|
·
|
On 20 June 2013 the Prudential Regulation Authority announced the results of its review of the capital adequacy of major UK banks and building societies. Barclays confirmed at the time that it expected to meet the PRA’s target for an adjusted 7% Fully Loaded CET1 ratio by December 2013 through planned balance sheet actions and retained earnings generation. This expectation has not changed.
|
|
·
|
As part of its recent review, the PRA also introduced a 3% leverage ratio target, calculated on a PRA-adjusted CET1 capital base and using a CRD IV leverage exposure measure. Applying this measure to Barclays’ previous capital plan, it estimated a PRA Leverage Ratio for Barclays of 2.5%. Barclays discussed a number of options with the PRA to meet the 3% PRA Leverage Ratio target, following which Barclays was asked to submit a plan to achieve the target by 30 June 2014.
|
|
·
|
The Transform programme, announced by Barclays on 12 February 2013 and representing the Company’s strategy over the medium term, assumed risk-based capital measures as the primary variable. It nonetheless was expected to achieve a leverage ratio of 3% ahead of the anticipated CRD IV deadline.
|
|
·
|
Barclays reported today CRD IV leverage ratios as at 30 June 2013 of 3.1% and 2.5%, using CRD IV transitional and fully loaded calculations respectively. The fully loaded figure is down from 2.8% as at the end of December 2012, calculated on a £1,413 billion CRD IV leverage exposure compared to £1,559 billion at 30 June 2013. This increase in leverage exposure arises principally from changes to the calculation methodology following publication of the final CRD IV text on 26 June 2013 and other refinements, totalling £85 billion net. The remaining increase of £61 billion includes seasonal movements in settlement balances and other assets.
|
|
·
|
In calculating the PRA Leverage Ratio, Barclays has applied PRA adjustments of £4.1 billion to fully loaded CRD IV CET1 capital. This adjustment has reduced from the figure of £8.6 billion used by the PRA in its review, principally through taking account of Conduct Provisions and a reduced impact of prudential valuation adjustments.
|
|
·
|
These adjustments bring the total calculated gap to £12.8 billion, or a PRA Leverage Ratio of 2.2%. Further details are set out in the following table.
|
|
£bn
|
FY 12
Pillar 3
|
Revised CRD IV & other refinements
|
FY 12
revised estimate
|
H1 13
movements |
H1 13
|
|
Total assets (IFRS balance sheet)
|
1,490
|
(2)
|
1,488
|
45
|
1,533
|
|
CRD IV exposure measure adjustments
|
(77)
|
87
|
10
|
16
|
26
|
|
Fully loaded CRD IV leverage exposure measure
|
1,413
|
85
|
1,498
|
61
|
1,559
|
|
CRD IV fully loaded Tier 1 capital
|
40.0
|
(2.5)
|
37.5
|
0.8
|
38.3
|
|
CRD IV fully loaded leverage
|
2.8%
|
(0.3%)
|
2.5%
|
-
|
2.5%
|
|
CRD IV fully loaded CET1 capital
|
39.8
|
(2.5)
|
37.3
|
0.8
|
38.1
|
|
PRA CET1 adjustments
|
(4.1)
|
||||
|
PRA adjusted fully loaded CET 1 capital
|
34.0
|
||||
|
PRA Leverage Ratio
|
2.2%
|
||||
|
CET1 capital gap to 3% PRA leverage target
|
12.8
|
||||
|
Leverage exposure gap to 3% PRA leverage target
|
427
|
||||
|
·
|
Barclays has agreed with the PRA to take the following leverage exposure and capital management actions to meet the PRA Leverage Ratio target:
|
|
o
|
Raise approximately £5.8 billion, net of expenses, through the underwritten Rights Issue announced today; and
|
|
o
|
Take further capital, or capital equivalent, actions through a combination of the following:
|
|
—
|
Reduce CRD IV leverage exposure by £65-80 billion to approximately £1.5 trillion (equal to approximately £2-2.5 billion of capital) through low execution risk management actions which have already been identified by the Board;
|
|
—
|
Raise up to £2 billion of CRD IV qualifying Additional Tier 1 securities with a 7% Fully Loaded CET1 trigger, which the PRA has confirmed can be used in the PRA Leverage Ratio calculation; and
|
|
—
|
Retention of earnings and other forms of capital accretion. As a result of the Conduct Provisions announced today, the Board believes that Barclays has further strengthened its ability to retain earnings and to generate capital going forward.
|
|
·
|
Execution of the Leverage Plan is expected to result in Barclays’ PRA Leverage Ratio being above 3% by June 2014.
