2016 Results Announcement

100 Pages·2016·2.06 MB·English

Barcclays PLC
Resuults AAnnouuncemment

330 June 20116
Table of CContents

Results Annnouncemment Pagee
Performance Highlights 2-44
Group Chief EExecutive Officcer’s Review 55
Group Financce Director’s Review 6-99
Results by Buusiness
 Barclays UUK 10-122
 Barclays CCorporate & Innternational 13-166
 Head Office 177
 Barclays NNon-Core 18-199
 Africa Bannking - Disconntinued Operattion 200
Quarterly Ressults Summaryy 21-233
Quarterly Corre Results by BBusiness 24-277
Quarterly Africa Banking - DDiscontinued OOperation Results 288
Performancee Managementt
 Margins aand balances 299
Risk Manageement
 Overview 300
 Funding RRisk - Liquidityy 31-355
 Funding RRisk - Capital 36-400
 Credit Rissk 41-499
 Market Riisk 50-522
Statement off Directors’ Ressponsibilities 533
Independent Auditors’ Reviiew Report to Barclays PLC 544
Condensed CConsolidated Fiinancial Statemments 55-600
Financial Stattement Notes 61-977
Shareholder IInformation 988

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

Barclays PLCC – 2016 Interimm Results
Notes

The term Barclaays or Group refeers to Barclays PLLC together with its subsidiaries. Unless otherwisee stated, the incoome statement annalysis comparess
the six months ended 30 June 22016 to the corrresponding six mmonths of 2015 aand balance sheeet analysis as at 30 June 2016 with comparativess
relating to 31 DDecember 2015. TThe abbreviationns ‘£m’ and ‘£bn’ represent millioons and thousandds of millions of Pounds Sterling respectively; thee
abbreviations ‘$$m’ and ‘$bn’ represent millions and thousands of millions of USS Dollars respecttively; the abbrevviations ‘€m’ andd ‘€bn’ representt
millions and thoousands of millionns of Euros respeectively.
Comparatives hhave been restateed to reflect thee implementationn of the Group bbusiness reorganisation. These reestatements weree detailed in ourr
announcement on 14 April 20166, accessible at hoome.barclays/ressults.
Notable items aare considered too be significant ittems impacting comparability off performance annd have been called out for eachh of the businesss
segments. Notaable items includee: the impact of own credit in total income; the ggain on disposal of Barclays’ sharre of Visa Europee Limited in totall
income; gains oon US Lehman accquisition assets in total income; revision of the EEducation, Sociall Housing, and Loocal Authority (EESHLA) valuationn
methodology inn total income; ggain on valuationn of a componennt of the definedd retirement beneefit liability in opperating expensess; impairment off
goodwill and other assets relatinng to businesses being disposed inn operating expenses, provisions for UK customer redress in litigation and conduct;;
provisions for ongoing investigations and litigatioon including Foreeign Exchange inn litigation and coonduct; and lossees on sale relatingg to the Spanish,,
Portuguese andd Italian businessees in other net inccome/(expenses)).
References to underlying performmance exclude thhe impact of notaable items.
There are a nummber of key judggement areas, forr example impairrment calculationns, which are bassed on models aand which are subject to ongoingg
adjustment and modifications. RReported numberss reflect best estimates and judgeements at the giveen point in time.
Relevant terms that are used in this documentt but are not deefined under appplicable regulatory guidance or International Financial Reportingg
Standards (IFRSS) are explained inn the results glossary that can be aaccessed at home.barclays/resultts.
The informationn in this announcement, which waas approved by thhe Board of Direcctors on 28 July 2016, does not coomprise statutoryy accounts withinn
the meaning off Section 434 off the Companiess Act 2006. Stattutory accounts for the year endded 31 December 2015, which included certainn
information reqquired for the Jooint Annual Repoort on Form 20-F of Barclays PPLC and Barclayss Bank PLC to tthe US Securitiees and Exchangee
Commission (SEC) and which ccontained an unnqualified audit rreport under Secction 495 of the Companies Act 2006 (which did not make anyy
statements under Section 498 off the Companies Act 2006) have bbeen delivered too the Registrar of Companies in acccordance with Seection 441 of thee
Companies Act 2006.
These results will be furnished ass a Form 6-K to the SEC as soon aas practicable folloowing their publiication. Once furnnished with the SSEC, copies of thee
Form 6-K will also be available frrom the Barclays Investor Relationns website home.barclays/results and from the SECC’s website at wwww.sec.gov.
Barclays is a freequent issuer in the debt capitall markets and reegularly meets wwith investors via formal road-shoows and other aad hoc meetings..
Consistent withh its usual practicce, Barclays expeects that from timme to time over tthe coming quarrter it will meet wwith investors gloobally to discusss
these results and other matters rrelating to the Group.

