6-K 1 a9355p.htm ANNUAL FINAL RESULTS a9355p
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
 
FORM 6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
February 15, 2023
 
Barclays PLC
(Name of Registrant)
 
1 Churchill Place
London E14 5HP
England
(Address of Principal Executive Office)
 
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 on Form 6-K is filed 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.
 
 
__________________________________________________________________________________
 
 
 
SIGNATURES
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
BARCLAYS PLC
 
(Registrant)
 
 
 
Date: February 15, 2023
 
 
 
By: /s/ Garth Wright
--------------------------------
 
Garth Wright
 
Assistant Secretary
 
 
 
 
Barclays PLC
 
 
 
2022 Results Announcement
 
 
 
31 December 2022
 
 
 
Results Announcement
Page
 
 
Notes
1
 
 
Performance Highlights
2
 
 
Group Finance Director’s Review
6
 
 
Results by Business
 
 
 
Barclays UK
8
 
 
Barclays International
11
 
 
Head Office
16
 
 
Quarterly Results Summary
17
 
 
Quarterly Results by Business
18
 
 
Performance Management
 
 
 
Margins and Balances
24
 
 
Remuneration
26
 
 
Risk Management
 
 
 
Risk Management and Principal Risks
28
 
 
Credit Risk
29
 
 
Market Risk
49
 
 
Treasury and Capital Risk
50
 
 
Statement of Directors' Responsibilities
63
 
 
Condensed Consolidated Financial Statements
64
 
 
Financial Statement Notes
69
 
 
Appendix: Non-IFRS Performance Measures
77
 
 
Shareholder Information
84
 
 
BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE: +44 (0) 20 7116 1000. COMPANY NO. 48839.
 
 
Notes
 
The terms Barclays and Group refer to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis compares the year ended 31 December 2022 to the corresponding 12 months of 2021 and the three months ended 31 December 2022 to the corresponding three months in 2021 and balance sheet analysis as at 31 December 2022 with comparatives relating to 31 December 2021. The historical financial information used for the purposes of such analysis has been restated. Please refer to Supplementary Information contained herein for further information. The abbreviations ‘£m’ and ‘£bn’ represent millions and thousands of millions of Pounds Sterling respectively; the abbreviations ‘$m’ and ‘$bn’ represent millions and thousands of millions of US Dollars respectively; and the abbreviations ‘€m’ and ‘€bn’ represent millions and thousands of millions of Euros respectively.
 
There are a number of key judgement areas, for example impairment calculations, which are based on models and which are subject to ongoing adjustment and modifications. Reported numbers reflect best estimates and judgements at the given point in time.
 
Relevant terms that are used in this document but are not defined under applicable regulatory guidance or International Financial Reporting Standards (IFRS) are explained in the results glossary, which can be accessed at home.barclays/investor-relations.
 
The information in this announcement, which was approved by the Board of Directors on 14 February 2023, does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2022, which contained an unmodified audit report under Section 495 of the Companies Act 2006 (which did not make any statements under Section 498 of the Companies Act 2006) have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.
 
These results will be furnished on Form 6-K with the US Securities and Exchange Commission (SEC) as soon as practicable following their publication. Once furnished with the SEC, a copy of the Form 6-K will be available from the SEC’s website at www.sec.gov.
 
Barclays is a frequent issuer in the debt capital markets and regularly meets with investors via formal road-shows and other ad hoc meetings. Consistent with its usual practice, Barclays expects that from time to time over the coming quarter it will meet with investors globally to discuss these results and other matters relating to the Group.
 
 
Non-IFRS performance measures
 
Barclays’ management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses’ performance between financial periods and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays’ management. However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Refer to the appendix on pages 77 to 83 for further information and calculations of non-IFRS performance measures included throughout this document, and the most directly comparable IFRS measures.
 
 
Forward-looking statements
 
This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as ‘may’, ‘will’, ‘seek’, ‘continue’, ‘aim’, ‘anticipate’, ‘target’, ‘projected’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’, ‘achieve’ or other words of similar meaning. Forward-looking statements can be made in writing but also may be made verbally by directors, officers and employees of the Group (including during management presentations) in connection with this document. Examples of forward-looking statements include, among others, statements or guidance regarding or relating to the Group’s future financial position, income levels, costs, assets and liabilities, impairment charges, provisions, capital, leverage and other regulatory ratios, capital distributions (including dividend policy and share buybacks), return on tangible equity, projected levels of growth in banking and financial markets, industry trends, any commitments and targets (including environmental, social and governance (ESG) commitments and targets), business strategy, plans and objectives for future operations and other statements that are not historical or current facts. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements speak only as at the date on which they are made. Forward-looking statements may be affected by a number of factors, including, without limitation: changes in legislation, regulation and the interpretation thereof, changes in IFRS and other accounting standards, including practices with regard to the interpretation and application thereof and emerging and developing ESG reporting standards; the outcome of current and future legal proceedings and regulatory investigations; the policies and actions of governmental and regulatory authorities; the Group’s ability along with governments and other stakeholders to measure, manage and mitigate the impacts of climate change effectively; environmental, social and geopolitical risks and incidents and similar events beyond the Group’s control; the impact of competition; capital, leverage and other regulatory rules applicable to past, current and future periods; UK, US, Eurozone and global macroeconomic and business conditions, including inflation; volatility in credit and capital markets; market related risks such as changes in interest rates and foreign exchange rates; higher or lower asset valuations; changes in credit ratings of any entity within the Group or any securities issued by it; changes in counterparty risk; changes in consumer behaviour; the direct and indirect consequences of the Russia-Ukraine war on European and global macroeconomic conditions, political stability and financial markets; direct and indirect impacts of the coronavirus (COVID-19) pandemic; instability as a result of the UK’s exit from the European Union (EU), the effects of the EU-UK Trade and Cooperation Agreement and any disruption that may subsequently result in the UK and globally; the risk of cyber-attacks, information or security breaches or technology failures on the Group’s reputation, business or operations; the Group’s ability to access funding; and the success of acquisitions, disposals and other strategic transactions. A number of these factors are beyond the Group’s control. As a result, the Group’s actual financial position, results, financial and non-financial metrics or performance measures or its ability to meet commitments and targets may differ materially from the statements or guidance set forth in the Group’s forward-looking statements. Additional risks and factors which may impact the Group’s future financial condition and performance are identified in Barclays PLC’s filings with the SEC (including, without limitation, Barclays PLC’s Annual Report on Form 20-F for the financial year ended 31 December 2022), which are available on the SEC’s website at www.sec.gov.
 
Subject to Barclays PLC’s obligations under the applicable laws and regulations of any relevant jurisdiction (including, without limitation, the UK and the US) in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
 
Performance Highlights
 
In 2022 Barclays delivered a profit before tax of £7.0bn and return on tangible equity (RoTE) of 10.4%, with total capital distributions equivalent to c.13.4p per share
 
 
C. S. Venkatakrishnan, Group Chief Executive, commented
“Barclays performed strongly in 2022. Each business delivered income growth, with Group income up 14%. We achieved our RoTE target of over 10%, maintained a strong Common Equity Tier 1 (CET1) capital ratio of 13.9%, and returned capital to shareholders. We are cautious about global economic conditions, but continue to see growth opportunities across our businesses through 2023.”
 
 
Key financial metrics:
 
 
Income
Cost: income ratio
Profit before tax
Attributable profit
RoTE
EPS
TNAV per share
CET1 ratio
Total capital return1
FY22
£25.0bn
67%
£7.0bn
£5.0bn
10.4%
30.8p
295p
13.9%
c.13.4p equivalent
Q422
£5.8bn
69%
£1.3bn
£1.0bn
8.9%
6.5p
 
 
Demonstrating execution against our three strategic priorities:
 
●
Deliver next generation digitised consumer financial services: simplifying and upgrading online banking services - with over 10.5 million Barclays UK mobile banking app users, and log-ins up 8% year-on-year. c.220k ‘Rainy Day Saver’ accounts opened online since launch on 29 September 2022, 41% are new or re-joining Blue Rewards customers. In the US Consumer Bank, the Gap portfolio2 integration onto our platform doubled our US customer base to over 20 million
●
Deliver sustainable growth in the Corporate and Investment Bank (CIB): 114bps of revenue share gain in Global Markets from 2019-20223; second fastest growth rate across the top 10 global peers. Investment in Financing businesses delivered more stable, high returning income of £2.9bn in 2022 reflecting a compound annual growth rate (CAGR) of 16% since 2019
●
Capture opportunities as we transition to a low-carbon economy: new expanded target to facilitate $1 trillion of Sustainable and Transition Financing by the end of 2030. The Group’s Sustainable Impact Capital investment mandate is now £500m by the end of 2027
 
 
2022 Performance highlights4:
 
●
Group attributable profit of £5.0bn and RoTE of 10.4%, with all operating divisions delivering double-digit returns
 
–
Excluding the impact of Over-issuance of Securities in the US (Over-issuance of Securities)5, RoTE was 11.6%
●
Group profit before impairment of £8.2bn, up 9% year-on-year
●
Group income of £25.0bn, up 14% year-on-year with broad-based momentum across our operating divisions and the benefit from FX:
 
–
CIB income increased by 8%; the best full year for both Global Markets and FICC6, and strong performance in Transaction banking, more than offsetting the impact of a reduced fee pool in Investment Banking7
 
–
Consumer, Cards and Payments (CC&P) income increased by 35% supported by higher balances in US cards and Private Bank with turnover growth in Payments
 
–
Barclays UK income increased by 11% primarily driven by the rising rate environment
●
Group operating expenses were £16.7bn, reflecting £1.6bn of litigation and conduct charges, primarily driven by the Over-issuance of Securities
 
–
Group operating expenses excluding litigation and conduct were £15.1bn, up 6% year-on-year, reflecting the impact of FX and inflation
●
Credit impairment charges were £1.2bn, with a loan loss rate (LLR) of 30bps, reflecting macroeconomic deterioration, partially offset by the utilisation of post-model adjustments (PMAs) for macroeconomic uncertainty and the release of COVID-19 related adjustments informed by refreshed scenarios. Coverage ratios at the portfolio level remain strong
●
CET1 ratio of 13.9% and tangible net asset value (TNAV) per share of 295p
●
Capital distributions: total dividend for 2022 of 7.25p per share (2021: 6.0p), including a 5.0p per share 2022 full year dividend. Intend to initiate a share buyback of up to £0.5bn, bringing the total share buybacks announced in relation to 2022 to £1.0bn and total capital return equivalent to c.13.4p per share
 
 
1
Includes total dividend for 2022 of 7.25p per share and total share buybacks announced in relation to 2022 of £1.0bn.
2
The Gap portfolio refers to the Gap Inc. US credit card portfolio.
3
Barclays' calculations using Peer reported financials.
4
2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
5
Denotes the Over-issuance of Securities under Barclays Bank PLC’s (BBPLC) US shelf registration statements on Form F-3 filed with the SEC in 2018 and 2019. See page 5 for reconciliation of Barclays' performance excluding the impact of the Over-issuance of Securities.
6
Period covering 2014-2022. Pre 2014 data was not restated following re-segmentation in 2016.
7
Data source: Dealogic for the period covering 1 January to 31 December 2022.
 
 
Q422 Performance highlights1:
 
●
Attributable profit was £1.0bn and RoTE was 8.9% with profit before impairment of £1.8bn, up 29% year-on-year with positive cost: income jaws of 6%
●
Group income was £5.8bn, up 12% year-on-year including the benefit from FX, with strong performances in Barclays UK and CC&P. Within CIB, strong performances in Global Markets and Transaction banking were more than offset by reduced income in Investment Banking and Corporate Lending
●
Group operating expenses were £4.0bn, up 6% year-on-year, reflecting the impact of FX, inflation and investment in the business
●
Credit impairment charges were £0.5bn with an LLR of 49bps. The deteriorating macroeconomic forecast resulted in an increased charge, partially offset by utilising economic uncertainty PMAs
 
 
Outlook:
 
●
Returns: targeting RoTE of greater than 10% in 2023
●
Income: diversified income streams continue to position the Group well for the current economic and market environment including higher interest rates. In 2023, Barclays UK net interest margin (NIM) is expected to be greater than 3.20%2
●
Costs: targeting a cost: income ratio percentage in the low 60s in 2023, investing for growth whilst progressing towards the Group’s medium-term target of below 60%
●
Impairment: expect an LLR of 50-60bps in 2023, based on the current macroeconomic outlook
●
Capital: expect to operate within the CET1 ratio target range of 13-14%
●
Capital returns: capital distribution policy incorporates a progressive ordinary dividend, supplemented with buybacks as appropriate
 
 
1
2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
2
Assumes the UK bank rate peaks at 4.25% in 2023.
 
 
Barclays Group results
Year ended
 
Three months ended
31.12.22
Restated1
31.12.21
 
 
31.12.22
Restated1
31.12.21
 
 
£m
£m
% Change
 
£m
£m
% Change
Barclays UK
7,259
6,536
11
 
1,970
1,699
16
Corporate and Investment Bank
13,368
12,334
8
 
2,576
2,632
(2)
Consumer, Cards and Payments
4,499
3,331
35
 
1,286
878
46
Barclays International
17,867
15,665
14
 
3,862
3,510
10
Head Office
(170)
(261)
35
 
(31)
(49)
37
Total income
24,956
21,940
14
 
5,801
5,160
12
Operating costs
(14,957)
(14,092)
(6)
 
(3,748)
(3,514)
(7)
UK bank levy
(176)
(170)
(4)
 
(176)
(170)
(4)
Litigation and conduct
(1,597)
(397)
 
 
(79)
(92)
14
Total operating expenses
(16,730)
(14,659)
(14)
 
(4,003)
(3,776)
(6)
Other net income
6
260
(98)
 
10
13
(23)
Profit before impairment
8,232
7,541
9
 
1,808
1,397
29
Credit impairment (charges)/releases
(1,220)
653
 
 
(498)
31
 
Profit before tax
7,012
8,194
(14)
 
1,310
1,428
(8)
Tax (charge)/credit
(1,039)
(1,138)
9
 
33
(104)
 
Profit after tax
5,973
7,056
(15)
 
1,343
1,324
1
Non-controlling interests
(45)
(47)
4
 
(22)
(27)
19
Other equity instrument holders
(905)
(804)
(13)
 
(285)
(218)
(31)
Attributable profit
5,023
6,205
(19)
 
1,036
1,079
(4)
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
Return on average tangible shareholders' equity
10.4%
13.1%
 
 
8.9%
9.0%
 
Average tangible shareholders' equity (£bn)
48.3
47.3
 
 
46.7
48.0
 
Cost: income ratio
67%
67%
 
 
69%
73%
 
Loan loss rate (bps)
30
(18)
 
 
49
(3)
 
Basic earnings per share
30.8p
36.5p
 
 
6.5p
6.4p
 
Dividend per share
7.25p
6.0p
 
 
 
 
 
Share buyback announced (£m)
1,000
1,500
 
 
 
 
 
Total payout equivalent per share
c.13.4p
15.0p
 
 
 
 
 
Basic weighted average number of shares (m)
16,333
16,985
(4)
 
15,828
16,985
(7)
Period end number of shares (m)
15,871
16,752
(5)
 
15,871
16,752
(5)
 
 
 
As at 31.12.22
As at 30.09.22
Restated
As at 31.12.211
 
 
 
 
Balance sheet and capital management2
£bn
£bn
£bn
 
 
 
 
Loans and advances at amortised cost
398.8
413.7
361.5
 
 
 
 
Loans and advances at amortised cost impairment coverage ratio
1.4%
1.4%
1.6%
 
 
 
 
Total assets
1,513.7
1,726.9
1,384.3
 
 
 
 
Deposits at amortised cost
545.8
574.4
519.4
 
 
 
 
Tangible net asset value per share
295p
286p
291p
 
 
 
 
Common equity tier 1 ratio
13.9%
13.8%
15.1%
 
 
 
 
Common equity tier 1 capital
46.9
48.6
47.3
 
 
 
 
Risk weighted assets
336.5
350.8
314.1
 
 
 
 
UK leverage ratio
5.3%
5.0%
5.2%
 
 
 
 
UK leverage exposure
1,130.0
1,232.1
1,137.9
 
 
 
 
Average UK leverage ratio
4.8%
4.8%
4.9%
 
 
 
 
Average UK leverage exposure
1,281.0
1,259.6
1,229.0
 
 
 
 
 
 
 
 
 
 
 
 
Funding and liquidity
 
 
 
 
 
 
 
Group liquidity pool (£bn)
318
326
291
 
 
 
 
Liquidity coverage ratio
165%
151%
168%
 
 
 
 
Net stable funding ratio3
137%
 
 
 
 
 
 
Loan: deposit ratio
73%
72%
70%
 
 
 
 
 
 
1
2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
2
Refer to pages 54 to 62 for further information on how capital, Risk Weighted Assets (RWAs) and leverage are calculated.
3
Represents average of the last four spot quarter end positions.
 
 
Reconciliation of financial results excluding the impact of the Over-issuance of Securities
 
 
Year ended 31.12.22
 
Restated1
Year ended 31.12.21
 
 
 
Statutory
Impact of the Over-issuance of Securities
Excluding impact of the Over-issuance of Securities
 
Statutory
Impact of the Over-issuance of Securities
Excluding impact of the Over-issuance of Securities
 
 
 
£m
£m
£m
 
£m
£m
£m
 
% Change
Barclays UK
7,259
—
7,259
 
6,536
—
6,536
 
11
Corporate and Investment Bank
13,368
292
13,076
 
12,334
—
12,334
 
6
Consumer, Cards and Payments
4,499
—
4,499
 
3,331
—
3,331
 
35
Barclays International
17,867
292
17,575
 
15,665
—
15,665
 
12
Head Office
(170)
—
(170)
 
(261)
—
(261)
 
35
Total income
24,956
292
24,664
 
21,940
—
21,940
 
12
Operating costs
(14,957)
—
(14,957)
 
(14,092)
—
(14,092)
 
(6)
UK bank levy
(176)
—
(176)
 
(170)
—
(170)
 
(4)
Litigation and conduct
(1,597)
(966)
(631)
 
(397)
(220)
(177)
 
 
Total operating expenses
(16,730)
(966)
(15,764)
 
(14,659)
(220)
(14,439)
 
(9)
Other net income
6
—
6
 
260
—
260
 
(98)
Profit before impairment
8,232
(674)
8,906
 
7,541
(220)
7,761
 
15
Credit impairment (charges)/releases
(1,220)
—
(1,220)
 
653
—
653
 
 
Profit before tax
7,012
(674)
7,686
 
8,194
(220)
8,414
 
(9)
Attributable profit
5,023
(552)
5,575
 
6,205
(170)
6,375
 
(13)
 
£bn
 
£bn
 
£bn
 
£bn
 
 
Average tangible shareholders' equity
48.3
 
48.3
 
47.3
 
47.3
 
 
Return on average tangible shareholders' equity
10.4%
 
11.6%
 
13.1%
 
13.5%
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended 31.12.22
 
Restated1
Three months ended 31.12.21
 
 
 
Statutory
Impact of the Over-issuance of Securities
Excluding impact of the Over-issuance of Securities
 
Statutory
Impact of the Over-issuance of Securities
Excluding impact of the Over-issuance of Securities
 
 
 
£m
£m
£m
 
£m
£m
£m
 
% Change
Barclays UK
1,970
—
1,970
 
1,699
—
1,699
 
16
Corporate and Investment Bank
2,576
—
2,576
 
2,632
—
2,632
 
(2)
Consumer, Cards and Payments
1,286
—
1,286
 
878
—
878
 
46
Barclays International
3,862
—
3,862
 
3,510
—
3,510
 
10
Head Office
(31)
—
(31)
 
(49)
—
(49)
 
37
Total income
5,801
—
5,801
 
5,160
—
5,160
 
12
Operating costs
(3,748)
—
(3,748)
 
(3,514)
—
(3,514)
 
(7)
UK bank levy
(176)
—
(176)
 
(170)
—
(170)
 
(4)
Litigation and conduct
(79)
—
(79)
 
(92)
(46)
(46)
 
(72)
Total operating expenses
(4,003)
—
(4,003)
 
(3,776)
(46)
(3,730)
 
(7)
Other net income
10
—
10
 
13
—
13
 
(23)
Profit before impairment
1,808
—
1,808
 
1,397
(46)
1,443
 
25
Credit impairment (charges)/releases
(498)
—
(498)
 
31
—
31
 
 
Profit before tax
1,310
—
1,310
 
1,428
(46)
1,474
 
(11)
Attributable profit
1,036
—
1,036
 
1,079
(38)
1,117
 
(7)
 
£bn
 
£bn
 
£bn
 
£bn
 
 
Average tangible shareholders' equity
46.7
 
46.7
 
48.0
 
48.0
 
 
Return on average tangible shareholders' equity
8.9%
 
8.9%
 
9.0%
 
9.3%
 
 
 
 
1
2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Group Finance Director’s Review
 
2022 Group performance1
 
 
●
Barclays delivered a profit before tax of £7,012m (2021: £8,194m), RoTE of 10.4% (2021: 13.1%) and earnings per share (EPS) of 30.8p (2021: 36.5p)
●
The Group has a diverse income profile across businesses and geographies including a significant presence in the US. The 10% appreciation of average USD against GBP positively impacted income and profits and adversely impacted credit impairment charges and total operating expenses
●
Group income increased to £24,956m (2021: £21,940m)
 
–
Excluding the income benefit of £292m relating to hedging arrangements to manage the risks of the rescission offer in relation to the Over-issuance of Securities, total Group income was £24,664m, up 12% year-on-year
●
Group operating expenses increased to £16,730m (2021: £14,659m) mainly due to higher litigation and conduct charges:
 
–
Group operating expenses excluding litigation and conduct charges increased 6% to £15,133m, reflecting the impact of inflation and the appreciation of average USD against GBP
 
–
Litigation and conduct charges were £1,597m (2021: £397m) including £966m from the Over-issuance of Securities
●
Credit impairment charges were £1,220m (2021: £653m net release). The increase in charges reflect macroeconomic deterioration and a gradual increase in delinquencies, partially offset by the utilisation of macroeconomic uncertainty PMAs and the release of COVID-19 related adjustments informed by refreshed scenarios. Total coverage ratio decreased to 1.4% (December 2021: 1.6%) driven by changes in portfolio mix and write-offs. Coverage levels remain strong
●
The effective tax rate (ETR) was 14.8% (2021: 13.9%). The tax charge included a £346m re-measurement of the Group’s UK deferred tax assets (DTAs) due to the enactment of legislation to reduce the UK banking surcharge rate. Excluding this DTAs downward re-measurement, the ETR was 9.9%, reflecting tax benefits in the current year, primarily arising from tax relief related to government bonds linked to the high prevailing rate of inflation in 2022, as well as beneficial adjustments in respect of prior years
●
Attributable profit was £5,023m (2021: £6,205m)
●
Total assets increased to £1,513.7bn (December 2021: £1,384.3bn) reflecting higher levels of activity as we supported our clients through a period of market volatility, growth in customer lending, and appreciation of USD against GBP
●
TNAV per share increased to 295p (December 2021: 291p) with EPS of 30.8p and currency movements partially offset by net negative reserve movements due to higher interest rates, primarily in the cash flow hedging reserve
 
 
Capital distributions
 
●
Barclays intends to pay a 2022 full year dividend of 5.0p per share, taking the total dividend for 2022 to 7.25p per share (2021: 6.0p). Barclays also intends to initiate a share buyback of up to £0.5bn, bringing the total share buybacks announced in relation to 2022 to £1.0bn and total capital return equivalent to c.13.4p per share
●
Barclays is committed to maintaining an appropriate balance between delivering attractive total cash returns to shareholders, investment in the business and maintaining a strong capital position. Barclays pays a progressive ordinary dividend, taking into account these objectives and the earnings outlook of the Group. The Board will also continue to supplement the ordinary dividends as appropriate, including with share buybacks
●
Dividends will continue to be paid semi-annually
 
 
Group capital and leverage1
 
●
The reported CET1 ratio decreased by c.120bps to 13.9% (December 2021: 15.1%) as RWAs increased by £22.4bn to £336.5bn and CET1 capital decreased by £0.4bn to £46.9bn
–
 
c.150bps increase from 2022 attributable profit
–
 
c.80bps returned to shareholders including the 2.25p half year dividend paid in September 2022, £1.5bn of share buybacks announced with FY21 and H122 results and a FY22 dividend accrual
–
 
c.80bps reduction due to the impact of regulatory change on 1 January 2022 as CET1 capital decreased £1.7bn and RWAs increased £6.6bn
–
 
c.70bps reduction from decreases in the fair value of the bond portfolio through other comprehensive income and other capital deductions
–
 
c.40bps reduction due to pension contributions, including the accelerated cash settlement to the UK Retirement Fund (UKRF) of earlier deficit reduction contributions and deficit reduction payments made in 2022
–
 
A £14.1bn increase in RWAs as a result of foreign exchange movements was broadly offset by a £2bn increase in the currency translation reserve
●
The UK leverage ratio increased to 5.3% (December 2021: 5.2%) primarily due to a decrease in the leverage exposure of £7.9bn to £1,130.0bn and an increase in Tier 1 Capital of £0.6bn to £60.1bn
 
 
1
2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Group funding and liquidity
 
●
The liquidity pool was £318bn (December 2021: £291bn) and the liquidity coverage ratio (LCR) remained significantly above the 100% regulatory requirement at 165% (December 2021: 168%), equivalent to a surplus of £117bn (December 2021: £116bn). The increase in the liquidity pool over the year was driven by continued deposit growth and an increase in wholesale funding, partly offset by an increase in business funding consumption. An increase in net stress outflows and trapped liquidity within Barclays’ subsidiaries led to a modest reduction in the LCR ratio. The Net Stable Funding Ratio (NSFR) (average of last four quarter ends) was 137%, which represents a £155bn surplus above the 100% regulatory requirement
●
Wholesale funding outstanding, excluding repurchase agreements, was £184.0bn (December 2021: £167.5bn). The Group issued £15.3bn equivalent of minimum requirement for own funds and eligible liabilities (MREL) instruments from Barclays PLC (BPLC) (the Parent company) in 2022. The Group has a strong MREL position with a ratio of 33.5% of RWAs, which is in excess of the 28.9% regulatory requirement excluding a confidential, institution specific Prudential Regulation Authority (PRA) buffer
 
 
Other matters
 
●
Over-issuance of Securities: Barclays recognised a net attributable loss of £0.6bn in 2022 (£nil in Q422, £0.7bn total loss including 2021). This included a monetary penalty of $200m (£165m1) following the resolution of the SEC’s investigation of BPLC and BBPLC relating to the Over-issuance of Securities
As previously disclosed, Barclays has a contingent liability in relation to current and potential private civil claims and other potential enforcement actions relating to the Over-issuance of Securities. For further details see Restatement of financial statements (Note 1a) in the BPLC 2022 Annual Report on page 428.
●
SEC and Commodity and Futures Trading Commission (CFTC) devices investigation: in Q322, the SEC and CFTC announced the final settlement terms relating to their investigations of compliance with record-keeping obligations in connection with business-related communications over unapproved electronic messaging platforms. Under these settlements, BBPLC and Barclays Capital Inc. paid a combined $125m (£103m1) civil monetary penalty to the SEC and a $75m (£62m1) civil monetary penalty to the CFTC
●
Legacy Loan Portfolio: a customer remediation provision of £282m was recognised during 2022, relating to a legacy timeshare loan portfolio brokered by Azure Services Limited and other legacy loan portfolios
●
Financial Conduct Authority (FCA) proceedings: a provision of £50m was recognised in Q322 in relation to the FCA investigation into disclosure-related matters arising out of BPLC's June and November 2008 capital raisings
●
Gap portfolio acquisition: in Q222, Barclays completed the acquisition of a US credit card portfolio of $3.3bn (£2.7bn2) of receivables, in partnership with Gap Inc.
●
Kensington Mortgage Company (KMC) acquisition: in Q222, BPLC announced that Barclays Bank UK PLC had agreed to acquire UK specialist mortgage lender KMC and a portfolio of UK mortgages. Regulatory approval has been obtained and the transaction is now expected to complete in Q123
●
Absa Group Limited (Absa) sale: during 2022 Barclays fully disposed of its shareholding in Absa, raising aggregate gross sale proceeds of ZAR 21.0bn (c.£1.1bn3)
●
UK Corporation Tax: an increase in the UK Corporation Tax rate from 19% to 25% was enacted in 2021 and a reduction in the UK banking surcharge from 8% to 3% was enacted in 2022, both to be effective from 1 April 2023. The future statutory tax rate applied to UK banking profits will therefore be 28% from 1 April 2023
 
 
Group targets
 
Barclays continues to target the following over the medium-term:
●
Returns: RoTE of greater than 10%
●
Cost efficiency: cost: income ratio below 60%
●
Capital adequacy: CET1 ratio in the range of 13-14%
 
 
Anna Cross, Group Finance Director
 
1
Exchange rate GBP/USD 1.22 as at 30 June 2022.
2
Exchange rate GBP/USD 1.22 as at 17 June 2022.
3
On 21 April 2022, ZAR 10.3bn at exchange rate GBP/ZAR 20.04 and on 1 September 2022, ZAR 10.7bn at exchange rate GBP/ZAR 19.93.
 
