Barclays Plc · LSE:BARC
Barclays — Debt Investor Presentation (October 2012)
42 slides from Barclays's debt investor presentation, Oct 31, 2012
Slide 1: Fixed Income Investor Presentation
Fixed Income Investor Presentation Q3 2012 Interim Management Statement
Slide 2: Barclays Overview
Barclays Overview A Global Universal Bank Key Financial Metrics as at 30 Sep 2012 • Major global financial services provider Total Assets £1.6tr • 3 main businesses: Core Tier I (Basel 2.5) 11.2% - Retail and Business Banking (RBB), - Corporate & Investment Banking, and Adj. Gross Leverage Ratio 20x
Slide 3: Latest Financial Highlights (as at 30 September 2012)
Latest Financial Highlights (as at 30 September 2012) “These results demonstrate that we continue to have good momentum in our businesses despite the difficulties we faced through this period” (A. Jenkins, Chief Executive) • Adjusted income flat despite macroeconomic challenges Nine months ended – 2
Slide 4: Balanced Profit Distribution Across the Group
Balanced Profit Distribution Across the Group Composition of adjusted profit before tax demonstrates the benefits of the universal banking model Adj. PBT: £5,954m +17.6% Adj. PBT: £5,062m Investment Bank, £3,205m Investment Bank, £2,698m Corporate Bank, £167m Corporate Bank, £444m Wealth & Investmen
Slide 5: Strong Asset Quality
Strong Asset Quality Despite challenging macroeconomic environment, retail and wholesale portfolios are performing well, as evidenced by limited Credit Risk Loans (CRLs) and low loan loss rates 51.7% 50.4% 51.0% 47.9% 49.3% 49.7% 48.9% 39.0%* 5.1% 4.8% 4.5% 4.6% 4.4% 3.8% 3.7% 156bp 118bp 118bp 74bp
Slide 6: Reduced Exposure to the Eurozone Periphery
Reduced Exposure to the Eurozone Periphery Direct exposures continue to be managed down, whilst redenomination risk has significantly reduced in Spain and Portugal Exposures by Geography • During first 9 months, exposure to Spain, Italy, Portugal £67.5bn and Ireland decreased 11.6% to £59,623m, with
Slide 7: Managed Credit Market Exposure
Managed Credit Market Exposure Since December 2008, Barclays has successfully reduced its exposure to legacy assets by 76% to £10.0bn 2008-2012 CME Balances (£bn) • CMEs arose before market dislocation in mid-2007 and primarily consist of real estate and leveraged finance 41.7 -76.0% • Exposure mana
Slide 8: Capital
Capital 8 | Q3 2012 Fixed Income Investor Presentation | 31 October 2012
Slide 9: Capital Ratios and Leverage
Capital Ratios and Leverage Our financial strength continues to serve us well in the current environment and remains a core component of our strategy going forward Basel 2 Basel 2.5 Basel 2 Basel 2.5 10.8% 11.0% 11.2% 28x £bn 10.0% 16.6% 16.9% 16.4% 16.9% 20x 20x 20x 20x 13.6% 13.7% 13.0% 13.5% 12.9
Slide 10: Pro forma Capital and RWAs
Pro forma Capital and RWAs Barclays continues to manage the business to absorb changing regulation. Pro forma CT1 ratios are subject to finalisation of Basel 3 rules and market conditions Reported Pro forma Pro forma Pro forma Sep-12 Dec-12 Jan-13 Dec-13 CT1 Capital 42.5 42.9 42.9 47.2 CRDIV impact
Slide 11: Pro forma Capital and RWAs ─ Notes
Pro forma Capital and RWAs ─ Notes Notes on Basel 3 Core Tier 1 pro formas 1. Pro forma uses consensus estimates for retained earnings from 23 sell-side analysts, including consensus dividend payout. Barclays neither endorses nor verifies the estimates used 2. Pro forma assumes exercise of outstandi
Slide 12: 'Target' Capital Structure post CRD IV and ICB
‘Target’ Capital Structure post CRD IV and ICB Irrespective of final regulatory outcomes, proposed CRD IV requirements and ICB proposals provide enough certainty to target an end state capital structure with considerable confidence 16.9% Total 17.0% Total • Barclays “target” capital structure embrac
Slide 13: Liquidity & Funding
Liquidity & Funding 13 | Q3 2012 Fixed Income Investor Presentation | 31 October 2012
Slide 14: Balance Sheet as at 30 June 2012
Balance Sheet as at 30 June 2012 Whilst the balance sheet totals £1.6tn, wholesale funding requirements are limited to £263bn as a consequence of its structure £1,571bn1 £515bn £505bn Assets Liabilities £407bn £407bn £335bn £308bn £118bn £170bn £145bn £144bn £89bn Total Gross Derivative Repo financi
Slide 15: Liquidity Pool
