Barclays Plc · LSE:BARC
Barclays — FY2010 Earnings Presentation
37 slides from Barclays's earnings presentation, Feb 15, 2011
Slide 1: Barclays PLC 2010 Results
Barclays PLC 2010 Results 15 February 2011 1
Slide 2: Bob Diamond, Chief Executive
Bob Diamond Chief Executive 2
Slide 3: Chris Lucas, Group Finance Director
Chris Lucas Group Finance Director 3
Slide 4: Group performance
Group performance 2010 2009 Change Year ended (£m) (£m) % Profit before tax 6,065 4,585 32 Own credit (gain) / charge (391) 1,820 – Gains on acquisitions and disposals (210) (214) (2) Gains on debt buy-backs – (1,249) – Adjusted profit before tax 5,464 4,942 11 4
Slide 5: Financial summary
Financial summary 2010 2009 Change Year ended (£m) (£m) % Income 31,440 29,123 8 Impairment charges (5,672) (8,071) (30) Net income 25,768 21,052 22 Operating expenses (19,971) (16,715) 19 Profit before tax 6,065 4,585 32 Cost : income ratio 64% 57% – Cost : net income ratio 78% 79% – 5
Slide 6: Financial summary cont'd
Financial summary cont’d Year ended 2010 2009 Core Tier 1 ratio 10.8% 10.0% Return on equity 7.2% 6.7% Return on tangible equity 8.7% 9.0% Return on risk weighted assets 1.12% 0.86% Earnings per share 30.4p 24.1p Dividend per share 5.5p 2.5p 6
Slide 7: Global Retail Banking
Global Retail Banking 2010 2009 Change Year ended (£m) (£m) % UK Retail Banking 989 710 39 Barclaycard 791 727 9 Western Europe Retail Banking (139) 280 – Barclays Africa 188 104 81 GRB profit before tax 1,829 1,821 – Return on tangible equity 17.1% 16.9% Return on risk weighted assets 1.7% 1.5% 7
Slide 8: Absa
Absa 2010 2009 Change Year ended (£m) (£m) % Total income 3,114 2,724 14 Impairment charges (480) (567) (15) Net income 2,419 1,986 22 Operating expenses (1,810) (1,451) 25 Profit before tax 616 528 17 Return on tangible equity 19.9% 24.1% Return on risk weighted assets 1.7% 1.9% 8
Slide 9: GRB and Absa
GRB and Absa 2010 2009 Change Year ended (£m) (£m) % UK Retail Banking 989 710 39 Barclaycard 791 727 9 Western Europe Retail Banking (139) 280 – Barclays Africa 188 104 81 Absa 616 528 17 Profit before tax 2,445 2,349 4 Return on tangible equity 18% 18% Return on risk weighted assets 1.7% 1.6% 9
Slide 10: Barclays Capital
Barclays Capital 2010 2009 Change Year ended (£m) (£m) % Top-line income 13,333 17,862 (25) Impairment (543) (2,591) (79) Net income 13,057 9,034 45 Operating expenses (8,295) (6,592) 26 Profit before tax 4,780 2,464 94 Profit before tax (excl. own credit) 4,389 4,284 2 Return on tangible equity 16.
Slide 11: Barclays Capital quarterly top-line income
Barclays Capital quarterly top-line income 2010 Top-line income (£m) 3,845 2,827 3,380 3,281 2,695 2,253 1,948 1,915 725 625 563 556 493 501 461 359 Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q4 Top-line income FICC Equities Investment Banking 11
Slide 12: Barclays Corporate
Barclays Corporate UK & Cont. New Year ended Dec 2010 Ireland Europe Markets 2010 2009 Change (£m) (£m) (£m) (£m) (£m) % Income 2,313 394 267 2,974 3,181 (7) Impairment (468) (1,063) (165) (1,696) (1,558) 9 Net income 1,278 1,623 (21) Operating expenses (992) (201) (714) (1,907) (1,466) 30 Profit be
Slide 13: Barclays Wealth
Barclays Wealth 2010 2009 Change Year ended (£m) (£m) % Total income 1,560 1,322 18 Impairment charges (48) (51) 6 Net income 1,512 1,271 19 Operating expenses (1,349) (1,129) 19 Profit before tax 163 143 14 Return on tangible equity 13.7% 13.7% Return on risk weighted assets 1.2% 1.1% 13
Slide 14: Returns on Equity
Returns on Equity Return on Return on Return on Year ended Dec 2010 (%) Tangible Risk Weighted Equity Equity Assets Global Retail Banking 10.7 17.1 1.7 UK Retail Banking 12.0 23.7 2.2 Barclaycard 13.5 18.8 1.9 Western Europe Retail Banking (0.2) (0.3) (0.0) Barclays Africa 19.8 21.8 2.2 Absa 10.7 19
Slide 15: Returns: Cost of equity
Returns: Cost of equity Cost of equity 2005-2011 Direction of travel 12.5% 12.5% 11.5% 10.5% 9.5% 9.5% 9.5% 2005 2006 2007 2008 2009 2010 2011 … 15
Slide 16: Margins in retail, corporate and wealth management
Margins in retail, corporate and wealth management Annualised NIM (bps) Liability margin compression Asset margin 211 (22) increase 14 203 2009 2010 16
Slide 17: Impairment improvement
Impairment improvement (£m) Wealth £8,071 BarCorp 51 BarCap 1,558 Absa GRB £5,672 48 2,591 1,696 567 543 480 3,288 2,903 2009 2010 17
