Barclays Plc · LSE:BARC
Barclays — Investor Presentation (2010)
61 slides from Barclays's investor presentation, 2010
Slide 1: Spring 2010 Investor Presentation
www.barclays.com/investorrelations Spring 2010 Investor Presentation Post Q1 IMS Investor Presentation Spring 2010 I www.barclays.com/investorrelations
Slide 2: 2009 & 2010 Priorities and Strategic Framework
“Our record income performance produced a sharp increase in underlying profitability in 2009. We have strengthened our financial position considerably over the year in the areas of capital, liquidity and leverage and are well positioned to manage further changes that may be required of us by our reg
Slide 3: Barclays solidly profitable in 2009, resumed dividends
Barclays has remained solidly profitable in 2009 and resumed dividend payments in the second half of the year Financial Summary FY09 FY08 change £m £m % • Income growth of 34% Income 30,986 23,115 34 • Positive jaws of 10% Impairment charges (8,071) (5,419) 49 Operating expenses (17,852) (14,366) 24
Slide 4: Income and profit diversified by geography
Barclays has diversified income and profit by geography… 2008 2009 Income PBTa Income PBTb 35% 38% 43% 47% £23.1bn 53% £3.8bn £31.0bn £5.3bn 57% 65% 62% Non UK UK a Excluding gain on Lehman acquisition b Excluding gain on BGI disposal 4 Investor Presentation Spring 2010 I www.barclays.com/investorre
Slide 5: Income and profit by business
…and by business 2008 2009 Income PBTa Income PBTb Wealth Wealth Wealth Wealth BGI UKRB UKRB BGI UKRB BGI UKRB 2% 10% 6% BGI 11% 4% 13% 12% 23% 6% 8% 19% BarCap BCB 10% BCB 12% 9% BCB BarCap 23% £23.1bn 12% £6.1bn £31.0bn £5.3bn 21% 13% 12% BarCap 21% 38% B’card B’card 40% 2% 14% BCB 6% 9% 2% 3% 8%
Slide 6: Group performance by business
Group performance by business 2009 2008 Impair- Income/ Impair- £m Income Costs PBTa £m Costs PBTa ment (loss) ment UKRB 3,985 (936) (2,440) 612 UKRB 4,482 (602) (2,519) 1,369 BCB 2,753 (974) (1,030) 749 BCB 2,745 (414) (1,063) 1,266 Barclaycard 4,042 (1,798) (1,494) 761 Barclaycard 3,219 (1,097) (1
Slide 7: Balance sheet and capital highlights
Balance sheet and capital highlights change 31 Dec 09 31 Dec 08 • Reduced balance sheet size – total % assets down 33% Total assets £1,379bn £2,053bn (33) RWAs £383bn £433bn (12) • Improved capital ratios – pro forma Core Tier 1 of 10.4% a Core Tier 1 ratio 10.4% a 5.6% • Reduced adjusted gross leve
Slide 8: Strong funding position
Strong funding position with self-funded retail and commercial balance sheet and a flexible wholesale balance sheet As at 31 Dec 09 As at 31 Dec 08 Assets Liabilities Assets Liabilities £bn £bn £bn £bn Retail & commercial balances Customer loans & advances/deposits UK Retail Banking 99 93 94 90 Barc
Slide 9: Adjusted gross leverage reduced
Adjusted gross leverage reduced 31 Dec 09 31 Dec 08 • Total assets reduced - but new lending £bn £bn of £35bn to UK households and businesses Total assets 1,379 2,053 Derivative gross-up (374) (917) • Offsetting derivative contracts eliminated at no cost and with no AUM on balance sheet (1) (69) cap
Slide 10: Strengthening capital
Strengthening capital Risk Weighted Assets Capital Capital Ratios £bn £bn % RWAs Non-Core Tier 1 Non-Core Tier 1 Core Tier 1 Core Tier 1 13.4 50.9 433 37.3 383 8.6 39.7 10.4 24.4 5.6 2008 2009 2008 2009 a 2008 2009 a 10 Investor Presentation Spring 2010 I www.barclays.com/investorrelations a Pro for
