399
6,478
150
(7,416)
(934)
(2)
Funds and fund linked products
53
137
273
-
(170)
(37)
Private equity investments
23
110
856
-
(18)
(12)
Assets and liabilities held for sale
6,754
8,511
6,009
(397)
(5,224)
(6,201)
Other1
74
328
489
(73)
(237)
(173)
Total
78,814
479,136
27,020
(25,723)
(443,085)
(14,219)
 
1
Other includes asset backed loans, investment properties and physical commodities.
 
 
Assets and liabilities reclassified between Level 1 and Level 2
 
There were no material transfers between Level 1 and 2 (December 2016: £2,340m government bonds assets transferred from Level 2 to Level 1).
 
 Level 3 movement analysis
 
The following table summarises the movements in the Level 3 balance during the period. The table shows gains and losses and includes amounts for all financial assets and liabilities that are held at fair value transferred to and from Level 3 during the period. Transfers have been reflected as if they had taken place at the beginning of the year.
 
Assets and liabilities included in disposal groups classified as held for sale are not included as these are measured at fair value on a non-recurring basis.
 
Asset and liability moves between Level 2 and Level 3 are primarily due to i) an increase or decrease in observable market activity related to an input or ii) a change in the significance of the unobservable input, with assets and liabilities classified as Level 3 if an unobservable input is deemed significant.
 
During the period, £1.7bn of non-asset backed loans were derecognised due to a substantial modification of terms on a subset of the ESHLA loans. The new restructured loans are measured on an amortised cost basis.
 
 
 Level 3 movement analysis
 
 
Sales
Issues
Settlements
Total gains and losses in the period recognised in the income statement
Total gains or losses recognised in OCI
Transfers
As at 30.06.17
 
As at 01.01.17
Purchases
Trading income
Other income
In
Out
 
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Government and government sponsored debt
3
37
 -
 -
 -
 -
 -
 -
 -
 -
40
Corporate debt
969
56
(71)
 -
(2)
14
 -
 -
27
(30)
963
Non-asset backed loans
151
369
(87)
 -
(21)
(2)
 -
 -
 -
(7)
403
Asset backed securities
515
46
(69)
 -
(9)
3
 -
 -
 -
 -
486
Funds and fund linked products
273
 -
(28)
 -
(24)
(8)
 -
 -
11
(22)
202
Equity cash products
77
32
(7)
-
-
(13)
-
-
2
-
91
Other
77
2
(12)
-
-
1
-
-
-
(8)
60
Trading portfolio assets
2,065
542
(274)
 -
(56)
(5)
 -
 -
40
(67)
2,245
 
 
 
 
 
 
 
 
 
 
 
 
Non-asset backed loans
8,616
 -
 -
 -
(1,706)
79
-
 -
 -
 -
6,989
Commercial real estate loans
442
1,905
(1,215)
 -
(29)
34
(10)
 -
 -
 -
1,127
Private equity investments
562
31
(106)
 -
 -
(3)
36
 -
28
(58)
490
Other
327
108
(50)
 -
(30)
(10)
110
 -
-
 -
455
Financial assets designated at fair value
9,947
2,044
(1,371)
 -
(1,765)
100
136
 -
28
(58)
9,061
Private equity investments
294
 -
(45)
 -
 -
 -
(2)
23
34
 -
304
Equity cash products
73
-
-
-
-
-
2
1
6
(42)
40
Other
5
 -
(1)
 -
(1)
 -
-
1
 -
 -
4
Available for sale investments
372
 -
(46)
 -
(1)
 -
-
25
40
(42)
348
 
 
 
 
 
 
 
 
 
 
 
 
Investment property
81
62
 -
 -
 -
 -
(2)
 -
 -
 -
141
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt
(7)
 -
(4)
 -
1
 -
 -
 -
 -
 -
(10)
 
 
 
 
 
 
 
 
 
 
 
 
Trading portfolio liabilities
(7)
 -
(4)
 -
1
 -
 -
 -
 -
 -
(10)
 
 
 
 
 
 
 
 
 
 
 
 
Certificates of deposit,
commercial paper and other
money market instruments
(319)
 -
 -
 -
 -
 -
1
 -
(31)
92
(257)
Issued debt
(298)
 -
 -
 -
71
 -
 -
 -
 -
 -
(227)
Other
(223)
 -
 -
 -
27
 -
(3)
 -
 -
 -
(199)
Financial liabilities
designated at fair value
(840)
 -
 -
 -
98
 -
(2)
 -
(31)
92
(683)
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives
899
27
12
 -
15
(130)
 -
 -
419
(202)
1,040
Foreign exchange derivatives
81
 -
 -
 -
(16)
2
5
 -
(3)
(54)
15
Credit derivatives
1,370
 -
3
 -
(19)
(263)
 -
 -
(71)
 -
1,020
Equity derivatives
(970)
67
(222)
 -
11
78
 -
 -
(45)
(1)
(1,082)
Commodity derivatives
(5)
 -
 -
 -
 -
3
 -
 -
 -
7
5
Net derivative financial
Instruments1
1,375
94
(207)
 -
(9)
(310)
5
 -
300
(250)
998
Assets and liabilities held for sale
574
 -
(574)
 -
 -
 -
 -
 -
 -
 -
 -
Total
13,567
2,742
(2,476)
 -
(1,732)
(215)
137
25
377
(325)
12,100
 
 
 
 
 
 
 
 
 
 
 
 
Net liabilities held for sale measured at fair value on non-recurring basis
 
 
 
 
 
 
 
 
 
 
(1,339)
Total
 
 
 
 
 
 
 
 
 
 
10,761
 
1
The derivative financial instruments are represented on a net basis. On a gross basis, derivative financial assets are £7,872m (H116: £6,771m) and derivative financial liabilities are £6,874m (H116: £6,306m).
 
 
Level 3 movement analysis
 
 
Sales
Issues
Settlements
Total gains and losses in the period recognised in the income statement
Total gains or losses recognised in OCI
Transfers
As at 30.06.16
 
As at 01.01.16
Purchases
Trading income
Other income
In
Out
 
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Government and government sponsored debt
320
 -
(34)
 -
 -
(1)
 -
 -
 -
 -
285
Corporate debt
2,843
66
(20)
 -
(65)
367
 -
 -
18
(11)
3,198
Non-asset backed loans
507
116
(275)
 -
 -
(29)
 -
 -
18
(3)
334
Asset backed securities
743
56
(230)
 -
(12)
71
 -
 -
43
 -
671
Funds and fund linked products
340
 -
(47)
 -
(286)
296
 -
 -
 -
(13)
290
Equity cash products
121
3
(2)
-
-
(1)
-
-
1
(32)
90
Other
34
4
(20)
-
(68)
11
-
-
-
(7)
(46)
Trading portfolio assets
4,908
245
(628)
 -
(431)
714
 -
 -
80
(66)
4,822
Non-asset backed loans
15,963
 -
(4)
 -
(8,111)
1,695
 -
 -
82
 -
9,625
Commercial real estate loans
543
785
(773)
 -
(10)
45
 -
 -
 -
 -
590
Private equity investments
457
21
(49)
 -
(1)
5
85
 -
4
 -
522
Equity cash products
26
-
(26)
-
-
-
-
-
-
-
-
Other
308
24
(178)
 -
(22)
2
110
 -
70
(38)
276
Financial assets designated at fair value
17,297
830
(1,030)
 -
(8,144)
1,747
195
 -
156
(38)
11,013
Private equity investments
877
11
(514)
 -
(9)
 -
3
37
4
(5)
404
Equity cash products
24
-
(14)
-
-
-
3
3
-
(1)
15
Other
20
7
-
 -
(14)
 -
-
1
26
(1)
39
Available for sale investments
921
18
(528)
 -
(23)
 -
6
41
30
(7)
458
Investment property
82
 -
 -
 -
 -
 -
4
 -
 -
 -
86
Trading portfolio liabilities
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
 -
Certificates of deposit, commercial paper and other money market instruments
(272)
 -
 -
(128)
114
 -
(19)
 -
(29)
62
(272)
Issued debt
(538)
 -
 -
(27)
203
8
 -
 -
 -
 -
(354)
Other
(244)
 -
 -
(110)
113
(26)
(2)
 -
(61)
38
(292)
Financial liabilities designated at fair value
(1,054)
 -
 -
(265)
430
(18)
(21)
 -
(90)
100
(918)
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate derivatives
418
(36)
(22)
 -
(179)
(77)
 -
 -
(187)
(26)
(109)
Foreign exchange derivatives
(104)
 -
 -
 -
(41)
11
 -
 -
20
75
(39)
Credit derivatives
1,685
10
(4)
 -
(12)
264
 -
 -
(3)
 -
1,940
Equity derivatives
(857)
61
 -
(82)
53
(131)
 -
 -
(50)
26
(980)
Commodity derivatives
(506)
5
 -
 -
48
61
 -
 -
25
20
(347)
Net derivative financial instruments1
636
40
(26)
(82)
(131)
128
 -
 -
(195)
95
465
Assets and liabilities held for sale
424
12
 -
248
(52)
 -
(1)
 -
 -
 -
631
 
 
 
 
 
 
 
 
 
 
 
 
Total
23,214
1,145
(2,212)
(99)
(8,351)
2,571
183
41
(19)
84
16,557
Net liabilities held for sale measured at fair value on non-recurring basis
 
 
 
 
 
 
 
 
 
 
(1,732)
Total
 
 
 
 
 
 
 
 
 
 
14,825
 
1
The derivative financial instruments are represented on a net basis. On a gross basis, derivative financial assets are £7,872m (H116: £6,771m) and derivative financial liabilities are £6,874m (H116: £6,306m).
 
Unrealised gains and losses on Level 3 financial assets and liabilities
 
The following table discloses the unrealised gains and losses recognised in the year arising on Level 3 financial assets and liabilities held at the period end.
 
 
Half year ended 30.06.17
Half year ended 30.06.16
 
Income statement
Other compre- hensive income
Total
Income statement
Other compre- hensive income
Total
 
Trading income
Other income
Trading income
Other income
 
£m
£m
£m
£m
£m
£m
£m
£m
Trading portfolio assets
(25)
-
-
(25)
400
-
-
400
Financial assets designated at fair value
73
102
-
175
764
166
-
930
Available for sale investments
-
-
25
25
-
33
41
74
Investment property
-
-
-
-
-
3
-
3
Financial liabilities designated at fair value
45
(2)
-
43
(24)
(17)
-
(41)
Net derivative financial instruments
(305)
-
-
(305)
110
-
-
110
Assets and Liabilities held for sale
-
-
-
-
-
-
-
-
Total
(212)
100
25
(87)
1,250
185
41
1,476
 
 
 
 
 
 
 
 
 
 
Valuation techniques and sensitivity analysis
 
Sensitivity analysis is performed on products with significant unobservable inputs (Level 3) to generate a range of reasonably possible alternative valuations. The sensitivity methodologies applied take account of the nature of valuation techniques used, as well as the availability and reliability of observable proxy and historical data and the impact of using alternative models.
 
Current year valuation and sensitivity methodologies are consistent with those described within Note 18 Fair value of financial instruments in the 2016 Annual Report.
 
