Barclays Plc · LSE:BARC
Barclays — Debt Investor Presentation (October 2015)
51 slides from Barclays's debt investor presentation, Oct 29, 2015
Slide 1: Barclays PLC Fixed Income Investor Presentation Q3 2015
PERFORMANCE HOLDCO TRANSITION Free Writing Prospectus CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Filed Pursuant to Rule 433 Reg-Statement No. 333-195645 Barclays PLC Fixed Income Investor Presentation Q3 2015 Results Announcement 29 Octob
Slide 2: Continued progress in 2015 year to date
Continued progress in 2015 year to date Increased Group adjusted pre-tax profits by 4%, with Core up 7% Positive cost to income jaws: Group adjusted costs of £12.5bn, down 5% Core business continued to perform well: PBT of £6.0bn and RoE of 10.5% Further progress on Non-Core: £2.5bn of equity releas
Slide 3: Performance Overview
PERFORMANCE PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW OVERVIEW & STRUCTURAL REFORM Performance Overview | Barclays Q3 2015 Fixed Income Investor Presentation
Slide 4: Summary Group financials: adjusted PBT up 4% in 2015 YTD
PERFORMANCE PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW OVERVIEW & STRUCTURAL REFORM Summary Group financials: adjusted PBT up 4% in 2015 YTD % Ninth months ended – September (£m) 2014 2015 change Nine months financial performanc
Slide 5: Q3 Core performance: Profit growth across all operating businesses
PERFORMANCE PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW OVERVIEW & STRUCTURAL REFORM Q3 Core performance: Profit growth across all operating businesses1 Three months ended (£m) Sep-14 Sep-15 % change Profit before tax (£m) Sep-14
Slide 6: Non-Core: Continued shrinkage and capital recycling
PERFORMANCE PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW OVERVIEW & STRUCTURAL REFORM Non-Core: Continued shrinkage and capital recycling Three months ended (£m) Sep-14 Jun-15 Sep-15 Highlights – Businesses 327 153 199 • Period en
Slide 7: Non-Core: Reductions across every measure
PERFORMANCE PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW OVERVIEW & STRUCTURAL REFORM Non-Core: Reductions across every measure RWAs by type (£bn) Leverage exposure by type (£bn) 50% 60% 110 382 Trade unwinds: -£2bn 2772 752 Model
Slide 8: Capital & Leverage
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Capital & Leverage | Barclays Q3 2015 Fixed Income Investor Presentation
Slide 9: Progressive strengthening of key capital metrics
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Progressive strengthening of key capital metrics Fully-loaded CET1 ratio1 • CET1 ratio increased 200bps since Dec-13 to 11.1% enabling us to 200bps achieve our 2016
Slide 10: RWAs: Closely managed to support business growth and capital ratio accretion
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM RWAs: Closely managed to support business growth and capital ratio accretion RWAs (£bn) Highlights • RWAs increased by £5bn in the quarter to £382bn, primarily drive
Slide 11: Continued progress on the transition towards end-state capital structure
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Continued progress on the transition towards end-state capital structure Evolution of capital structure blah Fully-loaded CRD IV capital position • Transitional and
Slide 12: Significant management focus on maintaining robust capital buffers
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Significant management focus on maintaining robust capital buffers above future mandatory distribution restrictions • Maintained robust capital buffers above CET1 re
Slide 13: Leverage ratio increased to 4.2%
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Leverage ratio increased to 4.2% Leverage exposure1 (£bn) Highlights L&A and other assets2 Derivatives • Improvement in leverage ratio in Q315 driven by AT1 issuance
Slide 14: Holding company transition and structural reform
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Holding company transition and structural reform | Barclays Q3 2015 Fixed Income Investor Presentation
Slide 15: UK approach to resolution
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM UK approach to resolution1 Illustrative UK resolution loss allocation waterfall1 OpCo waterfall Intercompany investments HoldCo waterfall • BRRD PONV write-down • To
Slide 16: Managing the risk profile of Holding Company term senior unsecured debt
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Managing the risk profile of Holding Company term senior unsecured debt today and in end-state Managing HoldCo term senior debt credit profile in transition1 Deliver
Slide 17: Proactive refinancing out of HoldCo supports achieving future TLAC requirements
