Slide 1: Investor Seminar New York, June 17, 2009
Investor Seminar New York, June 17, 2009 1
Slide 2: Barclays Group
Barclays Group Investment Banking & Investment Global Retail & Commercial Banking Management (IBIM) (GRCB) Cards and Investment Asset Wealth Retail Commercial Consumer Banking Management Management Banking Banking Finance 2
Slide 3: Challenging market environment…
Challenging market environment… Global Investment Banking net revenues (excluding writedowns) US$bn 429 434 372 337 324 310 291 255 264 % client 2004 2005 2006 2007 2008 2011 scenarios driven 80 77 78 75 81 Quick Fix Battered but Resilient/ Long Freeze revenue Stalled Globalisation Source: McKinsey
Slide 4: …but underlying growth has returned
…but underlying growth has returned Issuance Proceeds US$bn 569 29 1,834 1,628 1,005 1,195 242 200 93 5 Global All Int’l US IG US LSE Equity Debt Bonds Debt Treasury (£bn) Q1 2006 Q1 2007 Q1 2008 Q1 2009 Source: Thomson Reuters; US Treasury; LSE 4
Slide 5: 2008 consolidation redefined the sector…
2008 consolidation redefined the sector… Industry Consolidation Bear Stearns/WAMU JPMorgan Chase Lehman Brothers Barclays Merrill Lynch/Countrywide Bank of America HBOS Lloyds TSB Wachovia Wells Fargo Industry Restructuring Freddie Mac and Fannie Mae Nationalised by US Government Goldman Sachs and B
Slide 6: …and changed the competitive environment
…and changed the competitive environment Capital Markets and Investment Banking Fixed Income, Currencies, and Commodities revenues of 5 Global players, US$bn revenues of 5 Global players, US$bn 100% = 372 90 100% = 137 56 59% 53% 64% 75% +29% +63% 47% 41% 36% 25% 2006 Q1 2009 2006 Q1 2009 5 Global p
Slide 7: Regulatory changes will influence the model
Regulatory changes will influence the model New Regulatory Environment Business Impact • Focus on returns Capital • Lower leverage • Premium on client-driven business Liquidity • Access to diverse funding • Increased disclosure Transparency • Stress tests • New market mechanisms 7
Slide 8: New priorities will drive growth
New priorities will drive growth Strategic relationships • Re-equitisation • Risk management • Governments 8
Slide 9: Well-executed client focused models will win market share
Well-executed client focused models will win market share Global Client Solutions Disciplined Execution Capital raising Client Focus Risk management + Built to last Advisory Culture: One Firm 9
Slide 10: Jerry del Missier
Jerry del Missier 10
Slide 11: New priorities driving growth
New priorities driving growth Gov 10 yr Issuance, spread, & volatility Indexed Revenue Growth- I-Bank sector & BarCap 500 7 6 250 400 5 200 300 4 150 2.3x 200 3 100 2 100 1 50 0 0 0 Jan May Sep Jan May Sep Jan Apr 2005 2006 2007 2008 Q1 08 Q1 09 07 07 07 08 08 08 09 09 Tota l Gov Issua nce (US, UK,
Slide 12: Barclays Capital has built a world class FICC business
Barclays Capital has built a world class FICC business Revenue Growth (£bn) Regional Client Production £10 FICC CAGR 37% 1.5x £8 £6 £4 £2 £0 2005 2006 2007 2008 2007 2008 BarCap FICC revenues BarCap total revenues Americas Europe Asia + ROW 12
Slide 13: Lehman positions us for significant US led growth
Lehman positions us for significant US led growth US Revenue Growth (£bn) Regional Client Production, Q1 09 £4 £3 3.3 x £2 Americas Europe Asia & ROW £1 Q1 08 Q1 09 £0 Product Revenue, Q1 09 (£bn) 2005 2006 2007 2008 Q1 08 Q1 09 £4 BarCap FICC revenues BarCap total revenues £3 £2 £1 £0 FICC Equities
Slide 14: The deal transformed our credit franchise…
The deal transformed our credit franchise… BarCap Credit Client Production 900 Corporate bond trading market share 800 Indexed growth 700 4x BarCap Q1 2008 4% 600 500 400 BarCap Q1 2009 14% 300 200 100 0 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Structured Flow #1 Overall debt house 2009
Slide 15: …positioning us well for European growth
…positioning us well for European growth European Bond and Loan Issuance Corporate Bonds and Bank Loans £70 Outstanding of Non-financial Corporations £60 Bonds Loans 9% £50 33% Bond £40 £bn £30 US Euro-Zone £20 Loan £10 Bonds 67% Loans £0 91% Jan- 07 Jul-07 Jan- 08 Jul- 08 Jan-09 Source: S&P LCD, Ba
Slide 16: Opportunity to build Equities, M&A and equity Prime Services
Opportunity to build Equities, M&A and equity Prime Services Incremental Impact on Revenue return on % Industry Revenue Build-out Areas potential for Capital (2011E) BarCap Equities >£3bn Equities 21% >£1bn Direct M&A M&A 9% 2-3x Indirect Prime Prime Services 5% >£1bn Services Sourc e: McKinsey 16
