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Excluding litigation and conduct items,profit before tax was 5.7bn, up 20% on theprevious year and yielded a return on tangibleequity of 8.5%, just shy of our target levels for2019 and 2020. Earnings per share was 21.9p,up from a 3.5p loss in the prior year.I have been lucky enough to enjoy36 years at Rothschild, working withmany wonderful colleagues and clients,and particularly honoured to lead thefirm for a decade or so.I am totally committed to helpingBarclays and its people continue todevelop and progress.home.barclays/annualreport Nigel HigginsChairman-designateHowever, as we all know, in bankingthe journey is never done. The economicenvironment remains uncertain and issueswill emerge, but we feel secure that we willbe able to deal with these as they arise.In particular, we are well prepared for Brexitand the transfer of businesses into the EU,as and when this is required.Shareholders may now be aware thatfunds managed by Sherborne, controllingapproximately 5.5% of your company’s sharecapital, have proposed that Edward Bramson,of Sherborne, be appointed to your Board.Sherborne’s views and intentions in doing soare not fully clear to us. We continue to meetand correspond with Sherborne and MrBramson, and give due consideration to theissues they raise. As such, we do not believethat a board seat is needed for Sherborne tocontribute its views. Your Directors believethat good governance requires a cohesiveboard that can properly represent the interestsof all shareholders, and not just a smallproportion of them.The Board remains confident in ourstrategy, the fruits of which are reflected inour improved operating results. We believeit is important to avoid a further period ofsignificant disruption, from which we haveonly this year freed ourselves, so that theBoard and management can focus onexecuting the strategy and on our plans toimprove performance beyond current levels.As a result, your Board is recommendingthat shareholders vote against theSherborne resolution.Barclays PLC Annual Report 2018Shareholder informationSucceeding John McFarlane,who has done such a sterlingjob during a period of greatchange at Barclays, is ahuge honour.Barclays UK continues to be a majorcontributor to the Group with profits beforetax of 2.4bn and with a strong return ontangible equity of 16.7%.Financial performanceI now look forward to joining anothergreat institution and to working closelywith its executive management team,led by Jes Staley, and my fellownon‑executive Directors.Barclays International (which includesour Corporate and Investment Bank andConsumer Cards and Payments) grew itsprofits before tax 10% to 3.9bn and achieveda return on tangible equity of 8.7%. TheCorporate and Investment Bank was the majorcontributor to profit growth, up 15% on theprior year at 2.7bn, and with an improvedreturn on tangible equity of 7.1%. ConsumerCards and Payments achieved profits beforetax of 1.2bn, with a strong return ontangible equity of 17.3%.Remuneration frameworkIntroducing your Chairman-designateOn the same basis, our businesses generallyshowed progress and advanced performancein the year.Governance overviewMoreover, and finally, our major businessesare now positioned for success and on a pathto deliver healthy and sustainable returns forshareholders. The return to profit in the yearhas also enabled us to increase the return ofcapital to shareholders, including increasingour dividend to its previous level.The conduct losses were a major factor inreducing our tangible net asset value pershare (TNAV) from 276p to 262p in the year.The significant reduction to today’s level inpart reflects the gruelling effect of the globalfinancial crisis. I believe, and we have seen itin the quarterly progression since Q1 2018,that period of decline is now over, and weshould over time see TNAV rising, which isan important foundation for the share priceand progressive dividends.These results demonstrate a good levelof progress and provide a solid foundationfor the future.Performance reviewAt Barclays, we have made defending againstcybercrime one of our most important andmost urgent priorities. Accordingly, we areinvesting heavily to protect our customers,our systems, our bank and society. This isa decision not only worth making, but onewhere there really is no choice in assuringthe long-term future of the company.Turning to the year itself, Group statutoryprofit before tax was 3.5bn, down 1% onthe prior year (after absorbing litigation andconduct losses in the year of 2.2bn) yieldinga return on tangible equity of 3.6%, up 7.2%on the prior year. Earnings per share showeda better picture at 9.4p, up from a 10.3p lossin 2017. The improved result benefited from asignificant reduction in impairment as a resultof prudent management of credit risk, as wellas the benefit from improved macroeconomicforecasts during the year.Strategic reportWhile digital technology has radically changedpeople’s lives and has brought untold benefits,unfortunately, it has also brought cybercrime.Not only are criminals after information, theyare after money, and can and will steal itwhere and whenever they choose, whetherwe are awake or asleep. They are harnessingthis new digital reality, in which they can reachout across the globe, anonymously, andvirtually risk-free. They are smart, highlyinnovative and persistent. The rewards areenormous and the risks to them low. Thisissue is a real and present danger, not onlyto our current way of life, but also to societyas a whole.03

