Slide 1: Barclays PLC Q3 2020 Results
Barclays PLC Q3 2020 Results 23 October 2020 | Barclays Q3 2020 Results | 23 October 2020
Slide 2: Jes Staley, Barclays Group Chief Executive
Jes Staley Barclays Group Chief Executive | Barclays Q3 2020 Results | 23 October 2020
Slide 3: Diversification is a key strength of Barclays
Diversification is a key strength of Barclays 57% Continued resilient performance, despite the severe 12% Wholesale 22% global macroeconomic downturn Banking fees Q320 YTD Markets Strong CIB performance helping to offset recent Group income income headwinds in the consumer businesses by customer1 Co
Slide 4: Resilient performance in Q320 reflecting the Group's diversified business model
Resilient performance in Q320 reflecting the Group’s diversified business model Q320 Financial highlights Resilient operating performance delivered Group PBT of £1.1bn £5.2bn Income £5.2bn of income down 6% YoY, but CIB income up 11%, Cost: driven by a 29% increase in Markets income 67% income ratio
Slide 5: All businesses returned to profitability in Q320
All businesses returned to profitability in Q320, with the benefit of the wholesale and consumer mix evident RoTE1 • Group RoTE of 5.1% (5.5% excl. L&C) recovered from the Q220 low point of 0.7% Q119 Q219 Q319 Q419 Q120 Q220 Q320 (0.8% excl. L&C) Group2 9.6% 9.3% 10.2% 6.9% 5.1% 5.5% − Barclays UK (
Slide 6: Consumer business activity recovered in Q320 from the April low point
Consumer business activity recovered in Q320 from the April low point Cards spending1 Merchant acquiring turnover2 Mortgages Cards spending in the UK and US Merchant acquiring turnover values Mortgage application values recovered as continued to recover in Q320 from the continued to improve in Q320
Slide 7: Barclays has grown share in the Markets business since 2017
Barclays has grown share in the Markets business since 2017, with a material outperformance versus peers in H120 Barclays Average US banks Average European banks Barclays share1 US banks European banks +5% +5% +6% FY17 FY18 FY19 H120 Total Markets +16% +2% +19% Total Markets 3.6% 4.2% 4.3% 5.1% shar
Slide 8: Remained open for business during the COVID-19 pandemic
Remained open for business during the COVID-19 pandemic helping support the economy Supporting Supporting Supporting our communities customers businesses and colleagues Supported customers Delivered UK Government Used our reach to support communities in financial need with support measures for small
Slide 9: Tushar Morzaria, Barclays Group Finance Director
Tushar Morzaria Barclays Group Finance Director | Barclays Q3 2020 Results | 23 October 2020
Slide 10: Q320 YTD Group highlights
Q320 YTD Group highlights Group RoTE of 3.8% with 4% positive cost: income jaws1 Financial performance1 • Income increased 3%, reflecting a 24% increase in CIB income, driven by a standout performance in `` Markets, more than offsetting income headwinds in BUK and CC&P Income £16.8bn Q319 YTD: £16.3
Slide 11: Q320 Group highlights
Q320 Group highlights Barclays continued to be profitable in the third quarter supported by a strong balance sheet Financial performance1 • Income decreased 6% as continued strong performance in CIB, particularly in Markets, was offset by `` income headwinds in BUK and CC&P Income £5.2bn Q319: £5.5b
Slide 12: Gradual QoQ income improvement in consumer businesses and YoY growth in CIB
Gradual QoQ income improvement in consumer businesses and YoY growth in CIB £6,283m £5,541m £5,301m £5,338m £5,204m Income +11% YoY £3,617m • Markets income +29%, driven by +23% in FICC and +40% in Equities £2,617m £2,314m Corporate and • Banking fees -11% as strong performance in debt and equity ca
Slide 13: Consumer businesses income still facing headwinds from the low rate environment
Consumer businesses income still facing headwinds from the low rate environment Jan Feb Mar Apr May Jun Jul Aug Sep • Balances in UK and US cards began to stabilise in Q320, driven in part by recovery in spend volumes from the low point in (8%) (9%) (10%) (10%) (14%) (18%) (21%) (19%) (19%) April Lo
Slide 14: FY20 costs expected to be broadly flat versus FY19
FY20 costs expected to be broadly flat versus FY191, with the Group evaluating actions to structurally reduce the cost base £3,534m £3,391m • Continued focus on cost discipline, but short-term Bank Levy £3,293m £226m £3,253m £3,310m headwinds remain from spend on COVID-19 initiatives − Q320 costs in
Slide 15: Q320 impairment charge reduced significantly from H120 quarterly run rate