Sensitivity analysis of valuations using unobservable inputs
 
 
 
Fair value
Favourable changes
Unfavourable changes
 
Total
assets
Total
liabilities
Income
statement
Equity
Income
statement
Equity
As at 30.06.17
£m
£m
£m
£m
£m
£m
Interest rate derivatives
5,389
(4,349)
127
-
(152)
-
Foreign exchange derivatives
122
(107)
9
-
(9)
-
Credit derivatives
1,297
(277)
128
-
(117)
-
Equity derivatives
1,059
(2,141)
160
-
(160)
-
Commodity derivatives
5
-
5
-
(3)
-
Government and government sponsored debt
40
-
-
-
-
-
Corporate debt
963
(10)
4
-
(4)
-
Certificates of deposit, commercial paper and other money market instruments
-
(257)
-
-
-
-
Non-asset backed loans
7,392
-
254
-
(570)
-
Asset backed securities
486
-
1
-
(1)
-
Commercial real estate loans
1,127
-
1
-
(1)
-
Issued debt
-
(227)
-
-
-
-
Equity cash products
130
-
11
23
(10)
(23)
Funds and fund linked products
202
(9)
5
-
(5)
-
Private equity investments
796
(15)
90
20
(90)
(20)
Assets and liabilities held for sale
4,319
(5,658)
-
-
-
-
Other1
659
(175)
1
-
-
-
Total
23,986
(13,225)
796
43
(1,122)
(43)
 
 
 
 
 
 
 
As at 31.12.16
 
 
 
 
 
 
Interest rate derivatives
5,759
(4,860)
209
-
(249)
-
Foreign exchange derivatives
132
(51)
15
-
(15)
-
Credit derivatives
1,611
(241)
127
-
(133)
-
Equity derivatives
1,037
(2,007)
163
-
(164)
-
Commodity derivatives
8
(13)
5
-
(5)
-
Government and government sponsored debt
3
-
-
-
-
-
Corporate debt
969
(5)
7
-
(2)
-
Certificates of deposit, commercial paper and other money market instruments
-
(319)
-
-
(1)
-
Non-asset backed loans
8,767
-
462
-
(597)
-
Asset backed securities
515
-
1
-
(1)
-
Commercial real estate loans
442
-
2
-
(2)
-
Issued debt
-
(298)
-
-
-
-
Equity cash products
150
(2)
12
26
(11)
(26)
Funds and fund linked products
273
(37)
6
-
(6)
-
Private equity investments
856
(12)
104
18
(104)
(21)
Assets and liabilities held for sale
699
(125)
3
-
(3)
-
Other1
489
(173)
147
-
(105)
-
Total
21,710
(8,143)
1,263
44
(1,398)
(47)
 
1
Other includes asset backed loans and investment property.
 
 
The effect of stressing unobservable inputs to a range of reasonably possible alternatives alongside considering the impact of using alternative models, would be to increase fair values by up to £0.8bn (December 2016: £1.3bn) or to decrease fair values by up to £1.2bn (December 2016: £1.4bn) with substantially all the potential effect impacting profit and loss rather than reserves.
 
Significant unobservable inputs
 
The valuation techniques and significant unobservable inputs for assets and liabilities recognised at fair value and classified as Level 3 are consistent with Note 18 Fair value of financial instruments in the 2016 Annual Report. The description of the significant unobservable inputs and the sensitivity of fair value measurement of the instruments categorised as Level 3 assets or liabilities to increases in significant unobservable inputs is also found in Note 18 Fair value of financial instruments of the 2016 Annual Report. Assets and liabilities included in disposal groups classified as held for sale are not included as these are measured at fair value on a non-recurring basis.
 
Fair value adjustments
 
Key balance sheet valuation adjustments are quantified below:
 
 
As at
30.06.17
As at
31.12.16
 
£m
£m
Exit price adjustments derived from market bid-offer spreads
(409)
(475)
Uncollateralised derivative funding
(47)
(82)
Derivative credit valuation adjustments
(121)
(237)
Derivative debit valuation adjustments
131
242
 
●
 
Exit price adjustments decreased £66m to £409m primarily due to tightening in the market bid offer spreads
●
 
Uncollateralised derivative funding decreased £35m to £47m as a result of tightening in funding spreads and unwinds of derivative exposures
●
 
Credit Valuation Adjustments (CVA) decreased £116m to £121m as a result of tightening in credit spreads and unwinds of derivative exposures
●
 
Debit Valuation Adjustments (DVA) decreased £111m to £131m as a result of tightening in credit spreads
 
 Portfolio exemption
 
The Group uses the portfolio exemption in IFRS 13 Fair Value Measurement to measure the fair value of groups of financial assets and liabilities. Instruments are measured using the price that would be received to sell a net long position (i.e. an asset) for a particular risk exposure or to transfer a net short position (i.e. a liability) for a particular risk exposure in an orderly transaction between market participants at the balance sheet date under current market conditions. Accordingly, the Group measures the fair value of the group of financial assets and liabilities consistently with how market participants would price the net risk exposure at the measurement date.
 
Unrecognised gains as a result of the use of valuation models using unobservable inputs
 
The amount that has yet to be recognised in income that relates to the difference between the transaction price (the fair value at initial recognition) and the amount that would have arisen had valuation models using unobservable inputs been used on initial recognition, less amounts subsequently recognised, is £120m (2016: £179m). There are additions of £14m (2016: £29m) and £73m (2016: £37m) of amortisation and releases.
 
 
Third party credit enhancements
 
Structured and brokered certificates of deposit issued by Barclays Group are insured up to $250,000 per depositor by the Federal Deposit Insurance Corporation (FDIC) in the United States. The FDIC is funded by premiums that Barclays and other banks pay for deposit insurance coverage. The carrying value of these issued certificates of deposit that are designated under the IAS 39 fair value option includes this third party credit enhancement. The on balance sheet value of these brokered certificates of deposit amounted to £3,203m (December 2016: £3,905m).
 
Comparison of carrying amounts and fair values for assets and liabilities not held at fair value
 
Valuation methodologies employed in calculating the fair value of financial assets and liabilities measured at amortised cost are consistent with the 2016 Annual Report disclosure.
 
The following table summarises the fair value of financial assets and liabilities measured at amortised cost on the Group’s balance sheet:
 
 
 
As at 30.06.17
As at 31.12.16
 
Carrying amount
Fair Value
Carrying amount
Fair Value
Financial assets
£m
£m
£m
£m
Held to maturity
5,142
5,228
5,176
5,347
Loans and advances to banks
37,108
37,101
43,251
43,228
Loans and advances to customers:
 
 
 
 
-Home loans
144,706
142,212
144,765
141,155
-Credit cards, unsecured and other retail lending
55,423
55,347
57,808
57,699
-Finance lease receivables
1,554
1,554
1,602
1,598
-Corporate loans
188,321
187,261
188,609
186,715
Reverse repurchase agreements and other similar secured lending
17,209
17,209
13,454
13,454
Assets included in disposal groups classified as held for sale1
-
-
43,593
44,838
 
 
 
 
 
Financial liabilities
 
 
 
 
Deposits from banks
(48,887)
(48,887)
(48,214)
(48,212)
Customer accounts:
 
 
 
 
-Current and demand accounts
(140,614)
(140,614)
(138,204)
(138,197)
-Savings accounts
(133,219)
(133,223)
(133,344)
(133,370)
-Other time deposits
(163,029)
(163,029)
(151,630)
(151,632)
Debt securities in issue
(76,664)
(78,289)
(75,932)
(76,971)
Repurchase agreements and other similar secured borrowing
(38,578)
(38,578)
(19,760)
(19,760)
Subordinated liabilities
(23,879)
(25,419)
(23,383)
(24,547)
Liabilities included in disposal groups classified as held for sale1
-
-
(51,775)
(51,788)
 
1
Disposal groups held for sale and measured at fair value less cost to sell are included in the fair value table. For disposal groups measured at carrying amount, the underlying financial assets and liabilities measured at fair value are included in the fair value disclosures on page 67-74 and items measured at amortised costs are included on page 75.
 
 
12.  Subordinated liabilities
 
As at
As at
 
30.06.17
31.12.16
 
£m
£m
Opening balance as at 1 January
23,383
21,467
Issuances
1,547
1,457
Redemptions
(140)
(1,142)
Other
(911)
1,601
Total dated and undated subordinated liabilities as at period end
23,879
23,383
 
Subordinated liabilities increased 2% to £23,879m (December 2016: £23,383m). There was one issuance of 4.836% Fixed Rate Subordinated Notes of £1,547m. Redemptions totalling £140m include £133m 6.375% Undated Subordinated Notes. Other movements of £911m decreased largely due to the appreciation of GBP against USD and JPY.
 
 
13.  Provisions
 
 
 
As at
As at
 
30.06.17
31.12.16
 
£m
£m
UK Customer Redress
 
 
Payment Protection Insurance redress
2,109
1,979
Other customer redress
543
712
Legal, competition and regulatory matters
351
455
Redundancy and restructuring
154
206
Undrawn contractually committed facilities and guarantees
66
67
Onerous contracts
279
385
Sundry provisions
428
330
Total
3,930
4,134
 
Payment Protection Insurance Redress
 
As at 30 June 2017, Barclays had recognised cumulative provisions totalling £9.1bn (December 2016: £8.4bn) against the cost of Payment Protection Insurance (PPI) redress and associated processing costs with utilisation of £7.0bn (December 2016: £6.5bn), leaving a residual provision of £2.1bn (December 2016: £2.0bn).
 
Through to 30 June 2017, 2.0m (December 2016: 1.8m) customer initiated claims1 had been received and processed. The volume of claims received during H117 increased 32%2 from H216 (increased by 15% from H116).
 
The current provision reflects the estimate of costs of PPI redress primarily relating to customer initiated complaints and on-going remediation programmes. This also includes liabilities managed by third parties arising from portfolios previously sold where Barclays remains liable. 
 
An additional charge of £0.7bn has been recognised to reflect an updated estimated cost of PPI redress, primarily relating to an increase in expected future volume of claims.
 
As at 30 June 2017, the provision of £2.1bn represents Barclays’ best estimate of expected PPI redress. However, it is possible the eventual outcome may differ from the current estimate. We will continue to review the adequacy of provision level in respect of the on-going level of complaints. The FCA marketing campaign commences on 29 August 2017 covering the period until the FCA’s deadline for the bringing the claims in August 2019. The impact of the marketing campaign on Barclays’ provision is uncertain but has been considered in Barclays’ provision estimate.
 
The PPI provision is calculated using a number of key assumptions which continue to involve significant management judgement and modelling:
 
●
 
Customer initiated claim volumes – claims received but not yet processed plus an estimate of future claims initiated by customers where the volume is anticipated to cease after August 2019
●
 
Average claim redress – the expected average payment to customers for upheld claims based on the type and age of the policy/policies
●
 
Processing cost per claim – the cost to Barclays of assessing and processing each valid claim
 
These assumptions remain subjective, in particular due to the uncertainty associated with future claims levels, which include complaints driven by CMC activity.
 
The current provision represents Barclays’ revised best estimate of all future expected costs of PPI redress based on the information available at the end of H117.
 
The following table details actual data through to 30 June 2017, key forecast assumptions used in the provision calculation and a sensitivity analysis illustrating the impact on the provision if the future expected assumptions prove too high or too low.
 
 
 
 
Assumption
Cumulative
actual to
30.06.17
 
Future
expected
Sensitivity analysis increase/decrease
in provision
Customer initiated claims received and processed1
2,000k
740k
50k = £105m
Average uphold rate per claim3
87%
87%
1% = £17m
Average redress per valid claim4
£2,268
£1,932
£100 = £77m
Processing cost per claim5
£386
£283
£10 = £7m
 
1
Total claims received directly by Barclays to date, including those received via CMCs but excluding those for which no PPI policy exists and excluding responses to proactive mailing.
2
Gross volumes received including no PPI.
3
Average uphold rate per customer initiated claims received directly by Barclays and proactive mailings, excluding those for which no PPI policy exists.
4
Average redress stated on a per policy basis for future customer initiated complaints received directly by Barclays and proactive mailings.
5
Processing cost per claim is based on customer initiated claims received and processed.
 
