UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
November 2007
Barclays PLC and
Barclays Bank PLC
(Names of Registrants)
1 Churchill Place
London E14 5HP
England
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No x
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):
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This Report is a joint Report on Form 6-K filed by Barclays PLC and Barclays
Bank PLC. All of the issued ordinary share capital of Barclays Bank PLC is
owned by Barclays PLC.
This Report comprises:
Information given to The London Stock Exchange and furnished pursuant to
General Instruction B to the General Instructions to Form 6-K.
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EXHIBIT INDEX
Trading Statement - 15 November, 2007
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each of
the registrants has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BARCLAYS PLC
(Registrant)
Date: November 15, 2007 By: /s/ Patrick Gonsalves
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Patrick Gonsalves
Deputy Secretary
BARCLAYS BANK PLC
(Registrant)
Date: November 15, 2007 By: /s/ Patrick Gonsalves
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Patrick Gonsalves
Joint Secretary
15th November 2007
BARCLAYS PLC
OCTOBER YEAR TO DATE TRADING PERFORMANCE
AT BARCLAYS CAPITAL AHEAD OF RECORD PRIOR YEAR PERIOD
"This announcement briefs stakeholders on the performance of Barclays Capital
during the first ten months of the year. It continues a pattern of performance
commentary that we have given during the last three months. Today's extensive
disclosure demonstrates the strength and resilience of our performance during
the year and in particular during the turbulent month of October."
John Varley, Group Chief Executive
Barclays today issues the following update on its capital markets trading
performance and exposures:
- Net income and profit before tax for the ten months to 31st October
2007 ahead of record prior year period
- Strength and diversity of income generation enabling absorption of
write downs
- Significant reduction in exposures through proactive risk management
"The diversity of our business, our strong risk management and our focus on
execution and clients has allowed Barclays Capital to deliver year to date
performance in 2007 ahead of last year's record October year to date profits."
Robert E Diamond Jr, President
Barclays Capital - October 2007 year to date
Barclays Capital's net income and profit before tax for the ten months ended
31st October 2007 exceeded the record net income and profits of the equivalent
prior year period. Profit before tax of GBP1.9bn for the period was after
booking credit, mortgage and leveraged finance related charges and write downs
of GBP0.5bn net of hedging in the third quarter (reflected in our previous
statements to the market); and an additional GBP0.8bn net charges and write
downs in October. The charges and write downs are stated net of a gain of
GBP0.2bn in each of the third quarter and October arising from the fair
valuation of notes issued by Barclays Capital. The October charges and write
downs reflected the impact of rating agency downgrades on a broad range of CDOs
and the subsequent market downturn.
The overall performance reflected the benefit of proactive risk management
throughout 2007 and Barclays Capital's diverse revenue base, with strong growth
across commodity, equity, currency and interest rate products; and excellent
contributions from continental Europe and Asia and good results in the UK
markets.
Sub Prime ABS Positions
Barclays Capital's involvement in the US sub-prime sector comprises liquidity
facilities to CDOs and other structures, now held as ABS CDO Super Senior
exposure; and other exposures consisting of warehouse lines provided to
third-party originators, whole loan purchases, and ABS and CDO trading
positions.
ABS CDO Super Senior Exposure
Liquidity facilities to CDOs and other structures primarily held on our banking
book were principally in support of CDO high grade and mezzanine structures
originated by Barclays Capital. The liquidity facilities have now been drawn and
Barclays Capital consequently holds ABS CDO super senior exposure. The CDO
structures were originated between 2005 and the first half of 2007, with the
older structures benefiting from better performing collateral. Over half of the
collateral underlying these structures was 2005 or earlier vintages and more
than three quarters was originated prior to the second half of 2006.
Prior to October, we used cash flow analysis to estimate impairment for the
originated high grade and mezzanine ABS CDO positions in the banking book. To do
this, we considered observable data for relevant benchmark instruments, implied
cumulative losses in mortgage pools and the likelihood of events of default in
underlying ABS CDO collateral. For the trading book, we assessed fair value with
reference to observable market benchmarks, including the ABX indices.
