Slide 1: Barclays PLC 2015 Financial Results
Barclays PLC 2015 Financial Results 1 March 2016
Slide 2: Jes Staley, Group Chief Executive Officer
Jes Staley Barclays Group Chief Executive Officer
Slide 3: Tushar Morzaria, Group Finance Director
Tushar Morzaria Barclays Group Finance Director
Slide 4: Summary Group financials: Adjusted PBT of £5.4bn
Summary Group financials: Adjusted PBT of £5.4bn Year ended – December (£m) 2015 2014 % change Full year financial performance2 Income 24,528 25,728 (5%) • PBT decreased 2% to £5.4bn, as an increased loss in Non-Core offset Impairment (2,114) (2,168) 2% improvements in all Core operating businesses3
Slide 5: Core performance: Profit growth across all operating businesses
Core performance: Profit growth across all operating businesses1 Year ended – December (£m) 2015 2014 % change Profit before tax (£m) 2015 2014 % change Income 24,692 24,678 - – Barclaycard 1,634 1,339 22% Impairment (2,036) (2,000) (2%) – Investment Bank 1,611 1,377 17% – Operating expenses (14,478
Slide 6: PCB: PBT up 12% excluding the US Wealth business
PCB: PBT up 12% excluding the US Wealth business Excluding the US Wealth business1 Year ended – December (£m) 2015 2014 % change Year ended – December (£m) 2015 2014 % change – Personal 4,054 4,159 (3%) Income 8,584 8,544 - – Corporate 3,754 3,592 5% Impairment (375) (469) 20% – Wealth 918 1,077 (15
Slide 7: Digital is Barclays' biggest branch
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) Customers 2.3m 3.6m 4.7m 31% Payments and transfers (monthly) £13.3bn £16.1bn £19.0bn 18% Unsecured lending completed digitally end-to-end £0.5bn £1.0bn £1.6bn 5
Slide 8: Barclaycard: PBT up 22% and RoTE of 22.3%
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 profit in 2015, with asset growth across all geographies − PBT increased 22% to £1.6bn. RoTE improved to 22.3% Impairment (1,251) (1,183) (6%) • Income increa
Slide 9: Africa Banking: PBT up 11% on constant currency basis
Africa Banking: PBT up 11% on constant currency basis Year ended – December (£m) 2015 2014 % change Constant currency2 2015 2014 % change Income 3,574 3,664 (2%) Income 3,574 3,336 7% Impairment (352) (349) (1%) Impairment (352) (317) (11%) – Operating expenses (2,244) – Operating expenses (2,169) (
Slide 10: Investment Bank: PBT up 17% with reduced costs and RWAs
Investment Bank: PBT up 17% with reduced costs and RWAs Year ended – December (£m) 2015 2014 % change Year ended – December (£m) 2015 2014 Banking 2,529 2,528 - Average allocated tangible equity £13.9bn £14.6bn Markets 5,030 5,040 - Return on average tangible equity 6.0% 2.8% – Credit 995 1,044 (5%)
Slide 11: Non-Core: Continued shrinkage and capital recycling
Non-Core: Continued shrinkage and capital recycling Year ended – December (£m) 2015 2014 Highlights – Businesses 613 1,101 • £3.8bn of equity released in the year, as a 38% reduction in RWAs led to – Securities and loans (481) 117 period end allocated equity falling to £7.2bn – Derivatives (296) (16
Slide 12: Non-Core: Reductions across every measure
Non-Core: Reductions across every measure RWAs by type (£bn) Leverage exposure by type (£bn) 57% 56% 382 110 2772 752 18 39 55 152 18 47 121 9 114 7 31 9 20 6 27 21 c.20 83 18 16 107 64 10 8 9 9 9 42 33 Dec-13 Dec-14 Sept-15 Dec-15 2017 Jun-14 Dec-14 Sept-15 Dec-15 Guidance Operational risk 1 Securi
Slide 13: Significant cost reduction across Group, Core and Non-Core
Significant cost reduction across Group, Core and Non-Core Group adjusted costs1 (£bn) Non-Core Core bank levy Core litigation and conduct costs £2.3bn Underlying Core costs 18.52 2.1 16.9 16.2 0.4 1.8 0.2 1.1 0.4 0.4 0.3 0.2 Core 15.8 £16.4bn Core Core 14.5 £15.1bn 14.5 £15.1bn FY13 FY14 FY15 Costs
Slide 14: Limited oil and gas exposures and robust risk management
Limited oil and gas exposures and robust risk management Key stats Good quality and well diversified Effective risk management Of our total wholesale credit exposures1: • Our exposure to Oil & Gas is well balanced, with Total credit risk exposures of no large concentration of exposure, either by £18
