Barclays Plc · LSE:BARC
Barclays — Debt Investor Presentation (April 2015)
53 slides from Barclays's debt investor presentation, Apr 29, 2015
Slide 1: Barclays PLC Fixed Income Investor Presentation
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Barclays PLC Fixed Income Investor Presentation Q1 2015 Interim Management Statement 29 April 2015 | Barclays Q1 2015 Fixed Income Investor Presentation
Slide 2: Q1 financial highlights
PERFORMANCE PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW OVERVIEW TRANSITION Q1 financial highlights Increased adjusted pre-tax profits by 9% – Core up 14% Core business continued to performed well with PBT of £2.1bn and RoE of 10.9
Slide 3: Performance Overview
PERFORMANCE PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW OVERVIEW TRANSITION Performance Overview | Barclays Q1 2015 Fixed Income Investor Presentation
Slide 4: Summary Group financials: Adjusted profits up 9%
PERFORMANCE PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW OVERVIEW TRANSITION Summary Group financials: Adjusted profits up 9% Three months ended – March (£m) 2014 2015 % change Financial performance Income 6,650 6,430 (3%) • Adjuste
Slide 5: Strengthening key financial metrics
PERFORMANCE PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW OVERVIEW TRANSITION Strengthening key financial metrics (£bn) Dec-14 Mar-15 Highlights • Progressive strengthening of key balance sheet metrics Total assets 1,358 1,416 • CET1
Slide 6: Core business performing well: Positive jaws and PBT up 14%
PERFORMANCE PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW OVERVIEW TRANSITION Core business performing well: Positive jaws and PBT up 14% Three months ended – March (£m) 2014 2015 % change Financial performance Income 6,277 6,420 2%
Slide 7: Barclays Non-Core: Continued shrinkage and capital recycling
PERFORMANCE PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW OVERVIEW TRANSITION Barclays Non-Core: Continued shrinkage and capital recycling Three months ended – March (£m) 2014 2015 Highlights – Businesses 301 122 • Period end equity
Slide 8: Capital & Leverage
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Capital & Leverage | Barclays Q1 2015 Fixed Income Investor Presentation
Slide 9: Continued progress on CET1 ratio despite adjusting items
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Continued progress on CET1 ratio despite adjusting items Fully loaded (FL) CRD IV CET1 ratio progression1 RWA reduction (£bn)1 CET1 40 41 42 Capital +30bps (1%) >11% 442 10.3%
Slide 10: RWAs: Closely managed to support business growth and capital ratio accretion
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION RWAs: Closely managed to support business growth and capital ratio accretion RWAs (£bn) Highlights • RWAs reduced by £6bn reflecting continued progress on the run- down of Non-
Slide 11: Barclays Non-Core: Further RWA reduction
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Barclays Non-Core: Further RWA reduction RWA reduction bridge (£bn) Leverage exposure by type (£bn) Operational risk 1 Securities and loans Derivatives Businesses Businesses Se
Slide 12: Continued progress on the transition towards our target end-state capital structure
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Continued progress on the transition towards our „target‟ end-state capital structure Evolution of capital structure blahloaded CRD IV capital position Fully • Fully loaded CRD
Slide 13: Managing CET1 ratio against mandatory distribution restrictions
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION We intend to manage our CET1 capital ratio to mitigate against the risk of mandatory distribution restrictions CET1 requirements1 (as at 1 January except Q115) • Mandatory rest
Slide 14: Leverage ratio on track for 2016 target
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Leverage ratio on track for 2016 target Leverage ratio progression1 Leverage exposure (£trn)1 T1 41 46 46 BCBS 270 Capital impact 1.36 1.35 >4% 3.7% 3.7% 1.26 1.23 3.0% 1 Dec-1
Slide 15: Leverage ratio maintained at 3.7%
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Leverage ratio maintained at 3.7% Leverage exposure1 (£bn) Highlights L&A and other assets2 Derivatives • Leverage exposures during Q1 15 increased by £22bn to £1,255bn SFTs Un
Slide 16: Holding company transition
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Holding company transition | Barclays Q1 2015 Fixed Income Investor Presentation
Slide 17: Better aligning credit proposition during transition towards a holding company model
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Better aligning credit proposition during transition towards a holding company capital and funding model Expected creditor hierarchy during transition1 Barclays position • Barc
