Barclays Plc · LSE:BARC
Barclays — Debt Investor Presentation (April 2017)
52 slides from Barclays's debt investor presentation, Apr 28, 2017
Slide 1: Barclays PLC Fixed Income Investor Presentation
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Barclays PLC Fixed Income Investor Presentation1 Q1 2017 Results Announcement 28 April 2017 | Barclays Q1 2017 Fixed Income Investor Presentation
Slide 2: Strategy & Performance
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & & PERFORMANCE PERFORMANCE & LEVERAGE & MREL REFORM Strategy & Performance 1 (From prior page) This presentation must be read and construed with all applicable law, rules and regulations applicable to Barclays and
Slide 3: Transatlantic consumer, corporate and investment bank
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & & PERFORMANCE PERFORMANCE & LEVERAGE & MREL REFORM Transatlantic consumer, corporate and investment bank Benefits of diversification by customer, product and geography showing through Group returns converging with
Slide 4: Our strategy is on track with further good progress in Q117
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & & PERFORMANCE PERFORMANCE & LEVERAGE & MREL REFORM Our strategy is on track with further good progress in Q117 Core RoTE 11.0%, with Barclays UK RoTE 21.6% Robust Core returns and Barclays International RoTE 12.5%
Slide 5: Group RoTE converging towards Core
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & & PERFORMANCE PERFORMANCE & LEVERAGE & MREL REFORM Group RoTE converging towards Core Three months ended (£m) Mar-17 Mar-16 % change Q117 performance metrics Income 5,823 5,041 16% • Group results reflected strong
Slide 6: Core RoTE improved 110bps to 11.0%
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & & PERFORMANCE PERFORMANCE & LEVERAGE & MREL REFORM Core RoTE improved 110bps to 11.0% Business performance Q117 performance metrics Three months ended (£m) Mar-17 Mar-16 % change • Core RoTE increased 110bps to 11
Slide 7: Generating a consistently strong Core RoTE on an increasing tangible equity base
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & & PERFORMANCE PERFORMANCE & LEVERAGE & MREL REFORM Generating a consistently strong Core RoTE on an increasing tangible equity base Core return on average allocated tangible equity1 Return on average allocated tan
Slide 8: Non-Core: On track for closure at 30 June 2017
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & & PERFORMANCE PERFORMANCE & LEVERAGE & MREL REFORM Non-Core: On track for closure at 30 June 2017 Business performance Q117 vs. Q416 performance metrics Three months ended (£m) Mar-17 Dec-16 Mar-16 • Loss before t
Slide 9: Non-Core: Rundown guidance
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & & PERFORMANCE PERFORMANCE & LEVERAGE & MREL REFORM Non-Core: Rundown guidance RWAs rundown (£bn) Loss before tax (£bn)2 110 2.8 44 10 32 c.1.0 27 c.25 17 7 6 12 10 8 8 7 9 5 4 1 Dec-13 Sep-16 Dec-16 Mar-17 Jun-17
Slide 10: Barclays Africa selldown on track
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & & PERFORMANCE PERFORMANCE & LEVERAGE & MREL REFORM Barclays Africa selldown on track Confident of executing BAGL selldown and achieving regulatory deconsolidation c.75bps in line with previously guided timeline of
Slide 11: Barclays Africa selldown on track
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & & PERFORMANCE PERFORMANCE & LEVERAGE & MREL REFORM Barclays Africa selldown on track Impairment CET1 ratio guidance • Per IFRS5, impairment is assessed based on the difference between carrying value (CV) of a • Es
Slide 12: Capital & Leverage
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Capital & Leverage | Barclays Q1 2017 Fixed Income Investor Presentation
Slide 13: Strong CET1 and leverage ratio progression
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Strong CET1 and leverage ratio progression Fully Loaded CET1 ratio • CET1 ratio increased to 12.5% at Mar-17, representing c.340bps – 33bps of capital ratio accretion from prof
Slide 14: Managing evolving future minimum CET1 levels
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Managing evolving future minimum CET1 levels Illustrative evolution of minimum CET1 requirements and buffers Minimum CRD IV CET1 requirement CRDIV Mandatory distribution restri
Slide 15: Evolving CRD IV capital structure transitioning to HoldCo over time
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Evolving CRD IV capital structure transitioning to HoldCo over time Illustrative evolution of CRD IV capital structure Well managed and balanced total capital structure • Trans
Slide 16: Managing capital position above mandatory distribution restrictions and stress test hurdles
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Managing capital position above mandatory distribution restrictions and stress test hurdles Barclays’ expected MDA thresholds and systemic reference points for 2017 BoE stress