In October, further to the rating agency downgrades and subsequent market
downturns, we valued the following collateral underlying our ABS CDO super
senior exposures as follows:
- all RMBS backed CDO collateral written down to zero, only retaining
valuation in expected interest payments where appropriate
- all second lien collateral written down to zero.
In October, we also assessed additional impairment on mezzanine transactions in
the banking book using projected cash flows, as calculated for the trading book
and the potential for these structures to hit default triggers by the end of
2008.
Write downs, charges, hedges and subordination provide protection against loss
levels of 65% of sub prime collateral across both high grade and mezzanine
transactions.
At 31st October 2007, Barclays Capital's high grade exposure net of hedges and
subordination was GBP3.8bn (30th June 2007: GBP5.8bn) after charges and write
downs net of hedges in the third quarter of GBP0.3bn and a further GBP0.4bn in
October 2007. At 31st October 2007, Barclays Capital's mezzanine exposure net of
hedges and subordination was GBP1.2bn (30th June 2007: GBP1.6bn) after charges
and write downs net of hedges in the third quarter of GBP0.1bn and a further
GBP0.3bn in October 2007.
Other US Sub Prime Exposure
Barclays Capital provided secured financing lines to third-party mortgage
originators in advance of securitisations, and also purchased pools of mortgages
("whole loans") for Barclays Capital's own account in anticipation of its own
securitisations. At the end of March 2007, we acquired EquiFirst, a mortgage
originator, who, from that point, originated the large majority of the whole
loans we have acquired. Excluding the whole loans we originated through
EquiFirst, at the beginning of January 2007 our warehouse and whole loan
positions totalled GBP4.3bn and we had reduced these positions to GBP0.8bn by
30th June 2007 and GBP0.4bn at 31st October 2007.
Since acquiring EquiFirst, we have progressively tightened underwriting
criteria, and our EquiFirst mortgage origination has been at an average LTV of
82%, with only 4% of origination above a 95% LTV. In addition, 99% of the
exposure was first lien. Whole loan inventory is held in a trading book at fair
value determined with reference to current market parameters for the underlying
mortgage pools.
ABS and CDO positions held on the trading book were acquired for market-making,
ABS and CDO structuring purposes. These positions, which include ABS bonds, CDOs
and sub prime residuals, are valued by reference to observable transactions
including the level of the ABX indices and on a pool-by-pool basis, implied
cumulative loss projections. RMBS backed CDOs have been valued consistently to
the ABS CDO super senior exposure as noted above.
Whole loan and trading book valuations gave rise to a GBP0.2bn write down net of
hedges in the third quarter and a further GBP0.2bn write down net of hedges in
the month of October. At 31st October 2007, Barclays Capital's whole loan and
trading book net exposure was GBP5.4bn (30th June 2007: GBP6.0bn).
SIVs and SIV-lites
Our trading book inventory at 31st October 2007 included GBP0.2bn of assets from
the drawdown of SIV-lite liquidity facilities (30th June 2007: GBP0.7bn). Our
exposure to SIVs was GBP0.7bn comprising derivative exposures, undrawn CP
backstop facilities and bonds held in our trading book (30th June 2007:
GBP0.9bn). We have no further undrawn backup liquidity facilities for SIVs or
SIV-lites. Cumulative write downs on SIVs and SIV-lites to 31st October 2007
were GBP70m.
Leveraged Finance and Own Credit
October year to date income was also impacted by reduced demand for leveraged
finance. At 31st October 2007, Barclays Capital had GBP7.3bn in exposure from
unsold underwriting positions down from a peak exposure of GBP9.0bn during
September (30th June 2007: GBP7.3bn), and less than GBP20m exposure to equity
bridges (30th June 2007: GBP82m). We have performed a detailed analysis of the
unsold underwriting positions in the portfolio with reference to both credit
quality and observable market transactions. As a result of this exercise, we
have written down the carrying value of the exposures by GBP190m, which after
fees of GBP130m produced a provision of GBP60m.
