Barclays Plc · LSE:BARC
Barclays — Debt Investor Presentation (August 2024)
54 slides from Barclays's debt investor presentation, Aug 1, 2024
Slide 1: Q2 2024 Fixed Income Investor Presentation
Q2 2024 Fixed Income Investor Presentation 1st August 2024
Slide 2: Why Barclays
Why Barclays Barclays Q2 2024 Results August 2024 2 1 High returning UK retail and corporate franchises 2 Top-tier global Investment Bank with focus and scale, operating in core UK and US markets 3 Multiple levers to allocate capital in a disciplined way to drive growth within higher returning divis
Slide 3: Performance
Performance
Slide 4: We set out financial targets and are on the path to delivery
We set out financial targets and are on the path to delivery Barclays Q2 2024 Results August 2024 4 Targets Q224 H124 2024 2026 Statutory RoTE 9.9% 11.1% >10% >12% 11.8% excl. inorganic activity1 12.0% excl. inorganic activity1 c.10.5% excl. inorganic activity1 Broadly in line with At least £10bn3 T
Slide 5: Q224 performance summary
Q224 performance summary Barclays Q2 2024 Results August 2024 5 Q224 Statutory RoTE Barclays UK 22.3% FY26 target: high teens% 18.0% Execution progress UK Corporate Bank FY26 target: high teens% Realised a further £0.2bn of c.£1bn FY24 gross efficiency savings (£0.4bn YTD) Private Bank & Wealth 30.8
Slide 6: Barclays Group Q224 and H124
Barclays Group Q224 and H124 Barclays Q2 2024 Results August 2024 6 Q224 H124 9.9% £6.3bn 11.1% £13.3bn Statutory RoTE Income Statutory RoTE Income 11.8% excl. inorganic activity1 Q223: £6.3bn 12.0% excl. inorganic activity1 H123: £13.5bn Q223: 11.4% H123: 13.2% £4.0bn 63% £8.2bn 62% Costs Cost: inc
Slide 7: Group delivered Q224 RoTE of 9.9%; FY24 RoTE target >10%
Group delivered Q224 RoTE of 9.9%1; FY24 RoTE target >10% Barclays Q2 2024 Results August 2024 7 Group RoTE (%) Includes c.50bps from (0.4) (0.1) less negative cash flow 1.8 hedge reserve (1.9) 1.9 (1.0) Loss on sale of performing Italian mortgage book and German consumer finance business – broadly
Slide 8: Income up 1% YoY; more stable income streams 73% of Group income
Income up 1% YoY; more stable income streams 73% of Group income Barclays Q2 2024 Results August 2024 8 Group income (£bn) More stable income More stable income streams +1% YoY More stable income streams expected to +4% excl. inorganic activity streams contribute continue to contribute 7.0 73% of Gr
Slide 9: Q224 Group NII of £2.7bn; FY24 NII guidance revised to c.£11.0bn
Q224 Group NII of £2.7bn1; FY24 Group NII guidance revised to c.£11.0bn1,2 Barclays Q2 2024 Results August 2024 9 Net interest income (£bn) Broadly stable 2.8 2024 Group NII (excl. IB and HO) guidance: c.£11.0bn1,2 2.7 2.7 Previously: c.£10.7bn1,2 • £5.4bn Group NII in H1241 2.2 1.1 1.1 UK Corporate
Slide 10: £2.2bn structural hedge income in H124
£2.2bn structural hedge income in H124 Barclays Q2 2024 Results August 2024 10 Gross hedge income expected to continue to grow 10.0 09.0 Q224: 3.9% Gross contribution 3.4% resilient to marginal 08.0 4.1% changes in rates 07.0 and hedge notional GBP 5yr Q224: 1.9% swap rate1 06.0 1.0% 0.9% Average 05
Slide 11: Lower interest rate sensitivity, with one rate cut expected in 2024
Lower interest rate sensitivity, with one rate cut expected in 2024 Barclays Q2 2024 Results August 2024 11 Illustrative interest rate sensitivity1 • Illustrative Group income impact from a 25bps Year 1 Year 2 Year 3 downward parallel shift in interest rate curves • The sensitivity is calculated usi
