Slide 1: Barclays PLC H1 2022 Results
Barclays PLC H1 2022 Results 28 July 2022
Slide 2: C.S. Venkatakrishnan, Barclays Group Chief Executive
C.S. Venkatakrishnan Barclays Group Chief Executive
Slide 3: Statutory PBT of £3.7bn and RoTE of 10.1% in H122
Statutory PBT of £3.7bn and RoTE of 10.1% in H122 Strong Income • Attributable profit of £2.5bn1 despite the net of tax impact of Over- operating £13.2bn issuance of Securities in the US2 of £(0.6)bn performance Cost: income ratio 69% Income • Group income up 10% YoY3 with diversified strategy deliv
Slide 4: Update on Over-issuance of Securities
Update on Over-issuance of Securities Barclays PLC and Barclays Bank PLC (BBPLC) each filed a Form 20-F/A, completing the restatement process Commenced £1bn share buyback announced at FY21 Key updates since BBPLC filed an automatic shelf registration on Form F-3, under which it can issue unlim
Slide 5: Another strong performance in Q222 across all operating businesses
Another strong performance in Q222 across all operating businesses Group PBT: AP: RoTE: EPS: £1.5bn £1.1bn 8.7%1 6.4p Barclays UK Consumer, Cards and Payments Corporate and Investment Bank Income Income Income £1.7bn £1.1bn £3.3bn2 +6% +29% +10%2 RoTE 18.4% RoTE 17.8% RoTE 7.1%3 1 Group RoTE excludi
Slide 6: Broad income momentum with H122 Group income up 10% YoY
Broad income momentum with H122 Group income up 10% YoY1 Strong income growth Drivers of income growth across all operating businesses (£bn) +5% • Sensitivity to increasing interest rates 3.2 3.4 BUK • Higher transaction-based revenues H121 H122 +20% • US cards balance growth 2.0 CC&P 1.6 • Increase
Slide 7: Inflation uncertainty but GDP growth and unemployment resilient
Inflation uncertainty but GDP growth and unemployment resilient Monthly YoY inflation1 (%) Interest rates (%) Jun-22: 9.40 GBP 5 Year UK base 10 UK US Jun-22: 9.10 swap rate2 rate 8 3.25 Jun-22: 2.48 2.75 6 2.25 4 1.75 1.25 2 0.75 0.25 0 -0.25 Jun-22: 1.25 GDP growth and inflation forecasts (%) Unem
Slide 8: Barclays is prepared to navigate this uncertainty
Barclays is prepared to navigate this uncertainty Dedicated to helping customers, clients and colleagues More conservative risk positioning and management Supporting clients through market volatility Updated affordability models Supporting customers through Monitoring of customer behaviour cost of l
Slide 9: Highlights across each of our three strategic priorities
Highlights across each of our three strategic priorities Deliver next-generation, digitised Capture opportunities as we Deliver sustainable growth in the CIB consumer financial services transition to a low-carbon economy Enhancing product capabilities Investments in the franchise delivering Active s
Slide 10: We continued to advance our ESG agenda in H122
We continued to advance our ESG agenda in H122 • Scope 1 and 2 emissions: -82%1 reduction against 2018 baseline • Green financing: facilitated £11bn2 in H122 (2018-H122: £74bn2) • Sustainable Impact Capital Programme: £27m of own capital invested in H122 (2020-H122: £81m) • Met LifeSkills programme
Slide 11: Strong H122 profitability, continue to target a RoTE >10% in 2022
Strong H122 profitability, continue to target a RoTE >10% in 2022 H122 metrics Group targets over the medium term Returns Returns Cost efficiency Group RoTE 10.1% Group RoTE >10% Cost efficiency Continue to target Cost: income ratio <60% a RoTE >10% in 2022 Cost: income ratio 69% Capital adequacy CE
Slide 12: Anna Cross, Barclays Group Finance Director
Anna Cross Barclays Group Finance Director
Slide 13: H122 Group highlights
H122 Group highlights • Income up 17% with broad-based and steady growth across all operating businesses Income Costs − Income excluding benefit from hedging arrangements relating to Over-issuance of Securities up 10%1 £13.2bn £9.1bn • Costs up £1.8bn or 25% primarily driven by higher L&C charges H1
