Barclays Plc · LSE:BARC
Barclays — Q1 2016 Earnings Presentation
54 slides from Barclays's earnings presentation, Apr 27, 2016
Slide 1: Barclays PLC Fixed Income Investor Presentation
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Barclays PLC Fixed Income Investor Presentation Q1 2016 Results Announcement 27 April 2016 | Barclays Q1 2016 Fixed Income Investor Presentation
Slide 2: Strategy & Performance Overview
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Strategy & Performance Overview | Barclays Q1 2016 Fixed Income Investor Presentation
Slide 3: Management focus to deliver value
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Management focus to deliver value Transatlantic Consumer, Corporate and Investment Bank Measures to deliver strategy and manage legacy headwinds
Slide 4: Financial highlights
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Financial highlights Underlying Core RoTE of 10.7%, driven by Barclays UK RoTE of 20.5% and Barclays Corporate & International RoTE of 9.5%5 CET
Slide 5: Statutory Group financials
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Statutory Group financials Three months ended (£m) Mar-16 Mar-15 % change Q116 Performance metrics Income 5,041 5,650 (11%) • Group results refl
Slide 6: Core: Underlying Return on Tangible Equity of 10.7%
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Core: Underlying Return on Tangible Equity of 10.7% Business performance excluding notable items Profit/(loss) before tax (£m) Mar-16 Mar-15 % c
Slide 7: Non-Core: Continued rundown momentum
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Non-Core: Continued rundown momentum Business performance excluding notable items Q116 Performance metrics Three months ended (£m) Mar-16 Dec-15
Slide 8: Non-Core: Rundown progression
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Non-Core: Rundown progression RWAs by type (£bn) Leverage exposure by type (£bn) (43%) (57%) 316 89 23 50 22 54 51 127 149 136 33 11 11 12 10 25
Slide 9: Capital & Leverage
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Capital & Leverage | Barclays Q1 2016 Fixed Income Investor Presentation
Slide 10: Strong CET1 and leverage ratio trajectory
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Strong CET1 and leverage ratio trajectory Fully-loaded CET1 ratio10 220bps • CET1 ratio of 11.3% as at 31 March 2016, an improvement of Cumulati
Slide 11: Confident in our ability to accrete capital going forward
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Confident in our ability to accrete capital going forward Core divisions generated 1 double digit adjusted RoTEs in 201512 Expect considerable C
Slide 12: Managing evolving future minimum CET1 levels
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Managing evolving future minimum CET1 levels Illustrative evolution of minimum CET1 requirements and buffers13 Minimum CRD IV CET1 requirement C
Slide 13: Managing capital position for regulatory minimum levels and stress testing
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Managing capital position for regulatory minimum levels and stress testing Barclays‟ expected systemic reference points for BoE stress test13,17
Slide 14: RWAs by risk type and division
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC RWAs by risk type and division Group RWAs (£bn) by risk type – Mar-16 Group RWAs (£bn) by division – Mar-16 £363bn £363bn Market risk: 9% 34 402
Slide 15: Leverage ratio decreased to 4.3% due to seasonality
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Leverage ratio decreased to 4.3% due to seasonality Leverage exposure21 (£bn) Highlights L&A and other assets22 Derivatives Q1 2016 SFTs Undrawn
Slide 16: Holding company transition and MREL/TLAC
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Holding company transition and MREL/TLAC | Barclays Q1 2016 Fixed Income Investor Presentation
Slide 17: TLAC and MREL requirement expectations
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC TLAC and MREL requirement expectations Pillar 1 TLAC minimum requirements and illustrative MREL expectations24 Pillar 1 requirements 2016 Pillar
Slide 18: Well positioned to meet future MREL/TLAC requirements
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Well positioned to meet future MREL/TLAC requirements Illustrative annual MREL/TLAC issuance volumes to meet future requirements24 23% • Proacti
Slide 19: Continued progress on transition to HoldCo capital and funding model
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Continued progress on transition to HoldCo capital and funding model PRA transitional regulatory capital Outstanding term vanilla senior unsecur
Slide 20: UK approach to resolution
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC UK approach to resolution Illustrative UK resolution loss allocation waterfall31 OpCo waterfall Intercompany investments HoldCo waterfall • BRRD
Slide 21: Barclays PLC parent company accounts
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Barclays PLC parent company accounts Barclays PLC parent company balance sheet Key notes Balance sheet • Barclays PLC is the holding company of
Slide 22: Structural Reform
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Structural Reform | Barclays Q1 2016 Fixed Income Investor Presentation
Slide 23: Simplifying our business divisions for structural reform
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Simplifying our business divisions for structural reform Barclays PLC Barclays PLC34 1 Barclays Barclays UK Barclays Corporate & International B
Slide 24: Anticipated funding sources of future UK ring-fenced bank and Barclays Bank PLC
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Anticipated funding sources of future UK ring-fenced bank and Barclays Bank PLC (and subsidiaries) Barclays PLC36 Barclays UK Barclays Corporate
Slide 25: Liquidity & Funding
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Liquidity & Funding | Barclays Q1 2016 Fixed Income Investor Presentation
Slide 26: Maintaining a robust liquidity position and well diversified funding profile
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Maintaining a robust liquidity position and well diversified funding profile High quality liquidity pool (excluding BAGL) (£bn) Robust liquidity
Slide 27: Continue to access diverse wholesale funding sources
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Continue to access diverse wholesale funding sources across multiple products, currencies and maturities Wholesale funding by product39 Key mess
