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Barclays continues to maintain strong capital and leverage ratios.
  

CRD IV capital

Barclays’ current regulatory requirement is to meet a fully loaded CRD IV CET1 ratio comprising the required 4.5% minimum CET1 ratio and, phased in from 2016, a combined buffer requirement. This currently comprises a Capital Conservation Buffer (CCB) of 2.5% and a Globally Systemically Important Institution (G-SII) buffer determined by the PRA in line with guidance from the Financial Stability Board (FSB). Both buffers are subject to phased implementation, the CCB is phased in at 25% per annum with 0.625% applicable for 2016. The G-SII buffer for 2016 and 2017 has been set at 2% and is also phased in at 25% per annum with 0.5% applicable for 2016 and 1% for 2017. On 21 November 2016 the FSB confirmed that the G-SII buffer for 2018 will be 1.5% with 1.1% applicable for 2018 and taking full effect from 2019 onwards.

Also forming part of the Combined Buffer Requirement is a Counter-Cyclical Capital Buffer (CCyB) and a Systemic Risk Buffer (SRB). On 30 November 2016 the Financial Policy Committee (FPC) reaffirmed that it expects to maintain a CCyB of 0% on UK exposures until at least June 2017. Other national authorities also determine the appropriate CCyBs that should be applied to exposures in their jurisdiction. During 2016, CCyBs started to apply for Barclays’ exposures to other jurisdictions; however based on current exposures these are not material. No SRB has been set to date.

In addition, Barclays’ Pillar 2A requirement as per the PRA’s Individual Capital Guidance (ICG) for 2016 based on a point in time assessment was 3.9% of which 56% needs to be met in CET1 form, equating to approximately 2.2% of RWAs. The Pillar 2A requirement is subject to at least annual review and for 2017 Barclays’ Pillar 2A add-on will be 4.0%, with approximately 2.3% of RWAs needing to be met in CET1 form. All capital, RWA and leverage calculations reflect Barclays’ interpretation of the current rules.

As at 31 December 2016, Barclays’ CET1 ratio was 12.4% which exceeds the 2016 transitional minimum requirement of 7.8% including the minimum 4.5% CET1 ratio requirement, 2.2% of Pillar 2A, a 0.625% CCB buffer, a 0.5% G-SII buffer and a 0% CCyB.

 

Fully loaded capital ratios

  Dec-16 Dec-15 Dec-14
CET1 capital  12.4% 11.4% 10.3%
Tier 1 capital  14.2% 12.9% 11.5%
Total capital  18.5% 17.3% 15.4%

PRA transitional capital ratios

  Dec-16 Dec-15 Dec-14
CET1 capital 12.4% 11.4% 10.2%
Tier 1 capital  15.6% 14.7% 13.0%
Total capital  19.6% 18.6% 16.5%
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Leverage

Effective 1 January 2016, Barclays is required to disclose a leverage ratio and an average leverage ratio applicable to the Group:

• The leverage ratio is consistent with the December 2015 method of calculation and has been included in the table below. The calculation uses the end point CRR definition of Tier 1 capital for the numerator and the CRR definition of leverage exposure. The current expected minimum fully loaded requirement is 3%, but this could be impacted by the Basel Consultation on the Leverage Framework.

• The average leverage ratio as outlined by the PRA Supervisory Statement SS45/15 and the updated PRA rulebook is calculated as the capital measure divided by the exposure measure, where the capital and exposure measure is based on the average of the last day of each month in the quarter. The expected end point minimum requirement is 3.5% comprising of the 3% minimum requirement, a fully phased in G-SII additional leverage ratio buffer (G-SII ALRB) and a countercyclical leverage ratio buffer (CCLB). The minimum requirement is on a phased basis in line with the CET1 G-SII buffer which results in a minimum requirement of 3.175% at 31 December 2016.

At 31 December 2016, Barclays’ leverage ratio was 4.6% (December 2015: 4.5%) and the average leverage ratio was 4.3%, which exceeds the transitional minimum requirement for Barclays of 3.175% and expected end point minimum requirement of 3.5%.

In August 2016, the PRA implemented the FPC’s recommendation to allow firms to exclude qualifying central bank claims from the calculation of the leverage exposure measure, as long as these are matched by deposits denominated in the same currency, subject to firms obtaining permission from the PRA. This change in reporting requirements is effective 1 April 2017 and will result in a modification to the calculation of the exposure measure for the purpose of calculating the UK leverage ratio. At 31 December 2016, Barclays’ reported leverage ratio and average leverage ratio disclosed below is unaffected by this announcement as firms are required to disclose based on the existing rules. The impact of the PRA rule modification would have resulted in an average leverage ratio of 4.5% and a leverage ratio at 31 December 2016 of 5.0%.

 

 

Leverage ratio

  Dec-16 Dec-15 Dec-14
Fully loaded leverage ratio 4.6% 4.5% 3.7%

For detail on capital and leverage ratios, please refer to the:

Full Year 2016 Results Announcement (PDF 1.8MB)Full Year 2016 Results Announcement (PDF 1.8MB)
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The Directors

Biographies of Barclays’ Board and Executive Committee members.

03 Mar 2014, 09:11 GMT

Corporate strategy and priorities

Our strategy remains on course to build a stronger, fitter, better bank. Barclays has been repositioned, simplified and rebalanced to generate sustainable returns.

03 Mar 2014, 09:11 GMT

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