Forward-llooking staatements
This document contains certainn forward-lookingg statements within the meaning of Section 21EE of the US Secuurities Exchange Act of 1934, ass
amended, and SSection 27A of the US Securities Act of 1933, as amended, with respect to the GGroup. Barclays cautions readers tthat no forward--
looking statemeent is a guaranteee of future perfoormance and thaat actual results oor other financial condition or peerformance meassures could differr
materially from those contained in the forward-loooking statementts. These forwardd-looking statemments can be idenntified by the fact that they do nott
relate only to hiistorical or currennt facts. Forwardd-looking statemeents sometimes uuse words such aas ‘may’, ‘will’, ‘seeek’, ‘continue’, ‘aim’, ‘anticipate’,,
‘target’, ‘projectted’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘beelieve’, ‘achieve’ or other words oof similar meaning. Examples of forward-lookingg
statements include, among others, statements or guidance regarding the Grouup’s future financcial position, incoome growth, asssets, impairmentt
charges, provisions, notable itemms, business strattegy, capital, leveerage and other reegulatory ratios, payment of dividdends (including ddividend pay-outt
ratios and expected payment sttrategies), projectted levels of growwth in the banking and financial markets, projectted costs or savings, original andd
revised committments and targets in connectioon with the strattegic cost programme and the Group Strategy Update, rundowwn of assets andd
businesses withhin Barclays Non-Core, sell down oof the Group’s intterest in Barclayss Africa Group Limmited, estimates of capital expendditures and planss
and objectives ffor future operations, projected emmployee numbers and other stateements that are nnot historical factt. By their nature, forward-lookingg
statements invoolve risk and unceertainty because tthey relate to future events and circumstances. Thhese may be affeccted by changes in legislation, thee
development off standards and innterpretations unnder International Financial Reportting Standards, eevolving practicess with regard to tthe interpretationn
and application of accounting and regulatory staandards, the outccome of current and future legal proceedings andd regulatory invesstigations, futuree
levels of conducct provisions, futuure levels of notaable items, the poolicies and actionss of governmentaal and regulatory authorities, geoppolitical risks andd
the impact of coompetition. In adddition, factors including (but not limited to) the foollowing may havve an effect: capital, leverage and other regulatoryy
rules (including with regard to the future structuure of the Group) applicable to paast, current and fuuture periods; UKK, US, Africa, Euroozone and globall
macroeconomicc and business coonditions; the efffects of continued volatility in creedit markets; marrket related risks such as changess in interest ratess
and foreign exchange rates; effeects of changes inn valuation of creedit market exposures; changes inn valuation of isssued securities; voolatility in capitall
markets; changees in credit ratinggs of any entitiess within the Grouup or any securities issued by such entities; the pootential for one or more countriess
exiting the Euroozone; the implicaations of the resuults of the 23 Junee 2016 referenduum in the United KKingdom and thee disruption that may result in thee
UK and globally from the withdraawal of the Uniteed Kingdom from the European Unnion; the implementation of the sttrategic cost proggramme; and thee
success of futurre acquisitions, disposals and otheer strategic transsactions. A numbber of these influeences and factorss are beyond the Group’s control..
As a result, thee Group’s actual future results, ddividend paymennts, and capital and leverage rattios may differ mmaterially from tthe plans, goals,,
expectations annd guidance set fforth in the Group’s forward-lookking statements. AAdditional risks aand factors which may impact thhe Group’s futuree
financial conditiion and performaance are identifieed in our filings wwith the SEC (inccluding, without llimitation, our annnual report on ffoorm 20-F for thee
fiscal year endedd 31 December 22015), which are available on the SSEC’s website at wwww.sec.gov.
Subject to our obligations undeer the applicable laws and regulaations of the Uniited Kingdom and the United Staates in relation too disclosure andd
ongoing informmation, we undertake no obligattion to update ppublicly or revisee any forward loooking statemennts, whether as a result of neww
information, futture events or othherwise.

