Barclays Regulatory News (BARC)

Barclays PLC

Interim Results Announcement

30 June 2022

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

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 six months ended 30 June 2022 to the corresponding six months of 2021 and balance sheet analysis as at 30 June 2022 with comparatives relating to 31 December 2021 and 30 June 2021. The historical financial information used for the purposes of such analysis has been restated. Please refer to Note 1 to the condensed consolidated interim financial statements 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.

The information in this announcement, which was approved by the Board of Directors on 27 July 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 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 115 to 123 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 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 levels, assets and liabilities, impairment charges, provisions, capital, leverage and other regulatory ratios, capital distributions (including dividend pay-out ratios and expected payment strategies), projected levels of growth in banking and financial markets, projected expenditures, costs or savings, any commitments and targets (including, without limitation, environmental, social and governance (ESG) commitments and targets), business strategy, plans and objectives for future operations, group structure, IFRS impacts 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, the development of IFRS and other accounting standards, evolving practices with regard to the interpretation and application of accounting standards, emerging and developing ESG reporting standards, the outcome of current and future legal proceedings and regulatory investigations and any related impact on 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 incidents or similar events beyond the Group's control, 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; volatility in credit and capital markets; market related risks such as changes in interest rates and foreign exchange rates; changes in valuation of credit market exposures; changes in valuation of issued securities; changes in credit ratings of any entity within the Group or any securities issued by such entities; 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 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; the Group's ability to access funding; and the success of 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, as amended, for the financial 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.

Barclays delivered profit before tax of £3.7bn and return on tangible equity (RoTE) of 10.1%, with a half year dividend of 2.25p per share and intends to initiate a further share buyback of up to £500m

Key financial metrics:

H122 performance2:

· Attributable profit was £2.5bn (H121: £3.8bn) and RoTE was 10.1% (H121: 16.1%) having reflected a £0.6bn net of tax impact for the Over-issuance of Securities in the US (Over-issuance of Securities3). Excluding this impact, RoTE was 12.5%

· £0.6bn impact of Over-issuance of Securities is comprised of:

· £0.4bn post tax expected net impact of the rescission offer losses, driven by £1.3bn of costs as a result of market movements and interest, substantially offset by £0.8bn of income from hedging arrangements

· £0.2bn of costs relating to an estimated monetary penalty from the SEC

· Excluding the impact of Over-issuance of Securities:

· Group income was £12.4bn, up 10% year-on-year, driven by strong client activity in Markets, recovery in both Consumer, Cards and Payments (CC&P) and Barclays UK more than offsetting the impact of a weak fee pool in Investment Banking

· Group costs were £7.7bn (H121: £7.2bn) including other litigation and conduct charges of £0.4bn (H121: £0.1bn), with operating costs (excluding litigation and conduct) up 2% year-on-year

· On a statutory basis, including the impacts of Over-issuance of Securities:

· Group income was £13.2bn, up 17% year-on-year, including the £0.8bn of income from hedging arrangements related to the Over-issuance of Securities

· Credit impairment charges were £0.3bn (H121: £0.7bn net release) with provision levels broadly retained in light of an uncertain macroeconomic backdrop

· Group costs were £9.1bn (H121: £7.3bn), including litigation and conduct charges of £1.9bn (H121: £0.2bn), including £1.5bn estimated impact of rescission offer losses in relation to the Over-Issuance of Securities and associated estimated monetary penalty from the SEC

· Capital: Common Equity Tier 1 (CET1) ratio of 13.6% (December 2021: 15.1% and March 2022: 13.8%) and tangible net asset value (TNAV) per share of 297p (December 2021: 291p and March 2022: 294p)

· Increased capital distributions: total capital return equivalent of c.5.25p per share, including a half year dividend of 2.25p per share. Intend to initiate a further share buyback of up to £0.5bn, which is expected to have a c.15bps CET1 ratio impact

1 Excluding the Q222 income benefit of £0.8bn from hedging arrangements related to the Over-issuance of Securities, Group income was up 10% to £12.4bn.

2 2021 financial and capital metrics have been restated to reflect the impact of the Over-issuance of Securities. See Basis of preparation on page 65 and Restatement of financial statements (Note 1) on page 87 for more information.

3 Denotes the Over-issuance of Securities under Barclays Bank PLC's US shelf registration statements on Form F-3 filed with the SEC in 2018 and 2019.