|
|
·
|
Barclays considered a range of alternative plans to meet the 3% PRA Leverage Ratio by June 2014, including through accelerated asset reductions. Meeting this target through reducing leverage exposure alone would have required approximately £427 billion of reductions. The Board determined that such actions in that timeframe would have a damaging effect on Barclays’ business franchises and would be subject to significant execution risk. In addition, such actions would negatively impact Barclays’ commitment and desire to support lending to customers and clients.
|
|
·
|
Barclays will continue to analyse and scrutinise its balance sheet for additional opportunities to further reduce leverage exposure beyond 2014 over and above the original Transform plans. Barclays expects to update the market on its progress in due course.
|
|
·
|
Alongside implementation of the Leverage Plan, Barclays will look to manage the trade-off between the benefits of holding additional capital and implementing measures to improve return on equity, as our ability to deploy capital in higher return areas improves.
|
|
·
|
Given the introduction of the PRA Leverage Ratio, the Board has assessed the impact of the Leverage Plan on Transform and has concluded that the programme can still achieve its objectives over time. The Board believes that the Leverage Plan will not significantly affect the Group’s strategy as the underlying businesses remain fundamentally strong and resilient. The Board also believes that the Leverage Plan will place Barclays in a stronger position to achieve its Transform targets and objectives in the new regulatory environment.
|
|
·
|
The Transform programme is underpinned by six financial targets, described in the table below. Three of these are directly impacted as a consequence of the Leverage Plan:
|
|
1.
|
Return on Equity – an important objective of the Transform programme is to generate a sustainable return on equity above the cost of equity. Barclays is now targeting that its RoE will exceed CoE in the course of 2016, rather than in 2015, as a consequence of its limited ability to deploy the capital raised through the Leverage Plan in higher return areas. Notwithstanding this expectation, Barclays will continue to assess further actions to accelerate and increase its RoE.
|
|
2.
|
Dividends – Barclays announced today a second interim dividend of 1.0 pence per Ordinary Share. Notwithstanding the Rights Issue, Barclays anticipates maintaining a dividend payout for the remainder of 2013 at the same level per share as that for 2012. The Board expects that the combination of capital generation through retention of earnings and execution of the Leverage Plan will result in significantly higher levels of capital by December 2015. Accordingly, subject to meeting applicable minimum regulatory requirements, the Board expects to adopt a 40-50% dividend payout policy from 2014. This policy would represent a higher rate of payout and would apply a year earlier than the original Transform schedule.
|
|
3.
|
Fully Loaded Common Equity Tier 1 – Barclays reported today an estimated Fully Loaded CET1 ratio of 8.1% as at 30 June 2013; adjusted for the Rights Issue this is equivalent to 9.3%. The Board expects this ratio to increase during the second half of 2013, with an accelerated achievement of the target 10.5% Fully Loaded CET1 ratio early in 2015.
|
|
Original Target for 2015
|
Revised Target
|
|
|
Return on Equity
|
RoE>CoE
|
RoE>CoE in the course of 2016
|
|
Cost / Income Ratio
|
Mid-50’s
|
No change
|
|
CRD IV Risk Weighted Assets
|
£440bn
|
No change
|
|
Dividend Payout Ratio
|
30%
|
40-50% from 2014
|
|
Operating Expenses
(excl. Costs to Achieve Transform)
|
£16.8bn
|
No change
|
|
Common Equity Tier 1 Ratio
|
Transitional CET1 ratio >10.5%
|
Fully Loaded CET1 ratio >10.5% early in 2015
|
|
·
|
The Board has concluded that the Leverage Plan provides the best way of balancing the interests of Barclays’ investors, customers and clients with the objective of meeting the PRA Leverage Ratio target by June 2014.
|
|
·
|
The Leverage Plan includes £65-80 billion of reduction (approximately £2-2.5 billion capital equivalent) in Barclays’ expected CRD IV leverage exposure, through a series of low execution risk management actions that have already been identified by the Board. These actions are not expected to have a material impact on revenues or profit before tax.
|
|
Planned CRD IV Leverage Exposure Actions (as at June 2013)
|
(£bn)
|
|
Potential Future Exposure on derivatives
|
30-35
|
|
Securities Financing Transactions
|
20-25
|
|
Liquidity pool assets
|
15-20
|
|
Planned Reduction
|
65-80
|
|
·
|
Barclays will continue to analyse the Group’s balance sheet with the objective of identifying opportunities to reduce further its expected CRD IV leverage exposure.