 
Results by Business
 
Barclays UK
Year ended
 
Three months ended
 
31.12.22
31.12.21
 
 
31.12.22
31.12.21
 
Income statement information
£m
£m
% Change
 
£m
£m
% Change
Net interest income
5,893
5,202
13
 
1,600
1,313
22
Net fee, commission and other income
1,366
1,334
2
 
370
386
(4)
Total income
7,259
6,536
11
 
1,970
1,699
16
Operating costs
(4,260)
(4,357)
2
 
(1,108)
(1,202)
8
UK bank levy
(26)
(36)
28
 
(26)
(36)
28
Litigation and conduct
(41)
(37)
(11)
 
(13)
(5)
 
Total operating expenses
(4,327)
(4,430)
2
 
(1,147)
(1,243)
8
Other net income/(expenses)
—
—
 
 
1
(1)
 
Profit before impairment
2,932
2,106
39
 
824
455
81
Credit impairment (charges)/releases
(286)
365
 
 
(157)
59
 
Profit before tax
2,646
2,471
7
 
667
514
30
Attributable profit
1,877
1,756
7
 
474
420
13
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
Return on average allocated tangible equity
18.7%
17.6%
 
 
18.7%
16.8%
 
Average allocated tangible equity (£bn)
10.0
10.0
 
 
10.2
10.0
 
Cost: income ratio
60%
68%
 
 
58%
73%
 
Loan loss rate (bps)
13
(16)
 
 
27
(10)
 
Net interest margin
2.86%
2.52%
 
 
3.10%
2.49%
 
 
 
 
 
 
 
 
 
Key facts
 
 
 
 
 
 
 
UK mortgage balances (£bn)
162.2
158.1
 
 
 
 
 
Mortgage gross lending flow (£bn)
30.3
33.9
 
 
 
 
 
Average loan to value of mortgage portfolio1
50%
51%
 
 
 
 
 
Average loan to value of new mortgage lending1
68%
70%
 
 
 
 
 
Number of branches
481
666
 
 
 
 
 
Mobile banking active customers
10.5m
9.7m
 
 
 
 
 
30 day arrears rate - Barclaycard Consumer UK
0.9%
1.0%
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
 
 
 
 
 
Loans and advances to customers at amortised cost
205.1
208.8
 
 
 
 
 
Total assets
313.2
321.2
 
 
 
 
 
Customer deposits at amortised cost
258.0
260.6
 
 
 
 
 
Loan: deposit ratio
87%
85%
 
 
 
 
 
Risk weighted assets
73.1
72.3
 
 
 
 
 
Period end allocated tangible equity
10.1
10.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1
Average loan to value (LTV) of mortgages is balance weighted and reflects both residential and buy-to-let (BTL) mortgage portfolios within the Home Loans portfolio.
 
 
Analysis of Barclays UK
Year ended
 
Three months ended
31.12.22
31.12.21
 
 
31.12.22
31.12.21
 
Analysis of total income
£m
£m
% Change
 
£m
£m
% Change
Personal Banking
4,540
3,883
17
 
1,229
983
25
Barclaycard Consumer UK
1,093
1,250
(13)
 
269
352
(24)
Business Banking
1,626
1,403
16
 
472
364
30
Total income
7,259
6,536
11
 
1,970
1,699
16
 
 
 
 
 
 
 
 
Analysis of credit impairment (charges)/releases
 
 
 
 
 
 
 
Personal Banking
(167)
28
 
 
(120)
8
 
Barclaycard Consumer UK
30
404
(93)
 
(12)
114
 
Business Banking
(149)
(67)
 
 
(25)
(63)
60
Total credit impairment (charges)/releases
(286)
365
 
 
(157)
59
 
 
 
 
 
 
 
 
 
Analysis of loans and advances to customers at amortised cost
£bn
£bn
 
 
 
 
 
Personal Banking
169.7
165.4
 
 
 
 
 
Barclaycard Consumer UK
9.2
8.7
 
 
 
 
 
Business Banking
26.2
34.7
 
 
 
 
 
Total loans and advances to customers at amortised cost
205.1
208.8
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of customer deposits at amortised cost
 
 
 
 
 
 
 
Personal Banking
195.6
196.4
 
 
 
 
 
Barclaycard Consumer UK
—
—
 
 
 
 
 
Business Banking
62.4
64.2
 
 
 
 
 
Total customer deposits at amortised cost
258.0
260.6
 
 
 
 
 
 
 
Barclays UK delivered a RoTE of 18.7% (2021: 17.6%) as the transformation into a next generation, digitised consumer bank drove strong returns and cost efficiencies, which combined with rising interest rates contributed to a cost: income ratio of 60% (2021: 68%). Barclays UK continues to support customers through affordability pressures.
 
 
2022 compared to 2021
 
Income statement
 
 
●
Profit before tax increased to £2,646m (2021: £2,471m), with benefits from the rising rate environment in the UK more than offsetting the non-recurrence of a prior year credit impairment release
●
Total income increased 11% to £7,259m. Net interest income increased 13% to £5,893m with a NIM of 2.86% (2021: 2.52%) primarily driven by the rising interest rate environment in the UK. Net fee, commission and other income increased 2% to £1,366m
 
–
Personal Banking income increased 17% to £4,540m, driven by rising interest rates, partially offset by mortgage margin compression
 
–
Barclaycard Consumer UK income decreased 13% to £1,093m as higher customer spend volumes were more than offset by lower interest earning lending (IEL) balances following repayments and ongoing prudent risk management
 
–
Business Banking income increased 16% to £1,626m driven by rising interest rates alongside improved transaction based revenues, partially offset by lower government scheme lending income as repayments continue
●
Total operating expenses decreased 2% to £4,327m driven by efficiency savings more than offsetting the impact of inflation
●
Credit impairment charges were £286m (2021: £365m net release). The charges reflect an updated macroeconomic scenario together with a partial return to more normalised levels of customer behaviour. This is partially offset from the release of COVID-19 related adjustments as performance stabilises at or below pre-pandemic levels. As at 31 December 2022, UK cards 30 and 90 day arrears remain at 0.9% (Q421: 1.0%) and 0.2% (Q421: 0.2%) respectively1. The UK cards business is supported by a total coverage ratio of 7.6% (December 2021: 12.8%). The UK cards coverage reflects revised recovery expectations under the ongoing debt sale program and continued resilience in the underlying book. PMAs are in place for the anticipated stress arising from the cost-of-living crisis
 
 
Balance sheet
 
●
Loans and advances to customers at amortised cost decreased 2% to £205.1bn as £4.1bn of mortgage growth was more than offset by a £8.5bn decrease in Business Banking balances due to the repayment of government scheme lending and the yield curve impact from rising interest rates on the Education, Social Housing and Local Authority portfolio carrying value
●
Customer deposits at amortised cost remained broadly stable at £258.0bn (December 2021: £260.6bn), maintaining a strong loan: deposit ratio of 87% (December 2021: 85%)
●
RWAs remained broadly stable at £73.1bn (December 2021: £72.3bn)
 
 
1
As at 31 December 2019, UK cards 30 and 90 day arrears were 1.7% and 0.8% respectively.
 
 
Barclays International
Year ended
 
Three months ended
 
31.12.22
Restated1
31.12.21
 
 
31.12.22
Restated1
31.12.21
 
Income statement information
£m
£m
% Change
 
£m
£m
% Change
Net interest income
4,927
3,263
51
 
1,465
955
53
Net trading income
7,709
5,693
35
 
1,169
789
48
Net fee, commission and other income
5,231
6,709
(22)
 
1,228
1,766
(30)
Total income
17,867
15,665
14
 
3,862
3,510
10
Operating costs
(10,361)
(9,076)
(14)
 
(2,543)
(2,160)
(18)
UK bank levy
(133)
(134)
1
 
(133)
(134)
1
Litigation and conduct
(1,503)
(345)
 
 
(67)
(84)
20
Total operating expenses
(11,997)
(9,555)
(26)
 
(2,743)
(2,378)
(15)
Other net income
28
40
(30)
 
5
3
67
Profit before impairment
5,898
6,150
(4)
 
1,124
1,135
(1)
Credit impairment (charges)/releases
(933)
288
 
 
(328)
(23)
 
Profit before tax
4,965
6,438
(23)
 
796
1,112
(28)
Attributable profit
3,844
4,647
(17)
 
625
818
(24)
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
Return on average allocated tangible equity
10.2%
14.4%
 
 
6.4%
9.9%
 
Average allocated tangible equity (£bn)
37.6
32.4
 
 
38.9
32.9
 
Cost: income ratio
67%
61%
 
 
71%
68%
 
Loan loss rate (bps)
54
(21)
 
 
75
7
 
Net interest margin
5.02           %
4.01           %
 
 
5.71%
4.14           %
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
 
 
 
 
 
Loans and advances to customers at amortised cost
133.7
106.4
 
 
 
 
 
Loans and advances to banks at amortised cost
8.7
8.4
 
 
 
 
 
Debt securities at amortised cost
27.2
19.0
 
 
 
 
 
Loans and advances at amortised cost
169.6
133.8
 
 
 
 
 
Trading portfolio assets
133.8
146.9
 
 
 
 
 
Derivative financial instrument assets
301.7
261.5
 
 
 
 
 
Financial assets at fair value through the income statement
210.5
188.2
 
 
 
 
 
Cash collateral and settlement balances
107.7
88.1
 
 
 
 
 
Other assets
258.0
225.6
 
 
 
 
 
Total assets
1,181.3
1,044.1
 
 
 
 
 
Deposits at amortised cost
287.6
258.8
 
 
 
 
 
Derivative financial instrument liabilities
288.9
256.4
 
 
 
 
 
Loan: deposit ratio
59%
52           %
 
 
 
 
 
Risk weighted assets
254.8
230.9
 
 
 
 
 
Period end allocated tangible equity
36.8
33.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1
2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information
 
 
Analysis of Barclays International
 
 
 
 
 
 
Corporate and Investment Bank
Year ended
 
Three months ended
 
31.12.22
Restated1
31.12.21
 
 
31.12.22
Restated1
31.12.21
 
Income statement information
£m
£m
% Change
 
£m
£m
% Change
Net interest income
1,949
1,351
44
 
548
432
27
Net trading income
7,733
5,652
37
 
1,201
774
55
Net fee, commission and other income
3,686
5,331
(31)
 
827
1,426
(42)
Total income
13,368
12,334
8
 
2,576
2,632
(2)
Operating costs
(7,630)
(6,818)
(12)
 
(1,796)
(1,562)
(15)
UK bank levy
(126)
(128)
2
 
(126)
(128)
2
Litigation and conduct
(1,189)
(237)
 
 
(55)
(59)
7
Total operating expenses
(8,945)
(7,183)
(25)
 
(1,977)
(1,749)
(13)
Other net income
2
2
—
 
2
1
 
Profit before impairment
4,425
5,153
(14)
 
601
884
(32)
Credit impairment (charges)/releases
(119)
473
 
 
(41)
73
 
Profit before tax
4,306
5,626
(23)
 
560
957
(41)
Attributable profit
3,364
4,032
(17)
 
454
695
(35)
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
Return on average allocated tangible equity
10.2%
14.3%
 
 
5.4%
9.7%
 
Average allocated tangible equity (£bn)
32.8
28.3
 
 
33.7
28.7
 
Cost: income ratio
67%
58%
 
 
77%
66%
 
Loan loss rate (bps)
9
(47)
 
 
13
(29)
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
 
 
 
 
 
Loans and advances to customers at amortised cost
90.5
73.4
 
 
 
 
 
Loans and advances to banks at amortised cost
8.1
7.6
 
 
 
 
 
Debt securities at amortised cost
27.2
19.0
 
 
 
 
 
Loans and advances at amortised cost
125.8
100.0
 
 
 
 
 
Trading portfolio assets
133.7
146.7
 
 
 
 
 
Derivative financial instrument assets
301.6
261.5
 
 
 
 
 
Financial assets at fair value through the income statement
210.5
188.1
 
 
 
 
 
Cash collateral and settlement balances
106.9
87.2
 
 
 
 
 
Other assets
222.6
195.8
 
 
 
 
 
Total assets
1,101.1
979.3
 
 
 
 
 
Deposits at amortised cost
205.8
189.4
 
 
 
 
 
Derivative financial instrument liabilities
288.9
256.4
 
 
 
 
 
Risk weighted assets
215.9
200.7
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of total income
£m
£m
% Change
 
£m
£m
% Change
FICC
5,695
3,448
65
 
976
546
79
Equities
3,149
2,967
6
 
440
501
(12)
Global Markets
8,844
6,415
38
 
1,416
1,047
35
Advisory
768
921
(17)
 
197
287
(31)
Equity capital markets
166
813
(80)
 
40
158
(75)
Debt capital markets
1,281
1,925
(33)
 
243
511
(52)
Investment Banking fees
2,215
3,659
(39)
 
480
956
(50)
Corporate lending
(231)
588
 
 
(128)
176
 
Transaction banking
2,540
1,672
52
 
808
453
78
Corporate
2,309
2,260
2
 
680
629
8
Total income
13,368
12,334
8
 
2,576
2,632
(2)
 
 
1
2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information
 
 
Analysis of Barclays International
 
 
 
 
 
 
Consumer, Cards and Payments
Year ended
 
Three months ended
 
31.12.22
31.12.21
 
 
31.12.22
31.12.21
 
Income statement information
£m
£m
% Change
 
£m
£m
% Change
Net interest income
2,979
1,912
56
 
918
522
76
Net fee, commission, trading and other income
1,520
1,419
7
 
368
356
3
Total income
4,499
3,331
35
 
1,286
878
46
Operating costs
(2,731)
(2,258)
(21)
 
(747)
(598)
(25)
UK bank levy
(7)
(6)
(17)
 
(7)
(6)
(17)
Litigation and conduct
(314)
(108)
 
 
(12)
(25)
52
Total operating expenses
(3,052)
(2,372)
(29)
 
(766)
(629)
(22)
Other net income
26
38
(32)
 
3
2
50
Profit before impairment
1,473
997
48
 
523
251
 
Credit impairment charges
(814)
(185)
 
 
(287)
(96)
 
Profit before tax
659
812
(19)
 
236
155
52
Attributable profit
480
615
(22)
 
171
123
39
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
Return on average allocated tangible equity
10.0%
15.0%
 
 
13.0%
11.7%
 
Average allocated tangible equity (£bn)
4.8
4.1
 
 
5.2
4.2
 
Cost: income ratio
68%
71%
 
 
60%
72%
 
Loan loss rate (bps)
175
51
 
 
245
105
 
 
 
 
 
 
 
 
 
Key facts
 
 
 
 
 
 
 
US cards 30 day arrears rate
2.2%
1.6%
 
 
 
 
 
US cards customer FICO score distribution
 
 
 
 
 
 
 
<660
11%
10%
 
 
 
 
 
>660
89%
90%
 
 
 
 
 
Total number of payments clients
395k
380k
 
 
 
 
 
Value of payments processed (£bn)1
307
277
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
 
 
 
 
 
Loans and advances to customers at amortised cost
43.2
33.0
 
 
 
 
 
Total assets
80.2
64.8
 
 
 
 
 
Deposits at amortised cost
81.8
69.4
 
 
 
 
 
Risk weighted assets
38.9
30.2
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of total income
£m
£m
% Change
 
£m
£m
% Change
International Cards and Consumer Bank
2,913
2,092
39
 
860
552
56
Private Bank
1,014
781
30
 
285
200
43
Payments
572
458
25
 
141
126
12
Total income
4,499
3,331
35
 
1,286
878
46
 
 
1
Includes £296bn (2021: £270bn) of merchant acquiring payments.
 
 
Barclays International delivered a RoTE of 10.2% (2021: 14.4%) reflecting the benefits of income diversification and continued investment in sustainable growth, partially offset by the net impact of the Over-issuance of Securities in the CIB. CC&P performance reflected continued income momentum, investment for growth and a provision for customer remediation costs relating to legacy loan portfolios.
 
 
2022 compared to 2021
 
Income statement1
 
●
Profit before tax decreased 23% to £4,965m with a RoTE of 10.2% (2021: 14.4%), reflecting a RoTE of 10.2% (2021: 14.3%) in CIB and 10.0% (2021: 15.0%) in CC&P
 
–
Excluding the impact of the Over-issuance of Securities, CIB RoTE was 12.0%
●
Barclays International has a diverse income profile across businesses and geographies including a significant presence in the US. The 10% appreciation of average USD against GBP positively impacted income and profits and adversely impacted credit impairment charges, total operating expenses and RWAs
●
Total income increased to £17,867m (2021: £15,665m)
 
–
CIB income increased 8% to £13,368m
 
 
–
Global Markets income increased 38% to £8,844m representing the best full year for both Global Markets and FICC on a comparable basis2. FICC income increased 65% to £5,695m, mainly in macro, reflecting higher levels of activity as we supported our clients through a period of market volatility. Equities income of £3,149m (2021: £2,967m) included £292m of income related to hedging arrangements to manage the risks of the rescission offer in relation to the Over-issuance of Securities
 
 
–
Investment Banking fees decreased 39% to £2,215m due to the reduced fee pool, particularly in Equity and Debt capital markets3
 
 
–
Within Corporate, Transaction banking income increased 52% to £2,540m driven by improved margins and growth in deposits, and higher fee income. Corporate lending income reflected fair value losses on leverage finance lending of c.£335m net of mark to market gains on related hedges, of which c.£85m was recognised in Q422, and higher costs of hedging and credit protection
 
–
CC&P income increased 35% to £4,499m
 
 
–
International Cards and Consumer Bank income increased 39% to £2,913m reflecting higher cards balances, including the Gap portfolio acquisition, partially offset by higher customer acquisition costs
 
 
–
Private Bank income increased 30% to £1,014m, reflecting client balance growth and improved margins partially offset by the non-recurrence of a property sale gain in the prior year
 
 
–
Payments income increased 25% to £572m driven by turnover growth from the easing of lockdown restrictions
●
Total operating expenses increased 26% to £11,997m
 
–
CIB total operating expenses increased 25% to £8,945m. Operating expenses excluding litigation and conduct charges increased 12% to £7,756m driven by continued investment in talent and technology, and the impact of inflation. Litigation and conduct charges were £1,189m (2021: £237m) including £966m from the Over-issuance of Securities and £165m relating to the Devices Settlements4
 
–
CC&P total operating expenses increased 29% to £3,052m. Operating expenses excluding litigation and conduct charges increased 21% to £2,738m, including higher investment spend reflecting an increase in marketing and partnership costs. Litigation and conduct charges were £314m (2021: £108m) mainly driven by customer remediation costs relating to legacy loan portfolios
●
Credit impairment charges were £933m (2021: £288m net release) driven by a deteriorating macroeconomic forecast
 
–
CIB credit impairment charges of £119m (2021: £473m net release) were driven by a net increase in modelled impairment and single name charges partially offset by the benefit of credit protection
 
–
CC&P credit impairment charges increased to £814m (2021: £185m), driven by higher balances in US cards, including the day one impact of acquiring the Gap portfolio, macroeconomic deterioration and a gradual increase in delinquencies, partially offset by the utilisation of economic uncertainty PMAs and the release of COVID-19 related adjustments informed by refreshed macroeconomic scenarios. As at 31 December 2022, US cards 30 and 90 day arrears remain below pre-pandemic levels at 2.2% (Q421: 1.6%) and 1.2% (Q421: 0.8%) respectively5. The US cards business is supported by a total coverage ratio of 8.1% (December 2021: 10.6%)
 
 
1
2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
2
Period covering 2014-2016. Pre 2014 data was not restated following re-segmentation in 2016.
3
Data source: Dealogic for the period covering 1 January to 31 December 2022.
4
Refers to the settlements with the SEC and CFTC in connection with their investigations of the use of unauthorised devices for business communications. See Other matters on page 7.
5
As at 31 December 2019, US cards 30 and 90 days arrears were 2.7% and 1.4% respectively.
 
 
Balance sheet
 
●
Loans and advances at amortised cost increased £35.8bn to £169.6bn due to increased lending to customers across CIB and CC&P, inclusive of the Gap portfolio acquisition and appreciation of USD against GBP, and increased investment in debt securities
●
Trading portfolio assets decreased £13.1bn to £133.8bn due to a reduction in equity securities as clients repositioned their demand, partially offset by increased trading activity in debt securities
●
Derivative assets and liabilities increased £40.2bn and £32.5bn respectively to £301.7bn and £288.9bn driven by market volatility and increased activity
●
Financial assets at fair value through the income statement increased £22.3bn to £210.5bn driven by increased reverse repurchase activity
●
Deposits at amortised cost increased £28.8bn to £287.6bn primarily due to growth in Corporate deposits and an increase in short-term money market deposits
●
RWAs increased to £254.8bn (December 2021: £230.9bn) mainly resulting from the impact of the appreciation of USD against GBP, regulatory changes and higher CC&P balances including the Gap portfolio
 
 
Head Office
Year ended
 
Three months ended
 
31.12.22
31.12.21
 
 
31.12.22
31.12.21
 
Income statement information
£m
£m
% Change
 
£m
£m
% Change
Net interest income
(248)
(392)
37
 
(324)
(38)
 
Net fee, commission and other income
78
131
(40)
 
293
(11)
 
Total income
(170)
(261)
35
 
(31)
(49)
37
Operating costs
(336)
(659)
49
 
(97)
(152)
36
UK bank levy
(17)
—
 
 
(17)
—
 
Litigation and conduct
(53)
(15)
 
 
1
(3)
 
Total operating expenses
(406)
(674)
40
 
(113)
(155)
27
Other net (expenses)/income
(22)
220
 
 
4
11
(64)
Loss before impairment
(598)
(715)
16
 
(140)
(193)
27
Credit impairment charges
(1)
—
 
 
(13)
(5)
 
Loss before tax
(599)
(715)
16
 
(153)
(198)
23
Attributable loss
(698)
(198)
 
 
(63)
(159)
60
 
 
 
 
 
 
 
 
Performance measures1
 
 
 
 
 
 
 
Average allocated tangible equity (£bn)
0.7
5.0
 
 
(2.4)
5.1
 
 
 
 
 
 
 
 
 
Balance sheet information1
£bn
£bn
 
 
 
 
 
Total assets
19.2
19.0
 
 
 
 
 
Risk weighted assets
8.6
11.0
 
 
 
 
 
Period end allocated tangible equity
(0.2)
5.5
 
 
 
 
 
 
 
2022 compared to 2021
 
Income statement
 
●
Loss before tax was £599m (2021: £715m)
●
Total income was an expense of £170m (2021: £261m) primarily reflecting treasury items, funding costs on legacy capital instruments and mark-to-market losses on legacy investments, partially offset by hedge accounting gains. Additionally, there was a £74m loss on sale arising from disposals of Barclays’ equity stake in Absa, and a £72m interest expense that became payable to a US tax authority upon the resolution of historical tax issues. This was partially offset by a gain of £86m from the sale and leaseback of UK data centres and the receipt of £30m of dividends from Absa prior to disposal
●
Total operating expenses reduced to £406m (2021: £674m) reflecting the non-recurrence of the £266m structural cost action charge taken as part of the real estate review in June 2021
●
Other net income was an expense of £22m (2021: £220m income) driven by a fair value loss on investments held by the Business Growth Fund in which Barclays has an associate interest
 
 
Balance sheet
 
●
RWAs reduced to £8.6bn (December 2021: £11.0bn) reflecting the disposals of Barclays' equity stake in Absa in April 2022 and September 2022
 
 
1
2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Quarterly Results Summary
 
 
Barclays Group
 
 
 
 
 
 
 
 
 
 
Q422
Q322
Q222
Q122
 
Q4211
Q3211
Q2211
Q121
Income statement information
£m
£m
£m
£m
 
£m
£m
£m
£m
Net interest income
2,741
3,068
2,422
2,341
 
2,230
1,940
2,052
1,851
Net fee, commission and other income
3,060
2,883
4,286
4,155
 
2,930
3,525
3,363
4,049
Total income
5,801
5,951
6,708
6,496
 
5,160
5,465
5,415
5,900
Operating costs
(3,748)
(3,939)
(3,682)
(3,588)
 
(3,514)
(3,446)
(3,587)
(3,545)
UK bank levy
(176)
—
—
—
 
(170)
—
—
—
Litigation and conduct
(79)
339
(1,334)
(523)
 
(92)
(129)
(143)
(33)
Total operating expenses
(4,003)
(3,600)
(5,016)
(4,111)
 
(3,776)
(3,575)
(3,730)
(3,578)
Other net income/(expenses)
10
(1)
7
(10)
 
13
94
21
132
Profit before impairment
1,808
2,350
1,699
2,375
 
1,397
1,984
1,706
2,454
Credit impairment (charges)/releases
(498)
(381)
(200)
(141)
 
31
(120)
797
(55)
Profit before tax
1,310
1,969
1,499
2,234
 
1,428
1,864
2,503
2,399
Tax credit/(charge)
33
(249)
(209)
(614)
 
(104)
(292)
(246)
(496)
Profit after tax
1,343
1,720
1,290
1,620
 
1,324
1,572
2,257
1,903
Non-controlling interests
(22)
(2)
(20)
(1)
 
(27)
(1)
(15)
(4)
Other equity instrument holders
(285)
(206)
(199)
(215)
 
(218)
(197)
(194)
(195)
Attributable profit
1,036
1,512
1,071
1,404
 
1,079
1,374
2,048
1,704
 
 
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
 
 
Return on average tangible shareholders' equity
8.9%
12.5%
8.7%
11.5%
 
9.0%
11.4%
17.6%
14.7%
Average tangible shareholders' equity (£bn)
46.7
48.6
49.0
48.8
 
48.0
48.3
46.5
46.5
Cost: income ratio
69%
60%
75%
63%
 
73%
65%
69%
61%
Loan loss rate (bps)
49
36
20
15
 
(3)
13
(90)
6
Basic earnings per share
6.5p
9.4p
6.4p
8.4p
 
6.4p
8.0p
11.9p
9.9p
Basic weighted average number of shares (m)
15,828
16,148
16,684
16,682
 
16,985
17,062
17,140
17,293
Period end number of shares (m)
15,871
15,888
16,531
16,762
 
16,752
16,851
16,998
17,223
 
 
 
 
 
 
 
 
 
 
Balance sheet and capital management2
£bn
£bn
£bn
£bn
 
£bn
£bn
£bn
£bn
Loans and advances to customers at amortised cost
343.3
346.3
337.2
325.8
 
319.9
313.5
309.2
306.9
Loans and advances to banks at amortised cost
10.0
12.5
12.5
11.4
 
9.7
10.6
11.0
12.9
Debt securities at amortised cost
45.5
54.8
46.1
34.5
 
31.8
28.9
28.3
25.9
Loans and advances at amortised cost
398.8
413.7
395.8
371.7
 
361.5
353.0
348.5
345.8
Loans and advances at amortised cost impairment coverage ratio
1.4%
1.4%
1.4%
1.5%
 
1.6%
1.7%
1.8%
2.2%
Total assets
1,513.7
1,726.9
1,589.2
1,496.1
 
1,384.3
1,406.5
1,376.3
1,379.7
Deposits at amortised cost
545.8
574.4
568.7
546.5
 
519.4
510.2
500.9
498.8
Tangible net asset value per share
295p
286p
297p
294p
 
291p
286p
280p
267p
Common equity tier 1 ratio
13.9%
13.8%
13.6%
13.8%
 
15.1%
15.3%
15.0%
14.6%
Common equity tier 1 capital
46.9
48.6
46.7
45.3
 
47.3
47.2
46.2
45.9
Risk weighted assets
336.5
350.8
344.5
328.8
 
314.1
307.7
307.4
313.4
UK leverage ratio
5.3%
5.0%
5.1%
5.0%
 
5.2%
5.1%
5.0%
5.0%
UK leverage exposure
1,130.0
1,232.1
1,151.2
1,123.5
 
1,137.9
1,162.7
1,154.9
1,145.4
Average UK leverage ratio
4.8%
4.8%
4.7%
4.8%
 
4.9%
4.9%
4.8%
4.9%
Average UK leverage exposure
1,281.0
1,259.6
1,233.5
1,179.4
 
1,229.0
1,201.1
1,192.7
1,174.9
 
 
 
 
 
 
 
 
 
 
Funding and liquidity
 
 
 
 
 
 
 
 
 
Group liquidity pool (£bn)
318
326
343
320
 
291
293
291
290
Liquidity coverage ratio
165%
151%
156%
159%
 
168%
161%
162%
161%
Net stable funding ratio3
137%
 
 
 
 
 
 
 
 
Loan: deposit ratio
73%
72%
70%
68%
 
70%
69%
70%
69%
 
 
1
The comparative capital and financial metrics relating to Q221 - Q421 have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
2
Refer to pages 54 to 62 for further information on how capital, RWAs and leverage are calculated.
3
Represents average of the last four spot quarter end positions.
 