Outlook:

· Returns: Barclays continues to target a RoTE of greater than 10% in 2022

· Income: Barclays' diversified income streams position the Group well for the current economic and market environment and rising interest rates

· Costs: given £1.3bn of litigation and conduct charges in Q222 and the appreciation of average USD against GBP, Barclays now expects FY22 total operating expenses to be around £16.7bn1 versus previous outlook of £15.0bn2

· Impairment: while acknowledging macroeconomic uncertainty, the impairment charge is expected to remain below pre-pandemic levels in coming quarters given reduced unsecured lending balances and existing coverage ratios

· Capital: Barclays continues to target a CET1 ratio within the range of 13-14%

· Capital returns: Barclays' capital distribution policy incorporates a progressive ordinary dividend, supplemented with buybacks as appropriate. Dividends will continue to be paid semi-annually, with the half year dividend expected to represent, under normal circumstances, around one-third of the total dividend for the year

1 Group cost outlook is based on an average USD/GBP FX rate of 1.23 across H222 and subject to foreign currency movements.

2 Previous FY22 Group cost outlook was based on an average USD/GBP FX rate of 1.31 throughout 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 65 and Restatement of financial statements (Note 1) on page 87 for more information.

2 Refer to pages 55 to 62 for further information on how capital, Risk Weighted Assets (RWAs) and leverage are calculated.

Group performance1, 2

· Barclays' diversified model delivered a profit before tax of £3,733m (H121: £4,902m), RoTE of 10.1% (H121: 16.1%), and earnings per share (EPS) of 14.8p (H121: 21.9p)

· Total income increased to £13,204m (H121: £11,315m). Barclays UK income increased 5%. Barclays International income increased 21%, with CIB income up 21% and CC&P income up 20%. Excluding the income benefit of £758m from hedging arrangements related to the Over-issuance of Securities, total Group income was £12,446m, up 10% year-on-year, Barclays International income was £9,182m, up 12% year-on-year and CIB income was £7,213m, up 10% year-on-year

· Credit impairment charges were £341m (H121: £742m net release) reflecting low flows to delinquency and an improved UK employment outlook, partially offset by a day one charge relating to the acquisition of the GAP Inc. US credit card portfolio (the GAP portfolio). Expert judgement post-model adjustments have been maintained to incorporate customer affordability and inflationary headwinds

· Total operating expenses increased to £9,127m (H121: £7,308m). Operating costs increased 2% to £7,270m, reflecting continued investment and business growth, the impact of inflation and the appreciation of average USD against GBP, partially offset by efficiency savings and the non-recurrence of structural cost actions, primarily relating to the real estate review in June 2021. Litigation and conduct charges were £1,857m (H121: £176m) including £1,304m estimated impact of rescission offer losses in relation to the Over-Issuance of Securities and £165m associated estimated monetary penalty from the SEC, £181m of customer remediation costs relating to a legacy loan portfolio in CC&P and £165m related to settlements in principle in respect of industry-wide devices investigations by the SEC and the Commodity Futures Trading Commission (CFTC)3. This resulted in a cost: income ratio of 69% (H121: 65%)

· The effective tax rate (ETR) was 22.0% (H121: 15.1%). The tax charge included a £346m charge recognised for the re-measurement of the Group's UK deferred tax assets (DTAs) due to the enactment of legislation in Q122 which will result in the UK banking surcharge rate being reduced from 8% to 3% effective from 1 April 2023. The ETR excluding the impact of this downward re-measurement of UK DTAs was 12.8% which included a 5.8% benefit relating to adjustments in respect of prior years

· Attributable profit was £2,475m (H121: £3,752m) including the net impact of the Over-issuance of Securities net of tax, of £581m, of which £341m was in Q222

· Total assets increased to £1,589bn (December 2021: £1,384bn) primarily due to an increase in client and trading activity, and growth in the liquidity pool

· TNAV per share increased to 297p (December 2021: 291p) primarily reflecting 14.8p of EPS, partially offset by net negative reserve movements driven by higher interest rates

Group capital and leverage1

· The CET1 ratio decreased by c.150bps to 13.6% (December 2021: 15.1%) as capital decreased by £0.6bn to £46.7bn and RWAs increased by £30.4bn to £344.5bn

