Barclays Plc · LSE:BARC
Barclays — Debt Investor Presentation (February 2023)
56 slides from Barclays's debt investor presentation, Feb 15, 2023
Slide 1: Barclays PLC Q4 2022 Fixed Income Investor Presentation
Barclays PLC Q4 2022 Fixed Income Investor Presentation 15 February 2023
Slide 2: Performance
Performance
Slide 3: Targets and performance
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Targets and performance Medium-term targets FY22 RoTE >10% 10.4% Cost: income ratio <60% 67% CET1 ratio 13-14% 13.9% Capital returns Announced 2022 total capital return Progressive ordinary dividend, su
Slide 4: Demonstrating execution against our three strategic priorities
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Demonstrating execution against our three strategic priorities Deliver next-generation, digitised Deliver sustainable growth in Capture opportunities as we consumer financial services the CIB transition
Slide 5: FY22: Group RoTE of 10.4% with profit before impairment up 9%
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT FY22: Group RoTE of 10.4% with profit before impairment up 9% Performance Reported profit before tax (£bn) £25.0bn £16.7bn (0.9) Income Costs FY21: £21.9bn FY21: £14.7bn 3.0 (1.2) (0.3) 67% £8.2bn Cost:
Slide 6: FY22: Double digit RoTE across all three operating businesses
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT FY22: Double digit RoTE across all three operating businesses FY22 RoTE UK Retail Banking Barclays UK • • UK Business Banking 18.7% • International Cards and Consumer Consumer Cards & Banking Payments •
Slide 7: FY22 Income: Growth across all three operating businesses
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT FY22 Income: Growth across all three operating businesses Group income (£bn) +14% 25.0 BUK Net Interest Margin (NIM) +34bps YoY to 2.86% 21.9 +11% 7.3 6.5 US cards balances +31% YoY (in USD) 4.5 CC&
Slide 8: FY22 Income: Interest rates tailwind likely to continue into FY23
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT FY22 Income: Interest rates tailwind likely to continue into FY23 Interest rate sensitivity Structural hedge Illustrative Group income impact from a 25bps upward Q422 gross hedge income up 91% YoY paral
Slide 9: Quarterly income and costs
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Quarterly income and costs Income1 Operating costs2 3,939 6,496 6,708 3,682 3,748 3,514 3,588 5,951 5,801 5,160 2,043 1,796 4,033 1,562 1,921 1,870 3,938 2,821 2,576 2,632 598 733 747 1,244 1,286 584 66
Slide 10: FY22 Costs: Investing for growth; targeting improved CIR
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT FY22 Costs: Investing for growth; targeting improved CIR FY22 Group costs (£bn) FY23 CIR CIR Targeting a Group 67%1 67%1 CIR percentage in t he low 60s 16.7 Cost 0.5 14.7 0.4 1.6 considerations 1.2 0.4
Slide 11: Q422: Group profit before impairment increased 29%
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Q422: Group profit before impairment increased 29% Q422 Performance Reported profit before tax (£bn) £5.8bn £4.0bn Income Costs Q421: £5.2bn Q421: £3.8bn (0.2) 69% £1.8bn 0.6 Cost: Income Profit before
Slide 12: Q422: Barclays UK higher income supported by rising rates
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Q422: Barclays UK higher income supported by rising rates Q422 Performance Income (£bn) Net interest margin £2.0bn £1.1bn +16% Income Costs FY23 NIM expected to be greater than 3.20%2 Q421: £1.7bn Q421:
Slide 13: Q422: CC&P strong income growth of 46% YoY
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Q422: CC&P strong income growth of 46% YoY Q422 Performance Income (£bn) £1.3bn £0.8bn +46% $29.2bn Income Q421: £0.9bn Costs Q421: £0.6bn US Cards End 1.3 Net Receivables +31% vs Q421 60% £0.3bn Cost:
Slide 14: Q422: CIB performance demonstrates diversification benefits
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Q422: CIB performance demonstrates diversification benefits Q422 Performance Income (£bn) Income by business (£m) YoY % USD YoY %: £2.6bn £2.0bn Income Costs Markets Q421: £2.6bn Q421: £1.7bn FICC, 976
Slide 15: FY22 Income: Financing provides more stability to Global Markets income
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT FY22 Income: Financing provides more stability to Global Markets income Global Markets income (£bn) 5.3 7.6 6.4 8.8 Our financing businesses: Provide a more stable, core income stream Generate attra
Slide 16: FY22 Income: Investment delivering market share gains
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT FY22 Income: Investment delivering market share gains Top 10 Peer Global Markets revenue share change 2022 vs. 2019 (bps)1 Client rankings #1 GS 356 Number of Barclays Top 100 clients #2 BARC 114 where
Slide 17: Outlook
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Outlook Returns Targeting RoTE of greater than 10%in 2023 Diversified income streams continue to position the Group well for the current Income economic and market environment including higher interest
Slide 18: Asset Quality
Asset Quality
Slide 19: FY22 Impairment: Expect to normalise towards historical LLRs
