Interim Management Statement

Barclays PLC - Interim Management Statement

''I am pleased with the performance we have delivered for the first nine months of the year, with profit before tax exceeding £5bn, despite significant economic and market headwinds. These results demonstrate the continued progress towards our 2013 goals through building momentum across retail and corporate banking businesses and strong relative performance by Barclays Capital in difficult market conditions. Our focus on cost reduction continues to deliver results and we are confident that we will exceed the £1bn savings target we set earlier this year.

Our profits before tax have been generated equally across our retail and investment banking businesses, showing the diversity and balance of Barclays. Rock solid capital, funding, and liquidity have been maintained. We will continue to generate sufficient capital for our business needs and do not intend to raise new equity capital. We remain committed to lending in the UK and are on track to exceed our Merlin goals.''

Bob Diamond, Chief Executive

Q311 Interim Management Statement

Group Performance

Capital

- Core Tier 1 remained strong at 11.0% (30 June 2011: 11.0%), with risk weighted assets flat at £390bn (30 June 2011: £395bn). Adjusted gross leverage was 21x (30 June 2011: 20x)

- Eurozone country exposures continue to be managed closely and valued appropriately. The Group's sovereign exposure to Spain, Italy, Portugal, Ireland and Greece reduced in Q3 by 31% to £8.0bn

- £6bn of term funding raised in Q3 2011, making £24bn in 2011 year to date. This compares to full year 2011 term funding maturities of £25bn

- Robust liquidity position with a liquidity pool of £166bn (30 June 2011: £145bn), which represent over a year of wholesale maturities, of which £152bn is FSA-eligible

- Net asset value per share increased 16p to 439p during Q3 and net tangible asset value per share increased 19p to 372p

Returns

- Adjusted return on average shareholders' equity improved to 8.1% (2010: 6.5%) and adjusted return on average tangible shareholders' equity improved to 9.7% (2010: 7.9%). These returns on a statutory basis improved to 6.9% (2010: 6.7%) and 8.3% (2010: 8.1%) respectively

- Adjusted profit before tax of £5,015m up 18%. Statutory profit before tax of £5,066m up 19%

- Impairment charges and other credit provisions of £2,851m down 34%, resulting in a year-to-date annualised loan loss rate of 74bps (2010: 110bps)

- BlackRock, Inc. investment assessed as impaired for accounting purposes, resulting in recycling through the income statement of the £1,800m cumulative reduction in fair value, which was already recognised in equity and deducted for regulatory capital purposes

- Operating expenses excluding PPI provision, flat at £14,488m

- Third interim dividend of 1.0p per share, making 3.0p for the year to date

Income Growth

- Income excluding own credit down 3% to £22,242m. Including own credit, income was up 10% to £25,213m. Own credit gain of £2,882m in the third quarter driven by widening credit spreads on Barclays Capital structured notes, which are held at fair value

- Net operating income up 4% to £19,391m excluding own credit and impairment of investment in BlackRock, Inc. Statutory net operating income up 11% to £20,562m

- Increased contribution from RBB, Barclays Corporate and Barclays Wealth, which together generated a 6% increase in income. Net interest margin was up 9bps to 2.10%, reflecting improvements in the underlying margin and hedging activities

- Increase in net benefit from Group hedging activities of £559m (full year 2010: £665m)

Citizenship

- Increased 2011 gross new UK lending to businesses of £33bn, including £11bn to SMEs, with the Group on track to exceed Project Merlin targets for 2011

- Extended access to basic financial services in 11 countries across Africa, Asia and South America, reaching more than 130,000 new people through our Banking On Change programme including community-led savings and loans groups

- Reached over 175,000 disadvantaged people through our Building Young Futures partnership with UNICEF, including provision of business or vocational skills training to over 112,000

Business Performance

- Increase in income of 6% reflecting strong growth in mortgages and personal savings partially offset by a reduction in income following closure of the branch-based financial planning business