Slide 11: Improved liquidity
Improved liquidity Liquidity Barclays Capital: movement in average • Group liquidity pool trebled to £127bn term of net unsecured liabilities • Loan to deposit ratio improved from <6 Months 138% to 130% >1 Year • Loan to deposit and long term funding 26 mths ratio improved from 93% to 81% 300 • £17b
Slide 12: Margins in retail, commercial and private banking
Margins in retail, commercial and private banking businesses 2008 2009 236 236 207 207 207 207 211 211 172 172 131 131 Liability Margin Liability Margin Asset Margin Asset Margin Net Net Interest Margin Interest Margin 12 Investor Presentation Spring 2010 I www.barclays.com/investorrelations
Slide 13: Positive jaws of 10% in 2009
Barclays achieved positive jaws of 10% in 2009 FY09 FY08 change £m £m % Income 30,986 23,115 34 Net income 22,915 17,696 29 Operating expenses (17,852) (14,366) (24) Group cost : income ratio 58% 62% Group cost : net income ratio 78% 81% BarCap comp : income ratio 38% 44% 13 Investor Presentation Sp
Slide 14: Remuneration
Remuneration • Total Group 2009 discretionary cash payments : £1.5bn • Additional long term awards of £1.2bn vesting over 3 years and subject to clawback • 73% of new long term awards in equity • 5,000 employees received long term awards Average total Average total Average total 2009 discretionary a
Slide 15: Results by Business
Results by Businessa UK Retail Banking Barclays Capital Barclays Commercial Banking Barclays Global Investors Barclaycard Barclays Wealth GRCB – Western Europe GRCB – Emerging Markets Absa 15 Investor Presentation Spring 2010 I www.barclays.com/investorrelations a This reflects business segmentation
Slide 16: UK Retail Banking
UK Retail Banking FY 09 FY 08 change £m £m % Total income net of insurance claims 3,985 4,482 (11) Impairment charges (936) (602) 55 • Margin compression on deposit book and increased impairment Net Income 3,049 3,880 (21) Operating expenses (2,440) (2,519) (3) • Partially offset by reduced costs an
Slide 17: Barclays Commercial Banking
Barclays Commercial Banking FY 09 FY 08 change £m £m % Total income net of insurance claims 2,753 2,745 0 • Average lending grew 3% to £63.3bn Impairment charges (974) (414) 135 Net Income 1,779 2,331 (24) Operating expenses (1,030) (1,063) (3) • Asset driven income and increased fee income partly o
Slide 18: Barclaycard
Barclaycard FY 09 FY 08 change £m £m % Income Average Outstanding (£m) Balances Total income net of insurance claims 4,042 3,219 26 Impairment charges (1,798) (1,097) 64 (£bn) 4,042 20.5 Net Income 2,244 2,122 6 Operating expenses (1,494) (1,422) 5 16.7 3,219 1,548 Share of results of associates and
Slide 19: GRCB – Western Europe
GRCB – Western Europe FY 09 FY 08 change £m £m % Customers Distribution Points Total income net of insurance claims 1,723 1,455 18 (m) Impairment charges (667) (297) 125 1,318 2.8 Net Income 1,056 1,158 (9) 1,181 2.5 Operating expenses (1,113) (960) 16 Share of results of associates and JVs 4 - - Pr
Slide 20: GRCB – Emerging Markets
GRCB – Emerging Markets FY 09 FY 08 change £m £m % Total income net of insurance claims 1,045 994 5 • Income increased 5% Impairment charges (471) (165) 186 • Profit before tax in established markets Net Income 574 829 (31) in Africa and the Indian Ocean was £109m Operating expenses (852) (688) 24 •
