Barclays Plc · LSE:BARC
Barclays — H1 2002 Earnings Presentation
27 slides from Barclays's earnings presentation, Aug 1, 2002
Slide 1: Barclays PLC 2002 Interim Results
Barclays PLC 2002 Interim Results 1st August 2002
Slide 2: John Varley, Finance Director
John Varley Finance Director
Slide 3: Performance objectives 2002
Performance objectives 2002 • Deliver against value goals • Maintain income momentum • Improve productivity • Control risk • Manage capital • Leverage Woolwich • Extend Legal & General
Slide 4: Performance overview
Performance overview (£ million unless otherwise stated) Half-year ended: 30.06.02 30.06.01 % change Return on equity - Operating profit basis 19% 22% - - Statutory basis 16% 19% - Operating profit 1,992 2,079 -4 Income 5,755 5,537 +4 Costs 3,047 2,952 +3 Provisions - Argentina 104 (4) - - Other 609
Slide 5: Country risk - Argentina
Country risk - Argentina 1000 864 £ millions 500 460 315 251 0 Dec-00 Jun-01 Dec-01 Jun-02 Loan book
Slide 6: Personal Financial Services
Personal Financial Services (£ millions) Half-year ended: 30.06.02 30.06.01 % change Operating profit 500 475 +5 Income 1,473 1,458 +1 Costs (790) (799) -1 Provisions (182) (185) -2 Excludes exceptional items, restructuring charges, Woolwich integration costs, goodwill amortisation and Woolwich fair
Slide 7: Barclays Private Clients
Barclays Private Clients (£ millions) Half-year ended: 30.06.02 30.06.01 % change Operating profit 214 331 - 35 Income 716 790 -9 Costs (484) (441) + 10 Provisions (18) (18) - Excludes exceptional items, restructuring charges, Woolwich integration costs, goodwill amortisation and Woolwich fair value
Slide 8: Barclaycard
Barclaycard (£ millions) Half-year ended: 30.06.02 30.06.01 % change Operating profit 316 254 + 24 Income 744 673 + 11 Costs (256) (253) +1 Provisions (172) (164) +5 Excludes exceptional items, restructuring charges, Woolwich integration costs, goodwill amortisation and Woolwich fair value adjustmen
Slide 9: Business Banking
Business Banking (£ millions) Half-year ended: 30.06.02 30.06.01 % change Operating profit 640 581 + 10 Income 1,221 1,176 +4 Costs (498) (515) -3 Provisions (80) (76) +5 Excludes exceptional items, restructuring charges, Woolwich integration costs, goodwill amortisation and Woolwich fair value adju
Slide 10: Africa
Africa (£ millions) Half-year ended: 30.06.02 30.06.01 % change Operating profit 48 68 - 29 Income 130 170 - 24 Costs (72) (86) - 16 Provisions (10) (16) - 38 Excludes exceptional items, restructuring charges, Woolwich integration costs, goodwill amortisation and Woolwich fair value adjustments
Slide 11: Barclays Capital
Barclays Capital (£ millions) Half-year ended: 30.06.02 30.06.01 % change Operating profit 370 337 + 10 Income 1,224 1,037 + 18 Costs (701) (647) +8 Provisions (153) (53) + 189 Excludes exceptional items, restructuring charges, Woolwich integration costs, goodwill amortisation and Woolwich fair valu
Slide 12: Barclays Global Investors
Barclays Global Investors (£ millions) Half-year ended: 30.06.02 30.06.01 % change Operating profit 60 37 + 62 Income 289 259 + 12 Costs (229) (222) +3 Excludes exceptional items, restructuring charges, Woolwich integration costs, goodwill amortisation and Woolwich fair value adjustments
Slide 13: Group operating income
Group operating income (£ millions) Half-year ended: 30.06.02 30.06.01 % change Net interest income 3,160 2,963 +7 Non-interest income 2,595 2,574 +1 Net fees and commissions 1,996 1,786 + 12 Dealing profits 513 570 - 10 Other income 86 218 - 61 Total operating income 5,755 5,537 +4 Figures exclude
Slide 14: Group banking interest margin