|
|
·
|
Barclays announced in late 2012 its intention to issue 2% of risk weighted assets in contingent capital to meet its end state CRD IV capital structure, comprising 0.5% of Tier 2 and 1.5% of AT1. The PRA has confirmed that CRD IV-compliant AT1 with a 7% Fully Loaded CET1 trigger will satisfy both the PRA’s capital and leverage ratio requirements. Barclays therefore expects to raise up to £2 billion of such AT1 securities by June 2014, in accordance with its existing capital plan. The 7% trigger for Barclays’ existing contingent capital securities will, in accordance with their terms, continue to be calculated on a basis that takes into account the PRA’s interpretation of the transitional provisions under CRD IV. Barclays reported today an estimated Transitional CRD IV CET1 ratio of 10.0% as at 30 June 2013; adjusted for the Rights Issue this is equivalent to 11.3%.
|
|
·
|
Barclays today announced £2 billion of additional Conduct Provisions, with remaining provisions for both these items totalling £3 billion as at 30 June 2013. Barclays’ ability to generate retained earnings remains strong and the Board plans further capital accretive actions, leaving the Group well placed to convert operating profits into capital.
|
|
£bn
|
FY 12
Pillar 3
|
Revised CRD IV & other refinements
|
FY 12
revised estimate
|
H1 13 movements
|
H1 13
|
|
Derivative financial assets
|
469
|
-
|
469
|
(66)
|
403
|
|
Reverse repo and other similar secured lending
|
177
|
-
|
177
|
46
|
223
|
|
Loans and advances and other assets
|
844
|
(2)
|
842
|
65
|
907
|
|
Total assets (IFRS balance sheet)
|
1,490
|
(2)
|
1,488
|
45
|
1,533
|
|
Derivatives netting adjustment
|
(390)
|
-
|
(390)
|
66
|
(324)
|
|
Potential future exposure (PFE) add-on
|
161
|
126
|
287
|
21
|
308
|
|
SFT adjustments
|
(5)
|
(53)
|
(58)
|
(72)
|
(130)
|
|
Undrawn commitments
|
179
|
8
|
187
|
3
|
190
|
|
Regulatory deductions & other adj.
|
(22)
|
6
|
(16)
|
(2)
|
(18)
|
|
CRD IV leverage exposure measure adjustments
|
(77)
|
87
|
10
|
16
|
26
|
|
Fully loaded CRD IV leverage exposure measure
|
1,413
|
85
|
1,498
|
61
|
1,559
|
|
CRD IV fully loaded Tier 1 capital
|
40.0
|
(2.5)
|
37.5
|
0.8
|
38.3
|
|
CRD IV fully loaded leverage
|
2.8%
|
(0.3%)
|
2.5%
|
-
|
2.5%
|
|
CRD IV fully loaded CET1 capital
|
39.8
|
(2.5)
|
37.3
|
0.8
|
38.1
|
|
Additional Prudential Value Adjustment
|
(2.1)
|
||||
|
Other valuation adjustments
|
(2.0)
|
||||
|
PRA CET1 adjustments
|
(4.1)
|
||||
|
PRA adjusted fully loaded CET 1 capital
|
34.0
|
||||
|
PRA Leverage Ratio
|
2.2%
|
||||
|
CET1 capital gap to 3% PRA leverage target
|
12.8
|
||||
|
Leverage exposure gap to 3% PRA leverage target
|
427
|
||||
|
·
|
As explained above, Barclays PLC intends to raise approximately £5.8 billion (net of expenses) by way of a Rights Issue of one New Ordinary Share for every four Existing Ordinary Shares at an Issue Price of 185 pence per New Ordinary Share. This represents a discount of approximately 40.1% to the Closing Price and a discount of approximately 34.9% to the theoretical ex-rights price based on the Closing Price. As at the date of this announcement, the Rights Issue has been underwritten by Credit Suisse, Deutsche Bank, BofA Merrill Lynch and Citi on the terms set out in the Underwriting Agreement, details of which are set out below.
|
|
·
|
The Rights Issue is expected to be launched in September 2013, subject to and following the approval of the Prospectus by the UKLA and the filing of the US Prospectus with the SEC, and will be implemented pursuant to authorities granted by the Company's shareholders at its 2013 Annual General Meeting. Barclays will also take steps to enable holders of Barclays ADSs to participate in the Rights Issue.