Q320 impairment charge reduced significantly from H120 quarterly run rate £2,115m Group loan 2000 loss rate (bps) Although reduced from the Q220 level, 223 Corporate and impairment increased £156m YoY primarily £1,623m Investment Bank reflecting several single name wholesale loan £724m charges 179 1
Slide 16: Q320 impairment was materially lower than the impairment build in Q120 and Q220
Q320 impairment was materially lower than the impairment build in Q120 and Q220 Components of impairment charge £2,115m Q319-Q220 2000 £370m £1,623m Single name wholesale loan charges Impact of updated COVID-19 scenarios and weights, £424m including benefit of support schemes Other impairment £1,340
Slide 17: Q320 impairment coverage ratios
Q320 impairment coverage ratios Increased impairment coverage with the stage 2 unsecured coverage ratio of 23.8% Wholesale loans Credit cards, unsecured loans and other retail lending Gross exposure (£m) Impairment allowance (£m) Coverage ratio Gross exposure (£m) Impairment allowance (£m) Coverage
Slide 18: Q320 impairment coverage ratios for credit cards, unsecured loans and other retail lending
Q320 impairment coverage ratios for credit cards, unsecured loans and other retail lending UK and US cards coverage ratios of 16.4% and 14.2% respectively, with stage 2 coverage above 28% UK cards US cards Gross exposure (£m) Impairment allowance (£m) Coverage ratio Gross exposure (£m) Impairment al
Slide 19: Payment holidays granted have reduced materially and balances outstanding are at low levels
Payment holidays granted have reduced materially and balances outstanding are at low levels UK mortgages1 UK cards1 Balances Balances 17,960 20,348 14,919 4,359 644 810 663 120 outstanding (£m) outstanding (£m) Gross on Payment holidays Gross on Payment holidays balance sheet £4.4bn granted (£m) 9,6
Slide 20: Wholesale exposures are diversified and well covered
Wholesale exposures are diversified and well covered, especially in selected vulnerable sectors Wholesale exposure as at Sep-20 (1.5% coverage ratio) • Well diversified portfolio across sector and geography Coverage ratio • Majority of exposure (>65%) is to clients internally rated Selected £18.6bn
Slide 21: Q320 Barclays UK
Q320 Barclays UK RoTE of 5.2% reflects the impact of COVID-19 on the business1 Financial performance1 • Income decreased 16% in a challenging operating Q319 Q419 Q120 Q220 Q320 environment Income − Impact of lower UK rates, lower unsecured lending 1,846 1,959 1,704 1,467 1,550 balances and residual
Slide 22: Q320 Barclays International
Q320 Barclays International RoTE of 10.5% with stable income and impairment, and lower costs1 Financial performance1 • Income was stable at £3.8bn, reflecting strong Income balanced across performance in CIB, offset by lower income in businesses and geographies Income CC&P £3.8bn Q319: £3.8bn − Inco
Slide 23: Q320 Barclays International: Corporate & Investment Bank
Q320 Barclays International: Corporate & Investment Bank RoTE of 9.5% driven by strong income performance and positive jaws1 Financial performance1 • Overall CIB income increased 11% to £2.9bn Income – Markets income increased 29%, resulting in the best Income ever Q3 on a comparable basis3 GBP basi
Slide 24: Q320 Barclays International: Consumer, Cards & Payments
Q320 Barclays International: Consumer, Cards & Payments RoTE of 16.5%, with lower income offset by reduction in costs and impairment1 Q319 Q419 Q120 Q220 Q320 Financial performance1 • Income decreased 23% YoY due to lower US co-branded card balances and reduced 1,133 1,138 1,027 (23)% Income payment
Slide 25: Head Office
Head Office Q319 Q220 Q320 • Q320 negative income of £127m included: – c.£30m residual negative income impact (55) from legacy capital instruments Income (127) (139) – Certain negative treasury items (£m) – Hedge accounting losses • Q320 costs increased to £69m YoY1, including COVID-19 Community Aid
Slide 26: Q320 CET1 ratio increased to 14.6%
Q320 CET1 ratio increased to 14.6% Reflecting resilient profits and reduced RWAs CET1 ratio1 of 14.6% reflecting: • 40bps of profit after tax, excluding impairment charges 10bps 14bps 2bps 24bps • 2bps increase in IFRS 9 40bps transitional relief • 24bps of RWA movements excluding IFRS 9 impact and
Slide 27: RWAs decreased over Q320
RWAs decreased over Q320 RWAs reduced as limited procyclical RWA inflation was more than offset by lower loan demand, regulatory tailwinds and FX Total RWAs (£bn) • Anticipated procyclicality impacts only partially materialised in Jun-20 319.0 the quarter, with a £3.3bn increase in credit risk RWAs
