Double click here to edit Header component
Signpost is empty.Double click here to edit it in Header component

Annual Report 2015

Hub Hero
Parsys 1

A strategy that answers the business challenges ahead

At the heart of Barclays’ strategy is to build on our strength as a transatlantic consumer, corporate and investment bank, anchored in the two financial centres of the world, London and New York.
Jes Staley, Group Chief Executive Officer
View the full Annual ReportView the full Annual Report

Financial highlights for 2015

Our core businesses performed very well over the course of the year, generating an adjusted Return on Tangible Equity of 10.9%.
Tushar Morzaria, Barclays Group Finance Director

Addressing the issues facing Barclays today

Banking is in the eye of a perfect storm. It was in full consciousness of this, that I undertook the role as your Chairman at the end of April, with the strong conviction that we could not only stabilise the situation relatively quickly, but also return the Group to prosperity during my tenure.
John McFarlane, Chairman

Strategy

Our strategic direction

At the heart of Barclays’ strategy is to build on our strength as a transatlantic consumer, corporate and investment bank, anchored in the two financial centres of the world, London and New York.

We have made great progress in simplifying Barclays over the last few years by re-shaping our balance sheet, strengthening our capital base, and reducing costs.
All of this has been done to move us towards becoming a Group which can generate the returns our shareholders deserve and it represents important progress.

But in order to complete our restructuring in a reasonable timeframe, and deliver for shareholders who have been patient for a very long time, requires us to make some definitive choices today about the future shape of the Group.

First, it is our intention, subject to regulatory and shareholder approvals, if and as required, to reduce our interest in Barclays Africa Group Limited (BAGL) to a non-controlling, non-consolidated, position in the next two to three years.

It has been very difficult to make this decision. Barclays has been in Africa for over 100 years. We have some excellent franchises on the continent, with a great management team and dedicated colleagues.

Second, besides simplifying our business, we also need to accelerate the separation of our very profitable Core businesses from the drag of our Non-Core businesses as soon as possible. In order to give us the flexibility to accelerate the exit of Non-Core, the Board has decided to reduce our dividend to 3 pence in 2016 and 2017.

We recognise the importance of paying a meaningful dividend as part of total shareholder returns and are committed to doing so in the future.

 

 

Barclays will operate as two clearly defined divisions, Barclays UK and Barclays Corporate & International. Barclays UK will include our leading UK retail bank, our UK consumer credit card business, and play its traditional role as a committed provider of lending and financial services for small businesses up and down the UK.

Second, Barclays Corporate & International will comprise our market leading corporate banking business, our Barclaycard operations in Europe and the US, our bulge bracket Investment Bank and our International Wealth offering.

In summary then, the future is bright. Both Barclays UK and Barclays Corporate & International already generate double digit Returns on Tangible Equity. They are strong financially, and will be as sibling businesses, and shareholders and debt investors in Barclays will benefit from the diversified revenue streams they produce.

These strategic actions will bring forward the completion of our restructuring and the emergence of a simpler and very profitable Barclays. 

Business model and service offer

We are making significant progress in achieving our strategic aim of a more simplified and balanced business.

What we do

Barclays is a transatlantic consumer, corporate and investment bank...

Our goal

...that will become the bank of choice for our stakeholders...

Our focus

...by providing superior services and supporting our stakeholders...

Our strategy

...via a commercially successful business that generates long-term sustainable returns.

 

   

Performance

Our Balanced Scorecard

In 2015 the Balanced Scorecard was used throughout the organisation and formed part of the framework by which our staff were assessed, with individual performance objectives aligned to the 5Cs.

This year has seen improvement across a number of our metrics, especially our capital strengthening, as measured by the CET1 ratio, and within Colleague. Further work is required in some areas, including RoE. The Customer & Client Relationship metrics remained stable as a strong performance in corporate banking, combined with improvements in Barclays current accounts, was offset by the impact of reshaping our wealth business and the competitive challenges in Africa banking. Our Client Franchise Rank remained stable in challenging market conditions.