Chairman’s letterA solid foundation for the futureI might also mention our position on energyfinance and climate change, as it is now amajor consideration for boards. It is a priorityfor us to contribute to society’s initiativesin limiting the impact of climate change.In doing so, we must recognise that forsome time to come, renewable sourcesalone cannot meet global demand for energy.Hence, our position has three areas of focus: The Corporate and Investment Bank is animportant contributor to the economy, hasincreased its market position globally andparticularly in the US and Europe, positioningitself as a leading player in the world’s deepestcapital pools at a time when capital marketsare playing an increasingly important role insupporting the growth of our corporate andinstitutional clients.financing the growth of green and renewableenergy sources and proactively supportingthe development of businesses aiming tosolve the world’s environmental challengesBarclays UK is strongly positioned in bothCards and in Retail banking, and our US cardsbusiness is now larger than our UK equivalentwith attractive prospects for growth.taking a responsible and sustainableapproach to the financing of essentialsources of energy today that are morecarbon intensive, or those with higherenvironmental impact, andThe Group has also invested appropriately indigitisation to position us to take advantageof the technical revolution, as well as defendingourselves from new Fintech competitors.reducing the carbon footprint of ourown operations and supply chain.The world is in transition, and Barclays’approach reflects this. It requires a balancebetween advancing tomorrow’s energytechnologies and reducing our currentexposure to carbon-intensive energy sourcessuch as thermal coal, recognising currentreliance on traditional energy sources isnecessary until such time as new methodscan replace them fully.We share the desire to accelerate thetransition to a green future, and willtherefore work constructively with all ofour stakeholders to find the right balance.Shareholders can read more about ourapproach on page 23 of the StrategicReport and in the Environmental, Socialand Governance (ESG) Report.This new financial and operational foundationand improved business productivity andperformance should serve us well in thecoming years and should enable share pricerecovery from recent discounted levels.And finally, since this is my last letter to you asChairman, it has been a great privilege for meto have served this great company and you asshareholders, and I thank you for allowing meto do so. I will of course continue to serve youuntil I finally step down.I commend my proposed successor, NigelHiggins to you. The Board has made anexcellent choice and I have every confidencethat Nigel will be a superb steward of theBoard and the Company.John McFarlaneChairmanIf we pause to reflect on the period since thecrisis, it has indeed been a tough few years forthe Group. What we have achieved could nothave been done without the leadership of ourChief Executive Jes Staley and his senior team.I would therefore like to thank the Board,our management and all our staff for theenormous efforts they have made to makeBarclays a better place.You will be aware I plan to retire from theGroup at the upcoming AGM. I’m satisfiedthat I will leave a company that is capableand prepared for the future, in particular tobe able to deliver sustainably stronger returnsto shareholders than have been seen formany years.04 Barclays PLC Annual Report 2018 home.barclays/annualreport

Chief Executive’s reviewWe are delivering on our strategyIn the course of the year, having resolvedmajor legacy issues and reduced the dragfrom low returning businesses, we startedto see the true earnings potential of this bank,as the strategy we have implemented beganto deliver.Strategic report2018 represented a very significant periodfor Barclays.This was evident in the strongly improvedperformance across the Group comparedto 2017.BX, our service company, has driven greaterefficiency through the business and allowedus to bring costs down to within our guidancerange of 13.6-13.9 billion, while creatingcapacity for investment. We have the abilityto flex that investment to support our returnon tangible equity targets if the environmentrequires us to do so.James E. StaleyGroup Chief Executive“The fundamental strength of our Group restson a diversified, though connected, portfolio ofinterests – and Barclays today is very welldiversified by geography, by product segment,and by currency.”What these key performance measuresdemonstrate is that our strategy is working,and momentum is building in Barclays.As we began the year, we had all but reachedthe end of the huge restructuring of thebusiness which we commissioned withour strategy in March of 2016: we had completed the run-down of ourNon-Core Unit, eliminating over 90bn ofRisk Weighted Assets – predominantly inour Corporate & Investment Bank – closingoperations in a dozen countries, and sellingsome 20 businesses which were no longerstrategically important to Barclayswe had sold down our interest in BarclaysAfrica to a level allowing regulatorydeconsolidation, which was formallygranted in July of 2018Barclays PLC Annual Report 201805Shareholder informationwe had completed our work on structuralreform, creating our Intermediate HoldingCompany in the USA, and standing up ourring-fenced bank in the UK – the successfulexecution of which in April was the resultof an extraordinary effort by colleaguesacross the bank, and one of the biggesttechnological shifts ever carried out infinancial services; andFinancial statements home.barclays/annualreport Financial reviewExcluding litigation and conduct, our earningsper share for the full year were 21.9p.Risk reviewOur Group return on tangible equity, was8.5% for the full year – close to our 2019financial target of greater than 9%. Achievingour return on tangible equity targets of greaterthan 9% in 2019 and greater than 10% in2020 will remain our overriding priority.GovernanceExcluding litigation and conduct, profit beforetax was up 20% – an outcome driven in partby lower impairment as a result of prudentmanagement of credit risk, as well as thebenefit from improved macroeconomicforecasts during the year.

