Slide 1: Barclays PLC 2013 Full Year Results
Barclays PLC 2013 Full Year Results 11 February 2014
Slide 2: Antony Jenkins
Antony Jenkins Barclays Group Chief Executive
Slide 3: Tushar Morzaria
Tushar Morzaria Barclays Group Finance Director
Slide 4: Resilient outcome driven by traditional banking franchises
FINANCIAL DIVISIONAL LEVERAGE & LEVERAGE CONCLUSION PERFORMANCE PERFORMANCE OVERVIEW CAPITAL Resilient outcome driven by traditional banking franchises Year ended – December (£m) 2012 2013 Financial Performance Income 29,361 28,155 • Adjusted PBT reflects diversity and strength of our franchise, giv
Slide 5: Balanced consumer/wholesale franchises with diversity of income
FINANCIAL DIVISIONAL LEVERAGE & LEVERAGE CONCLUSION PERFORMANCE PERFORMANCE OVERVIEW CAPITAL Balanced consumer/wholesale franchises with diversity of income Group adjusted income of £28.2bn… …with 80% of income from three markets Business dynamics Wealth, £1.8bn UK RBB Europe RBB, £0.7bn • Well-posi
Slide 6: Balance sheet metrics steadily improving
FINANCIAL DIVISIONAL LEVERAGE & LEVERAGE CONCLUSION PERFORMANCE PERFORMANCE OVERVIEW CAPITAL Balance sheet metrics steadily improving £bn Dec-11 Dec-12 Dec-13 • Key balance sheet and capital measures continue to trend in the right direction Total IFRS assets 1,562 1,488 1,312 • Capital and leverage
Slide 7: Many future minimum requirements already being met
FINANCIAL DIVISIONAL LEVERAGE & LEVERAGE CONCLUSION PERFORMANCE PERFORMANCE OVERVIEW CAPITAL Many future minimum requirements already being met • Barclays already meets a number of Barclays Regulatory Date Exceeds Dec-13 benchmark required target future regulatory minimum requirements as they are kn
Slide 8: Stable and diverse funding bolstered by strong liquidity
FINANCIAL DIVISIONAL LEVERAGE & LEVERAGE CONCLUSION PERFORMANCE PERFORMANCE OVERVIEW CAPITAL Stable and diverse funding bolstered by strong liquidity Significant increase in deposit funding • Growth in high quality customer deposits enabled a reduction £bn 118% 110% 101% in wholesale funding, giving
Slide 9: Significantly improved leverage ratios and capital position
FINANCIAL DIVISIONAL LEVERAGE & LEVERAGE CONCLUSION PERFORMANCE PERFORMANCE OVERVIEW CAPITAL Significantly improved leverage ratios and capital position Estimated PRA leverage ratio1 (%) 0.1 • Completed £5.8bn rights issue 0.3 0.4 • Issued £2.1bn equivalent of CRD IV and PRA compliant 0.2 Additional
Slide 10: Net interest income - driven by volume growth
FINANCIAL DIVISIONAL LEVERAGE & LEVERAGE CONCLUSION PERFORMANCE PERFORMANCE OVERVIEW CAPITAL Net interest income - driven by volume growth Asset and liability growth… £bn • Asset and liability increases in non-IB and Head Office 350.0 300.0 Customer Liabilities1,2 250.0 businesses of 2% and 14% resp
Slide 11: Asset quality trends remain favourable
FINANCIAL DIVISIONAL LEVERAGE & LEVERAGE CONCLUSION PERFORMANCE PERFORMANCE OVERVIEW CAPITAL Asset quality trends remain favourable Impairment charge and CRLs tracking downwards… £m 5.1% • Annualised loan loss rate of 64bps, down from peak of 156bps 4.4% 6,000 0.06 CRL as % of Gross L&A 5,000 3.2% 0
Slide 12: Transitioning the cost base for structurally lower operating expenses
FINANCIAL DIVISIONAL LEVERAGE & LEVERAGE CONCLUSION PERFORMANCE PERFORMANCE OVERVIEW CAPITAL Transitioning the cost base for structurally lower operating expenses £bn Costs to achieve Staff costs UK Bank Levy Other opex Costs to achieve Other Transform Industrialisation Innovation CTA • Technology s