14. Retirement benefits
 
As at 30 June 2017, the Group’s IAS19 pension surplus across all schemes was £0.4bn (December 2016: £0.4bn deficit). The UK Retirement Fund (UKRF), which is the Group’s main scheme, had a surplus of £0.7bn (December 2016: £27m deficit). The movement for the UKRF was driven by payment of deficit reduction contributions over the last six months, with changes in market conditions largely being neutral.
 
Triennial valuation
 
The latest triennial actuarial valuation of the UKRF with an effective date of 30 September 2016 has been completed. This valuation showed a funding deficit of £7.9bn and a funding level of 81.5%, versus £6.0bn funding deficit at the 30 September 2015 update. The increase in funding deficit over that period was mainly driven by the increase in liabilities due to changes in financial conditions, namely from falls in gilt yields and the lower outlook for future investment returns, offset by favourable asset returns over the year and payment of deficit reduction contributions.
 
The Bank and UKRF Trustee have agreed a revised scheme-specific funding target, statement of funding principles, schedule of contributions, a recovery plan to seek to eliminate the deficit relative to the funding target and some additional support measures. The agreement with the UKRF Trustee also takes into account the changes to the Group structure that will be implemented as a result of ring-fencing1. The UKRF will remain in Barclays Bank PLC (BBPLC).
 
The main differences between the funding and IAS 19 assumptions were a different approach to setting the discount rate and a more conservative longevity assumption for funding.
 
The deficit reduction contributions agreed with the UKRF Trustee as part of the 30 September 2016 valuation recovery plan are shown alongside the deficit recovery contributions agreed in 2014 for the prior 30 September 2013 valuation.
 
Year
Deficit contributions 30 September 2016 valuation
£m
Deficit contributions30 September 2013 valuation
£m
2017
740 2
 
1,240 3
 
2018
500
 
740
 
2019
500
 
740
 
2020
500
 
740
 
2021
1,000
 
2403
2022 to 2026
1,000 each year
-
 
 
 
The deficit reduction contributions are in addition to the regular contributions to meet the Group’s share of the cost of benefits accruing over each year. The next funding valuation of the UKRF is due to be completed in 2020 with an effective date of 30 September 2019.
 
Other measures agreed at the same time as the Valuation
 
Collateral - The UKRF Trustee and BBPLC have entered into an arrangement whereby a collateral pool has been put in place to provide security for 88.5% of the UKRF funding deficit as it increases or decreases over time, and associated deficit recovery contributions, with a cap of £9.0bn. The collateral pool is currently made up of government securities and high quality securitisations of credit cards, mortgages and corporate loans. The arrangement provides the UKRF Trustee with dedicated access to the pool of assets in the event of BBPLC not paying a deficit reduction contribution to the UKRF or in the event of BBPLC’s insolvency.
 
Support from Barclays PLC (BPLC) - In the event of BBPLC not paying a deficit reduction contribution payment required under the 2016 valuation recovery plan by a specified pre-payment date, BPLC has entered into an arrangement whereby it will be required to use, in first priority, dividends received from the UK Ring-Fenced Bank (RFB) (if any) to invest the proceeds in BBPLC (up to the maximum amount of the deficit reduction contribution unpaid by BBPLC). The proceeds of the investment will be used to discharge BBPLC’s unpaid deficit reduction contribution.
 
Participation - As permitted under the Financial Services and Markets Act 2000 (Banking Reform) (Pensions) Regulations 2015, RFB will participate as an employer in the UKRF during a transitional phase until the end of 2025. RFB will make contributions for the future service of its employees who are currently Afterwork members and, in the event of BBPLC's insolvency during this period, RFB would step in as principal employer of the UKRF.
 
1
Refer to page 236 of the Barclays PLC 2016 Annual Report for further information on structural reform.
2
£620m of the £740m for 2017 had been paid to the UKRF by 30 June 2017.
3
The 2017 contribution included up to £500m payable if the deficit in 2017 exceeded a certain level. If it was paid, the additional amount would be deducted from the 2021 payment due.
 
15.  Called up share capital
 
Called up share capital comprises 17,034m (December 2016: 16,963m) ordinary shares of 25p each. The increase was largely due to the issuance of shares under employee share schemes and the Barclays PLC Scrip Dividend Programme.
 
16.  Other equity instruments
 
Other equity instruments of £7,694m (December 2016: £6,449m) include Additional Tier 1 (AT1) securities issued by Barclays PLC. The increase was primarily due to the issuance of a GBP AT1 security, with a principal amount of £1,250m.
 
The AT1 securities are perpetual securities with no fixed maturity and are structured to qualify as AT1 instruments under CRD IV.
 
 
17.  Other reserves
 
 
 
As at
As at
 
30.06.17
31.12.16
 
£m
£m
Currency translation reserve
3,756
3,051
Available for sale reserve
(16)
(74)
Cash flow hedging reserve
1,578
2,105
Own credit reserve
(153)
-
Other
983
969
Total
6,148
6,051
 
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 30 June 2017, there was a credit balance of £3,756m (December 2016: £3,051m credit) in the currency translation reserve. The £705m credit movement principally reflected the £1,377m credit movement driven by recycling of the accumulated currency translation losses into the income statement resulting from the partial disposal of BAGL. This credit movement was partially offset by debit movements driven by the weakening of USD against GBP.
 
Available for sale reserve
 
The available for sale reserve represents the unrealised change in the fair value of available for sale investments since initial recognition.
 
As at 30 June 2017, there was a debit balance of £16m (December 2016: £74m debit) in the available for sale reserve. The increase of £58m (2016: £391m decrease) was primarily due to £218m of net gains from changes in fair value on Government Bonds predominantly held in the liquidity pool and the related hedging. There were also £165m of net gains transferred to net profit and a tax charge of £49m was recognised in the period relating to these items.
 
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 30 June 2017, there was a credit balance of £1,578m (December 2016: £2,105m credit) in the cash flow hedging reserve. The decrease of £527m (2016: £844m increase) principally reflected a £413m decrease in the fair value of interest rate swaps held for hedging purposes as interest rate forward curves increased and £321m gains transferred to net profit, partially offset by a tax credit of £205m.
 
Own credit reserve
As a result of the early adoption of the own credit provisions of IFRS 9 on 1 January 2017, own credit which was previously recorded in the income statement is now recognised within other comprehensive income. Changes in own credit in respect of debt instruments are recognised at fair value through the income statement.
 
As at 30 June 2017, the amount of own credit recognised in the Group’s other comprehensive income was a debit balance of £153m (December 2016: £nil). Upon adoption of IFRS 9, an opening debit balance of £175m was recognised. The increase of £22m (2016: £nil) principally reflected amortisation movements of £32m and a widening of Barclays own credit spreads of £6m, partially offset by tax of £13m and foreign exchange of £3m.
 
Other reserves and treasury shares
 
As at 30 June 2017, there was a credit balance of £1,011m (December 2016: £1,011m credit) in other reserves relating to redeemed ordinary and preference shares issued by the Group.
 
There was a debit balance of £28m (December 2016: £42m debit) in other reserves relating to treasury shares. During the period £294m (2016: £140m) net purchases of treasury shares were made, principally reflecting the increase in shares held for the purposes of employee share schemes, and £308m (2016: £166m) was transferred to retained earnings reflecting the vesting of deferred share based payments.
 
18. Contingent liabilities and commitments
 
 
 
As at
As at
 
30.06.17
31.12.16
 
£m
£m
Guarantees and letters of credit pledged as collateral security
15,971
15,303
Performance guarantees, acceptances and endorsements
4,664
4,636
Total contingent liabilities
20,635
19,939
 
 
 
Documentary credits and other short-term trade related transactions
966
1,005
Forward starting reverse repurchase agreements
133
24
Standby facilities, credit lines and other commitments
297,339
302,657
Total commitments
298,438
303,686
 
Further details on contingent liabilities relating to legal, competition and regulatory matters can be found in Note 19.
 
19. Legal, competition and regulatory matters
 
Barclays PLC, Barclays Bank PLC and the Group face legal, competition and regulatory challenges, many of which are beyond our control. The extent of the impact on Barclays PLC, Barclays Bank PLC and the Group of these matters cannot always be predicted but may materially impact our operations, financial results, condition and prospects. Matters arising from a set of similar circumstances can give rise to either a contingent liability or a provision, or both, depending on the relevant facts and circumstances. The Group has not disclosed an estimate of the potential financial effect on the Group of contingent liabilities where it is not currently practicable to do so.
 
Investigations into certain advisory services agreements and other matters and civil action
 
The UK Serious Fraud Office (SFO), the Financial Conduct Authority (FCA), the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) have been conducting investigations into certain advisory services agreements entered into by Barclays Bank PLC.
 
 
Background Information
Barclays Bank PLC entered into two advisory services agreements with Qatar Holding LLC (Qatar Holding) in June and October 2008 (the Agreements). The FCA commenced an investigation into whether the Agreements may have related to Barclays PLC’s capital raisings in June and November 2008 (the Capital Raisings). The existence of the June 2008 advisory services agreement was disclosed, but the entry into the advisory services agreement in October 2008 and the fees payable under the Agreements, which amounted to a total of £322m payable over a period of five years, were not disclosed in the announcements or public documents relating to the Capital Raisings. The SFO also commenced an investigation into the Agreements and into a $3bn loan (the Loan) provided by Barclays Bank PLC in November 2008 to the State of Qatar.
 
SFO Proceedings
In June 2017, the SFO charged Barclays PLC with two offences of conspiring with certain former senior officers and employees of Barclays to commit fraud by false representations relating to the Agreements and one offence of unlawful financial assistance contrary to section 151 of the Companies Act 1985 in relation to the Loan (the Charges). The SFO has informed Barclays that it has not made a decision as to whether it will also bring a charge against Barclays Bank PLC in respect of the Loan. The trial of the Charges has been scheduled to begin in January 2019.
 
FCA Proceedings and other investigations
In September 2013, the FCA issued warning notices (the Notices) finding that while, Barclays PLC and Barclays Bank PLC believed at the time of the execution of the Agreements that there should be at least some unspecified and undetermined value to be derived from them, the primary purpose of the Agreements was not to obtain advisory services but to make additional payments, which would not be disclosed, for the Qatari participation in the Capital Raisings. The Notices concluded that Barclays PLC and Barclays Bank PLC were in breach of certain disclosure-related listing rules and Barclays PLC was also in breach of Listing Principle 3 (the requirement to act with integrity towards holders and potential holders of the Company’s shares). In this regard, the FCA considers that Barclays PLC and Barclays Bank PLC acted recklessly. The financial penalty provided in the Notices against the Group is £50m. Barclays PLC and Barclays Bank PLC continue to contest the findings. A stay of the FCA action has been lifted. It is possible that the stay may be reimposed due to the SFO proceedings.
 
In addition, the DOJ and the SEC have been conducting investigations relating to the Agreements.
 
