Slide 1: UK Retail and Business Banking
UK Retail and Business Banking 30 May 2012 Company confidential
Slide 2: UK RBB – Scale Business, diversified by Product & Segment
UK RBB – Scale Business, diversified by Product & Segment 4 Core Product Groups Savings, Transactional Consumer Investments & Mortgages Business Lending Insurance 3 Segments MASS MASS AFFLUENT SME 1 Customer Network Customers Branches Employees 15m over 1,625 34k 1
Slide 3: UK RBB – Sizeable Contributor to RBB and the Group
UK RBB – Sizeable Contributor to RBB and the Group Barclays 2011 RBB 2011 PBT (£m) PBT by business (£m) £5,590 £3,302 UK Retail & Business Bank customer £1,420 franchise 43% UK RBB RBB • Providing a quarter of PBT £3,302 contribution to Barclays Group and; 59% • Nearly half of RBB’s PBT £1,208 Barcl
Slide 4: Delivering strong Returns on Equity…
Delivering strong Returns on Equity… High returning business Adjusted Return on Equity 2008-11 25% Adjusted ROE 21.7% Adjusted ROE with constant 20% equity ratio of 10% 14.9% 15% 16.3% UK RBB target 9.9% 10% 8.3% 5% 7.5% 0% 2008 2009 2010 2011 Adjusted PBT (£m) 1,558 710 8891 1,4202 RWA as % of 35%
Slide 5: …in a challenging economic climate
…in a challenging economic climate Well-managed Net Interest Margin NIM and Risk Adjusted NIM 2008-11 Net Interest margin 2.0% 1.75% Risk adjusted Net Interest Margin 1.45% 1.45% 1.51% 1.5% 1.41% 1.27% 1.0% 1.08% 0.93% 0.5% 2008 2009 2010 2011 Base Rate (average) 4.67% 0.64% 0.50% 0.50% 5yr swap rat
Slide 6: High quality customer balance sheet; strong liquidity
High quality customer balance sheet; strong liquidity 2011 period end customer balances Consumer loans 4% Personal overdraft 1% LDR 108% SME 6% 9bn funding gap £bn Assets 121bn 112bn £121bn1 Personal Mortgages 89% Customer Assets Customer Liabilities 1Secured assets 94% LDR adjusted for secured Pers
Slide 7: Proactively managing costs
Proactively managing costs Cost pools Cost Income Ratio1 Directional £bn 2011 Trend 63% 65% 58% Customer Network (ex property) (0.9) 2009 2010 2011 Operations (ex property) (0.5) Other Cost Indicators Head Office Teams (0.3) 2009 2010 2011 Branches 1,698 1,658 1,625 Property (0.3) Operational Sites2
Slide 8: High quality personal and business books…
High quality personal and business books… Consumer Lending Mortgages Business Banking Portfolio Balance splits (%) Distribution of balances by LTV (%) Portfolio Balance splits (%) c.£5bn balances in 2011 c.£108bn balances in 2011 c.£8bn balances in 2011 90 80 70 Pre 2009 60 > 85% in 2011 = 9.6% of b
Slide 9: …translating directly into the bottom line
…translating directly into the bottom line Delinquency Rates Impairment (£m) and LLR 1200 1.20% 4.00% 1000 1.00% 3.50% 800 0.80% 3.00% 2.50% 600 0.60% 2.00% 400 0.40% 1.50% 1.00% 200 0.20% 0.50% 0 0.00% 0.00% 2008 2009 2010 2011 Consumer Mortgages Barclays Business Lending 90+ EWL3 90+ Note: FY 2008
Slide 10: Moving from the back of the pack to the front of the pack
Moving from the back of the pack to the front of the pack Improved customer satisfaction… …and brand consideration JD Power survey measuring customer satisfaction Millward Brown research: people who would across six service metrics consider taking out a financial product with us Other competitors 1s
Slide 11: Becoming the Go To Bank
Becoming the Go To Bank 1 Economic Environment Focus on Returns Develop Capabilities Uncertain Macro-economic environment • Focus on costs, consolidate relationships, sustainable growth • Develop Capabilities 10
Slide 12: Becoming the Go To Bank
Becoming the Go To Bank 1 Economic 2 Regulators Environment Focus on Customer Focus on Returns Simple Products Develop Capabilities Increasing Regulatory Focus and Intervention • Simple Products Delivered Excellently • Culture Driving Clarity and Openness 11
Slide 13: Becoming the Go To Bank
Becoming the Go To Bank 1 Economic 2 Regulators 3 Customers Environment Speed & Transparency Focus on Returns Focus on Customer Seamless Access Develop Capabilities Simple Products Transforming customer needs and expectations • Delivering Speed and Transparency • Seamless Access and Engagement 12
Slide 14: Becoming the Go To Bank
Becoming the Go To Bank 1 Economic 2 Regulators 3 Customers 4 Competition Environment Differentiate Experience Focus on Returns Focus on Customer Speed & Transparency Consolidate Develop Capabilities Simple Products Seamless Access Relationships Reducing market differentiation, increasing competitio
Slide 15: Consolidating customer relationships, focusing on experience to drive increased engagement
Consolidating customer relationships, focusing on experience to drive increased engagement Transactional Savings Mortgages Consumer Lending • Pingit • Loyalty • Product engine • Instant • Features Store • Flexibility • On us/off us (great • On us/off us • Personalised debit • Innovation escape) • Fl
Slide 16: UK Retail and Business Banking
UK Retail and Business Banking • We have repositioned the bank to increase returns from a low of 7.5% in 2009 to pre-crisis levels at almost 15% • Income growth will remain muted over the next 2 years due to the economic environment, therefore we are focusing on cost reduction and selective balance