Barclays Plc · LSE:BARC
Barclays — Debt Investor Presentation (July 2023)
25 slides from Barclays's debt investor presentation, Jul 27, 2023
Slide 1: Barclays PLC Q2 2023 Fixed Income Investor Call
Barclays PLC Q2 2023 Fixed Income Investor Call 27 July 2023
Slide 2: Presenters and agenda
i ii iii Anna Cross Daniel Fairclough Appendix: Financials Group Finance Director Group Treasurer
Slide 3: Performance highlights
Performance highlights Targets and guidance Q223 H123 RoTE >10% in 2023 11.4% 13.2% Cost: income ratio Low 60s % in 2023 63% 60% Loan loss rate 50-60bps in 2023 37bps 44bps CET1 ratio 13-14% 13.8% Average Liquidity Coverage >100% regulatory minimum2 157% Ratio1 Total distributions in respect of H123
Slide 4: Well provisioned balance sheet
Well provisioned balance sheet Balance sheet provisions for ECL1 (£bn) UK GDP2 UK unemployment3 Q123 6.3 Q223 4.6% 6.1 3.3% 4.3% 4.2% (0.1) (0.1) 3.7% Other ECL 1.2 4.4% 1.1 4.1% 4.2% Economic 1.6% uncertainty 0.3 0.3 0.9% adjustments 0.3% 1.6% 0.5% (0.6)% 2022 2023 2024 2025 2022 2023 2024 2025 Mod
Slide 5: Reiterating FY23 loan loss rate guidance of 50-60bps
Reiterating FY23 loan loss rate guidance of 50-60bps Loan loss rate (bps) Credit impairment charge (£m) 138 524 113 Group 372 BUK 53 57 55 52 No impairment charge in Q222 44 95 37 Cards repayment rates remain high 30 and delinquencies stable 200 371 CC&P US cards average balance growth (18) 14
Slide 6: Long-term prudent risk positioning on our credit card portfolios
Long-term prudent risk positioning on our credit card portfolios UK cards US cards Balances c.40% lower vs. FY19 with strong and stable credit quality Controlled portfolio growth with improved risk mix Repayment rates remain elevated across the risk spectrum Improved >660 FICO1 score of 89%
Slide 7: Resilient mortgage book with customers proactively locking in rates
Resilient mortgage book with customers proactively locking in rates Mortgage portfolio Maturity profile 52.8% average balance weighted LTV of mortgage stock <20% of c.£84bn 5+ years fixed balances maturing before FY241 o 39.2% average valuation weighted LTV Only 1.5% of FY23 and 2.2% of FY24 m
Slide 8: Commercial Real Estate exposure is modest and well managed
Commercial Real Estate exposure is modest and well managed 4.7%1 of customer loans and advances (L&A), with a weighted average LTV of 49%2 Well diversified portfolio across sectors and underlying counterparties Prudent lending policy for over three decades Customer L&A3 £349bn Further to the l
Slide 9: Presenters and agenda
i ii iii Anna Cross Daniel Fairclough Appendix: Financials Group Finance Director Group Treasurer
Slide 10: H123 highlights
H123 highlights Strong balance sheet evidenced across key metrics Prudently managed capital position; Capital 15.1% 13.9% 13.8% CET1 CET1 ratio of 13.8% vs. 13-14% target range MREL 34.4% 33.5% 32.9% MREL MREL position of £111bn Robust liquidity levels; Liquidity 160% 156% 157% Average LCR2 Liquidit
Slide 11: Strong CET1 ratio with significant headroom to MDA
Strong CET1 ratio with significant headroom to MDA Q223 CET1 movement Key messages Target range of 13-14% (8bps) Target RoTE of >10%: translates to 39bps (13bps) 8bps (22bps) 13.8% 13.6% >c.150bps of annual CET1 ratio accretion 13.6% MDA hurdle o Generated 92bps in H123 11.4% UK countercyclica
Slide 12: Operate with a prudent buffer to each tier of capital requirements
Operate with a prudent buffer to each tier of capital requirements AT1 and T2 needs managed on a total capital basis Balanced total capital structure Operate with prudent buffers at each part of the capital stack to 20.5% total manage FX and RWA movements capital ratio Announced the call of the