Slide 21: GRCB – Absa
GRCB – Absa FY 09 FY 08 change £m £m % Retail Customers Customer Accounts Total income net of insurance claims 2,549 2,198 16 (m) (£bn) Impairment charges (567) (347) 63 11.4 19.7 Net Income 1,982 1,851 7 10.4 Operating expenses (1,469) (1,305) 13 17.0 Share of results of associates and JVs (4) 5 -
Slide 22: Barclays Capital
Barclays Capital FY 09 FY 08 change £m £m % Fixed Income, Currency and Commodities 12,964 7,353 76 • FICC drove top-line income growth of Equities and Prime Services 2,846 1,153 147 81% with step change in Equities and Prime Services and in Investment Investment Banking 2,195 1,053 108 Banking incom
Slide 23: Barclays Capital: record performance
Barclays Capital: record performance well ahead of prior year (£m) CAGR (03-09) Income Income 26% 11,625 PBT PBT 18% 7,119 6,267 5,231 4,505 3,518 2,841 2,335 2,464 2,216 1,431 1,302 930 1,142 2003 2004 2005 2006 2007 2008 2009 23 Investor Presentation Spring 2010 I www.barclays.com/investorrelation
Slide 24: Barclays Capital: model delivers across cycles
Barclays Capital: model continues to deliver across cycles Top-line income 2009 17,862 (£m) 2008 2007 9,858 8,678 2006 2005 6,267 2004 2002 2003 4,505 2,841 3,518 2,427 Interest Rates Down - Up Up Up Down Down - Credit Spreads Up Down Down Down Down Up Up Down Volatility Up Down Down Down Down Up Up
Slide 25: Barclays Capital: diversification of income
Barclays Capital: diversification of income Top-line income (£m) 2007 2008 5,000 4,000 2009 3,000 2,000 1,000 0 -1,000 Investment Credit Equities Mortgages Emerging Commodities Currency Prime Principal Rates Banking & ABS Markets Services Investments 25 Investor Presentation Spring 2010 I www.barcla
Slide 26: Barclays Capital: credit market exposures
Barclays Capital: credit market exposures £bn Exposure 2009 movement Exposure Net sales/ Write- 31 Dec 09 FX/ Other 31 Dec 08 payments downs US residential mortgages 3.3 (5.1) (1.8) (0.6) 10.8 Commercial mortgages and property 8.2 (0.6) (2.5) (1.0) 12.3 Leveraged finance 5.5 (3.1) (0.4) - 9.0 Monoli
Slide 27: Barclays Global Investors
Barclays Global Investors FY 09 FY 08 change £m £m % Total income 1,903 1,844 3 • Sale of BGI completed 1 December 2009 Operating expenses (1,154) (1,249) (8) Profit before tax and disposal of discontinued operations 748 595 26 • Residual stake in BlackRock of 19.9% Profit on disposal of discontinue
Slide 28: Barclays Wealth
Barclays Wealth FY 09 FY 08 change £m £m % • Total client assets grew 4% to over Total income net of insurance claims 1,333 1,324 1 £150bn Impairment charges (51) (44) 16 Net Income 1,282 1,280 0 • Underlying profits declined 24% Operating expenses (1,138) (935) 22 Profit on disposal of subsidiaries
Slide 29: Q1 2010 IMS Summary
Q1 2010 IMS Summary* “I am pleased with the strong growth in profits which we have delivered this quarter. Diversification of our business and risk, and good underlying performance, have combined to produce this result. The improvement that we have seen in impairment reflects the signs of economic r
Slide 30: Strong growth in profits in Q1 2010
Strong growth in profits in Q1 2010 Financial Summary Q110 Q109 change £m £m % • Income up 4% despite continued Income 8,065 7,719 4 impact of liability margin compression Impairment charges (1,508) (2,309) (35) • Impairment down 35% relative to Q109 Operating expenses (4,852) (4,163) 17 and down 19
