Slide 1: Barclays PLC Q3 2018 Financial Results
Barclays PLC Q3 2018 Financial Results 24 October 2018
Slide 2: Jes Staley
Jes Staley Barclays Group Chief Executive
Slide 3: On track to deliver enhanced and sustainable returns for shareholders
On track to deliver enhanced and sustainable returns for shareholders BAGL deconsolidated and Non-Core closed RoTE2 Service Company and Ring-Fenced Bank established Q1 11.0% US RMBS settled with DoJ Q2 12.3% Group Passed first public US CCAR Q3 10.2% YoY3 CET1 ratio of 13.2% at end-state target YTD
Slide 4: Think digital, think Barclays UK
Think digital, think Barclays UK Capacity to continue investing in digital transformation Most used mobile banking app in the UK1 Open Banking – first major high street bank to launch in-app account aggregator, using APIs2 10.6 million digitally active customers and 4.8 million digital only customer
Slide 5: Barclays International: Improving share in the CIB
Barclays International: Improving share in the CIB Gaining share in Markets and strong Banking franchise Markets Banking fees Share gains across all products H118 vs. H117 Increased global Banking fee share 40bps 60bps 60bps 10bps 10bps 10bps 4.2% 4.5% 4.1% 4.2% 4.3% 3.8% 3.6% 3.9% 4.0% 3.4% M
Slide 6: Barclays International: Driving Consumer, Cards & Payments opportunities
Barclays International: Driving Consumer, Cards & Payments opportunities Portfolio of leading franchises with high returns and growth potential Cards & Payments #9 US Credit card receivables1 Strong market Barclays US position and #5 Co-brand card issuer2 Consumer delivering Bank growth c.$14bn Reta
Slide 7: Diversified and prudently positioned
Diversified and prudently positioned Well prepared for Brexit and macro uncertainties Barclaycard UK Diversified by currency, geography and product 10% Personal Banking 19% Business Banking 18% Group Corporate lending & 10% Income by Transaction banking Strong asset quality with bias to grow the UK
Slide 8: Jes Staley
Jes Staley Barclays Group Chief Executive
Slide 9: Tushar Morzaria
Tushar Morzaria Barclays Group Finance Director
Slide 10: Q318 YTD Group highlights
Q318 YTD Group highlights Group RoTE of 11.1% with double digit returns in Barclays UK and Barclays International Financial performance1 Generated 21.6p of EPS RoTE1 Income £16.1bn Double digit returns across Q1 Q2 Q3 YTD (Q317 YTD: £16.1bn) Group, BUK and BI Impairment 53% Group3 £0.8bn (Q317
Slide 11: Q318 Group highlights
Q318 Group highlights Double digit RoTE, and improved TNAV and capital in the quarter Financial performance1 Double digit Group RoTE of 10.2% • Strong returns in BUK of 22.0% and BI of 9.2% Income 1% £5.1bn (Q317: £5.2bn) PBT increased 32% – up 18% in BUK and 34% in BI Costs 2% £3.3bn (Q317: £
Slide 12: Q318 Barclays UK
Q318 Barclays UK RoTE of 22.0% and positive operating jaws, with further growth in customer balances Financial performance1 Income increased 2%, with NIM of 3.22% Q317 Q417 Q118 Q218 Q318 YoY • Focused on growth in secured lending Income 2% • Competitive pressure in mortgage +2% market persists T
Slide 13: Q318 Barclays International
Q318 Barclays International Improved returns with strong performance across CIB and CC&P Financial performance1 Significant improvement in RoTE Income balanced across businesses to 9.2%, up from 5.5% in Q317 and geographies Income 1% £3.3bn (Q317: £3.3bn) Balanced and diversified business, with
Slide 14: Q318 Barclays International: Corporate & Investment Bank
Q318 Barclays International: Corporate & Investment Bank Investments driving sustained outperformance in Markets Financial performance1 Markets income increased 19% Income (18% in USD) Income 2% • 4th consecutive quarter of GBP basis (£m) USD basis3 ($m) outperformance vs. peers in Markets2 Q317
