UPDATE: Barclays PLC Announces Leverage Plan, Will Issue One New Share For Every Four Outstanding

The Prudential Regulation Authority announced the results of its review of the capital adequacy of major UK banks and building societies. As part of its review, the PRA introduced a 3% Leverage Ratio target, calculated on a PRA-adjusted CET1 capital base and using a CRD IV leverage exposure measure. As at 30 June 2013, Barclays' PRA Leverage Ratio was 2.2%, representing a gap of £12.8 billion. In order to achieve the PRA 3% Leverage Ratio target by June 2014, Barclays today announces a series of actions, including an underwritten Rights Issue, measures to reduce Barclays' CRD IV leverage exposure, and the continued execution of Barclays' capital plan with the issuance of CRD IV qualifying Additional Tier 1 securities. More detailed information is set out below. Rights Issue Barclays PLC today announces its intention to raise approximately £5.8 billion (net of expenses) by way of a Rights Issue of one New Ordinary Share for every four Existing Ordinary Shares at an Issue Price of 185 pence per New Ordinary Share. This represents a discount of approximately 40.1% to the closing price on the London Stock Exchange of 309.05 pence per Ordinary Share on 29 July 2013 (being the last Business Day prior to the release of this announcement) and a discount of approximately 34.9% to the theoretical ex-rights price based on the Closing Price. Barclays Investment Bank is acting as global co-ordinator for the Rights Issue. The Rights Issue has been underwritten by a syndicate of banks comprising Credit Suisse, Deutsche Bank, BofA Merrill Lynch and Citi. Further details of the Rights Issue are set out in Appendix 2 of this announcement. “After careful consideration of the options to meet the PRA request for a 3% leverage ratio by June 2014, the Board has decided on a set of actions, including the rights issue, to meet this target, whilst continuing to deliver our strategy under the Transform programme. The PRA has agreed and welcomes our plan. As a result we expect Barclays to be in an even stronger capital position, allowing us to increase the dividend payout ratio ahead of the original Transform target. The Board expects that Barclays will continue to reduce leverage further, whilst maintaining target capital levels, and will aim to do so in a way that achieves sustainable returns above the cost of equity.” Sir David Walker, Chairman “We remain committed to the objectives set out in the Transform programme to achieve our goal of becoming the ‘Go-To' bank. Just five months into our plan I believe we are building good momentum. As a consequence of the PRA's review we have had to modify our capital plans, in order to meet the 3% leverage ratio target by June 2014. After careful consideration of the options, the Board and I have determined that Barclays should respond quickly and decisively to meet this new target. We have developed a bold but balanced plan to do so. The plan is a combination of: a rights issue; prudent reduction of our leverage exposure; issuance of additional tier 1 securities; and the retention of earnings and other forms of capital accretion. We believe this represents the right combination to meet the PRA's leverage target. It also enables us to maintain our planned lending growth and broader support of our customers and clients. The Board and I are aware of the implications of a rights issue for shareholders. We hope to balance this with reduced uncertainty in the outlook for Barclays and with enhancement of our dividend payout from 2014. Five of our six Transform financial targets remain unchanged, or have accelerated timescales. There is a modest delay in the RoE target as a consequence of these plans. However, we believe Barclays will be stronger for taking decisive action today.” Antony Jenkins, Chief Executive Background to and Rationale for the Rights Issue • On 20 June 2013 the Prudential Regulation Authority announced the results of its review of the capital adequacy of major UK banks and building societies. Barclays confirmed at the time that it expected to meet the PRA's target for an adjusted 7% Fully Loaded CET1 ratio by December 2013 through planned balance sheet actions and retained earnings generation. This expectation has not changed. • As part of its recent review, the PRA also introduced a 3% leverage ratio target, calculated on a PRA-adjusted CET1 capital base and using a CRD IV leverage exposure measure. Applying this measure to Barclays' previous capital plan, it estimated a PRA Leverage Ratio for Barclays of 2.5%. Barclays discussed a number of options with the PRA to meet the 3% PRA Leverage Ratio target, following which Barclays was asked to submit a plan to achieve the target by 30 June 2014. • The Transform programme, announced by Barclays on 12 February 2013 and representing the Company's strategy over the medium term, assumed risk-based capital measures as the primary variable. It nonetheless was expected to achieve a leverage ratio of 3% ahead of the anticipated CRD IV deadline. • Barclays reported today CRD IV leverage ratios as at 30 June 2013 of 3.1% and 2.5%, using CRD IV transitional and fully loaded calculations respectively. The fully loaded figure is down from 2.8% as at the end of December 2012, calculated on a £1,413 billion CRD IV leverage exposure compared to £1,559 billion at 30 June 2013. This increase in leverage exposure arises principally from changes to the calculation methodology following publication of the final CRD IV text on 26 June 2013 and other refinements, totalling £85 billion net. The remaining increase of £61 billion includes seasonal movements in settlement balances and other assets. • In calculating the PRA Leverage Ratio, Barclays has applied PRA adjustments of £4.1 billion to fully loaded CRD IV CET1 capital. This adjustment has reduced from the figure of £8.6 billion used by the PRA in its review, principally through taking account of Conduct Provisions and a reduced impact of prudential valuation adjustments. • These adjustments bring the total calculated gap to £12.8 billion, or a PRA Leverage Ratio of 2.2%. Further details are set out in the following table.