Under Colleague, we have seen an improvement in both the colleague engagement and the gender-diversity in our leadership, with numerous initiatives to promote equality and support our workforce proving successful.

In our Citizenship plan, 10 out of 11 metrics on target shows that we are having a positive impact on the communities in which we operate, with lending to households the only initiative to lose momentum primarily as a result of market and trading conditions.

Conduct also showed a slight improvement on 2014 following a number of actions being taken to improve customer outcomes, although we are below where we would like to be. Within Company there has been a significant strengthening in the CET1 ratio, however we have plenty of work to do to deliver an acceptable return to shareholders, with RoE slightly down on 2014.

There is still plenty of work to do and we remain focused on improving our balanced performance for colleagues, customers and clients, the wider community and shareholders.

Stakeholders and metrics

We have agreed eight key measures categorised into the 5Cs against which our stakeholders can hold us to account. We are committed to monitoring and reporting on our progress annually. 

  Metric Actual 2014 Actual 2015 Target 2018

Customer & Client

PCB, Barclaycard and Africa Banking weighted average ranking of Relationship Net Promoter Score© (NPS) vs. peer sets 4th 4th 1st
Client Franchise Rank: Weighted average ranking of wallet share or customer satisfaction with priority clients in the Investment Bank 5th 5th Top 3

Colleagues

Sustained engagement of colleagues score 72% 75% 87-91%
% women in senior leadership 22% 23% 26%

Citizenship

Citizenship Plan - initiatives on track or ahead 11/11 10/11 Plan targets

Conduct

Conduct Reputation (YouGov survey) 5.3/10 5.4/10 6.5/10

Company

Adjusted Return on Equity (RoE) 5.1% 4.9% N/Aa
Fully loaded CRD IV CET1 ratio (Capital Requirements Directive IV Common Equity Tier 1) 10.3% 11.4% N/Aa

Notes
a Please refer to the new financial targets set out in the Chief Executive’s review in the full report

Gender: Barclays Board membership includes four women and ten men, and one woman and nine men on the Group Executive Committee. During 2015 we had a maximum of three women on the Group Executive Committee. Under the Companies Act 2006, Barclays are also required to report on the gender breakdown of our employees and ‘senior managers’.

Of our global workforce of 129,400 (66,100 male, 63,300 female), 796 were senior managers (574 male, 222 female), which include Officers of the Group, certain direct reports of the Chief Executive, heads of major business units, certain senior Managing Directors, and directors on the boards of undertakings of the Group, but exclude individuals who sit as directors on the board of the Company.

For our Customers and Clients

We aim to be the bank of choice.

Metric Actual 2015 Actual 2014 Actual 2013
PCB, Barclaycard and Africa Banking weighted average ranking of Relationship Net Promoter Score© (NPS) vs. peer sets 4th 4th 3rda
Client Franchise Rank: Weighted average ranking of wallet share or customer satisfaction with priority clients in the Investment Bank 5th 5th N/A

Notes
a Revised due to the creation of PCB as part of the May 2014 Strategy Update. Corporate clients now contribute to the NPS metric, and no longer contribute to the Client Franchise Rank

What we are doing 

In building customer advocacy we will continue to:

  • further invest in our brand and the attractiveness of customer and
    client propositions
  • bring increased accountability to those closer to customers
  • innovate through customer relevant technology and the
    transformation of the branch network
  • develop service models tailored to the changing needs of our
    global customer and client base.

The 2018 target is to be 1st in NPS, and Top 3 in Client Franchise Rank.

For our Colleagues

We create an environment where they can fulfil their potential.

Metric Actual 2015 Actual 2014 Actual 2013
Sustained engagement of colleagues score 75% 72% 74%
% women in senior leadership 23% 22% 21%

What we are doing 

Our colleagues remain core to success at Barclays, and we remain committed to investing in them and ensuring they are enabled to consistently deliver strong performance over time.

Fostering an inclusive and diverse culture where all colleagues can
achieve their potential remains a core business focus:

  • through diversity, we gain a greater breadth of perspectives
  • through inclusion these perspectives feed innovation.

In turn, this ensures we deliver services and innovative products that are market leading, enabling our diverse customers to achieve their goals.