Slide 15: Maintaining a robust liquidity position and well diversified funding profile
Maintaining a robust liquidity position and well diversified funding profile High quality liquidity pool (£bn) Robust liquidity position LCR1 124% 133% • Stable liquidity position with the Group liquidity pool at £145bn, providing a 96% surplus to internal and external minimum requirements 149 145 •
Slide 16: Continued strengthening of key capital metrics
Continued strengthening of key capital metrics Fully-loaded CET1 ratio1 230bps • CET1 ratio of 11.4% as at December 2015, an improvement of 230bps in 24 months Significant conduct − After absorbing c.150bps impact of significant conduct 110bps and litigation2 and litigation c.150bps • In Q415, the C
Slide 17: Managing capital position for regulatory minimum levels and stress testing
Managing capital position for regulatory minimum levels and stress testing Capital requirements Minimum CRD IV CET1 requirement Capital conservation buffer (CCB) G-SIB buffer 2016 Pillar 2A CET1 requirement2 Counter Cyclical Buffer (CCyB) assumption3 Mandatory distribution restrictions hurdle BoE st
Slide 18: Financial highlights
Financial highlights Solid performance in the Core and continued Non-Core rundown Core business performed well, adjusted PBT of £6.9bn, up 3%, and RoTE of 10.9% Non-Core RWAs reduced £29bn to £47bn Strong capital generation of 110bps, taking the CET1 ratio to 11.4% Costs excluding CTA of £16.2bn, do
Slide 19: Jes Staley, Group Chief Executive Officer
Jes Staley Barclays Group Chief Executive Officer
Slide 20: Materially simplified and refocused Barclays
Materially simplified and refocused Barclays RWAs (£bn) Wealth and Investment Management Investment UK RBB Bank 17 Investment 44 Europe RBB Bank 16 PCB 108 120 222 2013 71 Corporate 2015 Banking 47 34 23 41 Africa 41 Non-Core Africa RBB Banking Barclaycard Barclaycard Group RWAs1 £442bn £358bn Non-C
Slide 21: Intention to reduce 62.3% stake in Barclays Africa Group Limited
Intention to reduce 62.3% stake in Barclays Africa Group Limited (BAGL) Impact of sell-down1 c.£2bn c.40,000 CET1 ratio Cost reduction Headcount uplift reduction in 2-3 years Rationale for sell-down FY15 returns (%) • 100% financial responsibility with only 62.3% of benefits 17.0 • Despite strong re
Slide 22: One-time increase to Non-Core: 2017 RWA guidance retained
One-time increase to Non-Core: 2017 RWA guidance retained Non-Core RWAs (£bn) Closing 9 countries Investment Bank Exiting certain product lines 57% PCB Wealth Asia 110 in 2 years c.8 Barclaycard Southern European cards c.35 47 47 Africa Banking Egypt and Zimbabwe c.20 Dec-13 Dec-15 Perimeter RWA red
Slide 23: Transatlantic Consumer, Corporate and Investment Bank
Transatlantic Consumer, Corporate and Investment Bank Barclays PLC1 Barclays UK Barclays Corporate & International BAGL Non-Core Focused UK consumer Diversified transatlantic wholesale and business bank with scale and consumer bank Personal Banking Corporate and Investment Bank Announced Focus on in
Slide 24: Barclays UK: Focused UK consumer and business bank with scale
Barclays UK: Focused UK consumer and business bank with scale Differentiated through scale, with 23 million customers, and digital innovation Personal 16 million retail customers Banking Digital is our biggest branch Leading the Deepening Driving Barclaycard way in digital customer 11 million
Slide 25: Barclays Corporate & International: Diversified transatlantic wholesale and consumer bank
Barclays Corporate & International: Diversified transatlantic wholesale and consumer bank Scale and strength with growth opportunities in key geographies, with prudent risk management Top tier investment bank Corporate and #1 US fee share for European Investment banks1 Bank #1 arranger of UK c
Slide 26: Benefits of diversification