Slide 18: Barclays PLC parent company accounts
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Barclays PLC parent company accounts Barclays PLC parent company balance sheet Notes Balance sheet • Barclays PLC is the holding company (HoldCo) of the 2014 Q1 15 Barclays Gro
Slide 19: Proxy Total Loss Absorbing Capacity (TLAC)
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Proxy Total Loss Absorbing Capacity (TLAC)1 (£bn) Mar-15 • Proactive transition towards a HoldCo funding and capital model positions us well to meet potential future TLAC requi
Slide 20: Liquidity & Funding
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Liquidity & Funding | Barclays Q1 2015 Fixed Income Investor Presentation
Slide 21: Maintaining a robust liquidity position
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Maintaining a robust liquidity position, with pool well in excess of internal and external minimum requirements High quality liquidity pool (£bn) Key messages Cash & Deposits a
Slide 22: Stable and diverse sources of funding
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION We maintain access to stable and diverse sources of funding, across customer deposits and wholesale debt Broadly self-funded retail businesses1(£bn) Key messages 91% • Group Lo
Slide 23: Diverse wholesale funding sources across products, currencies and maturities
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Continue to access diverse wholesale funding sources across multiple products, currencies and maturities Wholesale funding by product (as at 31 December 2014) Key messages Depo
Slide 24: Asset quality
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Asset quality | Barclays Q1 2015 Fixed Income Investor Presentation
Slide 25: Continued strong asset quality
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Continued strong asset quality Impairment charge (£m) Highlights • Credit impairment improved 7% to £448m, principally reflecting lower impairments in PCB 7% • PCB benefitted f
Slide 26: Group impairment stable
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Group impairment stable (31 December 2014) Retail loan loss rate (bps) Highlights Dec-13 Dec-14 • Declining Loan Loss Rate (LLR) trend across 332 308 the Group reflecting Barcl
Slide 27: Reduced exposure to Eurozone periphery
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Reduced exposure to Eurozone periphery (31 December 14) Exposures by geography (£bn)1 Key Messages Spain Italy Portugal Ireland • The vast majority of the exposures to Spain ha
Slide 28: Risk – Minimising potential headwinds
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Risk – Minimising potential headwinds Passing stress tests – stressed CET1 ratios 7.0% 7.1% 7.0% • Barclays has always maintained internal stress tests Barclays CET1 • Barclays
Slide 29: Credit ratings
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Credit ratings | Barclays Q1 2015 Fixed Income Investor Presentation
Slide 30: Industry-wide credit rating agency action reflects evolving resolution frameworks
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Recent industry-wide credit rating agency (CRA) action reflects evolving resolution frameworks Ratings (29 May 15)1 S&P Moody's Fitch • Recent industry-wide CRA announcements d
Slide 31: Reserving for potential rating actions in the liquidity pool
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Barclays manages and reserves for potential rating actions in the liquidity pool (31 December 2014) Key Messages Contractual credit rating downgrade exposure Contractual outflo
Slide 32: Summary
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Summary • Diversified international bank focused on delivering improved and more sustainable returns Business model • Concentrating on high growth opportunities where we have c
Slide 33: Appendix
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Appendix | Barclays Q1 2015 Fixed Income Investor Presentation
Slide 34: Repositioning and simplifying Barclays
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Repositioning and simplifying Barclays Rightsizing and focusing the Investment Bank Establishing a dedicated Non-Core unit and a new Personal and Corporate Banking business All
Slide 35: 2016 Transform targets
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION 2016 Transform targets 2016 Target Q1 2015 Capital CRD IV FL CET1 ratio >11.0% 10.6% Group Leverage Leverage ratio >4.0% 3.7% Dividend Payout ratio 40-50% 1p1 Returns Adjusted
Slide 36: Simpler, focused and balanced structure
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Simpler, focused and balanced structure Barclays Group Personal and Africa Investment Barclaycard Barclays Non-Core Corporate Banking Banking Bank PBT £787m PBT £366m PBT £295m