Slide 17: ADI position supports strong distribution capacity
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM ADI position supports strong distribution capacity Distribution capacity as at 31 December 2016 Distributable items ADI BPLC Dividend payments BPLC AT1 coupons • Barclays PLC h
Slide 18: Liquidity, Funding and MREL
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Liquidity, Funding and MREL | Barclays Q1 2017 Fixed Income Investor Presentation
Slide 19: High level of liquidity
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM High level of liquidity LCR progression since 2013 LCR continues to remain in prudential surplus • Liquidity pool increased £20bn in the quarter to £185bn and the LCR increased
Slide 20: Manageable MREL requirements through proactive issuance
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Manageable MREL requirements through proactive issuance HoldCo MREL position and requirements including requisite buffers Well advanced on 20171 HoldCo issuance plan Incrementa
Slide 21: Proactive transition to HoldCo capital and funding model
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Proactive transition to HoldCo capital and funding model HoldCo issuance by year1,2 Total: 3.3% (£11.9bn) Total: 1.6% (£6.3bn) • The Group has continued to make strong progress
Slide 22: Continued progress on transition to HoldCo capital and funding model
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Continued progress on transition to HoldCo capital and funding model PRA transitional regulatory capital Outstanding term vanilla senior unsecured debt (£bn) Mar-17 Dec-16 (£bn
Slide 23: Structural Reform
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Structural Reform | Barclays Q1 2017 Fixed Income Investor Presentation
Slide 24: Structural reform plan is on track achieving critical milestones as planned
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Structural reform plan is on track achieving critical milestones as planned H2 2017 Group Service Company setup H1 2018 Legal entity separation Milestones completed Milestones
Slide 25: Simplifying our business divisions for structural reform
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Simplifying our business divisions for structural reform Barclays Barclays PLC PLC1 Barclays UK Barclays International Non-Core Africa Banking Aim to achieve UK consumer and bu
Slide 26: Progress on Group legal structure
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Progress on Group legal structure Barclays PLC Barclays UK Barclays International constructs Divisional UK consumer and business bank Diversified transatlantic wholesale differ
Slide 27: Anticipated funding sources of future UK ring-fenced bank and Barclays Bank PLC
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Anticipated funding sources of future UK ring-fenced bank and Barclays Bank PLC (and subsidiaries) Barclays PLC Barclays UK Barclays International constructs Divisional UK cons
Slide 28: Asset Quality
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Asset Quality | Barclays Q1 2017 Fixed Income Investor Presentation
Slide 29: Underlying stable trends reflect prudent approach to credit risk management
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Underlying stable trends reflect prudent approach to credit risk management Retail CRL % of Gross L&A Prudent risk management Dec-16 Mar-17 CRL coverage • Impairment charge inc
Slide 30: Stable UK Cards portfolio with flat underlying impairment trends
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Stable UK Cards portfolio with flat underlying impairment trends UK Cards portfolio Q117 UK Cards balance mix • UK macro environment remains benign, with record low unemploymen
Slide 31: Actively managed US Cards growth, including shifts in portfolio mix
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Actively managed US Cards growth, including shifts in portfolio mix US Cards delinquency rates US Cards 30 day delinquency 90 day delinquency • The US Cards portfolio is weight
Slide 32: Credit Ratings
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Credit Ratings | Barclays Q1 2017 Fixed Income Investor Presentation
Slide 33: Ratings are a key strategic priority
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Ratings are a key strategic priority Senior Long Term/ Rating priorities Fitch Standard & Poor’s Moody's Short Term ratings • Barclays is committed to maintaining solid investm
Slide 34: Barclays rating composition for senior debt
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Barclays rating composition for senior debt Standard & Poor’s Moody’s Fitch Stand-Alone Credit Profile bbb+ Baseline Credit Assessment baa2 Viability Ratings a Anchor bbb+ Macr
Slide 35: Barclays rating composition for subordinated debt