Group banking interest margin % Net interest margin second half 2001* 2.89 Non recurring items booked in net interest income 0.03 Movement due to business margin compression - 0.08 Net interest margin first half 2002 2.84 * Restated for the impact of new accounting treatment for Reserve Capital Inst
Slide 15: Operating expenses
Operating expenses (£ millions) H1 02 on H1 01 Half-year ended: 30.06.02 31.12.01 30.06.01 % increase Business as usual costs 2,460 2,410 2,307 +7 Strategic investment costs 188 308 243 - 23 Revenue related costs 382 377 371 +3 Disposals/acquisitions 17 20 31 - 45 Total operating expenses 3,047 3,11
Slide 16: Income growth versus cost growth
% -5 -20 -15 -10 0 5 10 Personal 2% Financial Services Barclays Private -19% Clients Barclaycard 10% Business 7% Banking Africa -7% Income growth versus cost growth Barclays 10% Capital Barclays 8% Global Investors
Slide 17: Cost programme
Cost programme 1,500 £325m £1bn 1,000 £ millions £130m £675m £285m 500 £260m 0 2000 2001 H1 2002 2000 - H1 H2 2002 Goal 2002 & 2003
Slide 18: Cost:income benchmarking
Cost:income benchmarking Cost income 2001 Market upper quartile cost income ratio ratio 2001 Barclays cost income ratio 100% 2002 H1 Barclays cost income ratio 85% 79% 73% 68% 67% 63% 58%57% 57% 50% 55%54% 54% 55% 50% 50% 45%45% 41% 36%35%34% 0% Financial Africa Barclays Barclaycard Barclays Busines
Slide 19: Provisions summary
Provisions summary (£ millions) Half-year ended: 30.06.02 31.12.01 30.06.01 Net provisions charge 713 651 498 - Argentina 104 40 (4) - Other 609 611 502 New and increased 858 872 568 Releases and recoveries 101 199 76 Provisions stock 2,841 2,716 2,499 Risk tendency 1,300 1,245 1,100
Slide 20: Potential Credit Risk Lendings
Potential Credit Risk Lendings 5,988 6,000 5,273 1,218 4,731 1,402 965 4,000 (£ millions) PPLs NPLs 4,770 2,000 3,766 3,871 0 30.06.01 31.12.01 30.06.02 PCRL coverage 55% 53% 49%
Slide 21: Coverage ratios
Coverage ratios 30th June 2002 Corporate Personal Mortgages Group Balances (£m) & Financials unsecured Total* Total non-performing loans 1,508 2,291 733 4,770 Typical default impact (5) 30% (3) 70% (1) 10% Total severity estimate 453 1,604 73 Specific & general provisions * 961 * 1,680 * 100 2,925 C
Slide 22: Capital management
Capital management • Rating: AA • Strong ratios – tier 1: 7.9% – risk asset: 12.9% • Interim dividend: 10% growth • Buybacks on the agenda
Slide 23: Performance versus economic profit goal
Performance versus economic profit goal Cumulative EP (£bn) 4 3.3 3 2.5 2 1.2 3.3 1 2.7 1 1.4 1 0 1999 2000 2001 30.06.02 Actual Goal
Slide 24: Performance versus absolute value goal
Performance versus absolute value goal Cumulative £100 = original investment Value (£) 250 200 200 168 Barclays £136 154 142 150 119 100 Peer 100 group £106 average 121 137 136 50 100 0 FTSE £71 00 02 99 01 03 02 20 20 19 20 20 20 £0 £50 £100 £150 H1 Actual Goal FTSE 100 = £71 2001 Peer set = £106
Slide 25: Performance versus relative TSR goal
Performance versus relative TSR goal Total Shareholder Return 1st January 2000 to 30th June 2002 (percentage) RBOS 92 b 36 BNP Paribas 30 HBOS 17 Lloyds TSB -3 HSBC -3 Citigroup -4 Abbey National -9 Deutsche Bank -12 BBV Argentaria -15 ABN Amro -18 Standard Chartered -20 FTSE Banks 15 FTSE 100 -29
Slide 26: Summary
Summary • Value goals: on track • Income: 4% growth despite markets • Productivity: more to go for • Risk: calm but vigilant • Capital: a good time to be strong • Woolwich: integration ahead • L&G: momentum increasing
Slide 27: Forward-looking statements
This document contains certain forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to certain of the Group's plans and its current goals and expectations relat