Slide 14: Overview of financial impacts from Over-issuance of Securities
Overview of financial impacts from Over-issuance of Securities ` £m FY21 Q122 Q222 H122 • Post-tax net impact of £581m in Income from hedging arrangements - - 758 758 H122 of which £341m in Q222 L&C charge for estimated rescission losses1 (220) (320) (984) (1,304) • Total L&C charges relating to Ove
Slide 15: Q222 Group highlights
Q222 Group highlights • Income up 24% driven by strong performances across all operating businesses Income Costs − Income excluding benefit from hedging arrangements up 10% YoY2 £6.7bn £5.0bn • Costs up £1.3bn or 34% mainly driven by higher L&C charges of £1,334m, of which £1,149m relates to the Q22
Slide 16: Broad-based drivers of income momentum
Broad-based drivers of income momentum Balance sheet growth Transactional activity recovery +13% +14% +14% 568.7 128.7 145.4 395.8 500.9 348.5 Loans and advances (£bn) Deposits (£bn) H121 H122 H121 H122 Merchant acquiring payments processed (£bn) Sustained CIB performance Rates tailwind 8.0 +13bps 0
Slide 17: Income: 10% growth YoY
Income: 10%1 growth YoY Q222 Group income up 10%1 YoY (£m) • Global Markets +31%1 6,708 6,496 – FICC +71% 758 – Equities -16%, excluding benefit from 5,415 5,465 +10%1 YoY hedging arrangements of £758m 5,160 BI: Corporate & • Investment Banking fees -37% Investment – Advisory +8%, DCM -34% and ECM -
Slide 18: H122 delivered positive operating cost:income jaws
H122 delivered positive operating cost : income jaws1, 2 H122 vs. H121 Cost: income ratio bridge Delivering positive jaws1, 2 7.6% -2pp 4.4% 2.3% H222 cost drivers 0.5% 2.1% 2.3% Other costs Inflation include: Efficiency savings Inflation 69% Balance sheet growth and activity 64% Net of 62
Slide 19: Costs: H122 operating costs (which exclude L&C) +2% YoY
Costs: H122 operating costs (which exclude L&C) +2% YoY H122 vs. H121 total costs YoY (£m) Key drivers of £0.5bn increase in base costs • Inflation +£0.2bn, mainly due to wage Structural cost actions 9,127 -82% inflation 57 Performance costs Inflation / FX: • FX +£0.1bn (stronger USD is net P&L 1,
Slide 20: FY22 costs expected to be around £16.7bn
FY22 costs expected to be around £16.7bn1 Q222 total costs YoY (£m) FY22 costs outlook (£bn) Increase of £1.3bn largely driven by L&C 5,016 c.1.3 c.0.3 4,111 • FX impact, • Q222 charge for 3,776 1,334 notably stronger Over-issuance of 3,730 3,575 170 523 USD vs. GBP Securities 143 129 92 • Q222 char
Slide 21: Impairment: Q222 charge of £0.2bn, lower unsecured balances, appropriate coverage
Impairment: Q222 charge of £0.2bn, reflecting lower unsecured lending balances and maintained appropriate coverage ratios 30 day arrears rates Credit card balances 1.6% 1.6% 1.6% BUK: UK cards 1.5% 1.4% End Net 15.9 11.2 9.6 9.5 9.2 9.6 Receivables 1.4% (£bn) Dec-19 Dec-20 Jun-21 Dec-21 Mar-22 Jun-2
Slide 22: Retaining management adjustments due to uncertainty
Retaining management adjustments due to uncertainty Macroeconomic variables (MEVs) Balance sheet impairment allowance and management adjustment Q222 Baseline MEVs Q222 Downside 1 MEVs Impairment allowance Write- P&L Other Dec-19 Mar-22 Jun-22 2022 2023 2024 2022 2023 2024 (£m) offs charge incl. FX A
Slide 23: Q222 Barclays UK
Q222 Barclays UK RoTE of 18.4% reflecting higher rates, with Q222 NIM of 2.71% • Income up 6% capturing the benefit from rising Q221 Q321 Q421 Q122 Q222 Income Costs interest rates 1,623 1,638 1,699 1,649 1,724 Total 318 335 386 310 331 £1.7bn £1.1bn • NIM increased 9bps QoQ to 2.71% driven by incom
Slide 24: Q222 Barclays International
Q222 Barclays International RoTE of 8.4% driven by strong income growth, offset by litigation and conduct charges • Income up 34% Income Costs − Diversified income profile across businesses 21% Global £5.1bn £3.9bn and geographies Markets Q221: £3.8bn Q221: £2.3bn Business Investment − Income exclud
Slide 25: Q222 Barclays International: Corporate & Investment Bank