Quarterly Results by Business
 
 
Barclays UK
 
 
 
 
 
 
 
 
 
 
Q422
Q322
Q222
Q122
 
Q421
Q321
Q221
Q121
Income statement information
£m
£m
£m
£m
 
£m
£m
£m
£m
Net interest income
1,600
1,561
1,393
1,339
 
1,313
1,303
1,305
1,281
Net fee, commission and other income
370
355
331
310
 
386
335
318
295
Total income
1,970
1,916
1,724
1,649
 
1,699
1,638
1,623
1,576
Operating costs
(1,108)
(1,069)
(1,085)
(998)
 
(1,202)
(1,041)
(1,078)
(1,036)
UK bank levy
(26)
—
—
—
 
(36)
—
—
—
Litigation and conduct
(13)
(3)
(16)
(9)
 
(5)
(10)
(19)
(3)
Total operating expenses
(1,147)
(1,072)
(1,101)
(1,007)
 
(1,243)
(1,051)
(1,097)
(1,039)
Other net income/(expenses)
1
(1)
—
—
 
(1)
1
—
—
Profit before impairment
824
843
623
642
 
455
588
526
537
Credit impairment (charges)/releases
(157)
(81)
—
(48)
 
59
(137)
520
(77)
Profit before tax
667
762
623
594
 
514
451
1,046
460
Attributable profit
474
549
458
396
 
420
317
721
298
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
£bn
£bn
 
£bn
£bn
£bn
£bn
Loans and advances to customers at amortised cost
205.1
205.1
205.9
207.3
 
208.8
208.6
207.8
205.7
Total assets
313.2
316.8
318.8
317.2
 
321.2
312.1
311.2
309.1
Customer deposits at amortised cost
258.0
261.0
261.5
260.3
 
260.6
256.8
255.5
247.5
Loan: deposit ratio
87%
86%
85%
85%
 
85%
86%
87%
88%
Risk weighted assets
73.1
73.2
72.2
72.7
 
72.3
73.2
72.2
72.7
Period end allocated tangible equity
10.1
10.1
9.9
10.1
 
10.0
10.0
9.9
10.0
 
 
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
18.7%
22.1%
18.4%
15.6%
 
16.8%
12.7%
29.1%
12.0%
Average allocated tangible equity (£bn)
10.2
9.9
10.0
10.1
 
10.0
10.0
9.9
9.9
Cost: income ratio
58%
56%
64%
61%
 
73%
64%
68%
66%
Loan loss rate (bps)
27
14
—
9
 
(10)
24
(93)
14
Net interest margin
3.10%
3.01%
2.71%
2.62%
 
2.49%
2.49%
2.55%
2.54%
 
 
Analysis of Barclays UK
Q422
Q322
Q222
Q122
 
Q421
Q321
Q221
Q121
Analysis of total income
£m
£m
£m
£m
 
£m
£m
£m
£m
Personal Banking
1,229
1,212
1,077
1,022
 
983
990
987
923
Barclaycard Consumer UK
269
283
265
276
 
352
293
290
315
Business Banking
472
421
382
351
 
364
355
346
338
Total income
1,970
1,916
1,724
1,649
 
1,699
1,638
1,623
1,576
 
 
 
 
 
 
 
 
 
 
Analysis of credit impairment (charges)/releases
 
 
 
 
 
 
 
 
 
Personal Banking
(120)
(26)
(42)
21
 
8
(30)
72
(22)
Barclaycard Consumer UK
(12)
2
84
(44)
 
114
(108)
434
(36)
Business Banking
(25)
(57)
(42)
(25)
 
(63)
1
14
(19)
Total credit impairment (charges)/releases
(157)
(81)
—
(48)
 
59
(137)
520
(77)
 
 
 
 
 
 
 
 
 
 
Analysis of loans and advances to customers at amortised cost
£bn
£bn
£bn
£bn
 
£bn
£bn
£bn
£bn
Personal Banking
169.7
168.7
167.1
166.5
 
165.4
164.6
162.4
160.4
Barclaycard Consumer UK
9.2
9.0
8.8
8.4
 
8.7
8.6
8.8
8.7
Business Banking
26.2
27.4
30.0
32.4
 
34.7
35.4
36.6
36.6
Total loans and advances to customers at amortised cost
205.1
205.1
205.9
207.3
 
208.8
208.6
207.8
205.7
 
 
 
 
 
 
 
 
 
 
Analysis of customer deposits at amortised cost
 
 
 
 
 
 
 
 
 
Personal Banking
195.6
197.3
197.0
196.6
 
196.4
193.3
191.0
186.0
Barclaycard Consumer UK
—
—
—
—
 
—
—
0.1
0.1
Business Banking
62.4
63.7
64.5
63.7
 
64.2
63.5
64.4
61.4
Total customer deposits at amortised cost
258.0
261.0
261.5
260.3
 
260.6
256.8
255.5
247.5
 
 
Barclays International
 
 
 
 
 
 
 
 
 
 
Q422
Q322
Q222
Q122
 
Q4211
Q3211
Q2211
Q121
Income statement information
£m
£m
£m
£m
 
£m
£m
£m
£m
Net interest income
1,465
1,497
1,029
936
 
955
749
811
748
Net trading income
1,169
1,328
2,766
2,446
 
789
1,515
1,455
1,934
Net fee, commission and other income
1,228
1,240
1,321
1,442
 
1,766
1,673
1,553
1,717
Total income
3,862
4,065
5,116
4,824
 
3,510
3,937
3,819
4,399
Operating costs
(2,543)
(2,776)
(2,537)
(2,505)
 
(2,160)
(2,310)
(2,168)
(2,438)
UK bank levy
(133)
—
—
—
 
(134)
—
—
—
Litigation and conduct
(67)
396
(1,319)
(513)
 
(84)
(100)
(140)
(21)
Total operating expenses
(2,743)
(2,380)
(3,856)
(3,018)
 
(2,378)
(2,410)
(2,308)
(2,459)
Other net income
5
10
5
8
 
3
15
13
9
Profit before impairment
1,124
1,695
1,265
1,814
 
1,135
1,542
1,524
1,949
Credit impairment (charges)/releases
(328)
(295)
(209)
(101)
 
(23)
18
271
22
Profit before tax
796
1,400
1,056
1,713
 
1,112
1,560
1,795
1,971
Attributable profit
625
1,136
783
1,300
 
818
1,191
1,207
1,431
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
£bn
£bn
 
£bn
£bn
£bn
£bn
Loans and advances to customers at amortised cost
133.7
137.0
126.7
113.9
 
106.4
99.9
96.3
97.1
Loans and advances to banks at amortised cost
8.7
11.0
11.3
10.2
 
8.4
9.4
9.9
12.0
Debt securities at amortised cost
27.2
36.2
29.3
20.7
 
19.0
16.6
15.7
14.4
Loans and advances at amortised cost
169.6
184.2
167.3
144.8
 
133.8
125.9
121.9
123.5
Trading portfolio assets
133.8
126.3
126.9
134.1
 
146.9
144.8
147.1
131.1
Derivative financial instrument assets
301.7
415.7
343.5
288.8
 
261.5
257.0
255.4
269.4
Financial assets at fair value through the income statement
210.5
244.7
209.3
203.8
 
188.2
200.5
190.4
197.5
Cash collateral and settlement balances
107.7
163.3
128.5
132.0
 
88.1
115.9
108.5
109.7
Other assets
258.0
257.2
275.1
255.5
 
225.6
231.8
223.5
221.7
Total assets
1,181.3
1,391.4
1,250.6
1,159.0
 
1,044.1
1,075.9
1,046.8
1,052.9
Deposits at amortised cost
287.6
313.2
307.4
286.1
 
258.8
253.3
245.4
251.2
Derivative financial instrument liabilities
288.9
394.2
321.2
277.2
 
256.4
252.3
246.9
260.2
Loan: deposit ratio
59%
59%
54%
51%
 
52%
50%
50%
49%
Risk weighted assets
254.8
269.3
263.8
245.1
 
230.9
222.7
223.2
230.0
Period end allocated tangible equity
36.8
38.8
38.0
35.6
 
33.2
31.8
31.8
32.7
 
 
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
6.4%
11.6%
8.4%
14.8%
 
9.9%
14.9%
14.9%
17.7%
Average allocated tangible equity (£bn)
38.9
39.1
37.3
35.1
 
32.9
31.8
32.4
32.3
Cost: income ratio
71%
59%
75%
63%
 
68%
61%
60%
56%
Loan loss rate (bps)
75
62
49
28
 
7
(6)
(87)
(7)
Net interest margin
5.71%
5.58%
4.52%
4.15%
 
4.14%
4.02%
3.96%
3.92%
 
 
1
The comparative capital and financial metrics relating to Q221 - Q421 have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Analysis of Barclays International
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate and Investment Bank
Q422
Q322
Q222
Q122
 
Q4211
Q3211
Q2211
Q121
Income statement information
£m
£m
£m
£m
 
£m
£m
£m
£m
Net interest income
548
606
410
385
 
432
279
370
270
Net trading income
1,201
1,344
2,738
2,450
 
774
1,467
1,494
1,917
Net fee, commission and other income
827
871
885
1,103
 
1,426
1,383
1,115
1,407
Total income
2,576
2,821
4,033
3,938
 
2,632
3,129
2,979
3,594
Operating costs
(1,796)
(2,043)
(1,870)
(1,921)
 
(1,562)
(1,747)
(1,623)
(1,886)
UK bank levy
(126)
—
—
—
 
(128)
—
—
—
Litigation and conduct
(55)
498
(1,314)
(318)
 
(59)
(99)
(78)
(1)
Total operating expenses
(1,977)
(1,545)
(3,184)
(2,239)
 
(1,749)
(1,846)
(1,701)
(1,887)
Other net income
2
—
—
—
 
1
—
—
1
Profit before impairment
601
1,276
849
1,699
 
884
1,283
1,278
1,708
Credit impairment (charges)/releases
(41)
(46)
(65)
33
 
73
128
229
43
Profit before tax
560
1,230
784
1,732
 
957
1,411
1,507
1,751
Attributable profit
454
1,015
579
1,316
 
695
1,085
989
1,263
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
£bn
£bn
 
£bn
£bn
£bn
£bn
Loans and advances to customers at amortised cost
90.5
93.6
86.5
79.5
 
73.4
68.3
66.3
68.5
Loans and advances to banks at amortised cost
8.1
10.2
10.0
9.4
 
7.6
8.9
9.0
11.4
Debt securities at amortised cost
27.2
36.2
29.3
20.7
 
19.0
16.6
15.7
14.4
Loans and advances at amortised cost
125.8
140.0
125.8
109.6
 
100.0
93.8
91.0
94.3
Trading portfolio assets
133.7
126.1
126.7
134.0
 
146.7
144.7
147.0
130.9
Derivative financial instruments assets
301.6
415.5
343.4
288.7
 
261.5
256.9
255.3
269.4
Financial assets at fair value through the income statement
210.5
244.6
209.2
203.8
 
188.1
200.4
190.3
197.3
Cash collateral and settlement balances
106.9
162.6
127.7
131.2
 
87.2
115.1
107.7
108.8
Other assets
222.6
220.6
237.2
222.5
 
195.8
200.4
192.5
190.8
Total assets
1,101.1
1,309.4
1,170.0
1,089.8
 
979.3
1,011.3
983.8
991.5
Deposits at amortised cost
205.8
229.5
229.5
214.7
 
189.4
185.8
178.2
185.2
Derivative financial instrument liabilities
288.9
394.2
321.2
277.1
 
256.4
252.2
246.8
260.2
Risk weighted assets
215.9
230.6
227.6
213.5
 
200.7
192.5
194.3
201.3
 
 
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
5.4%
11.9%
7.1%
17.1%
 
9.7%
15.6%
14.0%
17.9%
Average allocated tangible equity (£bn)
33.7
34.0
32.7
30.8
 
28.7
27.8
28.4
28.2
Cost: income ratio
77%
55%
79%
57%
 
66%
59%
57%
53%
Loan loss rate (bps)
13
13
20
(12)
 
(29)
(54)
(100)
(18)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of total income
£m
£m
£m
£m
 
£m
£m
£m
£m
FICC
976
1,546
1,529
1,644
 
546
803
895
1,204
Equities
440
246
1,411
1,052
 
501
757
777
932
Global Markets
1,416
1,792
2,940
2,696
 
1,047
1,560
1,672
2,136
Advisory
197
150
236
185
 
287
253
218
163
Equity capital markets
40
42
37
47
 
158
186
226
243
Debt capital markets
243
341
281
416
 
511
532
429
453
Investment Banking fees
480
533
554
648
 
956
971
873
859
Corporate lending
(128)
(181)
(47)
125
 
176
168
38
206
Transaction banking
808
677
586
469
 
453
430
396
393
Corporate
680
496
539
594
 
629
598
434
599
Total income
2,576
2,821
4,033
3,938
 
2,632
3,129
2,979
3,594
 
 
1
The comparative capital and financial metrics relating to Q221 - Q421 have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Analysis of Barclays International
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer, Cards and Payments
Q422
Q322
Q222
Q122
 
Q421
Q321
Q221
Q121
Income statement information
£m
£m
£m
£m
 
£m
£m
£m
£m
Net interest income
918
891
619
551
 
522
471
441
478
Net fee, commission, trading and other income
368
353
464
335
 
356
337
399
327
Total income
1,286
1,244
1,083
886
 
878
808
840
805
Operating costs
(747)
(733)
(667)
(584)
 
(598)
(563)
(545)
(552)
UK bank levy
(7)
—
—
—
 
(6)
—
—
—
Litigation and conduct
(12)
(102)
(5)
(195)
 
(25)
(1)
(62)
(20)
Total operating expenses
(766)
(835)
(672)
(779)
 
(629)
(564)
(607)
(572)
Other net income
3
10
5
8
 
2
15
13
8
Profit before impairment
523
419
416
115
 
251
259
246
241
Credit impairment (charges)/releases
(287)
(249)
(144)
(134)
 
(96)
(110)
42
(21)
Profit/(loss) before tax
236
170
272
(19)
 
155
149
288
220
Attributable profit/(loss)
171
121
204
(16)
 
123
106
218
168
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
£bn
£bn
 
£bn
£bn
£bn
£bn
Loans and advances to customers at amortised cost
43.2
43.4
40.2
34.4
 
33.0
31.6
30.0
28.6
Total assets
80.2
82.0
80.6
69.2
 
64.8
64.6
63.0
61.4
Deposits at amortised cost
81.8
83.7
77.9
71.4
 
69.4
67.5
67.2
66.0
Risk weighted assets
38.9
38.7
36.2
31.6
 
30.2
30.2
29.0
28.8
 
 
 
 
 
 
 
 
 
 
Performance measures
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
13.0%
9.5%
17.8%
(1.5)%
 
11.7%
10.5%
21.8%
16.5%
Average allocated tangible equity (£bn)
5.2
5.1
4.6
4.3
 
4.2
4.0
4.0
4.1
Cost: income ratio
60%
67%
62%
88%
 
72%
70%
72%
71%
Loan loss rate (bps)
245
211
132
145
 
105
127
(49)
27
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of total income
£m
£m
£m
£m
 
£m
£m
£m
£m
International Cards and Consumer Bank
860
824
691
538
 
552
490
517
533
Private Bank
285
270
245
214
 
200
188
214
179
Payments
141
150
147
134
 
126
130
109
93
Total income
1,286
1,244
1,083
886
 
878
808
840
805
 
 
Head Office
 
 
 
 
 
 
 
 
 
 
Q422
Q322
Q222
Q122
 
Q421
Q321
Q221
Q121
Income statement information
£m
£m
£m
£m
 
£m
£m
£m
£m
Net interest income
(324)
10
—
66
 
(38)
(112)
(64)
(178)
Net fee, commission and other income
293
(40)
(132)
(43)
 
(11)
2
37
103
Total income
(31)
(30)
(132)
23
 
(49)
(110)
(27)
(75)
Operating costs
(97)
(94)
(60)
(85)
 
(152)
(95)
(341)
(71)
UK bank levy
(17)
—
—
—
 
—
—
—
—
Litigation and conduct
1
(54)
1
(1)
 
(3)
(19)
16
(9)
Total operating expenses
(113)
(148)
(59)
(86)
 
(155)
(114)
(325)
(80)
Other net income/(expenses)
4
(10)
2
(18)
 
11
78
8
123
Loss before impairment
(140)
(188)
(189)
(81)
 
(193)
(146)
(344)
(32)
Credit impairment (charges)/releases
(13)
(5)
9
8
 
(5)
(1)
6
—
Loss before tax
(153)
(193)
(180)
(73)
 
(198)
(147)
(338)
(32)
Attributable (loss)/profit
(63)
(173)
(170)
(292)
 
(159)
(134)
120
(25)
 
 
 
 
 
 
 
 
 
 
Balance sheet information
£bn
£bn
£bn
£bn
 
£bn
£bn
£bn
£bn
Total assets
19.2
18.7
19.8
19.9
 
19.0
18.5
18.3
17.7
Risk weighted assets1
8.6
8.2
8.6
11.0
 
11.0
11.8
12.0
10.7
Period end allocated tangible equity1
(0.2)
(3.5)
1.1
3.6
 
5.5
6.3
5.9
3.3
 
 
 
 
 
 
 
 
 
 
Performance measures1
 
 
 
 
 
 
 
 
 
Average allocated tangible equity (£bn)
(2.4)
(0.4)
1.7
3.6
 
5.1
6.5
4.2
4.3
 
 
1
The comparative capital and financial metrics relating to Q221 - Q421 have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Performance Management
 
Margins and balances
 
Year ended 31.12.22
Year ended 31.12.21
 
Net interest income
Average customer assets
Net interest margin
Net interest income
Average customer assets
Net interest margin
 
£m
£m
%
£m
£m
%
Barclays UK
5,893
205,972
2.86
5,202
206,628
2.52
Corporate and Investment Bank1
1,796
56,008
3.21
1,238
47,725
2.59
Consumer, Cards and Payments
2,979
39,193
7.60
1,911
30,805
6.21
Barclays International1
4,775
95,201
5.02
3,149
78,530
4.01
Total Barclays UK and Barclays International
10,668
301,173
3.54
8,351
285,158
2.93
Other2
(96)
 
 
(278)
 
 
Total Barclays Group
10,572
 
 
8,073
 
 
 
 
1
CIB and Barclays International margins include the lending related investment bank business.
2
Other includes Head Office and the non-lending related investment bank businesses not included in Barclays International margins.
 
 
The Group NIM increased 61bps to 3.54%. Barclays UK NIM increased 34bps to 2.86%, reflecting the impact of higher UK interest rates. Barclays International NIM increased 101bps to 5.02%. CIB NIM increased 62bps to 3.21% and CC&P NIM increased 139bps to 7.60%, reflecting the impact of balance growth and higher interest rates.
 
The Group’s combined product and equity structural hedge notional as at 31 December 2022 was £263bn (31 December 2021: £228bn), with an average duration of approximately 2.5 years (2021: average duration close to 3 years). Gross structural hedge contributions of £2,196m (2021: £1,415m) and net structural hedge contributions of £(1,544)m (2021: £1,187m) are included in Group net interest income. Gross structural hedge contributions represent the absolute level of interest earned from the fixed receipts on swaps in the structural hedge, while the net structural hedge contributions represent the net interest earned on the difference between the structural hedge rate and prevailing floating rates.
 
 
Quarterly analysis for Barclays UK and Barclays International
Net interest income
 
Average customer assets
Net interest margin
Three months ended 31.12.22
£m
£m
%
Barclays UK
1,600
204,941
3.10
Corporate and Investment Bank
556
59,146
3.73
Consumer, Cards and Payments
918
43,319
8.40
Barclays International1
1,474
102,465
5.71
Total Barclays UK and Barclays International
3,074
307,406
3.97
 
 
 
 
Three months ended 30.09.22
 
 
 
Barclays UK
1,561
205,881
3.01
Corporate and Investment Bank
529
58,891
3.56
Consumer, Cards and Payments
891
42,019
8.41
Barclays International1
1,420
100,910
5.58
Total Barclays UK and Barclays International
2,981
306,791
3.85
 
 
 
 
Three months ended 30.06.22
 
 
 
Barclays UK
1,393
205,834
2.71
Corporate and Investment Bank
397
55,181
2.88
Consumer, Cards and Payments
619
37,190
6.68
Barclays International1
1,016
92,371
4.41
Total Barclays UK and Barclays International
2,409
298,205
3.24
 
 
 
 
Three months ended 31.03.22
 
 
 
Barclays UK
1,339
207,607
2.62
Corporate and Investment Bank
316
50,798
2.52
Consumer, Cards and Payments
551
34,040
6.56
Barclays International1
867
84,838
4.15
Total Barclays UK and Barclays International
2,206
292,445
3.06
 
 
 
 
Three months ended 31.12.21
 
 
 
Barclays UK
1,313
209,064
2.49
Corporate and Investment Bank
326
48,310
2.67
Consumer, Cards and Payments
522
32,934
6.29
Barclays International1
848
81,244
4.14
Total Barclays UK and Barclays International
2,161
290,308
2.95
 
 
1
Barclays International margins include the lending related investment bank business.
 
 
Remuneration
 
Deferred bonuses are payable only once an employee meets certain conditions, including a specified period of future service. This creates a timing difference between the communication of the bonus pool and the charges that are recognised in the income statement which are reconciled in the table below to show the charge for performance costs. Refer to the Remuneration Report on pages 197 to 245 of the Barclays PLC Annual Report 2022 for further detail on remuneration. The table below includes the other elements of compensation and staff costs.
 
 
 
Year ended 31.12.22
Year ended 31.12.21
 
 
£m
£m
% Change
Incentive awards granted:
 
 
 
Current year bonus
1,241
1,278
3
Deferred bonus
549
667
18
Total incentive awards granted
1,790
1,945
8
 
 
 
 
Reconciliation of incentive awards granted to income statement charge:
 
 
 
Less: deferred bonuses granted but not charged in current year
(388)
(457)
15
Add: current year charges for deferred bonuses from previous years
399
280
(43)
Other differences between incentive awards granted and income statement charge
35
(23)
252
Income statement charge for performance costs
1,836
1,745
(5)
 
 
 
 
Other income statement charges:
 
 
 
Salaries
4,732
4,290
(10)
Social security costs
714
619
(15)
Post-retirement benefits1
563
539
(4)
Other compensation costs
504
431
(17)
Total compensation costs2
8,349
7,624
(10)
 
 
 
 
Other resourcing costs
 
 
 
Outsourcing
607
357
(70)
Redundancy and restructuring
(7)
296
102
Temporary staff costs
113
109
(4)
Other
190
125
(52)
Total other resourcing costs
903
887
(2)
 
 
 
 
Total staff costs
9,252
8,511
(9)
 
 
 
 
Group compensation costs as a % of total income
33.5
34.7
 
Group staff costs as a % of total income
37.1
38.8
 
 
One of the primary considerations for performance costs are Group and business level returns, alongside other financial and non-financial measures, including strategic delivery, risk and conduct, aligning colleague, shareholder and wider stakeholder interests.
 
 
1
Post-retirement benefits charge includes £313m (2021: £289m) in respect of defined contribution schemes and £250m (2021: £250m) in respect of defined benefit schemes.
2
£604m (2021: £484m) of Group compensation was capitalised as internally generated software and excluded from the Staff cost disclosed above.
 
Deferred bonuses have been awarded and are expected to be charged to the income statement in the years outlined in the table that follows:
 
Year in which income statement charge is expected to be taken for deferred bonuses awarded to date1
 
 
 
Actual
 
Expected1, 2
 
Year ended
Year ended
 
Year ended
2024 and
 
31.12.21
31.12.22
 
31.12.23
beyond
 
£m
£m
 
£m
£m
Deferred bonuses from 2019 and earlier bonus pools
141
52
 
50
—
Deferred bonuses from 2020 bonus pool
139
133
 
55
10
Deferred bonuses from 2021 bonus pool
210
214
 
165
102
Deferred bonuses from 2022 bonus pool
—
161
 
152
177
Income statement charge for deferred bonuses
490
560
 
422
289
 
 
1
The actual amount charged depends upon whether conditions have been met and may vary compared with the above expectation.
2
Does not include the impact of grants which will be made in 2023 and beyond.
 
Charging of deferred bonus profile1
 
Grant date
Expected payment date(s)2 and percentage of the deferred bonus paid
Year
Income statement charge % profile of 2022 onwards3,4
March 2023
 
2022
33%
 
 
2023
31%
 
March 2024 (33.3%)
2024
21%
 
March 2025 (33.3%)
2025
13%
 
March 2026 (33.3%)
2026
2%
 
 
1
Represents a typical vesting schedule for deferred awards. Certain awards may be subject to a 3, 4, 5 or 7 year deferral in line with regulatory requirements.
2
Share awards may be subject to an additional holding period.
3
The income statement charge is based on the period over which conditions are met.
4
Income statement charge profile % disclosed as a percentage of the award excluding lapse. The percentages have changed from last year due to introduction of 4 year awards.
 
 
Risk Management
 
Risk management and principal risks
 
The roles and responsibilities of the business groups, Risk and Compliance in the management of risk in the Group are defined in the Enterprise Risk Management Framework. The purpose of the framework is to identify the principal risks of the Group, the process by which the Group sets its appetite for these risks in its business activities, and the consequent limits which it places on related risk taking.
 
The framework identifies nine principal risks: credit risk, market risk, treasury and capital risk, climate risk, operational risk, model risk, conduct risk, reputation risk and legal risk. Further detail on the Group’s principal risks and previously identified material existing and emerging risks and how such risks are managed is available in the Barclays PLC Annual Report 2022, or online at home.barclays/annualreport.
 
The following section gives an overview of credit risk, market risk, and treasury and capital risk for the period.
 
 
Credit Risk
 
Loans and advances at amortised cost by stage
 
The table below presents a stage allocation and business segment analysis of loans and advances at amortised cost by gross exposure, impairment allowance, impairment charge and coverage ratio as at 31 December 2022. Also included are stage allocation of off-balance sheet loan commitments and financial guarantee contracts by gross exposure, impairment allowance and coverage as at 31 December 2022.
 
Impairment allowance under IFRS 9 considers both the drawn and the undrawn counterparty exposure. For retail portfolios, the total impairment allowance is allocated to gross loans and advances to the extent allowance does not exceed the drawn exposure and any excess is reported on the liabilities side of the balance sheet as a provision. For wholesale portfolios, impairment allowance on undrawn exposure is reported on the liability side of the balance sheet as a provision.
 
 
 
Gross exposure
 
Impairment allowance
Net exposure
 
Stage 1
Stage 2
Stage 3
Total
 
Stage 1
Stage 2
Stage 3
Total
As at 31.12.22
£m
£m
£m
£m
 
£m
£m
£m
£m
£m
Barclays UK
160,424
24,837
2,711
187,972
 
232
718
485
1,435
186,537
Barclays International
33,735
4,399
1,793
39,927
 
392
1,200
949
2,541
37,386
Head Office
3,644
252
661
4,557
 
3
24
359
386
4,171
Total Barclays Group retail
197,803
29,488
5,165
232,456
 
627
1,942
1,793
4,362
228,094
Barclays UK
34,858
2,954
805
38,617
 
129
109
96
334
38,283
Barclays International
117,692
14,298
1,098
133,088
 
301
265
312
878
132,210
Head Office
192
—
18
210
 
—
—
18
18
192
Total Barclays Group wholesale1
152,742
17,252
1,921
171,915
 
430
374
426
1,230
170,685
Total loans and advances at amortised cost
350,545
46,740
7,086
404,371
 
1,057
2,316
2,219
5,592
398,779
Off-balance sheet loan commitments and financial guarantee contracts2
372,945
30,694
1,180
404,819
 
245
315
23
583
404,236
Total3
723,490
77,434
8,266
809,190
 
1,302
2,631
2,242
6,175
803,015
 
 
 
 
 
 
 
 
 
 
 
 
As at 31.12.22
 
Year ended 31.12.22
 
 
Coverage ratio
 
Loan impairment charge/(release) and loan loss rate
 
 
Stage 1
Stage 2
Stage 3
Total
 
Loan impairment charge/(release)
Loan loss rate
 
 
%
%
%
%
 
£m
bps
 
Barclays UK
0.1
2.9
17.9
0.8
 
 
169
 
9
 
Barclays International
1.2
27.3
52.9
6.4
 
 
763
 
191
 
Head Office
0.1
9.5
54.3
8.5
 
 
—
 
 
 
Total Barclays Group retail
0.3
6.6
34.7
1.9
 
 
932
 
40
 
Barclays UK
0.4
3.7
11.9
0.9
 
 
106
 
27
 
Barclays International
0.3
1.9
28.4
0.7
 
 
127
 
10
 
Head Office
—
—
100
8.6
 
 
—
 
 
 
Total Barclays Group wholesale1
0.3
2.2
22.2
0.7
 
 
233
 
14
 
Total loans and advances at amortised cost
0.3
5.0
31.3
1.4
 
 
1,165
 
29
 
Off-balance sheet loan commitments and financial guarantee contracts2
0.1
1.0
1.9
0.1
 
 
18
 
 
 
Other financial assets subject to impairment3
 
 
 
 
 
 
37
 
 
 
Total4
0.2
3.4
27.1
0.8
 
 
1,220
 
 
 
 
 
1
Includes Wealth UK and Private Banking exposures measured on an individual customer exposure basis and excludes Business Banking exposures, including lending under the government backed Bounce Back Loan Scheme (BBLS) of £6.6bn that are managed on a collective basis and reported within Barclays UK Retail. The net impact is a difference in total exposure of £3.8bn of balances reported as wholesale loans on page 31 in the Loans and advances at amortised cost by product disclosure.
2
Excludes loan commitments and financial guarantees of £14.9bn carried at fair value.
3
Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £180.1bn and impairment allowance of £163m. This comprises £10m ECL on £178.4bn Stage 1 assets, £9m on £1.5bn Stage 2 fair value through other comprehensive income assets, cash collateral and settlement balances and £144m on £149m Stage 3 other assets.
4
The loan loss rate is 30bps after applying the total impairment charge of £1,220m.
 