Barclays PLCC – 2016 Interimm Results 1
Performance Highligghts

 Group pprofit before tax of £2,0663m (H115: £2,602m) rreflected an increased CCore profit bbefore tax off
£3,967mm (H115: £33,347m) andd Non-Core losses befoore tax of £1,904m (H1115: £745m)). Excludingg
notable items and an impairmennt of £372mm in respect oof the Frencch retail, andd wealth andd investmentt
management busineesses, Group profit beforee tax was £22,037m (H115: £3,217m))
 Group reeturn on aveerage tangibble equity (RRoTE) of 4.88% (H115: 66.9%) reflectted attributable profit inn
Core of ££2,444m (H1115: £2,000mm) and the aattributable looss in Non-CCore of £1,4990m (H115: ££582m)
 Core proofit before taax increased 19% to £3,9967m including a gain off £615m on tthe disposal of Barclays’’
share off Visa Europee Limited andd an additionnal provision of £400m reelating to UKK customer reedress. Coree
RoTE waas 12.5% (H115: 11.3%) on an increeased averagge tangible equity base oof £40bn (H1115: £36bn)..
Core bassic earnings per share coontribution wwas 14.8p (H115: 12.1p)
 Non-Corre loss befoore tax was £1,904m (H115: £7455m) reflectinng the contiinued execuution of ourr
strategy. The loss inncluded the impairment of £372m inn respect of the assets oof the French retail, andd
wealth aand investmeent managemment businessses that are held for salee
 Barclayss UK delivereed a strong underlying RRoTE of 19.44% (H115: 221.9%). Undeerlying profiit before taxx
decreaseed 4% to £1,329m driven by lower interchange fee income iin Barclaycard Consumeer UK and ann
increasee in impairmeent. Net interrest margin iincreased 2bbps to 3.59%%
 Barclayss Corporate & International deliveredd an underlyying RoTE of 10.7% (H1115: 12.4%). Underlyingg
income remained inn line with sstrong growwth in Consuumer, Cardss and Paymeents and whhilst incomee
decreaseed in Corporate & Investmment Bank (CCIB), it was rresilient in chhallenging mmarket condittions
 Momenttum in the exxecution of the Non-Corre strategy ccontinued with good proogress on buusiness saless
and the rundown off the derivattive portfolioo during the period. Period end allocated tangibble equity inn
Non-Corre reduced to £8bn (Deccember 20155: £9bn), witth risk weighhted assets ((RWAs) decrreasing by aa
further ££8bn to £46.7bn in H1166, despite advverse markett movementss
 Commonn equity tier 1 (CET1) rattio increasedd to 11.6% (December 2015: 11.4%)). CET1 capittal increasedd
£1.6bn tto £42.4bn pprimarily throough profits generated inn the period of £1.3bn. GGroup RWAss continue too
be activeely managedd with the inncrease of £8bn to £3666bn being prrincipally duue to the apppreciation off
USD andd EUR against GBP
 The leveerage ratio ddecreased too 4.2% (Deccember 20155: 4.5%), with leverage exposure inncreasing byy
£127bn to £1,155bnn primarily ddue to higheer cash and settlement balances, foollowing incrreased clientt
activity, and the appreciation of USD and EURR against GBBP
 Tangiblee net asset vaalue per share increasedd to 289p (Deecember 20115: 275p) drriven by proffit generatedd
in the peeriod and nett favourable reserve movvements
Progress onn strategy exxecution in QQ216
 Sale of 112.2% of Barrclays Africaa Group Limiited (BAGL) issued sharee capital. Barclays now hholds 50.1%%
of BAGL’s issued shaare capital
 Complettion of the ssale of the rretail bankinng, wealth, aand investmment manageement, and parts of thee
Corporatte Banking bbusiness in Portugal
 Announccement of eexclusive disscussions wiith AnaCap Financial Paartners for the potentiall sale of thee
French rretail, and weealth and invvestment maanagement businesses
 Restructturing of thee terms of the Education, Social Hoousing and LLocal Authority (ESHLA)) loans withh
Lender Option Borrrower Option (LOBO) feeatures. Theese loans are now classsified as looans held att
amortiseed cost, reduucing the ESHLA loans hheld at fair value by £8bn and the faair value volaatility on thee
ESHLA pportfolio goinng forward
 Redemption of $1.155bn 7.75% SSeries 4 Non--Cumulative Callable Dollar Preferencce Shares