Slide 12: Q224 total costs up 1% YoY; operating costs up 2%
Q224 total costs up 1% YoY; operating costs up 2% Barclays Q2 2024 Results August 2024 12 Group total costs (£bn) Group c.63% CIR 2024 target 62% Group CIR in H124 Efficiency savings offsetting inflation, enabling investments Cost: income ratio Q222 Q223 Q224 2026 target 0.1 Group 75% 63% 63% High 5
Slide 13: Barclays UK Q224
Barclays UK Q224 Barclays Q2 2024 Results August 2024 13 Targets 2026 22.3% £0.8bn RoTE High teens % RoTE Profit before tax Q223: 20.9% Q223: £0.8bn Mid-single digits CAGR £1.9bn £1.6bn Income Income Net Interest Income FY24 NII c.£6.1bn1 Q223: £2.0bn Q223: £1.7bn 55% £8m Cost: income ratio c.50% Co
Slide 14: Barclays UK delivered Q224 RoTE of 22.3%
Barclays UK delivered Q224 RoTE of 22.3% Barclays Q2 2024 Results August 2024 14 RoTE (%) Income by product (£m) YoY Costs (£m) Includes £54m BoE Levy 1,961 1,887 -4% 1,724 1,826 Business 480 Banking 382 469 485 +1% 237 229 228 YoY Barclaycard 265 -4% Consumer UK 1,101 1,085 1,063 1,045 -4% 1,077 1,
Slide 15: Stabilising deposit trends; expect net lending stability in H2 before growth
Stabilising deposit trends; expect net lending stability in H2 before growth Barclays Q2 2024 Results August 2024 15 Barclays UK deposit balances and mix (£bn) Barclays UK loans and advances1 (£bn) -£6.6bn -£2.1bn -£3.9bn -£0.5bn 250 207 205 203 201 243 241 237 237 Business 199 Banking 24 23 23 22 B
Slide 16: UK Corporate Bank Q224
UK Corporate Bank Q224 Barclays Q2 2024 Results August 2024 16 Targets 2026 18.0% £0.2bn RoTE High teens % RoTE Profit before tax Q223: 32.9% Q223: £0.3bn Deliver high-quality £0.4bn £0.2bn Income growth across broad Income Costs Q223: £0.5bn Q223: £0.2bn sources 53% £8m Cost: income ratio High 40s
Slide 17: UK Corporate Bank delivered Q224 RoTE of 18.0%
UK Corporate Bank delivered Q224 RoTE of 18.0% Barclays Q2 2024 Results August 2024 17 RoTE (%) Income by product (£m) YoY Income by type (£m) YoY 32.9 472 443 472 434 -6% 434 443 -6% 405 405 68 57 Corporate 72 -16% -15% 63 173 147 lending 139 157 8.7 Non-NII 404 362 386 Transaction 342 -4% -1% 266
Slide 18: Private Bank & Wealth Management Q224
Private Bank & Wealth Management Q224 Barclays Q2 2024 Results August 2024 18 Targets 2026 30.8% £0.1bn RoTE >25% RoTE Profit before tax Q223: 35.9% Q223: £0.1bn Deliver high-quality £0.3bn £0.2bn Income growth across broad Income Costs sources Q223: £0.3bn Q223: £0.2bn 68% £7.0bn Cost: income ratio
Slide 19: Private Bank & Wealth Management delivered Q224 RoTE of 30.8%
Private Bank & Wealth Management delivered Q224 RoTE of 30.8% Barclays Q2 2024 Results August 2024 19 RoTE (%) Income by type (£m) YoY Costs (£m) 312 320 +7% 299 35.9 RoTE pre-WM&I1 transfer: negative 245 2.2 impact c.2.2% 113 137 133 +18% 78 YoY Non-NII 217 219 +20% 167 186 175 187 +1% 182 NII 138
Slide 20: Investment Bank Q224
Investment Bank Q224 Barclays Q2 2024 Results August 2024 20 Targets 2026 9.6% £1.1bn RoTE In line with Group RoTE Profit before tax Q223: 7.7% Q223: £0.9bn £3.0bn £1.9bn Income High single digit CAGR Income Costs Q223: £2.7bn Q223: £1.8bn 63% £44m Cost: income ratio High 50s % Cost: income ratio Im
Slide 21: Investment Bank delivered Q224 RoTE of 9.6%
Investment Bank delivered Q224 RoTE of 9.6% Barclays Q2 2024 Results August 2024 21 RoTE (%) Income by business (£m)1 Costs (£m)1,4 YoY 3,328 2,924 3,019 +10% Banking fees & 2,743 617 underwriting 554 472 679 +44% YoY Intermediation2 937 1,587 1,051 +12% 1,869 1,814 1,999 1,903 +5% 1,435 Financing3
