Barclays PLC — 2021 Form 20-F Summary
Business context and reporting period. This is Barclays PLC’s annual report for the fiscal year ended 31 December 2021, comparing full-year results with 2020 and year-end balance-sheet figures. It is not a standalone fourth-quarter report. Barclays is a UK-based universal bank with two main operating divisions: Barclays UK and Barclays International. The statements are prepared under IFRS.
Key financial metrics
| Metric | 2021 | 2020 |
|---|---|---|
| Total income | £21.940bn | £21.766bn |
| Profit before tax | £8.414bn | £3.065bn |
| Profit after tax | £7.226bn | £2.461bn |
| Attributable profit | £6.375bn | £1.526bn |
| Basic EPS | 37.5p | 8.8p |
| Return on tangible equity (RoTE) | 13.4% | 3.2% |
| Cost: income ratio | 66% | 64% |
| Net interest income | £8.073bn | £8.122bn |
| Credit impairment release/(charge) | £653m release | £4.838bn charge |
- Income and profitability: Income rose 1%; profit before tax reached a record level. Improved results reflected the credit impairment release and increased income, while higher expenses partly offset these gains. Net interest margin was 2.93%, broadly flat year on year.
- Expenses and margins: Operating expenses increased 4% to £14.439bn, including £648m of structural cost actions. Excluding structural actions and performance costs, expenses were flat at £12.0bn. The cost: income ratio rose to 66%, above management’s target of below 60%.
- Cash flow: Net cash from operating activities was £48.9bn versus £57.5bn in 2020; year-end cash and cash equivalents were £259.2bn versus £210.1bn. These bank cash-flow measures are substantially affected by customer deposits and financial activities, and should not be read like industrial-company operating cash flow.
- Balance sheet and funding: Total assets were £1.384tn, up from £1.350tn. Loans and advances at amortised cost were £361.5bn; deposits at amortised cost were £519.4bn. Total wholesale funding outstanding, excluding repurchase agreements, was £167.5bn, of which £60.7bn matured within one year.
- Capital and liquidity: CET1 ratio was 15.1%, unchanged year on year, against a stated target range of 13–14%. Total regulatory capital ratio was 22.3%. The liquidity pool was £291bn and the liquidity coverage ratio was 168%, with a £116bn surplus over net stress outflows.
Material changes versus 2020
- Credit impairment moved from a £4.838bn charge to a £653m release. The release included a £1.3bn reversal of non-default charges as the macroeconomic outlook improved; management retained economic-uncertainty overlays.
- Barclays reported substantially higher profit, returns and EPS, while the cost: income ratio worsened by two percentage points and operating expenses increased.
- Loans and advances rose £18.8bn and deposits rose £38.4bn. Cash at central banks increased £47.4bn.
- Risk-weighted assets rose £7.9bn to £314.1bn, including higher market-risk RWAs following recalibration of the modelled stress period.
- 2021 attributable profit was supported by a £462m tax benefit from remeasuring UK deferred tax assets following the enacted rise in the UK corporation tax rate to 25% from April 2023.
Outlook, commentary, risks and unusual items
- Targets and distributions: Management’s medium-term targets include RoTE above 10% and a cost: income ratio below 60%. RoTE exceeded target in 2021; the cost ratio did not. The board proposed a 4p-per-share final dividend, making the 2021 total dividend 6p per share, and announced a further share buyback of up to £1.0bn after year-end. During 2021, the company completed buybacks totalling £1.2bn.
- Credit and macroeconomic uncertainty: Management warned that credit deterioration could emerge as government support is withdrawn, and cited inflation, supply-chain disruption, new COVID-19 variants, unemployment and interest-rate changes as sources of uncertainty. The £1.7bn economic-uncertainty adjustment remained in the year-end impairment allowance.
- Other principal risks: The filing highlights competition and technology change, cyberattacks, operational resilience, model risk, conduct and legal exposure, regulatory change, Brexit-related disruption, funding and capital risks, and climate physical and transition risks. Climate risk became a principal risk from 1 January 2022. Barclays’ ambition is to be a net-zero bank by 2050 and to align financing with the Paris Agreement; achievement depends partly on factors outside its control.
- Legal and governance matters: The report describes ongoing legal, competition and regulatory matters and says outcomes can be difficult to predict. Jes Staley stepped down as Group CEO on 31 October 2021 amid an FCA/PRA investigation; vesting of his unvested awards was suspended pending further developments. C.S. Venkatakrishnan became CEO on 1 November 2021. Tushar Morzaria notified the board of his intention to retire as Group Finance Director in April 2022.
- Audit: The auditor issued an unmodified opinion on the financial statements and concluded that internal control over financial reporting was effective. The audit identified impairment allowances, fair value of certain difficult-to-value instruments, and UK pension assumptions as critical audit matters.
Most important facts for investors to verify
- How much of the profit improvement is repeatable, given the £653m impairment release and £462m deferred-tax remeasurement benefit.
- Whether retained credit overlays adequately reflect post-support defaults, inflation and other downside scenarios.
- Whether the bank can lower its 66% cost: income ratio toward its below-60% target while continuing investment and absorbing structural actions.
- How 2022 regulatory changes affect capital: Barclays estimated an approximately 80-basis-point CET1 ratio reduction from changes effective 1 January 2022.
- The timing, terms and execution of the proposed £1.0bn buyback and the capacity to sustain dividends while maintaining capital and liquidity buffers.
- Developments in the Staley-related investigation and other legal, regulatory and conduct matters, including any changes to provisions or suspended awards.