Slide 17: Strong platform in US is key to success
Strong platform in US is key to success US Equities Revenues US Investment banking fee income 600 1,000 Indexed growth Indexed growth 500 800 9.2x 400 5x 600 300 400 200 200 100 0 0 Q1 08 Q1 09 Q1 08 Q1 09 17
Slide 18: Target Top 3 position over the next 3 years in Europe and Asia
Target Top 3 position over the next 3 years in Europe and Asia • Leading with content • Build/leverage scalable global Infrastructure • Hire ‘A’ players • Leverage strong Barclays Capital franchise 18
Slide 19: Client focused execution in a controlled and scalable manner
Client focused execution in a controlled and scalable manner Client Revenue Top 500 Clients – Clients with Production > £10m – 2006 May YTD to 2009 May YTD 2006 May YTD to 2009 May YTD 800 2009 700 92 Indexed Client Revenue 600 500 4x 400 2008 2007 300 2006 32 200 20 23 100 0 0 100 200 300 400 500 2
Slide 20: Financial and Risk Management is at the core of what we do
Financial and Risk Management is at the core of what we do Approach Implementation Centrally Set • Market & Credit Risk • Firm wide Appetite Limits • Liquidity • Capital & Balance Sheet Dynamically • Business Level • Direct Accountability • Desk Level Managed • ExCo • Capital Commitments Culture • P
Slide 21: Summary points
Summary points • Significant transformation of US franchise • Building top tier global equities and M&A businesses • World class franchise underpinned by • Client focus • Financial discipline • Strong risk management 21
Slide 22: Rich Ricci
Rich Ricci 22
Slide 23: Built-to-last philosophy underpins performance
Built-to-last philosophy underpins performance Built-to-last Investment Banking Objectives Requirements Deliver strategic and Execution financial objectives Scalable platforms Leverage scale globally Manage balance sheet Risk management and actively and focus on capital management returns 23
Slide 24: Execution capability – Lehman integration
Execution capability – Lehman integration Now operating as ‘One Firm’ • Single brand and identity Completed Lehman integration in • Unified management team January 2009 – within 100 day • Strong risk and cost control target processes • One culture 24
Slide 25: Execution capability: Managing costs
Execution capability: Managing costs • Proven track record of managing cost Operating costs • Strong performance relative to peers • Disciplined organisational structure Cost principles • Rigorous hiring process Global and regional • Global and regional infrastructure hubs hubs • Global client execu
Slide 26: Leveraging scalable platforms: BARX
Leveraging scalable platforms: BARX FX, MM, FI a nd Equities Client Volumes (£bn) 7,734 \ 6,455 49% CAG R 4,541 Money Futures Equities 3,085 Markets 1,561 Emerging 2004 2005 2006 2007 2008 Commodities Markets 2009 YT D Geographi cal Breakdow n Asia Americas Fixed Income 21% Structured Foreign Rates
Slide 27: Focus on risk and capital management
Focus on risk and capital management Overall risk management control framework Implications • Independent risk function and • Direct business Governance accountability at Board review macro and desk level for capital, balance sheet and • Balance sheet, liquidity and capital Implementation liquidity
Slide 28: Proactively managing balance sheet
Proactively managing balance sheet As at 31 December 2008 £bn Group Barclays Capital Total assets 2,053 1,629 Significantly Derivative gross-up (917) (917) reduced in 2009 AUM on balance sheet (69) - Settlement balances (30) (30) Goodwill & intangible assets (10) (1) Adjusted tangible assets 1,027 6
Slide 29: Barclays Capital balance sheet
Barclays Capital balance sheet 31 December 2008 Adjusted tangible assets Assets % of Total • Highly liquid assets • Cash and balances with Central Banks 16% • Reverse repos 20% • Unencumbered liquid assets expected to increase • Governments and agency securities 16% • Corporate debt securities 10% •
Slide 30: Delivering built-to-last philosophy
Delivering built-to-last philosophy Investment Banking Built-to-last Requirements Objectives Delivery examples Deliver strategic • Lehman integration and financial Execution • Financial discipline objectives Leverage scale Scalable • BARX multi-asset platform globally platforms Manage balance Risk •
Slide 31: Robert E Diamond, Jr.
Robert E Diamond, Jr. 31
Slide 32: Barclays Capital's new Mission Statement
Barclays Capital’s new Mission Statement “To be the Premier Global Investment Bank” 32
Slide 33: Investor Seminar New York, June 17, 2009
Investor Seminar New York, June 17, 2009 33