Slide 1: Global Retail and Commercial Banking
Global Retail and Commercial Banking Autumn 2009
Slide 2: GRCB operates in 28 countries around the world
GRCB operates in 28 countries around the world UK Retail Bank Barclaycard Western Europe 49m 4,864 £465bn Barclays Commercial Bank Customers Distribution Points Customer Balances Emerging Markets Absa 2 Note: 1) Customer Balances = Loans and Advances to Customers (non-banks) + Customer Accounts (non
Slide 3: Operating with a clear and consistent strategy
Operating with a clear and consistent strategy Staying Close to Maintain Strategic Manage our Risk Customers and Clients Momentum Strategic Build the Build Non-UK Operational Pillars Best Bank in the UK Presence Selectively Excellence • Capitalise on share gains • Consolidate acquisitions • Rigorous
Slide 4: GRCB delivered a strong H1 PBT performance relative to peers
GRCB delivered a strong H1 PBT performance relative to peers GRCB H109 Performance P&L vs PY (£m) H109 H208 H108 B/(W) % Income 8,051 8,051 7,040 14% Cost (4,160) (4,274) (3,682) (13%) Operating Margin 3,890 3,777 3,358 16% Impairment (2,660) (1,714) (1,207) (120%) PBT 1,256 2,122 2,245 (44%) Balanc
Slide 5: GRCB remains solidly profitable through tough economic conditions
GRCB remains solidly profitable through tough economic conditions…. H109 Operating Performance (£m) +14% +13% (477) +16% 1,010 533 (1,453) (69) 2,245 1,256 H1 2008 PBT Income Cost Operating Impairment JVs H1 2009 PBT Margin 5
Slide 6: Very strong income growth primarily driven by international expansion
...reflecting very strong income growth primarily driven by international expansion H109 Income Growth (£m) +14% 119 245 160 591 (169) 64 8,051 7,040 B’Card Intl: £321m B’Card UK: £270m H1 2008 PBT UKRB BCB B'card Absa WE EM H1 2009 Income International £846m 84% UK Domestic £165m 16% Total £1,010m
Slide 7: …while maintaining stringent cost focus
…while maintaining stringent cost focus H109 Operating Expenses (£m) H109 FTEs -3% +13% +2% -5% 4,300 3,795 4,168 120,400 118,400 114,300 H108 H208 H109 H108 H208 H109 7
Slide 8: Absorbing higher impairment resulting from economic deterioration
…absorbing higher impairment resulting from significant economic deterioration H109 Impairment Growth (£m) +120% 147 198 170 438 2,660 (177bps) 319 181 1,207 (88bps) H108 UKRB BCB B'card Absa WE EM H109 LLR (bps) H108 0.64% 0.37% 4.08% 0.82% 0.47% 1.52% H109 0.96% 1.23% 6.36% 1.57% 1.17% 5.00% 8
Slide 9: Increasing operating margin will drive earnings when impairment normalises
Increasing operating margin will drive earnings when impairment normalises Operating Margin (£m) 3,890 3,689 3,446 3,022 2,948 3,017 3,016 Operating Margin 2,660 Impairment # 1,714 1,159 1,003 1,207 962 936 H106 H206 H107 H207 H108 H208 H109 LLR* 0.98% 1.14% 0.82% 0.79% 0.88% 1.10% 1.77% * Annualise
Slide 10: This was achieved whilst reducing RWA consumption
This was achieved whilst reducing RWA consumption H109 RWAS (£bn) -5% -6.2 3.1 -6.6 191.3 181.6 YE 08 Management Actions & Pro-cyclicality Estimated FX H109 Organic Growth 10
Slide 11: … geographically diversifying the franchise
… geographically diversifying the franchise Income (£m) +31% (+88% Intl, +8% UK) 8,051 7,040 6,132 6,252 4,679 4,513 4,343 4,333 3,372 1,919 2,526 1,789 H106 H107 H108 H109 International UK Distribution Points Customers (millions) +34% +42% (+95% Intl, -13% UK) (+76% Intl, +15% UK) 4,780 4,864 48.8
Slide 12: … and staying committed to our UK customers
… and staying committed to our UK customers H1 09 Gross UK Lending (£bn) +£17bn 7.4 6.0 1.5 1.0 0.7 0.6 BCB Term UKRB Mortgages B'card UK Cards BarCap Barclays Partner UKRB Local Lending Finance Business 12
Slide 13: Performance by business
Performance by business PBT Performance by Business (£m) 690 702 H108 679 H208 564 H109 404 388 401 391 298 268 254 248 135 115 89 52 31 UKRB BCB B'card Absa WE EM -86 13
Slide 14: Conclusion
Conclusion • Strong relative performance in the first half versus peers • Income growth demonstrates underlying franchise momentum • Inevitably not immune from impact of UK margin compression • Loan loss rate maintained below 200 basis points, reflecting solid book quality • Management actions taken
Slide 15: Appendix
Appendix
Slide 16: UKRB: profitable in a challenging UK retail environment
UKRB: profitable in a challenging UK retail environment UKRB H109 Performance UKRB Key Notes P&L (£m) H109 H208 vs PY H108 B/(W) % • Remains profitable despite fully-absorbing Income 2,007 2,306 2,176 (8%) the impact of Cost (1,272) (1,317) (1,202) (6%) Operating Margin 735 989 974 (25%) – Significa
Slide 17: BCB: strong income growth despite difficult economic conditions
BCB: strong income growth despite difficult economic conditions BCB H109 Performance BCB Key Notes P&L (£m) H109 H208 vs PY H108 B/(W) % • Solid income growth despite margin Income 1,413 1,396 1,349 5% compression reflecting Cost (542) (565) (498) (9%) Operating Margin 870 832 850 2% – £83m from the
Slide 18: Barclaycard: profit maintained with step change in business scale
Barclaycard: profit maintained with step change in business scale B’card H109 Performance B’card Key Notes P&L (£m) H109 H208 vs PY H108 B/(W) % • 42% income growth reflecting Income 2,009 1,801 1,418 42% – Loan growth in Barclaycard US Cost (708) (781) (641) (10%) Operating Margin 1,301 1,020 777 6
Slide 19: WE: strong income growth helps offset impairment and restructuring costs
WE: strong income growth helps offset impairment and restructuring costs WE H109 Performance Western Europe Key Notes P&L (£m) H109 H208 vs PY H108 B/(W) % • 38% income growth reflecting underlying Income 885 814 641 38% franchise momentum Cost (554) (537) (423) (31%) – 23% growth in distribution po
Slide 20: EM: well-placed to deliver rapid growth when conditions improve
EM: well-placed to deliver rapid growth when conditions improve EM H109 Performance Emerging Markets Key Notes P&L (£m) H109 H208 vs PY H108 B/(W) % • Profit performance reflects local market Income 529 584 410 29% conditions Cost (419) (396) (292) (44%) – 29% increase in PBT from established Africa
Slide 21: GRCB – Absa: strongly profitable in a challenging local environment
GRCB – Absa: strongly profitable in a challenging local environment GRCB – Absa H109 Performance GRCB – Absa Key Notes P&L (£m) H109 H208 vs PY H108 B/(W) % • 15% income growth predominantly reflects Income 1,208 1,151 1,047 15% FX movement Cost (665) (678) (627) (6%) Operating Margin 542 473 420 29
Slide 22: Forward-looking statements
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 and its current goa