- c.80bps reduction to the CET1 ratio due to the expected impact of regulatory change on 1 January 2022 as CET1 capital decreased £1.7bn and RWAs increased £6.6bn

- c.30bps reduction due to the £1bn buyback announced with FY21 results, which is well progressed

- c.40bps reduction due to the impact of the Over-issuance of Securities. c.20bps due to the £0.6bn net of tax impact reducing CET1 capital and c.20bps due to a £4.5bn temporary increase in RWAs reflecting the hedging arrangements designed to manage the risk of the rescission offer. The hedging related RWAs are expected to reverse after the rescission offer is completed in Q322

- Excluding the impacts above, an increase in CET1 capital of £2.7bn was offset by a £19.3bn increase in RWAs:

- The £2.7bn increase in CET1 capital reflects profits and an increase in the currency translation reserve, offset by an accrual toward a FY22 dividend, equity coupons paid, and a decrease in the fair value through other comprehensive income reserve

- The £19.3bn increase in RWAs was primarily due to the appreciation of USD against GBP, increased client activity within CIB and higher CC&P balances mainly driven by the GAP portfolio acquisition. This was marginally offset by the partial disposal of Barclays' equity stake in Absa Group Limited (Absa) in April 2022 

· The UK leverage ratio decreased to 5.1% (December 2021: 5.2%) primarily due to an increase in the leverage exposure of £13.3bn to £1,151.2bn

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 65 and Restatement of financial statements (Note 1) on page 87 for more information.

2 The 6% appreciation of average USD against GBP positively impacted income and profits and adversely impacted credit impairment charges and total operating expenses.

3 See 'Other matters' on page 6 for further details.

Group funding and liquidity

· The liquidity pool was £343bn (December 2021: £291bn) and the liquidity coverage ratio (LCR) remained significantly above the 100% regulatory requirement at 156% (December 2021: 168%), equivalent to a surplus of £119bn (December 2021: £116bn). The increase in the liquidity pool was driven by deposit growth and an increase in wholesale funding, which were partly offset by an increase in business funding consumption

· Wholesale funding outstanding, excluding repurchase agreements, was £181.5bn (December 2021: £167.5bn). The Group issued £3.5bn equivalent of minimum requirement for own funds and eligible liabilities (MREL) instruments from Barclays PLC (the Parent company) in the year to date. The Group has a strong MREL position with a ratio of 30.9% of RWAs which is in excess of its regulatory requirement of 28.5%, excluding the confidential institution specific PRA buffer. The Group remains above its MREL regulatory requirement including the PRA buffer

Other matters

· Over-issuance of Securities: since 31 March 2022, the following developments should be noted with respect to the Over-issuance of Securities:

· On 23 May 2022, Barclays PLC and Barclays Bank PLC filed amendments to their respective Annual Reports on Form 20-F to, among other matters, restate the financial statements for the financial year ended 31 December 2021 to reflect certain impacts of the Over-issuance of Securities

· On 23 May 2022, Barclays Bank PLC filed a shelf registration statement on Form F-3 with the SEC, which was automatically effective and under which an unlimited amount of securities may be registered, on the basis that Barclays Bank PLC is a "well-known seasoned issuer" (the "2022 F-3"). Barclays PLC also has an automatic shelf registration statement on Form F-3 filed with the SEC on 1 March 2021

· On 1 August 2022, Barclays Bank PLC intends to launch an offer to rescind the purchase of securities that were issued in excess of Barclays Bank PLC's shelf registration statement on Form F-3 declared effective by the SEC in 2019 (2019 F-3) and the predecessor US shelf registration statement filed in 2018 (Predecessor Shelf) by certain purchasers who purchased such securities in a distribution from Barclays Bank PLC during certain relevant periods (the rescission offer)

· Following the launch of the rescission offer, Barclays Bank PLC is expected to resume issuances and sales of series of iPath ETNs that were not affected by the rescission offer. Barclays Bank PLC further expects to resume issuances and sales of the remaining series of iPath ETNs when the rescission offer has been completed and settlement of the rescission offer with respect to the relevant series has occurred

· Barclays has recognised a H122 attributable profit impact of £581m relating to this matter net of tax, including a £1,304m charge recognised in costs, substantially offset by hedging arrangements which generated income of £758m, as well as an estimated monetary penalty from the SEC of £165m