Slide 31: 35% increase in EPS year on year
35% increase in EPS year on year Performance ratios Q110 Q109 • Earnings per share up 35% Basic earnings per share 9.3p 6.9p Dividend per share 1.0p - • First quarter dividend of 1p per share Return on average shareholders’ equity 8.7% 8.0% • Barclays Capital cost : net income ratio improved 6 perce
Slide 32: Capital, leverage and liquidity
Capital, leverage and liquidity • Growth of 8% in risk weighted assets since year end to £415bn • Core Tier 1 ratio of 9.8% as at 31st March 2010 • Group liquidity pool strengthened further to £152bn • Funding of £17bn raised in Q1 2010 through the unsecured, covered bond and structured note market
Slide 33: Profit before tax by segment
Profit before tax by segment Q110 Q109 change £m £m % Global Retail Banking 403 429 (6) UK Retail Banking 238 199 20 Barclaycard 118 179 (34) Western Europe Retail Banking 17 25 (32) Barclays Africa 30 26 15 Corporate and Investment Banking, and Wealth 1,468 1,000 47 Management Barclays Capital 1,46
Slide 34: Quarterly Results Summary
Quarterly Results Summary Q110 Q409 Q309 Q209 Q109 £m £m £m £m £m Income 8,065 6,765 7,040 7,599 7,719 Impairment charges (1,508) (1,857) (1,658) (2,247) (2,309) Net income 6,557 4,908 5,382 5,352 5,410 Operating expenses (4,852) (4,482) (4,182) (3,888) (4,163) Profit before tax 1,820 478 1,362 1,50
Slide 35: Appendices
Appendices* 35 Investor Presentation Spring 2010 I www.barclays.com/investorrelations * Includes results by segment in accordance with the restatement announced on 22 March 2010
Slide 36: Capital management
Capital management Core Tier 1 Bridge % 0.4 10.4% 10.0% a 1.0 0.6 0.5 1.9 0.8 (0.4) 5.6% 2008 Underlying Capital Sale of Attributable Conversion Exercise of Other net 2009 RWAs deductions BGI profit of MCNs warrants a movements 36 Investor Presentation Spring 2010 I www.barclays.com/investorrelation
Slide 37: Group restructuring
Group restructuring We have reorganised our activities to form three business groupings: Global Retail Banking (“GRB”), Corporate and Investment Banking, Wealth Management, and Absa. We retain our Head Office and Other Operations activity. These changes have been made to the Group structure to creat
Slide 38: Results by Business
Results by Business* UK Retail Banking Barclays Capital Barclaycard Barclays Corporate Western Europe Retail Barclays Wealth Banking Barclays Africa Investment Management Absa Head Office and Other Operations 38 Investor Presentation Spring 2010 I www.barclays.com/investorrelations * Reflecting new
Slide 39: Group performance by business under new structure
Group performance by business under new structure 2009 2008 Impair- Income Impair- £m Income Costs PBT* £m Costs PBT* ment /(loss) ment UKRB 4,276 (1,031) (2,538) 710 UKRB 4,820 (642) (2,628) 1,558 Barclaycard 4,041 (1,798) (1,527) 727 Barclaycard 3,221 (1,097) (1,447) 766 Western Europe Western Eur
Slide 40: UK Retail Banking
UK Retail Banking FY 09 FY 08 £m £m Dec 09 Dec 08 Total income net of insurance claims 4,276 4,820 Loans and advances to £103.0bn £98.8bn customers at amortised cost Impairment charges (1,031) (642) Customer accounts £96.8bn £93.8bn Net Income 3,245 4,178 Total assets £109.3bn £105.9bn Operating exp