 
 
Gross exposure
 
Impairment allowance
Net exposure
 
Stage 1
Stage 2
Stage 3
Total
 
Stage 1
Stage 2
Stage 3
Total
As at 31.12.21
£m
£m
£m
£m
 
£m
£m
£m
£m
£m
Barclays UK
160,695
22,779
2,915
186,389
 
261
949
728
1,938
184,451
Barclays International
25,981
2,691
1,566
30,238
 
603
795
858
2,256
27,982
Head Office
3,735
429
705
4,869
 
2
36
347
385
4,484
Total Barclays Group retail
190,411
25,899
5,186
221,496
 
866
1,780
1,933
4,579
216,917
Barclays UK
35,571
1,917
969
38,457
 
153
43
111
307
38,150
Barclays International
92,341
13,275
1,059
106,675
 
187
192
458
837
105,838
Head Office
542
2
21
565
 
—
—
19
19
546
Total Barclays Group wholesale1
128,454
15,194
2,049
145,697
 
340
235
588
1,163
144,534
Total loans and advances at amortised cost
318,865
41,093
7,235
367,193
 
1,206
2,015
2,521
5,742
361,451
Off-balance sheet loan commitments and financial guarantee contracts2
312,142
34,815
1,298
348,255
 
217
302
23
542
347,713
Total3
631,007
75,908
8,533
715,448
 
1,423
2,317
2,544
6,284
709,164
 
 
 
 
 
 
 
 
 
 
 
 
As at 31.12.21
 
Year ended 31.12.21
 
 
Coverage ratio
 
Loan impairment charge/(release) and loan loss rate
 
 
Stage 1
Stage 2
Stage 3
Total
 
Loan impairment charge/(release)
Loan loss rate
 
 
%
%
%
%
 
£m
bps
 
Barclays UK
0.2
4.2
25.0
1.0
 
 
(227)
 
—
 
Barclays International
2.3
29.5
54.8
7.5
 
 
181
 
60
 
Head Office
0.1
8.4
49.2
7.9
 
 
—
 
—
 
Total Barclays Group retail
0.5
6.9
37.3
2.1
 
 
(46)
 
—
 
Barclays UK
0.4
2.2
11.5
0.8
 
 
122
 
32
 
Barclays International
0.2
1.4
43.2
0.8
 
 
(197)
 
—
 
Head Office
—
—
90.5
3.4
 
 
—
 
—
 
Total Barclays Group wholesale1
0.3
1.5
28.7
0.8
 
 
(75)
 
—
 
Total loans and advances at amortised cost
0.4
4.9
34.8
1.6
 
 
(121)
 
—
 
Off-balance sheet loan commitments and financial guarantee contracts2
0.1
0.9
1.8
0.2
 
 
(514)
 
 
 
Other financial assets subject to impairment3
 
 
 
 
 
 
(18)
 
 
 
Total
0.2
3.1
29.8
0.9
 
 
(653)
 
 
 
 
 
1
Includes Wealth and Private Banking exposures measured on an individual basis, and excludes Business Banking exposures, including BBLS of £9.4bn that are managed on a collective basis and reported within Barclays UK Retail. The net impact is a difference in total exposure of £6.0bn of balances reported as wholesale loans on page 31 in the Loans and advances at amortised cost by product disclosure.
2
Excludes loan commitments and financial guarantees of £18.8bn carried at fair value.
3
Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £155.2bn and impairment allowance of £114m. This comprises £6m ECL on £154.9bn Stage 1 assets, £1m on £157m Stage 2 fair value through other comprehensive income assets, other assets and cash collateral and settlement balances and £107m on £110m Stage 3 other assets.
 
 
Loans and advances at amortised cost by product
 
The table below presents a breakdown of loans and advances at amortised cost and the impairment allowance with stage allocation by asset classification.
 
 
 
 
Stage 2
 
 
As at 31.12.22
Stage 1
Not past due
<=30 days past due
>30 days past due
Total
Stage 3
Total
Gross exposure
£m
£m
£m
£m
£m
£m
£m
Home loans
153,672
15,990
1,684
526
18,200
2,414
174,286
Credit cards, unsecured loans and other retail lending
44,175
7,126
397
576
8,099
2,122
54,396
Wholesale loans
152,698
20,194
150
97
20,441
2,550
175,689
Total
350,545
43,310
2,231
1,199
46,740
7,086
404,371
 
 
 
 
 
 
 
 
Impairment allowance
 
 
 
 
 
 
 
Home loans
29
53
11
9
73
414
516
Credit cards, unsecured loans and other retail lending
582
1,483
129
220
1,832
1,278
3,692
Wholesale loans
446
403
6
2
411
527
1,384
Total
1,057
1,939
146
231
2,316
2,219
5,592
 
 
 
 
 
 
 
 
Net exposure
 
 
 
 
 
 
 
Home loans
153,643
15,937
1,673
517
18,127
2,000
173,770
Credit cards, unsecured loans and other retail lending
43,593
5,643
268
356
6,267
844
50,704
Wholesale loans
152,252
19,791
144
95
20,030
2,023
174,305
Total
349,488
41,371
2,085
968
44,424
4,867
398,779
 
 
 
 
 
 
 
 
Coverage ratio
%
%
%
%
%
%
%
Home loans
—
0.3
0.7
1.7
0.4
17.1
0.3
Credit cards, unsecured loans and other retail lending
1.3
20.8
32.5
38.2
22.6
60.2
6.8
Wholesale loans
0.3
2.0
4.0
2.1
2.0
20.7
0.8
Total
0.3
4.5
6.5
19.3
5.0
31.3
1.4
 
 
 
 
 
 
 
 
As at 31.12.21
 
 
 
 
 
 
 
Gross exposure
£m
£m
£m
£m
£m
£m
£m
Home loans
148,058
17,133
1,660
707
19,500
2,122
169,680
Credit cards, unsecured loans and other retail lending
37,840
5,102
300
248
5,650
2,332
45,822
Wholesale loans
132,967
15,246
306
391
15,943
2,781
151,691
Total
318,865
37,481
2,266
1,346
41,093
7,235
367,193
 
 
 
 
 
 
 
 
Impairment allowance
 
 
 
 
 
 
 
Home loans
19
46
6
7
59
397
475
Credit cards, unsecured loans and other retail lending
824
1,493
85
123
1,701
1,504
4,029
Wholesale loans
363
248
4
3
255
620
1,238
Total
1,206
1,787
95
133
2,015
2,521
5,742
 
 
 
 
 
 
 
 
Net exposure
 
 
 
 
 
 
 
Home loans
148,039
17,087
1,654
700
19,441
1,725
169,205
Credit cards, unsecured loans and other retail lending
37,016
3,609
215
125
3,949
828
41,793
Wholesale loans
132,604
14,998
302
388
15,688
2,161
150,453
Total
317,659
35,694
2,171
1,213
39,078
4,714
361,451
 
 
 
 
 
 
 
 
Coverage ratio
%
%
%
%
%
%
%
Home loans
—
0.3
0.4
1.0
0.3
18.7
0.3
Credit cards, unsecured loans and other retail lending
2.2
29.3
28.3
49.6
30.1
64.5
8.8
Wholesale loans
0.3
1.6
1.3
0.8
1.6
22.3
0.8
Total
0.4
4.8
4.2
9.9
4.9
34.8
1.6
 
 
Loans and advances at amortised cost by selected sectors
 
The table below presents a breakdown of drawn exposure and impairment allowance for loans and advances at amortised cost with stage allocation for selected industry sectors within the wholesale loans portfolio. As the nature of macroeconomic uncertainty has evolved from the COVID-19 pandemic towards high inflation, supply chain constraints and consumer demand headwinds, so has the selected population under management focus. The credit risk industry concentration disclosure in the analysis of the concentration of credit risk section represents all the industry categories and the below only covers a subset of that table.
 
 
The gross loans and advances to selected sectors has decreased during the year. The increased provision is informed by the current macroeconomic outlook and underlying portfolio performance. The wholesale portfolio also benefits from a hedge protection programme that enables effective risk management against credit losses. An additional £115m (December 2021: £123m) impairment allowance has been applied to the undrawn exposures not included in the table below.
 
 
 
Gross exposure
 
Impairment allowance
 
Stage 1
Stage 2
Stage 3
Total
 
Stage 1
Stage 2
Stage 3
Total
As at 31.12.22
£m
£m
£m
£m
 
£m
£m
£m
£m
Autos
881
194
31
1,106
 
6
5
6
17
Consumer manufacture
3,845
1,729
199
5,773
 
45
41
46
132
Discretionary retail and wholesale
5,143
1,711
249
7,103
 
41
37
51
129
Hospitality and leisure
3,902
1,316
429
5,647
 
40
31
70
141
Passenger travel
744
267
51
1,062
 
9
7
13
29
Real estate
13,042
3,049
499
16,590
 
91
66
123
280
Steel and aluminium manufacturers
486
85
18
589
 
7
1
8
16
Total
28,043
8,351
1,476
37,870
 
239
188
317
744
Total of wholesale exposures (%)
18%
41%
58%
22%
 
54%
46%
60%
54%
 
 
 
 
 
 
 
 
 
 
 
Gross exposure
 
Impairment allowance
 
Stage 1
Stage 2
Stage 3
Total
 
Stage 1
Stage 2
Stage 3
Total
As at 31.12.21
£m
£m
£m
£m
 
£m
£m
£m
£m
Autos
656
295
2
953
 
3
3
—
6
Consumer manufacture
3,904
1,304
211
5,419
 
18
22
43
83
Discretionary retail and wholesale
5,413
1,197
230
6,840
 
47
20
54
121
Hospitality and leisure
4,348
1,613
384
6,345
 
28
33
44
105
Passenger travel
856
285
143
1,284
 
30
8
40
78
Real estate
13,620
3,314
518
17,452
 
65
53
93
211
Steel and aluminium manufacturers
415
75
6
496
 
2
3
1
6
Total
29,212
8,083
1,494
38,789
 
193
142
275
610
Total of wholesale exposures (%)
22%
51%
54%
26%
 
53%
56%
44%
49%
 
 
Exposure to UK Commercial Real Estate (CRE) of £9.7bn (2021: £10bn1) remained stable and was predominantly in Stage 1 at 81% (2021: 78%). The loan portfolio was well collateralised, hence a low coverage of 1.1% (ECL: £0.1bn). Exposure at Stage 3 was 2% (2021: 3%) with a coverage ratio of 12% (2021: 18%).
 
However, UK CRE has been included within selected sector scoping as the broader real estate sector remains under pressure due to pricing and affordability concerns, as well as construction input costs and supply chain issues adding to the uncertainty, in particular across non-investment grade exposures.
 
The coverage ratio for selected sectors has increased from 1.6% as at 31 December 2021 to 2.0% as at 31 December 2022. Non-default coverage ratio has increased from 0.9% as at 31 December 2021 to 1.2% as at 31 December 2022.
 
1
From 2022, Barclays has enhanced the process of identifying UK CRE exposures.
 
 
Movement in gross exposures and impairment allowance including provisions for loan commitments and financial guarantees
 
The following tables present a reconciliation of the opening to the closing balance of the exposure and impairment allowance. An explanation of the methodology used to determine credit impairment provisions is included in the Barclays PLC Annual Report 2022. Transfers between stages in the table have been reflected as if they had taken place at the beginning of the year. The movements are measured over a 12-month period.
 
Loans and advances at amortised cost
 
 
 
Stage 1
Stage 2
Stage 3
Total
 
Gross exposure
ECL
Gross exposure
ECL
Gross exposure
ECL
Gross exposure
ECL
Home loans
£m
£m
£m
£m
£m
£m
£m
£m
As at 1 January 2022
148,058
19
19,500
59
2,122
397
169,680
475
Transfers from Stage 1 to Stage 2
(8,747)
(1)
8,747
1
—
—
—
—
Transfers from Stage 2 to Stage 1
7,489
24
(7,489)
(24)
—
—
—
—
Transfers to Stage 3
(400)
—
(725)
(6)
1,125
6
—
—
Transfers from Stage 3
32
1
229
4
(261)
(5)
—
—
Business activity in the period1
30,028
10
1,142
7
6
—
31,176
17
Refinements to models used for calculation
—
—
—
—
—
—
—
—
Net drawdowns, repayments, net re-measurement and movement due to exposure and risk parameter changes
(8,846)
(22)
(1,081)
36
(125)
52
(10,052)
66
Final repayments2
(13,942)
(2)
(2,123)
(4)
(426)
(9)
(16,491)
(15)
Disposals
—
—
—
—
—
—
—
—
Write-offs3
—
—
—
—
(27)
(27)
(27)
(27)
As at 31 December 20224
153,672
29
18,200
73
2,414
414
174,286
516
 
 
 
 
 
 
 
 
 
Credit cards, unsecured loans and other retail lending
As at 1 January 2022
37,840
824
5,650
1,701
2,332
1,504
45,822
4,029
Transfers from Stage 1 to Stage 2
(3,474)
(80)
3,474
80
—
—
—
—
Transfers from Stage 2 to Stage 1
1,941
489
(1,941)
(489)
—
—
—
—
Transfers to Stage 3
(649)
(20)
(707)
(307)
1,356
327
—
—
Transfers from Stage 3
87
33
25
13
(112)
(46)
—
—
Business activity in the period1
11,339
177
769
186
157
126
12,265
489
Refinements to models used for calculation5
—
86
—
(45)
—
96
—
137
Net drawdowns, repayments, net re-measurement and movement due to exposure and risk parameter changes
1,246
(887)
1,199
736
179
787
2,624
636
Final repayments2
(3,996)
(36)
(341)
(32)
(228)
(60)
(4,565)
(128)
Disposals6
(159)
(4)
(29)
(11)
(275)
(169)
(463)
(184)
Write-offs3
—
—
—
—
(1,287)
(1,287)
(1,287)
(1,287)
As at 31 December 20224
44,175
582
8,099
1,832
2,122
1,278
54,396
3,692
 
 
1
Business activity in the period does not include additional drawdowns on the existing facility which are reported under 'Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes'. Business activity reported within Credit cards, unsecured loans and other retail lending portfolio includes Gap portfolio acquisition in US cards of £2.7bn.
2
Final repayments include repayment from the facility closed during the year whereas partial repayments from existing facility are reported under 'Net drawdowns, repayments, net remeasurement and movements due to exposure and risk parameter changes'.
3
In 2022, gross write-offs amounted to £1,620m (2021: £1,836m). In Q422, £329m of balances with de minimis recovery expectations were written-off in line with policy in UK Cards and Unsecured Loans. Post write-off recoveries amounted to £64m (2021: £66m). Net write-offs represent gross write-offs less post write-off recoveries and amounted to £1,556m (2021: £1,770m).
4
Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £180.1bn (December 21: £155.2bn) and an impairment allowance of £163m (December 21: £114m). This comprises £10m ECL (December 21: £6m) on £178.4bn Stage 1 assets (December 21: £154.9bn), £9m (December 21: £1m) on £1.5bn Stage 2 fair value through other comprehensive income assets, other assets and cash collateral and settlement balances (December 21: £157m) and £144m (December 21: £107m) on £149m Stage 3 other assets (December 21: £110m).
5
Refinements to models used for calculation reported within Credit cards, unsecured loans and other retail lending portfolio include a £0.3bn movement in US Cards and £(0.2)bn movement in UK Cards. These reflect model enhancements made during the year. Barclays continually review the output of models to determine accuracy of the ECL calculation including review of model monitoring, external benchmarking and experience of model operation over an extended period of time. This ensures that the models used continue to reflect the risks inherent across the businesses.
6
The £0.5bn disposals reported within Credit cards, unsecured loans and other retail lending portfolio includes £0.2bn sale of NFL portfolio within US Cards and £0.3bn of debt sales undertaken during the year.
 
 
Loans and advances at amortised cost
 
 
 
 
 
 
 
Stage 1
Stage 2
Stage 3
Total
 
Gross exposure
ECL
Gross exposure
ECL
Gross exposure
ECL
Gross exposure
ECL
Wholesale loans
£m
£m
£m
£m
£m
£m
£m
£m
As at 1 January 2022
132,967
363
15,943
255
2,781
620
151,691
1,238
Transfers from Stage 1 to Stage 2
(9,488)
(67)
9,488
67
—
—
—
—
Transfers from Stage 2 to Stage 1
5,258
55
(5,258)
(55)
—
—
—
—
Transfers to Stage 3
(1,480)
(6)
(684)
(11)
2,164
17
—
—
Transfers from Stage 3
204
21
339
28
(543)
(49)
—
—
Business activity in the period1
40,490
83
4,104
86
239
30
44,833
199
Refinements to models used for calculation2
—
(64)
—
(66)
—
(374)
—
(504)
Net drawdowns, repayments, net re-measurement and movement due to exposure and risk parameter changes3
12,799
103
352
154
(1,504)
693
11,647
950
Final repayments4
(26,540)
(42)
(3,812)
(47)
(232)
(57)
(30,584)
(146)
Disposals5
(1,512)
—
(31)
—
(49)
(47)
(1,592)
(47)
Write-offs6
—
—
—
—
(306)
(306)
(306)
(306)
As at 31 December 20227
152,698
446
20,441
411
2,550
527
175,689
1,384
 
 
 
 
 
 
 
 
 
Reconciliation of ECL movement to impairment charge/(release) for the period
 
 
 
 
 
 
Stage 1
Stage 2
Stage 3
Total
 
 
 
 
 
£m
£m
£m
£m
Home loans
10
14
44
68
Credit cards, unsecured loans and other retail lending
(238)
142
1,230
1,134
Wholesale loans
83
156
260
499
ECL movement excluding assets derecognised due to disposals and write-offs
(145)
312
1,534
1,701
ECL movement on loan commitments and other financial guarantees
28
13
—
41
ECL movement on other financial assets7
4
8
37
49
Recoveries and reimbursements8
(122)
(63)
(78)
(263)
Total exchange and other adjustments9
 
 
 
(308)
Total income statement charge for the period
 
 
 
1,220
 
 
1
Business activity in the period does not include additional drawdowns on the existing facility which are reported under 'Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes'.
2
Refinements to models used for calculation reported within Wholesale loans include a £(0.5)bn movement in Business Banking. This relates to an update in the underlying ECL model that now fully recognises the 100% government guarantee against Barclays Bounce Back Loans exposure.
3
'Net drawdowns, repayments, net re-measurement and movements due to exposure and risk parameter changes' reported within Wholesale loans also include assets of £1.3bn de-recognised due to payment received on defaulted loans from government guarantees issued under government’s Bounce Back Loans Scheme.
4
Final repayments include repayment from the facilities closed during the year whereas partial repayments from existing facility are reported under 'Net drawdowns, repayments, net remeasurement and movements due to exposure and risk parameter changes'.
5
The £1.6bn disposals reported within Wholesale loans includes sale of debt securities as part of Group Treasury Operations.
6
In 2022, gross write-offs amounted to £1,620m (2021: £1,836m). In Q422, £329m of balances with de minimis recovery expectations were written-off in line with policy in UK Cards and Unsecured Loans. Post write-off recoveries amounted to £64m (2021: £66m). Net write-offs represent gross write-offs less post write-off recoveries and amounted to £1,556m (2021: £1,770m).
7
Other financial assets subject to impairment not included in the table above include cash collateral and settlement balances, financial assets at fair value through other comprehensive income and other assets. These have a total gross exposure of £180.1bn (December 21: £155.2bn) and impairment allowance of £163m (December 21: £114m). This comprises £10m ECL (December 21: £6m) on £178.4bn stage 1 assets (December 21: £154.9bn), £9m (December 21: £1m) on £1.5bn stage 2 fair value through other comprehensive income assets, other assets and cash collateral and settlement balances (December 21: £157m) and £144m (December 21: £107m) on £149m stage 3 other assets (December 21: £110m).
8
Recoveries and reimbursements includes £199m (2021 loss: £306m) for reimbursements expected to be received under the arrangement where Group has entered into financial guarantee contracts which provide credit protection over certain loan assets with third parties and cash recoveries of previously written off amounts of £64m (FY21: £66m).
9
Exchange and other adjustments includes foreign exchange and interest and fees in suspense.
 
 
Loan commitments and financial guarantees
 
Stage 1
Stage 2
Stage 3
Total
 
Gross
exposure
ECL
Gross
exposure
ECL
Gross
exposure
ECL
Gross
exposure
ECL
Home loans
£m
£m
£m
£m
£m
£m
£m
£m
As at 1 January 2022
10,833
—
532
—
3
—
11,368
—
Net transfers between stages
8
—
(17)
—
9
—
—
—
Business activity in the period
8,034
—
—
—
—
—
8,034
—
Net drawdowns, repayments, net re-measurement and movement due to exposure and risk parameter changes
(6,793)
—
(21)
—
(6)
—
(6,820)
—
Limit management and final repayments
(368)
—
(44)
—
—
—
(412)
—
As at 31 December 2022
11,714
—
450
—
6
—
12,170
—
 
 
 
 
 
 
 
 
 
Credit cards, unsecured loans and other retail lending
As at 1 January 2022
122,819
50
5,718
61
218
20
128,755
131
Net transfers between stages
(3,390)
47
3,050
(42)
340
(5)
—
—
Business activity in the period
38,204
25
451
27
14
2
38,669
54
Net drawdowns, repayments, net re-measurement and movement due to exposure and risk parameter changes
9,633
(54)
(1,949)
67
(151)
5
7,533
18
Limit management and final repayments
(8,212)
(7)
(503)
(23)
(89)
(2)
(8,804)
(32)
As at 31 December 2022
159,054
61
6,767
90
332
20
166,153
171
 
 
 
 
 
 
 
 
 
Wholesale loans
 
 
 
 
 
 
 
 
As at 1 January 2022
178,490
167
28,565
241
1,077
3
208,132
411
Net transfers between stages
5,826
60
(5,759)
(64)
(67)
4
—
—
Business activity in the period
43,683
28
4,233
54
15
—
47,931
82
Net drawdowns, repayments, net re-measurement and movement due to exposure and risk parameter changes
28,353
(42)
5,953
59
138
(2)
34,444
15
Limit management and final repayments
(54,175)
(29)
(9,515)
(65)
(321)
(2)
(64,011)
(96)
As at 31 December 2022
202,177
184
23,477
225
842
3
226,496
412
 
 
Management adjustments to models for impairment
 
Management adjustments to impairment models are applied in order to factor in certain conditions or changes in policy that are not fully incorporated into the impairment models, or to reflect additional facts and circumstances at the period end. Management adjustments are reviewed and incorporated into future model development where applicable.
 
Management adjustments are captured through “Economic uncertainty” and “Other” adjustments presented by product below:
 
Management adjustments to models for impairment allowance presented by product1
 
 
Impairment allowance pre management adjustments2
Economic uncertainty adjustments
Other adjustments
Management adjustments
Total impairment allowance3
Proportion of Management adjustments to total impairment allowance
 
 
(a)
(b)
(a+b)
 
 
As at 31 December 2022
£m
£m
£m
£m
£m
%
Home loans
427
4
85
89
516
17.2
Credit cards, unsecured loans and other retail lending
3,543
118
202
320
3,863
8.3
Wholesale loans
1,680
195
(79)
116
1,796
6.5
Total
5,650
317
208
525
6,175
8.5
 
 
 
 
 
 
 
As at 31 December 2021
£m
£m
£m
£m
£m
%
Home loans
372
72
31
103
475
21.7
Credit cards, unsecured loans and other retail lending
2,798
1,217
145
1,362
4,160
32.7
Wholesale loans
1,628
403
(382)
21
1,649
1.3
Total
4,798
1,692
(206)
1,486
6,284
23.6
 
 
Economic uncertainty adjustments presented by stage
 
 
 
Stage 1
Stage 2
Stage 3
Total
As at 31 December 2022
£m
£m
£m
£m
Home loans
1
3
—
4
Credit cards, unsecured loans and other retail lending
24
93
1
118
Wholesale loans
181
14
—
195
Total
206
110
1
317
 
 
As at 31 December 2021
£m
£m
£m
£m
Home loans
5
35
32
72
Credit cards, unsecured loans and other retail lending
403
803
11
1,217
Wholesale loans
333
70
—
403
Total
741
908
43
1,692
 
 
1
Positive values reflect an increase in impairment allowance and negative values reflect a reduction in the impairment allowance.
2
Includes £4.8bn (December 2021: £4.2bn) of modelled ECL, £0.4bn (December 2021: £0.5bn) of individually assessed impairments and £0.5bn (December 2021: £0.1bn) ECL from non-modelled exposures.
3
Total impairment allowance consists of ECL stock on drawn and undrawn exposure.
 
 
Economic uncertainty adjustments
 
Models have been developed with data from non-inflationary periods establishing a relationship between input variables and customer delinquency based on past behaviour. Additionally, models are trying to interpret significant rates of change in macroeconomic variables and applying these to stable probability of default (PD) levels. As such there is a risk that the modelled output fails to capture the appropriate response to changes in macroeconomic variables and rising costs with modelled impairment provisions impacted by uncertainty.
 
This uncertainty continues to be captured in two ways. Firstly, customer uncertainty: the identification of customers and clients who may be more vulnerable to economic instability; and secondly, model uncertainty: to capture the impact from model limitations and sensitivities to specific macroeconomic parameters which are applied at a portfolio level.
 
In 2022, previously established economic uncertainty adjustments have been partially released, informed by some normalisation of customer behaviour, refreshed scenarios and a rebuild of certain models to better capture the macroeconomic outlook.
 
 
The balance as at 31 December 2022 is £317m (December 2021: £1,692m) and includes:
Customer and client uncertainty provisions of £423m (December 2021: £1,508m) includes:
●
Credit cards, unsecured loans and other retail lending includes an adjustment of £118m (December 2021: £1,203m) which has been applied to customers and clients considered most vulnerable to affordability pressures. This adjustment is predominantly held in Stage 2 in line with customer risk profiles.
 
The reduction is informed by the release of COVID-19 related adjustments as credit performance stabilises at or below pre-pandemic levels which is reflected in the models, and a rebuild of certain models to better capture the macroeconomic outlook.
●
Wholesale loans: £301m (FY21: £305m) includes an adjustment of £205m for exposures considered most at risk from inflationary concerns, supply chain constraints and consumer demand headwinds. The adjustment involves applying Stage 2 coverage rates to Stage 1 exposures assessed as most vulnerable. Sectors in scope are presented in the selected sectors disclosure on page 32. The remaining adjustment includes £92m to reflect possible cross default risk on Barclays' lending in respect of clients who have taken bounce back loans.
Model uncertainty provisions of £(106)m (December 2021: £184m) includes:
●
Wholesale loans: £(106)m (December 2021: £98m) includes an adjustment to correct for the deterioration in wholesale PDs impacted by model over-sensitivity to certain macroeconomic variables. In 2021, this adjustment was held at £98m driven by an unintuitive model output from certain Q421 macroeconomic variables.
●
Management adjustments of £72m within home loans in 2021 primarily comprised of a now retired adjustment, reflecting the non-linearity of the UK mortgages portfolio in order to generate a more appropriate level of predicted results.
 
 
Other adjustments
 
Other adjustments are operational in nature and are expected to remain in place until they can be reflected in the underlying models. These adjustments result from data limitations and model performance related issues identified through model monitoring and other established governance processes.
 
Other adjustments of £208m (December 2021: £(206)m) includes:
●
Home loans: £85m (December 2021: £31m) primarily includes adjustments for model performance informed by model monitoring and an adjustment for the adoption of the new definition of default under the Capital Requirements Regulation.
●
Credit cards, unsecured loans and other retail lending: £202m (December 2021: £145m) primarily includes an adjustment for adoption of the new definition of default under the Capital Requirements Regulation and an adjustment to the qualitative measures used in identification of high-risk account management (HRAM) accounts for US cards, partially offset by a recalibration of Loss Given Default (LGD) to reflect revised recovery expectations.
 
The £145m adjustments held in December 2021 primarily included adjustments for model performance informed by model monitoring, partially offset by an adjustment for reclassification of loans and advances from Stage 2 to Stage 1 in credit cards. The reclassification followed a review of back-testing results which indicated that accuracy of origination probability of default characteristics require management adjustment. These adjustments are no longer required due to model enhancements made during the year.
●
Wholesale loans: £(79)m (December 2021: £(382)m): includes adjustments for model performance informed by model monitoring.
 
Management adjustments of £(382)m within wholesale loans in 2021 consisted of an adjustment of £(380)m applied on bounce back loans to reverse out the modelled charge which did not consider the government guarantee. This adjustment is no longer needed due to model enhancements made during the year.
 
