Barclays Plc · LSE:BARC
Barclays — Q1 2019 Earnings Presentation
33 slides from Barclays's earnings presentation, Apr 25, 2019
Slide 1: Barclays PLC 2019 Q1 Results
Barclays PLC 2019 Q1 Results 25 April 2019
Slide 2: Jes Staley, Barclays Group Chief Executive
Jes Staley Barclays Group Chief Executive
Slide 3: Tushar Morzaria, Barclays Group Finance Director
Tushar Morzaria Barclays Group Finance Director
Slide 4: Q119 Group highlights
Q119 Group highlights Another clean quarter of resilient statutory performance Financial performance1 Income • Income decreased by 2%, more than offset by a 3% reduction in costs, £5.3bn Q118: £5.4bn delivering positive jaws Costs £3.3bn Q118: £3.4bn • Impairment was down from Q418 (which included a
Slide 5: Q119 Barclays UK
Q119 Barclays UK Strong RoTE of 16.4% with broadly stable income despite margin pressure • Strong RoTE of 16.4% Q118 Q218 Q318 Q418 Q119 Financial performance1 • Income was broadly stable year-on-year, as £1.8bn £1.8bn Income growth in deposit balances and mortgages Total 295 343 367 350 308 £1.8bn
Slide 6: Q119 Barclays International
Q119 Barclays International Diversified business delivered double digit returns despite a challenging income environment for CIB • RoTE of 10.6% Income balanced across Financial performance1 • Balanced and diversified business, with businesses and geographies Income US c.50% and UK c.30% of income3
Slide 7: Q119 Barclays International: Corporate & Investment Bank
Q119 Barclays International: Corporate & Investment Bank Resilient performance reflecting franchise strength despite the challenging income environment • RoTE of 9.5% Financial performance1 Income • Markets income decreased 6% Income (12% in USD) reflecting challenging income GBP basis (£m) USD basi
Slide 8: Q119 Barclays International: Consumer, Cards & Payments
Q119 Barclays International: Consumer, Cards & Payments RoTE of 15.4% with continued growth in US Cards and investments across CC&P businesses • RoTE of 15.4% Q118 Q218 Q318 Q418 Q119 Financial performance1 YoY • Income increased 6% reflecting growth in Income US Cards +6% £1.1bn Q118: £1.0bn US Car
Slide 9: Head Office
Head Office Q118 Q418 Q119 • Q119 negative income included: (11) (95) – c.£90m impact from legacy capital Income (238) instruments (predominantly the 14% (£m) RCI) funding costs per quarter – Hedge accounting expenses – Partially offset by Absa dividend declared in Q119 (59) (82) (52) Costs1 • Expec
Slide 10: Increased flexibility in the Group cost base to reflect the operating environment
Increased flexibility in the Group cost base to reflect the operating environment Absolute cost reduction 2018 to 2019 (£bn)1 2019 cost flexibility • £13.6-13.9bn 2019 cost guidance unchanged • However, should the challenging income environment experienced in Q119 continue, expect to reduce 2019 cos
Slide 11: TNAV progression
TNAV progression Continued growth in TNAV; accretion of 15p since Mar-18 TNAV (pence per share) 3 2 2 6 1 266 262 Dec-18 Profits Cash flow Currency Pensions Employee Mar-19 hedging and translation remeasurement share FVOCI reserves reserve reserve awards • TNAV grew to 266p in the quarter, as 6p of
Slide 12: CET1 ratio at target level
CET1 ratio at target level 13.0% with strong capital generation, offset by seasonal RWA movements CET1 ratio1 39bps 14bps 8bps 10bps 13.2% 25bps 13.0% Dec-18 Profits Dividends Employee share IFRS 16 and IFRS 9 RWA and other Mar-19 2 paid & awards transitional relief movements foreseen • CET1 ratio o
Slide 13: High quality funding position with a conservatively positioned liquidity pool and LDR
High quality funding position with a conservatively positioned liquidity pool and LDR Well prepared for Brexit and macroeconomic uncertainties Diversified funding profile with strong deposit base Well positioned for future MREL requirements 2% Deposits • Continue to expect 8% 29.9% c.£8bn of total M
Slide 14: Focused on profitability and returning capital to shareholders
Focused on profitability and returning capital to shareholders Q119 highlights Group targets Group RoTE RoTE2 Cost 9.6%1 £13.6-13.9bn >9% in 2019 guidance for 20191 >10% in 2020 Cost: income ratio CET1 ratio <60% over time on target 13.0% Capital CET1 ratio3 Returns Group Progressive ordinary cost:
Slide 15: Appendix
Appendix
Slide 16: Diversified and prudently positioned
Diversified and prudently positioned Well prepared for Brexit and macroeconomic uncertainties Diversified income mix by geography and product Diversified funding 4% 2% 8% 8% 20% 18% 8% Group Group Group 9% 11% income by income by funding business1 geography2 52% 18% sources3 6% 36% 63% 11% 17% 9% Pe
Slide 17: Evolving Group capital allocation
Evolving Group capital allocation c.60% of Group RWAs are allocated to lending activities to consumers and businesses Corporate loan book2 Consumer lending/payments3 • Improve client returns • Focus of investment spend on lending c.30% c.30% and growth • Add transaction banking and Group • Low capit
Slide 18: Capacity to invest and increase cash returns to shareholders over time