· The total balance sheet provision as at 30 June 2022 was £1,757m, of which: £1,592m relates to the estimated rescission offer losses and £165m relates to an estimated SEC monetary penalty. Barclays also expects temporary RWAs of £4.5bn, which translates to a c.20bps reduction in the CET1 ratio, from the hedging arrangements to reverse after the rescission offer has been completed in Q322

· Barclays also expects the Review (see pages 25-26 for more detail), assisted by external counsel, of the facts and circumstances related to this matter to conclude shortly and will continue to engage with regulators

· SEC and CFTC devices investigation: in July 2022, Barclays Bank PLC and Barclays Capital Inc. (BCI) reached an agreement in principle with the staff of the SEC's Division of Enforcement and the staff of CFTC in connection with investigations by the SEC and the CFTC of Barclays Bank PLC, BCI and other financial institutions as part of a financial industry sweep regarding compliance with record-keeping obligations in connection with business-related communications sent over unapproved electronic messaging platforms (the Devices Settlements In Principle). The SEC and the CFTC found that Barclays Bank PLC and BCI failed to comply with their respective record keeping and supervisory obligations, where such communications were sent or received by employees over electronic messaging channels that had not been approved by the bank for business use by employees. The proposed resolution with the SEC and the CFTC will include Barclays Bank PLC and BCI paying a combined $125m civil monetary penalty to the SEC and a $75m civil monetary penalty to the CFTC. Subject to final agreement of the terms of the settlements and related documentation, as well as the SEC's and CFTC's approval, the civil monetary penalties are expected to be paid during the third quarter of 2022

· GAP portfolio acquisition: on 21 June 2022, Barclays completed the acquisition of a US credit card portfolio of $3.3bn of receivables, in partnership with GAP Inc. The acquisition reduced the Group CET1 ratio by approximately 15bps. The partnership broadens Barclays product offering in the retail sector and store cards, advancing our strategy and growth ambitions in the United States

· Kensington Mortgage Company acquisition: on 24 June 2022 Barclays PLC announced that Barclays Bank UK PLC has agreed to acquire UK specialist mortgage lender Kensington Mortgage Company Limited, thereby broadening Barclays' capabilities and product offering in the UK mortgage market. The transaction is subject to regulatory approval and is expected to complete in late Q422 or early Q123

· Legacy Loan Portfolio: a customer remediation provision of £181m was recognised in Q122 in relation to a legacy timeshare loan portfolio brokered by Azure Services Limited (ASL). The provision represents the best estimate as at 30 June 2022. Barclays continues to review complaints regarding legacy partner finance loans, however it is not currently possible to predict the outcome of this review

· Absa sale: on 21 April 2022, Barclays sold 63m ordinary shares in Absa (7.4% of Absa's issued share capital) at a price of ZAR 164.0 per share, raising aggregate gross sale proceeds of ZAR 10.3bn (£516m1)

· Pensions: during 2019 and 2020, the UK Retirement Fund (UKRF), the Group's main pension scheme, subscribed for non-transferable listed senior fixed rate notes for £1.25bn. Following the PRA's statement on 13 April 2022, Barclays is planning to unwind these transactions, which would result in a c.30bps reduction to the CET1 ratio, being accelerated to Q422 from 2023, 2024 and 2025. For more details, see note 16 on page 103

Capital distributions

· 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

· Announced a half year dividend of 2.25p per share and intention to initiate a further share buyback of up to £500m

· Dividends will continue to be paid semi-annually, with the half year dividend expected to represent, under normal circumstances, around one-third of the total dividend for the year

· The £1.0bn buyback programme announced in FY21 results is expected to complete before the end of September 2022

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/ZAR 20.04 as of 21 April 2022.

1 Average loan to value of mortgages is balance weighted and reflects both residential and buy-to-let mortgage portfolios within the Home Loans portfolio.

Barclays UK delivered a RoTE of 17.0% (H121: 20.6%), and a lower cost: income ratio of 62% (H121: 67%), reflecting improved income performance across Personal Banking and Business Banking, alongside reduced total operating expenses, while impairment returned to a charge following a net release in H121. Barclays UK remains well positioned, with a strong focus on supporting customers in an increasingly difficult and uncertain environment.