Q222 Barclays International: Corporate & Investment Bank RoTE of 7.1%. Excluding the impact of the Over-issuance of Securities, RoTE would be 11.4%1 • CIB income up 35% Q221 Q222 Q221 Q222 Income Costs − Income excluding benefit from hedging arrangements GBP basis USD basis5 relating to Over-issuanc
Slide 26: Q222 Barclays International: Consumer, Cards & Payments
Q222 Barclays International: Consumer, Cards & Payments RoTE of 17.8% reflecting strong income performance driven by economic recovery and business growth • Income up 29% Q221 Q321 Q421 Q122 Q222 Income Costs − Payments income up 35% driven by higher volumes and margin improvements following the 1,0
Slide 27: Q222 Head Office
Q222 Head Office Q221 Q321 Q421 Q122 Q222 • Q222 income of £(132)m including: − £(42)m loss on sale from the partial Income 23 disposal of our stake in Absa Group (£m) (110) (132) Limited (“Absa”) in April 2022 (27) (49) − Hedge accounting losses (114) (86) (59) − Funding costs on legacy capital Cos
Slide 28: High quality and robust liquidity and funding positions
High quality and robust liquidity and funding positions Liquidity coverage ratio (LCR) Loan: deposit ratio2 Loans (£bn) Deposits (£bn) LDR 82% 162% 161% 168% 159% 71% 70% 70% 156% Minimum requirement: 100% Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 569 481 519 Liquidity 416 396 291 293 291 320 343 339 343 3
Slide 29: Q222 CET1 ratio of 13.6%
Q222 CET1 ratio of 13.6% 42bps generated from profits more than offset by reserve movements and RWA growth QoQ CET1 ratio1 movements 42bps 17bps 27bps 17bps 9bps 6bps c.15bps 19bps 10bps due to net losses and 7bps due to incremental 13.6% hedges 13.5% 13.8% 13.8% 13.5% 13.6% 13.6% [x.x]% Mar-22 Attr
Slide 30: 13-14% CET1 ratio target provides headroom above MDA hurdle
13-14% CET1 ratio target continues to provide appropriate headroom above evolving MDA hurdle Illustrative evolution of minimum CET1 requirements and buffers • CET1 ratio target of 13-14%, with an appropriate headroom 13-14% CET1 ratio target over the MDA hurdle, which is currently 10.9%1 • UK counte
Slide 31: Outlook
Outlook Returns • Barclays continues to target a RoTE of >10% in 2022 • Barclays’ diversified income streams position the Group well for the current economic and Income market environment and rising interest rates • Given £1.3bn of litigation and conduct charges in Q222 and the appreciation of avera
Slide 32: Appendix
Appendix
Slide 33: Well-positioned to deliver sustainable double digit returns
Barclays is well-positioned to deliver sustainable double digit returns 1 2.2% 2 £(1.0)bn 1.0% Interest rates Impairment Cost dynamics £(0.5)bn NII uplift from higher Increased credit Investment spend rates impairment, but below Post-tax modelled Inflationary pressures 1 pre-COVID-19 l
Slide 34: Mortgage growth continues, well positioned for rising rates
Mortgage growth continues, well positioned for rising rates Indexed card spending data1 Mortgages UK debit and UK credit cards US credit cards credit cards 159.1 159.6 148 BUK: Mortgage 148.3 155.2 158.1 143.3 150 balances (£bn) 123 125 Dec-19 Dec-20 Jun-21 Dec-21 Mar-22 Jun-22 100 75 94 • Strong mo
Slide 35: Structural hedge
Structural hedge Structural hedge programme update Dec-19 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Structural hedge dynamics FY21 H122 Hedge 1,415 879 Total hedge income (£m) notional 224 228 238 256 (£bn) 171 188 192 198 Average hedge balances (£bn) 204 237 Yield on hedge (%) 0.69 0.74 3.0
Slide 36: Interest rate sensitivity
Interest rate sensitivity Illustrative sensitivity of Group NII to a parallel shift in interest rate curves1 • This analysis assumes an instantaneous 25bps parallel shift in interest NII impact of parallel shifts rate curves and a 25bps shock to the underlying bank rate Year 1 Year 2 Year 3 in inter
Slide 37: Jun-22 coverage ratios remain strong
