Barclays Plc · LSE:BARC
Barclays — H1 2001 Earnings Presentation
25 slides from Barclays's earnings presentation, Aug 2, 2001
Slide 1: Barclays PLC 2001 Interim Results
Barclays PLC 2001 Interim Results 2nd August 2001
Slide 2: Sir Peter Middleton, Chairman
Sir Peter Middleton Chairman
Slide 3: John Varley, Finance Director
John Varley Finance Director
Slide 4: Performance objectives
Performance objectives • Double economic value every four years • Income growth on income growth • Managing margins • Cost programme on track • Improve productivity ratio • Risk in control • Provisions in line with risk tendency • Integrate Woolwich • Leverage Legal & General
Slide 5: Overview of results (pro forma)
Overview of results (pro forma) (£ millions) Half-year ended: 30.06.01 30.06.00* % change Operating income 5,598 5,051 11 Operating expenses (2,952) (2,776) 6 Operating profit before provisions 2,646 2,275 16 Provisions for bad & doubtful debts (498) (397) 25 Provisions for contingent liabilities an
Slide 6: Economic profit
Economic profit (£ millions) Half-year ended: 30.06.01 31.12.00 30.06.00 Published economic profit 722 610 819 Sale of Dial business - - (186) Underlying economic profit 722 610 633
Slide 7: Operating profit by business group (Statutory basis)
Operating profit by business group (Statutory basis) (£ millions) Half-year ended: 30.06.01 30.06.00 % change Personal Financial Services 263 165 59 Woolwich* 238 102 N/A Barclays Private Clients 331 339 (2) Barclaycard 275 234 18 Business Banking 608 564 8 Africa 68 57 19 Barclays Capital 377 309 2
Slide 8: Pro-forma profit and loss account for Woolwich plc
Pro-forma profit and loss account for Woolwich plc (£ millions) Half-year ended: 30.06.01 30.06.00 Net interest income 316 316 Net fees and commissions 147 128 Income from long term assurance business 11 21 Other operating income 10 6 Total income 484 471 Operating costs (279) (273) Profit/loss from
Slide 9: Operating profit by business group (Statutory basis)
Operating profit by business group (Statutory basis) (£ millions) Half-year ended: 30.06.01 30.06.00 % change Personal Financial Services 263 165 59 Woolwich* 238 102 N/A Barclays Private Clients 331 339 (2) Barclaycard 275 234 18 Business Banking 608 564 8 Africa 68 57 19 Barclays Capital 377 309 2
Slide 10: Group operating income (pro forma)
Group operating income (pro forma*) (£ millions) Half-year ended: 30.06.01 30.06.00* % change Net interest income 3,024 2,686 13 Non-interest income 2,574 2,365 9 Fees and commissions 1,786 1,732 3 Dealing profits 570 415 37 Other income 218 218 - Total operating income 5,598 5,051 11 * Figures are
Slide 11: Group banking interest margins
Group banking interest margins (£ millions) Half-year ended: 30.06.01 31.12.00 30.06.00 Group interest margin 2.99 3.05 3.17
Slide 12: Operating expenses (pro forma)
Operating expenses (pro forma*) (£ millions) Half year on half year Half-year ended: 30.06.01 31.12.00* 30.06.00* % increase Business as usual costs 2,321 2,219 2,294 1 Strategic investment costs 243 300 178 37 Revenue related costs 371 303 290 28 Disposals/acquisitions 17 20 14 21 Total operating e
Slide 13: Analysis of half year-on-half year increase in operating expenses
Analysis of half year-on-half year increase in operating expenses (pro forma*) % change Foreign exchange 0.7 Disposals/acquisitions 0.6 Other business as usual costs (0.2) Strategic investment costs 2.3 Revenue related costs 2.9 6.3 * Figures are presented as though the Woolwich plc acquisition took
Slide 14: Movements in provisions
Movements in provisions (£ millions) Half-year ended: 30.06.01 30.06.00 At beginning of the period: 2,353 1,983 Gross specific provisions charge 568 497 Releases (44) (42) Recoveries (32) (53) General provision charge/(release) 6 (26) Amounts written off (net of recoveries) (361) (296) Exchange and
Slide 15: Woolwich integration update: expected phasing of pre-tax synergies
Woolwich integration update Expected phasing of pre-tax synergies (£ millions) Year ended: 2001 2002 2003 2004 Revenue synergies 30 150 295 360 Attributable operating costs (25) (80) (105) (110) Net revenue synergies 5 70 190 250 Cost savings 75 120 140 150 Total operating profit impact 80 190 330 4
Slide 16: Woolwich integration update
Woolwich integration update Actual Half Year 2001 Gross revenue synergies 12 Attributable operating costs (6) Net revenue synergies 6 Cost savings 15 Avoided costs 9 Total pre-tax profit impact 30
Slide 17: Income growth: the use of technology
Income growth The use of technology • Customer action prompts • Event driven action prompts • Conversion rates • Products per customer • Channel usage
Slide 18: Cost control: £1.15 billion target
Cost control: £1.15 billion target Cost savings to date (£ millions) Target productivity savings by end 2003 1,150 (inc. Woolwich cost savings) Productivity savings - 2000 260 Productivity savings - half year ended June 2001 104 Woolwich cost synergy savings - half year ended June 2001 24 Productivi
Slide 19: Productivity (pro-forma basis)
Productivity (pro-forma basis) (£ millions) Half-year ended: 30.06.01 31.12.00* 30.06.00* Total operating income 5,598 5,197 5,051 Less: provisions charge (498) (453) (397) 5,100 4,744 4,654 Business as usual costs 2,338 2,239 2,308 Revenue related costs 371 303 290 2,709 2,542 2,598 Productivity ra
Slide 20: Productivity: managing revenue and cost growth
Productivity Managing revenue and cost growth Revenue Growth 35 Barclays 30 Barclays Global Capital Investors 25 20 Personal Barclaycard Financial 15 Services Africa 10 Barclays Private Client 5 0 -5 Business Woolwich Banking -10 -10 -5 0 5 10 15 20 25 30 35 Cost Growth
Slide 21: Credit risk: portfolio re-positioning
Credit risk Portfolio re-positioning Gross loans and advances to customers: banking business June 2001 Dec 1991 29% 42% 31% 8% 57% 6% 13% 14% £145bn £86bn Retail Corporate - Property & Construction Corporate - Manufacturing Corporate - Other
Slide 22: Credit risk: controlling the portfolio shape
Credit risk Controlling the portfolio shape June 2001 balances Corporate Personal Mortgages Group (£m) & Financials unsecured Total Total non-performing loans 840 1,932 740 3,766 Typical loss given default 30% 70% 10% Total default impact 252 1,352 74 Specific & general provisions 796 1,549 98 2,583
Slide 23: Summary
Summary • Double EV : on track • Income : 11% growth over a record half • Margins : good mix and good consequent volume growth • Costs : the brake maintained; travelling at different speeds • Productivity : improved • Risk : in control • Provisions : tracking RT • Woolwich and L&G : delivering
Slide 24: Matthew Barrett, Chief Executive
Matthew Barrett Chief Executive
Slide 25: Questions & Answers
Questions & Answers BARCLAYS