Barclays: Strong CIB Performance in Q4, but Elevated Impairments Weigh on FY 2020 Profits
Barclays PLC (Barclays or the Group) reported net attributable profit of GBP 220 million in Q4 2020 down from GBP 681 million in Q4 2019. For the full 2020, net attributable profit was GBP 1,526 million, down 38% on 2019. Results in Q4 2020 reflected revenue pressure from the COVID-19 pandemic on the Group's other businesses, including Consumer, Cards and Payments (CC&P) and Barclays UK despite strong revenue growth in the Markets and Banking divisions within the Corporate & Investment Bank (CIB), and lower impairment charges than in the previous 2020 quarters. Overall, the Group reported a statutory Return on Average Tangible Shareholders’ Equity (RoTE) of 3.2% in FY20, down from 5.3% in FY19 (including litigation and conduction). Management has maintained its target for a RoTE of >10% over time, which we view as challenging to achieve in the short-term given the still uncertain economic environment.
Barclays is a holding company. Through its subsidiaries, Co. is a financial services provider engaged in retail banking, credit cards, wholesale banking, investment banking, wealth management and investment management services. Co.'s business segments are: Barclays U.K, which provides everyday products and services to retail customers and small to medium sized enterprises; Barclays International, which delivers products and services designed for Co.'s corporate, wholesale and international banking clients; and Head Office, which comprises head office and central support functions (including treasury) and businesses in transition.
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