 
Measurement uncertainty
 
Scenarios used to calculate the Group’s ECL charge were refreshed in Q422 with the Baseline scenario reflecting the latest consensus macroeconomic forecasts available at the time of the scenario refresh. In the Baseline scenario, further deterioration in major economies, as inflation pressures continue to squeeze household income, along with significant monetary policy tightening contribute to lower growth prospects. UK GDP is expected to continue falling into 2023 and the US economy dips into mild recession in 2023. Slight increases in the UK and US unemployment rates are expected, peaking at 4.9% in Q423 and 4.7% in Q124 respectively. Central banks continue raising interest rates, peaking during 2023, and consumer price inflation eases over 2023.
 
In the Downside 2 scenario, inflation continues to accelerate amid increasing gas and oil prices and persistent supply-chain pressures as a result of the Russia-Ukraine conflict. Central banks are forced to raise interest rates sharply with the UK bank rate reaching 8% and the US federal funds rate peaking at 7%. Unemployment peaks at 8.5% in the UK and 8.6% in the US. Given already stretched valuations, the sharp increase in borrowing costs sees house prices decrease significantly. In the Upside 2 scenario, lower energy prices add downward pressure on prices globally, while recovering labour force participation limits wage growth. As a result of easing inflation, central banks lower interest rates to support the economic recovery.
 
The methodology for estimating scenario probability weights involves simulating a range of future paths for UK and US GDP using historical data with the five scenarios mapped against the distribution of these future paths. The median is centred around the Baseline with scenarios further from the Baseline attracting a lower weighting before the five weights are normalised to total 100%. The increase in the Downside weightings and the decrease in the Upside weightings reflected the deteriorating economic outlook which moved the Baseline UK/US GDP paths closer to the Downside scenarios. For further details see page 41.
 
The economic uncertainty adjustments of £0.3bn (2021: £1.7bn) have been applied as overlays to the modelled ECL output. These adjustments consist of a customer and client uncertainty provision of £0.4bn (2021: £1.5bn) which has been applied to customers and clients considered most vulnerable to affordability pressures, and a model uncertainty adjustment of £(0.1)bn (2021: £0.2bn). For further details see page 36.
 
The tables below show the key macroeconomic variables used in the five scenarios (5 year annual paths), the probability weights applied to each scenario.
 
 
Baseline average macroeconomic variables used in the calculation of ECL
 
2022
2023
2024
2025
2026
As at 31.12.22
%
%
%
%
%
UK GDP1
3.3
(0.8)
0.9
1.8
1.9
UK unemployment2
3.7
4.5
4.4
4.1
4.2
UK HPI3
8.4
(4.7)
(1.7)
2.2
2.2
UK bank rate
1.8
4.4
4.1
3.8
3.4
US GDP1
1.8
0.5
1.2
1.5
1.5
US unemployment4
3.7
4.3
4.7
4.7
4.7
US HPI5
11.2
1.8
1.5
2.3
2.4
US federal funds rate
2.1
4.8
3.6
3.1
3.0
 
2021
2022
2023
2024
2025
As at 31.12.21
%
%
%
%
%
UK GDP1
6.2
4.9
2.3
1.9
1.7
UK unemployment2
4.8
4.7
4.5
4.3
4.2
UK HPI3
4.7
1.0
1.9
1.9
2.3
UK bank rate
0.1
0.8
1.0
1.0
0.8
US GDP1
5.5
3.9
2.6
2.4
2.4
US unemployment4
5.5
4.2
3.6
3.6
3.6
US HPI5
11.8
4.5
5.2
4.9
5.0
US federal funds rate
0.2
0.3
0.9
1.2
1.3
 
 
1
Average Real GDP seasonally adjusted change in year.
2
Average UK unemployment rate 16-year+.
3
Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
4
Average US civilian unemployment rate 16-year+.
5
Change in year end US HPI = FHFA House Price Index, relative to prior year end.
 
 
Downside 2 average economic variables used in the calculation of ECL
 
2022
2023
2024
2025
2026
As at 31.12.22
%
%
%
%
%
UK GDP1
3.3
(3.4)
(3.8)
2.0
2.3
UK unemployment2
3.7
6.0
8.4
8.0
7.4
UK HPI3
8.4
(18.3)
(18.8)
(7.7)
8.2
UK bank rate
1.8
7.3
7.9
6.6
5.5
US GDP1
1.8
(2.7)
(3.4)
2.0
2.6
US unemployment4
3.7
6.0
8.5
8.1
7.1
US HPI5
11.2
(3.1)
(4.0)
(1.9)
4.8
US federal funds rate
2.1
6.6
6.9
5.8
4.6
 
2021
2022
2023
2024
2025
As at 31.12.21
%
%
%
%
%
UK GDP1
6.2
0.2
(4.0)
2.8
4.3
UK unemployment2
4.8
7.2
9.0
7.6
6.3
UK HPI3
4.7
(14.3)
(21.8)
11.9
15.2
UK bank rate
0.1
2.2
3.9
3.1
2.2
US GDP1
5.5
(0.8)
(3.5)
2.5
3.2
US unemployment4
5.5
6.4
9.1
8.1
6.4
US HPI5
11.8
(6.6)
(9.0)
5.9
6.7
US federal funds rate
0.2
2.1
3.4
2.6
2.0
 
 
1
Average Real GDP seasonally adjusted change in year.
2
Average UK unemployment rate 16-year+.
3
Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
4
Average US civilian unemployment rate 16-year+.
5
Change in year end US HPI = FHFA House Price Index, relative to prior year end.
 
 
Downside 1 average economic variables used in the calculation of ECL
 
2022
2023
2024
2025
2026
As at 31.12.22
%
%
%
%
%
UK GDP1
3.3
(2.1)
(1.5)
1.9
2.1
UK unemployment2
3.7
5.2
6.4
6.0
5.8
UK HPI3
8.4
(11.7)
(10.6)
(2.8)
5.2
UK bank rate
1.8
5.9
6.1
5.3
4.6
US GDP1
1.8
(1.1)
(1.1)
1.7
2.1
US unemployment4
3.7
5.1
6.6
6.4
5.9
US HPI5
11.2
(0.7)
(1.3)
0.2
3.6
US federal funds rate
2.1
5.8
5.4
4.4
3.9
 
2021
2022
2023
2024
2025
As at 31.12.21
%
%
%
%
%
UK GDP1
6.2
2.8
(0.7)
2.3
2.9
UK unemployment2
4.8
6.2
6.8
6.0
5.3
UK HPI3
4.7
(6.8)
(10.5)
6.9
8.6
UK bank rate
0.1
1.6
2.7
2.3
1.6
US GDP1
5.5
1.6
(0.4)
2.4
2.7
US unemployment4
5.5
5.4
6.6
6.1
5.2
US HPI5
11.8
(1.2)
(2.1)
4.8
5.2
US federal funds rate
0.2
1.3
2.3
2.1
1.8
 
 
1
Average Real GDP seasonally adjusted change in year.
2
Average UK unemployment rate 16-year+.
3
Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
4
Average US civilian unemployment rate 16-year+.
5
Change in year end US HPI = FHFA House Price Index, relative to prior year end.
 
 
Upside 2 average economic variables used in the calculation of ECL
 
2022
2023
2024
2025
2026
As at 31.12.22
%
%
%
%
%
UK GDP1
3.3
2.8
3.7
2.9
2.4
UK unemployment2
3.7
3.5
3.4
3.4
3.4
UK HPI3
8.4
8.7
7.5
4.4
4.2
UK bank rate
1.8
3.1
2.6
2.5
2.5
US GDP1
1.8
3.3
3.5
2.8
2.8
US unemployment4
3.7
3.3
3.3
3.3
3.3
US HPI5
11.2
5.8
5.1
4.5
4.5
US federal funds rate
2.1
3.6
2.9
2.8
2.8
 
2021
2022
2023
2024
2025
As at 31.12.21
%
%
%
%
%
UK GDP1
6.2
7.2
4.0
2.7
2.1
UK unemployment2
4.8
4.5
4.1
4.0
4.0
UK HPI3
4.7
8.5
9.0
5.2
4.2
UK bank rate
0.1
0.2
0.5
0.5
0.3
US GDP1
5.5
5.3
4.1
3.5
3.4
US unemployment4
5.5
3.9
3.4
3.3
3.3
US HPI5
11.8
10.6
8.5
7.2
6.6
US federal funds rate
0.2
0.3
0.4
0.7
1.0
 
 
1
Average Real GDP seasonally adjusted change in year.
2
Average UK unemployment rate 16-year+.
3
Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
4
Average US civilian unemployment rate 16-year+.
5
Change in year end US HPI = FHFA House Price Index, relative to prior year end.
 
 
Upside 1 average economic variables used in the calculation of ECL
 
2022
2023
2024
2025
2026
As at 31.12.22
%
%
%
%
%
UK GDP1
3.3
1.0
2.3
2.4
2.1
UK unemployment2
3.7
4.0
3.9
3.8
3.8
UK HPI3
8.4
1.8
2.9
3.3
3.2
UK bank rate
1.8
3.5
3.3
3.0
2.8
US GDP1
1.8
1.9
2.3
2.2
2.2
US unemployment4
3.7
3.8
4.0
4.0
4.0
US HPI5
11.2
3.8
3.3
3.4
3.4
US federal funds rate
2.1
3.9
3.4
3.0
3.0
 
2021
2022
2023
2024
2025
As at 31.12.21
%
%
%
%
%
UK GDP1
6.2
6.0
3.1
2.3
1.9
UK unemployment2
4.8
4.6
4.3
4.2
4.1
UK HPI3
4.7
5.0
5.0
3.9
3.3
UK bank rate
0.1
0.6
0.8
0.8
0.5
US GDP1
5.5
4.6
3.4
2.9
2.9
US unemployment4
5.5
4.0
3.5
3.5
3.5
US HPI5
11.8
8.3
7.0
6.0
5.7
US federal funds rate
0.2
0.3
0.6
1.0
1.1
 
 
1
Average Real GDP seasonally adjusted change in year.
2
Average UK unemployment rate 16-year+.
3
Change in year end UK HPI = Halifax All Houses, All Buyers index, relative to prior year end.
4
Average US civilian unemployment rate 16-year+.
5
Change in year end US HPI = FHFA House Price Index, relative to prior year end.
 
 
Scenario probability weighting1
 
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
 
%
%
%
%
%
As at 31.12.22
 
 
 
 
 
Scenario probability weighting
10.9
23.1
39.4
17.6
9.0
As at 31.12.21
 
 
 
 
 
Scenario probability weighting
20.9
27.2
30.1
14.8
7.0
 
 
1
For further details on changes to scenario weights please see page 38.
 
 
Specific bases show the most extreme position of each variable in the context of the downside/upside scenarios, for example, the highest unemployment for downside scenarios, average unemployment for baseline scenarios and lowest unemployment for upside scenarios. GDP and HPI downside and upside scenario data represents the lowest and highest cumulative position relative to the start point, in the 20 quarter period.
 
 
Macroeconomic variables (specific bases)1
 
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 31.12.22
%
%
%
%
%
UK GDP2
13.9
9.4
1.4
(3.2)
(6.8)
UK unemployment3
3.4
3.6
4.2
6.6
8.5
UK HPI4
37.8
21.0
1.2
(17.9)
(35.0)
UK bank rate
0.5
0.5
3.5
6.3
8.0
US GDP2
14.1
9.6
1.3
(2.5)
(6.3)
US unemployment3
3.3
3.6
4.4
6.7
8.6
US HPI4
35.0
27.5
3.8
3.7
0.2
US federal funds rate
0.1
0.1
3.3
6.0
7.0
 
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 31.12.21
%
%
%
%
%
UK GDP2
21.4
18.3
3.4
(1.6)
(1.6)
UK unemployment3
4.0
4.1
4.5
7.0
9.2
UK HPI4
35.7
23.8
2.4
(12.7)
(29.9)
UK bank rate
0.1
0.1
0.7
2.8
4.0
US GDP2
22.8
19.6
3.4
1.5
(1.3)
US unemployment3
3.3
3.5
4.1
6.8
9.5
US HPI4
53.3
45.2
6.2
2.2
(5.0)
US federal funds rate
0.1
0.1
0.8
2.3
3.5
 
 
1
UK GDP = Real GDP growth seasonally adjusted; UK unemployment = UK unemployment rate 16-year+; UK HI = Halifax All Houses, All Buyers Index; US GDP = Real GDP growth seasonally adjusted; US unemployment = US civilian unemployment rate 16-year+; US HPI = FHFA House Price Index. 20 quarter period starts from Q122 (2021: Q121).
2
Maximum growth relative to Q421 (2021: Q420), based on 20 quarter period in Upside scenarios; 5-year yearly average CAGR in Baseline; minimum growth relative to Q421 (2021: Q420), based on 20 quarter period in Downside scenarios.
3
Lowest quarter in 20 quarter period in Upside scenarios; 5-year average in Baseline; highest quarter 20 quarter period in Downside scenarios.
4
Maximum growth relative to Q421 (2021: Q420), based on 20 quarter period in Upside scenarios; 5-year quarter end CAGR in Baseline; minimum growth relative to Q421 (2021: Q420), based on 20 quarter period in Downside scenarios.
 
 
Average basis represents the average quarterly value of variables in the 20 quarter period with GDP and HPI based on yearly average and quarterly CAGRs respectively.
 
 
Macroeconomic variables (5-year averages)1
 
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 31.12.22
%
%
%
%
%
UK GDP2
3.0
2.2
1.4
0.7
—
UK unemployment3
3.5
3.8
4.2
5.4
6.7
UK HPI4
6.6
3.9
1.2
(2.6)
(6.4)
UK bank rate
2.5
2.9
3.5
4.7
5.8
US GDP2
2.9
2.1
1.3
0.7
—
US unemployment3
3.4
3.9
4.4
5.5
6.7
US HPI4
6.2
5.0
3.8
2.5
1.2
US federal funds rate
2.8
3.1
3.3
4.3
5.2
 
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
As at 31.12.21
%
%
%
%
%
UK GDP2
4.4
3.9
3.4
2.7
1.8
UK unemployment3
4.3
4.4
4.5
5.8
7.0
UK HPI4
6.3
4.4
2.4
0.3
(2.0)
UK bank rate
0.3
0.5
0.7
1.7
2.3
US GDP2
4.4
3.9
3.4
2.4
1.3
US unemployment3
3.9
4.0
4.1
5.7
7.1
US HPI4
8.9
7.7
6.2
3.6
1.4
US federal funds rate
0.5
0.6
0.8
1.5
2.1
 
 
1
UK GDP = Real GDP growth seasonally adjusted; UK unemployment = UK unemployment rate 16-year+; UK HPI = Halifax All Houses, All Buyers Index; US GDP = Real GDP growth seasonally adjusted; US unemployment = US civilian unemployment rate 16-year+; US HPI = FHFA House Price Index.
2
5-year yearly average CAGR, starting 2021 (2021: 2020).
3
5-year average. Period based on 20 quarters from Q122 (2021: Q121).
4
5-year quarter end CAGR, starting Q421 (2021: Q420).
 
ECL under 100% weighted scenarios for modelled portfolios
 
The table below shows the modelled ECL assuming each of the five modelled scenarios are 100% weighted with the dispersion of results around the Baseline, highlighting the impact on exposure and ECL across the scenarios. Model exposure uses exposure at default (EAD) values and is not directly comparable to gross exposure used in prior disclosures.
 
 
 
Scenarios
As at 31 December 2022
Weighted1
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
Stage 1 Model Exposure (£m)
 
 
 
 
 
 
Home loans
144,701
147,754
146,873
145,322
142,599
138,619
Credit cards, unsecured loans and other retail lending2, 3
81,329
81,772
81,457
81,171
80,921
80,529
Wholesale loans
186,838
194,970
192,218
188,746
181,247
167,848
Stage 1 Model ECL (£m)
 
 
 
 
 
 
Home loans
7
3
3
4
9
30
Credit cards, unsecured loans and other retail lending
592
562
579
594
604
610
Wholesale loans
325
245
274
308
382
431
Stage 1 Coverage (%)
 
 
 
 
 
 
Home loans
—
—
—
—
—
—
Credit cards, unsecured loans and other retail lending
0.7
0.7
0.7
0.7
0.7
0.8
Wholesale loans
0.2
0.1
0.1
0.2
0.2
0.3
Stage 2 Model Exposure (£m)
 
 
 
 
 
 
Home loans
18,723
15,670
16,551
18,102
20,825
24,805
Credit cards, unsecured loans and other retail lending2, 3
9,414
8,131
8,817
9,535
10,377
11,456
Wholesale loans
25,634
17,503
20,255
23,726
31,226
44,624
Stage 2 Model ECL (£m)
 
 
 
 
 
 
Home loans
33
15
18
23
45
151
Credit cards, unsecured loans and other retail lending
1,786
1,487
1,629
1,785
2,004
2,274
Wholesale loans
603
392
463
562
809
1,288
Stage 2 Coverage (%)
 
 
 
 
 
 
Home loans
0.2
0.1
0.1
0.1
0.2
0.6
Credit cards, unsecured loans and other retail lending
19.0
18.3
18.5
18.7
19.3
19.8
Wholesale loans
2.4
2.2
2.3
2.4
2.6
2.9
Stage 3 Model Exposure (£m)4
 
 
 
 
 
 
Home loans
1,553
1,553
1,553
1,553
1,553
1,553
Credit cards, unsecured loans and other retail lending
1,606
1,606
1,606
1,606
1,606
1,606
Wholesale loans
2,855
2,855
2,855
2,855
2,855
2,855
Stage 3 Model ECL (£m)
 
 
 
 
 
 
Home loans
332
311
317
323
347
405
Credit cards, unsecured loans and other retail lending
1,033
1,011
1,023
1,034
1,048
1,059
Wholesale loans5
49
45
47
49
57
64
Stage 3 Coverage (%)
 
 
 
 
 
 
Home loans
21.4
20.0
20.4
20.8
22.3
26.1
Credit cards, unsecured loans and other retail lending
64.3
63.0
63.7
64.4
65.3
65.9
Wholesale loans5
1.7
1.6
1.6
1.7
2.0
2.2
Total Model ECL (£m)
 
 
 
 
 
 
Home loans
372
329
338
350
401
586
Credit cards, unsecured loans and other retail lending
3,411
3,060
3,231
3,413
3,656
3,943
Wholesale loans5
977
682
784
919
1,248
1,783
Total Model ECL
4,760
4,071
4,353
4,682
5,305
6,312
 
 
Reconciliation to total ECL
£m
Total weighted model ECL
4,760
ECL from individually assessed impairments5
434
ECL from non-modelled exposures and others
456
ECL from post model management adjustments
525
Of which: ECL from economic uncertainty adjustments
317
Total ECL
6,175
 
 
1
Model exposures are allocated to a stage based on an individual scenario rather than a probability-weighted approach as required for Barclays reported impairment allowances. As a result, it is not possible to back solve the final reported weighted ECL from individual scenarios given balances may be assigned to a different stage dependent on the scenario.
2
For Credit cards, unsecured loans and other retail lending, the model exposure movement between stages 1 and 2 across scenarios differs due to additional impacts from the undrawn exposure.
3
For Credit cards, unsecured loans and other retail lending, the dispersion of results around Baseline has narrowed following model enhancements made during the year.
4
Model exposures allocated to Stage 3 does not change in any of the scenarios as the transition criteria relies only on an observable evidence of default as at 31 December 2022 and not on macroeconomic scenario.
5
Material wholesale loan defaults are individually assessed across different recovery strategies. As a result, ECL of £434m is reported as an individually assessed impairment in the reconciliation table.
 
The use of five scenarios with associated weightings results in a total weighted ECL uplift from the Baseline ECL of 1.7%.
 
 
Home loans: Total weighted ECL of £372m represents a 6.3% increase over the Baseline ECL (£350m) with coverage ratios remaining steady across the Upside scenarios, Baseline and Downside 1 scenario. Under the Downside 2 scenario, total ECL increases to £586m driven by a significant fall in UK HPI to (18.3)% in 2023 reflecting the non-linearity of the UK portfolio.
 
 
Credit cards, unsecured loans and other retail lending: Total weighted ECL of £3,411m is aligned to the Baseline ECL (£3,413m). The impact of the deteriorated Baseline scenario relative to the severity of the downside scenarios is greater than the impact of the higher weights applied to the Downside scenarios when compared to 2021. This results in a convergence between Baseline and Weighted ECL in 2022. Total ECL increases to £3,943m under the Downside 2 scenario, driven by the significant increase in UK unemployment rate to 6.0% and US unemployment rate to 6.0% in 2023.
 
 
Wholesale loans: Total weighted ECL of £977m represents an 6.3% increase over the Baseline ECL (£919m). Total ECL increases to £1,783m under Downside 2 scenario, driven by a significant decrease in UK GDP to (3.4)% and US GDP to (2.7)% in 2023.
 
 
 
 
Scenarios
As at 31 December 2021
Weighted1
Upside 2
Upside 1
Baseline
Downside 1
Downside 2
Stage 1 Model Exposure (£m)
 
 
 
 
 
 
Home loans
137,279
139,117
138,424
137,563
135,544
133,042
Credit cards, unsecured loans and other retail lending2, 3
56,783
54,758
55,771
56,821
57,698
55,315
Wholesale loans
174,249
177,453
176,774
175,451
169,814
161,998
Stage 1 Model ECL (£m)
 
 
 
 
 
 
Home loans
4
2
2
3
6
14
Credit cards, unsecured loans and other retail lending
324
266
272
279
350
418
Wholesale loans
290
240
262
286
327
350
Stage 1 Coverage (%)
 
 
 
 
 
 
Home loans
—
—
—
—
—
—
Credit cards, unsecured loans and other retail lending
0.6
0.5
0.5
0.5
0.6
0.8
Wholesale loans
0.2
0.1
0.1
0.2
0.2
0.2
Stage 2 Model Exposure (£m)
 
 
 
 
 
 
Home loans
22,915
21,076
21,769
22,631
24,649
27,151
Credit cards, unsecured loans and other retail lending2, 3
7,500
6,447
6,757
7,084
10,689
18,452
Wholesale loans
32,256
29,052
29,732
31,054
36,692
44,507
Stage 2 Model ECL (£m)
 
 
 
 
 
 
Home loans
15
10
11
12
22
47
Credit cards, unsecured loans and other retail lending
1,114
925
988
1,058
1,497
3,295
Wholesale loans
572
431
467
528
851
1,510
Stage 2 Coverage (%)
 
 
 
 
 
 
Home loans
0.1
—
0.1
0.1
0.1
0.2
Credit cards, unsecured loans and other retail lending
14.9
14.3
14.6
14.9
14.0
17.9
Wholesale loans
1.8
1.5
1.6
1.7
2.3
3.4
Stage 3 Model Exposure (£m)4
 
 
 
 
 
 
Home loans
1,724
1,724
1,724
1,724
1,724
1,724
Credit cards, unsecured loans and other retail lending
1,922
1,922
1,922
1,922
1,922
1,922
Wholesale loans
1,811
1,811
1,811
1,811
1,811
1,811
Stage 3 Model ECL (£m)
 
 
 
 
 
 
Home loans
303
292
295
299
320
346
Credit cards, unsecured loans and other retail lending
1,255
1,236
1,245
1,255
1,277
1,297
Wholesale loans5
323
321
322
323
326
332
Stage 3 Coverage (%)
 
 
 
 
 
 
Home loans
17.6
16.9
17.1
17.3
18.6
20.1
Credit cards, unsecured loans and other retail lending
65.3
64.3
64.8
65.3
66.4
67.5
Wholesale loans5
17.8
17.7
17.8
17.8
18.0
18.3
Total Model ECL (£m)
 
 
 
 
 
 
Home loans
322
304
308
314
348
407
Credit cards, unsecured loans and other retail lending
2,693
2,427
2,505
2,592
3,124
5,010
Wholesale loans5
1,185
992
1,051
1,137
1,504
2,192
Total Model ECL
4,200
3,723
3,864
4,043
4,976
7,609
 
 
Reconciliation to total ECL
£m
Total model ECL
4,200
ECL from individually assessed impairments5
524
ECL from non-modelled exposures and others
74
ECL from post model management adjustments6
1,486
Of which: ECL from economic uncertainty adjustments
1,692
Total ECL
6,284
 
 
1
Model exposures are allocated to a stage based on an individual scenario rather than a probability-weighted approach, as required for Barclays reported impairment allowances. As a result, it is not possible to back solve the final reported weighted ECL from individual scenarios given balances may be assigned to a different stage dependent on the scenario.
2
For Credit cards, unsecured loans and other retail lending, the model exposure movement between stages 1 and 2 across scenarios differs due to additional impacts from the undrawn exposure.
3
In 2021, Loans & Advances at amortised cost were used as model exposure for the International Consumer Bank within this disclosure. The process was revised in 2022 to incorporate Exposure at Default (EAD) with no impact to ECL. This has been represented in prior year comparatives.
4
Model exposures allocated to Stage 3 does not change in any of the scenarios as the transition criteria relies only on an observable evidence of default as at 31 December 2021 and not on macroeconomic scenario.
5
Material wholesale loan defaults are individually assessed across different recovery strategies. As a result, ECL of £524m is reported as an individually assessed impairment in the reconciliation table.
6
Post Model Adjustments include negative adjustments reflecting operational post model adjustments.
 
 
Analysis of specific portfolios and asset types
 
 
Secured home loans
 
 
The UK home loan portfolio primarily comprises first lien mortgages and accounts for 93% (December 2021: 93%) of the Group’s total home loans balance.
 
 
 
Barclays UK
Home loans principal portfolios
As at 31.12.22
As at 31.12.21
Gross loans and advances (£m)
162,380
158,192
90 day arrears rate, excluding recovery book (%)
0.1
0.1
Annualised gross charge-off rates - 180 days past due (%)
0.5
0.5
Recovery book proportion of outstanding balances (%)
0.5
0.6
Recovery book impairment coverage ratio (%)
5.2
4.2
 
 
 
Average marked to market LTV
 
 
Balance weighted %
50.4
50.7
Valuation weighted %
37.3
37.5
 
 
 
New lending
Year ended 31.12.22
Year ended 31.12.21
New home loan bookings (£m)
30,307
33,945
New home loan proportion > 90% LTV (%)
2.8
1.9
Average LTV on new home loans: balance weighted (%)
68.1
69.5
Average LTV on new home loans: valuation weighted (%)
59.6
61.9
 
 
Home loans principal portfolios – distribution of balances by LTV1
 
 
 
Distribution of balances
Distribution of impairment allowance
Coverage ratio
 
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Barclays UK
%
%
%
%
%
%
%
%
%
%
%
%
As at 31.12.22
 
 
 
 
 
 
 
 
 
 
 
 
<=75%
78.8
10.5
0.8
90.1
10.2
30.8
33.2
74.2
—
0.2
2.9
0.1
>75% and <=90%
8.8
0.5
—
9.3
3.9
9.7
5.2
18.8
—
1.4
30.8
0.1
>90% and <=100%
0.6
—
—
0.6
0.3
0.3
2.4
3.0
—
1.5
85.0
0.4
>100%
—
—
—
—
0.1
0.6
3.3
4.0
0.4
21.4
64.9
13.1
As at 31.12.21
 
 
 
 
 
 
 
 
 
 
 
 
<=75%
77.2
11.3
0.7
89.2
8.3
17.7
31.9
57.9
—
0.1
2.4
—
>75% and <=90%
9.3
0.6
—
9.9
4.8
10.7
11.7
27.2
—
1.0
22.6
0.1
>90% and <=100%
0.9
—
—
0.9
0.9
1.0
2.9
4.8
0.1
1.9
87.5
0.3
>100%
—
—
—
—
0.2
1.0
8.9
10.1
0.4
6.4
100.0
14.1
 
 
1
Portfolio marked to market based on the most updated valuation including recovery book balances. Updated valuations reflect the application of the latest HPI available as at 31 December 2022.
 
 
New lending in 2022 was £30.3bn, a reduction of 11% on 2021. This was mainly driven by economic conditions that resulted in general mortgage market suppression, including higher mortgage payments as rates continued to rise and increased cost of living factors in line with inflation.
 
 
Head Office: Italian home loans and advances at amortised cost reduced to £4.5bn (2021: £4.7bn) and continue to run-off since new bookings ceased in 2016. The portfolio is secured on residential property with an average balance weighted mark to market LTV of 58.8% (2021: 60.4%). 90 day arrears decreased to 1.2% (2021: 1.3%), gross charge-off rates increased to 0.6% (2021: 0.3%) due to a combination of affordability stress related to rising inflation and interest rates, and the particularly low rate observed in 2021 due to the COVID portfolio improvements.
 
 
Credit cards, unsecured loans and other retail lending
 
 
The principal portfolios listed below accounted for 85% (December 2021: 82%) of the Group’s total credit cards, unsecured loans and other retail lending.
 