Civil Action
In January 2016, PCP Capital Partners LLP and PCP International Finance Limited (PCP) served a claim on Barclays Bank PLC seeking damages of £721.4m plus interest and costs for fraudulent misrepresentation and deceit, arising from alleged statements made by Barclays Bank PLC to PCP in relation to the terms on which securities were to be issued to potential investors, allegedly including PCP, in the November 2008 capital raising. Barclays Bank PLC is defending the claim.
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have upon the Group’s operating results, cash flows or financial position in any particular period. PCP has made a claim against Barclays Bank PLC totalling £721.4m plus interest and costs. This amount does not necessarily reflect Barclays Bank PLC’s potential financial exposure if a ruling were to be made against it in that matter.
 
Investigations into certain business relationships
In 2012, the DOJ and SEC commenced investigations in relation to whether certain relationships with third parties who assist Barclays PLC to win or retain business are compliant with the US Foreign Corrupt Practices Act. Various regulators in other jurisdictions are also being briefed on the investigations. Separately, the Group is cooperating with the DOJ and SEC in relation to an investigation into certain of its hiring practices in Asia and elsewhere and is keeping certain regulators in other jurisdictions informed.
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have upon the Group’s operating results, cash flows or financial position in any particular period.
 
Investigations relating to whistleblowing systems and controls
The FCA and PRA are conducting investigations in relation to the Group Chief Executive Officer (CEO) and Barclays Bank PLC in connection with certain whistleblowing issues.
 
Background Information
In April 2017, the FCA and PRA commenced investigations into the CEO as to his individual conduct and senior manager responsibilities relating to Barclays’ whistleblowing programme and to his attempt in 2016 to identify the author of a letter that was treated by Barclays Bank PLC as a whistleblow; and Barclays Bank PLC, as to its responsibilities relating to the attempt by the CEO to identify the author of the letter, as well as Barclays’ systems and controls and culture relating to whistleblowing.
 
The attempt to identify the author of the letter first came to the attention of the Barclays PLC Board (Board) early in 2017. The Board instructed an external law firm to conduct a focussed investigation into the matter and also notified the FCA and PRA and other relevant authorities. The investigation found, and the Board concluded, that the CEO honestly, but mistakenly, believed that it was permissible to identify the author. However, the Board concluded that the CEO made an error in becoming involved with, and not applying appropriate governance around the matter, and in taking action to attempt to identify the author of the letter. The Board has commissioned independent reviews of Barclay’s relevant processes and controls, including its whistleblowing programme.
 
Barclays and the CEO are cooperating fully with the FCA and PRA investigations. Barclays is also providing information to, and cooperating with, authorities in the United States with respect to these matters.
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have upon the Group’s operating results, cash flows or financial position in any particular period.
 
Investigation relating to retail structured deposits
The FCA has been conducting an enforcement investigation in relation to structured deposits provided by Barclays Bank PLC and Woolwich Plan Managers Limited, a wholly owned subsidiary of Barclays Bank PLC.
 
Background Information
In 2015, the FCA commenced an enforcement investigation into the design, manufacture and sale of structured deposit products by Barclays from November 2009 to the present.
 
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the action described on the Group or what effect that it might have upon the Group’s operating results, cash flows or financial position in any particular period.
 
Investigation into Americas Wealth & Investment Management advisory business
The SEC has carried out an investigation into certain practices in Barclays' former Wealth Americas investment advisory business relating to certain due diligence failures, fee and billing practices and mutual fund fee waivers and related disclosures. In May 2017, the SEC announced a settlement pursuant to which Barclays Capital Inc. (BCI) agreed to resolve this matter for US$97m, consisting of a penalty of US$30m (to be paid to the SEC) and US$67m (to be paid to the clients) in remediation and disgorgement.
 
Investigation into suspected money laundering related to foreign exchange transactions in South African operation
Absa Bank Limited, a subsidiary of Barclays Africa Group Limited, identified potentially fraudulent activity by certain of its customers using advance payments for imports in 2014 and 2015 to effect foreign exchange transfers from South Africa to beneficiary accounts located in East Asia, UK, Europe and the US. As a result, the Group conducted a review of relevant activity, processes, systems and controls. The Group is continuing to provide information to relevant authorities as part of the Group’s ongoing cooperation.
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have upon the Group’s operating results, cash flows or financial position in any particular period.
 
Investigations into LIBOR and other benchmarks
Regulators and law enforcement agencies, including certain competition authorities, from a number of governments have been conducting investigations relating to Barclays Bank PLC’s involvement in manipulating certain financial benchmarks, such as LIBOR and EURIBOR.
 
Background Information
In 2012, Barclays Bank PLC announced that it had reached settlements with the Financial Services Authority (FSA) (as predecessor to the FCA), the US Commodity Futures Trading Commission (CFTC) and the DOJ in relation to their investigations concerning certain benchmark interest rate submissions, and Barclays Bank PLC paid total penalties of £290m. The settlement with the DOJ was made by entry into a Non-Prosecution Agreement (NPA) which has now expired. Barclays PLC, Barclays Bank PLC and BCI have reached settlements with certain other regulators and law enforcement agencies. Barclays Bank PLC continues to respond to requests for information from the SFO in relation to its ongoing LIBOR investigation, including in respect of Barclays Bank PLC. The investigation by the prosecutor’s office in Trani, Italy also remains pending.
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have upon the Group’s operating results, cash flows or financial position in any particular period.
 
LIBOR and other benchmark civil actions
A number of individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group and other banks in relation to LIBOR and/or other benchmarks.
 
Background Information
Following settlement of the investigations referred to above in ‘Investigations into LIBOR and other Benchmarks’ various individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group. While certain cases have been dismissed or settled subject to approval from the court (and in the case of class actions, the right of class members to opt-out of the settlement and to seek to file their own claims), other actions remain pending and their ultimate impact is unclear.
 
USD LIBOR Cases in MDL Court
The majority of the USD LIBOR cases, which have been filed in various US jurisdictions, have been consolidated for pre-trial purposes before a single judge in the SDNY (MDL Court).
 
 
The complaints are substantially similar and allege, amongst other things, that Barclays Bank PLC and the other banks individually and collectively violated provisions of the US Sherman Antitrust Act (Antitrust Act), the US Commodity Exchange Act (CEA), the US Racketeer Influenced and Corrupt Organizations Act (RICO) and various state laws by manipulating USD LIBOR rates.
 
The proposed class actions purported to be brought on behalf of (amongst others) plaintiffs that (i) engaged in USD LIBOR-linked over-the-counter transactions (OTC Class); (ii) purchased USD LIBOR-linked financial instruments on an exchange (Exchange-Based Class); (iii) purchased USD LIBOR-linked debt securities (Debt Securities Class); (iv) purchased adjustable-rate mortgages linked to USD LIBOR (Homeowner Class); or (v) issued loans linked to USD LIBOR (Lender Class).
 
The lawsuits seek unspecified damages with the exception of five lawsuits, in which the plaintiffs are seeking a combined total in excess of $1.25bn in actual damages against all defendants, including Barclays Bank PLC, plus punitive damages. Some of the lawsuits also seek trebling of damages under the Antitrust Act and RICO.
 
Between 2013 and 2016, the MDL Court issued a series of decisions effectively dismissing the majority of claims, including antitrust claims, against Barclays Bank PLC and other foreign defendants in both class actions and individual actions. In May 2016, the appeal court reversed the MDL Court’s holding that plaintiffs in certain class actions and individual actions had not suffered an antitrust injury and remanded the antitrust claims to the MDL Court for further consideration. Following further consideration, the MDL Court dismissed the majority of antitrust claims against foreign defendants, including Barclays Bank PLC, for lack of personal jurisdiction. Plaintiffs in a number of individual actions and class actions are appealing the MDL Court’s personal jurisdiction ruling.
 
In 2014, the MDL Court granted preliminary approval for the settlement of the Exchange-Based Class claims for $20m, of which $5m was paid. The balance of the settlement amount will be paid following final approval of the settlement by the court. Final approval of the settlement is awaiting plaintiff’s submission of a plan for allocation of the settlement proceeds acceptable to the MDL Court and will be subject to the right of class members to opt-out of the settlement and to seek to file their own claims.
 
In 2015, the OTC Class claims were settled for $120m. The settlement was preliminarily approved by the MDL court in December 2016 but remains subject to final approval and the right of class members to opt-out of the settlement and to seek to file their own claims. Payment of $120m was made in June 2017.
 
In November 2016, $7.1m was paid in settlement of the Debt Securities Class claims. The settlement has been preliminarily approved by the court but remains subject to final approval and the right of class members to opt-out of the settlement and seek to file their own claims.
 
EURIBOR Case in the SDNY
In 2015, $94m was paid in settlement of a EURIBOR-related class action. The settlement has been preliminarily approved by the court but remains subject to final approval and the right of class members to opt-out of the settlement and to seek to file their own claims.
 
Additional USD LIBOR Case in the SDNY
In 2015, an individual action against Barclays Bank PLC and other panel bank defendants was dismissed by the SDNY. The plaintiff alleged that the panel bank defendants conspired to increase USD LIBOR, which caused the value of bonds pledged as collateral for a loan to decrease, ultimately resulting in the sale of the bonds at a low point in the market. The plaintiff’s motion to file a further amended complaint is pending.
 
 
Sterling LIBOR Case in SDNY
In 2015, a putative class action was filed in the SDNY against Barclays Bank PLC and other Sterling LIBOR panel banks by a plaintiff involved in exchange-traded and over-the-counter derivatives that were linked to Sterling LIBOR. The complaint alleges, among other things, that defendants manipulated the Sterling LIBOR rate between 2005 and 2010 and, in so doing, committed CEA, Antitrust Act, and RICO violations. In early 2016, this class action was consolidated with an additional putative class action making similar allegations against Barclays Bank PLC and BCI and other Sterling LIBOR panel banks. Defendants have filed a motion to dismiss.
 
Japanese Yen LIBOR Cases in SDNY
In 2012, a putative class action was filed in the SDNY against Barclays Bank PLC and other Japanese Yen LIBOR panel banks by a plaintiff involved in exchange-traded derivatives. The complaint also names members of the Japanese Bankers Association’s Euroyen Tokyo Interbank Offered Rate (Euroyen TIBOR) panel, of which Barclays Bank PLC is not a member. The complaint alleges, amongst other things, manipulation of the Euroyen TIBOR and Yen LIBOR rates and breaches of the CEA and Antitrust Act between 2006 and 2010. In 2014, the court dismissed the plaintiff’s antitrust claims in full, but sustained the plaintiff’s CEA claims, which are pending. Discovery is ongoing.
 
In March 2017, a second putative class action concerning Yen LIBOR filed in the SDNY against Barclays PLC, Barclays Bank PLC and BCI was dismissed in full. The complaint makes similar allegations to the 2012 class action. Plaintiffs have appealed the dismissal.
 
SIBOR/SOR Case in the SDNY
A putative class action filed in the SDNY against Barclays PLC, Barclays Bank PLC, BCI, and other defendants, alleging manipulation of the Singapore Interbank Offered Rate (SIBOR) and Singapore Swap Offer Rate (SOR) was dismissed by the court in relation to claims against Barclays for failure to state a claim. The court indicated that plaintiffs will be allowed to amend their complaint.
 
Non-US Benchmarks Cases
In addition to US actions, legal proceedings have been brought or threatened against the Group in connection with alleged manipulation of LIBOR and EURIBOR in a number of jurisdictions. The number of such proceedings in non-US jurisdictions, the benchmarks to which they relate and the jurisdictions in which they may be brought have increased over time.
 
Claimed Amounts/Financial Impact
Aside from the settlements discussed above, it is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have upon the Group’s operating results, cash flows or financial position in any particular period.
 