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT FY22 Impairment: Expect to normalise towards historical LLRs Balance sheet provisions for ECL1 (£bn) LLR2 (bps) 6.4 6.2 0.3 (0.4) 138 (0.1) Other ECL 1.2 1.1 Economic 0.3 uncertainty 0.7 adjustments 53
Slide 20: Macroeconomic variables
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Macroeconomic variables Q422 Q422 Upside 2 Q422 Upside 1 Q422 Baseline Q422 Downside 1 Q422 Downside 2 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 UK GDP 1 2.8% 3.7% 2.9%
Slide 21: Macroeconomic variables
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Macroeconomic variables Q322 Q322 Upside 2 Q322 Upside 1 Q322 Baseline Q322 Downside 1 Q322 Downside 2 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 UK GDP 1 4.0% 3.3% 2.8%
Slide 22: FY22: Consumer loan book resilient for economic uncertainty
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT FY22: Consumer loan book resilient for economic uncertainty UK Mortgages (£bn) UK Cards (£bn) 90 day arrears rate Net loans and advances at amortised cost (L&A) 30 day arrears rate Net L&A 162.2 143.2 1
Slide 23: Impairment: Wholesale exposures and UK/US cards arrears rates
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Impairment: Wholesale exposures and UK/US cards arrears rates Wholesale and selected sector exposure W holesale lending excl. Se le cted sectors (£bn/coverage ratio %) Gro ss loans D ebt Securities (£bn
Slide 24: FY22: Disciplined approach to risk in the CIB
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT FY22: Disciplined approach to risk in the CIB CIB RWAs up £15bn driven by FX and regulation CIB loans & advances • Loans and advances to customers and banks: £99bn − £54bn corporate lending exposures; f
Slide 25: Impairment: December 2022 coverage ratios
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Impairment: December 2022 coverage ratios Credit cards, unsecured loans and other retail lending Wholesale loans Impairment allowance Impairment allowance Gross loans (£bn) Coverage ratio Gross loans (£
Slide 26: Impairment: December 2022 coverage ratios
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Impairment: December 2022 coverage ratios UK cards US cards Impairment allowance Impairment allowance Gross loans (£bn) Coverage ratio Gross loans (£bn) Coverage ratio ( £bn) ( £bn) Dec-19 Sep-22 Dec-22
Slide 27: Capital & Leverage
Capital & Leverage
Slide 28: Disciplined capital management
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Disciplined capital management Q422 CET1 ratio movements Future considerations Q123 (9bps) (28bps) (9bps) 31bps 24bps • Share buyback £0.5bn: c.(15)bps • IFRS 9: c.(13)bps reduction in transitional reli
Slide 29: Basel 3.1 day one impact expected to be at lower end of prior 5-10%
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Basel 3.1 day one impact expected to be at lower end of prior 5-10% RWA guidance Timeline Current view of impacts from Basel 3.1 implementation Nov-22 PRA released Consultation Paper 16/22 Day one Pilla
Slide 30: CET1 ratio within 13-14% target range and above requirements
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT CET1 ratio within 13-14% target range and above requirements CET1 minimum requirements UK leverage minimum requirements MDA 1 11.3% CCyB 0.4% CCB 2.5% Reg Min 3.975% G-SII 1.5% CCLB 0.2% 13.9% G-SII 0.5
Slide 31: RWA
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT RWA Q422 RWA movements (£bn) (4.2) (8.9) (1.2) 350.8 336.5 1 Sep-22 Book size FX Other Dec-22 FY22 RWA movements (£bn) (1.6) 14.1 (1.2) 4.5 6.6 336.5 314.1 1 Dec-21 Regulatory changes Book size Acquisit
Slide 32: Prior capital drag from pensions eliminated
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Prior capital drag from pensions eliminated Triennial actuarial valuation Pension transaction unwind Pension portfolio position Completed UKRF well positioned with a UKRF triennial actuarial valuati
Slide 33: Capital structure well managed
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Capital structure well managed Capital structure and requirements Balanced total capital structure ≥16.7% total 20.8% total • Continue to run a robust level of AT1 capital and maintain conservative capi
Slide 34: Balance Sheet Management
Balance Sheet Management
Slide 35: MREL position well established
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT MREL position well established MREL position of £112.8bn as at Dec-221 HoldCo issuance • Successfully executed c.£15bn of MREL issuance in 2022 • c.£10bn of MREL issuance across Senior, Tier 2 and AT1 r
Slide 36: Successful execution of 2022 funding plan
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Successful execution of 2022 funding plan 2022-23 HoldCo issuance1 Annual HoldCo issuance volume (£bn) and currency1 Jan-22: EUR 1.25bn Senior 15.0 12.1 11.5 12.1 11.0 c.11 May-22: EUR 1.0bn Senior 8.6
Slide 37: Strong liquidity position and deposit base
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Strong liquidity position and deposit base Liquidity comfortably exceeding minimum requirements Deposits evolution (£bn) 1 168% 165% 528 156% 151% 493 519 512 Minimum 78 84 82 requirement: 69 100% 179 1
