Barclays PLC — FY 2023 Form 20-F
Business context and reporting period. This is Barclays’ annual report for the fiscal year ended 31 December 2023, not a standalone Q4 report. Income-statement comparisons are against FY 2022; balance-sheet comparisons are against 31 December 2022. Barclays is a diversified UK-centred universal bank, reported for 2023 through Barclays UK and Barclays International, with Group-wide services provided by Barclays Execution Services. The filing says reporting will move to five divisions from Q1 2024.
Financial performance and position
| Metric | FY 2023 / year-end | Prior comparable |
|---|---|---|
| Total income | £25.4bn | £25.0bn; up 2% |
| Profit before tax | £6.6bn | £7.0bn; down 6% |
| Attributable profit | £4.3bn | £5.0bn |
| Basic EPS | 27.7p | 30.8p |
| Return on average tangible equity (RoTE) | 9.0% | 10.4% |
| Operating expenses | £16.9bn | £16.7bn |
| Cost: income ratio | 67% | 67% |
| Credit impairment charges | £1.9bn | £1.2bn |
| Loans and advances at amortised cost | £342.7bn | £353.3bn |
| Deposits at amortised cost | £538.8bn | £545.8bn |
| Total assets / total liabilities | £1,477.5bn / £1,405.6bn | £1,513.7bn / £1,444.4bn |
| CET1 ratio / risk-weighted assets | 13.8% / £342.7bn | 13.9% / £336.5bn |
| Liquidity coverage ratio / net stable funding ratio | 161% / 138% | 156% / 137% |
| Liquidity pool | £298bn | £318bn |
Reported operating cash flow was an outflow of £0.9bn, compared with an inflow of £30.2bn in 2022; cash and cash equivalents fell £30.8bn to £248.0bn. Bank cash flows are substantially affected by movements in financial assets and liabilities, so these figures should be read alongside the liquidity disclosures. The filing does not provide a single conventional net-debt measure.
Business performance
- Barclays UK: income £7.6bn (2022: £7.3bn), profit before tax £2.9bn (2022: £2.6bn), and RoTE 19.2% (2022: 18.7%). Disclosed net interest margin was 3.13% (2022: 2.86%).
- Barclays International: income £17.9bn (2022: £17.9bn), profit before tax £4.6bn (2022: £5.0bn), and RoTE 8.2% (2022: 10.2%). Its Corporate and Investment Bank income fell to £12.6bn from £13.4bn; Consumer, Cards and Payments income rose to £5.3bn from £4.5bn, while its profit before tax fell to £0.5bn from £0.7bn. International net interest margin was 5.78% (2022: 5.02%).
Material changes and unusual items
- Q4 included £927m of structural cost actions, bringing FY 2023 actions to £1.046bn. Excluding the Q4 actions, profit before tax was £7.484bn and RoTE was 10.6%; management said this exceeded its greater-than-10% RoTE target.
- 2022 included £966m of litigation and conduct charges, including £966m relating to the over-issuance of securities; 2023 litigation and conduct charges were £37m. The 2022 comparison also included £292m of income related to the securities matter.
- Impairment charges increased, principally due to higher US credit-card delinquencies, which management said were anticipated. Group loan loss rate was 46 basis points.
- Barclays completed the Kensington Mortgage Company acquisition in 2023. In February 2024, it announced an agreement to acquire Tesco Bank’s retail banking business, subject to approvals and expected to complete in H2 2024; this is subsequent to the reporting period.
Capital returns, outlook, and risks
The total FY 2023 dividend was 8.0p per share (2022: 7.25p). Barclays repurchased and cancelled 836.6m shares for £1.25bn during 2023. Management reported CET1 of 13.8%, within its 13–14% target range.
For 2024, Barclays targets RoTE above 10% (approximately 10.5% excluding inorganic activity), Group net interest income excluding Barclays Investment Bank and Head Office of approximately £10.7bn, a cost: income ratio of approximately 63%, and a through-the-cycle loan loss rate of 50–60 basis points. For 2026, targets include RoTE above 12%, income of approximately £30bn, a cost: income ratio in the high 50s, and Investment Bank RWAs of approximately 50% of Group RWAs. The Group targets at least £10bn of total payouts over 2024–2026, subject to supervisory and Board approval, anticipated performance and the stated CET1 range.
Management’s principal concerns include uncertain economic conditions, inflation and interest rates, customer affordability, credit losses, geopolitical developments, market volatility, competition, regulation, cyber and operational resilience, and legal, conduct and reputation risks. The filing also highlights uncertainty in climate-related data and targets, and the potential for future legal or regulatory developments. The Board and management concluded that the financial statements were prepared on a going-concern basis; the auditor issued an unmodified opinion and reported effective internal control over financial reporting at year-end.
Investor verification checklist
- Verify the £927m Q4 structural cost actions, their treatment in adjusted performance measures, and whether resulting savings are delivered.
- Track credit-card delinquencies, impairment coverage and the 50–60bp through-the-cycle loan loss outlook, particularly in the US.
- Assess deposit balances, deposit pricing, mortgage competition and the assumptions supporting 2024 net interest income targets.
- Check CET1, liquidity ratios and funding against regulatory requirements and the planned dividends and buybacks.
- Review provisions, contingencies and litigation disclosures, including securities over-issuance matters and the FCA investigation concerning the former Group Chief Executive.
- Monitor approvals, completion terms and expected financial effects of the Tesco Bank acquisition, and comparability following the new divisional reporting structure.