Foreign Exchange investigations
Various regulatory and enforcement authorities across multiple jurisdictions have been investigating a range of issues associated with Foreign Exchange sales and trading, including electronic trading.
 
 
Background Information
In 2015 the Group reached settlements with the CFTC, the DOJ, the New York State Department of Financial Services (NYDFS), the Board of Governors of the Federal Reserve System (Federal Reserve) and the FCA (together, the 2015 Resolving Authorities) in relation to investigations into certain sales and trading practices in the Foreign Exchange market. In connection with these settlements, the Group paid total penalties of approximately $2.38bn and agreed to undertake certain remedial actions.
 
Under the plea agreement with the DOJ, in addition to a criminal fine, Barclays PLC agreed to a term of probation of three years during which Barclays PLC must, amongst other things, (i) commit no crime whatsoever in violation of the federal laws of the United States, (ii) implement and continue to implement a compliance program designed to prevent and detect the conduct that gave rise to the plea agreement and agreement, (iii) report credible allegations of violations of US antitrust or fraud laws to the relevant U.S. authority, and (iv) strengthen its compliance and internal controls as required by relevant regulatory or enforcement agencies. In January 2017, the US District Court for the District of Connecticut accepted the plea agreement and in accordance with the agreement sentenced Barclays PLC to pay $650m as a fine and $60m for violating the NPA (which amounts are part of the $2.38bn referred to above) and to serve three years of probation from the date of the sentencing order. The Group also continues to provide relevant information to certain of the 2015 Resolving Authorities.
 
The full text of the DOJ plea agreement, the orders of the CFTC, NYDFS and Federal Reserve, and the Final Notice issued by the FCA related to the settlements referred to above are publicly available on the 2015 Resolving Authorities’ respective websites.
 
The European Commission (Commission) is one of several authorities conducting an investigation into certain trading practices in the Foreign Exchange market.
 
The DOJ is also conducting an investigation into conduct relating to certain trading activities in connection with certain transactions during 2011 and 2012. Barclays is providing information to the DOJ and other relevant authorities reviewing this conduct.
 
In February 2017 the South African Competition Commission (SACC) referred Barclays Bank PLC, BCI and Absa Bank Limited, a subsidiary of Barclays Africa Group Limited, among other banks, to the Competition Tribunal to be prosecuted for breaches of South African antitrust law related to Foreign Exchange trading of South African Rand. The SACC found from its investigation that between 2007 and 2013 the banks had engaged in various forms of collusive behaviour. Barclays was the first to bring the conduct to the attention of the SACC under its leniency programme and has cooperated with, and will continue to cooperate with, the SACC in relation to this matter. The SACC is therefore not seeking an order from the Tribunal to impose any fine on Barclays Bank PLC, BCI or Absa Bank Limited.
 
Claimed Amounts/Financial Impact
Aside from the settlements discussed above, it is not currently practicable to provide an estimate of any further financial impact of the actions described on the Group or what effect they might have on the Group’s operating results, cash flows or financial position in any particular period.
 
Civil actions in respect of Foreign Exchange
A number of individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group and other banks in relation to Foreign Exchange.
 
 
Background Information
Following settlement of certain investigations referred to above in ‘Foreign Exchange Investigations’ a number of individuals and corporates in a range of jurisdictions have threatened or brought civil actions against the Group and other banks in relation to Foreign Exchange or may do so in future. Certain of these cases have been dismissed or have been settled subject to final approval from the relevant court (and in the case of class actions, the right of class members to opt-out of the settlement and to seek to file their own claims).
 
Consolidated FX Action
In 2014, a number of civil actions filed in the SDNY on behalf of proposed classes of plaintiffs alleging manipulation of Foreign Exchange markets under the Antitrust Act and New York state law and naming several international banks as defendants, including Barclays Bank PLC, were combined into a single consolidated action (Consolidated FX Action). In 2015, Barclays Bank PLC and BCI settled the Consolidated FX Action and paid $384m. The settlement itself is subject to final court approval and the right of class members to opt-out of the settlement and to seek to file their own claims.
 
ERISA FX Action
Since 2015, several civil actions have been filed in the SDNY on behalf of proposed classes of plaintiffs purporting to allege different legal theories of injury (other than those alleged in the Consolidated FX Action) related to alleged manipulation of Foreign Exchange rates and naming several international banks as defendants, including Barclays PLC, Barclays Bank PLC and BCI. One such consolidated action asserts claims under the US Employee Retirement Income Security Act (ERISA) statute (ERISA Claims) and includes allegations of conduct that are duplicative of allegations in the other cases, as well as additional allegations about ERISA plans. The Court ruled that the ERISA allegations concerning collusive manipulation of FX rates are covered by the settlement agreement in the Consolidated FX Action, but did not rule on whether allegations characterised by the ERISA plaintiffs as non-collusive manipulation of FX rates are likewise covered by the agreement. In September 2016, the Court dismissed all ERISA Claims (based on both alleged collusive and non-collusive conduct) against Barclays and all other defendants as a matter of law. The ERISA plaintiffs have appealed this decision.
 
Retail Basis Action
A putative action was filed in the Northern District of California (and subsequently transferred to the SDNY) against several international banks, including Barclays PLC and BCI, on behalf of a putative class of individuals that exchanged currencies on a retail basis at bank branches (Retail Basis Claims). The Court has ruled that the Retail Basis Claims are not covered by the settlement agreement in the Consolidated FX Action. The Court subsequently dismissed all Retail Basis Claims against Barclays and all other defendants. Plaintiffs have requested the Court’s permission to file an amended complaint.
 
Last Look Actions
In 2015, two putative class actions were filed in the SDNY on behalf of proposed classes of plaintiffs alleging injuries based on Barclays’ purported improper rejection of customer trades through Barclays Last Look functionality in Barclays’ FX e-trading platforms In 2016, Barclays Bank PLC and BCI paid $50m and settled one of the actions on a class-wide basis. (The other action was voluntarily dismissed.) The deadline for opting out of the class has expired (a small number of class members have opted out), but the Court has not yet granted final approval of the settlement.
 
 
State Law FX Action
In 2016, a putative class action was filed in the SDNY under federal, New York and California law on behalf of proposed classes of stockholders of Exchange Traded Funds and others who supposedly were indirect investors in FX Instruments. The defendants (including Barclays) moved to dismiss the action. Plaintiffs also filed a complaint on behalf of a proposed class of investors under federal and various state laws who traded FX Instruments through FX dealers or brokers not alleged to have manipulated Foreign Exchange Rates. A different group of plaintiffs subsequently filed another action based on the same theories and asserted substantively similar claims. These two actions have been consolidated and a consolidated complaint was filed in June 2017. Defendants (including Barclays) will move to dismiss the action.
 
Canadian FX Action
Civil actions similar to the Consolidated FX Action have been filed in Canadian courts on behalf of proposed classes of plaintiffs containing similar factual allegations of manipulation of Foreign Exchange rates and of damages resulting from such manipulation, in violation of Canadian law. The parties have reached a settlement in principle for $14.8m which has been preliminary approved by the Court. Payment of $14.8m was made in July 2017.
 
Claimed Amounts/Financial Impact
Aside from the settlements discussed above, the financial impact of the actions described on the Group or what effect that they might have upon the Group’s operating results, cash flows or financial position in any particular period is currently uncertain.
 
Civil actions in respect of ISDAFIX
In 2014, a number of ISDAFIX related civil actions were filed in the SDNY on behalf of proposed class of plaintiffs, alleging that Barclays Bank PLC, a number of other banks and one broker violated the Antitrust Act and several state laws by engaging in a conspiracy to manipulate the USD ISDAFIX. In 2016, Barclays Bank PLC and BCI entered into a settlement agreement with plaintiffs to resolve the consolidated action and paid $30m, fully resolving all ISDAFIX-related claims that were or could have been brought by the class. The court has preliminarily approved the settlement, which remains subject to final approval and to the right of class members to opt-out of the settlement and to seek to file their own claims.
 
Claimed Amounts/Financial Impact
The principal financial impact of the actions described on the Group is reflected in the settlement described above.
Metals investigations
Barclays Bank PLC has been providing information to the DOJ, the CFTC and other authorities in connection with investigations into metals and metals-based financial instruments.
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have upon the Group’s operating results, cash flows or financial position in any particular period.
 
Civil actions in respect of the gold and silver fix
Various civil actions have been filed against Barclays Bank PLC and others alleging manipulation of the prices of gold and silver.
 
 
Background Information
A number of civil complaints, each on behalf of a proposed class of plaintiffs, have been consolidated and transferred to the SDNY. The complaints allege that Barclays Bank PLC and other members of The London Gold Market Fixing Ltd. manipulated the prices of gold and gold derivative contracts in violation of the CEA, the Antitrust Act, and state antitrust and consumer protection laws.
 
Civil actions have been filed in Canadian courts against Barclays PLC, Barclays Bank PLC, Barclays Capital Canada Inc., BCI and Barclays Capital PLC on behalf of proposed classes of plaintiffs containing similar factual allegations of the manipulation of the prices of gold in violation of Canadian law.
 
In the US, a proposed class of plaintiffs has filed an amended complaint in an existing class action relating to silver, adding several non-silver fixing banks, including Barclays Bank PLC, BCI and Barclays Capital Services Ltd. alleging manipulation of the price of silver in violation of CEA and the antitrust laws. 
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have upon the Group’s operating results, cash flows or financial position in any particular period.
 
US residential and commercial mortgage-related activity and litigation
There have been various investigations and civil litigation relating to secondary market trading of US residential mortgage-backed securities (RMBS) and US commercial mortgage-backed securities (CMBS).
 
Background Information
The Group’s activities within the US residential mortgage sector during the period from 2005 through 2008 included:
 
 
●
 
sponsoring and underwriting of approximately $39bn of private-label securitisations;
 
 
●
economic underwriting exposure of approximately $34bn for other private-label securitisations;
 
 
●
sales of approximately $0.2bn of loans to government sponsored enterprises (GSEs);
 
 
●
sales of approximately $3bn of loans to others; and
 
 
●
sales of approximately $19.4bn of loans (net of approximately $500m of loans sold during this period and subsequently repurchased) that were originated and sold to third parties by mortgage originator affiliates of an entity that the Group acquired in 2007 (Acquired Subsidiary).
 
 
DOJ Civil Action
In December 2016, the DOJ filed a civil complaint against Barclays Bank PLC, Barclays PLC, BCI., Barclays Group US Inc., Barclays US LLC, BCP LLC, Securitized Asset Backed Receivables LLC and Sutton Funding LLC, as well as two former employees, in the US District Court in the Eastern District of New York (EDNY) containing a number of allegations, including mail and wire fraud, relating to mortgage-backed securities sold between 2005 and 2007. The DOJ complaint seeks, amongst other relief, unspecified monetary penalties. Barclays is defending the complaint and has filed a motion to dismiss. 
 
RMBS Repurchase Requests
The Group was the sole provider of various loan-level representations and warranties (R&Ws) with respect to:
 
 
●
 
approximately $5bn of Group sponsored securitisations;
 
 
●
approximately $0.2bn of sales of loans to GSEs; and
 
 
●
approximately $3bn of loans sold to others.
 
 
In addition, the Acquired Subsidiary provided R&Ws on all of the $19.4bn of loans it sold to third parties.
 
R&Ws on the remaining Group sponsored securitisations were primarily provided by third-party originators directly to the securitisation trusts with a Group subsidiary, such as the depositor for the securitisation, providing more limited R&Ws. There are no stated expiration provisions applicable to most R&Ws made by the Group, the Acquired Subsidiary or these third parties.
 