Slide 28: Asset quality
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Asset quality | Barclays Q1 2016 Fixed Income Investor Presentation
Slide 29: Stable CRLs in proportion to gross L&A reflecting prudent approach to credit risk
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Stable CRLs in proportion to gross L&A reflecting Barclays prudent approach to credit risk management Strong coverage of Group Credit Risk Loans
Slide 30: Limited oil and gas exposures and robust risk management
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Limited oil and gas exposures and robust risk management (31 December 2015) Key stats Good quality and well diversified Effective risk managemen
Slide 31: Level 3 assets at 31 December 2015
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Level 3 assets at 31 December 2015 Level 3 assets (£bn) 7.5 Other Available for 1.0 Sale investments ESHLA 5.4 Derivative financial assets 17.4
Slide 32: Credit ratings
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Credit ratings | Barclays Q1 2016 Fixed Income Investor Presentation
Slide 33: Focused on maintaining strong investment grade ratings
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Focused on maintaining strong investment grade ratings • Barclays is committed to maintaining strong investment Ratings45 Standard & Poor’s Mood
Slide 34: Barclays rating composition for senior debt
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Barclays rating composition for senior debt Standard & Poor’s Moody’s Fitch Stand-Alone Credit Profile bbb+ Baseline Credit Assessment baa2 Viab
Slide 35: Barclays rating composition for subordinated debt
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Barclays rating composition for subordinated debt Standard & Poor’s Moody’s Fitch Baseline Stand-alone Stand-Alone Viability bbb+ Credit baa2 a
Slide 36: Appendix
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Appendix | Barclays Q1 2016 Fixed Income Investor Presentation
Slide 37: One-time increase to Non-Core: 2017 RWA guidance retained
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC One-time increase to Non-Core: 2017 RWA guidance retained Non-Core RWAs (£bn) Closing 9 countries Investment Bank Exiting certain product lines
Slide 38: Intention to reduce 62.3% stake in Barclays Africa Group Limited (BAGL)
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Intention to reduce 62.3% stake in Barclays Africa Group Limited (BAGL) Impact of sell-down3 c.£2bn c.40,000 CET1 ratio Cost reduction Headcount
Slide 39: Barclays UK: Focused UK consumer and business bank with scale
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Barclays UK: Focused UK consumer and business bank with scale Differentiated through scale, with 23 million customers, and digital innovation Pe
Slide 40: Barclays Corporate & International: Diversified transatlantic wholesale and consumer bank
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Barclays Corporate & International: Diversified transatlantic wholesale and consumer bank Scale and strength with growth opportunities in key ge
Slide 41: Business level analysis of Barclays UK and Barclays Corporate & International
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Business level analysis of Barclays UK and Barclays Corporate & International Barclays UK – Q116 Barclays Corporate & International – Q116 Incom
Slide 42: Barclays UK: Return on Tangible Equity of 20.5%
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Barclays UK: Return on Tangible Equity of 20.5% Business performance excluding notable items Q116 Performance metrics Three months ended (£m) Ma
Slide 43: Barclays UK: Stable income on increased customer balances
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Barclays UK: Stable income on increased customer balances Income (£m) – Three months ended Mar-16 Mar-15 % change • NIM increased to 3.62%, with
Slide 44: Barclays UK: Digital is Barclays' biggest branch
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Barclays UK: Digital is Barclays‟ biggest branch Personal Banking Q116 2015 2014 2013 Digitally active 5.3m 6.3m 6.9m 7.0m Barclays Mobile Banki
Slide 45: Barclays Corporate & International: RoTE of 9.5%
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Barclays Corporate & International: RoTE of 9.5% Business performance excluding notable items Q116 Performance metrics Three months ended (£m) M
Slide 46: Corporate & Investment Bank: RoTE of 7.3%
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Corporate & Investment Bank: RoTE of 7.3% Business performance excluding notable items Q116 Performance metrics Three months ended (£m) Mar-16 M
Slide 47: Consumer, Cards & Payments: RoTE of 23.4%
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Consumer, Cards & Payments: RoTE of 23.4% Business performance excluding notable items Q116 Performance metrics Three months ended (£m) Mar-16 M
Slide 48: Head Office and Africa Banking summary financials
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Head Office and Africa Banking summary financials Africa Banking Three months ended – Business performance excluding notable items Mar-16 Mar-15
Slide 49: Wholesale funding composition
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Wholesale funding composition63 >1 month >3 months >6 months >1 year >2 year >3 year >4 year Total As at 31 March 2016 (£bn) ≤1 month but ≤3 but
Slide 50: Contact – Debt Investor Relations Team
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Contact – Debt Investor Relations Team Lisa Bartrip Sofia Lonnqvist Dan Colvin +44 (0)20 7773 0708 +44 (0)20 7116 5716 +44 (0)20 7116 6533 lisa.
Slide 51: Footnotes
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Footnotes 1 Including Head Office | 2 As at Q116 | 3 Implementation of Barclays‟ intentions is subject to, amongst other things, shareholder and
Slide 52: Disclaimer
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Disclaimer Important Notice The information, statements and opinions contained in this presentation do not constitute a public offer under any a
Slide 53: Disclaimer (continued)
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Disclaimer (continued) Barclays has filed a registration statement (including a prospectus) and has filed, or will file, a prospectus supplement
Slide 54: Disclaimer (continued)
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Disclaimer (continued) • Net Stable Funding Ratio (NSFR) is calculated according to the definition and methodology detailed in the standard prov