Slide 15: Q318 Barclays International: Consumer, Cards & Payments
Q318 Barclays International: Consumer, Cards & Payments Strong returns whilst investing in growth across CC&P businesses Financial performance1 Income increased 2% reflecting Q317 Q417 Q118 Q218 Q318 continued underlying growth in US Income 2% Cards partially offset by a £41m impact +4% of revalu
Slide 16: Head Office: Negative income expected to reduce over time
Head Office: Negative income expected to reduce over time Q317 Q218 Q318 Q318 negative income includes: • c.£90m impact from certain 6 33 legacy capital instrument funding Income (57) costs per quarter (£m) • Hedge accounting drag, expected to be c.£200m over FY18 • Receipt of Absa Group dividend
Slide 17: Continued cost reduction towards 2019 guidance
Continued cost reduction towards 2019 guidance Improving operational efficiency creating capacity to invest in growth, digitisation and returns BX generating significant Further absolute cost reduction Capacity to invest operational leverage to 2019 (£bn)1 Process automation Barclays UK • Standard
Slide 18: Capital accretion driven by profitability
Capital accretion driven by profitability Generating capacity for attractive capital returns to shareholders over time CET1 ratio1 CRD IV MDR hurdle 37bps 14bps Target of c.13% 14bps 6bps 7bps 13.2% 13.0% 1.6% Management buffer1 11.4% 0.5% CCyB 2.5% CCB 1.5% G-SII Pillar 2A 2.4% requirement Pillar 1
Slide 19: Successive quarters of CET1 ratio and TNAV progression, since Q118
Successive quarters of CET1 ratio and TNAV progression, since Q118 Accreted c.130bps YTD from profits, demonstrating strong organic capital generation Funded c.40bps of dividends paid CET1 and foreseen 13.3% 13.0% 13.2% Ratio 12.7% Paid c.65bps in litigation & conduct, mostly in Q118 Q417 Q118
Slide 20: Focused on profitability and returning capital to shareholders
Focused on profitability and returning capital to shareholders Q318 YTD highlights Group targets Strong double digit >9% in 2019 RoTE2 Group returns of 11.1%1 >10% in 2020 CET1 ratio of 13.2% CET1 ratio3 c.13% at end-state target 62% Group cost: income ratio £13.6-13.9bn in 20191 Costs with 3% posit
Slide 21: Barclays PLC Q3 2018 Financial Results
Barclays PLC Q3 2018 Financial Results 24 October 2018
Slide 22: Appendix
Appendix
Slide 23: Think digital, think Barclays UK
Think digital, think Barclays UK Building meaningful relationships with our 24 million customers Front end Changing the shape of our business digitisation Delivering sustainable Investing in digital talent, income generation through cyber resilience Automation digital transformation and digital tech
Slide 24: Tangible Net Asset Value
Tangible Net Asset Value TNAV accretion driven by profits, net of interim dividend payment TNAV (pence per share) 6 3 2 259 260 Expect further TNAV accretion over time, driven by profits Jun-18 Profits Dividends paid FVOCI Sep-18 TNAV increased 1p in the quarter as 6p of profits were partially off
Slide 25: CET1 ratio and TNAV progression YTD
CET1 ratio and TNAV progression YTD 0.4% 1.3% 0.1% 0.2% 13.9% 0.7% 13.3% 13.2% CET1 Ratio Dec-17 Profits Dividends Pension FVOCI Litigation Sep-18 (ex. L&C) paid & contributions & other & conduct foreseen 5 22 8 285 13 TNAV 276 (pence per 12 share) 260 Dec-17 Profits Dividends Net movement IFRS 9 Li
Slide 26: Strong Group CET1 and leverage ratios
Strong Group CET1 and leverage ratios Fully loaded and transitional CET1 ratio Fully loaded CET1 ratio -10bps • Transitional CET1 ratio increased by 20bps in the quarter to 13.2% IFRS 9 transitional benefit +20bps • Transitional CET1 ratio decreased by 10bps in the nine months to 13.3%1 13.0%1 13.2%