Liquidity Pool Barclays continues to maintain a strong and high-quality liquidity pool that consists exclusively of unencumbered assets Liquidity pool amounted to £160bn at end of September 2012, with 87.5% held in cash, high quality government bonds and deposits with central banks 170 154 160 £bn
Slide 16: Funding
Funding Barclays maintains access to a variety of funding sources, including customer deposits and wholesale funding, and has significantly improved its loan to deposit ratio since 2008 £bn 138% 130% 124% 118% 111% 111% Group Loans & Advances to Customers 462 432 455 453 Group Deposits from Customer
Slide 17: Wholesale Funding
Wholesale Funding Despite reduced requirements for wholesale funding, Barclays maintains access to a variety of wholesale sources, with different maturities and in multiple currencies YTD Funding Activity Diverse Wholesale Funding Base (as at 30 June 2012) • £21.6bn of wholesale funding raised YTD:
Slide 18: Wholesale Debt Maturity
Wholesale Debt Maturity Barclays maintains access to a variety of sources of wholesale funds, with different maturities and in multiple currencies (principally EUR, GBP and USD) H1 - Q2 2012 Wholesale Funding Maturity Evolution £bn 263 253 • Wholesale funding decreased 3.6% in Q3 2012, to £253bn 145
Slide 19: Secured Funding
Secured Funding High-quality assets and low encumbrance levels allow Barclays to maintain access to secured funding Strategy Wholesale Secured Funding (as at 30 June 2012) 3% Secured term funding backed by prime assets, including 7% residential mortgages, credit cards and corporate loans, 13% Cove
Slide 20: Senior Unsecured Medium-Term Notes (public & private)
Senior Unsecured Medium-Term Notes (public & private) Barclays is a major Medium-Term Notes (MTNs) issuer, with MTNs representing c.40% of its total wholesale funding as at 30 June 2012 Strategy MTNs are an important source of funding diversity • MTN programme is an important component of (as at 30
Slide 21: Credit Ratings
Credit Ratings 21 | Q3 2012 Fixed Income Investor Presentation | 31 October 2012
Slide 22: 2012 Rating & Outlook Changes
2012 Rating & Outlook Changes Despite re-rating of sector by all main rating agencies in the last 12 months, Barclays rating remains strong and in line with peers’ Barclays Bank plc 2012 Rating & Outlook Changes 1 January 2012 31 October 2012 Standard & Poor's Long Term A+ (Stable) A+ (Negative) Sho
Slide 23: Credit Rating Management
Credit Rating Management Barclays prudently manages the impact of credit rating on the Group’s funding and liquidity positions • Credit rating downgrades could result in contractual outflows to meet collateral requirements on existing contracts • Outflows related to a multiple-notch credit downgrade
Slide 24: Barclays Debt
Barclays Debt Strong Credit (A+/A2/A, S&P/Moody’s/Fitch) Prudent Liquidity & Balance Sheet Management • Global universal bank with diversified • Large liquidity pool (£160bn), in excess of portfolio of customer-focused businesses stress outflows and compliant with UK ILG* • Prudent risk approach to
Slide 25: Appendix
Appendix 25 | Q3 2012 Fixed Income Investor Presentation | 31 October 2012
Slide 26: Resilient Performance
Resilient Performance Despite challenging macroeconomic conditions, Barclays has performed well and consistently remained profitable, since the beginning of the crisis £m Adjusted Income Adjusted PBT Bank Levy (£325m) 8,771 8,167 8,081 7,750 8,138 7,440 7,445 7,287 7,563 7,238 7,549 7,337 7,001 6,87
Slide 27: Adjusting Items to Profit Before Tax
Adjusting Items to Profit Before Tax Q312 Q212 Q112 Q411 Q311 Q211 (£m) (£m) (£m) (£m) (£m) (£m) Adjusted profit before tax 1,727 1,782 2,445 528 1,337 1,721 Own credit (1,074) (325) (2,620) (263) 2,882 440 Gains on debt buy-backs - - - 1,130 - - Impairment and gain/(loss) on - 227 - - (1,800) (58)
Slide 28: Adjusted Profit/(loss) Before Tax by Business
Adjusted Profit/(loss) Before Tax by Business Diverse portfolio of businesses supports resilient levels of profit generation 2012 2011 Change Nine months ended – as at 30 September (£m) (£m) (%) UK RBB 1,146 1,198 (4) Europe RBB (151) (109) 39 Africa RBB 330 561 (41) Barclaycard 1,150 949 21 Retail
Slide 29: Reduced Exposure to the Eurozone Periphery
