Barclays Plc · LSE:BARC
Barclays — Debt Investor Presentation (February 2014)
47 slides from Barclays's debt investor presentation, Feb 11, 2014
Slide 1: Barclays PLC Fixed Income Investor Presentation 2013 Full Year Results
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Barclays PLC Fixed Income Investor Presentation 2013 Full Year Results 11 February 2014 |
Slide 2: Financial performance
FINANCIAL PERFORMANCE FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Financial performance 2 | Barclays FY 2013 Fixed Income Investor Presentation
Slide 3: 2013 financial performance
FINANCIAL FINANCIALPERFORMANCE PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX 2013 financial performance “Despite challenging conditions, our underlying performance has been resilient and momentum is building” (Antony Jenkins, Group Chief Executive) Year ende
Slide 4: 2013 financial performance: earnings diversity
FINANCIAL FINANCIALPERFORMANCE PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX 2013 financial performance Resilient outcome highlighting the strength of our core franchises and the benefits of earnings diversity of the Group, by business and geography Group ad
Slide 5: 2013 financial performance: de-levered balance sheet
FINANCIAL FINANCIALPERFORMANCE PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX 2013 financial performance Materially de-levered and de-risked the balance sheet, while reducing reliance on short-term wholesale funding Selected balance sheet metrics (£bn) Dec-11
Slide 6: Capital & leverage
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Capital & leverage 6 | Barclays FY 2013 Fixed Income Investor Presentation
Slide 7: Capital and leverage ratios over time
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Capital and leverage ratios over time Our financial strength continues to serve us well in the current environment and remains a core component of our strategy going forward 2008-2013 CT1 Capital (£bn)
Slide 8: Capital
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Capital We continue to transition towards our end-state capital structure, including strengthening our CET1 position and successfully issuing contingent capital Evolution of capital structure CRD IV ful
Slide 9: Progressive implementation of CET1 requirements
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Progressive implementation of CET1 requirements Our capital plans incorporate the progressive implementation of CRD IV and seek to maintain a maximum 1.5% internal buffer, recalibrated annually on a pru
Slide 10: Leverage
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Leverage Making significant progress in delivering our leverage plan as we proceed with minimum impact on revenue PRA leverage exposure1 (£bn) June-13 PRA leverage • Optimisation target of £65-80bn (£bn
Slide 11: Leverage
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Leverage Clear plans to further delever beyond 2015 albeit with some loss of income PRA Leverage Ratio1 (%) Further deleveraging by 20151 (£bn) • Net reduction of more than £60bn by 2015 through further
Slide 12: Liquidity & funding
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Liquidity & funding 12 | Barclays FY 2013 Fixed Income Investor Presentation
Slide 13: Balance sheet funding
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Balance sheet funding While the balance sheet totals £1.2tn (excl. Absa), wholesale funding requirements are limited to £186bn as a consequence of its structure Total balance sheet, £1,266bn (excl. Absa
Slide 14: Liquidity
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Liquidity We maintain a robust position, efficiently managing a high quality liquidity pool, in excess of internal and regulatory requirements High quality liquidity pool Key messages £bn • Liquidity po
Slide 15: Funding
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Funding We maintain access to stable and diverse sources of funding, across customer deposits and wholesale debt, providing protection against fluctuations in supply and demand Significant increase in d
Slide 16: Wholesale funding
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Wholesale funding Despite reduced requirements for wholesale funding, Barclays maintains access to a variety of secured and unsecured funding sources across multiple products, currencies and maturities
Slide 17: Asset quality
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Asset quality 17 | Barclays FY 2013 Fixed Income Investor Presentation
Slide 18: Asset quality
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Asset quality Long term impairment performance demonstrates our conservative approach to credit risk management Impairment charge and CRLs tracking downwards… £m 5.1% CRL as % of 6,000 4.4% 0.06 • Annua
Slide 19: Impairments well contained
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Impairments well contained Reduction in credit impairment charges in 2013 reflects improvements in Corporate Banking and Africa RBB, partially offset by increases in other businesses Loan loss rate (bps
Slide 20: Reduced exposure to the Eurozone periphery
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Reduced exposure to the Eurozone periphery Barclays continues to manage down its direct exposures to the Eurozone periphery, and to reduce net funding mismatches in Portugal and Italy, while increasing
Slide 21: Asset quality: Exit Quadrant run down
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Asset quality Active run down of our Exit Quadrant resulting in a £39bn reduction in CRD IV RWAs (£bn) 94 15 17 11 23 54 34 12 4 19 Targeted reduction 34 36 in IB positions 19 Dec 12 Legacy Derivatives
Slide 22: Credit ratings
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Credit ratings 22 | Barclays FY 2013 Fixed Income Investor Presentation
Slide 23: Rating and outlook changes
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Rating and outlook changes Despite re-rating of sector by all main rating agencies in the last 24 months, Barclays‟ ratings remain strong and in line with peers‟ As at 31 December 2013 • Barclays‟ ratin
Slide 24: Credit rating management
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Credit rating management Barclays prudently manages the impact of credit ratings on the Group‟s funding and liquidity positions and reserves for potential rating action in its liquidity pool • Provision
Slide 25: Summary
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Summary A major global financial services provider with strong customer focus and client franchise Business model • • Diversified businesses, in multiple geographies, delivering resilient underlying ear