Slide 27: Managing Group capital position above mandatory distribution restrictions
Managing Group capital position above mandatory distribution restrictions Illustrative evolution of minimum CET1 requirements and buffers Pillar 1 requirement Countercyclical Buffer (CCyB) Distribution restrictions and management buffer Pillar 2A CET1 requirement CRD IV Mandatory Distribution Restri
Slide 28: Managing capital position above stress test hurdles
Managing capital position above stress test hurdles Barclays’ expected hurdle rate for 2018 BoE stress test1 Pillar 1 requirement Countercyclical Buffer (CCyB) Stress tests Pillar 2A CET1 requirement Maximum and indicative • Barclays’ end-state stress buffer is expected to be at least c.4.6% G-SII b
Slide 29: 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 • BBPLC issued capital instruments are expected to qualify as MREL in 21.3% ≥18.4% line with their regulatory capital values until 1 January 20
Slide 30: Managing the call and maturity profiles of BPLC and BBPLC capital instruments
Managing the call and maturity profiles of BPLC and BBPLC capital instruments First AT1 call to be effected on BPLC capital call and maturity profile (£bn) 15 December 2018 BPLC AT1 capital as at 30 September 20181 BPLC T2 capital as at 30 September 20181 • Following regulatory approval, proceeding
Slide 31: 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 32: Leverage requirements
Leverage requirements Requirements Requirements Disclosure Disclosure obligations obligations Basis Basisof of preparation preparation 30- Jun-18 01-Jan-191 01-Jan-22 FY17 Q118 onwards Today 01-Jan -225 Pillar 1 3.25% 3.25% G-SII 0.394% 0.525% CCyB 0.1% 0.2% FPC expected 1. Spot basis 1. Spot basis
Slide 33: ADI position supports strong distribution capacity
ADI position supports strong distribution capacity Distribution capacity as at 31 December 2017 (£m) Distributable items ADI Barclays PLC dividend payments Barclays PLC AT1 coupons • Barclays PLC has significant Available Distributable Items (ADIs)1 to Pro-forma impact from Sep-18 action cover divid
Slide 34: Successfully transitioning to HoldCo funding model
Successfully transitioning to HoldCo funding model HoldCo MREL position and requirement Well advanced on HoldCo issuance plan including requisite buffers Completed 2018 HoldCo issuance plan 29.1% • Issued £9.9bn equivalent of MREL YTD, in senior and AT1 form CCyB: 0.5% 28.1% CCB: 2.5% • Subject to m
Slide 35: Continued progress in HoldCo issuance whilst diversifying the markets we access
Continued progress in HoldCo issuance whilst diversifying the markets we access HoldCo issuance by year1 Total: £9.9bn • The Group has continued to make strong Senior unsecured Total: £11.7bn HoldCo Snr: £8.0bn progress on its commitment to transition to HoldCo Snr: £6.2bn AT1: £1.9bn HoldCo Snr: (£
Slide 36: High quality liquidity and funding position with a conservatively positioned liquidity pool
High quality liquidity and funding position with a conservatively positioned liquidity pool and stable LDR Liquidity remains in prudential surplus Loan: deposit ratio2 Liquidity Coverage Loans and advances3 (£bn) Deposits3 (£bn) LDR Ratio (LCR) 84% 83% 83% (%) 154% 154% 161% 131% 399 396 348 391 324
Slide 37: Wholesale funding composition as at June 2018
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 months <1 year years years years years Barclays PLC (the Parent company) Senior unsecured - 0.1 - - 0.1 2.3 2.8 2.7 2.4 16.8 27.1 (public benchmark) Sen
Slide 38: UK approach to resolution