Slide 13: UK RBB – well positioned for UK economic recovery
FINANCIAL DIVISIONAL LEVERAGE & LEVERAGE CONCLUSION PERFORMANCE OVERVIEW CAPITAL UK RBB – well positioned for UK economic recovery 2012 (£m) 2013(£m) Financial Performance Income 4,384 4,523 • NII increased 6%, driven by organic mortgage growth and the acquisition of ING Direct Impairment charges (2
Slide 14: Barclaycard – continued strong growth
FINANCIAL DIVISIONAL LEVERAGE & LEVERAGE CONCLUSION PERFORMANCE OVERVIEW CAPITAL Barclaycard – continued strong growth 2012 (£m) 2013 (£m) Financial Performance Income 4,344 4,786 • Income up 10% reflecting net lending growth, with international income up 17% and UK income up 6% Impairment charges (
Slide 15: Africa, Europe RBB, Wealth – turnaround or repositioning plans underway
FINANCIAL DIVISIONAL LEVERAGE & LEVERAGE CONCLUSION PERFORMANCE OVERVIEW CAPITAL Africa, Europe RBB, Wealth – turnaround or repositioning plans underway Africa RBB 2012 (£m) 2013 (£m) Financial Performance Income 2,928 2,617 • Income was up 5% in constant currency terms despite pressure on Impairmen
Slide 16: Investment Bank – continued growth in Equities and Advisory
FINANCIAL DIVISIONAL LEVERAGE & CONCLUSION PERFORMANCE OVERVIEW CAPITAL Investment Bank – continued growth in Equities and Advisory helped offset a tough FICC environment 2012 (£m) 2013 (£m) Financial Performance FICC 6,678 5,537 • Income reflected a reduction of £1.1bn in FICC and £309m in Exit Qua
Slide 17: Investment Bank – a strong core franchise
FINANCIAL DIVISIONAL LEVERAGE & LEVERAGE CONCLUSION PERFORMANCE PERFORMANCE OVERVIEW CAPITAL Investment Bank – a strong core franchise 2013 Business Mix Growth in Equity and Investment Banking (£m) (£m) • Income across Equities and +22% YoY Prime Services increased 825 22%, with improvements +3% YoY
Slide 18: Corporate – shifting from turnaround to growth
FINANCIAL DIVISIONAL LEVERAGE & CONCLUSION PERFORMANCE OVERVIEW CAPITAL Corporate – shifting from turnaround to growth 2012 (£m) 2013 (£m) Financial Performance Income 3,046 3,115 • Income up 2% reflecting growth in UK home market Impairment charges (885) (510) • Impairment down 42% reflecting reduc
Slide 19: Deleveraging ahead of plan with minimal impact on income
FINANCIAL DIVISIONAL LEVERAGE & CONCLUSION PERFORMANCE OVERVIEW CAPITAL Deleveraging ahead of plan with minimal impact on income PRA leverage exposure1 (£bn) (£bn) June-13 PRA leverage • Optimisation target of £65-80bn original plan exposure achieved with minimal revenue L&A and other assets2 Deriva
Slide 20: Aiming for 3.5-4.0% leverage ratio over time
FINANCIAL DIVISIONAL LEVERAGE & CONCLUSION PERFORMANCE OVERVIEW CAPITAL Aiming for 3.5-4.0% leverage ratio over time PRA Leverage Ratio1 (%) Further deleveraging by 20151 (£bn) • Net reduction of more than £60bn by 2015 through further reductions across derivatives, SFTs and undrawn 3.5-4.0% Derivat
Slide 21: 10.5% CET1 2015 milestone consistent with future requirements
FINANCIAL DIVISIONAL LEVERAGE & CONCLUSION PERFORMANCE OVERVIEW CAPITAL 10.5% CET1 2015 milestone consistent with future requirements Capital progression Key assumptions • CET1 minimum requirements per PRA implementation of CRD IV minimum CET1 requirement Capital Requirement Regulation (CRR) Pillar
Slide 22: Summary