 
Principal portfolios
Gross exposure
30 day arrears rate, excluding recovery book
90 day arrears rate, excluding recovery book
Annualised gross write-off rate
Annualised net write-off rate
As at 31.12.22
£m
%
%
%
%
Barclays UK
 
 
 
 
 
UK cards
9,939
0.9
0.2
3.7
3.6
UK personal loans
4,023
1.4
0.6
4.1
3.8
Barclays Partner Finance
2,612
0.5
0.2
0.7
0.7
Barclays International
 
 
 
 
 
US cards
25,554
2.2
1.2
2.4
2.3
Germany consumer lending
4,269
1.7
0.7
0.7
0.6
 
 
 
 
 
 
As at 31.12.21
 
 
 
 
 
Barclays UK
 
 
 
 
 
UK cards
9,933
1.0
0.2
4.1
4.0
UK personal loans
4,011
1.5
0.7
3.5
3.2
Barclays Partner Finance
2,471
0.4
0.2
1.4
1.4
Barclays International
 
 
 
 
 
US cards
17,779
1.6
0.8
4.3
4.2
Germany consumer lending
3,559
1.5
0.7
0.9
0.8
 
UK cards: 30 day arrears rate reduced marginally to 0.9% (Q421: 1.0%) and 90 day arrears rate remained stable at 0.2% (Q421: 0.2%), whilst total exposure was stable at £9.9bn. Both the gross and net write off rates decreased by 0.4% due to reduced debt sales and monthly delinquency flows.
 
UK personal loans: 30 and 90 day arrears rates have reduced marginally to 1.4% (Q421: 1.5%) and 0.6% (Q421: 0.7%) respectively, whilst total exposure was stable at £4.0bn. Both the annualised gross and net write off rates increased by 0.6% due to increased regular debt sales.
 
Barclays Partner Finance: 30 day arrears rate increased slightly to 0.5% (Q421: 0.4%) and 90 day arrears rate remained stable at 0.2% (Q421: 0.2%), reflecting marginally higher entry rates with stable flows through the delinquency cycles. Total exposure grew by £0.1bn to £2.6bn (December 2021: £2.5bn) as a result of increased sales. Both the annualised gross and net write off rates decreased by 0.7% as a result of the reducing delinquent stock and subsequent flow into recoveries.
 
US cards: Balances increased due to the acquisition of the Gap portfolio in June 2022, movement in the USD/GBP exchange rate and core portfolio growth. 30 and 90 day arrears rates increased to 2.2% (Q421: 1.6%) and 1.2% (Q421: 0.8%) due to the partial normalisation of customer behaviour and the acquisition of the Gap portfolio, though rates remain below pre-pandemic levels. Write-off rates decreased reflecting portfolio growth and the impact of lower charge offs in 2021 due to the benefit of government support schemes.
 
Germany consumer lending: 30 day arrears rate increased to 1.7% (Q421: 1.5%) due to increased macroeconomic uncertainty in Europe, though the rate was consistent with pre-pandemic levels.
 
Market Risk
 
Analysis of management value at risk (VaR)
 
The table below shows the total management VaR on a diversified basis by asset class. Total management VaR includes all trading positions in Barclays Bank Group and it is calculated with a one-day holding period. VaR limits are applied to total management VaR and by asset class. Additionally, the market risk management function applies VaR sub-limits to material businesses and trading desks.
 
Management VaR (95%) by asset class
 
 
Year ended 31.12.22
 
Year ended 31.12.21
 
Average
High
Low
 
Average
High
Low
 
£m
£m
£m
 
£m
£m
£m
Credit risk
25
71
8
 
14
30
7
Interest rate risk
13
23
4
 
7
15
4
Equity risk
10
29
4
 
9
29
4
Basis risk
12
24
4
 
6
10
3
Spread risk
7
11
3
 
4
6
3
Foreign exchange risk
8
25
2
 
4
16
1
Commodity risk
—
1
—
 
—
1
—
Inflation risk
6
17
3
 
3
5
2
Diversification effect1
(45)
n/a
n/a
 
(28)
n/a
n/a
Total management VaR
36
73
13
 
19
36
6
 
 
1
Diversification effects recognise that forecast losses from different assets or businesses are unlikely to occur concurrently, hence the expected aggregate loss is lower than the sum of the expected losses from each area. Historical correlations between losses are taken into account in making these assessments. The high and low VaR figures reported for each category did not necessarily occur on the same day as the high and low VaR reported as a whole. Consequently, a diversification effect balance for the high and low VaR figures would not be meaningful and is therefore omitted from the above table.
 
Average management VaR increased 89% to £36m (2021: £19m) driven by higher market volatility. The Russia-Ukraine conflict and elevated inflation increased volatility across all asset classes as central banks increased base rates, equity markets declined, and credit spreads widened during this period. The Global Markets business maintained a generally short and defensive risk profile (i.e. positioned to gain as the market sells off) for most of 2022. VaR increased in Q4 2022 from an increase in funded, fair-value leverage loan exposure in Investment Banking. Risk taking remained within agreed risk appetite limits at all times in 2022.
 
 
Treasury and Capital Risk
 
The Group has established a comprehensive set of policies, standards and controls for managing its liquidity risk; together these set out the requirements for Barclays’ liquidity risk framework. The liquidity risk framework meets the PRA standards and enables Barclays to maintain liquidity resources that are sufficient in amount and quality, and a funding profile that is appropriate to meet the Group’s Liquidity Risk Appetite. The liquidity risk framework is delivered via a combination of policy formation, review and challenge, governance, analysis, stress testing, limit setting and monitoring.
 
 
Liquidity risk stress testing
The internal liquidity stress test measures the potential contractual and contingent stress outflows under a range of scenarios, which are then used to determine the size of the liquidity pool that is immediately available to meet anticipated outflows if a stress occurs. The short-term scenarios include a 30 day Barclays-specific stress event, a 90 day market-wide stress event and a 30 day combined scenario consisting of both a Barclays specific and market-wide stress event. The Group also runs a long-term liquidity stress test, which measures the anticipated outflows over a 12 month market-wide scenario
 
The LCR requirement takes into account the relative stability of different sources of funding and potential incremental funding requirements in a stress. The LCR is designed to promote short-term resilience of a bank’s liquidity risk profile by holding sufficient high quality liquid assets to survive an acute stress scenario lasting for 30 days.
 
As at 31 December 2022, the Group held eligible liquid assets in excess of 100% of net stress outflows to its internal and external regulatory requirements.
 
Liquidity coverage ratio
 
 
 
As at 31.12.22
As at 31.12.21
 
£bn
£bn
Eligible liquidity buffer
295
285
Net stress outflows
(178)
(169)
Surplus
117
116
 
 
 
Liquidity coverage ratio
165%
168%
 
 
Net Stable Funding Ratio
 
The external NSFR metric requires banks to maintain a stable funding profile taking into account both on and certain off balance sheet exposures over a medium to long term period. The ratio is defined as the Available Stable Funding (capital and certain liabilities which are treated as stable sources of funding) relative to the Required Stable Funding (assets on balance sheet and certain off balance sheet exposures). The NSFR (average of last four quarter ends) as at 31 December 2022 was 137%, which was a surplus above requirements of £155bn.
 
 
Net Stable Funding Ratio1
As at31.12.22
 
£bn
Total Available Stable Funding
576
Total Required Stable Funding
421
Surplus
155
 
 
Net Stable Funding Ratio
137%
 
 
1
Represents average of the last four spot quarter end positions.
 
 
As part of the liquidity risk appetite, Barclays establishes minimum LCR, NSFR and internal liquidity stress test limits. The Group plans to maintain its surplus to the internal and regulatory requirements at an efficient level. Risks to market funding conditions, the Group’s liquidity position and funding profile are assessed continuously, and actions are taken to manage the size of the liquidity pool and the funding profile as appropriate.
 
 
Composition of the Group liquidity pool
 
 
 
 
 
 
 
 
LCR eligible1 High Quality Liquid Assets (HQLA)
 
Liquidity pool
 
Cash
Level 1
Level 2A
Level 2B
Total
 
2022
2021
 
£bn
£bn
£bn
£bn
£bn
 
£bn
£bn
Cash and deposits with central banks2
248
—
—
—
248
 
263
245
 
 
 
 
 
 
 
 
 
Government bonds3
 
 
 
 
 
 
 
 
AAA to AA-
—
21
10
—
31
 
39
26
A+ to A-
—
1
2
—
3
 
3
2
BBB+ to BBB-
—
—
—
—
—
 
—
—
Total government bonds
—
22
12
—
34
 
42
28
 
 
 
 
 
 
 
 
 
Other
 
 
 
 
 
 
 
 
Government Guaranteed Issuers, PSEs and GSEs
—
5
1
—
6
 
6
6
International Organisations and MDBs
—
2
—
—
2
 
2
5
Covered bonds
—
2
2
—
4
 
5
6
Other
—
—
—
1
1
 
—
1
Total other
—
9
3
1
13
 
13
18
 
 
 
 
 
 
 
 
 
Total as at 31 December 2022
248
31
15
1
295
 
318
 
Total as at 31 December 2021
243
37
3
2
285
 
 
291
 
 
1
The LCR eligible HQLA is adjusted for operational restrictions upon consolidation under Article 8 of the Liquidity Coverage Ratio section of the PRA rulebook (CRR) such as trapped liquidity within Barclays subsidiaries. It also reflects differences in eligibility of assets between the LCR and Barclays’ Liquidity Pool.
2
Includes cash held at central banks and surplus cash at central banks related to payment schemes. Over 99% (December 2021: over 99%) was placed with the Bank of England, US Federal Reserve, European Central Bank, Bank of Japan and Swiss National Bank.
3
Of which over 79% (December 2021: over 82%) comprised UK, US, French, German, Japanese, Swiss and Dutch securities.
 
The Group liquidity pool increased to £318bn as at December 2022 (December 2021: £291bn) driven by continued deposit growth and an increase in wholesale funding, which were partly offset by an increase in business funding consumption and trapped liquidity within Barclays’ subsidiaries. During 2022, the month-end liquidity pool ranged from £309bn to £359bn (2021: £290bn to £337bn), and the month-end average balance was £331bn (2021: £303bn). The liquidity pool is held unencumbered and is not used to support payment or clearing requirements. Such requirements are treated as part of our regular business funding. The liquidity pool is intended to offset stress outflows, and comprises the above cash and unencumbered assets.
 
As at 31 December 2022, 60% (December 2021: 58%) of the liquidity pool was located in Barclays Bank PLC, 25% (December 2021: 30%) in Barclays Bank UK PLC and 9% (December 2021: 7%) in Barclays Bank Ireland PLC. The residual portion of the liquidity pool is held outside of these entities, predominantly in US subsidiaries, to meet entity-specific stress outflows and local regulatory requirements. To the extent the use of this residual portion of the liquidity pool is restricted due to local regulatory requirements or operational restrictions, it is assumed to be unavailable to the rest of the Group in calculating the LCR.
 
The composition of the pool is subject to limits and controls set by the respective entity Boards and independent liquidity risk, credit risk and market risk functions. In addition, the investment of the liquidity pool is monitored for concentration by issuer, currency and asset type. Given returns generated by these highly liquid assets, the risk and reward profile is continuously managed.
 
Deposit funding
 
 
 
As at 31.12..22
 
As at 31.12.21
 
Loans and advances at amortised cost
Deposits at amortised cost
Loan: deposit ratio1
 
Loan: deposit ratio1
Funding of loans and advances
£bn
£bn
%
 
%
Barclays UK
225
258
87
 
85
Barclays International
170
288
59
 
52
Head Office
4
—
 
 
 
Barclays Group
399
546
73
 
70
 
 
1
The loan: deposit ratio is calculated as loans and advances at amortised cost divided by deposits at amortised cost.
 
 
Funding structure and funding relationships
 
The basis for liquidity risk management is a funding structure that reduces the probability of a liquidity stress leading to an inability to meet funding obligations as they fall due. The Group’s overall funding strategy is to develop a diversified funding base (geographically, by type and by counterparty) and maintain access to a variety of alternative funding sources, to provide protection against unexpected fluctuations, while minimising the cost of funding.
 
Within this, the Group aims to align the sources and uses of funding. As such, retail and corporate loans and advances are largely funded by deposits in the relevant entities, with the surplus primarily funding the liquidity pool. The majority of reverse repurchase agreements are matched by repurchase agreements. Derivative liabilities and assets are largely matched. A substantial proportion of balance sheet derivative positions qualify for counterparty netting and the remaining portions are largely offset when netted against cash collateral received and paid. Wholesale debt and equity is used to fund residual assets.
 
These funding relationships as at 31 December 2022 are summarised below:
 
 
 
 
 
 
 
Restated1
 
As at 31.12.22
As at 31.12.21
 
 
As at 31.12.22
As at 31.12.21
Assets
£bn
£bn
 
Liabilities and equity
£bn
£bn
Loans and advances at amortised cost2
385
358
 
Deposits at amortised cost
546
519
Group liquidity pool
318
291
 
<1 Year wholesale funding
73
67
 
 
 
 
>1 Year wholesale funding
111
101
Reverse repurchase agreements, trading portfolio assets, cash collateral and settlement balances
412
388
 
Repurchase agreements, trading portfolio liabilities, cash collateral and settlement balances
370
330
Derivative financial instruments
302
263
 
Derivative financial instruments
290
257
Other assets3
97
84
 
Other liabilities
55
40
 
 
 
 
Equity
69
70
Total assets
1,514
1,384
 
Total liabilities and equity
1,514
1,384
 
 
1
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1) on page 69 for more information. The contractual maturity profile of Senior unsecured (privately placed) has been restated to reflect the impact of the Over-issuance of Securities.
2
Adjusted for liquidity pool debt securities reported at amortised cost of £14bn (December 2021: £3bn).
3
Other assets include fair value assets that are not part of reverse repurchase agreements or trading portfolio assets, and other asset categories.
 
 
Composition of wholesale funding
 
Wholesale funding outstanding (excluding repurchase agreements) was £184.0bn (December 2021: £167.5bn). In 2022, the Group issued £15.3bn of MREL eligible instruments from Barclays PLC (the Parent company) in a range of tenors and currencies.
 
Our operating companies also access wholesale funding markets to maintain their stable and diversified funding bases. Barclays Bank PLC continued to issue in the shorter-term and medium-term notes markets. In addition, Barclays Bank UK PLC continued to issue in the shorter-term markets and maintains active secured funding programmes.
 
Wholesale funding of £72.5bn (December 2021: £66.7bn1) matures in less than one year, representing 39% (December 2021: 40%1) of total wholesale funding outstanding. This includes £15.0bn (December 2021: £24.9bn1) related to term funding2.
 
 
Maturity profile of wholesale funding2,3
 
 
 
<1
1-3
3-6
6-12
<1
1-2
2-3
3-4
4-5
>5
 
 
month
months
months
months
year
years
years
years
years
years
Total
 
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Barclays PLC (the Parent company)
 
 
 
 
 
 
 
 
 
 
 
Senior unsecured (public benchmark)
—
—
0.2
1.7
1.9
5.8
5.6
8.3
4.5
18.0
44.1
Senior unsecured (privately placed)
—
—
—
0.2
0.2
0.1
—
—
—
1.0
1.3
Subordinated liabilities
—
—
—
—
—
1.0
—
1.6
—
7.0
9.6
Barclays Bank PLC (including subsidiaries)
 
 
 
 
 
 
 
 
 
 
 
Certificates of deposit and commercial paper
0.3
17.7
12.8
11.0
41.8
1.5
0.6
0.1
—
—
44.0
Asset backed commercial paper
3.6
6.6
0.8
—
11.0
—
—
—
—
—
11.0
Senior unsecured (public benchmark)
—
—
—
—
—
1.0
—
—
—
—
1.0
Senior unsecured (privately placed)4
1.2
2.1
2.1
5.1
10.5
11.0
9.9
3.7
4.2
19.1
58.4
Asset backed securities
—
0.1
—
0.2
0.3
1.8
0.7
0.5
0.5
1.2
5.0
Subordinated liabilities
—
—
—
0.3
0.3
0.2
0.1
0.3
—
0.7
1.6
Barclays Bank UK PLC (including subsidiaries)
 
 
 
 
 
 
 
 
 
 
 
Certificates of deposit and commercial paper
4.7
—
—
—
4.7
—
—
—
—
—
4.7
Senior unsecured (public benchmark)
—
—
—
—
—
—
—
—
—
0.1
0.1
Covered Bonds
1.3
—
0.5
—
1.8
—
—
—
0.5
0.9
3.2
Total as at 31 December 2022
11.1
26.5
16.4
18.5
72.5
22.4
16.9
14.5
9.7
48.0
184.0
Of which secured
4.9
6.7
1.3
0.2
13.1
1.8
0.7
0.5
1.0
2.1
19.2
Of which unsecured
6.2
19.8
15.1
18.3
59.4
20.6
16.2
14.0
8.7
45.9
164.8
 
 
 
 
 
 
 
 
 
 
 
 
Total as at 31 December 20211
14.1
21.7
15.5
15.4
66.7
15.4
15.1
9.9
11.4
49.0
167.5
Of which secured
2.4
6.4
0.6
0.5
9.9
1.9
2.0
0.1
0.3
2.4
16.6
Of which unsecured
11.7
15.3
14.9
14.9
56.8
13.5
13.1
9.8
11.1
46.6
150.9
 
 
1
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1) on page 69 for more information. The contractual maturity profile of financial liabilities designated at fair value has been restated to reflect the impact of the Over-issuance of Securities. Securities issued by BBPLC in excess of the maximum aggregate offering price registered under Barclays Bank PLC's 2019 F-3 and Barclays Bank PLC’s predecessor shelf registration statement on Form F-3 filed in 2018 (Predecessor Shelf) with a value of £6,997m have been classified as "on demand".
2
The composition of wholesale funds comprises the balance sheet reported financial liabilities at fair value, debt securities in issue and subordinated liabilities. It does not include participation in the central bank facilities reported within repurchase agreements and other similar secured borrowing.
3
Term funding comprises public benchmark and privately placed senior unsecured notes, covered bonds, asset-backed securities and subordinated debt where the original maturity of the instrument is more than 1 year.
4
Includes structured notes of £48.4bn, of which £9.4bn matures within one year.
 
 
Regulatory minimum requirements
 
Capital
 
The Group’s Overall Capital Requirement for CET1 is 11.3% comprising a 4.5% Pillar 1 minimum, a 2.5% Capital Conservation Buffer (CCB), a 1.5% Global Systemically Important Institution (G-SII) buffer, a 2.4% Pillar 2A requirement and a 0.4% Countercyclical Capital Buffer (CCyB).
 
The Group’s CCyB is based on the buffer rate applicable for each jurisdiction in which the Group has exposures. On 13 December 2021, the Financial Policy Committee (FPC) announced the re-introduction of a CCyB rate of 1% for UK exposures with effect from 13 December 2022. The buffer rates set by other national authorities for non-UK exposures are not currently material. Overall, this results in a 0.4% CCyB for the Group. On 5 July 2022, the FPC announced that the UK CCyB rate will be increased from 1% to 2% with effect from 5 July 2023.
 
The Group’s updated Pillar 2A requirement as per the PRA’s Individual Capital requirement is 4.3% of which at least 56.25% needs to be met with CET1 capital, equating to 2.4% of RWAs. The Pillar 2A requirement, based on a point in time assessment, has been set as a proportion of RWAs and is subject to at least annual review.
 
The Group’s CET1 target ratio of 13-14% takes into account headroom above requirements which includes a confidential institution-specific PRA buffer. The Group remains above its minimum capital regulatory requirements including the PRA buffer.
 
 
Leverage
 
The Group is subject to a UK leverage ratio requirement of 4.0%. This comprises the 3.25% minimum requirement, a G-SII additional leverage ratio buffer (G-SII ALRB) of 0.53% and a countercyclical leverage ratio buffer (CCLB) of 0.2%. Although the leverage ratio is expressed in terms of Tier 1 (T1) capital, 75% of the minimum requirement, equating to 2.4375%, needs to be met with CET1 capital. In addition, the G-SII ALRB and CCLB must be covered solely with CET1 capital. The CET1 capital held against the 0.53% G-SII ALRB was £5.9bn and against the 0.2% CCLB was £2.3bn.
 
The Group is also required to disclose an average UK leverage ratio which is based on capital on the last day of each month in the quarter and an exposure measure for each day in the quarter.
 
 
MREL
 
The Group is required to meet the higher of: (i) two times the sum of 8% Pillar 1 and 4.3% Pillar 2A equating to 24.5% of RWAs; and (ii) 6.75% of leverage exposures. In addition, the higher of regulatory capital and leverage buffers apply. CET1 capital cannot be counted towards both MREL and the buffers, meaning that the buffers, including the above mentioned confidential institution-specific PRA buffer, will effectively be applied above MREL requirements.
 
 
Significant regulatory updates in the period
 
Capital and RWAs
 
On 1 January 2022, the PRA’s implementation of Basel III standards took effect including the re-introduction of the 100% CET1 capital deduction for qualifying software intangible assets and the introduction of the Standardised Approach for Counterparty Credit Risk (SA-CCR) which replaces the Current Exposure Method for Standardised derivative exposures as a more risk sensitive approach. In addition, the PRA also implemented IRB roadmap changes which includes revisions to the criteria for definition of default, probability of default and loss given default estimation to ensure supervisory consistency and increase transparency of IRB models.
 
On 30 November 2022, the PRA published its consultation paper 'Implementation of the Basel 3.1 standards', which covers the remaining parts of the Basel III standards to be implemented in the UK. Changes are expected to come in to force from 1 January 2025, other than those areas subject to transitional provisions. Barclays currently expects the impact on RWAs on 1 January 2025 to be at the lower end of the prior 5-10% RWA inflation guidance. The PRA is currently consulting on the rule changes, and there will be a review of the Pillar 2A framework in 2024 which may offset some of the impact.
 
 
Leverage
 
From 1 January 2022, UK banks became subject to a single UK leverage ratio requirement meaning that the CRR leverage ratio no longer applies. Under the revised UK leverage ratio framework, central bank claims have been excluded from the UK leverage exposure measure where they are matched by qualifying liabilities (rather than deposits).
 
In the disclosures that follow, references to CRR, as amended by CRR II, mean the capital regulatory requirements, as they form part of domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended.
 
 
Impact of Over-issuance of Securities in the US
 
Basis of preparation
 
In March 2022, the Group became aware that Barclays Bank PLC had issued securities materially in excess of the amount it had registered with the SEC under Barclays Bank PLC’s 2019 F-3. Subsequently, the Group became aware that securities had also been issued in excess of the amount it had registered with the SEC under the Predecessor Shelf. The securities issued in excess of the registered amount included structured products and exchange traded notes. As these securities were not issued in compliance with the Securities Act, a right of rescission arose for certain purchasers of the securities. A portion of the costs associated with the right of rescission was attributable to the financial statements for the year ended 31 December 2021, resulting in the restatement of the 2021 figures in the disclosures below.
 
Prior to the restatement, litigation and conduct charges in the income statement in relation to 2021 were underreported by £220m (pre-tax). This resulted in a CET1 capital decrease of £170m from £47,497m to £47,327m. Both the transitional and fully loaded CET1 ratios remained unchanged at 15.1% and 14.7% respectively. The T1 ratio moved from 19.2% to 19.1% and the total capital ratio moved from 22.3% to 22.2%.
 
The leverage exposure increased £1.9bn to recognise on a regulatory basis, the potential commitment relating to the rescission offer. This resulted in the UK leverage ratio moving from 5.3% to 5.2% whilst the average UK leverage ratio remained unchanged at 4.9%.
 
Total own funds and eligible liabilities decreased £0.2bn to £108bn, which was in excess of a restated requirement to hold £94bn of own funds and eligible liabilities.
 
 
 
 
 
Restated1
Capital ratios2,3
As at 31.12.22
As at 30.09.22
As at 31.12.21
CET1
13.9%
13.8%
15.1%
T1
17.9%
17.6%
19.1%
Total regulatory capital
20.8%
20.3%
22.2%
 
 
 
 
Capital resources
£m
£m
£m
Total equity excluding non-controlling interests per the balance sheet
68,292
67,034
69,052
Less: other equity instruments (recognised as AT1 capital)
(13,284)
(13,270)
(12,259)
Adjustment to retained earnings for foreseeable ordinary share dividends
(787)
(494)
(666)
Adjustment to retained earnings for foreseeable repurchase of shares
—
(9)
—
Adjustment to retained earnings for foreseeable other equity coupons
(37)
(82)
(32)
 
 
 
 
Other regulatory adjustments and deductions
 
 
 
Additional value adjustments (PVA)
(1,726)
(1,850)
(1,585)
Goodwill and intangible assets
(8,224)
(8,356)
(6,804)
Deferred tax assets that rely on future profitability excluding temporary differences
(1,500)
(1,034)
(1,028)
Fair value reserves related to gains or losses on cash flow hedges
7,237
9,451
852
Excess of expected losses over impairment
(119)
(7)
—
Gains or losses on liabilities at fair value resulting from own credit
(620)
(773)
892
Defined benefit pension fund assets
(3,430)
(3,162)
(2,619)
Direct and indirect holdings by an institution of own CET1 instruments
(20)
(20)
(50)
Adjustment under IFRS 9 transitional arrangements
700
759
1,229
Other regulatory adjustments
396
387
345
CET1 capital
46,878
48,574
47,327
 
 
 
 
AT1 capital
 
 
 
Capital instruments and related share premium accounts
13,284
13,270
12,259
Qualifying AT1 capital (including minority interests) issued by subsidiaries
—
—
637
Other regulatory adjustments and deductions
(60)
(60)
(80)
AT1 capital
13,224
13,210
12,816
 
 
 
 
T1 capital
60,102
61,784
60,143
 
 
 
 
T2 capital
 
 
 
Capital instruments and related share premium accounts
9,000
8,524
8,713
Qualifying T2 capital (including minority interests) issued by subsidiaries
1,095
1,176
1,113
Credit risk adjustments (excess of impairment over expected losses)
35
—
73
Other regulatory adjustments and deductions
(160)
(160)
(160)
Total regulatory capital
70,072
71,324
69,882
 
 
 
 
Total RWAs
336,518
350,774
314,136
 
 
1
Capital metrics as at 31 December 2021 have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 for more information. The transitional CET1 ratio remains unchanged at 15.1%.
2
CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR as amended by CRR II. This includes IFRS 9 transitional arrangements and the grandfathering of CRR II non-compliant capital instruments. December 2021 comparatives include the grandfathering of CRR non-compliant capital instruments.
3
The fully loaded CET1 ratio, as is relevant for assessing against the conversion trigger in Barclays PLC AT1 securities, was 13.7%, with £46.2bn of CET1 capital and £336.3bn of RWAs calculated without applying the transitional arrangements of the CRR as amended by CRR II.
 
 
Movement in CET1 capital
Three months ended 31.12.22
Twelve months ended 31.12.22
 
£m
£m
Opening CET1 capital1
48,574
47,327
 
 
 
Profit for the period attributable to equity holders
1,321
5,928
Own credit relating to derivative liabilities
90
(85)
Ordinary share dividends paid and foreseen
(293)
(1,149)
Purchased and foreseeable share repurchase
—
(1,500)
Other equity coupons paid and foreseen
(240)
(910)
Increase in retained regulatory capital generated from earnings
878
2,284
 
 
 
Net impact of share schemes
99
108
Fair value through other comprehensive income reserve
(26)
(1,277)
Currency translation reserve
(1,401)
2,032
Other reserves
(4)
138
(Decrease)/increase in other qualifying reserves
(1,332)
1,001
 
 
 
Pension remeasurements within reserves
(606)
(281)
Defined benefit pension fund asset deduction
(268)
(811)
Net impact of pensions
(874)
(1,092)
 
 
 
Additional value adjustments (PVA)
124
(141)
Goodwill and intangible assets
132
(1,420)
Deferred tax assets that rely on future profitability excluding those arising from temporary differences
(466)
(472)
Excess of expected loss over impairment
(112)
(119)
Direct and indirect holdings by an institution of own CET1 instruments
—
30
Adjustment under IFRS 9 transitional arrangements
(59)
(529)
Other regulatory adjustments
13
9
(Decrease) in regulatory capital due to adjustments and deductions
(368)
(2,642)
 
 
 
Closing CET1 capital
46,878
46,878
 
 
1 
Opening balance as at 1 January 2022 has been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 for more information
 
 
CET1 capital decreased £0.4bn to £46.9bn (December 2021: £47.3bn).
 
CET1 capital decreased by £1.7bn as a result of regulatory changes that took effect from 1 January 2022 including the re-introduction of the 100% CET1 capital deduction for qualifying software intangible assets and a reduction in IFRS9 transitional relief due to the relief applied to the pre-2020 impairment charge reducing to 25% in 2022 from 50% in 2021 and the relief applied to the post-2020 impairment charge reducing to 75% in 2022 from 100% in 2021.
 