|
|
·
|
The New Ordinary Shares will not be issued in time to receive the second interim dividend of one pence per Existing Ordinary Share announced today and to be paid on 13 September 2013 but will rank equally with other Ordinary Shares in respect of dividends from the date of issue. Ordinary Shares issued to participants in the new Scrip Dividend Programme who elect to receive all or any part of their entitlement to the second interim dividend in Ordinary Shares will be issued prior to the Record Date for the Rights Issue and will therefore be eligible to participate in the Rights Issue.
|
|
·
|
Based on the existing issued Ordinary Share capital of Barclays as at 29 July 2013 (being the last Business Day prior to the release of this announcement), completion of the Rights Issue would result in approximately 3,216,893,546 New Ordinary Shares being issued, representing approximately 25% of the existing issued Ordinary Share capital of Barclays and 20% of the Enlarged Ordinary Share Capital. Qualifying Shareholders who take up their pro rata entitlement in full will suffer no dilution to their interests in the Company. If a Qualifying Shareholder does not take up his/her entitlement in full, the Rights Issue will be dilutive to that Qualifying Shareholder.
|
|
·
|
The Rights Issue is conditional upon:
|
|
o
|
the Underwriting Agreement having become unconditional in all respects save for the conditions relating to Admission and not having been terminated in accordance with its terms; and
|
|
o
|
Admission becoming effective by no later than 8.00 a.m. (London time) on 3 October 2013 or, in certain circumstances, 7 November 2013.
|
|
·
|
Barclays Investment Bank is acting as global co-ordinator and Credit Suisse as sponsor for the Rights Issue. Barclays Investment Bank, Credit Suisse, Deutsche Bank, BofA Merrill Lynch and Citi are acting as joint bookrunners for the Rights Issue. The Rights Issue has been underwritten by the Initial Underwriters on the terms of the Underwriting Agreement.
|
|
·
|
The Underwriting Agreement (further details of which are set out below) provides that further principal underwriting banks may, at the Company's election, be brought into the syndicate of banks prior to the publication of the Prospectus. In addition, further institutions (including existing Shareholders) may be invited to become sub-underwriters in due course. Any sub-underwriters are expected to be paid a commission in the region of 0.8% of the aggregate proceeds of the Rights Issue in respect of the Ordinary Shares so sub-underwritten. The sub-underwriting commission will be deducted from the commissions paid to the Underwriters.
|
|
·
|
Pursuant to the Underwriting Agreement, the Initial Underwriters have severally (not jointly and severally) agreed to procure subscribers for the New Ordinary Shares or, failing which, themselves subscribe for the Underwritten Shares not taken up under the Rights Issue or in respect of which subscribers are not procured, in each case in pounds sterling at the Issue Price.
|
|
·
|
In consideration of their services under the Underwriting Agreement, and subject to their obligations under the Underwriting Agreement having become unconditional and the Underwriting Agreement not having been terminated in accordance with its terms prior to Admission, an aggregate underwriting commission of 1.7% of the aggregate proceeds of the Rights Issue in respect of the Underwritten Shares shall be payable to the Initial Underwriters. Such amount shall be reduced by any underwriting commission payable to the Additional Underwriters at a rate of 1.5% of the portion of the proceeds of the Rights Issue in respect of the Underwritten Shares which are underwritten by the Additional Underwriters. In each case, the respective commissions shall be apportioned between the Initial Underwriters and the Additional Underwriters in proportion to their underwriting commitments. In addition, certain other fees will be paid to some of the Banks. Further details are set out in the paragraph entitled "Fees and Commissions" below.
|
|
·
|
The Company shall pay (whether or not the Underwriters' obligations under the Underwriting Agreement become unconditional) all costs and expenses arising in connection with the Rights Issue, the allotment and issue of the New Ordinary Shares, Admission and the Underwriting Agreement, including customary professional services fees and other out-of-pocket expenses.
|
|
·
|
The obligations of the Underwriters under the Underwriting Agreement are subject to certain conditions including, amongst others:
|
|
o
|
Admission occurring by not later than 8.00 a.m. (London time) on 3 October 2013 or, in certain circumstances, 7 November 2013;
|
|
o
|
each condition to enable the Nil Paid Rights and the Fully Paid Rights to be admitted as a participating security in CREST (other than Admission);
|
|
o
|
the fulfilment by the Company of its obligations under the Underwriting Agreement which fall to be performed prior to Admission and which are material;
|
|
o
|
before Admission there being no breach by the Company of the representations and warranties given in the Underwriting Agreement;
|
|
o
|
the US Registration Statement having been filed with the SEC and having become effective no later than 11.59 p.m. (London time) on the date of the publication of the Prospectus;
|
|
o
|
in the opinion of the Initial Underwriters, acting in good faith, there having not been a material adverse change since the date of the Underwriting Agreement, as a result of which it is impracticable or inadvisable to proceed with Admission, the Rights Issue or the underwriting of the Underwritten Shares.