FINANCIAL DIVISIONAL LEVERAGE CONCLUSION PERFORMANCE OVERVIEW Summary 2013 – a year of transition Aiming for 3.5-4.0% but resilient performance leverage ratio over time 2014 – focus on balance Estimating an end-state sheet optimisation and cost 11.5-12% CET1 ratio reduction 22 | Barclays 2013 Full Y
Slide 23: Antony Jenkins
Antony Jenkins Barclays Group Chief Executive
Slide 24: The Barclays Balanced Scorecard
The Barclays Balanced Scorecard Metric Actual 2013 Target 2018 Customer & Client RBB, Barclaycard and W&IM: Weighted average ranking of Relationship 4th 1st Net Promoter Score® vs. peer sets CIB Client Franchise Rank: Weighted average ranking of wallet share or 4th Top 3 customer satisfaction with p
Slide 25: Legal Disclaimer
Legal Disclaimer Important Notice The information, statements and opinions contained in this document do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of any offer to buy any securities or financial instruments or any advice or recommendation with
Slide 26: Appendix
Appendix
Slide 27: Transform financial commitments
Transform financial commitments Targets Dates Return on Equity > CoE in 2016 2016 Operating Expenses £16.8bn 2015 Cost:Income Ratio mid-50s 2015 CRD IV RWAs £440bn 2015 Fully loaded CET1 Ratio >10.5% 2015 Dividend Payout Ratio 40-50% 40% from 2014 27 | Barclays 2013 Full Year Results | 11 February 2
Slide 28: Adjusted Return on Average Equity (RoE)
Adjusted Return on Average Equity (RoE) RoE – Twelve months ended December 2012 RoE1 – Twelve months ended December 2013 9.0% Group 4.5% 12.3% UK RBB 11.5% (12.9%) Europe RBB (45.2%) (0.1%) Africa RBB 0.4% 19.8% Barclaycard 18.4% 12.7% Investment Bank 8.2% 2.9% Corporate Banking 3.1% 11.2% Wealth an
Slide 29: Impact of costs to achieve Transform
Impact of costs to achieve Transform Twelve months ended – December 2013 Costs to achieve Profit Return on Cost: income Adjusted performance measures by business, Transform before tax average equity1 ratio excluding costs to achieve Transform (£m) (£m) (%) (%) UK RBB 175 1,370 13.2 63 Europe RBB 403
Slide 30: Broad contribution by diverse businesses
Broad contribution by diverse businesses Twelve months ended – December 2013 (£m) Income Profit Before Tax UK RBB1 4,523 1,195 Barclaycard1 4,786 1,507 Africa RBB 2,617 404 Europe RBB 666 (996) Wealth and Investment Management1 1,839 (19) Investment Bank 10,733 2,523 Corporate Banking1 3,115 801 Hea
Slide 31: Net interest margins and volumes
Net interest margins and volumes UK Europe Africa Barclay- Corporate Wealth Total1 RBB RBB RBB card Banking and IM Three months ended – Dec 2013 Net interest margin (%) 1.32 0.77 3.25 8.07 1.13 1.02 1.74 Of which customer margin (%) 1.10 0.42 2.95 8.17 1.06 0.97 1.58 Three months ended – Sept 2013 N
Slide 32: Analysis of Net Interest Income
Analysis of Net Interest Income Year ended - December 2012 2013 Customer assets 6,654 7,144 Customer liabilities 3,185 3,221 Total RBB, Corporate Banking and Wealth & IM customer income 9,839 10,365 Product structural hedge 962 843 Equity structural hedge 317 337 Other (69) (129) Total RBB, Corporat
Slide 33: Good loan growth in the UK
Good loan growth in the UK UK Funding for Lending Scheme eligible lending (£bn) UK mortgage book (£bn) 24 122.8 22 22 +7% 114.7 20 Q1 2013 Q2 2013 Q3 2013 Q4 2013 2012 2013 33 | Barclays 2013 Full Year Results | 11 February 2014
Slide 34: Balance sheet funding
Balance sheet funding Total balance sheet, £1,266bn (excl. Absa) Highlights (£bn) Derivative assets and liabilities largely matched Derivatives, 319 Derivatives, 319 Trading portfolio assets largely funded by repurchase Matched agreements funding £659bn Majority of reverse repurchase agreement
