Barclays Plc · LSE:BARC
Barclays — Nomura Financial Services Conference 2012
29 slides from Barclays's conference presentation, Aug 30, 2012
Slide 1: Barclays PLC Nomura Financial Services Conference
Barclays PLC Nomura Financial Services Conference 30 August 2012
Slide 2: Chris Lucas, Group Finance Director
Chris Lucas Group Finance Director
Slide 3: Performance highlights
Performance highlights Adjusted profit before tax up 13% Adjusted income up 1% with adjusted operating expenses down 3% Capital, liquidity and funding remain strong Reduced sovereign exposures to Eurozone periphery countries* by 22% Continued progress towards our returns target of 13% * In
Slide 4: Adjusted financial and performance highlights
Adjusted financial and performance highlights 2012 2011 Change Six months ended – June (£m) (£m) (%) Income 15,475 15,299 1 Impairment charges (1,832) (1,828) - Net operating income 13,643 13,471 1 Operating expenses (9,491) (9,782) (3) Adjusted profit before tax* 4,227 3,725 13 Statutory profit bef
Slide 5: Adjusted items to PBT
Adjusted items to PBT 2012 2011 Change Six months ended – June (£m) (£m) (%) Profit before tax 759 2,644 (71) Own credit charge/(gain) 2,945 (89) (Gain)/loss on sale of BlackRock (227) 58 investment Provision for PPI redress 300 1,000 Provision for interest rate hedging 450 - products redress Goodwi
Slide 6: UK Retail and Business Banking
UK Retail and Business Banking 2012 2011 Change Six months ended – June (£m) (£m) (%) Income 2,205 2,254 (2) Impairment charges (122) (275) (56) Net operating income 2,083 1,979 5 Operating expenses (1,337) (1,275) 5 (excludes provision for PPI redress) Adjusted profit before tax 746 704 6 Adjusted
Slide 7: Europe Retail and Business Banking
Europe Retail and Business Banking 2012 2011 Change Six months ended – June (£m) (£m) (%) Income 486 604 (20) Impairment charges (157) (116) 35 Net operating income 329 488 (33) Operating expenses (428) (657) (35) Loss before tax* (92) (161) (43) Return on average equity (6.2%) (9.3%) Cost: income r
Slide 8: Africa Retail and Business Banking
Africa Retail and Business Banking 2012 2011 Change Six months ended – June (£m) (£m) (%) Income 1,625 1,770 (8) Impairment charges (321) (270) 19 Net operating income 1,304 1,500 (13) Operating expenses (1,033) (1,161) (11) Profit before tax* 274 342 (20) Return on average equity 7.6% 7.9% Cost: in
Slide 9: Barclaycard
Barclaycard 2012 2011 Change Six months ended – June (£m) (£m) (%) Income 2,026 1,972 3 Impairment charges (460) (648) (29) Net operating income 1,566 1,324 18 Operating expenses (excludes provision (830) (771) 8 for PPI redress and goodwill impairment) Adjusted profit before tax* 753 571 32 Adjuste
Slide 10: Investment Bank
Investment Bank 2012 2011 Change Six months ended – June (£m) (£m) (%) Income 6,496 6,263 4 Impairment charges (323) 111 Net operating income 6,173 6,374 (3) Operating expenses (3,933) (4,073) (3) Profit before tax* 2,268 2,310 (2) Return on average equity 14.9% 15.6% Cost: income ratio 61% 65% Cost
Slide 11: Investment Bank Q2 income up 5% vs. Q2 2011
Investment Bank Q2 income up 5% vs. Q2 2011 Q2 2011 £m 3,464 Q3 2011 Q4 2011 3,032 2,897 Q1 2012 Q2 2012 2,396 2,254 1,968 Total income 1,818 1,715 • Q2 2012 vs Q2 2011 up 5% 1,438 • Q2 2012 vs Q1 2012 down 12% 971 563 550 520 506 509 501 423 389 338 305 Total income FICC Equities and Prime Investme
Slide 12: Corporate Banking
Corporate Banking 2012 2011 Change Six months ended – June (£m) (£m) (%) Income 1,527 1,568 (3) Impairment charges (425) (612) (31) Net operating income 1,102 956 15 Operating expenses (excludes provision (754) (901) (16) for interest rate hedging products redress) Adjusted profit before tax* 346 54
Slide 13: Wealth and Investment Management
Wealth and Investment Management 2012 2011 Change Six months ended – June (£m) (£m) (%) Income 892 848 5 Impairment charges (19) (19) - Net operating income 873 829 5 Operating expenses (751) (740) 1 Profit before tax* 121 88 38 Return on average equity 10.0% 9.6% Cost: income ratio 84% 87% * Includ
Slide 14: Adjusted cost : income ratio improved to 61%
Adjusted cost : income ratio improved to 61% £m Performance costs 15,299 +1% 15,475 Non-performance costs (3%) 9,782 9,491 1,648 1,422 (14%) (1%) 8,134 8,069 H1 2011 H1 2012 H1 2011 H1 2012 Costs Total income 14 | Nomura Financial Services Conference | 30 August 2012