|
|
·
|
The Initial Underwriters may terminate the Underwriting Agreement prior to Admission in certain circumstances including (without limitation) for material adverse change and force majeure. For the avoidance of doubt, the Underwriting Agreement cannot be terminated after Admission.
|
|
·
|
The Company has given certain customary representations, warranties and indemnities to the Banks.
|
|
·
|
If an entitlement to New Ordinary Shares is not validly taken up, then that provisional allotment shall be deemed to have been declined and will lapse. The Underwriters will severally use reasonable endeavours to procure subscribers for all (or as many as possible) of those New Ordinary Shares not taken up. If a premium over the total of the Issue Price (in pounds sterling) and the expenses of procuring such subscribers (including any applicable brokerage and commissions and amounts in respect of value added tax which are not recoverable) can be obtained, any such premium shall be paid to those persons with entitlements to the New Ordinary Shares at the time they lapsed. However, amounts of less than £5 per holding will not be paid but will be aggregated and retained for the benefit of the Company.
|
|
·
|
The Underwriters may cease to use their reasonable endeavours to procure subscribers if, in their opinion, it is unlikely that any such subscribers can be procured at the requisite price and within the relevant time frame. If and to the extent that any such subscribers cannot be procured on this basis, those Underwritten Shares not taken up will be acquired by the Underwriters in accordance with the Underwriting Agreement or by any sub-underwriters, in each case, at the Issue Price (in pounds sterling).
|
|
Fee/Commission
|
Recipient
|
Amount
|
|
Initial Underwriter Commission
|
The Initial Underwriters
|
An aggregate of 1.7% of the Gross Underwritten Proceeds less any amount payable to the Additional Underwriters
|
|
Additional Underwriter Commission
|
The Additional Underwriters
|
An aggregate of 1.5% of the product of the Issue Price and the aggregate number of Underwritten Shares which are underwritten by the Additional Underwriters
|
|
Global Co-ordinator Fee
|
Barclays Investment Bank, as global co-ordinator
|
0.1% of the Gross Underwritten Proceeds
|
|
Broking Fee
|
Credit Suisse and Deutsche Bank, as joint brokers
|
£446,344 each
|
|
Sponsor Fee
|
Credit Suisse
|
£1,553,656
|
|
Sub-underwriter Commission
|
The sub-underwriters
|
In the region of 0.8% of the product of the Issue Price and the aggregate number of Ordinary Shares sub-underwritten (to be deducted from the commissions paid to the Underwriters)
|
|
"£"
|
the lawful currency of the United Kingdom
|
|
"$"
|
the lawful currency of the United States
|
|
"Additional Underwriters"
|
any additional underwriters who accede to the Underwriting Agreement following the date of this announcement
|
|
"Admission"
|
the admission of the New Ordinary Shares (nil paid and fully paid) to the Official List of the FCA becoming effective in accordance with the Listing Rules and the admission of such shares (nil paid and fully paid) to trading on the London Stock Exchange's main market for listed securities
|
|
"ADS"
|
an American Depositary Share representing four Ordinary Shares, listed on the NYSE
|
|
"AT1" or "Additional Tier 1"
|
additional tier 1 securities which meet the requirements of Article 52 of CRD IV
|
|
"Banks"
|
Barclays Investment Bank, Credit Suisse, Deutsche Bank, Citi and BofA Merrill Lynch
|
|
"Barclays Investment Bank"
|
Barclays Bank PLC, in its capacity as global co-ordinator and/or joint bookrunner, as the context requires
|
|
"Board"
|
the board of Directors of the Company
|
|
"BofA Merrill Lynch"
|
Merrill Lynch International, a subsidiary of Bank of America Corporation
|
|
"Business Day"
|
any day on which banks are generally open in England and Wales for the transaction of business, other than a Saturday, Sunday or public holiday
|
|
"CET1" or "CRD IV CET1"
|
common equity tier 1 capital, calculated under CRD IV
|
|
"Citi"
|
Citigroup Global Markets Limited
|
|
"Closing Price"
|
309.05 pence per Ordinary Share, being the closing middle market price on the London Stock Exchange on 29 July 2013 (being the last Business Day prior to the release of this announcement)
|
|
"CoE"
|
cost of equity
|
|
"Company" and "Barclays"
|
Barclays PLC
|
|
"Conduct Provisions"
|