Slide 35: Continue to transition towards end-state capital structure
Continue to transition towards end-state capital structure, strengthening CET1 position and issuing contingent capital Evolution of capital structure CRD IV fully loaded capital position 19.9% • We expect fully loaded CET1 ratio to reach 10.5% and RWAs to be Total capital ratio at £440bn in 2015 • A
Slide 36: Capital Resources
Capital Resources 31 Dec 12 30 Jun 13 30 Sept 13 31 Dec 13 As at (£m) (£m) (£m) (£m) Shareholders‟ equity (excluding NCIs) 50,615 51,083 49,436 55,385 Qualifying NCIs 2,450 2,281 1,981 1,932 Regulatory adjustments and deductions: Own credit cumulative loss1 804 593 741 806 Unrealised (gains)/losses
Slide 37: Substantial progress on RWAs
Substantial progress on RWAs CRD III RWAs (£bn) 3.3 1.4 (13.9) (11.4) (4.4) (5.2) (2.4) 387.4 362.4 354.8 1 January Model Methodology Book size Acquisition Book quality Foreign Other 31 December 2013 updates and policy and disposals exchange 2013 1 Foreign exchange movement does not include movement
Slide 38: RWAs by Business
RWAs by Business Year ended – December (£m) 2012 2013 2013 CRD IV RWAs UK RBB 39,088 44,084 44,136 Europe RBB 15,795 15,906 16,218 Africa RBB 24,532 22,384 22,806 Barclaycard 37,836 41,143 40,453 Investment Bank 177,884 142,632 221,645 Corporate Banking 70,858 68,928 70,469 Wealth and Investment Man
Slide 39: Estimated capital and RWAs
Estimated capital and RWAs (£bn) 31 December 2013 CT1 Capital (CRD III) 46.8 RWAs (CRD III) 354.8 CT1 Ratio (CRD III) 13.2% CRD IV impact on CT1 Capital: CET1 Fully-loaded1 Conversion from securitisation deductions to RWAs 0.5 Prudential Value Adjustments (PVA) (2.5) Debit Valuation Adjustment (DVA)
Slide 40: Estimated CRD IV Capital and RWAs – notes
Estimated CRD IV Capital and RWAs – notes Estimated Capital Ratios are based on/subject to the following: CRD IV as implemented by the Prudential Regulation Authority The new Capital Requirements Regulation and amended Capital Requirements Directive have implemented Basel 3 within the EU (collective
Slide 41: Estimated CRD IV Capital and RWAs – notes
Estimated CRD IV Capital and RWAs – notes Estimated Capital Ratios are based on/subject to the following: RWAs • The PRA has confirmed Barclays model approvals under CRD IV, with certain provisions reflecting relevant changes to the rules and guidance; the impact of which has been reflected in our C
Slide 42: Reducing our Exit Quadrant portfolios
With a good track record in reducing legacy assets, we now focus on reducing our Exit Quadrant portfolios (£bn) 94 15 17 11 23 54 34 12 4 19 Targeted reduction 34 36 in IB positions 19 Dec 12 Legacy Derivatives Dec 13 Target IB Dec 15 CRD IV RWAs reduction efficiencies CRD IV RWAs CRD IV RWAs Portfo
Slide 43: Reduced exposure to the Eurozone
Reduced exposure to the Eurozone As at 31 December 2013 (£m) Spain Italy Portugal Ireland Sovereign 184 1,556 372 67 Financial institutions 1,029 417 38 5,030 Corporate 3,203 1,479 891 1,356 Residential mortgages 12,537 15,295 3,413 103 Other retail lending 2,292 1,881 1,548 100 Total1 19,245 20,628
Slide 44: FX rates
FX rates FX rates – Year ended 31 December 2012 2013 USD/GBP – Period end 1.62 1.65 EUR/GBP – Period end 1.23 1.20 ZAR/GBP – Period end 13.74 17.37 44 | Barclays 2013 Full Year Results | 11 February 2014