Slide 38: Wholesale funding composition as at 31 December 2022
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Wholesale funding composition as at 31 December 20221 1- 3 3- 6 6- 12 T otal 1- 2 2- 3 3- 4 4- 5 As at 31 December 2022 (£bn) <1 month >5 years T otal mon ths mon ths mon ths <1 year ye ars ye ars ye ar
Slide 39: Strong legal entity capital and liquidity positions
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Strong legal entity capital and liquidity positions Continue to manage legal entity capital ratios with appropriate headroom to requirements Barclays PLC Accounting and regulated sub-group Accounting su
Slide 40: Credit Ratings
Credit Ratings
Slide 41: Strategic priority to maintain strong ratings
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Strategic priority to maintain strong ratings Current Senior long and Moody’s Standard & Poor’s Fitch short term ratings Baa2 BBB A Review for Barclays PLC Upgrade Positive Stable P-2 A-2 F1 Barclays Ba
Slide 42: Barclays rating composition for senior debt
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Barclays rating composition for senior debt M oody’s Standard & Poor’s F itch BPLC BBPLC BBUKPLC BPLC BBPLC BBUKPLC BPLC BBPLC BBUKPLC Adjusted Baseline b aa2 b aa2 a3 Stand-Alone Credit Profile bbb+ Vi
Slide 43: ESG
ESG
Slide 44: We continued to advance our ESG agenda in 2022
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT We continued to advance our ESG agenda in 2022 Environmental Social Governance Brought forward part of the 2023 pay Created a pathway to address our increase, awarding 35,000 UK-based junior supply chai
Slide 45: Sustainable Impact Capital's upsized target to £500m
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Sustainable Impact Capital’s upsized target to £500m Sustainable finance activities through Treasury Mission Portfolio as at FY22 Accelerate the transition to a net zero future by investing £500m by the
Slide 46: Fulfilling our Purpose
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Fulfilling our Purpose creating positive influence our delivered through Our Purpose… and our Values… outcomes for our strategy… Group synergies… stakeholders Customers and cl ients Our diversification,
Slide 47: ESG has been an ongoing focus for Barclays…
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT ESG has been an ongoing focus for Barclays… E Announced ambition to be a net zero bank by 2050 E Joined the Paris Pledge for Action Launched BlueTrackTM to measure/track our financed emissions E Pre- S
Slide 48: …and we continued to advance our ESG agenda in 2022
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT …and we continued to advance our ESG agenda in 2022 • Sourced 100% renewable electricity for our operations1 and created a pathway to address our supply chain emissions • Extended assessment of our fina
Slide 49: We measure our progress against key metrics and targets (1/2)
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT We measure our progress against key metrics and targets (1/2) FY21 FY22 Category Metric Target(s) as at FY22 performance1 performance1 GHG emissions Scope 1 and 2 (market- -90% (2025) -86%2 -91%Δ, 3 b a
Slide 50: We measure our progress against key metrics and targets (2/2)
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT We measure our progress against key metrics and targets (2/2) Target(s) / benchmark FY21 FY22 Category Metric as at FY22 performance performance Females at Managing Director/Director 33% (2025) 28% 29%Δ
Slide 51: Our ESG ratings performance
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Our ESG ratings performance Agency Rating type Scale 2019 2020 2021 2022 Year on year (b e st to worst) MSCI ESG rating AAA – CCC BBB A AA AA Stable CDP Climate Change A – D- A- B B A- Improved Question
Slide 52: Appendix
Appendix
Slide 53: Over-issuance of Securities
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT Over-issuance of Securities1 Context Financial impact (£m) • In March 2022, the Group became aware that BBPLC2 had issued securities T otal materially in excess of the amount registered under its shelf
Slide 54: IFRS 9 transitional relief of c.20bps as at Dec-22
CAPITAL BALANCE SHEET PERFORMANCE ASSET QUALITY CREDIT RATINGS ESG APPENDIX & LEVERAGE MANAGEMENT IFRS 9 transitional relief of c.20bps as at Dec-22 2020 regulatory action gave further relief for impairments IFRS 9 transitional relief CET1 add-back (£bn) • 75% transitional relief for modified impair
Slide 55: Contacts – Debt Investor Relations Team
Contacts – Debt Investor Relations Team Version 4 Dan Colvin Joanne Cash Justin Lutterbuese +44 (0)20 7116 6533 +44 (0)20 7116 4215 +44 (0)20 7116 6021 daniel.colvin@barclays.com joanne.cash@barclays.com justin.lutterbuese@barclays.com 55 | Barclays Q3 2022 Results | 26 October 2022
Slide 56: Disclaimer
Disclaimer I m portant Notice The terms Barclays or Group refer to Barclays PLC together with its subsidiaries. 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
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