Slide 15: Adjusted non performance costs
Adjusted non performance costs £m 290 808 453 8,134 8,069 7,779 H1 2011 Cost reduction Investment, H1 2012 LIBOR H1 2012 regulatory and ex LIBOR other business expenditure • Target non-performance costs run rate of c.£15.5bn per annum • Additional investment in businesses self funded through further
Slide 16: Breakdown of £808m cost savings
Breakdown of £808m cost savings £m 220 Staff costs 153 Restructuring costs mainly in Spain & UK 808 Corporate Strategic Business Exits, 92 Branch Review & Investment Cuts 87 Other* 42 Tech costs in Retail & Corporate Banking 13 Procurement initiatives Variable items - e.g., FX movements & 201 pensio
Slide 17: NIM lower due to smaller contribution from hedges; customer NII up 2%
NIM lower due to smaller contribution from hedges; customer NII up 2% H1 2011 H1 2012 Hedge Income 809 606 Customer Income 4,819 4,899 Average Assets 316,297 317,900 250 Average Liabilities 267,374 277,412 197 189 200 30 23 basis points 150 100 167 166 50 0 H1 2011 H1 2012 Customer Margin Non Custom
Slide 18: Solid capital, liquidity and funding
Solid capital, liquidity and funding As at 30 Jun 2012 31 Dec 2011 Core Tier 1 ratio 10.9% 11.0% Risk weighted assets £390bn £391bn Adjusted gross leverage 20x 20x Adjusted gross leverage excluding the 17x 17x liquidity pool Group liquidity pool £170bn £152bn Six months ended 30 June 2012 Term issua
Slide 19: Pro forma Capital and RWAs
Pro forma Capital and RWAs Reported Pro forma Pro forma Pro forma Jun 12 Dec 12 Jan 13 Dec 13 CT1 Capital (Basel 2.5) 42.6 44.3 44.3 48.3 Basel 3 impact on CT1 Capital 1.1 1.1 CT1 Capital (Basel 3) 45.3 49.4 RWA (Basel 2.5) 390 390 390 390 Credit Valuation Adjustment 55 55 Securitisation 42 42 Other
Slide 20: Summary
Summary Adjusted profit before tax up 13% Adjusted income up 1% with adjusted operating expenses down 3% Capital, liquidity and funding remain strong Reduced sovereign exposures to Eurozone periphery countries* by 22% Continued progress towards our returns target of 13% * Includes Spain, I
Slide 21: Chris Lucas, Group Finance Director
Chris Lucas Group Finance Director
Slide 22: Appendix
Appendix Nomura Financial Services Conference
Slide 23: Reduced exposure to the Eurozone periphery
Reduced exposure to the Eurozone periphery Spain Italy Portugal Ireland As at 30 June 2012 (£m) (£m) (£m) (£m) Sovereign 2,207 2,551 588 211 Corporate 5,117 2,500 2,415 1,109 Residential mortgages 13,645 15,447 3,510 91 Financial institutions 1,082 270 45 4,222 Other retail lending 2,988 2,134 1,879
Slide 24: Reduced exposure to the Eurozone periphery
Reduced exposure to the Eurozone periphery • Since year end net funding mismatches in Spain reduced from £12.1bn to £2.5bn and from £6.9bn to £3.7bn in Portugal • Peripheral sovereign exposures down 22% to £5.6bn • Corporate assets in Spain, Italy and Portugal down 13% to £10bn • Retail lending in S
Slide 25: Customer profile Spain
Customer profile Spain Retail Gross mortgage exposure by location of Average indexed LTV of 63% outstanding balances Average retail customer age 48; less than 1% of mortgage balances with customers aged under Barcelona 25 c.13% 0.7% of home loans greater than 90 days in arrears* Corporate Madr
Slide 26: Customer profile Portugal
Customer profile Portugal Retail Gross mortgage exposure by location of Average indexed LTV of 73% outstanding balances Average retail customer age 40; less than 1% of mortgage balances with customers aged under 25 0.6% of home loans greater than 90 days in Porto arrears* c.15% Corporate £1.
Slide 27: Customer profile Italy
Customer profile Italy Retail Gross mortgage exposure by location of Average indexed LTV of 47% outstanding balances Average retail customer age 46; less than 3% of Milan mortgage balances with customers aged under c.10% 25 1.0% of home loans greater than 90 days in arrears* Corporate Focuse
Slide 28: Pro forma Capital and RWAs ─ Notes
Pro forma Capital and RWAs ─ Notes Notes on Basel 3 Core Tier 1 pro formas 1. Pro forma capital reflects consensus estimates for retained earnings from 22 sell-side analysts, including consensus dividend payout. Barclays neither endorses nor verifies the estimates used 2. Pro forma capital at 31 Dec
Slide 29: Legal disclaimers
Legal disclaimers 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 wit