Business context and reporting period
Barclays PLC’s Form 20-F is an audited annual report for the year ended 31 December 2022, not a standalone 2022 Q4 report. The Group reports under IFRS as issued by the IASB and operates through Barclays UK and Barclays International, supported by Barclays Execution Services. Comparisons below are with full-year 2021 unless stated otherwise.
Key financial metrics
| Metric | 2022 | 2021 |
|---|---|---|
| Total income | £25.0bn | £21.9bn |
| Profit before tax | £7.0bn | £8.2bn |
| Profit after tax | £6.0bn | £7.1bn |
| Attributable profit | £5.0bn | £6.2bn |
| Basic earnings per share | 30.8p | 36.5p |
| Return on tangible equity (RoTE) | 10.4% | 13.1% |
| Cost: income ratio | 67% | 67% |
| Credit impairment charge/(release) | £1.2bn charge | £0.7bn release |
| Net cash from operating activities, as presented in the cash flow statement | £30.2bn | £48.9bn |
Total operating expenses rose 14% to £16.7bn; excluding litigation and conduct charges, they increased 6% to £15.1bn. The effective tax rate was 14.8%, including a £346m charge from remeasuring UK deferred tax assets. Cash and cash equivalents were £278.8bn at year-end, compared with £259.2bn a year earlier.
Balance sheet, capital and liquidity
Total assets were £1.514tn, up from £1.384tn. Loans and advances at amortised cost were £398.8bn and deposits at amortised cost were £545.8bn; the loan:deposit ratio was 73%. The Group’s CET1 ratio was 13.9% (15.1% in 2021), within its 13%–14% target range. The liquidity coverage ratio was 165% and the average net stable funding ratio was 137%. Wholesale funding outstanding, excluding repurchase agreements, was £184.0bn, versus £167.5bn.
Material changes versus the prior year
- Income increased 14%, supported by higher interest rates and stronger Global Markets and corporate banking income. Global Markets income rose 38%; Investment Banking fees fell amid weaker market activity.
- Profit before tax fell 14%, attributable profit fell 19%, and RoTE declined from 13.1% to 10.4%. The prior-year credit impairment release became a £1.2bn charge in 2022.
- Litigation and conduct charges rose to £1.6bn from £0.4bn, including costs related to the over-issuance of securities. Costs also reflected inflation, investment and foreign-exchange movements.
- Barclays International income rose, but divisional profit before tax fell to £5.0bn from £6.4bn. Barclays UK profit before tax increased to £2.6bn from £2.5bn.
Outlook, risks and unusual items
Management continues to target medium-term RoTE above 10% and a cost:income ratio below 60%, with CET1 targeted at 13%–14%. These are targets, not assurances. The report describes inflation, higher interest rates, weaker growth, cost-of-living pressures, the war in Ukraine, credit deterioration, market volatility, competition, regulatory change, cyber threats and legal proceedings as risks.
Over-issuance of securities: Barclays disclosed that Barclays Bank PLC issued approximately $17.7bn of securities in excess of registered amounts under US shelf registration statements. The Group reported a net attributable loss of £0.6bn in 2022 related to the matter, in addition to £0.2bn attributed to 2021. A rescission offer was completed in September 2022, and Barclays and Barclays Bank PLC paid a combined $200m SEC penalty without admitting or denying the SEC’s findings. Further regulatory inquiries and purported class-action litigation remained possible. Management stated that the material weakness in internal control over financial reporting had been remediated by 31 December 2022; the auditor issued an unmodified opinion, including on internal control.
Shareholder returns and climate targets: The 2022 dividend was 7.25p per share. Barclays repurchased £1.5bn of shares during 2022; a further buyback of up to £500m was announced after year-end. The Group announced a target to facilitate $1tn of Sustainable and Transition Financing from 2023 through 2030.
Important facts for investors to verify
- Reconcile the reported 2022 losses and charges from the securities over-issuance, including rescission, hedging, penalties and any remaining litigation or regulatory exposure.
- Review credit impairment assumptions, downside economic scenarios and the £317m of economic-uncertainty management adjustments; the filing reports no separately identified climate-related ECL charge for 2022.
- Check the basis and ongoing headroom for CET1, leverage, liquidity and MREL requirements, particularly after capital distributions and regulatory changes.
- Assess progress toward the medium-term RoTE and cost:income targets, noting 2022 RoTE was 10.4% and the cost:income ratio was 67%.
- Distinguish completed 2022 distributions from post-year-end proposals, and assess the assumptions and measurement criteria underlying the $1tn sustainable-financing target.