The general widening of credit spreads that contributed to the leveraged finance
write-downs also reduced the carrying value of the GBP55bn traded debt held on
Barclays Capital's balance sheet. We have therefore recognised gains of GBP0.2bn
in each of the third quarter and October 2007.
Other capital markets business
Barclays other business with significant capital markets presence is Barclays
GIobal Investors, which has continued to perform well in the third quarter and
in October.
Liquidity and Funding
Barclays liquidity position remains very strong both for its own paper and paper
issued by its sponsored conduits. We have benefited from significant inflows of
deposits, increased credit lines from counterparties, increased client flows
across many businesses and continued full funding of our conduits.
Barclays exposure to its own conduits through undrawn backstop liquidity
facilities was GBP19.0bn as at 31st October 2007 (30th June 2007: GBP21.7bn).
The Barclays-sponsored vehicles are long established and are fully funded
through CP issuance. All are fully consolidated on the Barclays balance sheet on
an available-for-sale basis at fair value.
Barclays will provide its normal scheduled trading update on 27th November 2007.
Summary of Barclays Capital net charges and write downs
GBPbn Net charges and write downs Comments
Q3 2007 Oct 2007
ABS CDO Super Senior
High Grade (0.3) (0.4) -All RMBS CDO principal
valued at zero
-All second lien
collateral valued at
zero
-Sub Prime collateral
marked down 50%
Mezzanine (0.1) (0.3) -As above
-Used fair value with
impairment horizon to
2008
Other US Subprime
Whole loans and trading
book positions (0.2) (0.2) -Trading book assessed at
fair value based on
current market
parameters
SIVs/SIV-lites (0.1) 0.0 -Minimal sub prime
exposure in SIVs
-No undrawn SIV-lite
facilities
Leveraged Finance/
Own Credit 0.2 0.1
-------- ----------
Net Charges and Write
Downs in the period (0.5) (0.8)
======== ==========
Barclays Capital Trading Update conference call and webcast details
The briefing will be available as a live conference call at 08.30 (GMT) on
Thursday, 15th November 2007. The telephone number for UK callers is 0845 301
4070 (+44 (0) 20 8322 2723 for all other locations), with the access code
'Barclays Update'. The briefing will also be available as a live audio webcast
on the Investor Relations website at: www.investorrelations.barclays.com and a
recording will be posted on the website later.
For further information please contact
Barclays:
Investor Relations
Mark Merson John McIvor
+44 (0) 20 7116 5752 +44 (0) 20 7116 2929
Media Relations
Alistair Smith R Robin Tozer
+44 (0) 20 7116 6132 +44 (0) 20 7116 6586
Barclays Capital:
Siobhan Loftus Simon Eaton
+44 (0) 20 7773 7371 +44 (0) 20 313 42111
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. 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 '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, impairment charges, business strategy,
projected levels of growth in the banking and financial markets, projected
costs, estimates of capital expenditures, and plans and objectives for future
operations. By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances, including,
but not limited to, the further development of standards and interpretations
under International Financial Reporting Standards (IFRS) applicable to past,
current and future periods, evolving practices with regard to the interpretation
and application of standards under IFRS, as well as UK domestic and global
economic and business conditions, market related risks such as changes in
interest rates and exchange rates, the policies and actions of governmental and
regulatory authorities, changes in legislation, progress in the integration of
Absa into the Group's business and the achievement of synergy targets related to
Absa, the outcome of pending and future litigation, the success of future
acquisitions and other strategic transactions and the impact of competition - a
number of which factors are 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 by or on behalf of Barclays speak only as of
the date they are made. Barclays does not undertake to update forward-looking
statements to reflect any changes in Barclays expectations with regard thereto
or any changes 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 SEC.