The 2018 target is for a score of 87-91% in Sustained Engagement of colleagues, and 26% women in senior leadership.

For Citizenship

We have a positive impact on the communities in which we operate.

Metric Actual 2015 Actual 2014 Actual 2013
Citizenship Plan - initiatives on track or ahead 10/11 11/11 10/11

What we are doing

  • Ensuring that the way we do business is responsible, sustainable,
    and takes account of wider stakeholder needs
  • Contributing to growth by supporting households and businesses
  • Supporting our communities by building the skills of young people

For Conduct

We aim to act with integrity in everything we do.

Metric Actual 2015 Actual 2014 Actual 2013
Conduct Reputation (YouGov survey) 5.4/10 5.3/10 5.2/10

What we are doing

The Group continued to incur the significant costs of conduct matters

  • Additional charges were recognised for customer redress including
    £2.2bn for the cost of PPI remediation
  • Resolution of these matters remains a necessary and important part of delivering the Group’s strategy
  • There are early signs that we are driving better outcomes for customers from a more thoughtful consideration of our customers’ needs.

The 2018 target is for a Conduct Reputation (YouGov survey) score of 6.5/10.

For our Company

We seek to effectively manage risk and create sustainable returns.

Metric Actual 2015 Actual 2014 Actual 2013a
Fully Loaded CRD IV CET1 ratio 11.4% 10.3% 9.1%
Adjusted Return on Equity 4.9% 5.1% 4.3%

Notes
a 2013 Return on Equity (Adjusted) has been revised to account for the reclassification of £173m of charges, relating to a US residential mortgage related business settlement with the Federal Housing Finance Agency, to provisions for ongoing investigations and litigation including Foreign Exchange to aid comparability.

What are we doing:

We are committed to delivering long-term acceptable returns to shareholders in a sustainable way, while maintaining adequate levels of capital to enable the Bank to operate safely through challenging economic conditions.

We will achieve this by prudently optimising the level, mix and distribution to businesses of our capital resources whilst maintaining sufficient capital resources in order to:

  • ensure the Group is well capitalised relative to its minimum
  • regulatory capital requirements set by the PRA and other
  • regulatory authorities
  • support its credit rating
  • support its growth and strategic objectives.

Remuneration

Implementing fair and appropriate financial reward

The Board Remuneration Committee’s priorities are to ensure that Barclays pays for sustainable performance, aligns remuneration with risk and delivers a greater proportion of the income we generate to our shareholders.

2015 (£000) Salary Role Based Pay Taxable benefits Annual bonus LTIP Pension Total
Antony Jenkinsa 598 516 89 505 1,494 197 3,399
Tushar Morzaria 800 750 82 701 - 200 2,533
Jes Staleyb 100 96 48 - - 33 277

Notes
a The 2015 figures for Antony Jenkins relate to the period to 16 July 2015 when he ceased to be a Director, save in the case of the LTIP which relates to the whole performance period.
b The 2015 figures for Jes Staley relate to the period from 1 December 2015 when he joined the Board as Group Chief Executive.
 

The table shows a single total figure for 2015 remuneration in respect of qualifying service for each executive Director.

Read the full remuneration report in the Annual Report (PDF)Read the full remuneration report in the Annual Report (PDF)
2015 (£000) Fees Benefits Total
Chairman      
John McFarlanea 628 11 639
Sir David Walkerb 285 6 291
Non-executive Directors      
Mike Ashley 207 - 207
Tim Breedon 
232 - 232
Crawford Gilliesc 178 - 178
Reuben Jeffery III  135 - 135
Wendy Lucas-Bulld 358 - 358
Dambisa Moyo 152 - 152
Frits van Paasschen 88 - 88
Sir Michael Rakee
250 - 250
Diane de Saint Victor 135 - 135
Diane Schuenemanf,k 74 - 74
Sir John Sunderlandg 60 - 60
Steve Thiekeh,k 184 - 184
Fulvio Contii - - -
Simon Fraserj - - -
Total 2,966 17 2,983

Non-executive Directors are reimbursed expenses that are incurred for business reasons. Any tax that arises on these reimbursed expenses is paid by Barclays. The Chairman is provided with private medical cover and the use of a company vehicle and driver when required for business purposes.