Slide 26: Appendix
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Appendix 26 | Barclays FY 2013 Fixed Income Investor Presentation
Slide 27: Resilient performance
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Resilient performance £m 8,771 8,167 8,081 8,108 7,563 7,750 7,549 7,734 7,440 7,445 7,287 7,238 7,384 7,337 7,001 7,002 6,867 6,445 6,639 6,213 2,395 1,977 1,944 1,865 1,754 1,822 1,694 1,786 1,805 1,5
Slide 28: Net interest income - driven by volume growth
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Net interest income - driven by volume growth Asset and liability growth… £bn • Asset and liability increases in non-IB and Head Office 350.0 300.0 Customer Liabilities1,2 250.0 businesses of 2% and 14%
Slide 29: Analysis of Net Interest Income
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Analysis of Net Interest Income Year ended – December (£m) 2012 2013 Customer assets 6,654 7,144 Customer liabilities 3,185 3,221 Total RBB, Corporate Banking and Wealth & IM customer income 9,839 10,36
Slide 30: Net interest margins and volumes
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Net interest margins and volumes UK Europe Africa Barclay- Corporate Wealth Total1 RBB RBB RBB card Banking and IM Three months ended – Dec 2013 Net interest margin (%) 1.32 0.77 3.25 8.07 1.13 1.02 1.7
Slide 31: Adjusted income and profit/(loss) before tax by cluster
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Adjusted income and profit/(loss) before tax by cluster Income Profit/(loss) before tax 2013 2012 Change 2013 2012 Change Full year ended – December (£m) (£m) (%) (£m) (£m) (%) UK RBB 4,523 4,384 3 1,19
Slide 32: Revised Transform financial commitments
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Revised Transform financial commitments Targets Dates Return on Equity > CoE in 2016 2016 Operating Expenses £16.8bn 2015 Cost:Income Ratio mid-50s 2015 CRD IV RWAs £440bn 2015 Fully loaded CET1 Ratio >
Slide 33: Impact of costs to achieve Transform
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Impact of costs to achieve Transform Full year ended – December 2013 Costs to achieve Profit Return on Cost: income Adjusted performance measures by business, Transform before tax average equity ratio e
Slide 34: Transitioning the cost base for structurally lower operating expenses
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Transitioning the cost base for structurally lower operating expenses £bn Costs to achieve Staff costs UK Bank Levy Other opex Costs to achieve Other Transform Industrialisation Innovation CTA • Technol
Slide 35: Barclays Leverage Plan (as at 30 June 2013)
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Barclays Leverage Plan (as at 30 June 2013) Leverage ratios (%) > 3.0 0.4 0.1 0.1 2.2 H1 2013 Rights issue Deleveraging 2 AT1 issuance Other capital accretion & Target H1 2014 PRA1 net of expenses retai
Slide 36: Estimated capital and RWAs
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Estimated capital and RWAs (£bn) 31 December 2013 CT1 Capital (CRD III) 46.8 RWAs (CRD III) 354.8 CT1 Ratio (CRD III) 13.2% CRD IV impact on CT1 Capital: CET1 Fully-loaded1 Conversion from securitisatio
Slide 37: Estimated CRD IV capital and RWAs – notes
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Estimated CRD IV capital and RWAs – notes Estimated capital ratios are based on/subject to the following: CRD IV as implemented by the Prudential Regulation Authority The new Capital Requirements Regula
Slide 38: Estimated CRD IV capital and RWAs – notes
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Estimated CRD IV capital and RWAs – notes Estimated capital ratios are based on/subject to the following: RWAs • The PRA has confirmed Barclays model approvals under CRD IV, with certain provisions refl
Slide 39: Liquidity & funding management framework
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Liquidity & funding management framework Barclays has developed a dynamic liquidity framework and a diversified funding base, while maintaining protection against fluctuations in supply and demand Liqui
Slide 40: Wholesale funding composition (as at 31 Dec 2013)
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Wholesale funding composition (as at 31 Dec 2013) >1 month >3 months >6 months >9 months >1 year >2 years As at 31 December 2013 Total ≤1 month but ≤3 but ≤6 but ≤12 but ≤12 but ≤2 but ≤5 >5 years Total
Slide 41: Additional Tier 1 capital issuance
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Additional Tier 1 capital issuance Barclays PLC $2bn Perp-NC5 Additional Tier 1 Barclays PLC €1bn Perp-NC7 Additional Tier 1 Geography – Allocations Investor Type – Allocations Geography – Allocations I
Slide 42: Barclays funding cost
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Barclays funding cost 5-year USD Z-spread1 As at 31 Dec 2012 As at 31 Dec 2013 287 230 238 209 183 194 197 194 204 177 135 143 149 149 110 115 120 105 105 75 88 78 81 83 HSBC Deutsche Bank Credit Suisse
Slide 43: Reduced exposure to the Eurozone
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Reduced exposure to the Eurozone As at 31 December 2013 (£m) Spain Italy Portugal Ireland Total Sovereign 184 1,556 372 67 2,179 Financial institutions 1,029 417 38 5,030 6,514 Corporate 3,203 1,479 891
Slide 44: UK banking reform
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX UK banking reform Barclays backs initiatives to improve stability of the UK banking system and support a sustainable economy, however, requires alignment with international regulation and careful consid
Slide 45: CRD IV - Regulatory timeline
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX CRD IV - Regulatory timeline Timeframe based on Capital Requirements Regulation (CRR) and Capital Requirements Directive (CRD) published in June 2013 H1 2010 1 Jan 2011 1 Jan 2012 1 Jan 2013 1 Jan 2014
Slide 46: Debt investor relations contact information
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Debt investor relations contact information Richard Caven Sofia Lonnqvist Julie Stanzl +44 (0)20 7116 2809 +44 (0)20 7116 5716 +44 (0)20 7116 7748 richard.caven@barclays.com sofia.lonnqvist@barclays.com
Slide 47: Disclaimer
FINANCIAL PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Disclaimer Important Notice The information, statements and opinions contained in this document do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of a
Barclays — Debt Investor Presentation (February 2014) on 6ix