Chief Executive’s reviewWe are delivering on our strategy having the UK SFO charges against thebank relating to our 2008 capital raisingsdismissed; andproviding further for the completionof PPI redress.We have also implemented our contingencyplan to ensure we can continue to seamlesslyservice our clients across Europe followinga UK withdrawal from the EU.This transformation – as with any majorcorporate restructuring – cost a substantialamount of money to effect, and absorbedenormous amounts of colleague time andmanagement focus. But the effort andinvestment was worth it to remove majordrags on the operational effectiveness andprofitability of Barclays, and to create themodel we laid out in our strategy – atransatlantic consumer and wholesale bank,with global reach – which is now starting togenerate attractive and sustainable returnsfor our shareholders.The fundamental strength of our Group restson a diversified, though connected, portfolioof businesses - and Barclays is well diversifiedby geography, by product and by currencybetween our consumer and wholesalebusinesses.We have a great position in UK retail andbusiness banking, serving 23 millioncustomers and a million small businessesin a market where we have roots going back328 years. We have an enviable position in fastgrowing international cards and payments inthe UK, US, and Europe. And we are a strongand profitable global player in corporate andinvestment banking, anchored in the world’sdeepest and most sophisticated capitalmarkets of London and New York.Our diversified model is not only designed tobe well balanced and produce consistent andattractive returns through the economic cycle,it is also a more robust model for any modernfinancial services business. A decade after thefinancial crisis I am very confident thatBarclays today would be well prepared toweather major shocks in the future.06 Barclays PLC Annual Report 2018 Notwithstanding that, I have repeatedly saidthat a management team cannot rest whilethe share price trades below book value, and itis a priority for us to drive a recovery.Improved returns to shareholders will certainlyhelp in that endeavour. In 2018, based on ourstrong capital position, the restoration of thedividend to 6.5p, and the redemption ofexpensive preference shares dating from thefinancial crisis, saw us return around 1.8bnof capital. That is progress, but not yetsufficient.As we generate excess capital going forward weintend to return a greater proportion of thoseearnings to shareholders by way of dividendsand other distributions including buybacks, andI am optimistic for our prospects to do more in2019 and beyond.There are three principal reasons for thatoptimism.First, the opportunity to further digitise ourconsumer businesses in the UK, the US, andin Germany is significant. For example, todaywe have 11 million digitally active customers,with over six million users of our awardwinning mobile banking app in the UK, andthe quality of engagement with customerson digital platforms such as these isimpressive. On average, a Barclays customervisits a branch once every six weeks. Contrastthat with the statistics for Barclays MobileBanking, where customers typically go intothe app every single day. Our relationshipswith these customers are consequently muchstronger, and we are better able to help themwith their financial needs. Of course as weexpand our offering in this area we have aclose eye on the security and resilience ofsystems.Second, the importance of capital marketsas a source of funding for corporates andinvestment is growing, continuing the shiftin recent years away from reliance on bankbalance sheets. In the past decade banklending to corporates has declined by 14%relative to GDP. At the same time there hasbeen a surge in capital market issuance, withglobal Debt Capital Markets up by 75% in thepast decade - and we are a top 4 player inDebt Capital Markets. Since the financial crisis,growth in the bond market in Europe hasreplaced 90% of the decline in bank lending.These trends will continue and, as the onlynon-US investment bank operating at scale inboth London and New York, we are wellplaced to participate in the opportunity thisrepresents. Competing in the top tier of globalrclays UKBareaching a settlement with the USDepartment of Justice in relation toResidential Mortgage Backed Securitiesecution Servs ExlayicrcBarces Barclayss InternatilayWe were able to resolve major outstandinglegacy conduct issues for the bank in 2018:Of course one area where performanceprogress has unfortunately not been reflectedis in our share price, which remainsdisappointingly low. In common with allEuropean banks, we have been hit very hardin this regard by macroeconomic issues whichhave weighed heavily on investor sentiment.Bawe had created our Service Company,Barclays Execution Services, or ‘BX’, asa state-of-the-art operating platformon which to run and build our businessgoing forward.alon investment banking, enabled by our sizeand commitment across asset classes, isimportant to Barclays’ future returns – and wedemonstrably do compete. For example,in our Markets business in 2018 we sawrevenue growth on a US dollar basis.Third, we