Notes
a John McFarlane joined the Board as a non-executive Director with effect from 1 January 2015 and as Chairman from 24 April 2015. The total includes non-executive Director fees of £78,000 for the period from 1 January 2015 to 24 April 2015.
b Sir David Walker retired from the Board with effect from 23 April 2015.
c Crawford Gillies joined the Board as a non-executive Director with effect from 1 May 2014.
d The 2014 figure has been updated to include fees received by Wendy Lucas-Bull for her role as Chairman of Barclays Africa Group Limited. The 2015 figure includes fees received by her in 2015 for that role.
e Sir Michael Rake retired from the Board with effect from 31 December 2015.
f Diane Schueneman joined the Board as a non-executive Director with effect from 25 June 2015.
g Sir John Sunderland retired from the Board with effect from 23 April 2015.
h Steve Thieke joined the Board as a non-executive Director with effect from 7 January 2014.
i Fulvio Conti retired from the Board with effect from 24 April 2014.
j Simon Fraser retired from the Board with effect from 24 April 2014.
k Diane Schueneman and Steve Thieke both served in 2015 on the US Governance Review Board, which is an advisory board set up as the forerunner of the board of our US intermediate holding company which will be implemented during 2016. The 2015 figures for Diane Schueneman and Steve Thieke include fees of $37,500 and $75,000 for these roles respectively.

Remuneration for non-executive Directors reflects their responsibility and time commitment and the level of fees paid to non-executive Directors of comparable major UK companies.

Read the full remuneration report in the Annual Report (PDF)Read the full remuneration report (PDF) (new window)
Parsys 2

Our businesses

Barclays group business structure

The activity in our business units reflects our progress in becoming the partner of choice

The 2015 performance has been reported here in the business units operated during the year. With a change in structure for 2016, an upcoming restatement document will detail 2015 performance under the new business units.

Group structure Markets Customer type
Personal and Banking ■ UK Retail
■ Corporate Banking
■ Wealth
■ Individual
■ Small and medium businesses
■ Corporates 
Barclaycard ■ UK cards
■ US cards
■ Europe cards
■ Business solutions
■ Individual
■ Small and medium businesses
■ Corporates
■ Financial institutions and banks
■ Sovereigns and institutions
Africa Banking ■ Retail and business banking, cards and insurance
■ Corporate and investment banking
■ Wealth
■ Individual
■ Small and medium businesses
■ Corporates
■ Financial institutions and banks
■ Sovereigns and institutions
Investment Bank ■ Banking
■ Macro
■ Credit
■ Equities
■ Corporates 
■ Financial Institutions and Banks
■ Sovreigns and institutions
Barclays Non-Core ■ Principal non-strategic businesses, including European Retail and Corporate operations
■ Securities and loans, such as non-strategic long-dated corporate loans
■ Derivatives impacted by regulation
■ Individual
■ Small and medium businesses
■ Corporates
■ Financial institutions and banks
■ Sovereigns and institutions

Personal and Corporate Banking

Ashok Vashwami

Ashok Vaswani

Chief Executive, Personal and Corporate Banking
We are succeeding by putting our customers and clients at the centre of everything we do and by continuing to do this we will become the partner of choice for the UK ecosystem

What we do

Personal and Corporate Banking (PCB) is a powerhouse with the potential to challenge the traditional UK banking landscape.
 

  • Personal Banking: provision of simple and transparent banking products to c.14m customers, with a focus on transforming customer interactions through automating routine transactions and humanising important moments
  • Mortgages: a single, highly automated, industrial strength engine to provide mortgage services to over 1.5m individuals
  • Corporate Banking: an end-to-end proposition and service continuum that supports nearly one million clients, from start-ups and small businesses, through FTSE100 companies, to partnering with the largest global corporations
  • Wealth: a differentiated wealth and investment management business for 35k high net worth and ultra-high net worth client focused on the UK ecosystem.
Download the full Annual Report to read more (PDF)Download the full Annual Report to read more (PDF)

Barclaycard

Valerie Soranno Keating

Amer Sajed

Interim Chief Executive, Barclaycard
We continue to build on our heritage of innovation, offering a range of market leading solutions to help consumers make and retailers take payments.

