Barclays Plc · LSE:BARC
Barclays — Debt Investor Presentation (August 2018)
53 slides from Barclays's debt investor presentation, Aug 2, 2018
Slide 1: Barclays PLC Fixed Income Investor Presentation
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Barclays PLC Fixed Income Investor Presentation Q2 2018 Results Announcement 2 August 2018 | Barclays Q2 2018 Fixed Income Investor Presentation
Slide 2: Strategy, Targets and Guidance
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Strategy, Targets and Guidance | Barclays Q2 2018 Fixed Income Investor Presentation 1 (From prior page) This presentation must be read and construed
Slide 3: Focused on profitability and returns and capital targets
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Focused on profitability and returns and capital targets Q218 highlights Group targets >9% in 2019 Double digit returns – Group 12.3%1 RoTE2 >10% in
Slide 4: Continued cost reduction towards 2019 guidance
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Continued cost reduction towards 2019 guidance Improved operational efficiency creating capacity to invest in growth and digitisation Targeting cost:
Slide 5: Performance
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Performance | Barclays Q2 2018 Fixed Income Investor Presentation
Slide 6: Q218 Group highlights
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Q218 Group highlights Double digit Group returns with positive jaws driving improved profitability Financial performance1 Group RoTE was 12.3% as P
Slide 7: Q218 Barclays UK results
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Q218 Barclays UK results RoTE of 18.8% with growth in customer balances and ongoing investment in digital banking Stable income in a competitive ma
Slide 8: Think digital, think Barclays UK
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Think digital, think Barclays UK Building meaningful relationships with our 24 million customers Front end Changing the shape of our business digitis
Slide 9: Q218 Barclays International results
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Q218 Barclays International results Double digit returns with strong performance across CIB and CC&P Barclays International delivered a 12.2% Finan
Slide 10: Q218 Barclays International: Corporate & Investment Bank results
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Q218 Barclays International: Corporate & Investment Bank results Continued strength in Markets and Banking fees Markets income increased 11%, or 15
Slide 11: Q218 Barclays International: Consumer, Cards & Payments results
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Q218 Barclays International: Consumer, Cards & Payments results Strong returns whilst investing in growth across CC&P businesses Income increased 8
Slide 12: Head Office
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Head Office Post Non-Core integration Income included a one-off gain of £155m from settlement of receivables relating to Q217 Q317 Q417 Q118 Q218 L
Slide 13: Capital & Leverage
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Capital & Leverage | Barclays Q2 2018 Fixed Income Investor Presentation
Slide 14: Capital accretion driven by strong profitability
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Capital accretion driven by strong profitability CET1 ratio CRD IV MDR hurdle 44bps Target of 11bps 10bps c.13% c.13% 13bps 5bps 13.0% 1.6% Managemen
Slide 15: Strong Group CET1 and leverage ratios
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Strong Group CET1 and leverage ratios Fully loaded and transitional CET1 ratio Fully loaded CET1 ratio -30bps • Transitional CET1 ratio increased by
Slide 16: Managing Group capital position above mandatory distribution restrictions
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Managing Group capital position above mandatory distribution restrictions Illustrative evolution of minimum CET1 requirements and buffers 2017 Pillar
Slide 17: Managing capital position above stress test hurdles
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Managing capital position above stress test hurdles Barclays’ expected hurdle rate for 2018 BoE stress test1 2017 P1 requirement Countercyclical Buff
Slide 18: Transition to CRD IV capital structure well established
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Transition to CRD IV capital structure well established Illustrative evolution of CRD IV capital structure Well managed and balanced total capital st
Slide 19: Managing evolving future Group minimum leverage requirements
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Managing evolving future Group minimum leverage requirements Illustrative evolution of minimum leverage requirements and buffers under the UK regime
Slide 20: Leverage requirements
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Leverage requirements Requirements Requirements Disclosure Disclosure obligations obligations Basis Basisof of preparation preparation 30- Jun-18 01-
Slide 21: ADI position supports strong distribution capacity
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES ADI position supports strong distribution capacity Distribution capacity as at 31 December 2017 (£m) Distributable items ADI Barclays PLC dividend pa
Slide 22: MREL, Funding and Liquidity
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES MREL, Funding and Liquidity | Barclays Q2 2018 Fixed Income Investor Presentation
Slide 23: Transition to HoldCo funding model continues steadily
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Transition to HoldCo funding model continues steadily HoldCo MREL position and requirement Well advanced on HoldCo issuance plan including requisite
Slide 24: Proactive transition to HoldCo capital and funding model
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Proactive transition to HoldCo capital and funding model HoldCo issuance by year1 Senior unsecured Total: £3.8bn • The Group has continued to make st
Slide 25: High quality liquidity and funding position with a conservatively positioned liquidity pool and stable LDR
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES High quality liquidity and funding position with a conservatively positioned liquidity pool and stable LDR Liquidity remains in prudential surplus Lo
Slide 26: Wholesale funding composition as at June 2018
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Wholesale funding composition as at 30 June 20181 <1 1-3 3-6 6-12 Total 1-2 2-3 3-4 4-5 As at 30 June 2018 (£bn) >5 years Total month months months m
