Barclays : Full Year 2021 Results Announcement (PDF 565KB)

Barclays PLC

2021 Results Announcement

31 December 2021

Table of Contents

Results Announcement	Page
Notes	1
Performance Highlights	2
Group Chief Executive's Review	4
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	44
• Treasury and Capital Risk	45
Statement of Directors' Responsibilities	57
Condensed Consolidated Financial Statements	58
Financial Statement Notes	63
Appendix: Non-IFRS Performance Measures	69
Shareholder Information	75

BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE: [phone]. COMPANY NO. 48839.

Barclays PLC

Notes

This document contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014 (as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended)

The terms Barclays or Group refer to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analysis compares the year ended 31 December 2021 to the corresponding 12 months of 2020 and balance sheet analysis as at 31 December 2021 with comparatives relating to 31 December 2020. 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 that can be accessed at home.barclays/investor-relations/reports-and-events/latest-financial-results.

The information in this document, which was approved by the Board of Directors on 22 February 2022, does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2021, 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 as a Form 6-K to 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 69 to 74 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. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as 'may', 'will', 'seek', 'continue', 'aim', 'anticipate', 'target', 'projected', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', 'achieve' or other words of similar meaning. Forward-looking statements can be made in writing but also may be made verbally by members of the management of the Group (including, without limitation, during management presentations to financial analysts) 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 growth, assets, impairment charges, provisions, business strategy, capital, leverage and other regulatory ratios, capital distributions (including dividend pay-out ratios and expected payment strategies), projected levels of growth in the banking and financial markets, projected costs or savings, any commitments and targets (including, without limitation, environmental, social and governance (ESG) commitments and targets), estimates of capital expenditures, plans and objectives for future operations, projected employee numbers, IFRS impacts and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. The 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, the development of standards and interpretations under IFRS, including evolving practices with regard to the interpretation and application of accounting and regulatory standards, emerging and developing ESG reporting standards, the outcome of current and future legal proceedings and regulatory investigations, future levels of conduct provisions, the policies and actions of governmental and regulatory authorities, 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 the impact of competition. In addition, factors including (but not limited to) the following may have an effect: capital, leverage and other regulatory rules applicable to past, current and future periods; UK, US, Eurozone and global macroeconomic and business conditions; the effects of any volatility in credit markets; market related risks such as changes in interest rates and foreign exchange rates; effects of changes in valuation of credit market exposures; changes in valuation of issued securities; volatility in capital markets; changes in credit ratings of any entity within the Group or any securities issued by such entities; 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 the 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; and the success of future acquisitions, disposals and other strategic transactions. A number of these influences and factors are beyond the Group's control. As a result, the Group's actual financial position, future results, capital distributions, capital, leverage or other regulatory ratios or other financial and non-financial metrics or performance measures or 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 fiscal year ended 31 December 2021), which are available on the SEC's website at www.sec.gov.

Subject to Barclays' 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.

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Performance Highlights

Barclays delivered a record Group profit before tax of £8.4bn, and return on tangible equity (RoTE) of 13.4%,

resulting in a meaningful increase in distributions equivalent to 15p per share1

C. S. Venkatakrishnan, Group Chief Executive, commented

"Barclays demonstrated a clear and sustainable path to growth over the course of 2021, delivering double-digit RoTE across our operating businesses, and returning £2.51 billion of excess capital. Our strategic priorities will continue to develop the diversified business model that we have established, investing in advanced technology capabilities in our consumer businesses, delivering sustainable growth across our global Corporate and Investment Bank, and reinforcing our commitment to aiding the transition to a low-carbon economy."

Key financial metrics:

	Income	Cost: income	Profit before	RoTE	EPS	CET1	TNAV per	Total capital
	ratio	tax	ratio	share	return
								15p
2021	£21.9bn	66%	£8.4bn	13.4%	37.5p			equivalent per
						15.1%	292p	share1
Q421	£5.2bn	72%	£1.5bn	9.3%	6.6p

Group Finance Director

Tushar Morzaria has decided to retire as Group Finance Director and as an Executive Director of Barclays PLC and Barclays Bank PLC, in each case with effect from 22 April 2022. He will be succeeded by Anna Cross, currently Deputy Group Finance Director, who will take up the role of Group Finance Director subject to regulatory approval, and join the Boards of Barclays PLC and Barclays Bank PLC as an Executive Director, in each case with effect from 23 April 2022. Anna will also join the Group Executive Committee, reporting to Group Chief Executive C.S. Venkatakrishnan.