Capacity to invest and increase cash returns to shareholders over time Highly capital generative business with material headwinds to retained earnings addressed Strong capital position at target of c.13% 13.0% 39bps capital accretion Material capital CET1 ratio from profits1 in Q119 headwinds addres
Slide 19: Think digital, think Barclays UK
Think digital, think Barclays UK Building meaningful relationships with our 24 million customers Changing the shape of our business Front end digitisation Delivering sustainable Investing in digital talent, income generation through cyber resilience Automation digital transformation and digital tech
Slide 20: Barclays International: Improving share in the CIB
Barclays International: Improving share in the CIB Gaining share in Markets and maintaining strong Banking franchise Markets1 Banking fees2 70bps 40bps XXX XX XXX XX 4.0% 3.9% 4.6% 4.1% 4.2% 4.1% 4.3% 3.6% FY17 FY18 FY17 FY18 FY16 FY17 FY18 Q119 FICC Equities Global Markets ranking improved one pl
Slide 21: Barclays International: Consumer, Cards & Payments opportunities
Barclays International: Consumer, Cards & Payments opportunities Portfolio of leading franchises with high returns and growth potential Cards & Payments #9 US credit card receivables1 Barclays Strong market US position and Consumer delivering Bank growth $15bn Retail deposits £67bn Payments processe
Slide 22: Strongly capital generative and at target CET1 ratio
Strongly capital generative and at target CET1 ratio Managing the Group CET1 ratio above the regulatory minimum level, to pass stress tests and absorb the PRA buffer Q119 CET1 ratio: 13.0% Favourable drawdown in 2018 BoE stress test compared to c.13% target 2017, reflecting de-risking and reduced CE
Slide 23: Interest rate sensitivity as at FY18
Interest rate sensitivity as at FY18 Illustrative sensitivity of Group NII to a 100bps parallel upward shift in interest rates1 Change in NII (£m) Commentary/Assumptions • This analysis is based on the modelled performance of the consumer and corporate Illustrative 50% pass-through scenario banking
Slide 24: Prudently managing credit risk in both the UK and US
Prudently managing credit risk in both the UK and US Conservatively positioned in the UK in the face of Brexit and the consumer credit cycle in the US Q118 Q218 Q318 Q418 Q119 £134.4bn £136.5bn • Focus on growing mortgage book within conservative risk appetite UK 64.4% 65.4% UK mortgage • Low LTV mo
Slide 25: Financial results tables
Financial results tables
Slide 26: Other items of interest – Q119 vs. prior year
Other items of interest – Q119 vs. prior year Material items (£m) Q119 Q118 Litigation and conduct RMBS (1,420) Head Office Charges for PPI (400) Barclays UK Other (61) (141) Group (across divisions) Total (61) (1,961) Other items of interest (£m) Operating expenses Structural reform costs (50) Grou
Slide 27: Q119 Group
Q119 Group Three months ended (£m) Mar-19 Mar-18 % change Excluding L&C – Three months ended (£m) Mar-19 Mar-18 % change Income 5,252 5,358 (2%) PBT 1,544 1,725 (10%) Impairment (448) (288) (56%) Attributable profit 1,084 1,166 (7%) – Operating costs (3,257) (3,364) 3% – Litigation and conduct (61)
Slide 28: Q119 Barclays UK
Q119 Barclays UK Business performance Excluding L&C – Three months ended (£m) Mar-19 Mar-18 % change Three months ended (£m) Mar-19 Mar-18 % change PBT 588 581 1% – Personal Banking Attributable profit 424 373 14% 964 972 (1%) – Barclaycard Consumer UK 490 527 (7%) Performance measures – Business Ba
Slide 29: Q119 Barclays International
Q119 Barclays International Business performance Excluding L&C – Three months ended (£m) Mar-19 Mar-18 % change Three months ended (£m) Mar-19 Mar-18 % change PBT 1,137 1,428 (20%) – CIB 2,505 2,799 (11%) Attributable profit 804 985 (18%) – CC&P 1,065 1,009 6% Performance measures Income 3,570 3,808
Slide 30: Q119 Barclays International: CIB and Consumer, Cards & Payments
Q119 Barclays International: Corporate & Investment Bank and Consumer, Cards & Payments CIB business performance CC&P business performance % change % change Three months ended (£m) Mar-19 Mar-18 Three months ended (£m) Mar-19 Mar-18 % change GBP basis USD basis – FICC 902 869 4% (3)% Income 1,065 1,
Slide 31: Q119 Head Office
Q119 Head Office Head Office business performance Three months ended (£m) Mar-19 Mar-18 Income (95) (238) Impairment (charges) /releases (12) 6 – Operating costs (52) (59) – Litigation and conduct (39) (1,535) Operating expenses (91) (1,594) Other net (expenses)/income (22) 7 LBT (220) (1,819) Perfo
Slide 32: Abbreviations
Abbreviations ABS Asset-backed Securities ECB European Central Bank P1 Pillar 1 ADI Available Distributable Items ECM Equity Capital Markets P2A Pillar 2A ALAC Additional Loss-Absorbing Capacity EMEA Europe, Middle East and Africa PBT Profit Before Tax AP Attributable Profit EPS Basic Earnings per S
Slide 33: Disclaimer
Disclaimer Important Notice The information, statements and opinions contained in this presentation do not constitute a public offer under any applicable legislation, an offer to sell or solicitation of any offer to buy any securities or financial instruments, or any advice or recommendation with re