Benefits of diversification Barclays UK Barclays Corporate & International Strong returns and diversified Focused UK consumer revenue streams Diversified transatlantic wholesale and business bank with scale and consumer bank Well capitalised Personal Banking with balanced Corporate and Investment Ba
Slide 27: Management focus to deliver value
Management focus to deliver value Accelerate Non-Core rundown c.£20bn RWAs by end 2017 Resulting in At its core, Group RoTE Barclays is a £12.8bn1 converging to strong business Continue focus on cost reductions with diversified for 2016 Core RoTE revenue streams in a reasonable timeframe Settle rema
Slide 28: Financial Targets
Financial Targets Returns Group Return on Group will converge Tangible Equity (RoTE) with Core RoTE Capital Group 100-150 bps above CET1 Ratio regulatory minimum level Costs Group Below 60% Cost: income Ratio Intend to achieve these targets within a reasonable timeframe 28 | Barclays 2015 Financial
Slide 29: Jes Staley, Group Chief Executive Officer
Jes Staley Barclays Group Chief Executive Officer
Slide 30: Barclays PLC 2015 Financial Results
Barclays PLC 2015 Financial Results 1 March 2016
Slide 31: Appendices
Appendices
Slide 32: Non-Core perimeter enlargement of c.£8bn
Non-Core perimeter enlargement of c.£8bn Businesses added to Non-Core from 1 January 2016 Comments Barclays Wealth Americas Income PCB • Expected to be largely eroded by end-2016 Wealth Asia Costs Barclaycard Southern European Cards • Additional c.£600m of costs, majority of which are expected to be
Slide 33: Enhanced focus on cost discipline
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 BAGL 1 Impact of Excluding New core target implementation added to (inc. SRP & appreciation conduct guidance 3 (ex. SRP & & restructuring Non-Core restructur
Slide 34: Simplifying our business divisions for structural reform
Simplifying our business divisions for structural reform Barclays PLC1 Barclays Barclays UK Barclays Corporate & International BAGL Non-Core Focused UK consumer and Diversified transatlantic wholesale Announced business bank with scale and consumer bank intention to sell Focus on completion Division
Slide 35: Core income: Growth in net interest income and margin
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 businesses1 increased 2% year-on-year to £17.2bn – Net interest income 12,024 11,435 5% • Net interest income grew 5%, primarily driven by business growth
Slide 36: Continuous reduction in CRL balances reflecting prudent approach to credit risk management
Continuous reduction in CRL balances reflecting Barclays prudent approach to credit risk management Increasing coverage of Group Credit Risk Loans (CRLs) Retail CRL % of Gross L&A and stable Loan Loss Rate (LLR) Dec-14 Dec-15 CRLs % of Gross L&A Loan loss rate 63% 58% CRL coverage 7.3% 6.0% 5.1% 4.9
Slide 37: Continued reduction in Group adjusted costs
Continued reduction in Group adjusted costs Year-on-year progress – excluding CTA (£bn)1 16.9 0.7 0.1 0.2 0.1 0.1 0.2 16.2 FY14 Non-Core Investment PCB Africa Barclaycard Head Office FY15 Bank Banking 2 Quarterly progression – excluding UK bank levy (£bn) 5.1 8% 4.4 4.4 4.4 4.3 4.1 4.2 4.2 4.1 Q413
Slide 38: Increased returns across PCB, Barclaycard and the Investment Bank
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% 10.9% 9.3% 9.2% 9.0% 8.7% 6.0% 5.9% 5.8% 5.6% 5.1% 4.9% 2.8% 2.7% RoTE RoE RoTE RoE RoTE RoE RoTE RoE RoTE RoE RoTE RoE RoTE RoE (4.1%)(4.1%) (5.4%)(5.1%) PCB
Slide 39: Tangible Net Asset Value
Tangible Net Asset Value TNAV (pence per share) – Dec-14 to Dec-15 FY15 highlights 6 TNAV per share decreased 10p in the year to 275p 15 • Adjusted profits increased TNAV by 15p per share • Dividend distributions of £1.1bn resulted in a 6p per share 21 reduction 285 5 4 • Provisions for UK customer
Slide 40: Level 3 assets at 31 December 2015
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 31 December Other ESHLA 31 December 2014 17.0 Other 16.0 2015 20.6 £47.8bn £36.6bn 17.8 Financial assets designated at fair value Spain 13.4 Trading 4.9 por
Slide 41: Leverage ratio increased to 4.5%