Slide 18: Operating expenses
Operating expenses Operating expenses (£m) Regulatory & Pension Other Restructuring Infrastructure 272 28 19,971 & Goodwill FX Impact Write-Off 289 Prior year 314 Deferrals 486 656 Investment 1,211 16,715 2009 2010 18
Slide 19: Performance awards
Performance awards (£bn) Other BarCap 3.7 3.4 0.8 • Group and BarCap performance 0.8 awards down on 2009 • 34% of total 2010 performance awards deferred to future years 2.9 (2009: 31%) 2.6 • Senior staff deferrals all in shares or contingent capital awards subject to 7% CT1 vesting trigger 2009 2010
Slide 20: Balance sheet strength
Balance sheet strength £bn 31 Dec10 31 Dec 09 Total assets 1,490 1,379 Derivative gross-up (378) (374) Other (59) (36) Adjusted tangible assets 1,053 969 Tier 1 capital 53.5 49.6 Adjusted gross leverage 20x 20x 20
Slide 21: Capital management
Capital management Core Tier 1 ratio bridge Retained profit Warrants Other net less 0.4% movement own credit 0.1% 10.8% 0.7% BlackRock (0.2%) Methodology and business 10.0% related RWA movements (0.2%) 2009 2010 21
Slide 22: Funding and liquidity
Funding and liquidity Year ended 2010 2009 Group liquidity pool £154bn £127bn Net Stable Funding Ratio 94% - Liquidity Coverage Ratio 80% - Term issuance £35bn £38bn 22
Slide 23: Highlights
Highlights • Profit before tax up 32% to £6.1bn • Income up 8% to £31.4bn • Impairment charge reduced 30% to £5.7bn • Core Tier 1 ratio strengthened to 10.8% • Return on risk weighted assets increased to 1.1% • UK lending up over £8bn to £43bn • Final dividend of 2.5p resulting in total dividend of
Slide 24: Bob Diamond, Chief Executive
Bob Diamond Chief Executive 24
Slide 25: Our strategy remains unchanged
Our strategy remains unchanged • Integrated universal banking model • Diversification by business, geography, client and funding • Relentless customer and client focus 25
Slide 26: Our focus is on execution
Our focus is on execution • Capital • Returns • Income growth • Citizenship 26
Slide 27: Capital strength
Capital strength Core Tier 1 capital generation Core Tier 1 Tier 1 13.5% 13.0% 10.8% 10.0% 8.6% 7.6% 5.6% 4.7% 2007 2008 2009 2010 27
Slide 28: Solid capital base from which to move forward
Solid capital base from which to move forward Pro forma Core Tier 1 ratios under Basel III at 31 December 2013 Consensus retained earnings 3.1% Outstanding warrants 11.5% 10.8% 0.2% 11.5% Net RWA c£140bn effect from RWA Basel II.5/III capacity (2.6%) 9.0% Basel II 2010 Basel III 2013 See Appendix fo
Slide 29: Track record of capital generation
Track record of capital generation Core Tier 1 capital generation Net generated equity 2.1% 10.8% BGI transaction 1.9% £7.7bn Issuance Dividend 1.4% (0.2%) 5.6% 2008 2010 29
Slide 30: Returns: Changing industry trends
Returns: Changing industry trends ROE for European and US banks, 1962-2008, % 25 US and EU banks blended RoE Average Banking industry RoE 20 15 10 11% 5 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2008 Source: McKinsey 30
Slide 31: Returns: Internal focus on Return on Equity
Returns: Internal focus on Return on Equity Barclays businesses ranked by 2013f RoE Businesses with less than Businesses with greater than 11.5% RoE (CoE) 11.5% RoE (CoE) 11.5% 35% of Group Equity 65% of Group Equity 31
Slide 32: Returns: Target RoE 13%, RoTE 15%
Returns: Target RoE 13%, RoTE 15% RoE 15.0% RoTE 13.0% 9.0% 8.7% 7.2% 6.7% 2009 2010 2013 See Appendix for important notes 32
Slide 33: Income growth: clients and customer
Income growth: clients and customer Examples: • Corporate cards and solutions • Wealth: Gamma • Equities and Advisory • Growth markets – Africa – Asia 33
Slide 34: Citizenship
Citizenship • Jobs • Supporting economic growth • Investing in communities in which we work 34
Slide 35: Appendix
Appendix 2010 Results 15 February 2011 35
Slide 36: 2010 Performance awards reconciliation to P&L charge
2010 Performance awards reconciliation to P&L charge £bn Prior year deferrals 3.4 1.3 3.5 Future deferrals (1.2) Performance P&L Performance awards costs 36
Slide 37: Appendix notes
Appendix notes Slide- Solid Capital base from which to move forward • 2013 pro forma Core Tier 1 ratios are presented for illustrative purposes only. • Consensus estimates for retained earnings are from 18 sell-side analysts as at 11 Feb 2011. Barclays neither endorses nor verifies the estimates use