Slide 22: Income up 10% YoY; strong performance in Equities and Fee businesses
Income up 10% YoY; strong performance in Equities and Fee businesses Barclays Q2 2024 Results August 2024 22 Global Markets Investment Banking Global Markets income (£m)1 Banking fees and underwriting (£m) International Corporate Bank +5% YoY +44% YoY income (£m) +6% USD +45% USD -5% YoY YoY 2,287 6
Slide 23: US Consumer Bank Q224
US Consumer Bank Q224 Barclays Q2 2024 Results August 2024 23 Targets 2026 9.2% £0.1bn RoTE In line with Group RoTE Profit before tax Q223: 9.3% Q223: £0.1bn $31.2bn £0.8bn End Net Receivables c.$40bn (c.£31bn) End net receivables Income Mar-24: $30.5bn Q223: £0.8bn 10.43% £0.4bn Net interest margin
Slide 24: US Consumer Bank delivered Q224 RoTE of 9.2%
US Consumer Bank delivered Q224 RoTE of 9.2% Barclays Q2 2024 Results August 2024 24 RoTE (%) Income by type (£m) YoY Costs (£m) 859 819 767 +7% 629 171 173 145 +19% YoY Non-NII 240 365 405 390 410 +1% 622 688 646 +4% NII 389 Q222 Q223 Q124 Q224 Q222 Q223 Q124 Q224 NIM 8.37% 10.66% 11.12% 10.43% CIR
Slide 25: Head Office Q224
Head Office Q224 Barclays Q2 2024 Results August 2024 25 Income (£m) Inorganic activity 194 43 (164) YoY 23 • Completed sale of performing Italian mortgage portfolio 87 • Announced sale of German consumer finance business German 69 77 Cards 91 +18% FY24 P&L CET1 ratio Expected RWAs RoTE 63 impact im
Slide 26: Group Q224 performance against financial targets
Group Q224 performance against financial targets Barclays Q2 2024 Results August 2024 26 9.9% £1.2bn 11.8% excl. inorganic activity1 Statutory RoTE (2024 target: >10%) 2.9p dividend per share, £750m share buyback Capital contributions in respect of H124 (2024-2026 target: at least £10bn4) £2.7bn Gro
Slide 27: Asset quality
Asset quality
Slide 28: LLR of 38bps; maintaining through the cycle guidance of 50-60bps
LLR of 38bps; maintaining through the cycle guidance of 50-60bps Barclays Q2 2024 Results August 2024 28 LLR guidance 800 over FY24-FY26 period 190 Loan loss rate (bps) 636 610 582 600 515 US Consumer Bank 438 Trend towards 140 411 long term average 337 400 Q224 impairment charge: of c.400bps 257 £3
Slide 29: Lower delinquencies in US cards in line with seasonal industry trend
Lower delinquencies in US cards in line with seasonal industry trend Barclays Q2 2024 Results August 2024 29 Write offs increasing as expected with reserve build slowing 30 day US cards delinquencies 2.9% 3.1% 2.9% 2.4% 2.7% 2.0% 2.2% 2.3% 1.4% USCB loan loss rate1 (bps) 179 257 337 515 411 582 636
Slide 30: Long-term prudent risk positioning in our credit card portfolios
Long-term prudent risk positioning in our credit card portfolios Barclays Q2 2024 Results August 2024 30 UK cards US cards • Balances c.31% lower vs. FY19 with strong and stable credit quality • Controlled portfolio growth with improved risk mix • Repayment rates remain elevated across the risk spec
Slide 31: Resilient mortgage book with customers proactively locking in rates
Resilient mortgage book with customers proactively locking in rates Barclays Q2 2024 Results August 2024 31 Mortgage portfolio Maturity profile • 52.7% average balance weighted LTV of mortgage stock • 9% of total balances maturing during 20241 o 39.4% average valuation weighted LTV • Offering custom
Slide 32: Commercial Real Estate exposure is modest and well managed