Income statement - H122 compared to H121

·  Profit before tax decreased to £1,217m (H121: £1,506m). RoTE was 17.0% (H121: 20.6%) reflecting the non-recurrence of a prior year credit impairment release, partially offset by the rising rate environment in the UK

·  Total income increased 5% to £3,373m. Net interest income increased 6% to £2,732m with a net interest margin (NIM) of 2.67% (H121: 2.54%) primarily driven by the rising interest rate environment in the UK. Net fee, commission and other income increased 5% to £641m

· Personal Banking income increased 10% to £2,099m, driven by rising interest rates and the benefit of strong mortgage origination in 2021, partially offset by mortgage margin compression

· Barclaycard Consumer UK income decreased 11% to £541m as higher transaction based revenues from improved customer spend volumes were more than offset by lower interest earning lending (IEL) balances. Lower IEL balances were impacted by higher customer repayments and reduced borrowing

· Business Banking income increased 7% to £733m driven by rising interest rates alongside improved transaction based revenues, partially offset by lower government scheme lending income as repayments continue

·  Credit impairment charge of £48m (H121: £443m net release) driven by low flows to delinquency, improved UK employment data and reduced uncertainty around the possible effects of COVID-19, offset by increased concerns around customers' vulnerability to high inflation. As at 30 June 2022, 30 and 90 day arrears rates in UK cards were 1.0% (H121: 1.4%) and 0.2% (H121: 0.6%) respectively. The credit card and consumer loan businesses maintain appropriate provision levels in light of affordability headwinds, as reflected in a total coverage ratio of 9.2% (December 2021: 10.9%)

·  Total operating expenses decreased 1% to £2,108m driven by lower operational costs and efficiency savings, partially offset by increased investment spend and the impact of inflation

Balance sheet - 30 June 2022 compared to 31 December 2021

· Loans and advances to customers at amortised cost decreased 1% to £205.9bn as £1.5bn of mortgage growth was more than offset by a £4.7bn 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 £261.5bn, maintaining a strong loan: deposit ratio of 85% (December 2021: 85%)

· RWAs remained stable at £72.2bn (December 2021: £72.3bn)

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 65 and Restatement of financial statements (Note 1) on page 87 for more information.

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 65 and Restatement of financial statements (Note 1) on page 87 for more information.

1 Includes £145bn (H121: £129bn) of merchant acquiring payments.

Barclays International delivered a RoTE of 11.5% reflecting the benefits of being a diversified business. CIB delivered a RoTE of 11.9% reflecting a strong performance in FICC, partially offset by a decrease in Investment Banking fees, against a strong prior year comparative, and provisions for litigation and conduct. CC&P RoTE decreased to 8.5% as an increase in income was offset by a provision for higher customer remediation costs relating to a legacy loan portfolio and continued investment in the business.

Income statement - H122 compared to H1211

·  Profit before tax decreased 26% to £2,769m with a RoTE of 11.5% (H121: 16.3%), reflecting a RoTE of 11.9% (H121: 15.9%) in CIB and 8.5% (H121: 19.1%) in CC&P

·  The 6% appreciation of average USD against GBP positively impacted income and profits and adversely impacted impairment charges and total operating expenses

·  Total income increased to £9,940m (H121: £8,218m)

· CIB income increased 21% to £7,971m reflecting the benefit of a diversified business model and impact of hedging arrangements

· Global Markets income increased 48% to £5,636m. FICC income increased 51% to £3,173m, mainly in macro, reflecting higher levels of activity as we supported our clients through a period of market volatility. Equities income increased £754m to £2,463m including £758m of income related to hedging arrangements in relation to managing the risks from the rescission offer to be launched by Barclays Bank PLC in relation to the Over-issuance of Securities

· Investment Banking fees income decreased 31% to £1,202m due to the reduced fee pool, particularly in Equity capital markets2, and a strong prior year comparative

· Within Corporate, Transaction banking income increased 34% to £1,055m driven by deposit balance growth, improved margins and higher payments volumes. Corporate lending income decreased 68% to £78m due to losses on certain fair value lending positions and higher costs of hedging and credit protection, partially offset by the non-recurrence of a prior year fair value loan write-off on a single name

· CC&P income increased 20% to £1,969m

· International Cards and Consumer Bank income increased 17% to £1,229m as higher average cards balances were partially offset by higher customer acquisition costs