are today investing in multiplegrowth opportunities – principally intechnology development – across the Group.The efficiencies driven by BX, our servicecompany, have been instrumental in creatingthe capacity to do so, while continuingto control our costs. Such meaningfulinvestments in growth opportunitieswere simply not a viable option duringthe many years of reshaping this company.As our strategy continues to work, theprincipal calls on our future earningsshould now be returns to shareholdersand investment in growing the business –rather than litigation and conduct charges,restructuring costs, and capital accumulation.That shift is very welcome.I remain hugely proud of the continuingpositive impact which Barclays has in thecommunities in which we operate aroundthe world. From our major citizenshipprogrammes such as LifeSkills, Connectwith Work, and Unreasonable Impact, to theindividual, local, social and charitable effortsof colleagues and teams around the world.This work says much about the culture ofBarclays today – driven by a deep commitmentto help customers, clients, and wider society,to rise and succeed. I am grateful for the effortand commitment Barclays’ people exhibitevery day.home.barclays/annualreport

James E. StaleyGroup Chief ExecutiveWe are responding to global challenges likeclimate change and global energy demandby evaluating our financing of carbonintensive energy sources, while proactivelysupporting the development of greenfinancial products and services. We arecontributing to inclusive prosperity byenhancing the skills and meaningfulemployment opportunities of peoplein our local communities. And we areinvesting in innovation from our bestasset – our colleagues – to test and scalenew business opportunities that tacklesocial and environmental challenges.GovernanceJohn took on the Chairmanship of theGroup during a period of tumultuous changefor financial services, and for this bank inparticular. Barclays, and I personally, havebeen fortunate to benefit from his wisdom,his challenge, his courage to make tough calls,and his steadfast leadership during that time.It is due in no small part to John that we findourselves in such a positive position today,with our turnaround complete, and confidentin our prospects. On behalf of colleaguesacross the bank, I would like to thank Johnfor his stewardship, and to wish him and hisfamily well following his retirement in May.Delivering for our wider stakeholders is integral to our successStrategic reportFinally, I want to pay tribute to thecontribution of our retiring Chairman,John McFarlane, to the development ofBarclays over these past four years.Risk reviewWe are responding to globalchallenges, supporting thedevelopment of green financialproducts and services, andcontributing to inclusiveprosperity.The Environmental Social Governance(ESG) Report provides additionalinformation on key non-financial topicsand forms part of the Barclays PLC AnnualReport suite.See Barclays PLC ESG Report 2018 available athome.barclays/annualreportFinancial reviewFinancial statementsShareholder informationhome.barclays/annualreport Barclays PLC Annual Report 201807

Operating environmentA constantly evolving operating environmentBarclays is a transatlantic consumer and wholesale bank, anchored in ourtwo home markets of the UK and US, therefore impacted by a wide range ofmacroeconomic, political, regulatory and accounting, technological and socialdevelopments. The evolving operating environment presents opportunitiesand risks which we continue to monitor and evaluate to ensure that weappropriately adapt our strategy and its delivery.Economic growthThe global economy continued to expandin 2018, at an estimated rate of 3.7%a.However, there have been noticeable regionaldifferences. US expansion accelerated throughhigher consumer spending as tax cutsboosted disposable income. On the otherhand, growth in Japan, Eurozone and theUK slowed amid political and economicdisruption. Significant concerns remainaround the sustainability of the sovereigndebt level in Italy. Emerging markets divergeddue to higher interest rates in the US, volatileoil price and escalating trade tensions.Central banks continued tightening monetaryconditions, notably, the Federal Reserveand Bank of England increased their policyrate and the European Central Bank (ECB)announced the end of its quantitative easingprogramme. Labour markets have tightened,putting upward pressure on inflation,indicating potential further monetarytightening.Barclays’ business mix spans multiplegeographies and client types – we believea diversified portfolio lowers volatility andenhances stability in a macro environmentsuch as ours today. As a result, we believein Barclays’ ability to generate solid returnsthrough economic cycles, even w

Personal Banking Page 32 Barclaycard Consumer UK Page 32 Business Banking Page 33 Barclays International Page 34 Operating model, market opportunities, and how we deliver on our strength as a global wholesale and consumer bank Corporate and Investment Bank Page 36 Consumer, Cards and Payments Page 37 Barclays Execution Services Page 38 Operating model and how we provide efficiencies and .