- Impairment charges reduced by 41% due to significant improvement in unsecured lending

- Operating expenses down 5% excluding the provision for PPI redress

- Adjusted loss of £109m (2010: loss of £63m) including £129m (2010: £nil) of restructuring charges principally related to operations in Spain

- Strong growth in income of 9% driven by an improved liability margin and the appreciation of the Euro against Sterling

- Impairment charges improved by 21% reflecting focused risk management and stable arrears rates

- Operating expenses increased by 23% reflecting restructuring charges, Italian and Portuguese branch expansion during 2010 and the appreciation of the Euro against Sterling

- Profit before tax increased 13%, or 25% excluding a one off pension credit of £54m in 2010

- Income showed growth of 5% driven by improved performance in South Africa

- Impairment charges improved by 11% reflecting more stable economic conditions with improved retail collections and commercial recoveries

- Operating expenses increased 7% primarily reflecting inflationary pressures in South Africa and non recurrence of a pension credit in 2010

- Income was 4% ahead of prior year with growth in balances driven by UK Cards, partly offset by customer balance repayments in the US and appreciation of Sterling against the US Dollar

- Impairment charges reduced by 24% reflecting focused risk management and customer balance repayments. The 30 day delinquency rate continued to improve in the UK and the US. This led to a 163bps increase in risk adjusted margin

- Operating expenses were in line with prior year, after excluding the provision for PPI redress, goodwill impairment and portfolio acquisitions

- Total income excluding own credit was down 12% on 2010

- Fixed Income, Currency and Commodities (FICC) income declined 20%, reflecting lower contributions from the Credit, Commodities and Emerging Markets businesses, partially offset by an improved performance in Foreign Exchange which benefited from strong client volumes, and Group hedging activities

- Equities and Prime Services income increased 2% reflecting improved performance in equity financing

- Investment Banking income was flat with improved performance in equity underwriting and M&A advisory offset by a decrease in debt underwriting

- Total income excluding own credit in the third quarter of 2011 was down 22% on the second quarter of 2011 reflecting reduced income of 16% in FICC, 40% in Equities and Prime Services and 25% in Investment Banking

- Net operating income excluding own credit reduced 9%, having benefited from a significant reduction inimpairment charges to £3m (2010: £321m) principally reflecting charges relating to leveraged finance exposures, offset by a release of £223m against the loan to Protium Finance LLP (Protium) in the first half of 2011

- Operating expenses declined 4% reflecting the reduction in net operating income excluding own credit. Excluding the impact of own credit, the cost to net operating income ratio was 68% and the compensation to income ratio was 46%

- UK profit before tax up 5% largely reflecting solid income growth, including benefit from Group hedging activity, and a reduction in impairment, partially offset by an increase in costs mainly due to the non-recurrence of a prior year pension credit

- Europe loss before tax improved 38% principally due to lower impairment charges in Spain of £415m (2010: £751m)

- Rest of the World adjusted loss before tax improved 81% principally due to the non-recurrence of 2010 restructuring charges and subsequent benefits. A significant improvement in impairment charges reflected management action to reduce the risk profile of portfolios

- Strong income growth of 13% was driven by the High Net Worth businesses

- Operating expenses increased 12% due to uplift in investment spend and related restructuring costs as well as staff and infrastructure costs from growth in the High Net Worth businesses

- Adjusted profit before tax of £80m (2010: £55m), principally reflected dividend income from the Group's available for sale holding in BlackRock, Inc. which represents a 19.7% interest

- The loss before tax of £1,778m (2010: profit of £55m) resulted from an assessment for accounting purposes that there was objective evidence that the Group's investment in BlackRock, Inc. was impaired. For regulatory capital purposes, the reduction in fair value of £1,800m has already been recognised in the Group's Core Tier 1 capital