2021 performance highlights:

• All operating divisions delivered double-digit returns: Barclays UK generated a RoTE of 17.6% (2020: 3.2%) and Barclays
  International a RoTE of 14.9% (2020: 7.1%), including a 14.9% (2020: 9.5%) RoTE in the Corporate and Investment Bank (CIB) and
  15.0% (2020: (7.5)%) RoTE in Consumer, Cards and Payments (CC&P)
• Record CIB profitability: profit before tax of £5.8bn, including record Investment Banking fees and Equities income2
• Consumer and payments businesses benefitted from economic recovery: delivered robust UK mortgage lending and deposit growth. Experienced positive trends in UK and US consumer spending and payments volumes
• Cost discipline enabled investment for growth: excluding structural cost actions and performance costs, Group total operating expenses were flat at £12.0bn, as efficiency savings were reinvested to drive income growth
• Net credit impairment release: £0.7bn release (2020: £4.8bn charge) driven by an improved macroeconomic outlook, reduced unsecured lending balances and benign credit environment. Coverage ratios on unsecured lending remain higher than pre-COVID-19 pandemic levels
• Strong capital: Common equity tier 1 (CET1) ratio of 15.1% (December 2020: 15.1%) and tangible net asset value (TNAV) per share increased 9% to 292p
• Increased capital distributions: total dividend for 2021 of 6.0p per share (2020: 1.0p), including a 4.0p per share 2021 full year dividend. Intend to initiate a share buyback of up to £1.0bn, bringing the total share buybacks announced in relation to 2021 to £1.5bn and total capital return equivalent to 15p per share

Outlook:

• Income: Barclays' diversified income streams position the Group well for the ongoing economic recovery and rising interest rates
• Impairment: impairment charge is expected to remain below pre-COVID-19 pandemic levels in coming quarters given reduced unsecured lending balances and an improved macroeconomic outlook
• Costs: Barclays will continue to drive efficiency savings, however, inflationary pressures and planned investment spend are expected to result in FY22 costs, excluding structural cost actions and performance costs being modestly higher than £12.0bn3
• Capital: the CET1 ratio is expected to be impacted by c.80bps of regulatory changes which took effect from 1 January 2022. The announced share buyback of up to £1.0bn will also reduce the CET1 ratio by c.30bps
• Capital returns: capital returns policy incorporates a progressive ordinary dividend, supplemented as appropriate, including with share buybacks

• Includes total dividend for 2021 of 6.0p per share and total share buybacks announced in relation to 2021 of £1.5bn.

• On a comparable basis, period covering 2014 - 2021. Pre 2014 financials were not restated following re-segmentation in 2016.
  3 Group cost outlook is based on an average rate of 1.35 (USD/GBP) in 2022 and subject to foreign currency movements.

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Performance Highlights

Barclays Group results for the year ended

	31.12.21	31.12.20
	£m	£m	% Change
Net interest income	8,073	8,122	(1)
Net fee, commission and other income	13,867	13,644	2
Total income	21,940	21,766	1
Credit impairment releases/(charges)	653	(4,838)
Net operating income	22,593	16,928	33
Operating costs	(14,092)	(13,434)	(5)
UK bank levy	(170)	(299)	43
Litigation and conduct	(177)	(153)	(16)
Total operating expenses	(14,439)	(13,886)	(4)
Other net income	260	23
Profit before tax	8,414	3,065
Tax charge	(1,188)	(604)	(97)
Profit after tax	7,226	2,461
Non-controlling interests	(47)	(78)	40
Other equity instrument holders	(804)	(857)	6
Attributable profit	6,375	1,526

Performance measures

Return on average tangible shareholders' equity	13.4%	3.2%
Average tangible shareholders' equity (£bn)	47.4	48.3
Cost: income ratio	66%	64%
Loan loss rate (bps)	-	138
Basic earnings per share	37.5p	8.8p
Dividend per share	6.0p	1.0p
Share buyback announced1 (£m)	1,500	700
Total payout equivalent per share	15.0p	5.0p
Basic weighted average number of shares (m)	16,985	17,300	(2)
Period end number of shares (m)	16,752	17,359	(3)

Balance sheet and capital management2	£bn	£bn
Loans and advances at amortised cost	361.5	342.6	6
Loans and advances at amortised cost impairment coverage ratio	1.6%	2.4%
Deposits at amortised cost	519.4	481.0	8
Tangible net asset value per share	292p	269p	9
Common equity tier 1 ratio	15.1%	15.1%
Common equity tier 1 capital	47.5	46.3
Risk weighted assets	314.1	306.2
Average UK leverage ratio	4.9%	5.0%
UK leverage ratio	5.3%	5.3%
Funding and liquidity
Group liquidity pool (£bn)	291	266	9
Liquidity coverage ratio	168%	162%
Loan: deposit ratio	70%	71%

• Barclays intends to initiate a share buyback of up to £1.0bn, which is expected to commence in Q122. This brings the total share buybacks announced in relation to FY21 to £1.5bn.

• Refer to pages 48 to 53 for further information on how capital, Risk Weighted Assets (RWAs) and leverage are calculated.

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