Leverage ratio increased to 4.5% Leverage exposure1 (£bn) Highlights L&A and other assets2 Derivatives FY 2015 • Improvement in leverage ratio to 4.5% primarily driven by a £205bn SFTs Undrawn commitments reduction in leverage exposure to £1,028bn reflecting decreases across Leverage ratio1 both Cor
Slide 42: RWAs: Closely managed to support business growth and capital ratio accretion
RWAs: Closely managed to support business growth and capital ratio accretion RWAs (£bn)3 Highlights FY 2015 5 22 • RWAs decreased by £44bn to £358bn, mainly driven by a £29bn reduction in 8 7 Non-Core due to the sale of the Spanish business, and the rundown of legacy structured and credit products (
Slide 43: Movement in Common Equity Tier 1 capital
Movement in Common Equity Tier 1 capital CET1 capital movement (£bn) – Dec-14 to Dec-15 0.6 1.4 0.7 0.4 0.3 0.9 0.6 41.5 0.3 40.7 Dec-14 Loss for Dividends paid Other qualifying Retirement Pension fund asset Additional value Expected loss over Other 2 Dec-15 1 the period and foreseen reserves benefi
Slide 44: Managing evolving future minimum CET1 levels
Managing evolving future minimum CET1 levels Illustrative evolution of minimum CET1 requirements and buffers1 Minimum CRD IV CET1 requirement Counter Cyclical Buffer (CCyB) assumption3 CET1 minimum levels and internal management buffer 2016 Pillar 2A CET1 requirement2 BoE stress test hurdle for 2016
Slide 45: Managing capital position for regulatory minimum levels and stress testing
Managing capital position for regulatory minimum levels and stress testing Barclays’ expected BoE CET1 stress test hurdles1, 4 Minimum CRD IV CET1 requirement Counter Cyclical Buffer (CCyB) assumption3 2016 Pillar 2A CET1 requirement2 Mandatory distribution restrictions hurdle rates G-SIB buffer BoE
Slide 46: Well positioned to meet future MREL/TLAC requirements
Well positioned to meet future MREL/TLAC requirements Illustrative annual MREL/TLAC issuance volumes to meet future requirements1 • Proactive refinancing from HoldCo and liability management 23% exercises executed to date position us well for future TLAC requirement requirements +1.5% c.£6bn p.a. •
Slide 47: Anticipated funding sources of future UK ring-fenced bank and Barclays Bank PLC
Anticipated funding sources of future UK ring-fenced bank and Barclays Bank PLC (and subsidiaries) Barclays PLC1 Barclays UK Barclays Corporate & International constructs Divisional Focused UK consumer and Diversified transatlantic wholesale business bank with scale and consumer bank Formation of th
Slide 48: TLAC and MREL requirement expectations
TLAC and MREL requirement expectations Pillar 1 TLAC minimum requirements and illustrative MREL expectations1 Pillar 1 requirements 2016 Pillar 2A requirement2 Assumed CRD IV combined buffer requirement BoE Recapitalisation amount TLAC MREL3 FY15 PRA Transitional total c.5% c.5% capital ratio: c.5%
Slide 49: Continued progress on transition to HoldCo capital and funding model
Continued progress on transition to HoldCo capital and funding model PRA transitional regulatory capital Outstanding term vanilla senior unsecured debt (£bn) Dec-14 Dec-15 (£bn) Dec-14 Dec-15 PRA transitional Common Equity Tier 1 capital 40.9 40.7 Barclays PLC (HoldCo) term vanilla senior PRA transi
Slide 50: Focused on maintaining strong investment grade ratings
Focused on maintaining strong investment grade ratings • Barclays is committed to maintaining strong investment Ratings1 S&P Moody's Fitch grade ratings • All ratings carry a stable outlook across S&P, Moody’s Standalone rating bbb+ baa2 a and Fitch • Industry-wide rating agency actions in 2015 were
Slide 51: Barclays PLC parent company accounts
Barclays PLC parent company accounts Barclays PLC parent company balance sheet Key notes Balance sheet • Barclays PLC is the holding company of the Barclays Group As at As at • The HoldCo’s primary assets currently are its investments in, and loans and 31 Dec-14 31 Dec-15 advances made to, its sole
Slide 52: Disclaimer
APPENDIX 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 recommendatio