Commercial Real Estate exposure is modest and well managed Barclays Q2 2024 Results August 2024 32 4.7%1 of customer loans and advances (L&A), with a weighted average LTV of 52%2 Retail Customer loans & Construction £0.9bn £344bn advances3 £2.4bn Residential £16.1bn £3.9bn CRE exposure by type Other
Slide 33: Well provisioned balance sheet
Well provisioned balance sheet Barclays Q2 2024 Results August 2024 33 Balance sheet provisions for ECL (£bn) Credit impairment charges (£m) 6.3 372 6.2 384 Barclays UK Off-balance sheet 0.5 0.5 95 8 UK Corporate 8 Bank 44 Investment 77 Bank On-balance sheet 5.7 5.7 US Consumer 309 264 Bank 13 18 He
Slide 34: Risk transfer transactions enhance Barclays' risk management capabilities
Risk transfer transactions enhance Barclays’ risk management capabilities Barclays Q2 2024 Results August 2024 34 Purpose Barclays transfers c.£60bn1 risk via a variety of structures UK Corporate Bank and Investment Bank • The banking book has inherent credit Corporate risk, driving risk weight dens
Slide 35: Risk transfer activities focused on corporate loans and credit cards
Risk transfer activities focused on corporate loans and credit cards Barclays Q2 2024 Results August 2024 35 Corporate loans US credit cards • Colonnade programme established in 2016 • Initiated risk transfer in Q124 to help optimise • Deployed against exposure in the UK Corporate Bank and Investmen
Slide 36: Capital and leverage
Capital and leverage
Slide 37: CET1 ratio within the 13-14% target range
CET1 ratio within the 13-14% target range Barclays Q2 2024 Results August 2024 37 Q224 CET1 ratio movements (9bps) (9bps) 35bps (8bps) c.(20bps) 13.5% 13.6% 13.4% Q124 Attributable Dividend RWA Other Q224 H124 announced Q224 rebased profit accrual ex. FX inc. FX buyback H124 CET1 ratio movements (18
Slide 38: Unchanged guidance on regulatory driven RWA inflation
Unchanged guidance on regulatory driven RWA inflation Barclays Q2 2024 Results August 2024 38 Overall impact still expected at lower end of 5-10% of Group RWAs Basel 3.1 Lower end of 5-10% RWA inflation of Dec-23 position US Cards IRB c.£16bn Q125 Q325 US Cards IRB: Expected Q125 Basel 3.1: 1 July 2
Slide 39: RWAs increased by £1.8bn QoQ
RWAs increased by £1.8bn QoQ Barclays Q2 2024 Results August 2024 39 Risk weighted assets (£bn) 0.6 (1.9) 2.9 (0.0) 0.5 (0.2) 351.4 349.6 336.9 Q223 Q124 Barclays UK UK Corporate Private Bank & Investment Bank US Consumer Head Office Q224 Bank Wealth Bank Management Regulatory driven RWA inflation g
Slide 40: CET1 ratio with significant headroom to MDA
CET1 ratio with significant headroom to MDA Barclays Q2 2024 Results August 2024 40 CET1 minimum requirements at Q224 Leverage minimum requirements at Q224 MDA 12.0% CCyB 0.9% Reg Min 4.08% CCB 2.5% CCLB 0.30% G-SII 1.5% G-SII 0.53% 13.6% Pillar 2A 2.6% 5.0% 4.7% BoE minimum leverage 3.25% requireme
Slide 41: Operating with a prudent buffer to each tier of capital requirements
Operating with a prudent buffer to each tier of capital requirements Barclays Q2 2024 Results August 2024 41 AT1 and T2 needs managed on a total capital basis Balanced total capital structure As at Q224 • Operating with prudent buffers at each part of the capital stack to manage FX and RWA movements
Slide 42: Balance sheet management
Balance sheet management
Slide 43: MREL position well established; 80% of 2024 issuance plan complete