Slide 41: Barclaycard
Barclaycard FY 09 FY 08 £m £m Dec 09 Dec 08 Total income net of insurance claims 4,041 3,221 Loans and advances to customers £26.5bn £27.4bn Impairment charges (1,798) (1,097) Total assets £30.3bn £31.0bn Total – avg extended credit balances £16.4bn £13.2bn Net Income 2,243 2,124 Return on average e
Slide 42: Western Europe Retail Banking
Western Europe Retail Banking FY 09 FY 08 £m £m Dec 09 Dec 08 Total income net of insurance claims 1,318 1,159 Loans and advances to customers £41.1bn £42.1bn Impairment charges (338) (172) Customer accounts £17.6bn £13.2bn Total assets £51.0bn £52.0bn Net Income 980 987 Operating expenses (887) (80
Slide 43: Barclays Africa
Barclays Africa FY 09 FY 08 £m £m Dec 09 Dec 08 Total income net of insurance claims 739 726 Loans and advances to customers £3.9bn £5.0bn Impairment charges (121) (71) Customer accounts £6.4bn £7.3bn Total assets £7.9bn £8.5bn Net Income 618 655 Return on average economic capital 6% 17% Operating e
Slide 44: Barclays Capital
Barclays Capital* Dec 09 Dec 08 £17.9bn £515,000 Total assets Group liquidity pool £1,019.1bn £1,629.1bn £127bn £43bn top-line income average total income generated per Return on average economic 15% 20% capital member of staff Cost:income ratio 57% 72% Cost:net income ratio 73% 134% 1339 232 Compen
Slide 45: Barclays Corporate
Barclays Corporate UK & Continental New Ireland Europe Markets Total Dec 09 Dec 08 2009 £m £m £m £m Total income net of insurance claims 2,461 385 335 3,181 Loans and advances to £70.7bn £79.8bn customers at amortised cost Impairment charges (879) (308) (371) (1,558) Customer accounts £66.3bn £60.9b
Slide 46: Barclays Wealth
Barclays Wealth FY 09 FY 08 £m £m Dec 09 Dec 08 Total income net of insurance claims 1,322 1,312 Loans and advances to customers £13.0bn £11.4bn Impairment charges (51) (44) Customer accounts £38.4bn £42.3bn Total assets £14.9bn £13.2bn Net Income 1,271 1,268 Return on average economic capital 22% 1
Slide 47: Investment Management
Investment Management FY 09 FY 08 £m £m Total income 40 (72) Operating expenses (17) (274) Profit/(loss) before tax 22 (346) The Investment Management activities reflect the Group’s oversight of its retained 19.9% interest in BlackRock Inc. post the sale of BGI and forms part of Corporate and Invest
Slide 48: Absa
Absa FY 09 FY 08 £m £m Dec 09 Dec 08 Total income net of insurance claims 2,553 2,187 Loans and advances to customers £36.4bn £32.7bn Impairment charges (567) (347) Customer accounts £19.7bn £17.0bn Total assets £45.8bn £40.3bn Net Income 1,986 1,840 Return on average economic capital 13% 15% Operat
Slide 49: Risk management
Risk management Robert Le Blanc Risk Director 16 February 2010 49 Investor Presentation Spring 2010 I www.barclays.com/investorrelations
Slide 50: 2009 Impairment Planning
Topics 2009 Impairment Planning 170 Outcome • Impairment Review 130-150bps 135bps • Portfolio Trends 130 Loan • Market Risk Loss Rate 90 Retail (bps) • Themes and Outlook for 2010 Group 50 Wholesale (Steady FX and Balance Sheet) 38 38 FY 07 FY 08 FY 09 50 Investor Presentation Spring 2010 I www.barc
Slide 51: 2009 Loan Impairment Charge and Trend
Impairment Trend 2009 Loan Impairment Charge FY 09 £7,358m Observed LLR 156bps 2008 2009 £m FY 08 £4,913m Loan impairment charge £4,913 £7,358 2009: 184 bps Observed LLR 95bps 2,500 Retail LLR AFS /reverse repo charge £506 £713 2008: 116 bps bps 2009: 133 bps 250 Total impairment charge £5,419 £8,07