further provisions announced on 30 Jun 2013 relating to payment protection insurance redress and interest rate hedging products redress
|
|
"CRD IV"
|
the legislative package consisting of Directive 2013/36/EU on the access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms and Regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms of the European Parliament and of the Council of 26 June 2013
|
|
"CRD IV leverage exposure"
|
an estimated prudential exposure measure, reported on the basis set out in Article 429 of CRD IV and disclosed in the Interim Results
|
|
"CRD IV leverage ratio
|
an estimated non risk-based ratio calculated as CRD IV CET1 capital divided by CRD IV leverage exposure, in accordance with the reporting requirements set out in Article 429 of CRD IV and disclosed in the Interim Results
|
|
"Credit Suisse"
|
Credit Suisse Securities (Europe) Limited in its capacity as sponsor, joint bookrunner and underwriter and/or Credit Suisse AG, London Branch in its capacity as underwriter, as the context requires
|
|
"Deutsche Bank"
|
Deutsche Bank AG, London Branch
|
|
"Director"
|
a director of the Company
|
|
"Disclosure and Transparency Rules"
|
the Disclosure Rules and Transparency Rules contained in the FCA's sourcebook
|
|
"Enlarged Ordinary Share Capital"
|
the issued Ordinary Share capital of Barclays following the issue of the New Ordinary Shares pursuant to the Rights Issue based on the existing issued Ordinary Share capital of Barclays as at 29 July 2013 (being the last Business Day prior to the release of this announcement)
|
|
"Existing Ordinary Shares"
|
the Ordinary Shares in issue as at the Record Date
|
|
"FCA"
|
Financial Conduct Authority
|
|
"FSMA"
|
Financial Services and Markets Act 2000, as amended
|
|
"Fully Loaded CET1 ratio"
|
an estimated risk-based ratio calculated as CRD IV CET1 capital divided by CRD IV Risk Weighted Assets (before the application of the transitional provisions set out in CRD IV and interpretive guidance dated 26 October 2012 published by the Financial Services Authority) and as disclosed in the Interim Results
|
|
"Fully Paid Rights"
|
rights to acquire New Ordinary Shares, fully paid
|
|
"Gross Underwritten Proceeds"
|
the product of the Issue Price and the aggregate number of Underwritten Shares
|
|
"Group"
|
Barclays and its subsidiaries and subsidiary undertakings
|
|
"Initial Underwriters"
|
Credit Suisse, Deutsche Bank, Citi and BofA Merrill Lynch
|
|
"Interim Results"
|
Barclays’ interim results for the six month period ended 30 June 2013 announced by Barclays on today's date
|
|
"Issue Price"
|
185 pence per New Ordinary Share
|
|
"Leverage Plan"
|
the leverage exposure and capital management actions proposed to be taken by the Company and outlined in this announcement, in order to meet the PRA Leverage Ratio target of 3%
|
|
"London Stock Exchange" or "LSE"
|
London Stock Exchange plc or its successor(s)
|
|
"Listing Rules"
|
the rules and regulations made by the FCA under Part VI of FSMA
|
|
"New Ordinary Shares"
|
the Ordinary Shares to be issued by the Company pursuant to the Rights Issue
|
|
"Nil Paid Rights"
|
New Ordinary Shares in nil paid form to be provisionally allotted to Qualifying Shareholders pursuant to the Rights Issue
|
|
"NYSE"
|
the New York Stock Exchange
|
|
"Ordinary Share"
|
an ordinary share of 25 pence in the share capital of the Company
|
|
"PRA"
|
Prudential Regulation Authority
|
|
"PRA Adjustments"
|
valuation adjustments applied by the PRA and deducted from Barclays’ CRD IV CET1 capital in the calculation of the PRA Leverage Ratio
|
|
"PRA Leverage Ratio"
|
a non risk-based ratio introduced by the PRA in June 2013 calculated as CRD IV CET1 capital after PRA Adjustments divided by CRD IV leverage exposure
|
|
"Prospectus"
|
the UK prospectus to be published by the Company relating to the Rights Issue in accordance with the Prospectus Rules
|
|
"Prospectus Directive"
|
European Directive 2003/71/EC, as amended
|
|
"Prospectus Rules"
|
the rules published by the FCA under section 73A FSMA
|
|
"Provisional Allotment Letter"
|
the provisional allotment letter expected to be issued to Qualifying Shareholders (who hold their Ordinary Shares in certificated form) in respect of New Ordinary Shares to be provisionally allotted to them pursuant to the Rights Issue
|
|
"Qualifying Shareholders"
|
holders of Ordinary Shares (including those represented by ADSs) who will be entitled to participate in the Rights Issue, as set out in the Prospectus (when published)