Barclays PLCC – 2016 Interimm Results 2
Performance Highligghts

Barclays Group results
for the half year ended 30.06.16 30.06.15 YoYY
£m £m % Changee
Total income nnet of insurance claims 11,013 12,111 (9))
Credit impairmment charges andd other provisionns (9931) (779) (20))
Net operating income 10,082 11,332 (11))
Operating expeenses (7,172) (6,624) (8))
Litigation and cconduct (5525) (1,966) 73
Total operatingg expenses (7,6697) (8,590) 10
Other net expeenses (3322) (140)
Profit before taax 2,063 2,602 (21))
Tax charge (7715) (852) 16
Profit after taxx in respect of coontinuing operaations 1,348 1,750 (23))
Profit after tax in respect of disscontinued operration1 311 358 (13))
Non-controllingg interests in resspect of continuuing operations (186) (173) (8))
Non-controllingg interests in resspect of disconttinued operationn1 (155) (165) 6
Other equity hoolders2 (2208) (159) (31))
Attributable prrofit 1,110 1,611 (31))

Performancce measures
Return on averrage tangible shaareholders' equitty2 44.8% 6.9%
Average tangibble shareholderss' equity (£bn) 48 48
Cost: income raatio 770% 71%
Loan loss rate ((bps) 39 35

Basic earnings per share2 6.9p 9.9p
Dividend per shhare 1.0p 2.0p

AAs at As at

Balance sheeet and capittal managemment 30.06.16 31.12.15
Tangible net assset value per shhare 2289p 275p
Common equitty tier 1 ratio 111.6% 11.4%
Common equitty tier 1 capital £42.4bn £40.7bn
Risk weighted aassets £3666bn £358bn
Leverage ratio 44.2% 4.5%
Fully loaded tieer 1 capital £47.9bn £46.2bn
Leverage expossure £1,1555bn £1,028bn

Funding andd liquidity
Group liquidityy pool £1449bn £145bn
Estimated CRDD IV liquidity coverage ratio 1224% 133%
Estimated net sstable funding raatio 1006% 106%
Loan: deposit rratio3 885% 86%

1 Refer to pagge 20 for further infformation on the AAfrica Banking disccontinued operatioon.
2 The profit affter tax attributablle to other equity hholders of £208m (H115: £159m) iss offset by a tax crredit recorded in reeserves of £58m ((HH115: £32m). Thee
net amount of £150m (H115: £127m), along wwith non-controllingg interests (NCI) iss deducted from profit after tax in orrder to calculate eearnings per sharee
and return oon average tangiblee shareholders’ eqquity.
3 Loan: depossit ratio for Barclayys UK, Consumer, CCards and Paymennts, Corporate, andd Non-Core retail.

Barclays PLCC – 2016 Interimm Results 3
Performance Highligghts

Barclays Coore and Non-Core results Barclayss Core Barclays Non-Core
for the half year ended 300.06.16 30.006.15 YoY 30.006.16 30.06.15 YoYY
£m £m % Chaange £m ££m % Changee
Total income nnet of insurance claims 11,599 111,646 - (586) 4665
Credit impairmment charges andd other provisionns (876) (718) (22) (55) (661) 10
Net operating income/(expennses) 10,723 100,928 (2) (6641) 4004
Operating expeenses ((6,315) (55,679) (11) (857) (9445) 9
Litigation and cconduct (432) (1,834) 76 (93) (1332) 30
Total operatingg expenses (6,747) (77,513) 10 (9950) (1,0777) 12
Other net expeenses (9) (68) 87 (313) (772)
Profit/(loss) before tax 3,967 33,347 19 (1,9904) (7445)
Tax (charge)/ccredit ((1,181) (1,088) (9) 466 2336 97
Profit/(loss) affter tax 2,786 22,259 23 (1,4438) (5009)
Non-controllingg interests (164) (132) (24) (22) (441) 46
Other equity hoolders (178) (127) (40) (30) (332) 6
Attributable prrofit/(loss)1 2,444 22,000 22 (1,4490) (5882)

Performancce measures
Return on averrage tangible equuity 12.5% 11.3%
Average allocatted tangible equuity (£bn)1 40 36 8 112
Period end alloocated tangible eequity (£bn)1 41 37 8 110
Cost: income raatio 58% 65% n/m n//m
Loan loss rate ((bps) 43 38 15 117
Basic earnings//(loss) per sharee contribution 14.8p 12.1p (88.8p) (3.55p)