Slide 28: Continue to manage CET1 ratio with appropriate headroom above MDA
Continue to manage CET1 ratio1 with appropriate headroom above MDA through the stress Illustrative evolution of minimum CET1 requirements and buffers • Barclays intends to manage its capital position to Jun-20: Sep-20: enable it to support customers whilst maintaining MDA 14.2% 14.6% appropriate hea
Slide 29: High quality and conservatively positioned liquidity and funding position
High quality and conservatively positioned liquidity and funding position Highly liquid, comfortably exceeding minimum requirements Conservative loan: deposit ratio2 L&A3 (£bn) Deposits3 (£bn) LDR Liquidity Coverage Ratio (LCR) 83% 82% 76% 70% 186% 181% 169% 160% 154% Minimum requirement: 100% 467 4
Slide 30: Outlook: Diversification delivering resilient performance
Outlook: Diversification delivering resilient performance Certain headwinds to income in Barclays UK are expected to persist in 2021 including the low interest rate environment The drivers of CC&P income are showing signs of recovery but the outlook remains uncertain After a strong Q320 YTD CIB perf
Slide 31: Appendix
Appendix | Barclays Q3 2020 Results | 23 October 2020
Slide 32: Support for customers in the UK
Support for customers in the UK1 • Mortgage payment holidays granted for c.123,000 accounts Mortgages • 12 month interest only payments granted Personal loans and • Payment holidays granted for c.111,000 personal loan and point of sale finance point of sale financing accounts • Provided an interest
Slide 33: Support for businesses
Support for businesses1 • £14bn three year lending fund for UK SMEs Existing lending • Over £50bn of lending limits available to UK clients and withholding fees • Free banking and overdraft fees waived for 650,000 UK SMEs • 12-month capital repayment holidays for most loans over £25,000 • c.296,000
Slide 34: Support for our communities and colleagues
Support for our communities and colleagues1 • £100m committed to the COVID-19 Community Aid Package Supporting (for charity partners primarily in the UK, US, and India) communities • Extended LifeSkills and Digital Eagles programmes to support home schooling and fraud prevention • 65,000 of 88,000 c
Slide 35: Our ambition is to be a net zero bank by 2050
Our ambition is to be a net zero bank by 2050 Playing a leading role in tackling climate change 1 Our ambition is to be a net zero bank by 2050 • Includes net zero direct and indirect emissions, and for the business activities we finance around the world, across all sectors, by 2050 2 Our commitment
Slide 36: Interest rate sensitivity
Interest rate sensitivity Illustrative sensitivity of Group NII to a 10bps and 25bps parallel downward shifts in interest rates1 Change in NII based on illustrative scenario (£m) Commentary/assumptions • This analysis is based on the modelled performance of the consumer and corporate banking book, a
Slide 37: Key macroeconomic variable assumption trends
Key macroeconomic variable assumption trends GDP annualised Unemployment rate1 10.0% 14.0% 13% 3.8% 3.3% 12.0% 5.0% 2.3% 3.0% 1.4% 6.2% 10.0% 8% 0.0% 8.0% (4.4%) (5.0%) 6.0% (10.3%) 4.0% (10.0%) 2.0% (15.0%) 0.0% Q120 Q220 Q320 Q420 Q121 Q221 Q321 Q421 Q122 Q222 Q322 Q422 2019 2020 2021 2022 House p
Slide 38: Retail portfolios in the UK and US prudently positioned ahead of the crisis
Retail portfolios in the UK and US prudently positioned ahead of the crisis H119 FY19 H120 £138.3bn £143.3bn £145.2bn • Focused on growing mortgage book within risk appetite UK 67.1% 67.9% 68.4% UK mortgage • c.50% average LTV of mortgage book stock balance secured • Buy-to-Let mortgages represent o
Slide 39: UK cards conservatively positioned since the EU referendum
UK cards conservatively positioned since the EU referendum, having reduced balances and taken other risk actions UK cards balances have decreased whilst arrears rates are stable (£bn)1 • A suite of prudent risk actions were taken following the EU referendum in 16.2 16.2 16.5 16.1 16.2 16.3 16.4 15.2
Slide 40: Loans and advances at amortised cost by selected sectors
Loans and advances at amortised cost by selected sectors Gross exposure (£m) Impairment allowance (£m) As at 30.09.20 Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Air travel 776 418 66 1,260 1 23 24 48 Hospitality and leisure 3,633 3,103 243 6,979 11 113 74 198 Oil and gas 969 2,017 3
Slide 41: Q320 TNAV movement