Under certain circumstances, the Group and/or the Acquired Subsidiary may be required to repurchase the related loans or make other payments related to such loans if the R&Ws are breached.
 
The unresolved repurchase requests received on or before 30 June 2017 associated with all R&Ws made by the Group or the Acquired Subsidiary on loans sold to GSEs and others and private-label activities had an original unpaid principal balance of approximately $2.1bn at the time of such sale.
 
The unresolved repurchase requests discussed above relate to civil actions that have been commenced by the trustees for certain RMBS securitisations in which the trustees allege that the Group and/or the Acquired Subsidiary must repurchase loans that violated the operative R&Ws. Such trustees and other parties making repurchase requests have also alleged that the operative R&Ws may have been violated with respect to a greater (but unspecified) amount of loans than the amount of loans previously stated in specific repurchase requests made by such trustees. Cumulative realised losses reported at 30 June 2017 on loans covered by R&Ws made by the Group or the Acquired Subsidiary are approximately $1.3bn. This litigation is ongoing.
 
In addition, the Acquired Subsidiary is subject to a more advanced civil action seeking, among other things, indemnification for losses allegedly suffered by a loan purchaser as a result of alleged breaches of R&Ws provided by the Acquired Subsidiary in connection with loan sales to the purchaser during the period 1997 to 2007. This litigation is ongoing.
 
RMBS Securities Claims
As a result of some of the RMBS activities described above, the Group has been party to a number of lawsuits filed by purchasers of RMBS sponsored and/or underwritten by the Group between 2005 and 2008. As a general matter, these lawsuits alleged, among other things, that the RMBS offering materials allegedly relied on by such purchasers contained materially false and misleading statements and/or omissions and generally demanded rescission and recovery of the consideration paid for the RMBS and recovery of monetary losses arising out of their ownership. The Group has resolved the majority of these claims, and only one action currently remains pending.
 
Approximately $0.1bn of the original face amount of RMBS related to the remaining pending action was outstanding as at 30 June 2017. There were virtually no cumulative realised losses reported on these RMBS as at 30 June 2017. The Group does not expect that, if it were to lose the remaining pending action, any such loss to be material.
 
 
Secondary Trading Investigation
The Group has received requests for information and subpoenas from the SEC, the US Attorney’s Office for the District of Connecticut and the Special Inspector General for the US Troubled Asset Relief Program related to trading practices in the secondary market for both RMBS and CMBS. A settlement was announced in May 2017 pursuant to which BCI agreed to resolve this matter for $16.56m, consisting of $15.56m in disgorgement (to be repaid directly to customers) and $1m in a civil penalty (paid to the SEC).
 
Claimed Amounts/Financial Impact
Save for the May 2017 settlement, it is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have upon the Group’s operating results, cash flows or financial position in any particular period. The cost of resolving these actions could individually or in aggregate prove to be substantial.
 
Alternative trading systems and high-frequency trading
The SEC, the New York State Attorney General (NYAG) and regulators in certain other jurisdictions have been investigating a range of issues associated with alternative trading systems (ATSs), including dark pools, and the activities of high-frequency traders.
 
Background Information
In 2014, the NYAG filed a complaint (NYAG Complaint) against Barclays PLC and BCI in the Supreme Court of the State of New York alleging, amongst other things, that Barclays PLC and BCI engaged in fraud and deceptive practices in connection with LX, the Group’s SEC-registered ATS. In February 2016, Barclays reached separate settlement agreements with the SEC and the NYAG to resolve those agencies’ claims against Barclays PLC and BCI relating to the operation of LX and paid $35m to each.
 
Barclays PLC and BCI have been named in a purported class action by an institutional financial services firm under California law based on allegations similar to those in the NYAG Complaint. In October 2016, the federal court in California granted the motion of Barclays PLC and BCI to dismiss the entire complaint and plaintiffs have appealed the court’s decision.
 
Following the filing of the NYAG Complaint, Barclays PLC and BCI were also named in a putative shareholder securities class action along with certain of its former CEOs, and its current and a former CFO, as well as an employee (Shareholder Class Action). The plaintiffs claim that holders of Barclays American Depository Receipts (ADRs) suffered damages when the ADRs declined in value as a result of the allegations in the NYAG Complaint. A motion to dismiss the complaint filed by the defendants (including Barclays PLC and BCI), was granted in part and denied in part by the court. In February 2016, the court certified the action as a class action which Barclays is appealing.
 
Claimed Amounts/Financial Impact
The class actions seek unspecified monetary damages and injunctive relief. It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect they might have upon the Group’s operating results, cash flows or financial position in any particular period.
 
FERC and other civil actions
The US Federal Energy Regulatory Commission (FERC) has filed a civil action against Barclays Bank PLC and certain of its former traders in connection with allegations that Barclays Bank PLC manipulated the electricity markets in the Western US.
 
 
Background Information
In 2012, FERC issued an Order to Show Cause and Notice of Proposed Penalties (Order and Notice) against Barclays Bank PLC and four of its former traders asserting that Barclays Bank PLC and its former traders violated FERC’s Anti-Manipulation Rule by manipulating the electricity markets in and around California from 2006 to 2008, and proposed civil penalties and profit disgorgement to be paid by Barclays Bank PLC.
 
In 2013, FERC filed a civil action against Barclays Bank PLC and its former traders in the US District Court in California seeking to collect a $435m civil penalty and disgorgement of $34.9m of profits, plus interest. In 2015, the US District Court in California ordered that it would bifurcate its assessment of liabilities and penalties from its assessment of disgorgement. In March 2017, the court denied FERC’s motion for summary affirmance of the penalty assessment and ordered discovery.
 
In 2015, a civil class action complaint seeking damages of $139.3m was filed in the US District Court for the SDNY against Barclays Bank PLC by Merced Irrigation District, a California utility company, asserting antitrust allegations in connection with Barclays Bank PLC’s purported manipulation of the electricity markets in and around California. The factual allegations mirror those raised in the civil action filed by FERC. In 2016, Barclays Bank PLC motion to dismiss the civil class action for failure to state a claim was granted in part and denied in part by the SDNY. The matter is in discovery.
 
Claimed Amounts/Financial Impact
FERC has made claims against Barclays Bank PLC totalling $469.9m, plus interest, for civil penalties and profit disgorgement. The civil class action complaint refers to damages of $139.3m. These amounts do not necessarily reflect Barclays Bank PLC’s potential financial exposure if a ruling were to be made against it in either action.
 
Treasury auction securities civil actions and related matters
Numerous putative class action complaints have been filed in US Federal Courts against BCI and other financial institutions that have served as primary dealers in US Treasury securities. The complaints have been consolidated in the US Federal Court in New York. The complaints generally allege that defendants conspired to manipulate the US Treasury securities market in violation of US federal antitrust laws, the CEA and state common law. Some complaints also allege that defendants engaged in illegal “spoofing” of the US Treasury market.
Certain governmental authorities are conducting investigations into activities relating to the trading of certain government securities in various markets and Barclays has been providing information to various authorities on an ongoing basis.
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have upon the Group’s operating results, cash flows or financial position in any particular period.
 
American Depositary Shares
Barclays PLC, Barclays Bank PLC and various former members of Barclays Bank PLC's Board of Directors have been named as defendants in a securities class action consolidated in the SDNY.
 
 
 
Background Information
The securities class action against Barclays PLC, Barclays Bank PLC and various former members of Barclays Bank PLC's Board of Directors alleges misstatements and omissions in offering documents for certain American Depositary Shares issued by Barclays Bank PLC in April 2008 with an original face amount of approximately $2.5 billion (the April 2008 Offering). The plaintiffs assert claims under the Securities Act of 1933, alleging misstatements and omissions concerning (amongst other things) Barclays Bank PLC’s portfolio of mortgage-related (including US subprime-related) securities, Barclays Bank PLC’s exposure to mortgage and credit market risk, and Barclays Bank PLC’s financial condition. The plaintiffs have not specifically alleged the amount of their damages. In June 2016, the SDNY certified the action as a class action. Barclays has moved for summary judgement.
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the action described on the Group or what effect that it might have upon the Group’s operating results, cash flows or financial position in any particular period.
 
BDC Finance L.L.C.
BDC Finance L.L.C. (BDC) has filed a complaint against Barclays Bank PLC alleging breach of contract in connection with a portfolio of total return swaps governed by an ISDA Master Agreement (collectively, the Agreement).
 
Background Information
In 2008, BDC filed a complaint in the NY Supreme Court alleging that Barclays Bank PLC breached the Agreement when it failed to transfer approximately $40m of alleged excess collateral in response to BDC’s 2008 demand (Demand).
 
BDC asserts that under the Agreement Barclays Bank PLC was not entitled to dispute the Demand before transferring the alleged excess collateral and that even if the Agreement entitled Barclays Bank PLC to dispute the Demand before making the transfer, Barclays Bank PLC failed to dispute the Demand. BDC demands damages totalling $298m plus attorneys’ fees, expenses, and pre-judgement interest. A trial on liability issues concluded in April 2017 and the court’s decision is pending.
 
In 2011, BDC’s investment advisor, BDCM Fund Adviser, L.L.C. and its parent company, Black Diamond Capital Holdings, L.L.C. also sued Barclays Bank PLC and BCI in Connecticut State Court for unspecified damages allegedly resulting from Barclays Bank PLC’s conduct relating to the Agreement, asserting claims for violation of the Connecticut Unfair Trade Practices Act and tortious interference with business and prospective business relations. The parties agreed to stay this case.
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have upon the Group’s operating results, cash flows or financial position in any particular period. BDC has made claims against the Group totalling $298m plus attorneys’ fees, expenses, and pre-judgement interest. This amount does not necessarily reflect the Group’s potential financial exposure if a ruling were to be made against it.
 
Civil actions in respect of the US Anti-Terrorism Act
Civil complaints against Barclays Bank PLC and other banks allege engagement in a conspiracy and violation of the US Anti-Terrorism Act (ATA).
 
 
Background Information
In 2015, an amended civil complaint was filed in the US Federal Court in the EDNY by a group of approximately 250 plaintiffs, alleging that Barclays Bank PLC and a number of other banks engaged in a conspiracy and violated the ATA by facilitating US dollar denominated transactions for the Government of Iran and various Iranian banks, which in turn funded Hezbollah and other attacks that injured or killed the plaintiffs’ family members. Plaintiffs seek to recover for pain, suffering and mental anguish pursuant to the provisions of the ATA, which allows for the tripling of any proven damages and attorneys' fees. Plaintiffs filed a second amended complaint in July 2016, which, among other things, added various plaintiffs, bringing the total number of plaintiffs to approximately 350. In November 2016, defendants filed a motion to dismiss.
 
In November 2016, a separate civil complaint was filed in the US Federal Court in the Southern District of Illinois by a group of approximately 90 plaintiffs, alleging claims under the ATA against Barclays Bank PLC and a number of other banks. The allegations against Barclays Bank PLC are substantially similar to those in the second amended complaint filed in the US Federal Court in the EDNY action in July 2016. Plaintiffs filed an amended complaint in January 2017, which, among other things, added various plaintiffs, bringing the total number of plaintiffs to approximately 200. In April 2017, this action was transferred to the US Federal Court in the EDNY, where it is now pending.
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect that they might have upon the Group’s operating results, cash flows or financial position in any particular period.
 
Interest rate swap and credit default swap US civil actions
Barclays PLC, Barclays Bank PLC, and BCI, together with other financial institutions are defendants in interest rate swap and credit default swap antitrust civil actions in the SDNY.
 