Jun-22 coverage ratios remain strong Credit cards, unsecured loans and other retail lending Wholesale loans Gross exposure (£bn) Impairment allowance (£bn) Coverage ratio Gross exposure (£bn) Impairment allowance (£bn) Coverage ratio 60.2 8.1% 8.8% 7.3% 177.0 3.4 52.6 4.9 0.8% 0.8% 0.7% 151.7 2.7 45
Slide 38: Jun-22 UK and US cards coverage ratios remain robust
Jun-22 UK and US cards coverage ratios remain robust UK cards US cards Gross exposure (£bn) Impairment allowance (£bn) Coverage ratio Gross exposure (£bn) Impairment allowance (£bn) Coverage ratio 16.5 0.8 1.7 10.5% 12.8% 10.9% 23.3 22.5 0.9 9.1% 10.6% 8.4% 1.5 1.3 65.1% 67.0% 67.5% 18.0 2.1 2.1 5.1
Slide 39: Wholesale exposures are diversified and appropriately covered
Wholesale exposures are diversified and appropriately covered, including in selected sectors Wholesale and selected sector exposure Wholesale Wholesale lending excl. Debt Securities Selected sectors (£bn/coverage ratio %) 52.6 (£bn) excl. Debt Hospitality & Leisure 38.9 (1.6%) Securities 130.9 130.9
Slide 40: Retail portfolios in the UK and US appropriately positioned
Retail portfolios in the UK and US continue to be appropriately positioned • Strong balance growth supported by elevated market 158.2 159.7 demand UK 148.3 mortgage 143.3 UK • Arrears levels at multi-year lows 69.5% 68.6% balance 67.9% 67.5% mortgages • 50.8% average balance weighted LTV of mortgage
Slide 41: QoQ and YTD TNAV per share movements
QoQ and YTD TNAV per share movements QoQ TNAV movements (pence per share) 6 2 4 3 8 8 4 294 297 Mar-22 Earnings Share buyback Dividends paid Pension Currency Cash flow FVOCI Jun-22 remeasurement translation hedge reserve reserve reserve • TNAV per share increased 3p to 297p due to: • Partially offse
Slide 42: H122 CET1 ratio of 13.6%
H122 CET1 ratio of 13.6% 94bps generated from profits more than offset by regulatory changes and RWA growth QoQ YTD CET1 CET1 ratio ratio11 movements movements 94bps c.80bps 23bps 44bps 37bps 18bps 31bps 8bps 15.1% 14.5% 14.9% 14.1% 13.9% 13.6% 13.6% 13.6% Dec-21 Attributable Regulatory Fair Value R
Slide 43: RWA increase driven by book growth and FX
RWA increase driven by book growth and FX QoQ RWA movements (£bn) (1.4) 9.0 (0.1) 6.6 1.7 [x.x] 344.5 328.8 337.0 337.0 328.8 330.5 2 Mar-22 Hedges from Over- Book size Acquisition FX Other Jun-22 issuance of Securities and disposals 1 YTD RWA movements (£bn) (2.8) 12.3 (0.2) 10.0 4.5 344.5 6.6 335.
Slide 44: IFRS 9 transitional relief of c.20bps as at Jun-22
IFRS 9 transitional relief of c.20bps as at Jun-22 Constructive regulatory action in Q220 gave greater relief for Stage 1 and 2 impairments • 75% transitional relief for modified impairment post Dec-19 applied in 2022 • Transitional relief schedule for static component per original schedule • Total
Slide 45: Pension deficit reduction contributions
Pension deficit reduction contributions Potential acceleration of CET1 ratio headwinds from pension reduction contributions • During 2019 and 2020, the UK Retirement Fund (UKRF), the Group’s main pension scheme, subscribed for non-transferable listed senior fixed rate notes for £1.25bn. As a result
Slide 46: Group leverage position appropriately managed
Group leverage position appropriately managed Illustrative evolution of minimum leverage requirements and buffers under the UK regime • Q222 headroom to minimum leverage requirement of 130bps • The RWA-based CET1 ratio is expected to remain our primary UK Spot: 5.1% regulatory constraint through the
Slide 47: Financial results tables
Financial results tables
Slide 48: H122/Q222 notable items
H122/Q222 notable items Six months ended (£m) Jun-22 Jun-21 Income Income from hedging arrangements for Over-issuance of Securities 758 - CIB One-off gain from the sale and leaseback of UK data centres 86 - Head Office Costs Structural cost actions – real estate review - (266) Head Office Other stru
Slide 49: H122/Q222 Group impacts from Over-issuance of Securities
