Barclays Plc · LSE:BARC
Barclays — Debt Investor Presentation (February 2023)
26 slides from Barclays's debt investor presentation, Feb 15, 2023
Slide 1: Barclays PLC Q4 2022 Fixed Income Investor Call
Barclays PLC Q4 2022 Fixed Income Investor Call 15 February 2023
Slide 2: Anna Cross, Group Finance Director
Anna Cross Group Finance Director
Slide 3: Group RoTE of 10.4% with profit before impairment up 9%
Group RoTE of 10.4% with profit before impairment up 9% Performance Reported profit before tax (£bn) £25.0bn £16.7bn (0.9) Income Costs FY21: £21.9bn FY21: £14.7bn 3.0 (1.2) (0.3) 67% £8.2bn Cost: Income Profit before (1.9) ratio impairment FY21: 67% FY21: £7.5bn £1.2bn 30bps Impairment Loan loss ra
Slide 4: Impairment expected to normalise towards historical LLRs
Impairment expected to normalise towards historical LLRs Balance sheet provisions for ECL1 (£bn) LLR2 (bps) 6.4 6.2 0.3 (0.4) 138 (0.1) Other ECL 1.2 1.1 Economic 0.3 uncertainty 0.7 adjustments 53 57 55 Model ECL 4.5 4.8 44 30 Q322 Model ECL Economic Other ECL Q422 uncertainty adjustments (18) Base
Slide 5: Consumer loan book resilient for economic uncertainty
Consumer loan book resilient for economic uncertainty UK Mortgages (£bn) UK Cards (£bn) 90 day arrears rate Net loans and advances at amortised cost (L&A) 30 day arrears rate Net L&A 162.2 143.2 14.7 LTV >85% 9.2 2.3% of total balances Balance paydown at high levels 0.2% 1.7% 0.1% (FY19: 4.1%) 0.9%
Slide 6: Disciplined approach to risk in the CIB
Disciplined approach to risk in the CIB CIB RWAs up £15bn driven by FX and regulation CIB loans & advances • Loans and advances to customers and banks: £99bn − £54bn corporate lending exposures; first loss protection Revenue growth whilst managing RWA footprint on 32% of these loans2,3 12 (1) Group
Slide 7: Daniel Fairclough, Group Treasurer
Daniel Fairclough Group Treasurer
Slide 8: FY22 highlights
FY22 highlights1 Strong balance sheet evidenced across key metrics CET1 ratio 15.1% Prudently managed capital position; Capital 13.6% 13.9% MDA CET1 ratio of 13.9% vs. 13-14% target range hurdle 11.3% Dec-21 Jun-22 Dec-22 MREL ratio 34.4% MREL position of £112.8bn, Funding 30.9% 33.5% with MREL rati
Slide 9: Disciplined capital management
Disciplined capital management Q422 CET1 ratio movements Future considerations Q123 (9bps) (28bps) (9bps) 31bps 24bps • Share buyback £0.5bn: c.(15)bps • IFRS 9: c.(13)bps reduction in transitional relief 13.8% 13.85% 14.07% 13.79% 13.79% 13.94% 13.9% on 1-Jan-23 1 • Kensington3 : c.(12)bps on compl
Slide 10: CET1 ratio within 13-14% target range and above requirements
CET1 ratio within 13-14% target range and above requirements CET1 minimum requirements UK leverage minimum requirements MDA 1 11.3% CCyB 0.4% CCB 2.5% Reg Min 3.975% G-SII 1.5% CCLB 0.2% 13.9% G-SII 0.525% Pillar 2A 2.4% 5.3% 4.8% BoE minimum leverage 3.25% Pillar 1 4.5% requirement 2 2 2 CET1 requi
Slide 11: Prior capital drag from pensions eliminated
Prior capital drag from pensions eliminated Triennial actuarial valuation Pension transaction unwind Pension portfolio position Completed UKRF well positioned with a UKRF triennial actuarial valuation1 Completed b alanced portfolio £2bn funding surplus (vs. £2.3bn Pension transaction unwind 2
Slide 12: Basel 3.1 day one impact expected to be at lower end of prior 5-10%
Basel 3.1 day one impact expected to be at lower end of prior 5-10% RWA guidance Timeline Current view of impacts from Basel 3.1 implementation Nov-22 PRA released Consultation Paper 16/22 Day one Pillar 1 inflation Potential offsets on Basel 3.1 standards From the finalisation of the Basel • Expect
Slide 13: Capital structure well managed
