Barclays Q1 2020 Results

Financial Results

Barclays has published its Q1 2020 Results

Barclays has published its Q1 2020 Results

Jes Staley, Group CEO said:

“Barclays is committed to supporting its customers, clients and the UK economy through the crisis. Despite the macroeconomic downturn caused by the COVID-19 pandemic, the Group’s position remains robust, reflecting our diversified business model”

“An event like the COVID-19 pandemic makes everyone focus on what’s really important right now. For us, that means running the bank safely and soundly, helping our customers and clients through the difficulties they face, supporting the UK economy and the communities where we live and work, and taking care of our colleagues around the world.

I am incredibly proud of the way my colleagues have worked with such dedication and resilience to adapt to the crisis, applying their skills to deliver new products and services, bringing help where it is needed as quickly as we can. From colleagues serving customers in branches and call centres, to our technology teams, to our traders who help our clients to navigate volatile markets. Operationally, it has been extraordinarily challenging to deliver services under very tough conditions and constraints, and those challenges look set to remain in the near term.

We welcome the government and Bank of England’s business support programmes and have introduced additional measures to back UK companies ourselves. They are now having a real impact. As at 24 April 2020 we have facilitated significant commercial paper issuance though the Covid Corporate Financing Facility, lent £737m in Coronavirus Business Interruption Loans, approved over 238,000 mortgage and loan payment holidays, and over 6 million customers and clients are currently paying no personal overdraft or business banking charges. We have launched a community aid package; through which we are donating £100m to support those who are being hardest hit by COVID-19. We expect that all of these measures will help to limit the economic and social impact of the pandemic.

The impact of COVID-19 came late in what was until that point a good quarter. Statutory profit before tax was £0.9bn and profit before tax excluding credit impairment charges was £3.0bn. We have taken a £2.1bn credit impairment charge which reflects our initial estimates of the impact of the COVID-19 pandemic.

The strength of Barclays lies in our diversification by business, geography and currency, which allows us to remain resilient through the developing economic downturn.

Q1 represented a strong income performance in the Corporate and Investment Bank (CIB), where our Markets business had a record quarter as we supported our clients through a period of extreme volatility.

Barclays UK, and Consumer, Cards and Payments (CC&P) showed a resilient income performance in Q1 despite challenges that are expected to remain for the rest of the year.

Group return on tangible equity (RoTE) was 5.1% for the quarter, with attributable profit of £604m, and earnings per share (EPS) of 3.5 pence, excluding litigation and conduct.

Barclays remains well capitalised with a common equity tier 1 (CET1) ratio of 13.1%. Given the uncertainty around the developing economic downturn and low interest rate environment, 2020 is expected to be challenging. However, we believe that a RoTE of greater than 10% remains the right target for the bank over time.

In response to a request from the Prudential Regulation Authority (PRA), we cancelled the full year 2019 dividend payment of 6 pence per ordinary share, and the Board will decide on future dividends and its capital returns policy at year-end 2020.

Despite all the challenges we face as a consequence of COVID-19, I am confident Barclays will emerge from this pandemic, well placed to continue to serve our customers and clients, the communities and economies in which we operate, and our shareholders.”

Supporting our customers, businesses and the UK economy through COVID-19

Support for customers in the UK

  • Repayment holidays granted on c.94,000 mortgages, and on over c.57,000 personal loans or point of sale finance customers
  • 12-month interest only payments granted on mortgages
  • Overdraft interest waived for 5.4m customers in April, and £750 interest free buffer from May
  • Late payment and cash advance fees waived for 8m customers
  • Credit card repayment holidays granted for c.87,000 customers
  • 260,000 calls handled per week, significantly up due to COVID-19
  • NHS and key workers proactively identified and moved to the front of the queue
  • 655 branches remain open, over two-thirds of branch footprint

Support for businesses

  • 3,760 Coronavirus Business Interruption Loan Scheme (CBILS) loans approved to the value of £737m.
  • Free everyday banking and overdraft fees waived for 650,000 UK SMEs until June
  • 12-month capital repayment holidays for most loans over £25,000
  • Made £50 billion of lending limits available to UK corporates
  • Central role in arranging commercial paper issuance for clients through the Covid Corporate Financing Facility (CCFF)
  • Sole relationship bank supporting the UK Government with the Coronavirus Job Retention Scheme distributions to furloughed workers, and Self-employment Income Support Scheme

Support for communities and colleagues

  • Launched a £100m Community Aid Package for charities supporting vulnerable people impacted by the crisis
  • Extended LifeSkills and Digital Eagles programmes to support home schooling and fraud prevention
  • 3,000 of 4,000 UK call centre staff equipped with IT to work from home
  • Announced there will be no new redundancy programmes before September
  • Full pay and no impact on sick leave for colleagues self-isolating or in quarantine
  • Paid leave for colleagues to support caring for dependants including children

Metrics as at 24 April 2020