UK approach to resolution Illustrative UK resolution loss allocation waterfall assuming multiple OpCos1 OpCo waterfall Intercompany investments HoldCo waterfall • BRRD PONV write-down • Total OpCo losses are allocated to • Losses are transmitted to HoldCo • The loss on HoldCo’s investment powers ens
Slide 39: Divisions
Restructuring of the Group completed post ring-fencing in April this year Barclays PLC Barclays International Barclays UK and Head Office1 UK consumer and business bank Diversified wholesale differentiated by scale and digital innovation and consumer bank Divisions Personal Banking Consumer, Cards &
Slide 40: 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 41: Group expects to accommodate all legal entity capital requirements within current 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) Barclays Bank PLC (so
Slide 42: P&L bridge from Barclays UK division to Barclays Bank UK PLC legal entity
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 BBUKPLC H118 (£m) BUK B Group within Company Other UK Group Q118 impact BBUKPLC margin Total income 3,624 (1,788) (44) - 51 1,843 Credit impairment charges and other
Slide 43: P&L bridge from Barclays International division to Barclays Bank PLC legal entity
P&L bridge from Barclays International division to Barclays Bank PLC (BBPLC) legal entity 1 2 3 4 Head Office BX Service Barclays BBPLC H118 (£m) within Company Other International Group BBPLC margin Total income 7,515 (257) - (5) 7,253 Credit impairment charges and other provisions (161) 5 - - (156
Slide 44: Ratings remain a key priority
Ratings remain a key priority, with focus on strategy and achieving performance targets to improve ratings Current Senior Long and All ratings on stable or positive outlooks Standard & Poor’s Fitch Moody’s Short Term ratings We solicit ratings from S&P, Fitch and Moody’s for the HoldCo and both its
Slide 45: Barclays rating composition for senior debt
Barclays rating composition for senior debt Standard & Poor’s Fitch Moody’s BPLC BBPLC BBUKPLC BPLC BBPLC BBUKPLC BPLC BBPLC BBUKPLC Baseline Credit Stand-Alone Credit Profile bbb+ Viability Rating1 a a a baa3 baa3 a3 Assessment Operating Anchor bbb+ aa to a+ Macro profile Strong+ Strong+ Strong+ en
Slide 46: Barclays rating composition for subordinated debt
Barclays rating composition for subordinated debt Standard & Poor’s Fitch Moody’s Baseline Stand-alone Stand-Alone Viability bbb+ a a Credit baa3 baa3 rating Credit Profile Rating Assessment BPLC BBPLC BPLC BBPLC BPLC BBPLC T2 T2 T2 T1 T2 AT1 LT2 UT2 T1 T2 AT1 LT2 UT2 T1 T2 AT1 LT2 UT2 Coco Coco Coc
Slide 47: Preparation for continuity of business in the event of Brexit
Preparation for continuity of business in the event of Brexit Plans in place to expand Barclays Bank Ireland (BBI) in advance of March 2019 to support activity with European clients Expect to be operational by March 2019 with Central Bank of Pro-forma BBI as at 31 Ireland approval to proceed with ou
Slide 48: 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 Q317 Q417 Q118 Q218 Q318 30 day arrears 90 day arrears Net receivables Underlying Improving the mix 10% balance growth objective realistic within U
Slide 49: Financial results tables
Financial results tables
Slide 50: Other items of interest
Other items of interest Impairment Q318 Q317 Charge relating to deferred consideration from Q117 asset sale in - (£168m) Barclays International US Cards Operating expenses Structural reform costs - (£103m) Group (across divisions) Effect of change in compensation awards introduced in Q416 n/m (£21m)
Slide 51: Q318 Group