Slide 13: MREL position well established
MREL position well established MREL position as at Jun-231 HoldCo issuance 32.9% c.£11bn 2023 MREL issuance plan across Senior, Tier 2 and AT1 (£111.0bn) 29.2% o c.£4bn of original funding plan remaining (£98.3bn) o Pre-funding may be explored subject to the completion of CCyB: 0.5% CCB: 2.5% Seni
Slide 14: Diverse and stable franchise deposit base; total deposits stable
Diverse and stable franchise deposit base; total deposits stable Deposit mix shift driven by client deleveraging, FX and other macro factors CIB: Corporate Bank £170bn3, flat BUK: Personal Banking £191bn, -2% >20% insured4 72% insured c.14% term (>30 day) >75% of relationships 5+ years c.6
Slide 15: Prudently managed LCR supported by a highly liquid balance sheet
Prudently managed LCR supported by a highly liquid balance sheet Average LCR1 80% of Liquidity Pool held in cash HTC £24bn FVOCI 7% £43bn 160% 159% 13% 157% 156% 156% 157% 157% Liquidity Pool £331bn Q421 Q122 Q222 Q322 Q422 Q123 Q223 Cash Spot LCR £264bn >98% of cash placed with BoE, US Fed, ECB,
Slide 16: Business strategy supported by comprehensive liquidity framework
Business strategy supported by comprehensive liquidity framework Stress tests are applied across multiple scenarios Rigorous liquidity risk stress testing framework 30 days combined market-wide and Barclays-specific stress event Bespoke Group and all 30 days Barclays-specific stress event material l
Slide 17: Structural hedge income continuing to grow
Structural hedge income continuing to grow Tailwinds from higher yields expected to outweigh headwinds from any hedge notional declines H123 4.06% 5.03% GBP 5yr swap 0.67% 1.05% rate1 -0.01% H123 Average 1.26% Average yield continuing to grow as maturing hedges roll hedge yield 1.08% 0.94% 0.87% 0
Slide 18: Strong momentum with recent credit rating upgrades
Strong momentum with recent credit rating upgrades Recent upgrades Current Senior long and short term ratings Moody’s Standard & Poor’s Fitch Moody’s Two upgrades in just over three years Baa1 BBB+ A Stable Stable Stable Barclays PLC P-2 A-2 F1 Standard & Poor’s Upgraded in May 2023 A1 A+ A+ Stable
Slide 19: Presenters and agenda
i ii iii Anna Cross Daniel Fairclough Appendix: Financials Group Finance Director Group Treasurer
Slide 20: Q&A
Q&A
Slide 21: Appendix: Financials
i ii iii Anna Cross Daniel Fairclough Appendix: Financials Group Finance Director Group Treasurer
Slide 22: Risk weighted assets
Risk weighted assets Q223 RWA movements (£bn) 3.0 (4.8) 0.3 338.4 336.9 1 Mar-23 Book size FX Other Jun-23 H123 RWA movements (£bn) 0.7 6.2 (8.8) 2.4 336.5 336.9 1 Dec-22 Book size Acquisitions and disposals FX Other Jun-23 1 Foreign exchange movements does not include the impact of foreign exchange
Slide 23: CET1 ratio within 13-14% target range
CET1 ratio within 13-14% target range CET1 minimum requirements UK leverage minimum requirements MDA1 11.8% 11.4% CCyB 0.5% 1.0% CCB 2.5% 2.5% Reg Min 3.975% CCLB 0.2% G-SII 1.5% 1.5% G-SII 0.525% 13.8% Pillar 2A 2.4% 2.4% 5.1% 4.8% BoE minimum leverage 3.25% requirement Pillar 1 4.5% 4.5% Jun-23 Ju
Slide 24: Executed c.£7.1bn of c.£11bn 2023 issuance plan
Executed c.£7.1bn of c.£11bn 2023 issuance plan 2023 HoldCo issuance Annual HoldCo issuance volume (£bn) and currency1 15.0 Jan-23: GBP 1.0bn Senior 12.1 11.5 12.1 11.0 c.11 8.6 8.2 10.8 c.4 6.1 remaining Mar-23: GBP 1.5bn AT1 9.3 10.2 4.0 8.3 5.9 4.1 2.9 1.1 1.0 1.7 3.5 1.6 1.2 Mar-23: SGD 400m AT1
Slide 25: Disclaimer
Disclaimer Important Notice The terms Barclays or Group refer to Barclays PLC together with its subsidiaries. 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 bu