Slide 37: Reducing and reallocating RWAs to drive growth and returns
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION <15% Reducing and reallocating RWAs to drive growth and returns 2013 pre-resegmentation (£bn) 2013 post-resegmentation estimate (£bn) 2016 guidance (£bn) Leverage exposure £1.4
Slide 38: Core Investment Bank: Building on competitive advantages
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Core Investment Bank: Building on competitive advantages Core Investment Bank Non-Core Investment Bank RWAs: c.£120bn RWAs: c.£90bn 20131 FY Leverage exposure: c.£490bn Leverag
Slide 39: PCB: Profits up 14%
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION PCB: Profits up 14% Three months ended – March (£m) 2014 2015 % change Financial performance – Personal 1,026 1,009 (2%) • Income was in line at £2,174m: – Corporate 879 907 3%
Slide 40: Barclaycard: Income up 9% and RoE of nearly 17%
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Barclaycard: Income up 9% and RoE of nearly 17% Three months ended – March (£m) 2014 2015 % change Financial performance Income 1,042 1,135 9% • Income increased 9% to £1,135m
Slide 41: Africa Banking: Profits up 23%
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Africa Banking: Profits up 23% Three months ended – March (£m) 2014 2015 % change Financial performance1 Income 878 948 8% Currency movements had a limited effect on Q1 year on
Slide 42: Investment Bank: Profits up 37%
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Investment Bank: Profits up 37% Three months ended – March (£m) 2014 2015 % change Q4 14 % change Banking 616 632 3% 638 (1)% Markets 1,489 1,517 2% 1,028 48% – Credit 346 274
Slide 43: Core income: growth in net interest income and margin
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Core income: growth in net interest income and margin Core income (£m) Total income NII • Improved performance in income across all businesses Three months ended – March 2014 2
Slide 44: Group and Core cost targets
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Group and Core cost targets Group cost guidance1 (£bn) Core cost target1 (£bn) 18.7 Original Guidance = £17.5bn Revised Guidance = £17bn 16.9 c.16.3 16.4 15.1 <14.5 FY13 FY14 F
Slide 45: Core operating costs
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Core operating costs Core operating expenses1 (£bn) Highlights Staff costs Other operating costs Costs to achieve Transform • Core operating expenses decreased by 2% year on ye
Slide 46: Investment Bank: Downward trend in compensation charge
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Investment Bank: Downward trend in compensation charge (31 December 2014) Investment Bank operating expenses (£m) Investment Bank – Compensation actions 6,598 • Headcount down
Slide 47: Wholesale funding composition
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION Wholesale funding composition1 >1 month >3 months >6 months >9 months Total >1 year but >2 years As at 31 March 2015 (£bn) ≤1 month but ≤3 but ≤6 but ≤12 but ≤12 ≤1 year ≤2 yea
Slide 48: UK Banking Act now includes a statutory bail-in power
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION In line with the European Bank Recovery & Resolution Directive the UK Banking Act now includes a statutory bail-in power Overview Considerations for Bondholders • Statutory bai
Slide 49: Contact – Debt Investor Relations Team
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION 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.bartrip@barclays.com sofia.lonnq
Slide 50: Legal Disclaimer
PERFORMANCE HOLDING COMPANY CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX OVERVIEW TRANSITION 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 of
Slide 51: Legal Disclaimer (continued)
Legal Disclaimer (continued) Barclays has filed a registration statement (including a prospectus) and has filed, or will file, a prospectus supplement with the U.S. Securities and Exchange Commission (“SEC”) for the offering of securities to which this document relates. Before you invest, you should
Slide 52: Legal Disclaimer (continued)
Legal Disclaimer (continued) • Adjusted total operating expenses represents operating expenses excluding the provisions for PPI redress; provision for investigations and litigation primarily relating to Foreign Exchange; and gain on valuation of a component of the defined retirement benefit liabilit
Slide 53: Legal Disclaimer (continued)
Legal Disclaimer (continued) • Liquidity Coverage Ratio (LCR) is calculated according to the Commission Delegated Regulation of October 2014 that supplements Regulation (EU) 575/2013 (CRDIV) published by the European Commission in June 2013. The metric is a ratio that is not yet fully implemented in