Slide 27: Divisions and Legal Entities
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Divisions and Legal Entities | Barclays Q2 2018 Fixed Income Investor Presentation
Slide 28: Simplified business divisions, aligned to legal entity construct
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Simplified business divisions, aligned to legal entity construct Barclays PLC Barclays International Barclays UK and Head Office1 UK consum
Slide 29: Deposit and wholesale funding sources of Barclays Bank UK PLC and Barclays Bank PLC
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Deposit and wholesale funding sources of Barclays Bank UK PLC and Barclays Bank PLC Barclays PLC Barclays Bank UK PLC Barclays Bank PLC (an
Slide 30: Group expects to accommodate all legal entity capital requirements within current Group CET1 guidance of c.13%
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Group expects to accommodate all legal entity capital requirements within current Group CET1 guidance of c.13% Accounting and regulated sub
Slide 31: P&L bridge from Barclays UK division to Barclays Bank UK PLC legal entity
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES P&L bridge from Barclays UK division to Barclays Bank UK PLC (BBUKPLC) legal entity 1 2 3 4 Removal of Head Office BX Service Barclays BBUK
Slide 32: P&L bridge from Barclays International division to Barclays Bank PLC legal entity
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES P&L bridge from Barclays International division to Barclays Bank PLC (BBPLC) legal entity 1 2 3 4 Head Office BX Service Barclays BBPLC H11
Slide 33: Preparation for Brexit
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Preparation for Brexit Plans in place to expand Barclays Bank Ireland (BBI) in advance of March 2019 to support activity with European clie
Slide 34: Asset Quality
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Asset Quality | Barclays Q2 2018 Fixed Income Investor Presentation
Slide 35: Prudently managing credit risk in both the UK and US
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Prudently managing credit risk in both the UK and US Conservatively positioned in the UK in the face of Brexit and the consumer credit cycle in the U
Slide 36: Impairment
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Impairment Q218 impairment 1 In the UK, underlying credit metrics were broadly stable and economic conditions steady, resulting in steady impairmen
Slide 37: Credit Ratings
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Credit Ratings | Barclays Q2 2018 Fixed Income Investor Presentation
Slide 38: Ratings remain a key strategic priority
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Ratings remain a key strategic priority Current Senior Long and Confirmed ratings of Barclays PLC, BBPLC Standard & Poor’s Fitch Moody’s Short Term r
Slide 39: Barclays rating composition for senior debt
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Barclays rating composition for senior debt Fitch Moody’s Standard & Poor’s BPLC BBPLC BBUKPLC BPLC BBPLC BBUKPLC BPLC BBPLC BBUKPLC Viability Rating
Slide 40: Barclays rating composition for subordinated debt
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Barclays rating composition for subordinated debt Fitch Moody’s Standard & Poor’s Baseline Stand-alone Viability Stand-Alone a a Credit baa3 baa3 bbb
Slide 41: Appendix
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Appendix | Barclays Q2 2018 Fixed Income Investor Presentation
Slide 42: Litigation & conduct and other items
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Litigation & conduct and other items Litigation & conduct (£m) Q218 Q217 PPI - (700) Barclays UK Other (81) (15) Group (across divisions) Total (81)
Slide 43: Q218 Group results
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Q218 Group results Three months ended (£m) Jun-18 Jun-17 % change Excluding L&C – Three months ended (£m) Jun-18 Jun-17 % change Income 5,576 5,058 1
Slide 44: Q218 Barclays UK results
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Q218 Barclays UK results Business performance Excluding L&C – Three months ended (£m) Jun-18 Jun-17 % change Three months ended (£m) Jun-18 Jun-17 %
Slide 45: Q218 Barclays International results
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Q218 Barclays International results Business performance Excluding L&C – Three months ended (£m) Jun-18 Jun-17 % change Three months ended (£m) Jun-1
Slide 46: Q218 Barclays International: Corporate & Investment Bank and Consumer, Cards & Payments results
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Q218 Barclays International: Corporate & Investment Bank and Consumer, Cards & Payments results CIB Business performance CC&P Business performance %
Slide 47: Head Office and Non-Core results
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Head Office and Non-Core results Head Office Business performance Non-Core Business performance Three months ended (£m) Jun-18 Jun-17 Three months en
Slide 48: Income and margins
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Income and margins NII (£m) – Three months ended Jun-18 Jun-17 % change Q218 performance metrics – Barclays UK 1,493 1,534 (3%) • Combined Barclays U
Slide 49: Interest rate sensitivity
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Interest rate sensitivity Illustrative sensitivity of Group NII to a 100bps parallel upward shift in interest rates1 Change in NII (£m) Reconciling i
Slide 50: UK approach to resolution
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES UK approach to resolution Illustrative UK resolution loss allocation waterfall assuming multiple OpCos1 OpCo waterfall Intercompany investments HoldC
Slide 51: Abbreviations
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Abbreviations AP Attributable Profit HO Head Office TNAV Tangible Net Asset Value AT1 Additional Tier 1 L&A Loans and Advances US DoJ US Department o
Slide 52: Contact – Debt Investor Relations Team
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Version 4 Contact – Debt Investor Relations Team James Cranstoun Dan Colvin +44 (0)20 7773 1630 +44 (0)20 7116 6533 james.cranstoun@barclays.com dani
Slide 53: Disclaimer
STRATEGY, TARGETS CAPITAL MREL, FUNDING DIVISIONS PERFORMANCE ASSET QUALITY CREDIT RATINGS APPENDIX & GUIDANCE & LEVERAGE & LIQUIDITY & LEGAL ENTITIES Disclaimer Important Notice The information, statements and opinions contained in this presentation do not constitute a public offer under any applic