Slide 1: Barclays PLC Fixed Income Investor Call
Barclays PLC Fixed Income Investor Call Q2 2018 Results Announcement 2 August 2018 | Barclays Q2 2018 Fixed Income Call Presentation | 2 August 2018
Slide 2: Tushar Morzaria
Tushar Morzaria Barclays Group Finance Director | Barclays Q2 2018 Fixed Income Call Presentation | 2 August 2018
Slide 3: Q218 Group highlights
Q218 Group highlights Double digit Group returns with positive jaws driving improved profitability Financial performance1 Group RoTE was 12.3% as PBT increased 44% • Double digit returns in BUK of 18.8% and BI of 12.2% Income 10% £5.6bn2 (Q217: £5.1bn) Income growth of 10% and improved operatin
Slide 4: Prudently managing credit risk in both the UK and US
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 US Q416 Q217 Q417 Q218 Low LTV mortgage book Average LTV on flow Average LTV on stock Gross L&A <50% average LTV on stock as at Q218 UK Bias to grow
Slide 5: Kathryn McLeland
Kathryn McLeland Group Treasurer | Barclays Q2 2018 Fixed Income Call Presentation | 2 August 2018
Slide 6: Strong Group CET1 and leverage ratios
Strong Group CET1 and leverage ratios Fully loaded and transitional CET1 ratio Fully loaded CET1 ratio -30bps • Transitional CET1 ratio increased by 30bps in the quarter to 13.0% Transitional benefit +30bps • Transitional CET1 ratio decreased by 30bps in the half to 13.0% 1 13.3% 1 13.0% 1 positivel
Slide 7: Capital accretion driven by strong profitability
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% Management buffer1 12.7% 16bps 0.5% CCyB 11.4% 2.5% CCB 1.5% G-SII Pillar 2A 2.4% requirement Pillar 1 4.5% requirement Mar-18 Profit Dividends Pension BAGL Fai
Slide 8: Managing Group capital position above mandatory distribution restrictions
Managing Group capital position above mandatory distribution restrictions Illustrative evolution of minimum CET1 requirements and buffers 2017 Pillar 1 requirement Countercyclical Buffer (CCyB) Distribution restrictions and management buffer 2017 Pillar 2A CET1 requirement CRD IV Mandatory Distribut
Slide 9: Transition to HoldCo funding model continues steadily
Transition to HoldCo funding model continues steadily HoldCo MREL position and requirement Well advanced on HoldCo issuance plan including requisite buffers 2018 issuance plan – currently expect c.£10bn equivalent issuance in 20183 29.1% • Issued £6.2bn equivalent of MREL in H118, all in senior form
Slide 10: Deposit and wholesale funding sources of Barclays Bank UK PLC and Barclays Bank PLC
Deposit and wholesale funding sources of Barclays Bank UK PLC and Barclays Bank PLC Barclays PLC Barclays Bank UK PLC Barclays Bank PLC (and subsidiaries) – Personal Banking 153 – Corporate and Investment Bank 130 Deposit funding 194 1922 – Business Banking 41 – Consumer, Cards and Payments 61 – Cer
Slide 11: Group expects to accommodate all legal entity capital requirements within current Group CET1 guidance
Group expects to accommodate all legal entity capital requirements within current Group CET1 guidance of c.13% Accounting and regulated sub-group Accounting sub-group Barclays PLC Barclays Bank UK PLC sub-group Barclays Bank PLC accounting sub-group Barclays Bank UK PLC (solus) Group Service Barclay
Slide 12: High quality liquidity and funding position with a conservatively positioned liquidity pool and stable LDR
High quality liquidity and funding position with a conservatively positioned liquidity pool and stable LDR Liquidity remains in prudential surplus Loan: deposit ratio1 Liquidity Coverage Loans and advances2 (£bn) Deposits2 (£bn) LDR Ratio (LCR) 84% 84% 83% (%) 154% 147% 154% 131% 399 348 391 324 317
Slide 13: Preparation for Brexit
Preparation for Brexit Plans in place to expand Barclays Bank Ireland (BBI) in advance of March 2019 to support activity with European clients To provide a sense of size, using December 2017 Allows passported activity for EEA-domiciled clients post Brexit numbers, the EEA-domiciled clients and assum
Slide 14: Ratings remain a key strategic priority
Ratings remain a key strategic priority Current Senior Long and Confirmed ratings of Barclays PLC, BBPLC Standard & Poor’s Fitch Moody’s Short Term ratings and BBUKPLC Rating agencies finalised their ratings for the holding company, ring-fenced bank and non ring-fenced bank following the implementat
Slide 15: Focused on profitability and returns and capital targets
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 2020 CET1 ratio of 13.0% and full regulatory deconsolidation of BAGL CET1 ratio3 c.13% 59% Group cost: income ratio £13.6-13.9bn in 20191 Costs with 13
Slide 16: Q&A
Q&A | Barclays Q2 2018 Fixed Income Call Presentation | 2 August 2018
Slide 17: Appendix
Appendix | Barclays Q2 2018 Fixed Income Call Presentation | 2 August 2018
Slide 18: Managing capital position above stress test hurdles
Managing capital position above stress test hurdles Barclays’ expected hurdle rate for 2018 BoE stress test1 2017 P1 requirement Countercyclical Buffer (CCyB) Stress tests 2017 P2A CET1 requirement Maximum and indicative • Barclays’ end-state stress buffer is expected to be at least c.4.6% when G-SI
Slide 19: Managing evolving future Group minimum leverage requirements
Managing evolving future Group minimum leverage requirements Illustrative evolution of minimum leverage requirements and buffers under the UK regime BoE minimum leverage requirement Maximum BoE stress test hurdle rate for 2018 tests1 Leverage requirements G-SII leverage buffer Regulatory minimum lev
Slide 20: Transition to CRD IV capital structure well established
Transition to CRD IV capital structure well established Illustrative evolution of CRD IV capital structure Well managed and balanced total capital structure 20.5% • BBPLC issued capital instruments are expected to qualify as MREL in Total capital ratio line with their regulatory capital values until
Slide 21: Proactive transition to HoldCo capital and funding model
Proactive transition to HoldCo capital and funding model HoldCo issuance by year1 Senior unsecured Total: £3.8bn • The Group has continued to make strong T2 Total: £2.4bn HoldCo Snr: £3.8bn Total: £11.6bn progress on its commitment to transition to AT1 HoldCo Snr: £2.4bn T2: £0.0bn HoldCo Snr: £6.2b
Slide 22: Disclaimer
Disclaimer Important Notice 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 buy any securities or financial instruments, or any advice or recommendation with re