 
£5.9bn of capital generated from profit, after absorbing the £0.6bn net of tax impact of the Over-issuance of Securities, was partially offset by distributions of £3.5bn comprising:
●
£1.5bn of total buybacks including the £1bn buyback announced with FY21 results and the £0.5bn buyback announced with H122 results
●
£1.1bn of ordinary share dividends paid and foreseen reflecting the £0.4bn half year 2022 dividend paid and a £0.8bn accrual towards a full year 2022 dividend
●
£0.9bn of equity coupons paid and foreseen
Other significant movements in the period were:
●
£1.3bn reduction from decreases in the fair value of the bond portfolio through other comprehensive income
●
£2.0bn increase in the currency translation reserve driven by the appreciation of period end USD against GBP
●
£1.1bn decrease due to the net impact of pensions primarily as a result of the accelerated cash settlement to the UKRF of earlier deficit reduction contributions as well as deficit reduction payments made in 2022
 
 
RWAs by risk type and business
 
Credit risk
 
Counterparty credit risk
 
Market Risk
 
Operational risk
Total RWAs
 
STD
IRB
 
STD
IRB
Settlement Risk
CVA
 
STD
IMA
 
 
 
As at 31.12.22
£m
£m
 
£m
£m
£m
£m
 
£m
£m
 
£m
£m
Barclays UK
6,836
54,752
 
167
—
—
72
 
233
—
 
11,023
73,083
Corporate and Investment Bank
35,738
75,413
 
16,814
21,449
80
3,093
 
13,716
22,497
 
27,064
215,864
Consumer, Cards and Payments
27,882
3,773
 
214
46
—
61
 
—
388
 
6,559
38,923
Barclays International
63,620
79,186
 
17,028
21,495
80
3,154
 
13,716
22,885
 
33,623
254,787
Head Office
2,636
6,843
 
—
—
—
—
 
—
—
 
(831)
8,648
Barclays Group
73,092
140,781
 
17,195
21,495
80
3,226
 
13,949
22,885
 
43,815
336,518
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As at 30.09.22
 
 
 
 
 
 
 
 
 
 
 
 
 
Barclays UK
6,487
55,121
 
246
—
—
84
 
256
—
 
11,047
73,241
Corporate and Investment Bank
38,886
75,561
 
20,115
24,735
446
3,111
 
15,596
26,879
 
25,296
230,625
Consumer, Cards and Payments
28,180
3,597
 
279
35
—
69
 
—
104
 
6,424
38,688
Barclays International
67,066
79,158
 
20,394
24,770
446
3,180
 
15,596
26,983
 
31,720
269,313
Head Office
2,785
6,431
 
—
—
—
—
 
—
—
 
(996)
8,220
Barclays Group
76,338
140,710
 
20,640
24,770
446
3,264
 
15,852
26,983
 
41,771
350,774
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As at 31.12.21
 
 
 
 
 
 
 
 
 
 
 
 
 
Barclays UK
7,195
53,408
 
426
—
—
138
 
100
—
 
11,022
72,289
Corporate and Investment Bank
29,420
64,416
 
15,223
19,238
105
2,289
 
17,306
27,308
 
25,359
200,664
Consumer, Cards and Payments
20,770
2,749
 
215
18
—
21
 
—
57
 
6,391
30,221
Barclays International
50,190
67,165
 
15,438
19,256
105
2,310
 
17,306
27,365
 
31,750
230,885
Head Office
4,733
7,254
 
—
—
—
—
 
—
—
 
(1,025)
10,962
Barclays Group
62,118
127,827
 
15,864
19,256
105
2,448
 
17,406
27,365
 
41,747
314,136
 
 
Movement analysis of RWAs
Credit risk
Counterparty credit risk
Market risk
Operational risk
Total RWAs
 
£m
£m
£m
£m
£m
Opening RWAs (as at 31.12.21)
189,945
37,673
44,771
41,747
314,136
Book size
15,371
(3,254)
(9,707)
2,068
4,478
Acquisitions and disposals
(1,187)
—
—
—
(1,187)
Book quality
(2,236)
1,320
—
—
(916)
Model updates
—
—
—
—
—
Methodology and policy
2,961
2,952
—
—
5,913
Foreign exchange movements1
9,019
3,305
1,770
—
14,094
Total RWA movements
23,928
4,323
(7,937)
2,068
22,382
Closing RWAs (as at 31.12.22)
213,873
41,996
36,834
43,815
336,518
 
 
1
Foreign exchange movements does not include the impact of foreign exchange for modelled market risk or operational risk.
 
 
Overall RWAs increased £22.4bn to £336.5bn (December 2021: £314.1bn)
 
 
Credit risk RWAs increased £23.9bn:
●
A £15.4bn increase in book size primarily driven by an increase in lending activities across CIB, CC&P and growth in mortgages within Barclays UK
●
A £1.2bn decrease in acquisitions and disposals primarily driven by the disposal of Barclays' equity stake in Absa, offset by Gap portfolio acquisition
●
A £2.2bn decrease in RWAs due to book quality primarily driven by the benefit in mortgages from an increase in the HPI, partially offset by movements in risk parameters primarily within Barclays UK
●
A £3.0bn increase in methodology and policy primarily as a result of regulatory changes relating to implementation of IRB roadmap changes, partially offset by the reversal of the software intangibles benefit
●
A £9.0bn increase in FX primarily due to appreciation of USD against GBP
Counterparty Credit risk RWAs increased £4.3bn:
●
A £3.3bn decrease in book size primarily driven by derivative mark-to-market movements
●
A £1.3bn increase in RWAs due to book quality primarily driven by movements in risk parameters within CIB
●
A £3.0bn increase in methodology and policy as a result of regulatory changes relating to the introduction of SA-CCR
●
A £3.3bn increase in FX primarily due to appreciation of USD against GBP
Market risk RWAs decreased £7.9bn:
●
A £9.7bn decrease in book size primarily driven by a £6.7bn in Stressed Value at Risk (SVaR) model adjustment as a result of changes in portfolio composition, a £2.3bn decrease due to client and trading activities and a £0.7bn reduction in Structural FX
●
A £1.8bn increase in FX primarily due to appreciation of USD against GBP
Operational risk RWAs increased £2.1bn:
●
A £2.1bn increase in book size primarily driven by the inclusion of higher 2022 CIB income compared to 2019
 
 
 
 
 
Restated1
Leverage ratios2,3
As at 31.12.22
As at 30.09.22
As at 31.12.21
£m
£m
£m
Average UK leverage ratio
4.8%
4.8%
4.9%
Average T1 capital
60,865
60,651
59,739
Average UK leverage exposure
1,280,972
1,259,648
1,229,041
 
 
 
 
UK leverage ratio
5.3%
5.0%
5.2%
 
 
 
 
CET1 capital
46,878
48,574
47,327
AT1 capital
13,224
13,210
12,179
T1 capital
60,102
61,784
59,506
 
 
 
 
UK leverage exposure
1,129,973
1,232,105
1,137,904
 
 
 
 
UK leverage exposure
 
 
 
Accounting assets
 
 
 
Derivative financial instruments
302,380
416,908
262,572
Derivative cash collateral
69,048
90,948
58,177
Securities financing transactions (SFTs)
189,637
224,978
170,853
Loans and advances and other assets
952,634
994,065
892,683
Total IFRS assets
1,513,699
1,726,899
1,384,285
 
 
 
 
Regulatory consolidation adjustments
(8,278)
(6,598)
(3,665)
 
 
 
 
Derivatives adjustments
 
 
 
Derivatives netting
(256,309)
(347,999)
(236,881)
Adjustments to collateral
(52,715)
(76,083)
(50,929)
Net written credit protection
16,190
26,838
15,509
Potential future exposure (PFE) on derivatives
84,168
84,597
137,291
Total derivatives adjustments
(208,666)
(312,647)
(135,010)
 
 
 
 
SFTs adjustments
24,203
30,477
24,544
 
 
 
 
Regulatory deductions and other adjustments
(21,447)
(21,582)
(20,219)
 
 
 
 
Weighted off-balance sheet commitments
124,169
135,222
115,047
 
 
 
 
Qualifying central bank claims
(272,321)
(267,792)
(210,134)
 
 
 
 
Settlement netting
(21,386)
(51,874)
(16,944)
 
 
 
 
UK leverage exposure
1,129,973
1,232,105
1,137,904
 
 
1
Capital and leverage metrics as at 31 December 2021 have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 for further details.
2
Capital and leverage measures are calculated applying the transitional arrangements of the CRR as amended by CRR II.
3
Fully loaded average UK leverage ratio was 4.7%, with £60.1bn of T1 capital and £1,280.2bn of leverage exposure. Fully loaded UK leverage ratio was 5.3%, with £59.4bn of T1 capital and £1,129.3bn of leverage exposure. Fully loaded UK leverage ratios are calculated without applying the transitional arrangements of the CRR as amended by CRR II.
 
 
The UK leverage ratio increased to 5.3% (December 2021: 5.2%) primarily due to a £7.9bn decrease in the leverage exposure and a £0.6bn increase in Tier 1 capital. The UK leverage exposure decreased to £1,130.0bn (December 2021: £1,137.9bn) largely due to the following movements:
 
 
●
£53.1bn decrease in PFE on derivatives largely driven by increased netting eligibility due to the introduction of SA-CCR
●
£42.0bn decrease in cash at central banks net of the qualifying central bank claims exemption primarily due to the matching of allowable liabilities rather than deposits introduced under the UK leverage ratio framework and a decrease in Swiss Franc cash assets
●
£33.0bn increase in loans and advances and other assets (excluding cash and settlement balances which are subject to regulatory exemptions) primarily due to increased lending
●
£29.5bn increase in derivative financial instruments post additional regulatory netting and adjustments for cash collateral primarily driven by market volatility, increased activity in CIB and the application of a 1.4 multiplier introduced under SA-CCR
●
£18.4bn increase in SFTs primarily driven by increased reverse repurchase activity in CIB
 
 
The average UK leverage ratio decreased to 4.8% (December 2021: 4.9%) due to a £51.9bn increase in average leverage exposure partially offset by a £1.1bn increase in average T1 capital. The average UK leverage exposure increased to £1,281.0bn (December 2021: £1,229.0bn) mainly driven by increased activity during the year that was partially offset by the impact of regulatory changes that came into effect from 1 January 2022 under the UK leverage ratio framework.
 
 
MREL
 
 
 
 
 
 
 
MREL requirements including buffers1,2,3,4
Total requirement (£m) based on
 
Requirement as a percentage of:
 
 
 
Restated1
 
 
 
Restated1
 
As at 31.12.22
As at 30.09.22
As at 31.12.21
 
As at 31.12.22
As at 30.09.22
As at 31.12.21
Requirement based on RWAs (minimum requirement)
97,387
99,596
77,302
 
28.9%
28.4%
24.6%
Requirement based on UK leverage exposure4
91,213
97,243
93,975
 
8.1%
7.9%
6.9%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restated1
Own funds and eligible liabilities1,3
 
 
 
 
As at 31.12.22
As at 30.09.22
As at 31.12.21
 
 
 
 
 
£m
£m
£m
CET1 capital
 
 
 
 
46,878
48,574
47,327
AT1 capital instruments and related share premium accounts5
 
 
 
 
13,224
13,210
12,179
T2 capital instruments and related share premium accounts5
 
 
 
 
8,875
8,364
8,626
Eligible liabilities
 
 
 
 
43,851
41,744
39,889
Total Barclays PLC (the Parent company) own funds and eligible liabilities
 
 
112,828
111,892
108,021
 
 
 
 
 
 
 
 
Total RWAs
 
 
 
 
336,518
350,774
314,136
Total UK leverage exposure4
 
 
 
 
1,129,973
1,232,105
1,356,191
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restated1
Own funds and eligible liabilities ratios as a percentage of:1
 
 
 
 
As at 31.12.22
As at 30.09.22
As at 31.12.21
Total RWAs
 
 
 
 
33.5%
31.9%
34.4%
Total UK leverage exposure4
 
 
 
 
10.0%
9.1%
8.0%
 
 
 
 
 
 
 
 
 
 
As at 31 December 2022, Barclays PLC (the Parent company) held £112.8bn of own funds and eligible liabilities equating to 33.5% of RWAs. This was in excess of the Group's MREL requirement, excluding the PRA buffer, to hold £97.4bn of own funds and eligible liabilities equating to 28.9% of RWAs. The Group remains above its MREL regulatory requirement including the PRA buffer.
 
 
1
Capital and leverage metrics as at 31 December 2021 have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 for further details.
2
Minimum requirement excludes the confidential institution-specific PRA buffer.
3
CET1, T1 and T2 capital, and RWAs are calculated applying the transitional arrangements of the CRR as amended by CRR II including IFRS 9 transitional arrangements.
4
As at 31 December 2021, MREL requirements were on a CRR leverage basis which, from 1 January 2022, was no longer applicable for UK banks.
5
Includes other AT1 capital regulatory adjustments and deductions of £60m (December 2021: £80m), and other T2 credit risk adjustments and deductions of £125m (December 2021: £87m).
 
 
Statement of Directors’ Responsibilities
 
 
Each of the Directors (the names of whom are set out below) confirm that:
 
 
●
to the best of their knowledge, the condensed consolidated financial statements (set out on pages 64 to 68), which have been prepared in accordance with (a) UK-adopted international accounting standards; and (b) International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), including interpretations issued by the IFRS Interpretations Committee, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole. The condensed consolidated financial statements should be read in conjunction with the annual financial statements as included in the Annual Report for the year ended 31 December 2022; and
●
to the best of their knowledge, the management information (set out on pages 1 to 62) includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. This management information should be read in conjunction with the principal risks and uncertainties included in the Annual Report for the year ended 31 December 2022.
 
 
Signed on 14 February 2023 on behalf of the Board by
 
 
C.S. Venkatakrishnan
Anna Cross
Group Chief Executive
Group Finance Director
 
 
Barclays PLC Board of Directors
 
 
Chairman
Executive Directors
Non-Executive Directors
Nigel Higgins
C.S. Venkatakrishnan
Mike Ashley
 
Anna Cross
Robert Berry
 
 
Tim Breedon CBE
 
 
Mohamed A. El-Erian
 
 
Dawn Fitzpatrick
 
 
Mary Francis CBE
 
 
Crawford Gillies
 
 
Brian Gilvary
 
 
Marc Moses
 
 
Diane Schueneman
 
 
Julia Wilson
 
 
 
Condensed Consolidated Financial Statements
 
 
Condensed consolidated income statement
 
 
 
Restated2
 
Notes1
Year ended 31.12.22
Year ended 31.12.21
 
 
£m
£m
Interest and similar income
 
19,096
11,240
Interest and similar expense
 
(8,524)
(3,167)
Net interest income
 
10,572
8,073
Fee and commission income
 
9,637
9,880
Fee and commission expense
 
(3,038)
(2,206)
Net fee and commission income
 
6,599
7,674
Net trading income
 
8,049
5,794
Net investment income
 
(434)
311
Other income
 
170
88
Total income
 
24,956
21,940
 
 
 
 
Staff costs
 
(9,252)
(8,511)
Infrastructure, administration and general expenses
 
(5,881)
(5,751)
Litigation and conduct
 
(1,597)
(397)
Operating expenses
 
(16,730)
(14,659)
 
 
 
 
Share of post-tax results of associates and joint ventures
 
6
260
Profit before impairment
 
8,232
7,541
Credit impairment (charges)/releases
 
(1,220)
653
Profit before tax
 
7,012
8,194
Tax charge
2
(1,039)
(1,138)
Profit after tax
 
5,973
7,056
 
 
 
 
Attributable to:
 
 
 
Equity holders of the parent
 
5,023
6,205
Other equity instrument holders
 
905
804
Total equity holders of the parent
 
5,928
7,009
Non-controlling interests
3
45
47
Profit after tax
 
5,973
7,056
 
 
 
 
Earnings per share
 
p
p
Basic earnings per ordinary share
4
30.8
36.5
Diluted earnings per ordinary share
4
29.8
35.6
 
 
1
For Notes to the Financial Statements see pages 69 to 76.
2
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Condensed consolidated statement of comprehensive income
 
 
 
Restated2
 
 
Year ended 31.12.22
Year ended 31.12.21
 
Notes1
£m
£m
Profit after tax
 
5,973
7,056
 
 
 
 
Other comprehensive income/(loss) that may be recycled to profit or loss:3
 
 
Currency translation reserve
12
2,032
(131)
Fair value through other comprehensive income reserve
12
(1,421)
(429)
Cash flow hedging reserve
12
(6,382)
(2,428)
Other comprehensive loss that may be recycled to profit
 
(5,771)
(2,988)
 
 
 
 
Other comprehensive income/(loss) not recycled to profit or loss:3
 
 
Retirement benefit remeasurements
9
(281)
643
Fair value through other comprehensive income reserve
12
228
141
Own credit
12
1,463
(14)
Other comprehensive income not recycled to profit
 
1,410
770
 
 
 
 
Other comprehensive loss for the period
 
(4,361)
(2,218)
 
 
 
 
Total comprehensive income for the period
 
1,612
4,838
 
 
 
 
Attributable to:
 
 
 
Equity holders of the parent
 
1,567
4,791
Non-controlling interests
 
45
47
Total comprehensive income for the period
 
1,612
4,838
 
 
1
For Notes to the Financial Statements see pages 69 to 76.
2
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1) on page 69 for more information.
3
Reported net of tax.
 
 
Condensed consolidated balance sheet
 
 
 
Restated2
 
 
As at 31.12.22
As at 31.12.21
Assets
Notes1
£m
£m
Cash and balances at central banks
 
256,351
238,574
Cash collateral and settlement balances
 
112,597
92,542
Loans and advances at amortised cost
 
398,779
361,451
Reverse repurchase agreements and other similar secured lending
 
776
3,227
Trading portfolio assets
 
133,813
147,035
Financial assets at fair value through the income statement
 
213,568
191,972
Derivative financial instruments
 
302,380
262,572
Financial assets at fair value through other comprehensive income
 
65,062
61,753
Investments in associates and joint ventures
 
922
999
Goodwill and intangible assets
 
8,239
8,061
Property, plant and equipment
 
3,616
3,555
Current tax assets
 
385
261
Deferred tax assets
2
6,991
4,619
Retirement benefit assets
9
4,743
3,879
Other assets
 
5,477
3,785
Total assets
 
1,513,699
1,384,285
 
 
 
 
Liabilities
 
 
 
Deposits at amortised cost
 
545,782
519,433
Cash collateral and settlement balances
 
96,927
79,371
Repurchase agreements and other similar secured borrowing
 
27,052
28,352
Debt securities in issue
 
112,881
98,867
Subordinated Liabilities
7
11,423
12,759
Trading portfolio liabilities
 
72,924
54,169
Financial liabilities designated at fair value
 
271,637
250,960
Derivative financial instruments
 
289,620
256,883
Current tax liabilities
 
580
689
Deferred tax liabilities
2
16
37
Retirement benefit liabilities
9
264
311
Other liabilities
 
13,789
10,505
Provisions
8
1,544
1,908
Total liabilities
 
1,444,439
1,314,244
 
 
 
 
Equity
 
 
 
Called up share capital and share premium
10
4,373
4,536
Other reserves
12
(2,192)
1,770
Retained earnings
 
52,827
50,487
Shareholders' equity attributable to ordinary shareholders of the parent
 
55,008
56,793
Other equity instruments
11
13,284
12,259
Total equity excluding non-controlling interests
 
68,292
69,052
Non-controlling interests
3
968
989
Total equity
 
69,260
70,041
 
 
 
 
Total liabilities and equity
 
1,513,699
1,384,285
 
 
1
For Notes to the Financial Statements see pages 69 to 76.
2
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Condensed consolidated statement of changes in equity
 
Called up share capital and share premium
Other equity instruments
Other reserves
Restated1
Retained earnings
Restated1
Total
Non-controlling interests
Restated1
Total equity
Year ended 31.12.2022
£m
£m
£m
£m
£m
£m
£m
Balance as at 1 January 2022
4,536
12,259
1,770
50,487
69,052
989
70,041
Profit after tax
—
905
—
5,023
5,928
45
5,973
Retirement benefit remeasurements
—
—
—
(281)
(281)
—
(281)
Other comprehensive profit after tax for the year
—
—
(4,080)
—
(4,080)
—
(4,080)
Total comprehensive income for the period
—
905
(4,080)
4,742
1,567
45
1,612
Employee share schemes and hedging thereof
70
—
—
476
546
—
546
Issue and redemption of other equity instruments
—
1,032
—
28
1,060
(20)
1,040
Other equity instruments coupon paid
—
(905)
—
—
(905)
—
(905)
Disposal of Absa holding
—
—
(84)
84
—
—
—
Vesting of employee share schemes
—
—
5
(485)
(480)
—
(480)
Dividends paid
—
—
—
(1,028)
(1,028)
(45)
(1,073)
Repurchase of shares
(233)
—
233
(1,508)
(1,508)
—
(1,508)
Own credit realisation
—
—
(36)
36
—
—
—
Other movements
—
(7)
—
(5)
(12)
(1)
(13)
Balance as at 31 December 2022
4,373
13,284
(2,192)
52,827
68,292
968
69,260
 
 
Year ended 31.12.2021
 
 
 
 
 
 
 
Balance as at 1 January 2021
4,637
11,172
4,461
45,527
65,797
1,085
66,882
Profit after tax
—
804
—
6,205
7,009
47
7,056
Retirement benefit remeasurements
—
—
—
643
643
—
643
Other comprehensive profit after tax for the year
—
—
(2,861)
—
(2,861)
—
(2,861)
Total comprehensive income for the period
—
804
(2,861)
6,848
4,791
47
4,838
Employee share schemes and hedging thereof
60
—
—
235
295
—
295
Issue and redemption of other equity instruments
—
1,078
—
6
1,084
(75)
1,009
Other equity instruments coupon paid
—
(804)
—
—
(804)
—
(804)
Vesting of employee share schemes
—
—
1
(410)
(409)
—
(409)
Dividends paid
—
—
—
(512)
(512)
(44)
(556)
Repurchase of shares
(161)
—
161
(1,200)
(1,200)
—
(1,200)
Other movements
—
9
8
(7)
10
(24)
(14)
Balance as at 31 December 2021
4,536
12,259
1,770
50,487
69,052
989
70,041
 
 
 
 
 
 
 
 
 
 
 
1
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Condensed consolidated cash flow statement
 
 
Restated1
 
Year ended 31.12.22
Year ended 31.12.21
 
£m
£m
Profit before tax
7,012
8,194
Adjustment for non-cash items
(8,514)
5,023
Net increase in loans and advances at amortised cost
(24,949)
(10,728)
Net increase in deposits at amortised cost
26,349
38,397
Net increase in debt securities in issue
9,210
18,131
Changes in other operating assets and liabilities
21,811
(8,763)
Corporate income tax paid
(688)
(1,335)
Net cash from operating activities
30,231
48,919
Net cash from investing activities
(21,673)
4,270
Net cash from financing activities
696
107
Effect of exchange rates on cash and cash equivalents
10,330
(4,232)
Net increase in cash and cash equivalents
19,584
49,064
Cash and cash equivalents at beginning of the period
259,206
210,142
Cash and cash equivalents at end of the period
278,790
259,206
 
 
1
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Financial Statement Notes
 
1.  Basis of preparation
 
Restatement of financial statements
 
The comparatives in these condensed consolidated financial statements for the year ended 31 December 2022 (the financial statements) have been restated to reflect both a provision and contingent liability disclosure in respect of the impact of an over-issuance of securities (the Over-issuance of Securities) in excess of the maximum aggregate offering price registered under Barclays Bank PLC’s shelf registration statement on Form F-3, as declared effective by the SEC in August 2019 (2019 F-3) and Barclays Bank PLC’s Predecessor Shelf.
 
Due to an SEC settlement order in 2017, at the time the 2019 F-3 was filed and the Predecessor Shelf was amended, Barclays Bank PLC had ceased to be a “well-known seasoned issuer” (or WKSI) and had become an “ineligible issuer”, as defined in Rule 405 under the Securities Act of 1933, as amended (Securities Act), thus being required to register upfront a fixed amount of securities with the SEC.
 
In March 2022, Barclays Bank PLC became aware that it had issued securities in the US materially in excess of the amount it had registered with the SEC under the 2019 F-3. Subsequently, Barclays Bank PLC became aware that securities had also been issued in excess of the amount it had registered with the SEC under the Predecessor Shelf. The securities that were issued in this period included structured notes and exchange traded notes (ETNs). Certain offers and sales of these securities were not made in compliance with the Securities Act, giving rise to rights of rescission for certain purchasers of the securities. Under Section 12(a)(1) of the Securities Act, certain purchasers of unregistered securities have a right to recover, upon the tender of such security, the consideration paid for such security with interest, less the amount of any income received, or damages if the purchaser sold the securities at a loss (the Rescission Price). As a result, Barclays Bank PLC made a rescission offer to eligible purchasers of the relevant affected securities at the Rescission Price (the Rescission Offer).
 
A portion of the costs associated with the rights of rescission of certain investors was attributable to Barclays PLC’s financial statements for the year ended 31 December 2021. Accordingly, the comparatives in these financial statements have been restated. The restatement impacts the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, and the consolidated cash flow statement for the year ended 31 December 2021, as well as quarterly financial information that is presented within this document.
 
The table below reflects each of the consolidated financial statement line items that were affected by the restatement:
 
 
Impact on the condensed consolidated income statement
As reported
 
Restatement
 
As restated
Year ended 31.12.21
£m
 
£m
 
£m
Litigation and conduct
(177)
 
(220)
 
(397)
Operating expenses
(14,439)
 
(220)
 
(14,659)
Profit before tax
8,414
 
(220)
 
8,194
Taxation
(1,188)
 
50
 
(1,138)
Profit after tax
7,226
 
(170)
 
7,056
 
 
 
 
 
 
Impact on the condensed consolidated statement of comprehensive income
 
 
 
 
 
Year ended 31.12.21
£m
 
£m
 
£m
Profit after tax
7,226
 
(170)
 
7,056
Total comprehensive income for the period
5,008
 
(170)
 
4,838
 
 
 
 
 
 
Impact on the condensed consolidated cash flow statement
 
 
 
 
 
Year ended 31.12.21
£m
 
£m
 
£m
Profit before tax
8,414
 
(220)
 
8,194
Adjustment for non-cash items
4,803
 
220
 
5,023
 
 
 
 
 
 
Impact on the condensed consolidated balance sheet
 
 
 
 
 
As at 31.12.21
£m
 
£m
 
£m
Current tax liabilities
739
 
(50)
 
689
Provisions
1,688
 
220
 
1,908
Total liabilities
1,314,074
 
170
 
1,314,244
 
 
 
 
 
 
Retained earnings
50,657
 
(170)
 
50,487
Total equity
70,211
 
(170)
 
70,041
 
 
2.  Tax
 
The tax charge for 2022 was £1,039m (restated1 2021: £1,138m), representing an effective tax rate (ETR) of 14.8% (restated1 2021: 13.9%). The ETR for 2022 includes a charge recognised for the re-measurement of the Group’s UK deferred tax assets (DTAs) due to the enactment of legislation in Q122 to reduce the UK banking surcharge rate being from 8% to 3% effective from 1 April 2023. The ETR excluding the impact of this downward re-measurement of UK DTAs was 9.9%, reflecting the impact of tax benefits arising in the current year, primarily arising from tax relief related to government bonds linked to the high prevailing rate of inflation in 2022, as well as beneficial adjustments in respect of prior years. Included in the 2022 tax charge is a credit of £244m (2021: £212m) in respect of payments made on AT1 instruments that are classified as equity for accounting purposes. The 2021 ETR included a benefit recognised for the re-measurement of the Group’s UK DTAs as a result of the enactment of legislation to increase the UK Corporation Tax rate to 25% effective from 1 April 2023.
 
The re-measurement of UK DTAs has resulted in the Group's DTAs decreasing by £318m with a tax charge in the income statement of £346m and a tax credit within other comprehensive income of £28m.
 
In its Autumn Statement held in November 2022, the UK Government confirmed that, as currently enacted, the banking surcharge rate will be reduced from 8% to 3% from 1 April 2023. UK deferred tax assets as at 31 December 2022 are measured at this rate, having been remeasured when the 3% rate was substantively enacted in 2022. The statutory tax rate applicable to banks' UK profits will therefore be 28% (comprising a rate of 25% for Corporation Tax and of 3% for banking surcharge)from 1 April 2023.
 
The OECD and G20 Inclusive Framework on Base Erosion and Profit Shifting announced plans to introduce a global minimum tax rate of 15% and the OECD issued model rules in 2021. During 2022 further OECD guidance has been released and draft legislation to implement the global minimum tax regime has been published by the UK Government. The UK Government has stated that it intends to enact legislation in 2023 to apply for accounting periods beginning on or after 31 December 2023. The Group has reviewed the published OECD model rules and further guidance along with the draft UK legislation and has been assessing the expected impact ahead of the implementation of the new regime. The Group will review further guidance as well as new legislation expected to be released by governments implementing this new tax regime and continue to assess the potential impact.
 
In the USA, the Inflation Reduction Act was enacted in August 2022. The Act does not include changes to the US corporate income tax rate or to US international tax provisions included in the previously proposed Build Back Better Act but does introduce a corporate alternative minimum tax on adjusted financial statements income, effective from 1 January 2023. Further regulations and guidance are expected to be published in 2023, however the Group’s preliminary view is that the alternative minimum tax is not expected to materially increase the Group’s effective tax rate. The Group will review future guidance when it is published and continue to monitor other legislative developments and assess the potential impact.
 
 
1 
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1) on page 69 for more information.
 