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Barclays rating composition for subordinated debt Standard & Poor’s Moody’s Fitch Baseline Stand-alone Stand-Alone Viability bbb+ Credit baa2 a rating Credit Profile Assessment
Slide 36: Appendix
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Appendix | Barclays Q1 2017 Fixed Income Investor Presentation
Slide 37: Core income and margins – Q117
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Core income and margins – Q117 Income (£m) – Three months ended Mar-17 Mar-16 % change • Core income increased 12% driven by a 26% increase in non-interest income • Barclays UK
Slide 38: Barclays UK and Barclays International analysis
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Barclays UK and Barclays International analysis Barclays UK – Q117 Barclays International – Q117 Split of income (£m) Split of impairment (£m) Split of income (£m)1 5 399 50 1,
Slide 39: Barclays UK: Robust RoTE of 21.6%
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Barclays UK: Robust RoTE of 21.6% Business performance Q117 performance metrics Three months ended (£m) Mar-17 Mar-16 % change • Increased income and positive jaws delivered an
Slide 40: Barclays UK: Improved NIM and growth in deposits
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Barclays UK: Improved NIM and growth in deposits Income (£m) – Three months ended Mar-17 Mar-16 % change Q117 performance metrics Net interest income (NII) 1,511 1,501 1% • NIM
Slide 41: Barclays UK: Realising the significant opportunity with our 24 million customers
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Barclays UK: Realising the significant opportunity with our 24 million customers by leveraging digital and data Significant growth in digital banking – year-on-year Barclays Le
Slide 42: Barclays International: 12.5% RoTE with profit growth in CIB and Consumer, Cards & Payments
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Barclays International: 12.5% RoTE with profit growth in CIB and Consumer, Cards & Payments Business performance Q117 performance metrics Three months ended (£m) Mar-17 Mar-16
Slide 43: Barclays International: Corporate & Investment Bank
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Barclays International: Corporate & Investment Bank Strong banking performance drove 13% PBT growth Business performance Q117 performance metrics Three months ended (£m) Mar-17
Slide 44: Barclays International: Consumer, Cards & Payments
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Barclays International: Consumer, Cards & Payments Continued momentum and strong business growth Business performance Q117 performance metrics Three months ended (£m) Mar-17 Ma
Slide 45: Head Office and Africa Banking summary financials
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Head Office and Africa Banking summary financials Business performance Africa Banking – Three months ended (£m) Mar-17 Mar-16 % change Head Office – Three months ended (£m) Mar
Slide 46: Common Equity Tier 1 ratio progression
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Common Equity Tier 1 ratio progression CET1 ratio progression – Dec-16 to Mar-17 0.15% 0.33% 0.13% 0.07% 0.12% 0.09% 0.06% 0.06% 12.5% 12.4% Dec-16 Profit for RWAs Pref share S
Slide 47: UK approach to resolution
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM UK approach to resolution Illustrative UK resolution loss allocation waterfall assuming multiple OpCos1 OpCo waterfall Intercompany investments HoldCo waterfall • BRRD PONV wri
Slide 48: Wholesale funding composition as at 31 December 2016
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Wholesale funding composition as at 31 December 20161 >1 month >3 months >6 months >1 year >2 year >3 year >4 year Total As at 31 December 2016 (£bn) ≤1 month but ≤3 but ≤6 but
Slide 49: Index
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Index Version 1 Strategy & Performance 2 Structural Reform 23 • Transatlantic consumer, corporate and investment bank 3 • Structural reform plan is on track achieving critical
Slide 50: Index (continued)
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Index (continued) Appendix 36 • Core income and margins – Q117 37 • Barclays UK and Barclays International analysis 38 • Barclays UK: Robust RoTE of 21.6% 36 • Barclays UK: Imp
Slide 51: Contact – Debt Investor Relations Team
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Contact – Debt Investor Relations Team Lisa Bartrip James Cranstoun Dan Colvin +44 (0)20 7773 0708 +44 (0)20 7773 1630 +44 (0)20 7116 6533 lisa.bartrip@barclays.com james.crans
Slide 52: Disclaimer
STRATEGY CAPITAL LIQUIDITY, FUNDING STRUCTURAL ASSET QUALITY CREDIT RATINGS APPENDIX & PERFORMANCE & LEVERAGE & MREL REFORM Disclaimer Important Notice The information, statements and opinions contained in this presentation do not constitute a public offer under any applicable legislation, an offer