|
|
"Record Date"
|
the time (to be determined by the Company in due course) on which a holder of Ordinary Shares must be on the register of members of the Company in order to participate in the Rights Issue; the record date in respect of ADSs (also to be determined by the Company in due course) may differ
|
|
"Rights Issue"
|
the proposed offer by way of rights to Qualifying Shareholders to acquire New Ordinary Shares, on the terms and conditions to be set out in the Prospectus (or in the US Prospectus, as the case may be) and, where applicable, the Provisional Allotment Letter
|
|
"RoE"
|
return on equity
|
|
"RWA"
|
risk weighted asset
|
|
"Scrip Dividend Programme"
|
Barclays PLC's scrip dividend programme
|
|
"SEC"
|
US Securities and Exchange Commission
|
|
"Shareholders"
|
holders of Ordinary Shares
|
|
"Sponsor"
|
Credit Suisse Securities (Europe) Limited in its capacity as sponsor
|
|
"Transitional CET1 ratio"
|
an estimated risk-based ratio calculated as CRD IV CET1 capital divided by CRD IV Risk Weighted Assets (after the application of transitional provisions set out in CRD IV and interpretive guidance dated 26 October 2012 published by the Financial Services Authority) and as disclosed in the Interim Results
|
|
"UK" or "United Kingdom"
|
the United Kingdom of Great Britain and Northern Ireland
|
|
"UKLA"
|
the FCA, acting in its capacity as the competent authority for the purposes of FSMA
|
|
"Underwriters"
|
the Initial Underwriters and the Additional Underwriters
|
|
"Underwriting Agreement"
|
the underwriting agreement dated today's date between the Company, Barclays Investment Bank, the Underwriters and the Sponsor relating to the Rights Issue
|
|
"Underwritten Shares"
|
those New Ordinary Shares to be allotted pursuant to the Rights Issue (but excluding any New Ordinary Shares to be allotted under the Rights Issue as a result of any increase in the number of Ordinary Shares in issue after the date of the Underwriting Agreement but prior to the Record Date)
|
|
"US" or "United States"
|
the United States of America, its territories and possessions, any state of the United States and the District of Columbia
|
|
"US Prospectus"
|
the prospectus pursuant to which the Rights Issue will be made to Qualifying Shareholders in the United States and ADS holders and which will form part of the US Registration Statement
|
|
"US Registration Statement"
|
the registration statement filed by Barclays on Form F-3 (Registration No. 333-173886) with the SEC as amended on 29 July 2013, which may be amended or supplemented thereafter in respect of additional information relating to the Rights Issue
|
|
·
|
CRD IV CET1 on a transitional and fully loaded basis. See the “Estimated Impact of CRD IV – Capital” table below for a reconciliation of CRD IV CET1 to Core Tier 1 capital, which is calculated on the basis currently applied to Barclays under existing UK regulatory requirements.
|
|
·
|
CRD IV risk weighted assets (RWAs) on a transitional and fully loaded basis. See the “Estimated Impact of CRD IV – Capital” table below for a reconciliation of CRD IV RWAs to RWAs calculated on the basis currently applied to Barclays under existing UK regulatory requirements.
|
|
·
|
Fully Loaded CET1 ratio and Transitional CET1 ratio, each representing CRD IV CET1 divided by CRD IV RWAs. See the “Estimated Impact of CRD IV– Capital” table below for a reconciliation of the components of the Fully Loaded CET1 ratio and Transitional CET1 ratio to the respective components of the Core Tier 1 ratio, which is calculated on the basis currently applied to Barclays under existing UK regulatory requirements.
|
|
·
|
CRD IV leverage exposure on a transitional and fully loaded basis. CRD IV leverage exposure makes certain adjustments to total assets in accordance with Barclays’ interpretation of CRD IV requirements. See the “Estimated Impact of CRD IV – Leverage” table below for a reconciliation of CRD IV leverage exposure to total assets.
|
|
·
|
CRD IV leverage ratio on a transitional and fully loaded basis, which represents CRD IV Tier 1 divided by CRD IV leverage exposure. See the “Estimated Impact of CRD IV– Capital” table below for a reconciliation of CRD IV CET1 to Core Tier 1 capital, and see the “Estimated Impact of CRD IV – Leverage” table below for a reconciliation of CRD IV leverage exposure to total assets.
