Barclays Plc · LSE:BARC
Barclays — Debt Investor Presentation (March 2016)
54 slides from Barclays's debt investor presentation, Mar 1, 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 FY 2015 Results Announcement 1 March 2016 | Barclays FY 2015 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 FY 2015 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 Solid performance in the Core and continued Non-Core rundown Core business performed well, adjusted PBT of £6.9bn, up 3%, a
Slide 5: Summary Group financials: Adjusted PBT of £5.4bn
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Summary Group financials: Adjusted PBT of £5.4bn Year ended – December (£m) 2015 2014 % change Full year financial performance6 Income 24,528 25
Slide 6: Core performance: Profit growth across all operating businesses
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Core performance: Profit growth across all operating businesses8 Year ended – December (£m) 2015 2014 % change Profit before tax (£m) 2015 2014
Slide 7: Non-Core: Continued shrinkage and capital recycling
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Non-Core: Continued shrinkage and capital recycling Year ended – December (£m) 2015 2014 Highlights – Businesses 613 1,101 • £3.8bn of equity re
Slide 8: Non-Core: Reductions across every measure
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Non-Core: Reductions across every measure RWAs by type (£bn) Leverage exposure by type (£bn) 57% 56% 382 110 27711 7511 18 39 55 152 18 47 121 9
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 FY 2015 Fixed Income Investor Presentation
Slide 10: Continued strengthening of key capital metrics
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Continued strengthening of key capital metrics Fully-loaded CET1 ratio13 • CET1 ratio of 11.4% as at December 2015, an improvement 230bps of 230
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 1 Core divisions generated 1 double digit adjusted RoTEs in 20151 Expect considerable
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 buffers16 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 BoE CET1 stress test hurdles16,20 Minimum CRD IV C
Slide 14: Leverage ratio increased to 4.5%
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Leverage ratio increased to 4.5% Leverage exposure15 (£bn) Highlights L&A and other assets23 Derivatives FY 2015 • Improvement in leverage ratio
Slide 15: RWAs: Closely managed to support business growth and capital ratio accretion
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC RWAs: Closely managed to support business growth and capital ratio accretion RWAs (£bn)26 Highlights FY 2015 5 22 • RWAs decreased by £44bn to £
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 FY 2015 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 expectations27 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 requirements27 • Proactive r
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 waterfall34 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 FY 2015 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 Barclays PLC PLC37 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 PLC39 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 FY 2015 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 (£bn) Robust liquidity position LCR40 1
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 product42 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 FY 2015 Fixed Income Investor Presentation
Slide 29: Continuous reduction in CRL balances reflecting prudent approach to credit risk
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Continuous reduction in CRL balances reflecting Barclays prudent approach to credit risk management Increasing coverage of Group Credit Risk Loa
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 Key stats Good quality and well diversified Effective risk management Of our total whol
Slide 31: Reduced exposure to Eurozone periphery
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Reduced exposure to Eurozone periphery Exposures by geography (£bn)49 Key Messages Spain Italy Portugal Ireland • The vast majority of the expos
Slide 32: 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 33: Credit ratings
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Credit ratings | Barclays FY 2015 Fixed Income Investor Presentation
Slide 34: 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 Ratings50 S&P Moody's Fitch grad
Slide 35: Barclays rating composition
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Barclays rating composition Standard & Poor’s Moody’s Fitch Stand-alone credit profile bbb+ Baseline Credit Assessment baa2 Viability ratings a-
Slide 36: Appendix
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Appendix | Barclays FY 2015 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
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: Increased returns across PCB, Barclaycard and the Investment Bank
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Increased returns across PCB, Barclaycard and the Investment Bank FY14 FY15 22.3% 19.9% 17.7% 16.2% 15.8% 16.0% 12.9% 11.9%12.1% 11.7% 11.3% 10.
Slide 42: Core income: Growth in net interest income and margin
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Core income: Growth in net interest income and margin Income (£m) – Year ended Dec-15 Dec-14 % change • Total income in our retail and corporate
Slide 43: Significant cost reduction across Group, Core and Non-Core
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Significant cost reduction across Group, Core and Non-Core Group adjusted costs63 (£bn) Non-Core Core bank levy Core litigation and conduct cost
Slide 44: Enhanced focus on cost discipline
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Enhanced focus on cost discipline 2016 Core cost guidance (£bn) 0.6 0.6 14.5 14.5 2.0 0.2 0.5 12.8 12.5 Original SRP Businesses Revised target B
Slide 45: PCB: PBT up 12% excluding the US Wealth business
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC PCB: PBT up 12% excluding the US Wealth business Excluding the US Wealth business68 Year ended – December (£m) 2015 2014 % change Year ended – D
Slide 46: Digital is Barclays' biggest branch
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Digital is Barclays‟ biggest branch PCB Retail 2015 YoY 2014 change 2013 Digitally active 5.3m 6.3m 6.9m 10% Barclays Mobile Banking (BMB) Custo
Slide 47: Barclaycard: PBT up 22% and RoTE of 22.3%
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Barclaycard: PBT up 22% and RoTE of 22.3% Year ended – December (£m) 2015 2014 % change Financial performance Income 4,927 4,356 13% • Record pr
Slide 48: Africa Banking: PBT up 11% on constant currency basis
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Africa Banking: PBT up 11% on constant currency basis Year ended – December (£m) 2015 2014 % change Constant currency70 2015 2014 % change Incom
Slide 49: Investment Bank: PBT up 17% with reduced costs and RWAs
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Investment Bank: PBT up 17% with reduced costs and RWAs Year ended – December (£m) 2015 2014 % change Year ended – December (£m) 2015 2014 Banki
Slide 50: Wholesale funding composition
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Wholesale funding composition73 >1 month >3 months >6 months >1 year >2 year >3 year >4 year Total As at 31 December 2015 (£bn) ≤1 month but ≤3
Slide 51: 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 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: Footnotes
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Footnotes 1 Figures given are illustrative based on FY15 financials re-calculated on re-segmented basis. Illustrative financials are not a forec
Slide 54: Footnotes
STRATEGY & HOLDCO CAPITAL STRUCTURAL LIQUIDITY PERFORMANCE TRANSITION ASSET QUALITY CREDIT RATING APPENDIX & LEVERAGE REFORM & FUNDING OVERVIEW & MREL/TLAC Footnotes | 48 Strong Graded defined as DG (Default Grade) band 1-11 (inclusive of Investment Grade: DG 6 or better); Satisfactory defined as DG