Barclays Plc · LSE:BARC
Barclays — Debt Investor Presentation (July 2016)
28 slides from Barclays's debt investor presentation, Jul 29, 2016
Slide 1: Barclays PLC Fixed Income Investor Call
Barclays PLC Fixed Income Investor Call H1 2016 Results Announcement 29 July 2016 | Barclays H1 2016 Fixed Income Investor Results Call
Slide 2: Tushar Morzaria, Barclays Group Finance Director
Tushar Morzaria Barclays Group Finance Director | Barclays H1 2016 Fixed Income Investor Results Call
Slide 3: Our strategy is on track and is showing encouraging progress
Transatlantic Consumer, Corporate & Investment Bank Our strategy is on track and is showing encouraging progress Strong Core returns Double digit Core RoTE 11.0% RoTE1 New cost guidance for 2017 £400m-£500m2 Non-Core closure Continued momentum, on track to close in 2017 c.£20bn RWAs c.10bps Sell dow
Slide 4: Financial highlights – Q216
Financial highlights – Q216 Double digit Core returns: Underlying Core RoTE of 11.0%, driven by Barclays UK RoTE of 18.4% and Barclays Corporate & International RoTE of 11.9%4 Robust capital ratios: CET1 ratio of 11.6% – on track to meet end-state capital requirements, providing additional capital f
Slide 5: Resilience from prudent risk management and diversification
Resilience from prudent risk management and diversification Diversified income by business – H1167 Lower volatility of LLR vs. other major UK banks8 4% Average 1995-2015 Personal Banking 18% 3% 21% Barclaycard Consumer UK 2% 8% WEBB 1% Markets 7% 22% 0% Banking -1% 24% Consumer, Cards & Payments Bar
Slide 6: Dan Hodge, Barclays Group Treasurer
Dan Hodge Barclays Group Treasurer | Barclays H1 2016 Fixed Income Investor Results Call
Slide 7: Strong CET1 and leverage ratio progression
Strong CET1and leverage ratio progression Fully Loaded CET1 ratio11 442 402 • CET1 ratio of 11.6% as at 30 June 2016, an improvement of 358 363 366 c.250bps since December 2013 despite absorbing conduct and RWAs(£bn) litigation charges of c.160bps Organic capital accretion • The 30bps Q2 increase wa
Slide 8: Managing evolving future minimum CET1 levels
Managing evolving future minimum CET1 levels Illustrative evolution of minimum CET1 requirements and buffers14 Minimum CRD IV CET1 requirement Mandatory distribution restrictions hurdle16 CET1 minimum levels and internal management buffer 2016 Pillar 2A CET1 requirement15 BoE stress test systemic re
Slide 9: Evolving CRD IV capital structure transitioning to HoldCo over time
Evolving CRD IV capital structure transitioning to HoldCo over time Illustrative evolution of CRD IV capital structure20 Well managed and balanced total capital structure • Transitional and fully-loaded total capital ratios increased by 50 and 40bps 18.7% respectively to 18.7% (Mar-16: 18.2%) and 17
Slide 10: Illustrative MREL/TLAC requirements
Illustrative MREL/TLAC requirements Illustrative MREL/TLAC needs to meet future requirements21 c.£6bn p.a. / • Proactive refinancing from HoldCo and liability management exercises executed to date position us well for future requirements £33bn in aggregate • While our full MREL requirement might app
Slide 11: Maintaining a robust liquidity position and well diversified funding profile
Maintaining a robust liquidity position and well diversified funding profile High quality liquidity pool (excluding BAGL) (£bn) Maintained a robust liquidity position LCR23 • Group liquidity pool at £149bn, an increase on Q1 as we increased the cash 124% 133% 129% 124% contribution whilst reducing g
Slide 12: Progress on Group legal structure
Progress on Group legal structure Barclays PLC26 Barclays UK Likely to be Barclays Corporate & International constructs Divisional transferred under UK consumer and business bank27 Barclays PLC Diversified transatlantic wholesale differentiated by scale and digital innovation in the future and consu
Slide 13: Focused on delivery
Focused on delivery Continued to deliver on the strategy: Strong Core underlying RoTE of 11.0%4 and continued momentum in reducing Non-Core towards £20bn RWA guidance Robust capital ratios: Further progress on CET1 ratio up 30bps to 11.6% – comfortably on track to meet end-state capital requirements
Slide 14: Q&A
Q&A | Barclays H1 2016 Fixed Income Investor Results Call
Slide 15: Appendix
Appendix | Barclays H1 2016 Fixed Income Investor Results Call