|
|
Estimated Impact of CRD IV – Capital
|
CET1
|
CET1
|
|
|
Transitional
|
Fully-loaded
|
|
|
30.06.13
|
30.06.13
|
|
|
£bn
|
£bn
|
|
Core Tier 1 capital (FSA 2009 definition)
|
42.9
|
42.9
|
|
Risk Weighted Assets (RWA) (current Basel 2.5 rules)
|
387.2
|
387.2
|
|
|
|
|
|
Core Tier 1 ratio (Basel 2.5)
|
11.1%
|
11.1%
|
|
|
|
|
|
CRD IV impact on Core Tier 1 capital:
|
|
|
|
Adjustments not impacted by transitional provisions
|
|
|
|
Conversion from securitisation deductions to RWAs
|
0.8
|
0.8
|
|
Prudential Valuation Adjustment (PVA)
|
(2.1)
|
(2.1)
|
|
Other
|
(0.2)
|
(0.2)
|
|
Adjustments impacted by transitional provisions
|
|
|
|
Goodwill and intangibles
|
6.1
|
-
|
|
Expected losses over impairment
|
0.4
|
(1.0)
|
|
Deferred tax assets deduction
|
(0.4)
|
(1.9)
|
|
Excess minority interest
|
(0.2)
|
(0.6)
|
|
Debit Valuation Adjustment (DVA)
|
(0.1)
|
(0.3)
|
|
Gains on available for sale equity and debt
|
-
|
0.5
|
|
Non-significant holdings in Financial Institutions
|
(0.5)
|
(2.5)
|
|
Mitigation of non-significant holdings in Financial Institutions
|
0.5
|
2.5
|
|
CET1 capital
|
47.2
|
38.1
|
|
|
|
|
|
CRD IV impact to RWAs:
|
|
|
|
Credit Valuation Adjustment (CVA)
|
32.2
|
32.2
|
|
Securitisation
|
19.0
|
19.0
|
|
Central Counterparty Clearing
|
21.7
|
21.7
|
|
Other
|
11.4
|
11.4
|
|
Gross Impact
|
84.3
|
84.3
|
|
|
|
|
|
RWAs (CRD IV)
|
471.5
|
471.5
|
|
|
|
|
|
CET1 ratio
|
10.0%
|
8.1%
|
|
|
|||
|
Estimated Impact of CRD IV – Leverage
|
Final CRD IV
text basis
|
||
|
|
As at 30.06.13
|
||
|
Leverage exposure
|
£bn
|
||
|
Derivative financial instruments
|
403
|
||
|
Reverse repurchase agreements and other similar secured lending
|
223
|
||
|
Loans and Advances and other assets
|
907
|
||
|
Total assets
|
1,533
|
||
|
CRD IV exposure measure adjustments
|
|||
|
Derivatives
|
|
||
|
Netting adjustments for derivatives
|
(324)
|
||
|
Potential Future Exposure on derivatives
|
308
|
||
|
Securities Financing Transactions (SFTs)
|
|||
|
Remove net IFRS SFTs
|
(223)
|
||
|
Add leverage exposure measure for SFTs
|
93
|
||
|
Other adjustments
|
|||
|
Undrawn commitments
|
190
|
||
|
Regulatory deductions and other adjustments
|
(18)
|
||
|
|
|
||
|
Fully-loaded CRD IV Leverage exposure measure
|
1,559
|
||
|
|
|
||
|
Transitional adjustments to assets deducted from Tier 1 Capital
|
2
|
||
|
|
|
||
|
Transitional CRD IV Leverage exposure measure
|
1,561
|
||
|
|
|
||
|
Leverage Ratio as at 30.06.13
|
Tier 1 Capital
|
Leverage ratio
Final CRD IV
text basis
As at 30.06.13
|
|
|
|
£bn
|
%
|
|
|
Transitional measure1
|
48.2
|
3.1
|
|
|
Adjusted fully loaded point measure2
|
47.9
|
3.1
|
|
|
Fully-loaded measure3
|
38.3
|
2.5
|
|
|
1
|
Tier 1 capital is calculated as the transitional CRD IV measure assuming 2013 is the first year of implementation. Regulatory deductions are adjusted to reflect the transitional impact on Tier 1 capital.
|
|
2
|
Tier 1 capital is calculated as the fully loaded CRD IV measure with all ineligible Tier 1 instruments added back. Regulatory deductions reflect the fully-loaded impact on Tier 1 capital.
|
|
3
|
Tier 1 capital is calculated as the fully loaded CRD IV measure. Regulatory deductions reflect the fully loaded impact on Tier 1 capital.
|