Slide 52: Group Impairment Allowances and Coverage Ratios
Group Impairment Allowances Impaired Asset Coverage Ratios 10.8 64% 71% 8.8 Retail Other 69% 69% 66% 48% 6.6 44% 42% 4.9 41% Group 42% Balances (£bn) 40% Corporate (incl. CME) 35% 32% 18% Retail Mortgages 13% 13% (UK + Intl) 10% Jun-08 Dec 08 Jun 09 Dec-09 40 40 H1 08 H2 08 H1 09 H2 09 52 Investor P
Slide 53: UK Mortgages and Unsecured Arrears
UK Mortgages – Arrears rate UK Unsecured (Cards + Loans) Percentage of loans >3 months in arrears Council of Mortgage Lenders (CML) Annual 6.9% Net Charge Off 6.7% 5.6% 5.6% >90 Day Delinquency 1.7% 2.3% 2.1% 1.8% Balances (£bn) Barclays Unsecured Loans 7.7 7.8 7.5 7.2 Cards 10.4 10.6 10.6 11.4 41 4
Slide 54: UK and US Cards Delinquency Trends
UK Cards Delinquency Trends US Cards LLR 514bp 589bp 9.0% 7.8% Annual 7.8% Total 7.3% Delinquency 6.9% 6.9% Net Charge Off 6.9% 5.4% 5.3% Early Cycle Delinquency 6.4% >90 Day 3.2% 3.3% 5.8% 5.5% Delinquency 2.2% 2.3% 5.3% 5.0% 7.8 6.9 7.5 1.5% 1.6% 1.9% Late Cycle 1.4% 1.4% Balances (£bn) 3.4 Delinq
Slide 55: UK Commercial Bank and BarCap Loan Impairment
UK Commercial Bank Loan Impairment Barclays Capital Loan Impairment Loan Loss Rate 140 Loan Loss Rate 166 (bps) 116 143 (bps) 86 80 77 42 1.7 1.8 6.3 6.4 5.7 1.2 4.8 Credit Risk Loans 0.9 Credit Risk Loans (£bn) (£bn) H1 08 H2 08 H1 09 H2 09 H1 08 H2 08 H1 09 H2 09 43 43 55 Investor Presentation Spr
Slide 56: GRCB International Impairment; Single-Name Losses
GRCB International Loan Impairment Single-Name Corporate Losses in 2009 Impairment Charge (£m) 109 Largest single name charge 171 178 Average of next top ten charges Loan Loss Rate 104 7.0 (bps) 74 59 5.7 45 35 3.6 34 Credit Risk Loans 1.9 18 (£bn) 13 8 5 3 Barclays Western Emerging BCB Absa H1 08 H
Slide 57: BarCap Daily Revenue and DVaR
BarCap: Distribution of Daily Revenue BarCap: DVaR during 2009 Daily Trading Income > + – 25% of DVaR 100 £120m 2008 2009 DVaR 80 Business Days £60m 60 Avg. £0m 40 20 -£60m DVaR 0 -£120m <-30 -30 to 0 0 to 30 30 to 60 60 to 90 >90 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 45 £m 45 57 Investor Presentation
Slide 58: Risk-adjusted performance
BarCap: Risk-adjusted revenue performance Barclays Group: Risk-adjusted performance Average Monthly Revenue Ratio = Income Coverage of Impairment £31bn SD of Revenue 6 month £23bn £23bn £22bn Average £17bn Total Income £14bn Extreme £12bn Stress £11bn £11bn 38% £10bn 23% 26% Impairment/Total Income
Slide 59: Planning Assumptions and Impairment Outlook for 2010
Planning Assumptions for 2010 Impairment Outlook for 2010 Consensus view: • Retail credit trends continue to gradually improve • Moderate economic growth • Wholesale trends stabilise and improve later in year • Interest Rates to remain low • CME and AFS impairment reduced • More stable house prices
Slide 60: 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
Slide 61: Investor Relations
Investor Relations Contact Stephen Jones +44 (0)20 7116 5752 stephen.jones-ir@barclays.com James Johnson +44 (0)20 7116 7233 james.johnson@barclays.com Matt Sheppard +44 (0)20 7116 5724 matt.sheppard@barclays.com Maritz Carvalho +44 (0)20 7116 2928 maritz.carvalho@barclays.com 61 Investor Presentati