Background Information
Barclays PLC, Barclays Bank PLC, and BCI, together with other financial institutions that act as market makers for interest rate swaps (IRS), Trade Web, and ICAP, are named as defendants in several antitrust class actions which were consolidated in the SDNY in 2016. The complaints allege defendants conspired to prevent the development of exchanges for IRS and demand unspecified money damages, treble damages and legal fees. Plaintiffs include certain swap execution facilities, as well as buy-side investors. The buy-side investors claim to represent a class that transacted in fixed-for-floating IRS with defendants in the US from 2008 to the present, including, for example, US retirement and pension funds, municipalities, university endowments, corporations, insurance companies and investment funds. Defendants have filed motions to dismiss. In June 2017, a separate suit was filed in the US District Court in the SDNY against the same financial institution defendants in the IRS cases, including Barclays PLC, Barclays Bank PLC, and BCI, claiming that certain conduct alleged in the IRS cases also caused plaintiff to suffer harm with respect to the Credit Default Swaps market. Defendants will also move to dismiss this action.
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the actions described on the Group or what effect it have upon the Group’s operating results, cash flows or financial position in any particular period.
 
 
CCUK Finance Limited and CIAC Corporation
In May 2017, Barclays Bank PLC was served with a civil claim by CCUK Finance Limited and CIAC Corporation issued in the English High Court alleging breach of a contractual indemnity, fraudulent misrepresentation and breach of warranty arising out of the sale of a portfolio of credit cards in 2007. Barclays Bank PLC has filed a defence and counterclaim.
 
Claimed Amounts/Financial Impact
The claim seeks damages of not less than £1bn plus interest and costs. The damages claimed does not necessarily reflect Barclays Bank PLC’s potential financial exposure if a ruling were to be made against it. It is not currently practicable to provide an estimate of the financial impact of the action described or what effect it might have upon operating results, cash flows or the Group’s financial position in any particular period.
 
Portuguese Competition Authority investigation
The Portuguese Competition Authority is investigating whether competition law was infringed by the exchange of information about retail credit products amongst 15 banks in Portugal, including the Group, over a period of 11 years with particular reference to mortgages, consumer lending and lending to small and medium enterprises. The Group is cooperating with the investigation.
 
Claimed Amounts/Financial Impact
It is not currently practicable to provide an estimate of the financial impact of the action described or what effect it might have upon operating results, cash flows or the Group’s financial position in any particular period.
 
General
The Group is engaged in various other legal, competition and regulatory matters in the UK and US and a number of other overseas jurisdictions. It is subject to legal proceedings by and against the Group which arise in the ordinary course of business from time to time, including (but not limited to) disputes in relation to contracts, securities, debt collection, consumer credit, fraud, trusts, client assets, competition, data protection, money laundering, financial crime, employment, environmental and other statutory and common law issues.
 
The Group is also subject to enquiries and examinations, requests for information, audits, investigations and legal and other proceedings by regulators, governmental and other public bodies in connection with (but not limited to) consumer protection measures, compliance with legislation and regulation, wholesale trading activity and other areas of banking and business activities in which the Group is or has been engaged. The Group is co-operating with the relevant authorities and keeping all relevant agencies briefed as appropriate in relation to these matters and others described in this note on an ongoing basis.
 
At the present time, the Group does not expect the ultimate resolution of any of these other matters to have a material adverse effect on its financial position. However, in light of the uncertainties involved in such matters and the matters specifically described in this note, there can be no assurance that the outcome of a particular matter or matters will not be material to the Group’s results of operations or cash flow for a particular period, depending on, amongst other things, the amount of the loss resulting from the matter(s) and the amount of income otherwise reported for the reporting period.
 
 
20. Related party transactions
 
No related party transactions that have taken place in the half year ended 30 June 2017 have materially affected the financial position or the performance of the Group during this period.
 
Barclays Africa Group Limited
On 1 June 2017, Barclays reduced its holding in BAGL to 16.4% of BAGL’s issued share capital with an obligation to contribute to a BEE scheme leaving a residual holding of 14.9%. This resulted in accounting deconsolidation of BAGL from the Group, with the holding recognised as an available for sale investment. For further detail, see Note 4.
 
As a consequence of the Group no longer being considered to have a significant influence over BAGL, it ceased to be a related party of the Group on 1 June 2017.
 
Other related party transactions
Other related party transactions in the half year ended 30 June 2017 were similar in nature to those disclosed in the 2016 Annual Report.
 
21. Segmental reporting
 
Analysis of results by business
Barclays
UK
Barclays
International
Head
Office
Barclays
Core1
Barclays
Non-Core2
Barclays
Group
Half year ended 30.06.17
£m
£m
£m
£m
£m
£m
Total income net of insurance claims
3,661
7,748
2
11,411
(530)
10,881
Credit impairment charges and other provisions
(398)
(625)
(1)
(1,024)
(30)
(1,054)
Net operating income
3,263
7,123
1
10,387
(560)
9,827
Operating expenses
(2,628)
(4,720)
(100)
(7,448)
(284)
(7,732)
Other net (expenses)/income3
(1)
214
(164)
49
197
246
Profit before tax
634
2,617
(263)
2,988
(647)
2,341
 
 
 
 
 
 
 
 
£bn
£bn
£bn
£bn
£bn
£bn
Total assets
203.4
681.6
17.3
902.3
233.0
1,135.3
 
 
 
 
 
 
 
 
 
Analysis of results by business
Barclays
UK
Barclays
International
Head
Office
Barclays
Core
Barclays
Non-Core
Barclays
Group
Half year ended 30.06.16
£m
£m
£m
£m
£m
£m
Total income net of insurance claims
3,746
7,552
301
11,599
(586)
11,013
Credit impairment charges and other provisions
(366)
(509)
(1)
(876)
(55)
(931)
Net operating income
3,380
7,043
300
10,723
(641)
10,082
Operating expenses
(2,299)
(4,309)
(139)
(6,747)
(950)
(7,697)
Other net (expenses)/income2
(1)
19
(27)
(9)
(313)
(322)
Profit before tax
1,080
2,753
134
3,967
(1,904)
2,063
 
 
 
 
 
 
 
 
£bn
£bn
£bn
£bn
£bn
£bn
Total assets
204.6
679.9
87.7
972.2
379.1
1,351.3
 
1
Barclays Core consists of Barclays UK, Barclays International and Head Office.
2
Barclays Non-Core segment was closed on 1 July 2017, with prospective financial performance being reintegrated into Barclays UK, Barclays International and Head Office.
3
Other net (expenses)/income represents: profit or (loss) on disposal of undertakings, share of results of associates and joint ventures, and impairment on assets held for sale.
 
 
Half year ended
Half year ended
Split of income by geographic region1
30.06.17
30.06.16
 
£m
£m
UK
5,649
5,915
Europe
731
1,159
Americas
4,093
3,417
Africa and Middle East
139
191
Asia
269
331
Total
10,881
11,013
 
1
The geographic region is based on counterparty location.
 
22. Barclays PLC parent balance sheet
 
 
As at
As at
 
30.06.17
31.12.16
Assets
£m
£m
Investment in subsidiaries
37,803
36,553
Loans and advances to subsidiaries
25,200
19,421
Financial investments
1,286
1,218
Derivative financial instruments
148
268
Other assets
106
105
Total assets
64,543
57,565
 
 
 
Liabilities
 
 
Deposits from banks
515
547
Subordinated liabilities
5,236
3,789
Debt securities in issue
21,225
16,893
Other liabilities
68
14
Total liabilities
27,044
21,243
 
 
 
Equity
 
 
Called up share capital
4,258
4,241
Share premium account
17,740
17,601
Other equity instruments
7,697
6,453
Other reserves
473
420
Retained earnings
7,331
7,607
Total equity
37,499
36,322
Total liabilities and equity
64,543
57,565
 
Investment in subsidiary
The investment in subsidiary of £37,803m (December 2016: £36,553m) represents investments made into Barclays Bank PLC, including £7,736m (December 2016: £6,486m) of Additional Tier 1 (AT1) securities. The increase of £1,250m during the period was driven by a £1,250m AT1 issuance by Barclays PLC during the first quarter.
 
Loans and advances to subsidiary, subordinated liabilities and debt securities in issue
During H117, Barclays PLC issued $2.0bn of Fixed Rate Subordinated Notes included within the subordinated liabilities balance of £5,236m (December 2016: £3,789m), and $5.0bn of Fixed and Floating Rate Senior Notes and £0.95bn of Fixed Rate Senior Notes included within the debt securities in issue balance of £21,225m (December 2016: £16,893m). The proceeds raised through these transactions were used to invest in Barclays Bank PLC Notes in each case with a ranking corresponding to the notes issued by Barclays PLC and included within the loans and advances to subsidiary balance of £25,200m (December 2016: £19,421m) and financial investments balance of £1,286m (December 2016 £1,218m).
 
Management of internal investments, loans and advances
Barclays PLC retains the discretion to manage the nature of its internal investments in the subsidiaries according to their regulatory and business needs. As we implement our structural reform programme, Barclays PLC will invest capital and funding to Barclays Bank PLC and other Group subsidiaries such as the Group service company, the US IHC and the UK ring-fenced bank.
 
 
Appendix: Non-IFRS Performance Measures
 
The Barclays management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the business’ performance between financial periods, and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of Barclays PLC and its subsidiaries (the Group). They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays’ management.
 
Any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well.
 
Non-IFRS performance measures glossary
 
Measure
Definition
Barclays Core
Barclays Core includes Barclays UK, Barclays International and Head Office. A reconciliation of Core statutory results is included on page 95.
 
Return on average tangible shareholders’ equity
 
Statutory profit after tax attributable to ordinary shareholders, including an adjustment for the tax credit in reserves in respect of other equity instruments, as a proportion of average shareholders’ equity excluding non-controlling interests and other equity instruments adjusted for the deduction of intangible assets and goodwill. The components of the calculation have been included on pages 96-97.
 
Return on average allocated tangible shareholders’ equity
 
Statutory profit after tax attributable to ordinary shareholders, including an adjustment for the tax credit in reserves in respect of other equity instruments, as a proportion of average allocated tangible shareholders’ equity. The components of the calculation have been included on pages 96-97.
 
Period end allocated tangible equity
Allocated tangible equity is calculated as 12.0% (2016: 11.5%) of CRD IV fully loaded risk weighted assets for each business, adjusted for CRD IV fully loaded capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office tangible equity represents the difference between the Group's tangible equity and the amounts allocated to businesses.
 
Average tangible shareholders’ equity
Calculated as the average of the 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 shareholders’ 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 shareholders’ equity for the period is the average of the monthly averages within that period.
 
Cost: income ratio
Total operating expenses divided by total income.
 
Basic earnings/(loss) per share contribution (Barclays Core and Non-Core)
 
The calculation is consistent with the IFRS measure and applied to the Barclays Core and Non-Core: statutory profit after tax attributable to ordinary shareholders, including an adjustment for the tax credit in reserves in respect of other equity instruments, divided by the Group basic weighted average number of shares. The components of the calculation have been included on page 98.
 
Loan loss rate
 
Is quoted in basis points and represents total annualised loan impairment divided by gross loans and advances to customers and banks held at amortised cost at the balance sheet date.
 
Loan: deposit ratio
 
Loans and advances divided by customer accounts calculated for Barclays UK, Barclays International and Non-Core, excluding investment banking businesses. This excludes particular liabilities issued by the retail businesses that have characteristics comparable to retail deposits (for example structured Certificates of Deposit and retail bonds), which are included within debt securities in issue.
 