As at As at AAs at As at
Capital mannagement 300.06.16 31.12.15 30.006.16 31.12.15
Risk weighted aassets1 ££320bn £3304bn £447bn £54bn
Leverage expossure1 £1,,021bn £8879bn £1334bn £149bn

Notable itemms for the haalf year endeed 300.06.16 30.006.15 30.006.16 30.06.15
£m £m £m ££m
Own credit 183 410 - -
Gain on dispossal of Barclays’ share of Visa Eurrope
615 - - -
Limited
Gains on US Leehman acquisitioon assets - 496 - -
Provisions for oongoing investiggations and litigaation
- (800) - -
including Foreign Exchange
Gains on valuattion of a compoonent of the defined
- 429 - -
retirement benefit liability
Provisions for UUK customer reddress (400) (967) - (665)
Losses on sale relating to the SSpanish businesss - (97) - (221)

Excluding notaable items, the Core return on avverage tangible eequity was 10.8% (H115: 13.7%%) and the Core basic earnings pper share was
12.9p (H115: 15.0p). Excludingg notable items, the Non-Core bbasic loss per share was 8.8p (H115: 3.0p).

1 Attributablle profit in respect of the Africa Bankking discontinued ooperation is reportted at the Group leevel only. Allocatedd tangible equity, RRWAs and
leverage exxposure are reportted in Head Office within Core.

Half year ennded Half year ended
30.06.16 30.06.15 YoYY
Income by bbusiness £m ££m % Changee
Barclays UK 3,,746 3,6335 3
Barclays Corpoorate & Internatioonal 7,,552 7,5556 -
Head Office 301 4555 (34))
Barclays Core 11,599 11,6446 -
Barclays Non-CCore (5586) 4665
Barclays Groupp 11,013 12,1111 (9))

Profit/(loss) before tax by business
Barclays UK 1,,080 7112 52
Barclays Corpoorate & Internatioonal 2,,753 2,3880 16
Head Office 134 2555 (47))
Barclays Core 3,967 3,3447 19
Barclays Non-CCore (1,9904) (7445)
Barclays Groupp 2,063 2,6002 (21))

Barclays PLCC – 2016 Interimm Results 4
Group Chief Executiive Officerr’s Review

“This has bbeen a quartter of very eencouragingg progress aggainst our sstrategy.

Our Core bbusinesses, BBarclays UKK and Barclayys Corporatte & Internattional, contiinue to thrivve. Both
produced ddouble digit ROTEs in thhe half, whicch aggregatte to a collecctive 12.5%%, demonstraating the
already higgh quality fraanchises at the centre oof the futuree of this Grooup.

Non-Core rrundown – tthe key to unnlocking thee full earnings power off that Core –– has good
momentumm, and we reemain commmitted to cloosing the unnit in 2017.

In May we commenced the sell doown of our sstake in Barcclays Africa,, disposing oof 12.2% in a
successful and significcantly over-ssubscribed pplacing. Giveen the stronng level of innterest in thee asset we
have increaased confideence in our ability to deeconsolidatee Africa.

Cost remaiins firmly unnder controll and we aree on track too meet our ttarget of £122.8bn in Corre
expenses ffoor 2016 on a constant ccurrency baasis. Beyondd this we aree today provviding additioonal
guidance oon costs for Non-Core inn 2017 to bee in a range of betweenn £400-£5000 million, siggnificantly
below the eexpected 20016 level.

And we aree pleased too have been able to streengthen cappital in the qquarter to a CET1 ratio oof 11.6%.

Our prioritiies remain: sstrengtheninng our Coree businessess; closing Baarclays Non--Core as fast as
possible; prrogressing tthe sell dowwn of our staake in Barclaays Africa too a point whhere we can
deconsoliddate it; eliminnating costss in both Core and Non--Core; dealinng with legaacy issues; aand steadilyy
strengthenning our cappital positionn.

Taken togeether, the piicture in the second quaarter is one of strong annd acceleratting progresss against
our strateggy. We remaain confident that it is thhe right plann for Barclayys, and see nno reason too adjust it,
or the pacee of deliveryy,, in light of tthe vote by the UK last mmonth to exxit the EU.

Given the innherent diveersification of our businness model, coupled witth a longstaanding conservative
approach tto risk, Barcllays is well ppositioned tto weather aany potentiaal economicc consequennces of that
decision. WWe are very mmuch open for businesss, and fully ccommitted tto supportinng our custoomers and
clients, andd the real ecconomy, throough this peeriod of unccertainty.”