Capital structure well managed Capital structure and requirements Balanced total capital structure ≥16.7% total 20.8% total • Continue to run a robust level of AT1 capital and maintain conservative capital capital ratio headroom requirement1 • AT1 as a proportion of RWAs may vary due to seasonal and
Slide 14: MREL position well established
MREL position well established MREL position of £112.8bn as at Dec-221 HoldCo issuance • Successfully executed c.£15bn of MREL issuance in 2022 • c.£10bn of MREL issuance across Senior, Tier 2 and AT1 remaining in 2023 33.5% ( £112.8bn) • MREL issuance plan calibrated to meet requirements and allow
Slide 15: Strong liquidity position and deposit base
Strong liquidity position and deposit base Liquidity comfortably exceeding minimum requirements Deposits evolution (£bn) 1 168% 165% 528 156% 151% 493 519 512 Minimum 78 84 82 requirement: 69 100% 179 183 163 172 Dec-21 Jun-22 Sep-22 Dec-22 261 262 261 258 Liquidity pool 291 343 326 318 (£bn) Dec-21
Slide 16: Interest rates tailwind likely to continue into FY23
Interest rates tailwind likely to continue into FY23 Interest rate sensitivity Structural hedge Illustrative Group income impact from a 25bps upward Q422 gross hedge income up 91% YoY parallel shift in interest rate curves (£m)1 4.18% Structural hedge 3.05% c.500 3.69% Other 2.26% Spot3 1.52% c.150
Slide 17: Strategic priority to maintain strong ratings
Strategic priority to maintain strong ratings Current Senior long and Moody’s Standard & Poor’s Fitch short term ratings Baa2 BBB A Review for Barclays PLC Upgrade Positive Stable P-2 A-2 F1 Barclays Bank PLC A1 A A+ Negative Positive Stable (BBPLC) P-1 A-1 F1 Counterparty risk Resolution Derivative
Slide 18: Sustainable Impact Capital's upsized target to £500m
Sustainable Impact Capital’s upsized target to £500m Sustainable finance activities through Treasury Mission Portfolio as at FY22 Accelerate the transition to a net zero future by investing £500m by the end of 2027 (£175m by 2025 previously) in global climate tech start-ups, including a focus on: •
Slide 19: Daniel Fairclough, Group Treasurer
Daniel Fairclough Group Treasurer
Slide 20: Q&A
Q&A
Slide 21: Appendix
Appendix
Slide 22: Over-issuance of Securities
Over-issuance of Securities1 Context Financial impact (£m) • In March 2022, the Group became aware that BBPLC2 had issued securities T otal materially in excess of the amount registered under its shelf registration F Y21 F Y22 Impact st atement filed with the US Securities and Exchange Commission (S
Slide 23: RWA
RWA Q422 RWA movements (£bn) (4.2) (8.9) (1.2) 350.8 336.5 1 Sep-22 Book size FX Other Dec-22 FY22 RWA movements (£bn) (1.6) 14.1 (1.2) 4.5 6.6 336.5 314.1 1 Dec-21 Regulatory changes Book size Acquisitions and disposals FX Other Dec-22 from 1 Jan 2022 1 FX on credit risk, counterparty credit risk a
Slide 24: IFRS 9 transitional relief of c.20bps as at Dec-22
IFRS 9 transitional relief of c.20bps as at Dec-22 2020 regulatory action gave further relief for impairments IFRS 9 transitional relief CET1 add-back (£bn) • 75% transitional relief for modified impairment post Dec-19 applied in 2022 2.6 • Transitional relief schedule for static component per origi
Slide 25: Successful execution of 2022 funding plan
Successful execution of 2022 funding plan 2022-23 HoldCo issuance1 Annual HoldCo issuance volume (£bn) and currency1 Jan-22: EUR 1.25bn Senior 15.0 12.1 11.5 12.1 11.0 c.11 May-22: EUR 1.0bn Senior 8.6 8.2 10.8 6.1 9.3 10.2 8.3 Jun-22: GBP 1.25bn AT1 4.0 c.10 remaining 5.9 in 2023 2.9 1.1 1.0 Jul-22
Slide 26: Disclaimer
Disclaimer I m portant Notice The terms Barclays or Group refer to Barclays PLC together with its subsidiaries. The information, statements and opinions contained in this presentation do not constitute a public offer under any applicable legislation, an offer to sell or solicitation of any offer to
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