- The impairment reflects the recycling through the income statement of the cumulative reduction in market value previously recognised in equity, since the Group's acquisition of its holding in BlackRock, Inc. as part of the sale of Barclays Global Investors on 1 December 2009. The fair value of the holding as at 30 September 2011 was £3.6bn

- Loss before tax increased 22% largely due to a currency translation gain of £270m in 2010 relating to the repatriation of capital from overseas operations, partially offset by the non-recurrence of 2010 costs of £194m relating to compliance with US economic sanctions

- In accordance with International Financial Reporting Standards, the impact of the UK bank levy, for which legislation was enacted in July 2011, has not been reflected in these results. The total cost for 2011 is expected to be in the range of £330m-£380m

Credit Impairment

- Credit impairment charges and other provisions fell 34% to £2,851m

- Charges were lower across all RBB businesses, most notably in Barclaycard and unsecured personal loans and overdrafts in UK RBB, mainly due to lower delinquency rates, reflecting a general improvement in asset quality, the low interest rate environment and broadly flat unemployment rates in the UK and US in the year to date

- The £3m charge in Barclays Capital resulted principally from charges relating to leveraged finance exposures, offset by a release of £223m against the loan to Protium in the first half of 2011

- Charges were lower in Barclays Corporate, notably in Spain and UK, although charges were higher in Portugal where credit conditions remained weak

- The annualised loan loss rate reduced to 74bps (2010: 110bps) and is unchanged from 30 June 2011, as the higher impairment charge on loans and advances in the third quarter was offset by a 2% increase in loans and advances

- Delinquency trends were stable or improving in the majority of retail portfolios with the exception of certain European portfolios, which have experienced some deterioration in the past few months

- The Group's credit risk loans (CRL) coverage ratio remained broadly stable in the third quarter as both CRL balances and impairment allowances fell modestly

Liquidity and Funding

- Barclays liquidity pool increased to £166bn as at 30 September 2011 (30 June 2011: £145bn) and moved within a month end range of £145bn to £166bn during Q3. The increase was largely as a result of increased deposit-taking through the third quarter. The pool represents more than a year of wholesale maturities and includes £152bn FSA eligible assets1

- As at 30 September 2011, the Group has £146bn of wholesale debt maturing in less than one year. This includes £38bn of term funding, of which £16bn matures during Q4 2011

- Term funding raised over the first nine months of 2011 was £24bn, compared to full year term funding maturities of £25bn. In the third quarter, the Group raised £3bn term debt via Barclays Capital's private placement MTN programmes and £3bn in publicly issued covered bonds and credit card securitisations

- Funding continues to be raised at attractive rates and, as a result of the current funding position, the Group can be selective in accessing public term funding markets

- Retail and Business Banking (excluding Absa), Barclays Corporate and Barclays Wealth activities are largely funded with customer deposits. The funding gap for these businesses is met using asset backed securities and covered bonds, secured primarily over customer loans and advances such as residential mortgages and credit card receivables. The loan to deposit ratio for these businesses is 109% and the ratio of loans to deposits and secured funding is 99%

- Barclays Capital is primarily funded through wholesale markets. The Group maintains access to a variety of sources of wholesale funds, including unsecured money markets, repo markets and term investors, across a variety of distribution channels and geographies. The Group wholesale funding profile, including tenor and concentration risks, is managed under the Group Liquidity Risk Framework, which is subject to FSA supervision, to ensure sufficient liquidity is held to cover potential cash outflows in a stressed environment

1 High quality unencumbered assets that meet the requirements of the FSA liquidity regime, primarily comprising deposits with central banks and Government bonds

2  Over 95% of central bank deposits are placed with the Bank of England, US Federal Reserve, European Central Bank, Bank of Japan and Swiss National Bank. 80% of Government and supranational bonds are comprised of UK, US, Japanese, French, German and Dutch securities

Group Exposures to Selected Eurozone Countries

- The Group continues to closely monitor its exposure to Eurozone countries. Detailed information on the Group's balance sheet positions in Spain, Italy, Portugal, Ireland and Greece as at 30 September 2011 is set out on pages 14-16