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Proactive refinancing out of HoldCo supports achieving future Total Loss Absorbing Capacity (TLAC)1 requirements (£bn) Sep-15 • Expect TLAC conformance to be achieve
Slide 18: Barclays PLC parent company accounts
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Barclays PLC parent company accounts Barclays PLC parent company balance sheet Notes Balance sheet • Barclays PLC is the holding company of the Barclays Group As at
Slide 19: Progressing with plans for structural reform
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Progressing with plans for structural reform Evolving group structure Implications for bondholders Barclays PLC (HoldCo) Barclays PLC • Measured issuer of AT1 and Ti
Slide 20: Liquidity & Funding
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Liquidity & Funding | Barclays Q3 2015 Fixed Income Investor Presentation
Slide 21: Maintaining a robust liquidity position
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Maintaining a robust liquidity position, with pool well in excess of internal and external minimum requirements High quality liquidity pool (£bn) Key messages • Robu
Slide 22: Stable and diverse sources of funding
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM We maintain access to stable and diverse sources of funding, across customer deposits and wholesale debt Broadly self-funded retail businesses1(£bn) Key messages 91%
Slide 23: Diverse wholesale funding sources across products, currencies and maturities
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Continue to access diverse wholesale funding sources across multiple products, currencies and maturities Wholesale funding by product1 Key messages Depostis from ban
Slide 24: Asset quality
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Asset quality | Barclays Q3 2015 Fixed Income Investor Presentation
Slide 25: Continuous reduction in CRL balances reflecting prudent credit risk management
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Continuous reduction in CRL balances reflecting Barclays prudent approach to credit risk management Increasing coverage of Group Credit Risk Loans (CRLs) Retail CRL
Slide 26: Reduced exposure to Eurozone periphery (H115)
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Reduced exposure to Eurozone periphery (H115) Exposures by geography (£bn)1 Key Messages Spain Italy Portugal Ireland • The vast majority of the exposures to Spain w
Slide 27: Limited commodities exposures and robust risk management
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Limited commodities exposures and robust risk management Limited exposure of which with all exposures to commodities sector… vast majority are high quality… well bal
Slide 28: Credit ratings
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Credit ratings | Barclays Q3 2015 Fixed Income Investor Presentation
Slide 29: Industry-wide Credit Rating Agency actions in H115
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Industry-wide Credit Rating Agency (CRA) actions in H115 reflected evolving bank resolution frameworks Ratings1 S&P Moody's Fitch • Barclays‟ ratings carry a stable
Slide 30: Demonstrating further strengthening of Barclays' credit profile
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Demonstrating further strengthening of Barclays already solid credit profile1 • Diversified international bank focused on delivering more sustainable and Strategy dr
Slide 31: Appendix
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Appendix | Barclays Q3 2015 Fixed Income Investor Presentation
Slide 32: Accelerating delivery of shareholder value
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Accelerating delivery of shareholder value Strategy – focus on what we are High performance ethic with 1 good at and where we are good at it 2 Value Creation 3 stron
Slide 33: Repositioning and simplifying Barclays
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Repositioning and simplifying Barclays Rightsizing and focusing the Investment Bank Establishing a dedicated Non-Core unit and a new Personal and Corporate Banking b
Slide 34: Simpler, focused and balanced structure
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Simpler, focused and balanced structure Barclays Group Personal and Africa Investment Barclaycard Non-Core Corporate Banking Banking Bank PBT £855m PBT £508m PBT £25
Slide 35: Progress on targets/updated guidance
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Progress on targets/updated guidance Target/Guidance Sep-15 Status Capital Fully-loaded CET1 ratio in 2016 >11% 11.1% Leverage Leverage ratio in 2016 >4% 4.2% Gr