James E Staleey, Group Chieef Executive OOfficer

Barclays PLCC – 2016 Interimm Results 5
Group Finnance Direcctor’s Reviiew

Group perforrmance in thee half was imppacted by the results of Noon-Core, whichh reported a lloss before tax of £1,904mm
(H115: £745m) driven by net negative income of £5586m (H115: ppositive incomme of £465m)), as the mommentum in thee
rundown conntinued. Non-CCore results inncluded fair vaalue losses on the ESHLA poortfolio of £4224m (H115: £1175m) and ann
impairment oof £372m in reespect of the assets of the Frrench retail, annd wealth and investment mmanagement buusinesses heldd
for sale. Excluuding this impaairment and notable items, GGroup profit before tax was £2,037m (H1115: £3,217m).

The Core bussiness performmed well, with a RoTE of 12.5% (H115: 11.3%) on an increased averrage tangible eequity base off
£40bn (H1166: £36bn). Thiss was driven bby steady perfoormance in Baarclays UK, andd solid performmance in Barclays Corporatee
& Internationnal. CIB results were resilientt, despite the cchallenging maarket conditionns, particularlyy in Credit, whhile substantiall
business groowth in Consuumer, Cards aand Payments drove a signnificant increase in the proofit before taxx. Core resultss
included a £6615m (H115: £nil) gain folloowing the commpletion of thee sale of Barclays’ share of VVisa Europe Limited to Visaa
Inc. and an inncrease in provvisions for UK ccustomer redrress of £400m (H115: £967mm).

Total Core operating expeenses reduced 10% to £6,7747m driven bby lower litigaation and condduct charges, savings fromm
strategic costt programmess and reduced compensation costs, partiaally offset by aappreciation of the average USD and EURR
against GBP aand increased structural refoorm programmme implementaation costs.

Group perfoormance
 Profit beffore tax decreaased 21% to £2,063m primmarily driven bby the loss beffore tax in Noon-Core of £1,904m (H115::
£745m) aand a 19% incrrease in Core pprofit before taax of £3,967m
 Return onn average tanggible shareholdders’ equity was 4.8% (H115: 6.9%) and bbasic earningss per share waas 6.9p (H115::
9.9p)
 Total incoome net of insurance claimms decreased 99% to £11,013m as Non-Core income reeduced to a net expense off
£586m (HH115: income of £465m). Coore income waas in line at £11,599m (H1155: £11,646m)
 Credit imppairment charrges increasedd £152m to £9931m primarilyy driven by thee impairment oof a number oof single namee
exposuress, largely in reespect of counnterparties in tthe oil and gaas sector, and an increase inn Barclaycard Consumer UKK
impairmeent due to refinnement of imppairment moddelling. The loaan loss rate inncreased 4bps to 39bps whiilst underlyingg
delinquenncy rates remaained stable
 Total opeerating expensees reduced 100% to £7,697mm reflecting redduced litigation and conduct charges, andd savings fromm
strategic cost programmmes, partially offset by resttructuring andd structural reeform programmme implemeentation costs,,
and continued investmment in Consuumer, Cards aand Payments.. Total operatting expenses included a ££400m (H115::
£1,032m)) increase in prrovisions for UUK customer reedress
 The effecttive tax rate onn profit beforee tax increasedd to 34.7% (H115: 32.7%)
 Profit afteer tax in respeect of continuing operationss decreased 233% to £1,348mm. Profit after tax in relationn to the Africaa
Banking ddiscontinued ooperation decreeased 13% to £311m drivenn by the deprecciation of averrage ZAR againnst GBP
 Notable ittems were a nnet profit beforre tax of £3988m (H115: losss of £615m). HH116 notable items comprissed provisionss
for UK cuustomer redresss of £400m (H115: £1,032mm), a £615m (H115: £nil) ggain on disposal of Barclays’’ share of Visaa
Europe Limited and an oown credit gaiin of £183m (HH115: £410m))
 Group inccome statemeent performance was materrially impactedd by the appreeciation of aveerage USD andd EUR againstt
GBP, positively benefitinng income andd adversely afffecting impairmment and operrating expensees

All performannce commentaary which folloows is on an unnderlying basiss, excluding nootable items.