H122/Q222 Group impacts from Over-issuance of Securities Six months ended (£m) Jun-22 (Statutory) Adjustments Jun-22 (Adjusted) Income 13,204 (758) 12,446 Costs (9,127) 1,469 (7,658) Profit before tax 3,733 711 4,444 Attributable profit 2,475 581 3,056 RoTE 10.1% 2.4% 12.5% Cost: income ratio 69% (7
Slide 50: H121/Q221 Group impacts from Over-issuance of Securities
H121/Q221 Group impacts from Over-issuance of Securities Six months ended (£m) Jun-21 (Statutory) Adjustments Jun-21 (Adjusted) Income 11,315 - 11,315 Costs (7,308) 77 (7,231) Profit before tax 4,902 77 4,979 Attributable profit 3,752 60 3,812 RoTE 16.1% 0.3% 16.4% Cost: income ratio 65% (1)% 64% Th
Slide 51: H122/Q222 BI and CIB impacts from Over-issuance of Securities
H122/Q222 BI and CIB impacts from Over-issuance of Securities Barclays International (BI) Corporate and Investment Bank (CIB) Jun-22 Jun-22 Jun-22 Jun-22 Six months ended (£m) Adjustments Six months ended (£m) Adjustments (Statutory) (Adjusted) (Statutory) (Adjusted) Income 9,940 (758) 9,182 Income
Slide 52: H121/Q221 BI and CIB impacts from Over-issuance of Securities
H121/Q221 BI and CIB impacts from Over-issuance of Securities Barclays International (BI) Corporate and Investment Bank (CIB) Jun-21 Jun-21 Jun-21 Jun-21 Six months ended (£m) Adjustments Six months ended (£m) Adjustments (Statutory) (Adjusted) (Statutory) (Adjusted) Income 8,218 - 8,218 Income 6,57
Slide 53: H122/Q222 Group
H122/Q222 Group Six months ended (£m) Jun-22 Jun-21 % change Three months ended (£m) Jun-22 Jun-21 % change Income 13,204 11,315 +17% Income 6,708 5,415 +24% Impairment (charges) / releases (341) 742 Impairment (charges) / releases (200) 797 – Operating costs (7,270) (7,132) -2% – Operating costs (3
Slide 54: H122/Q222 Barclays UK
H122/Q222 Barclays UK Six months ended (£m) Jun-22 Jun-21 % change Three months ended (£m) Jun-22 Jun-21 % change – Personal Banking 2,099 1,910 +10% – Personal Banking 1,077 987 +9% – Barclaycard Consumer UK 541 605 -11% – Barclaycard Consumer UK 265 290 -8% – Business Banking 733 684 +7% – Busines
Slide 55: H122/Q222 Barclays International
H122/Q222 Barclays International Six months ended (£m) Jun-22 Jun-21 % change Three months ended (£m) Jun-22 Jun-21 % change Income 9,940 8,218 +21% Income 5,116 3,819 +34% Impairment (charges) / releases (310) 293 Impairment (charges) / releases (209) 271 – Operating costs (5,042) (4,606) -9% – Ope
Slide 56: H122/Q222 Barclays International: Corporate & Investment Bank
H122/Q222 Barclays International: Corporate & Investment Bank Six months ended (£m) Jun-22 Jun-21 % change Three months ended (£m) Jun-22 Jun-21 % change – FICC 3,173 2,099 +51% – FICC 1,529 895 +71% – Equities 2,463 1,709 +44% – Equities 1,411 777 +82% Global Markets 5,636 3,808 +48% Global Markets
Slide 57: H122/Q222 Barclays International: Consumer, Cards & Payments
H122/Q222 Barclays International: Consumer, Cards & Payments Six months ended (£m) Jun-22 Jun-21 % change Three months ended (£m) Jun-22 Jun-21 % change – International Cards and Consumer – International Cards and Consumer 1,229 1,050 +17% 691 517 +34% Bank Bank – Private Bank 459 393 +17% – Private
Slide 58: H122/Q222 Head Office
H122/Q222 Head Office Six months ended (£m) Jun-22 Jun-21 % change Three months ended (£m) Jun-22 Jun-21 % change Income (109) (102) -7% Income (132) (27) Impairment releases 17 6 +183% Impairment releases 9 6 +50% – Operating costs (145) (412) +65% – Operating costs (60) (341) +82% – Litigation and
Slide 59: Exchange rates and share count information
Exchange rates and share count information YTD % YoY % Exchange rates Jun-22 Dec-21 Jun-21 change change Period end - USD/GBP 1.22 1.35 1.38 -10% -12% 6 month average – USD/GBP 1.30 1.36 1.39 -4% -6% 3 month average - USD/GBP 1.26 1.35 1.40 -7% -10% Period end - EUR/GBP 1.16 1.19 1.17 -3% -1% 6 mont
Slide 60: Disclaimer
Disclaimer Important 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 bu