Q318 Group Three months ended (£m) Sep-18 Sep-17 % change Excluding L&C – Three months ended (£m) Sep-18 Sep-17 % change Income 5,129 5,173 (1%) PBT 1,566 1,188 32% Impairment (254) (709) 64% Attributable profit 1,087 660 65% – Operating expenses (excluding L&C) (3,329) (3,274) (2%) – Litigation and
Slide 52: Q318 Barclays UK
Q318 Barclays UK Business performance Excluding L&C – Three months ended (£m) Sep-18 Sep-17 % change Three months ended (£m) Sep-18 Sep-17 % change PBT 794 672 18% – Personal Banking 1,021 1,022 - Attributable profit 548 431 27% – Barclaycard Consumer UK 551 539 2% Performance measures – Business Ba
Slide 53: Q318 Barclays International
Q318 Barclays International Business performance Excluding L&C – Three months ended (£m) Sep-18 Sep-17 % change Three months ended (£m) Sep-18 Sep-17 % change PBT 882 657 34% – CIB 2,235 2,280 (2%) Attributable profit 676 363 86% – CC&P 1,055 1,035 2% Performance measures Income 3,290 3,315 (1%) RoT
Slide 54: Q318 Barclays International: Corporate & Investment Bank and Consumer, Cards & Payments
Q318 Barclays International: Corporate & Investment Bank and Consumer, Cards & Payments CIB business performance CC&P business performance % change % change Three months ended (£m) Sep-18 Sep-17 Three months ended (£m) Sep-18 Sep-17 % change GBP basis USD basis – FICC 688 627 10% 9% Income 1,055 1,0
Slide 55: Head Office
Head Office Head Office business performance Three months ended (£m) Sep-18 Sep-17 Income (57) 6 Impairment releases/(charges) 4 (13) – Operating expenses (excluding L&C) (64) (112) – Litigation and conduct (19) (65) Operating expenses (83) (177) Other net income/(expenses) 7 (22) LBT (129) (206) Pe
Slide 56: Q318 YTD Group
Q318 YTD Group Nine months ended (£m) Sep-18 Sep-17 % change Excluding L&C – Nine months ended (£m) Sep-18 Sep-17 % change Income 16,063 16,054 - PBT 5,267 4,272 23% Impairment (825) (1,763) 53% Attributable profit 3,544 171 – Operating expenses (excluding L&C) (10,003) (10,263) 3% – Litigation and
Slide 57: Q318 YTD Barclays UK
Q318 YTD Barclays UK Business performance Excluding L&C – Nine months ended (£m) Sep-18 Sep-17 % change Nine months ended (£m) Sep-18 Sep-17 % change PBT 2,034 2,001 2% – Personal Banking 3,008 3,098 (3%) Attributable profit 1,386 1,304 6% – Barclaycard Consumer UK 1,582 1,532 3% Performance measure
Slide 58: Q318 YTD Barclays International
Q318 YTD Barclays International Business performance Excluding L&C – Nine months ended (£m) Sep-18 Sep-17 % change Nine months ended (£m) Sep-18 Sep-17 % change PBT 3,654 3,283 11% – CIB 7,614 7,626 - Attributable profit 2,585 2,025 28% – CC&P 3,191 3,437 (7%) Performance measures Income 10,805 11,0
Slide 59: Q318 YTD Barclays International: Corporate & Investment Bank and Consumer, Cards & Payments
Q318 YTD Barclays International: Corporate & Investment Bank and Consumer, Cards & Payments CIB business performance CC&P business performance Nine months ended (£m) Sep-18 Sep-17 % change Nine months ended (£m) Sep-18 Sep-17 % change – FICC 2,293 2,268 1% Income 3,191 3,437 (7%) – Equities 1,662 1,
Slide 60: Q318 YTD Head Office
Q318 YTD Head Office Head Office business performance Nine months ended (£m) Sep-18 Sep-17 Income (262) 8 Impairment releases/(charges) 9 (14) – Operating expenses (excluding L&C) (159) (201) – Litigation and conduct (1,585) (76) Operating expenses (1,744) (277) Other net expenses (9) (186) LBT (2,0
Slide 61: Abbreviations
Abbreviations ABS Asset-backed Securities ECB European Central Bank P1 Pillar 1 ADI Available Distributable Items ECM Equity Capital Markets P2A Pillar 2A ALAC Additional Loss-Absorbing Capacity EMEA Europe, Middle East and Africa PBT Profit Before Tax AP Attributable Profit EPS Basic Earnings per S
Slide 62: 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