- During Q3 the Group's sovereign exposure to these countries reduced by 31% to £8.0bn

- Spanish sovereign exposure reduced 43% to £2.7bn due to the sale of available for sale government bonds held for interest rate hedging purposes that have been replaced by interest rate swaps with alternative counterparties

- Italian sovereign exposures reduced 24% to £4.1bn as government bond positions were closed out

- Portuguese sovereign exposure reduced 17% to £805m with a reduction in client activity

- Exposure to Ireland remained broadly flat in Q3, principally comprising exposures to financial institutions of £4.4bn (30 June 2011: £4.5bn), including £1.3bn of trading assets and £1.1bn of loans to entities domiciled in Ireland whose principal business and exposures are outside of Ireland. Exposures to domestic Irish banks remained below £250m

- Exposure to Greece remained minimal, including sovereign exposures of £23m

Dividends

- It is our policy to declare and pay dividends on a quarterly basis. We will pay a third interim cash dividend for 2011 of 1p per share on 9 December 2011, giving a declared dividend for the year to date of 3p per share

Outlook

- Capital markets remained difficult in October but have shown some improvement since the announcement by Eurozone leaders last week. Our retail, corporate and wealth businesses have performed broadly in line with their underlying run rates for the first nine months of the year

Other Information

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More information on Barclays can be found on our website: www.barclays.com

Notes

- Unless otherwise stated, the income statement analyses compare the nine months to 30 September 2011to the corresponding period in 2010. Balance sheet comparisons, unless otherwise stated, relate to the corresponding position as at 30 June 2011

- Adjusted profit before tax and adjusted performance metrics have been presented to provide a more consistent basis for comparing business performance between periods. These measures exclude: the impact of own credit; the impairment of the investment in BlackRock, Inc.; the provision for PPI redress; and gains and losses on acquisitions and disposals of subsidiaries, associates, joint ventures and strategic investments

- The financial information on which this Interim Management Statement is based, and other data set out in the appendices to this statement, are unaudited and have been prepared in accordance with Barclays previously stated accounting policies described in the 2010 Annual Report. A glossary of terms is also set out in the 2010 Annual Report

- For qualifying US and Canadian resident ADR holders, the interim dividend of 1p per ordinary share becomes 4p per ADS (representing four shares). The ADR depositary will mail the interim dividend on 9 December 2011 to ADR holders on the record on 11 November 2011

Forward-looking Statements

This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to certain of the Group's plans and its current goals and expectations relating to its future financial condition and performance. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "may", "will", "seek", "continue", "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe" or other words of similar meaning. Examples of forward-looking statements include, among others, statements regarding the Group's future financial position, income growth, assets, impairment charges, business strategy, capital ratios, leverage, payment of dividends, projected levels of growth in the banking and financial markets, projected costs, estimates of capital expenditures, and plans and objectives for future operations and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, UK domestic, Eurozone and global economic and business conditions, the effects of continued volatility in credit markets, market related risks such as changes in interest rates and exchange rates, effects of changes in valuation of credit market exposures, changes in valuation of issued notes, the policies and actions of governmental and regulatory authorities (including requirements regarding capital and Group structures), changes in legislation, the further development of standards and interpretations under IFRS applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation, the success of future acquisitions and other strategic transactions and the impact of competition - a number of such factors being beyond the Group's control. As a result, the Group's actual future results may differ materially from the plans, goals, and expectations set forth in the Group's forward-looking statements.

Any forward-looking statements made herein speak only as of the date they are made. Except as required by the UK Financial Services Authority, the London Stock Exchange plc or applicable law, Barclays expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in Barclays expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any additional disclosures that Barclays has made or may make in documents it has filed or may file with the LSE and/or the US Securities and Exchange Commission.

Q311 IMS Appendix I - Quarterly Results Summary