Q320 TNAV movement TNAV reduced 9p to 275p TNAV (pence per share) • TNAV reduced by 9p to 275p due to: – 5p reduction in the own credit reserve 1 4 5 – 4p reduction in the Currency Translation 4 Reserve (CTR), due to the weakening of USD 2 against GBP of c.4% 2 1 – 5p of other movements • Partially
Slide 42: IFRS 9 transitional relief at c.75bps
IFRS 9 transitional relief at c.75bps Impairment migration to stage 3 would lead to capital impact as it is not eligible for transitional relief Constructive regulatory action in Q220 gave greater relief Prudently positioned CET1 ratio for stage 1 and 2 impairments in the event of stage migration •
Slide 43: Constructive regulatory actions supporting our capital position
Constructive regulatory actions supporting our capital position Many regulatory actions in place for the medium term Expected timeline and beyond FY20 FY21 FY22 FY23 FY24 Q1 Q2 Q3 CET1 requirement • Modification of Pillar 2A requirement1 CET1 capital • IFRS 9 transitional relief on new Covid-19 rela
Slide 44: 2020 pension update
2020 pension update Capital benefit of £250m in Q2 due to UK Retirement Fund (UKRF) Trustee investment in Senior Notes • As at 30 September 2019, the triennial valuation showed a funding deficit of £2.3bn with the difference to the IAS 19 surplus representing a different approach to setting the disc
Slide 45: Managing evolving future Group minimum leverage requirements
Managing evolving future Group minimum leverage requirements Minimum leverage requirements and buffers under the UK regime • Headroom to minimum leverage requirement of 140bps in Q3, while the RWA based CET1 ratio remains Jun-201: Sep-201: our primary regulatory constraint UK Spot: 5.2% UK Spot: 5.2
Slide 46: Barclays is set up to continue serving clients based in the EU
Barclays is set up to continue serving clients based in the EU European Union subsidiary operational with a significant number of clients migrated • Barclays is well positioned to continue providing European footprint to service key markets services in the European Union with minimal disruption ahea
Slide 47: Financial results tables
Financial results tables | Barclays Q3 2020 Results | 23 October 2020
Slide 48: Other items of interest – Q320 vs. prior year
Other items of interest – Q320 vs. prior year Other items of interest – three months ended (£m) Q320 Q319 L&C PPI provision - (1,400) Barclays UK Other L&C across divisions (76) (168) Group Loss on Tradeweb position - (40) Corporate & Investment Bank 48 | Barclays Q3 2020 Results | 23 October 2020
Slide 49: Q320 Group
Q320 Group Three months ended (£m) Sep-20 Sep-19 % change Excluding L&C – three months ended (£m) Sep-20 Sep-19 % change Income 5,204 5,541 (6%) Profit before tax 1,223 1,814 (33%) Impairment (608) (461) (32%) Attributable profit 668 1,233 (46%) – Operating costs (3,391) (3,293) (3%) – Litigation an
Slide 50: Q320 Barclays UK
Q320 Barclays UK Three months ended (£m) Sep-20 Sep-19 % change Excluding L&C – three months ended (£m) Sep-20 Sep-19 % change – Personal Banking 833 1,035 (20%) Profit before tax 221 793 (72%) – Barclaycard Consumer UK 362 472 (23%) Attributable profit 130 550 (76%) – Business Banking 355 339 5% In
Slide 51: Q320 Barclays International
Q320 Barclays International Three months ended (£m) Sep-20 Sep-19 % change Excluding L&C – three months ended (£m) Sep-20 Sep-19 % change – CIB 2,905 2,617 11% Profit before tax 1,193 1,137 5% – CC&P 876 1,133 (23%) Attributable profit 803 801 - Income 3,781 3,750 1% – CIB (187) (31) >(200%) Perform
Slide 52: Q320 Barclays International: Corporate & Investment Bank
Q320 Barclays International: Corporate & Investment Bank CIB business performance – Sep-20 Sep-19 % change Excluding L&C – three months ended (£m) Sep-20 Sep-19 % change three months ended (£m) – FICC 1,000 816 23% Profit before tax 1,003 886 13% – Equities 691 494 40% Performance measures Markets 1
Slide 53: Q320 Barclays International: Consumer, Cards & Payments
Q320 Barclays International: Consumer, Cards & Payments CC&P business performance – Sep-20 Sep-19 % change Excluding L&C – three months ended (£m) Sep-20 Sep-19 % change three months ended (£m) Income 876 1,133 (23%) Profit before tax 190 251 (24%) Impairment (183) (321) 43% Performance measures – O
Slide 54: Q320 Head Office
Q320 Head Office Three months ended (£m) Sep-20 Sep-19 % change Excluding L&C – three months ended (£m) Sep-20 Sep-19 % change Income (127) (55) (131%) Loss before tax (191) (116) (65%) Impairment charges (5) (8) 38% Attributable loss (265) (118) (125%) – Operating costs (69) (59) (17%) – Litigation
Slide 55: 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