Net interest margin
 
Annualised net interest income divided by the sum of average customer assets. The components of the calculation have been included on page 30.
 
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 98.
 
 
Barclays Core Reconciliation
 
 
Half year ended 30.06.17
 
Half year ended 30.06.16
 
Barclays UK
Barclays International
Head Office
Barclays Core
 
Barclays UK
Barclays International
Head Office
Barclays Core
 
£m
£m
£m
£m
 
£m
£m
£m
£m
Total income
3,661
7,748
2
11,411
 
3,746
7,552
301
11,599
Credit impairment charges and other provisions
(398)
(625)
(1)
(1,024)
 
(366)
(509)
(1)
(876)
Net operating income
3,263
7,123
1
10,387
 
3,380
7,043
300
10,723
Operating expenses excluding litigation and conduct
(1,933)
(4,711)
(89)
(6,733)
 
(1,899)
(4,295)
(121)
(6,315)
Litigation and conduct
(695)
(9)
(11)
(715)
 
(400)
(14)
(18)
(432)
Operating expenses
(2,628)
(4,720)
(100)
(7,448)
 
(2,299)
(4,309)
(139)
(6,747)
Other net (expenses)/income
(1)
214
(164)
49
 
(1)
19
(27)
(9)
Profit/(loss) before tax
634
2,617
(263)
2,988
 
1,080
2,753
134
3,967
Attributable profit/(loss)
185
1,656
(298)
1,543
 
608
1,746
90
2,444
 
 
 
 
 
 
 
 
 
 
Average allocated tangible equity (£bn)
8.8
27.5
8.2
44.5
 
9.1
25.0
5.8
39.9
Risk weighted assets (£bn)
66.1
212.2
26.2
304.6
 
67.1
209.3
43.2
319.6
 
Returns
 
Return on average allocated tangible equity is calculated as profit for the period attributable to ordinary equity holders of the parent (adjusted for the tax credit recorded in reserves in respect of interest payments on other equity instruments) divided by average allocated tangible equity for the period as appropriate, excluding non-controlling and other equity interests for businesses. Allocated tangible equity has been calculated as 12.0% (2016: 11.5%) of CRD IV fully loaded risk weighted assets for each business, adjusted for CRD IV fully loaded capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office average tangible equity represents the difference between the Group's average tangible equity and the amounts allocated to businesses.
 
 
Half year ended
Half year ended
 
30.06.17
30.06.16
Attributable profit
£m
£m
Barclays UK
185
608
Corporate and Investment Bank
1,083
868
Consumer, Cards and Payments
573
878
Barclays International
1,656
1,746
Head Office
(298)
90
Barclays Core
1,543
2,444
Barclays Non-Core
(419)
(1,490)
Africa Banking discontinued operation
(2,335)
156
Barclays Group
(1,211)
1,110
 
 
 
Tax credit in respect of interest payments on other equity instruments
 
 
Barclays UK
18
14
Corporate and Investment Bank
45
35
Consumer, Cards and Payments
9
5
Barclays International
54
40
Head Office
-
(4)
Barclays Core
72
50
Barclays Non-Core
10
8
Africa Banking discontinued operation
-
-
Barclays Group
82
58
 
 
 
Profit/(loss) attributable to ordinary equity holders of the parent
 
 
Barclays UK
203
622
Corporate and Investment Bank
1,128
903
Consumer, Cards and Payments
582
883
Barclays International
1,710
1,786
Head Office
(298)
86
Barclays Core
1,615
2,494
Barclays Non-Core
(409)
(1,482)
Africa Banking discontinued operation
(2,335)
156
Barclays Group
(1,129)
1,168
 
 
 
Half year ended
Half year ended
 
30.06.17
30.06.16
Average allocated tangible equity
£bn
£bn
Barclays UK
8.8
9.1
Corporate and Investment Bank
23.3
21.5
Consumer, Cards and Payments
4.2
3.5
Barclays International
27.5
25.0
Head Office1
8.2
5.8
Barclays Core
44.5
39.9
Barclays Non-Core
4.9
8.5
Barclays Group
49.4
48.3
 
 
 
Return on average allocated tangible equity
%
%
Barclays UK
4.6%
13.6%
Corporate and Investment Bank
9.7%
8.4%
Consumer, Cards and Payments
28.0%
50.9%
Barclays International
12.4%
14.3%
 
 
 
Barclays Core2
7.3%
12.5%
 
 
 
Barclays Group
(4.6%)
4.8%
 
 
 
 
 
 
Returns excluding charges for PPI, impairment of Barclays' holding in BAGL and loss on the sale of BAGL
 
 
 
 
Half year ended
 
 
30.06.17
 
 
£m
 
Barclays Core profit attributable to ordinary equity holders
1,615
 
Impact of charges for PPI
(692)
 
Barclays Core profit attributable to ordinary equity holders of the parent excluding charges for PPI 
2,307
 
 
Average allocated tangible equity
£bn
Barclays Core
44.5
 
 
 
Return on average allocated tangible equity excluding charges for PPI
%
 
Barclays Core2
10.4%
 
 
 
 
 
£m
 
Barclays Group profit attributable to ordinary equity holders
(1,129)
 
Impact of charges for PPI
(692)
 
Impact of impairment of Barclays’ holding in BAGL
(1,008)
 
Impact of loss on the sale of BAGL
(1,435)
 
Barclays Group profit attributable to ordinary equity holders of the parent excluding charges for PPI, impairment of Barclays' holding in BAGL and loss on the sale of BAGL
2,006
 
 
Average allocated tangible equity
£bn
Barclays Group
49.4
 
 
Return on average allocated tangible equity excluding charges for PPI, impairment of Barclays' holding in BAGL and loss on the sale of BAGL
 
 
 
 
%
 
Barclays Group
8.1%
 
1
Includes the Africa Banking discontinued operation.
2
Includes Head Office.
 
 
 
Earnings per share
 
 
 
Half year ended
Half year ended
 
30.06.17
30.06.16
Profit/(loss) attributable to ordinary equity holders of the parent1
£m
£m
Barclays Core
1,615
2,494
Barclays Non-Core
(409)
(1,482)
Africa Banking discontinued operation
(2,335)
156
Barclays Group
(1,129)
1,168
 
 
 
 
m
m
Basic weighted average number of shares
16,989
16,859
 
 
 
Basic earnings per ordinary share
p
p
Barclays Core contribution
9.5
14.8
Barclays Non-Core contribution
(2.4)
(8.8)
 
 
 
Barclays Group
(6.6)
6.9
 
 
 
 
Earnings per share excluding charges for PPI, impairment of Barclays' holding in BAGL and loss on the sale of BAGL
 
Half year ended
 
30.06.17
Profit attributable to ordinary equity holders of the parent excluding charges for PPI, impairment of Barclays' holding in BAGL and loss on the sale of BAGL
£m
Barclays Group profit attributable to ordinary equity holders
(1,129)
Impact of charges for PPI
(692)
Impact of impairment of Barclays’ holding in BAGL
(1,008)
Impact of loss on the sale of BAGL
(1,435)
Barclays Group profit attributable to ordinary equity holders of the parent excluding charges for PPI, impairment of Barclays' holding in BAGL and loss on the sale of BAGL
2,006
 
 
 
m
Basic weighted average number of shares
16,989
 
 
Basic earnings per ordinary share excluding charges for PPI, impairment of Barclays' holding in BAGL and loss on the sale of BAGL
p
Barclays Group
11.8
 
1
The profit after tax attributable to other equity holders of £301m (H116: £208m) is offset by a tax credit recorded in reserves of 82m (H116: £58m). The net amount of £219m (H116: £150m), along with non-controlling interests (NCI) is deducted from profit after tax in order to calculate earnings per share and return on average tangible shareholders’ equity.
 
 
Tangible net asset value
 
 
 
As at
As at
 
30.06.17
31.12.16
 
£m
£m
Total equity excluding non-controlling interests
63,866
64,873
Other equity instruments
(7,694)
(6,449)
Goodwill and intangibles1
(7,724)
(9,245)
Tangible shareholders' equity attributable to ordinary shareholders of the parent
48,448
49,179
 
 
 
 
m
m
Shares in issue
17,034
16,963
 
 
 
 
p
p
Tangible net asset value per share
284
290
 
1
Comparative figures include goodwill and intangibles in relation to Africa Banking.
 
 
Shareholder Information
 
 
 
 
 
 
 
Results timetable1
Date
 
 
 
 
Ex-dividend date
10 August 2017
Dividend Record date
11 August 2017
Scrip reference share price set and made available to shareholders
17 August 2017
Cut off time of 4.30 pm (London time) for the receipt of Mandate Forms or Revocation Forms (as applicable)
25 August 2017
Dividend Payment date /first day of dealing in New Shares
18 September 2017
Q3 2017 Results Announcement
31 October 2017
 
 
 
 
 
 
For qualifying US and Canadian resident ADR holders, the interim dividend of 1.0p per ordinary share becomes 4.0p per ADS (representing four shares). The ex-dividend, dividend record and dividend payment dates for ADR holders are as shown above.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
% Change3
Exchange rates2
30.06.17
31.12.16
30.06.16
31.12.16
30.06.16
Period end - US$/£
1.30
1.23
1.34
6%
(3%)
6 month average - US$/£
1.26
1.28
1.43
(2%)
(12%)
3 month average - US$/£
1.28
1.24
1.43
3%
(10%)
Period end - €/£
1.14
1.17
1.21
(3%)
(6%)
6 month average - €/£
1.16
1.16
1.29
-
(10%)
3 month average - €/£
1.16
1.15
1.27
1%
(9%)
Period end - ZAR/£
16.98
16.78
19.63
1%
(13%)
6 month average - ZAR/£
16.61
17.90
22.17
(7%)
(25%)
3 month average - ZAR/£
16.85
17.29
21.51
(3%)
(22%)
 
 
 
 
 
 
Share price data
30.06.17
31.12.16
30.06.16
 
 
Barclays PLC (p)
202.75
223.45
138.60
 
 
Barclays PLC number of shares (m)
17,034
16,963
16,913
 
 
 Barclays Africa Group Limited (formerly Absa Group Limited) (ZAR)
143.75
168.69
144.08
 
 
 Barclays Africa Group Limited (formerly Absa Group Limited) number of shares (m)
848
848
848
 
 
 
 
 
 
 
 
For further information please contact
 
 
 
 
 
 
 
 
 
 
 
Investor relations
Media relations
Kathryn McLeland +44 (0) 20 7116 4943
Thomas Hoskin +44 (0) 20 7116 4755
 
 
 
 
 
 
More information on Barclays can be found on our website: home.barclays
 
 
 
 
 
 
 
 
 
 
 
Registered office
 
 
 
 
 
1 Churchill Place, London, E14 5HP, United Kingdom. Tel: +44 (0) 20 7116 1000. Company number: 48839
 
 
 
 
 
 
 
Registrar
 
 
 
 
 
Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA United Kingdom.
 
 
 
 
Tel: 0371 384 20554 from the UK or +44 121 415 7004 from overseas.
 
 
 
 
 
 
 
 
 
 
 
 
1
Note that these announcement dates are provisional and subject to change. Any changes to the Scrip Dividend Programme dates will be made available at home.barclays/dividends.
2
The average rates shown above are derived from daily spot rates during the year.
3
The change is the impact to GBP reported information.
4
Lines open 8.30am to 5.30pm UK time, Monday to Friday, excluding UK public holidays in England and Wales.