Reduced Exposure to the Eurozone Periphery Total Eurozone exposure of £59.6bn comprised of £38.8bn of high quality retail assets, principally low LTV residential mortgages. Sovereign exposure has decreased 15% in Q3 2012 to £4.7bn Spain Italy Portugal Ireland Total As at 30 September 2012 (£m) (£m)
Slide 30: Spanish Exposures
Spanish Exposures Retail Gross mortgage exposure by location of Average indexed LTV of 64% outstanding balances Average retail customer age 48; less than 1% of mortgage balances with customers aged under 25 Barcelona 0.7% of home loans greater than 90 days in arrears* c.13% Corporate £4.6bn
Slide 31: Portuguese Exposures
Portuguese Exposures Retail Gross mortgage exposure by location of Average indexed LTV of 77% outstanding balances Average retail customer age 40; less than 1% of mortgage balances with customers aged under 25 0.6% of home loans greater than 90 days in arrears* Corporate Porto £1.7bn gross l
Slide 32: Italian Exposures
Italian Exposures Retail Gross mortgage exposure by location of Average indexed LTV of 46% outstanding balances Average retail customer age 46; less than 3% of mortgage balances with customers aged under 25 Milan c.10% 1.1% of home loans greater than 90 days in arrears* Corporate Focused on
Slide 33: Investment Bank Credit Market Exposures
Investment Bank Credit Market Exposures Barclays continues to reduce its credit market exposure, managing for value Nine months ended 30 Sep12 FV (losses) Imp. (charge) Total (losses) 30 Sep12 31 Dec 11 As at / gains / release / gains (£m) (£m) (£m) (£m) (£m) ABS CDO Super Senior 1,536 1,842 (24) (1
Slide 34: Calculation of Adjusted Gross Leverage
Calculation of Adjusted Gross Leverage 30-Sep-12 30-Jun-12 As at (£bn) (£bn) Total assets 1,599.1 1,631.3 Counterparty netting (411.4) (425.6) Collateral on derivatives (48.1) (51.4) Net settlement balances and cash collateral (100.1) (97.2) Goodwill and intangible assets (7.9) (7.9) Customer assets
Slide 35: Capital Resources
Capital Resources 30-Sep-12 30-Jun-12 As at (£m) (£m) Shareholders’ equity (ex. NCIs) 54,295 54,205 Net NCIs 2,409 2,525 Regulatory adjustments and deductions: Goodwill and intangible assets (7,564) (7,574) Own credit cumulative gain (net of tax) 323 (492) Defined benefit pension adjustment (2,297)
Slide 36: Liquidity & Funding Management Framework
Liquidity & Funding Management Framework Barclays has developed a dynamic liquidity framework and a diversified funding base, whilst maintaining strong protection against unexpected fluctuations Liquidity Risk Framework Funding Structure Liquidity framework meets FSA standards Barclays maintains
Slide 37: Barclays Funding Cost
Barclays Funding Cost 275 251 • 5-year USD Z-spread (as at 28 Sep 2012) 243 216 180 165 148 149 154 136 138 144 114 120 111 Goldman BNP Paribas Generale HSBC JPMorgan UBS Morgan Credit Suisse Citigroup RBS America Nomura Barclays Macquarie Deutsche Bank Stanley Bank of Societe Sachs • 5-year CDS vs.
Slide 38: Basel 3 Regulatory Timeline
Basel 3 Regulatory Timeline • The initial timeframe mentioned below is now expected to be delayed in the EU – alternative dates have yet to be communicated H1 2010 1 Jan 2011 1 Jan 2012 1 Jan 2013 1 Jan 2014 1 Jan 2015 1 Jan 2016 1 Jan 2017 1 Jan 2018 1 Jan 2019 Capital Phased-in Capital Requirement
Slide 39: Independent Commission on Banking (ICB)
Independent Commission on Banking (ICB) Barclays backs ICB’s initiative to improve stability of UK banking system and support a sustainable economy, however, requires alignment with international regulation and careful consideration of implementation costs Regulatory Timeline • September 2011: publi
Slide 40: Debt Investor Relations Contact Information
Debt Investor Relations Contact Information Richard Caven Oihana Bessonart +44 (0)20 7116 2809 +44 (0)20 7116 6327 richard.caven@barclays.com oihana.bessonart@barclays.com Website: http://group.barclays.com/about-barclays/investor-relations#debt-investors 40 | Q3 2012 Fixed Income Investor Presentat
Slide 41: Legal Disclaimers
Legal Disclaimers 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
Slide 42: Legal Disclaimers
Legal Disclaimers Forward-looking Statements This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to certain of the Group’s plans a