What we do

Barclaycard serves consumers in both of Barclays’ core geographies, the UK and the US, as well as in Germany, and Southern Europe. We also operate in Norway, Sweden and Denmark via our EnterCard joint venture.

We provide branded and co-branded consumer cards to our customers, and business solutions to our clients, including commercial cards, payment acceptance and point of sale finance.

Our business model is diversified by geography and product line and our scale helps us deliver a strong financial performance through the economic cycle.

Download the full Annual Report to read more (PDF)Download the full Annual Report to read more (PDF)

Africa Banking

Maria Ramos

Maria Ramos

Chief Executive, Africa Banking
In the third year since the formation of Barclays Africa Group Limited, our strategy execution is on track. We are well positioned to address the Africa growth opportunity, make a positive economic contribution to our communities, and deliver sustainable returns for our shareholders

What we do


Africa Banking is a diversified financial services provider offering an integrated range of products and services across retail and business banking, credit cards, corporate and investment banking, wealth and investment management and insurance.

We serve nearly 12 million customers across Africa and have a long-standing presence in 12 countries, including in our largest market South Africa.

Africa Banking is a combination of the results of Barclays Africa Group Limited (BAGL), and Barclays Egypt and Barclays Zimbabwe.

Download the full Annual Report to read more (PDF)Download the full Annual Report to read more (PDF)

Investment Bank

Thomas King

Thomas King

Chief Executive, Investment Bank
From our unique position with dual home markets and global reach, we continue to transform the Investment Bank so that we can help our target clients achieve their ambitions.

What we do

Our business is split into three core areas:

  • Markets: provides execution, prime brokerage and risk management services across the full range of asset classes including equity and fixed income, currency and select commodity products
  • Banking: provides long-term strategic advice on mergers and acquisitions, corporate finance and strategic risk management solutions, and equity and credit origination capabilities
  • Research: provides multi-asset class and macro-economic research delivering practical ideas to help our clients make informed investment decisions


 

 

Download the full Annual Report to read more (PDF)Download the full Annual Report to read more (PDF)

Barclays Non-Core

Non-core
Barclays Non-Core is responsible for the divestment of Barclays non-strategic assets and businesses.

What we do

Barclays Non-Core (BNC) was formed to oversee the divestment of Barclays’ non-strategic assets and businesses, releasing capital to support strategic growth in our Core business.

BNC brings together businesses and assets that do not fit our client strategy, remain sub-scale with limited growth opportunities, or are challenged by the regulatory capital environment.

Non-Core assets have been grouped together in BNC, comprising three main elements:

  • Principal Businesses, Securities and Loans, and Derivatives. Several of the businesses managed within BNC are profitable and will be attractive to other owners.
  • BNC will be reduced over time, through sale or run-off. Reducing the capital and cost base will help improve Group returns and deliver shareholder value.
Download the full Annual Report to read more (PDF)Download the full Annual Report to read more (PDF)

 

   

Parsys 3

 

Parsys 4
Parsys 5

    

Financials

Running the company well underpinned by solid capital footings

The financial statements of the business not only allow analysis of the key financial information in a standardised format, but are important to help understand the performance and management of the business.

 

  2015 2014
CRD IV fully loaded Common Equity Tier 1 (CET1) ratio 11.40% 10.30%
Leverage ratio  4.50% 3.70%
Dividend per share  6.5p 6.5p
Return on average shareholders’ equity (RoE)  4.90% 5.10%
Operating expenses excluding costs to achieve  £16,205m £15,105m
Operating expenses excluding costs to achieve (Core)  £15,106m £15,105m
Non-Core RWAs  £47bn £75bn
Parsys 6
Parsys 7
Parsys 8
Parsys 9
Parsys 10
Parsys11
Parsys 12