· Private Bank income increased 17% to £459m, reflecting client balance growth and improved margins partially offset by the non-recurrence of a gain on a property sale in the prior year

· Payments income increased 39% to £281m driven by turnover growth following the easing of lockdown restrictions in the past year

· Credit impairment charges were £310m (H121: £293m net release)

· CIB credit impairment charge of £32m (H121: £272m net release) was driven by a net increase in modelled impairment whilst there continue to be limited material single name wholesale loan charges, with the prior year including a net release resulting from an improved macroeconomic outlook scenario refresh

· CC&P credit impairment charges increased to £278m (H121: £21m net release) driven by higher balances in US cards, including the day one impact of acquiring the GAP portfolio, partially offset by lower provisions held for uncertainty. As at 30 June 2022, 30 and 90 day arrears in US cards were 1.4% (H121: 1.6%) and 0.7% (H121: 0.9%) respectively. The US cards business continues to maintain appropriate provision levels in light of affordability headwinds

· Total operating expenses increased 44% to £6,874m

· CIB total operating expenses increased 51% to £5,423m. Operating costs increased 8% to £3,791m driven by investment in talent, systems and technology, and the impact of inflation. Litigation and conduct charges were £1,632m (H121: £79m) including £1,304m estimated impact of rescission offer losses in relation to the Over-Issuance of Securities and £165m associated estimated monetary penalty from the SEC, and £165m provision relating to the Devices Settlements in Principle

· CC&P total operating expenses increased 23% to £1,451m primarily driven by £200m of litigation and conduct costs, including a provision for higher customer remediation costs relating to a legacy loan portfolio. Operating costs increased 14% driven by higher investment spend reflecting an increase in marketing and costs for existing and new partnerships

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 87 for more information.

2 Data source: Dealogic for the period covering 1 January to 30 June 2022.

Balance sheet - 30 June 2022 compared to 31 December 2021

· Loans and advances at amortised cost increased £33.5bn to £167.3bn due to increased lending across CIB and CC&P, inclusive of the £2.7bn GAP portfolio acquisition and appreciation of USD against GBP, and increased investment in debt securities

· Trading portfolio assets decreased £20.0bn to £126.9bn due to a reduction in equity securities driven by facilitation of client activity, partially offset by increased trading activity in debt securities

· Derivative assets and liabilities increased £82.0bn and £64.8bn respectively to £343.5bn and £321.2bn driven by market volatility and increased activity in FICC and Equities

· Financial assets at fair value through the income statement increased £21.1bn to £209.3bn driven by increased secured lending

· Deposits at amortised cost increased £48.6bn to £307.4bn primarily due to an increase in short-term money market deposits and growth in Corporate deposits

· RWAs increased to £263.8bn (December 2021: £230.9bn) resulting from the impact of the appreciation of USD against GBP, regulatory changes that took effect from 1 January 2022, increased client activity within CIB, an increase in respect of hedging arrangements designed to manage the risks of the rescission offer relating to the Over-issuance of Securities and higher CC&P balances driven mainly by the GAP portfolio acquisition

Income statement - H122 compared to H121

· Loss before tax was £253m (H121: £370m)

· Total income was an expense of £109m (H121: £102m expense) which primarily reflected hedge accounting, funding costs on legacy capital instruments, treasury items as well as a £42m loss on sale from the partial disposal of Barclays' equity stake in Absa in April 2022. This was partially offset by a one-off gain of £86m from the sale and leaseback of UK data centres and the recognition of dividends on Barclays' equity stake in Absa

· Total operating expenses reduced to £145m (H121: £405m) reflecting the non-recurrence of the £266m charge related to structural cost actions taken as part of the real estate review in June 2021

· Other net income was an expense of £16m (H121: £131m income) driven by a fair value loss in Barclays associate investment holding in the Business Growth Fund

Balance sheet - 30 June 2022 compared to 31 December 2021

· RWAs reduced to £8.6bn (December 2021: £11.0bn) reflecting the partial sale of Barclays' equity stake in Absa in April 2022. The sale resulted in an increase to Barclays' CET1 ratio of c.10bps

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 65 and Restatement of financial statements (Note 1) on page 87 for more information.

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 65 and Restatement of financial statements (Note 1) on page 87 for more information.

2 Refer to pages 55 to 62 for further information on how capital, RWAs and leverage are calculated.