Slide 36: Core RoE guidance for 2016 updated to 11%
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Core RoE guidance for 2016 updated to 11% Return on Equity1 (%) >12.0 11.6 10.9 11.0 2014 9m Original Increased SRP Updated 2015 2016 Target Tax Implementation Costs
Slide 37: Increased returns across all Core operating businesses
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Increased returns across all Core operating businesses Q314 28.3% Q315 22.5% 21.8% 19.2% 17.8% 17.5% 14.4% 13.4% 13.1% 13.3% 11.5% 11.4% 9.5% 9.7% 9.5% 9.5% 5.2% 5.5
Slide 38: Core income: Growth in Q3 net interest income and margin
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Core income: Growth in Q3 net interest income and margin Income (£m) – YoY % • Total income in our retail and corporate businesses1 increased 1% Three months ended S
Slide 39: Group, Core and Non-Core cost guidance
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Group, Core and Non-Core cost guidance Group adjusted cost targets/guidance1 (£bn) Non-Core £2.4bn SRP implementation costs 18.7 Core Bank Levy and Absorbing SRP lit
Slide 40: PCB: PBT up 8% and RoE of 14.4%
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM PCB: PBT up 8% and RoE of 14.4% Three months ended (£m) Sep-14 Sep-15 % change Financial performance – Personal 1,061 1,018 (4%) • Highest quarterly RoE since 2012 o
Slide 41: Digital is Barclays' biggest branch
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Digital is Barclays‟ biggest branch PCB Retail September 2015 2014 2013 Digitally active 5.3m 6.3m 6.7m Barclays Mobile Banking (BMB) Customers 2.3m 3.6m 4.5m Paymen
Slide 42: Barclaycard: Continued growth; PBT up 40% and RoE 22.5%
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Barclaycard: Continued growth; PBT up 40% and RoE 22.5% Three months ended (£m) Sep-14 Sep-15 % change Financial performance Income 1,123 1,292 15% • Record profit i
Slide 43: Africa Banking: RoTE of 13.3% in a challenging environment
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Africa Banking: RoTE of 13.3% in a challenging environment Three months ended (£m) Sep-14 Sep-15 % change Constant currency1 Sep-14 Sep-15 % change Income 928 861 (7
Slide 44: Investment Bank: PBT up 12% with a 9% increase in income
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Investment Bank: PBT up 12% with a 9% increase in income Three months ended (£m) Sep-14 Sep-15 % change Financial performance Banking 547 657 20% • Profit before tax
Slide 45: Wholesale funding composition
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Wholesale funding composition1 >1 month >3 months >6 months >9 months >2 years Total >1 year but As at 30 September 2015 (£bn) ≤1 month but ≤3 but ≤6 but ≤9 but ≤12
Slide 46: Barclays Bank PLC term senior unsecured debt maturity profile
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Barclays Bank PLC term senior unsecured debt maturity profile BB PLC structured notes (£28bn total) BB PLC term senior unsecured debt (£21bn total) 9.4 6.4 3.6 0.9 2
Slide 47: Statutory bail-in power under the UK Banking Act
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM In line with the European Bank Recovery & Resolution Directive the UK Banking Act includes a statutory bail-in power Overview Considerations for Bondholders • Statut
Slide 48: Contact – Debt Investor Relations Team
PERFORMANCE HOLDCO TRANSITION CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW & STRUCTURAL REFORM Contact – Debt Investor Relations Team Lisa Bartrip Sofia Lonnqvist Dan Colvin +44 (0)20 7773 0708 +44 (0)20 7116 5716 +44 (0)20 7116 6533 lisa.bartrip@barclays.com
Slide 49: Disclaimer
APPENDIX Disclaimer Important Notice The information, statements and opinions in this presentation do not constitute a public offer under any applicable legislation, an offer to sell or solicitation of an offer to buy any securities or financial instruments, or any advice or recommendation with resp
Slide 50: Disclaimer
APPENDIX Disclaimer Certain Non-IFRS Measures Barclays management believes that the non-International Financial Reporting Standards (non-IFRS) measures included in this presentation provide valuable information to readers of its financial statements because they enable the reader to identify a more
Slide 51: Disclaimer
APPENDIX Disclaimer • Adjusted return on average tangible shareholders‟ equity represents annualised adjusted profit after tax for the period attributable to ordinary shareholders, including an adjustment for the tax credit in reserves in respect of other equity instruments, as a proportion of avera