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Barclays passes 2015 BoE stress test

Barclays PLC and Barclays Bank PLC (“Barclays”) note the publication today of stress test outcomes for UK banks by the Bank of England (“BoE”).  Under the BoE’s assessment of the effects of the modelled adverse stress scenario, Barclays’ minimum stressed Common Equity Tier 1 (“CET1”) ratio over the period 2015-19 was 7.3% after the impact of strategic management actions. 

 

The minimum stressed CET1 ratio before the impact of strategic management actions of 6.8% exceeded the 4.5% minimum threshold by a significant margin. Given the impact of strategic management actions, conversion of AT1 securities is not triggered in the stress scenario.

 

Barclays reported a 10.2% PRA Transitional CET1 ratio as at 31 December 2014, which was the starting point for the stress test modelling. This had increased to 11.1% as at 30 September 2015.  Barclays continues to target an end state fully loaded CET1 ratio of greater than 12%.  

 

The minimum stressed Tier 1 leverage ratio was calculated at 3.3% after management actions and 3.2% before management actions, both above the 3.0% minimum threshold.   Barclays reported a 3.7% Tier 1 leverage ratio as at 31 December 2014, which was the starting point for the stress test modelling. This had increased to 4.2% as at 30 September 2015.

 

The full year results for 2015 and the Annual Report will be published on 1 March 2016. 

 

The BoE stress test results for UK banks can be found on the BoE website at http://www.bankofengland.co.uk/financialstability/Pages/fpc/stresstest.aspx and Barclays’ results are summarised below.

 

    

Summary stress test results

 

The following is extracted from the stress test results in relation to Barclays published today by the BoE:

 

Capital and Leverage ratios

 

Minimum Stressed Ratio

Minimum Stressed Ratio

As at 31.12.14

before the impact of strategic management actions

after the impact of strategic management actions4

As at 30.09.15

PRA Transitional Common Equity Tier 11

10.2%

6.8%

7.3%

11.1%

PRA Transitional Tier 12,3

13.0%

9.0%

9.6%

14.2%

PRA Transitional Total Capital2,3

16.5%

12.2%

12.8%

17.7%

PRA Transitional CET1 capital (£bn)

41

31

32

42

Risk weighted assets (£bn)

402

453

444

382

Tier 1 leverage ratio

3.7%

3.2%

3.3%

4.2%

Total leverage exposure (£bn)

1,233

1,128

1,128

1,141

 

1       The transitional regulatory adjustment for unrealised gains is no longer applicable from 1 January 2015 resulting in CET1 capital on a fully loaded basis being equal to that on a transitional basis.

2       The PRA transitional capital is based on guidance provided in policy statement PS 7/13 on strengthening capital standards published in December 2013.

3       As at 30 September 2015, Barclays’ fully loaded Tier 1 capital was £47,859m, and the fully loaded Tier 1 ratio was 12.5%. Fully loaded total regulatory capital was £62,838m and the fully loaded total capital ratio was 16.5%. The fully loaded Tier 1 capital and total capital measures are calculated without applying the transitional provisions set out in CRD IV and assessing compliance of AT1 and T2 instruments against the relevant criteria in CRD IV.

4       Given the impact of proactive strategic management actions, the AT1 securities do not trigger in the stress scenario.

Notes to editors

For further information please contact:

 

Investor Relations

Media Relations

Kathryn McLeland

Tom Hoskin

+44 (0) 20 7116 4943

+44 (0) 20 7116 6927



INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

 

This document may contain forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. Generally, the words ‘‘will’’, ‘‘may’’, ‘‘should’’, ‘‘continue’’, ‘‘believes’’, ‘‘expects’’, ‘‘intends’’, ‘‘anticipates’’, “plans” or similar expressions that are predictive or indicative of future events identify forward-looking statements. These statements are based on the current expectations of management and are naturally subject to risks, uncertainties and changes in circumstances. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors, many of which are outside the control of Barclays and its Directors, that could cause actual results, and management’s plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. As such, forward-looking statements are no guarantee of future performance.

 

There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business, competitive, market and regulatory environment, future exchange and interest rates, changes in tax rates and future business combinations or dispositions.

 

Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this document. Barclays does not undertake any obligation (except as required by requirements of the UK Listing Authority or any other legal or regulatory requirement) to revise or update any forward-looking statement contained in this document, regardless of whether that statement is affected as a result of new information, future events or otherwise.

 

No statement in this document is intended as a profit forecast and no statement in this document should be interpreted to mean that the earnings per Share for the current or future years would necessarily match or exceed the historical published earnings per Share.

About Barclays

Barclays is an international financial services provider engaged in personal, corporate and investment banking, credit cards and wealth management with an extensive presence in Europe, the Americas, Africa and Asia. Barclays’ purpose is to help people achieve their ambitions – in the right way.

With 325 years of history and expertise in banking, Barclays operates in over 50 countries and employs over 130,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide.

For further information about Barclays, please visit our website www.home.barclays .