Core perforrmance
 Underlyinng Core performmance generaated a RoTE off 10.8% (H1155: 13.7%) reflecting an 8% reeduction in profit before taxx
to £3,5699m and a £4bnn increase in avverage tangiblee equity to £400bn as capital was redeployeed from Non-CCore
 Underlyinng total incomee was 1% up aat £10,801m, aas a 19% increease in Consummer, Cards andd Payments to £1,881m wass
partially ooffset by the impact of chaallenging markket conditionss in CIB wheree total incomee reduced 5%% to £5,207m..
Barclays UK underlyingg total incomme was 1% down at £3,5995m primarilyy reflecting thhe impact of the Europeann
Interchannge Fee Regulaation
 Credit imppairment charrges increasedd £158m to £8876m primarilyy driven by thee impairment oof a number oof single namee
exposuress, largely in reespect of counnterparties in tthe oil and gaas sector, and an increase inn Barclaycard Consumer UKK
due to reffinement of immpairment moddelling
 Underlyinng total operatting expensess increased 3%% to £6,347mm reflecting the appreciationn of average USD and EURR
against GBP and increased structural reform prograamme implemmentation costss, partially offsset by savings ffrom strategicc
cost programmes

Barclays PLCC – 2016 Interimm Results 6
Group Finnance Direcctor’s Reviiew

Barclays UK
 Underlyinng RoTE was 19.4% (H115: 221.9%)
 Underlyinng profit before tax decreaseed 4% to £1,3329m driven bby a 1% decreease in total inncome, primarrily due to thee
impact off the Europeann Interchange FFee Regulationn, and a 10% increase in credit impairmennt charges, parrtially offset byy
a 1% reduuction in total operating exppenses
 Credit immpairment chaarges increaseed 10% to £3366m primarilyy due to the refinement oof impairmentt modelling inn
Barclaycaard Consumer UK, whilst the 30 day and 900 day arrears rrates remainedd stable year-oon-year
 Underlyinng total operatting expenses reduced 1% reflecting saviings realised ffrom strategic cost programmmes, partiallyy
offset by sstructural refoorm programmme implementaation costs

Barclays Corpporate & Interrnational
 Underlyinng RoTE was 100.7% (H115: 112.4%)
 Underlyinng profit beforre tax decreassed 10% to £2,289m drivenn by a 4% inccrease in operating expenses due to thee
appreciation of averagee USD and EUR against GBPP, and increaseed structural reform programmme implemeentation costs,,
in addition to a 33% inccrease in creditt impairment ccharges largelyy in respect off counterpartiees in the oil andd gas sector
 Underlyinng total income was broadlyy in line at £7,088m (H115:: £7,060m), inncluding the appreciation off average USDD
and EUR against GBP, with Consummer, Cards andd Payments income increasing 19%, drivven by continuued growth inn
Barclaycaard US, Germany and Merchhant Acquiringg. CIB income decreased 5%% as Markets iincome reduceed 6%, withinn
which Equities and Maccro were 22%% and 4% loweer respectively,, relative to a sstrong H115 pperformance, ppartially offsett
by a 35% increase in Crredit. Banking income decreaased 5%

Head Office
 Underlyinng loss before ttax was £49mm (H115: loss oof £58m) refleecting the net result from treeasury operations, includingg
one-off gaains from the buyback of subordinated deebt in Q116

Non-Core pperformance
 The Non-Core rundownn remains on ttrack. As part oof this, on 27 AApril 2016, Baarclays announnced that it had entered intoo
exclusive discussions wwith AnaCap Financial Parrtners for thee potential saale of its Frennch retail, andd wealth andd
investmennt managemennt businesses. Other net exppenses includeed a £372m immpairment assoociated with thhese assets
 During QQ216, the termms of the ESHHLA portfolio loans with LLOBO featuress were restruuctured. As a result of thee
restructurring, a one-offf loss of £182m was recognnised in Non-CCore income inn Q216. The rrestructuring rresulted in thee
derecognition of £8bn of existing Levvel 3 fair valueed loan assets with the new restructured aassets now meeasured on ann
amortisedd cost basis. AAs a result, Barclays will bennefit from reduced fair valuue volatility onn the ESHLA pportfolio goingg
forward
 Non-Coree RWAs reduceed to £46.7bn (December 20015: £54.3bn), despite the aappreciation off USD and EURR against GBP,,
reflecting a £3bn reducction in Derivatives, a £3bn rreduction in Securities and lloans and a £11bn reduction in Businessess
RWAs, inccluding a £1.88bn reduction following the completion oof the sale of tthe retail bankking, wealth annd investmentt
managemment and part oof the Corporaate Banking buusiness in Portuugal
 Underlyinng loss before ttax increased tto £1,904m (HH115: £659m) driven by a £1,051m reduction in total inncome to a nett
expense oof £586m incluuding fair value losses of £424m (H115: £175m) on the ESHLA portfoolio, a one-off lloss of £182mm
due to the restructuringg of the ESHLA portfolio LOOBO loan termms as well as loower income ffollowing the completion off
the sale of the Barclays Wealth Ammericas, UK SSecured Lending, and Portuuguese retail and insurancce businesses..
Derivativees income reduuced £135m to an expense of £198m refleecting the actiive rundown oof the portfolioos and fundingg
costs
 Underlyinng operating exxpenses reducced 6% reflectiing cost savinggs from ceasinng certain inveestment bankinng activities inn
a numberr of countries, the completioon of the sale oof several businnesses and thee rundown of portfolios, parrtially offset byy
a £180m increase in resstructuring chaarges