MREL position well established; 80% of 2024 issuance plan complete Barclays Q2 2024 Results August 2024 43 MREL position at Q224 HoldCo issuance 33.5% • c.£12bn 2024 MREL issuance plan (£117.8bn) 30.1% o £9.7bn executed YTD across Senior, Tier 2 and AT1 (£105.8bn) o No further AT1 issuance expected
Slide 44: Diverse and stable franchise deposit base
Diverse and stable franchise deposit base Barclays Q2 2024 Results August 2024 44 QoQ movements Investment Bank BUK: Personal Banking £132bn, +3% £183bn, flat • International Corporate Bank1: £98bn, +2% • 72% insured • Treasury deposits: £34bn, +7% • >75% of relationships 5+ years UK Corporate Bank
Slide 45: Prudently managed LCR supported by a highly liquid balance sheet
Prudently managed LCR supported by a highly liquid balance sheet Barclays Q2 2024 Results August 2024 45 Average LCR1 Average NSFR2 76% of Liquidity Pool held in cash HTC £18bn 139% 139% 138% 138% 136% 136% FVOCI 5% 157% 157% 159% 161% 163% 167% £60bn 18% Q123 Q223 Q323 Q423 Q124 Q224 Q123 Q223 Q323
Slide 46: Executed £9.7bn of c.£12bn 2024 issuance plan
Executed £9.7bn of c.£12bn 2024 issuance plan Barclays Q2 2024 Results August 2024 46 2024 HoldCo benchmark Annual HoldCo issuance volume (£bn) and currency1,2 issuance 15.0 14.1 c.12 Jan-24: EUR 1.0bn 11.5 12.1 plan 11.0 Senior 8.6 10.7 7.8 9.8 Mar-24: USD 4.5bn multi-tranche 6.1 Senior 10.2 4.0 8.
Slide 47: Wholesale funding composition
Wholesale funding composition Barclays Q2 2024 Results August 2024 47 <1 1-3 3-6 6-12 Total 1-2 2-3 3-4 4-5 As at 30 June 2024 (£bn) >5 years Total month months months months <1 year years years years years Barclays PLC (the Parent company) Senior unsecured 1.6 1.6 6.9 5.8 7.0 4.0 23.0 48.3 (public
Slide 48: Strong legal entity capital and liquidity positions
Strong legal entity capital and liquidity positions Barclays Q2 2024 Results August 2024 48 Continue to manage legal entity capital ratios with appropriate headroom to requirements Barclays PLC Barclays Bank UK PLC (BBUKPLC) sub-group Barclays Bank PLC (BBPLC) sub-group Barclays Bank UK PLC (solus)
Slide 49: Credit ratings
Credit ratings
Slide 50: Targeting Barclays PLC to be “A” composite across all indices over time
Targeting Barclays PLC to be “A” composite across all indices over time Barclays Q2 2024 Results August 2024 50 Strong momentum with Current Senior long and short term ratings 2023 credit rating upgrades Moody’s Standard & Poor’s Fitch • HoldCo Senior composite rate “A” for two of four indices • One
Slide 51: Barclays rating composition for senior debt
Barclays rating composition for senior debt Barclays Q2 2024 Results August 2024 51 Moody’s Standard & Poor’s Fitch BBUK BBUK BBUK BPLC BBPLC BPLC BBPLC BPLC BBPLC PLC PLC PLC Adjusted Baseline baa1 baa1 a3 Stand-Alone Credit Profile a- Viability Rating2 a a a Credit Assessment Macro profile Strong+
Slide 52: Macroeconomic variables
Macroeconomic variables Barclays Q2 2024 Results August 2024 52 Assumptions 2023 2024 2025 2026 UK GDP2 0.5% 0.2% 1.1% 1.6% UK unemployment3 4.3% 4.8% 4.7% 4.8% UK bank rate4 5.25% 4.00% 3.25% 3.25% Sterling 5-year swap rate5 3.36% 3.58% 3.49% 3.49% UK inflation6 7.4% 3.0% 1.9% 2.0% Plan US GDP2 2.4
Slide 53: Contacts – Debt Investor Relations
Contacts – Debt Investor Relations Barclays Q1 2024 Results April 2024 53 Dan Colvin Justin Lutterbuese +44 (0)20 7116 6533 +44 (0)20 7116 6021 daniel.colvin@barclays.com justin.lutterbuese@barclays.com
Slide 54: Disclaimer
Disclaimer Barclays Q2 2024 Results August 2024 54 Important 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