 
 
As at 31.12.22
As at 31.12.21
Deferred tax assets and liabilities
£m
£m
UK
4,925
2,183
USA
1,576
2,006
Other territories
490
430
Deferred tax assets
6,991
4,619
Deferred tax liabilities
(16)
(37)
 
 
 
Analysis of deferred tax assets
 
 
Temporary differences
5,345
3,399
Tax losses
1,646
1,220
Deferred tax assets
6,991
4,619
 
 
3. Non-controlling interests
 
 
Profit attributable to
non-controlling interests
 
Equity attributable to
non-controlling interests
 
Year ended 31.12.22
Year ended 31.12.21
 
As at 31.12.22
As at 31.12.21
 
£m
£m
 
£m
£m
Barclays Bank PLC issued:
 
 
 
 
 
- Preference shares
31
27
 
529
529
- Upper T2 instruments
14
17
 
438
458
Other non-controlling interests
—
3
 
1
2
Total
45
47
 
968
989
 
 
4. Earnings per share
 
 
 
Restated1
 
Year ended 31.12.22
Year ended 31.12.21
 
£m
£m
Profit attributable to ordinary equity holders of the parent
5,023
6,205
 
 
 
 
m
m
Basic weighted average number of shares in issue
16,333
16,985
Number of potential ordinary shares
534
435
Diluted weighted average number of shares
16,867
17,420
 
 
 
 
p
p
Basic earnings per ordinary share
30.8
36.5
Diluted earnings per ordinary share
29.8
35.6
 
 
1
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1) on page 69 for more information.
 
 
5.            
Dividends on ordinary shares
 
It is Barclays' policy to declare and pay dividends on a semi-annual basis. The 2022 full year dividend of 5.0p per ordinary share will be paid on 31 March 2023 to the shareholders on the Share Registrar on 24 February 2023. A half year dividend for 2022 of 2.25p (H121: 2.0p) per ordinary share was paid on 16 September 2022.
 
 
 
Year ended 31.12.22
Year ended 31.12.21
 
 
Per share
Total
Per share
Total
 
Dividends paid during the period
p
£m
p
£m
 
Full year dividend paid during period
4.00
664
1.00
173
 
Interim dividend paid during the period
2.25
364
2.00
339
 
Total dividend
6.25
1,028
3.00
512
 
 
The Directors have confirmed their intention initiate a share buyback of up to £0.5bn after the balance sheet date. The share buyback is expected to commence in the first quarter of 2023. The financial statements for the year ended 31 December 2022 do not reflect the impact of the proposed share buyback, which will be accounted for as and when shares are repurchased by the Company.
 
 
6.            
Fair value of financial instruments
 
This section should be read in conjunction with Note 17, Fair value of financial instruments of the Barclays PLC Annual Report 2022 which provides more detail about accounting policies adopted, valuation methodologies used in calculating fair value and the valuation control framework which governs oversight of valuations. There have been no changes in the accounting policies adopted or the valuation methodologies used.
 
 
Valuation
 
The following table shows the Group’s assets and liabilities that are held at fair value disaggregated by valuation technique (fair value hierarchy) and balance sheet classification:
 
 
 
 
Valuation technique using
 
 
Quoted market prices
Observable inputs
Significant unobservable inputs
 
 
(Level 1)
(Level 2)
(Level 3)
Total
As at 31.12.22
£m
£m
£m
£m
Trading portfolio assets
62,478
64,855
6,480
133,813
Financial assets at fair value through the income statement
5,720
198,723
9,125
213,568
Derivative financial instruments
10,054
287,152
5,174
302,380
Financial assets at fair value through other comprehensive income
20,704
44,347
11
65,062
Investment property
—
—
5
5
Total assets
98,956
595,077
20,795
714,828
 
 
 
 
 
Trading portfolio liabilities
(44,128)
(28,740)
(56)
(72,924)
Financial liabilities designated at fair value
(133)
(270,454)
(1,050)
(271,637)
Derivative financial instruments
(10,823)
(272,434)
(6,363)
(289,620)
Total liabilities
(55,084)
(571,628)
(7,469)
(634,181)
 
 
 
 
 
As at 31.12.21
 
 
 
 
Trading portfolio assets
80,926
63,828
2,281
147,035
Financial assets at fair value through the income statement
5,093
177,167
9,712
191,972
Derivative financial instruments
6,150
252,412
4,010
262,572
Financial assets at fair value through other comprehensive income
22,009
39,706
38
61,753
Investment property
—
—
7
7
Total assets
114,178
533,113
16,048
663,339
 
 
 
 
 
Trading portfolio liabilities
(27,529)
(26,613)
(27)
(54,169)
Financial liabilities designated at fair value
(174)
(250,376)
(410)
(250,960)
Derivative financial instruments
(6,571)
(244,253)
(6,059)
(256,883)
Total liabilities
(34,274)
(521,242)
(6,496)
(562,012)
 
 
7.            
Subordinated liabilities
 
 
 
Year ended 31.12.22
Year ended 31.12.21
 
£m
£m
Opening balance as at 1 January
12,759
16,341
Issuances
1,477
1,890
Redemptions
(2,679)
(4,807)
Other
(134)
(665)
Closing balance
11,423
12,759
 
 
Issuances of £1,477m comprise £1,000m GBP 8.407% Fixed Rate Resetting Subordinated Callable Notes issued externally by Barclays PLC and £317m USD Floating Rate Notes, £89m ZAR Floating Rate Notes, £42m EUR Floating Rate Notes and £29m JPY Floating Rate Notes issued externally by Barclays subsidiaries.
 
Redemptions of £2,679m comprise £2,349m notes issued externally by Barclays Bank PLC, £175m USD Floating Rate Notes, £88m USD Fixed Rate Notes issued externally by Barclays subsidiaries and £67m GBP Undated Subordinated Loan Notes (secured) issued externally by a Barclays securitisation special purpose vehicle (SPV). £2,349m notes issued externally by Barclays Bank PLC comprise £1,275m USD 7.625% Fixed Rate Contingent Capital Notes, £838m EUR 6.625% Fixed Rate Subordinated Notes, £147m USD 6.86% Callable Perpetual Core Tier One Notes, £42m EUR Subordinated Floating Rate Notes, £35m GBP 5.330% Step-up Callable Perpetual Reserve Capital Instruments and £12m GBP 6% Callable Perpetual Core Tier One Notes.
 
Other movements predominantly comprise foreign exchange movements and fair value hedge adjustments.
 
 
8.            
Provisions
 
 
 
Restated1
 
As at 31.12.22
As at 31.12.21
 
£m
£m
Customer redress
378
530
Legal, competition and regulatory matters
159
226
Redundancy and restructuring
136
326
Undrawn contractually committed facilities and guarantees
583
542
Onerous contracts
—
5
Sundry provisions
288
279
Total
1,544
1,908
 
 
1
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Restatement of financial statements (Note 1) on page 69 for more information.
 
 
9.            
Retirement benefits
 
As at 31 December 2022, the Group’s IAS 19 net pension surplus across all schemes was £4.5bn (December 2021: £3.6bn). The UK Retirement Fund (UKRF), which is the Group’s main scheme, had an IAS 19 net pension surplus of £4.7bn (December 2021: £3.8bn). The movement for the UKRF was driven by payment of £294m deficit reduction contributions and the unwind of senior fixed rate notes (covered below), partially offset by higher than expected inflation.
 
 
UKRF funding valuations
 
The latest triennial actuarial valuation of the UKRF with an effective date of 30 September 2022 has been completed. The valuation showed a funding surplus of £2bn and a funding level of 108% (2021 update: £0.6bn surplus, funding level 102%). The improvement was mainly due to £294m deficit reduction contributions, changes to views on life expectancy, and inflationary returns on assets relative to liabilities being better than expected.
 
As the UKRF has a funding surplus the 2023 deficit reduction contribution (£286m), agreed as part of the 2019 triennial actuarial valuation, is no longer required, and no recovery plan is needed.
 
During 2019 and 2020, the UKRF subscribed for non-transferable listed senior fixed rate notes for £1.25bn issued by entities consolidated within the Group under IFRS 10. As a result of these transactions, the CET1 impact of the 2019 and 2020 deficit contributions was deferred until 2023, 2024 and 2025 upon maturity of the notes. Barclays unwound these transactions in December 2022. This resulted in a c.30bps reduction to the CET1 ratio being accelerated to Q4 2022 from 2023, 2024 and 2025.
 
 
10.            
Called up share capital
 
 
Ordinary share capital
Share premium
Total share capital and share premium
Year ended 31.12.22
£m
£m
£m
Opening balance as at 1 January
4,188
348
4,536
Issue of shares under employee share schemes
13
57
70
Repurchase of shares
(233)
—
(233)
Closing balance
3,968
405
4,373
 
Called up share capital comprises 15,871m (December 2021: 16,752m) ordinary shares of 25p each. The decrease is mainly due to the repurchase of 931m shares as part of the share buybacks conducted in 2022, partially offset by an increase due to the issuance of shares under employee share schemes.
 
 
11.            
Other equity instruments
 
 
Year ended 31.12.22
Year ended 31.12.21
 
£m
£m
Opening balance as at 1 January
12,259
11,172
Issuances
3,158
1,078
Redemptions
(2,126)
—
Securities held by the Group
(7)
9
Closing balance
13,284
12,259
 
Other equity instruments of £13,284m (December 2021: £12,259m) comprise AT1 securities issued by Barclays PLC. There were three issuances and two redemptions in the period.
 
The AT1 securities are perpetual securities with no fixed maturity and are structured to qualify as AT1 instruments under prevailing capital rules applicable as at the relevant issue date. AT1 securities are undated and are redeemable, at the option of Barclays PLC, in whole on (i) the initial call date, or on any fifth anniversary after the initial call date or (ii) any day falling in a named period ending on the initial reset date, or on any fifth anniversary after the initial reset date. In addition, the AT1 securities are redeemable, at the option of Barclays PLC, in whole in the event of certain changes in the tax or regulatory treatment of the securities. Any redemptions require the prior consent of the PRA.
 
All Barclays PLC AT1 securities will be converted into ordinary shares of Barclays PLC, at a pre-determined price, should the fully loaded CET1 ratio of the Group fall below 7%.
 
 
12.            
Other reserves
 
 
As at 31.12.22
As at 31.12.21
 
£m
£m
Currency translation reserve
4,772
2,740
Fair value through other comprehensive income reserve
(1,560)
(283)
Cash flow hedging reserve
(7,235)
(853)
Own credit reserve
467
(960)
Other reserves and treasury shares
1,364
1,126
Total
(2,192)
1,770
 
Currency translation reserve
 
The currency translation reserve represents the cumulative gains and losses on the retranslation of the Group’s net investment in foreign operations, net of the effects of hedging.
 
As at 31 December 2022, there was a credit balance of £4,772m (December 2021: £2,740m credit) in the currency translation reserve. The £2,032m credit movement principally reflects the weakening of GBP against USD during the period.
 
 
Fair value through other comprehensive income reserve
 
The fair value through other comprehensive income reserve represents the changes in the fair value of fair value through other comprehensive income investments since initial recognition.
 
As at 31 December 2022, there was a debit balance of £1,560m (December 2021: £283m debit) in the reserve. The movement in the year of £1,277m is principally driven by a loss of £1,836m from the decrease in fair value of bonds(net of hedges) due to increasing bond yields, a net loss of £111m transferred to the income statement, gains of £84m transferred to retained earnings on sale of 14.90% equity stake in Absa Group Limited offset by a tax credit of £523m.
 
 
Cash flow hedging reserve
 
The cash flow hedging reserve represents the cumulative gains and losses on effective cash flow hedging instruments that will be recycled to the income statement when the hedged transactions affect profit or loss.
 
As at 31 December 2022, there was a debit balance of £7,235m (December 2021: £853m debit) in the cash flow hedging reserve. The decrease of £6,382m principally reflects a £9,052m decrease in the fair value of interest rate swaps held for hedging purposes as major interest rate forward curves increased. This is partially offset by a tax credit of £2,331m and £339m of losses transferred to the income statement.
 
 
Own credit reserve
 
The own credit reserve reflects the cumulative own credit gains and losses on financial liabilities at fair value. Amounts in the own credit reserve are not recycled to profit or loss in future periods.
 
As at 31 December 2022, there was a credit balance of £467m (December 2021: £960m debit) in the own credit reserve. The movement of £1,427m principally reflects a £2,091m gain from the widening of Barclays’ funding spreads partially offset by a tax charge of £616m.
 
 
Other reserves and treasury shares
 
Other reserves relate to redeemed ordinary and preference shares issued by the Group. Treasury shares relate to Barclays PLC shares held principally in relation to the Group’s various share schemes.
 
As at 31 December 2022, there was a credit balance of £1,364m (December 2021: £1,126m credit) in other reserves and treasury shares. This is driven by an increase of £233m due to the repurchase of 931m shares as part of the share buybacks conducted in 2022 and a £5m movement in the treasury shares balance held in relation to employee share schemes.
 
 
Appendix: Non-IFRS Performance Measures
 
The Group’s management believes that the non-IFRS performance measures included in this document provide valuable information to the readers of the financial statements as they enable the reader to identify a more consistent basis for comparing the businesses’ performance between financial periods, and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by management.
 
However, any non-IFRS performance measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well.
 
 
Non-IFRS performance measures glossary
 
Measure
Definition
Loan: deposit ratio
Loans and advances at amortised cost divided by deposits at amortised cost. The components of the calculation have been included on page 52.
Period end allocated tangible equity
Allocated tangible equity is calculated as 13.5% (2021: 13.5%) of RWAs for each business, adjusted for capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office allocated tangible equity represents the difference between the Group’s tangible shareholders’ equity and the amounts allocated to businesses.
Average tangible shareholders’ equity
Calculated as the average of the previous month’s period end tangible equity and the current month’s period end tangible equity. The average tangible shareholders’ equity for the period is the average of the monthly averages within that period.
Average allocated tangible equity
Calculated as the average of the previous month’s period end allocated tangible equity and the current month’s period end allocated tangible equity. The average allocated tangible equity for the period is the average of the monthly averages within that period.
Return on average tangible shareholders’ equity
Statutory profit after tax attributable to ordinary equity holders of the parent, as a proportion of average shareholders’ equity excluding non-controlling interests and other equity instruments adjusted for the deduction of intangible assets and goodwill. The components of the calculation have been included on pages 78 to 80.
Return on average allocated tangible equity
Statutory profit after tax attributable to ordinary equity holders of the parent, as a proportion of average allocated tangible equity. The components of the calculation have been included on pages 78 to 81.
Operating expenses excluding litigation and conduct
A measure of total operating expenses excluding litigation and conduct charges.
Operating costs
A measure of total operating expenses excluding litigation and conduct charges and UK bank levy.
Cost: income ratio
Total operating expenses divided by total income.
Loan loss rate
Quoted in basis points and represents total impairment charges divided by gross loans and advances held at amortised cost at the balance sheet date. The components of the calculation have been included on page 29.
Net interest margin
Net interest income divided by the sum of average customer assets. The components of the calculation have been included on page 24.
Tangible net asset value per share
Calculated by dividing shareholders’ equity, excluding non-controlling interests and other equity instruments, less goodwill and intangible assets, by the number of issued ordinary shares. The components of the calculation have been included on page 82.
Performance measures excluding the impact of the Over-issuance of Securities
Calculated by excluding the impact of the Over-issuance of Securities from performance measures. The components of the calculations have been included on page 79.
Profit before impairment
Calculated by excluding credit impairment charges or releases from profit before tax.
 
 
Returns
 
Return on average tangible equity is calculated as profit after tax attributable to ordinary equity holders of the parent as a proportion of average tangible equity, excluding non-controlling and other equity interests for businesses. Allocated tangible equity has been calculated as 13.5% (2021: 13.5%) of RWAs for each business, adjusted for capital deductions, excluding goodwill and intangible assets, reflecting the assumptions the Group uses for capital planning purposes. Head Office average allocated tangible equity represents the difference between the Group’s average tangible shareholders’ equity and the amounts allocated to businesses.
 
 
 
Profit/(loss) attributable to ordinary equity holders of the parent
 
Average tangible equity
 
Return on average tangible equity
For the year ended 31.12.22
£m
 
£bn
 
%
Barclays UK
1,877
 
10.0
 
18.7
    Corporate and Investment Bank
3,364
 
32.8
 
10.2
    Consumer, Cards and Payments
480
 
4.8
 
10.0
Barclays International
3,844
 
37.6
 
10.2
Head Office
(698)
 
0.7
 
n/m
Barclays Group
5,023
 
48.3
 
10.4
 
 
 
 
 
 
For the year ended 31.12.211
 
 
 
 
 
Barclays UK
1,756
 
10.0
 
17.6
    Corporate and Investment Bank
4,032
 
28.3
 
14.3
    Consumer, Cards and Payments
615
 
4.1
 
15.0
Barclays International
4,647
 
32.4
 
14.4
Head Office
(198)
 
5.0
 
n/m
Barclays Group
6,205
 
47.3
 
13.1
 
 
1
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
 
 
 
Year ended 31.12.22
 
Barclays UK
Corporate and Investment Bank
Consumer, Cards and Payments
Barclays International
Head Office
Barclays Group
Return on average tangible shareholders' equity
£m
£m
£m
£m
£m
£m
Attributable profit/(loss)
1,877
3,364
480
3,844
(698)
5,023
 
 
 
 
 
 
 
 
£bn
£bn
£bn
£bn
£bn
£bn
Average shareholders' equity
13.6
32.8
5.7
38.5
4.3
56.4
Average goodwill and intangibles
(3.6)
—
(0.9)
(0.9)
(3.6)
(8.1)
Average tangible shareholders' equity
10.0
32.8
4.8
37.6
0.7
48.3
 
 
 
 
 
 
 
Return on average tangible shareholders' equity
18.7%
10.2%
10.0%
10.2%
n/m
10.4%
 
 
 
Year ended 31.12.211
 
Barclays UK
Corporate and Investment Bank
Consumer, Cards and Payments
Barclays International
Head Office
Barclays Group
Return on average tangible shareholders' equity
£m
£m
£m
£m
£m
£m
Attributable profit/(loss)
1,756
4,032
615
4,647
(198)
6,205
 
 
 
 
 
 
 
 
£bn
£bn
£bn
£bn
£bn
£bn
Average shareholders' equity
13.6
28.3
4.8
33.1
8.7
55.4
Average goodwill and intangibles
(3.6)
—
(0.7)
(0.7)
(3.7)
(8.1)
Average tangible shareholders' equity
10.0
28.3
4.1
32.4
5.0
47.3
 
 
 
 
 
 
 
Return on average tangible shareholders' equity
17.6%
14.3%
15.0%
14.4%
n/m
13.1%
 
Performance measures excluding the impact of the Over-issuance of Securities
 
 
Corporate and Investment Bank
 
 
 
Attributable profit excluding the impact of the Over-issuance of Securities
 
Year ended
31.12.22
£m
Attributable profit
 
3,364
Post-tax impact of the Over-issuance of Securities
 
(552)
Attributable profit excluding the impact of the Over-issuance of Securities
 
3,916
 
 
 
 
 
Return on average allocated tangible equity
 
£bn
Average allocated tangible equity
 
32.8
The impact of the Over-issuance of Securities
 
0.3
Average allocated tangible equity adjusted for the impact of the Over-issuance of Securities
 
32.5
 
 
 
 
 
Return on average allocated tangible equity
 
10.2%
The impact of the Over-issuance of Securities
 
(1.8)%
Return on average allocated tangible equity excluding the impact of the Over-issuance of Securities
 
12.0%
 
 
1
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Barclays Group
 
 
 
 
 
 
 
 
 
Return on average tangible shareholders' equity
Q422
Q322
Q222
Q122
 
Q4211
Q3211
Q2211
Q121
£m
£m
£m
£m
 
£m
£m
£m
£m
Attributable profit
1,036
1,512
1,071
1,404
 
1,079
1,374
2,048
1,704
 
 
 
 
 
 
 
 
 
 
 
£bn
£bn
£bn
£bn
 
£bn
£bn
£bn
£bn
Average shareholders' equity
54.9
56.8
57.1
56.9
 
56.1
56.5
54.4
54.4
Average goodwill and intangibles
(8.2)
(8.2)
(8.1)
(8.1)
 
(8.1)
(8.2)
(7.9)
(7.9)
Average tangible shareholders' equity
46.7
48.6
49.0
48.8
 
48.0
48.3
46.5
46.5
 
 
 
 
 
 
 
 
 
 
Return on average tangible shareholders' equity
8.9%
12.5%
8.7%
11.5%
 
9.0%
11.4%
17.6%
14.7%
 
 
 
 
 
 
 
 
 
 
 
 
Barclays UK
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
Q422
Q322
Q222
Q122
 
Q421
Q321
Q221
Q121
£m
£m
£m
£m
 
£m
£m
£m
£m
Attributable profit
474
549
458
396
 
420
317
721
298
 
 
 
 
 
 
 
 
 
 
 
£bn
£bn
£bn
£bn
 
£bn
£bn
£bn
£bn
Average allocated equity
13.7
13.5
13.6
13.7
 
13.6
13.6
13.5
13.5
Average goodwill and intangibles
(3.5)
(3.6)
(3.6)
(3.6)
 
(3.6)
(3.6)
(3.6)
(3.6)
Average allocated tangible equity
10.2
9.9
10.0
10.1
 
10.0
10.0
9.9
9.9
 
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
18.7%
22.1%
18.4%
15.6%
 
16.8%
12.7%
29.1%
12.0%
 
 
1
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Barclays International
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
Q422
Q322
Q222
Q122
 
Q4211
Q3211
Q2211
Q121
£m
£m
£m
£m
 
£m
£m
£m
£m
Attributable profit
625
1,136
783
1,300
 
818
1,191
1,207
1,431
 
 
 
 
 
 
 
 
 
 
 
£bn
£bn
£bn
£bn
 
£bn
£bn
£bn
£bn
Average allocated equity
39.9
40.1
38.2
36.0
 
33.8
32.7
33.0
32.8
Average goodwill and intangibles
(1.0)
(1.0)
(0.9)
(0.9)
 
(0.9)
(0.9)
(0.6)
(0.5)
Average allocated tangible equity
38.9
39.1
37.3
35.1
 
32.9
31.8
32.4
32.3
 
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
6.4%
11.6%
8.4%
14.8%
 
9.9%
14.9%
14.9%
17.7%
 
 
 
 
 
 
 
 
 
 
 
 
Corporate and Investment Bank
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
Q422
Q322
Q222
Q122
 
Q4211
Q3211
Q2211
Q121
£m
£m
£m
£m
 
£m
£m
£m
£m
Attributable profit
454
1,015
579
1,316
 
695
1,085
989
1,263
 
 
 
 
 
 
 
 
 
 
 
£bn
£bn
£bn
£bn
 
£bn
£bn
£bn
£bn
Average allocated equity
33.7
34.0
32.7
30.8
 
28.7
27.8
28.4
28.2
Average goodwill and intangibles
—
—
—
—
 
—
—
—
—
Average allocated tangible equity
33.7
34.0
32.7
30.8
 
28.7
27.8
28.4
28.2
 
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
5.4%
11.9%
7.1%
17.1%
 
9.7%
15.6%
14.0%
17.9%
 
 
Consumer, Cards and Payments
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
Q422
Q322
Q222
Q122
 
Q421
Q321
Q221
Q121
£m
£m
£m
£m
 
£m
£m
£m
£m
Attributable profit/(loss)
171
121
204
(16)
 
123
106
218
168
 
 
 
 
 
 
 
 
 
 
 
£bn
£bn
£bn
£bn
 
£bn
£bn
£bn
£bn
Average allocated equity
6.2
6.1
5.5
5.2
 
5.1
4.9
4.6
4.6
Average goodwill and intangibles
(1.0)
(1.0)
(0.9)
(0.9)
 
(0.9)
(0.9)
(0.6)
(0.5)
Average allocated tangible equity
5.2
5.1
4.6
4.3
 
4.2
4.0
4.0
4.1
 
 
 
 
 
 
 
 
 
 
Return on average allocated tangible equity
13.0%
9.5%
17.8%
(1.5)%
 
11.7%
10.5%
21.8%
16.5%
 
 
1
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Tangible net asset value per share
As at 31.12.22
Restated1
As at 31.12.21
 
£m
£m
Total equity excluding non-controlling interests
68,292
69,052
Other equity instruments
(13,284)
(12,259)
Goodwill and intangibles
(8,239)
(8,061)
Tangible shareholders' equity attributable to ordinary shareholders of the parent
46,769
48,732
 
 
 
 
m
m
Shares in issue
15,871
16,752
 
 
 
 
p
p
Tangible net asset value per share
295
291
 
 
1
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Notable Items
 
 
 
 
 
Year ended 31.12.22
 
Three months ended 31.12.22
£m
 Profit before tax
Attributable profit
 
Profit before tax
Attributable profit
Statutory
7,012
5,023
 
1,310
1,036
Net impact from the Over-issuance of Securities
(674)
(552)
 
—
—
Customer remediation costs on legacy loan portfolio
(282)
(228)
 
—
—
Settlements in principle in respect of industry-wide devices investigations by SEC and CFTC
(165)
(165)
 
—
—
Other litigation and conduct
(184)
(167)
 
(79)
(70)
Re-measurement of UK DTAs
—
(346)
 
—
—
Excluding the impact of notable items
8,317
6,481
 
1,389
1,106
 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended 31.12.21
 
Three months ended 31.12.21
£m
Profit before tax
Attributable profit
 
Profit before tax
Attributable profit
Statutory1
8,194
6,205
 
1,428
1,079
Net impact from the Over-issuance of Securities
(220)
(170)
 
(46)
(38)
Structural cost action - June 2021 real estate review
(266)
(203)
 
—
—
Other litigation and conduct
(177)
(136)
 
(46)
(29)
Re-measurement of UK DTAs
—
462
 
—
60
Excluding the impact of notable items
8,857
6,252
 
1,520
1,086
 
 
 
 
 
 
 
 
The Group’s management believes that the non-IFRS financial measures excluding notable items, included in the table above, provide valuable information to enable users of the financial statements to assess the performance of the Group. The notable items are separately identified within the Group’s results disclosures which, when excluded from Barclays’ statutory financials, provide an underlying profit and loss performance of the Group and enables consistent comparison of performance from one period to another.
 
These non-IFRS financial measures excluding notable items are included as a reference point only and are not incorporated within any of the key financial metrics used in our Group Targets, which are measured on a statutory basis.
 
1
2021 financial metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 55 and Restatement of financial statements (Note 1) on page 69 for more information.
 
 
Shareholder Information
 
 
 
 
 
 
 
 
Results timetable1
 
 
Date
 
 
 
Ex-dividend date
 
 
23 February 2023
Dividend record date
 
 
24 February 2023
Cut off time of 5:00pm (UK time) for the receipt of Dividend Re-investment Programme (DRIP) Application Form Mandate
 
10 March 2023
Dividend payment date
 
 
31 March 2023
Q1 2023 Results Announcement
 
 
27 April 2023
 
 
 
 
 
 
 
For qualifying US and Canadian resident ADR holders, the 2022 full year dividend of 5.0p per ordinary share becomes 20.0p per ADS (representing four shares). The ex-dividend, dividend record and dividend payment dates for ADR holders are as shown above
 
 
 
 
 
 
 
 
Year ended
Year ended
 
 
 
Exchange rates2
31.12.22
31.12.21
% Change3
 
 
 
Period end - USD/GBP
1.21
1.35
(10)%
 
 
 
YTD average - USD/GBP
1.24
1.38
(10)%
 
 
 
3 month average - USD/GBP
1.17
1.35
(13)%
 
 
 
Period end - EUR/GBP
1.13
1.19
(5)%
 
 
 
YTD average - EUR/GBP
1.17
1.16
1%
 
 
 
3 month average - EUR/GBP
1.15
1.18
(3)%
 
 
 
 
 
 
 
 
 
 
Share price data
 
 
 
 
 
 
Barclays PLC (p)
158.52
187.00
 
 
 
 
Barclays PLC number of shares (m)
15,871
16,752
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For further information please contact
 
 
 
 
 
 
 
 
 
 
 
 
 
Investor relations
Media relations
Chris Manners +44 (0) 20 7773 2136
Tom Hoskin +44 (0) 20 7116 4755
 
 
 
 
 
 
 
 
 
 
 
 
 
 
More information on Barclays can be found on our website: home.barclays
 
 
 
 
 
 
 
 
 
 
 
Registered office
 
 
 
 
 
 
1 Churchill Place, London, E14 5HP, United Kingdom. Tel: +44 (0) 20 7116 1000. Company number: 48839.
 
 
 
 
 
 
 
 
Registrar
 
 
 
 
 
 
Equiniti, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom.
 
Tel: 0371 384 20554 from the UK or +44 121 415 7004 from overseas.
 
 
 
 
 
 
 
 
American Depositary Receipts (ADRs)
 
 
 
 
 
 
EQ Shareowner Services
P.O. Box 64504
St. Paul, MN 55164-0854
United States of America
shareowneronline.com
 
 
 
 
 
Toll Free Number: +1 800-990-1135
 
 
 
 
 
 
Outside the US +1 651-453-2128
 
 
 
 
 
 
 
 
 
 
 
 
 
Delivery of ADR certificates and overnight mail
 
 
 
 
 
 
EQ Shareowner Services, 1110 Centre Pointe Curve, Suite 101, Mendota Heights, MN 55120-4100, USA.
 
 
1
Note that these dates are provisional and subject to change.
2
The average rates shown above are derived from daily spot rates during the year.
3
The change is the impact to GBP reported information.
4
Lines open 8.30am to 5.30pm (UK time), Monday to Friday, excluding UK public holidays in England and Wales.