Barclays PLCC – 2016 Interimm Results 7
Group Finnance Direcctor’s Reviiew

Group cappital, leverage and baalance sheeet
 The leveraage ratio decreeased to 4.2%% (December 22015: 4.5%) drriven by the increase in leverrage exposuree primarily duee
to balancee sheet movemments
 Leverage exposure increased 12% to £1,155bn, whhile total assetss increased 21% to £1,351bn from 31 Deccember 2015
‐ Totaal loans and aadvances and other assets increased £93bn to £718bnn. The increasee was primarily driven by aa
£27bn increase inn cash and balaances at central banks due tto an increase in the cash eleement of the GGroup liquidityy
pool in preparatioon for the EU referendum, a £26bn increease in settlemment balancess following increased clientt
activvity, lending growth of £14bbn within Barcllays Corporatee & Internationnal and an £8bbn increase in AAfrica Bankingg
asseets held for sale reflecting the appreciationn of ZAR againnst GBP
‐ Net derivative leveerage exposure remained brroadly flat as an increase in aassets of £1177bn to £445bnn was offset byy
an iincrease in deerivative liabilitties resulting in regulatory derivative nettting increasinng £109bn to £402bn. Thee
increase was mosstly within inteerest rate derivvatives and fooreign exchangge derivatives reflecting a deecrease in thee
major forward inteerest rates andd appreciation of all major cuurrencies against GBP
 The fully loaded CRD IVV CET1 ratio inncreased to 111.6% (Decembber 2015: 11.44%) reflecting an increase inn CET1 capitall
of £1.6bnn to £42.4bn, wwhilst RWAs inncreased by £88bn to £366bnn
‐ The increase in CCET1 capital wwas largely drivven by profits generated in the period and favourable mmovements inn
otheer qualifying rreserves whichh included thee currency traanslation reserrves as a result of the apprreciation of alll
major currencies aagainst GBP
‐ The increase in RWWAs was princcipally due to tthe appreciatioon of USD, EUR and ZAR against GBP, which more thann
offset underlying RWA reductions in Non-Corre 
 Tangible net asset valuue per share inncreased to 2889p (Decembeer 2015: 275p)) driven by proofit generatedd in the periodd
and net faavourable reseerve movements

Group funnding and liquidity
 The Grouup continued to maintain surpluses to its internal and reegulatory requuirements in HH116 with a liqquidity pool off
£149bn (December 2015: £145bn). The Liquidity Coverage Ratio (LCR) decreeased to 124%% (December 2015: 133%),,
equivalennt to a surpluss of £29bn (DDecember 20115: £37bn) drriven primarilyy by the early repayment oof the Bank off
England’ss Funding for LLending Schemme of £12bn inn Q116 as Barcclays optimisedd its funding cost
 Wholesalee funding outstanding excluuding repurchhase agreemennts increased £12bn to £1554bn, driven by the prudentt
managemment of the liquidity positionn in the immeddiate run-up too the 23 June 2016 referenddum in the United Kingdom..
The Grouup issued £5.77bn of senior unsecured deebt and capitaal transactionss from the holding companny in H116, off
which £4.2bn and £0.66bn in public aand private seenior unsecureed debt respecctively, and £00.9bn of subordinated debt..
£6.1bn of Barclays Bank PLC senior debt and caapital instrumments have beeen bought baack or called during H116..
Proceeds raised by Barclays PLC haave been usedd to invest in Barclays Bannk PLC instrumments in eachh case with aa
corresponnding ranking

Barclays PLCC – 2016 Interimm Results 8