Slide 16: Our strategy remains unchanged and is on track
Our strategy remains unchanged and is on track Transatlantic Consumer, Corporate and Investment Bank Measures to deliver strategy and manage legacy headwinds Accelerate Non-Core rundown. Flexibility to fund the accelerated Barclays UK Barclays Corporate & International rundown provided by plan to pa
Slide 17: Ratings a key strategic priority
Ratings a key strategic priority Senior Long Term/ • Barclays is committed to maintaining strong investment Standard & Poor’s Moody's Fitch Short Term ratings grade ratings • Pre-referendum, all 3 rating agencies affirmed Barclays ratings during H116 with stable outlooks Barclays PLC BBB Baa3 A Rati
Slide 18: Managing capital position for regulatory minimum levels and stress testing
Managing capital position for regulatory minimum levels and stress testing Barclays‟ expected systemic reference points for 2016 BoE stress test14,17 Minimum CRD IV CET1 requirement Mandatory distribution restrictions hurdle16 2016 Pillar 2A CET1 requirement15 BoE stress test systemic reference poin
Slide 19: TLAC and MREL requirement expectations
TLAC and MREL requirement expectations Pillar 1 TLAC minimum requirements and illustrative MREL expectations21 Pillar 1 requirements 2016 Pillar 2A requirement15 Assumed CRD IV combined buffer requirement BoE Recapitalisation amount TLAC MREL21 H116 PRA c.4.5% c.4.5% Transitional total c.4.5% Recapi
Slide 20: Continued progress on transition to HoldCo capital and funding model
Continued progress on transition to HoldCo capital and funding model PRA transitional regulatory capital Outstanding term vanilla senior unsecured debt (£bn) Dec-15 Jun-16 (£bn) Dec-15 Jun-16 PRA transitional Common Equity Tier 1 capital 40.7 42.4 Barclays PLC (HoldCo) term vanilla senior unsecured
Slide 21: Barclays PLC parent company accounts
Barclays PLC parent company accounts Barclays PLC parent company balance sheet Key notes Balance sheet • Barclays PLC is the holding company of the Barclays Group As at As at • The HoldCo‟s primary assets currently are its investments in, and loans and 31 Dec-15 30 Jun-16 advances made to, its sole
Slide 22: Asset quality trends remain favourable
Asset quality trends remain favourable Impairment charge and CRLs tracking downwards… £m 5.1% • Impairment charges have consistently 6,000 0.06 5,000 4.4% 0.05 CRL as % of 3.2% Gross L&A 4,000 2.8% 0.04 declined since 2010 3,000 5,672 2.0% 1.8% 0.03 1.4% P&L charge 2,000 3,802 3,340 3,071 0.02 • Cre
Slide 23: UK Mortgages – High quality, conservative portfolio
UK Mortgages – High quality, conservative portfolio BoE Stress Tests UK Mortgage Cumulative Impairment Charge Rates36 Key Messages 2014 2015 • High quality, conservative £127bn mortgage portfolio 4% − Average LTV38 of 47% 3% − >90 day arrears of 0.2% − UK mortgage LLR remains negligible 2% • Consist
Slide 24: UK and US Cards – Seasoned, diversified and resilient portfolios
UK and US Cards – Seasoned, diversified and resilient portfolios Breakdown by Delinquency Bucket – UK Key Messages 30% Early Delinquency Late Delinquency • History of strong and improving delinquency trends across both portfolios • Portfolios have been built to be resilient; credit criteria is regul
Slide 25: UK Commercial Real Estate – Stable and limited exposure
UK Commercial Real Estate – Stable and limited exposure BoE Stress Tests UK CRE Cumulative Impairment Charge Rates36 Key messages 18% 2014 2015 • Stable and limited exposure to UK Commercial Real Estate with strict adherence to conservative underwriting criteria over time 15% − Total UK CRE exposure
Slide 26: Anticipated funding sources of future UK ring-fenced bank and Barclays Bank PLC
Anticipated funding sources of future UK ring-fenced bank and Barclays Bank PLC (and subsidiaries) Barclays PLC26 Barclays UK Barclays Corporate & International constructs Divisional UK consumer and business bank27 differentiated by scale Diversified transatlantic wholesale and digital innovation an
Slide 27: Footnotes
Footnotes 1 Q216 RoTE excluding notable items | 2 Excluding notable items. Based on current exchange rates | 3 Target set at an average USD exchange rate for 2016 of 1.42 | 4 RoTE excluding notable items. Core RoTE includes Head Office | 5 Target set at an average USD exchange rate for 2016 of 1.42
Slide 28: 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