Slide 1: Barclays PLC Q2 2023 Results Presentation
Barclays PLC Q2 2023 Results Presentation 27 July 2023
Slide 2: Presenters and sections
i ii iii C.S. Venkatakrishnan Anna Cross Appendix: Financials Group CEO Group Finance Director
Slide 3: Performance in line with targets
Performance in line with targets Shareholder Distributions & Income Statement Balance Sheet Q223 H123 2.7p £750m Income £6.3bn £13.5bn H123 dividend H123 share buyback c.7.5p CIR 63% 60% H123 total distribution per share1 13.8% PBT £2.0bn £4.6bn CET1 ratio 291p RoTE 11.4% 13.2% TNAV 72% EPS 8.6p 19.
Slide 4: Delivering increased shareholder distributions
Delivering increased shareholder distributions Increased dividend and buyback Total distributions of £1.2bn equivalent to c.7.5p per share Total distributions (p) 10% yield1 Dividend Per Share (p) FY20 FY21 FY22 FY23 +20% c.5.0 c.15.0 c.13.4 2.7 Dividend c.7.5 2.25 Buyback c.4.9 c.5.25 c.4.8 c.2.9 c
Slide 5: Built on solid foundations
Built on solid foundations Well positioned for high inflation and interest rate environment, and to deliver consistent results through the cycle ▪ Prudent long-term credit risk management and balance sheet positioning ▪ Providing incremental and tailored support for customers and clients ▪ Continuin
Slide 6: Presenters and sections
i ii iii C.S. Venkatakrishnan Anna Cross Appendix: Financials Group CEO Group Finance Director
Slide 7: Performance highlights
Performance highlights Targets and guidance Q223 H123 RoTE >10% in 2023 11.4% 13.2% Cost: income ratio Low 60s % in 2023 63% 60% Loan loss rate 50-60bps in 2023 37bps 44bps CET1 ratio 13-14% 13.8% Average Liquidity Coverage >100% regulatory minimum2 157% Ratio1 Total distributions in respect of H123
Slide 8: Q223: Group RoTE of 11.4% with profit before tax of £2.0bn
Q223: Group RoTE of 11.4% with profit before tax of £2.0bn Performance Profit before tax excluding the impact of the Over-issuance of Securities in Q2221,2 £6.3bn £4.0bn Income Costs Q222: £6.0bn2 Q222: £3.9bn2 0.3 (0.2) 0.2 (0.2) 63% £2.3bn Cost: income Profit before ratio impairment Q222: 65%2 Q22
Slide 9: Income +6% YoY reflecting diverse sources of income
Income +6%1 YoY reflecting diverse sources of income Group income (£bn) excluding the impact of the Over-issuance of Securities in Q2221 +6%1 +£335m | +6% Group NIM: 4.06%2 6.3 6.0 5.5 5.4 NIM: 3.22% 5.3 1.7 2.0 +£237m | +14% Barclays UK3 1.8 1.5 ▪ Rates and structural hedge, partially offset by pro
Slide 10: Delivered Q223 costs below Q123; FY23 guidance unchanged
Delivered Q223 costs below Q123; FY23 guidance unchanged CIR 65%1 CIR 57% CIR 63% 2023 Group cost: income ratio % in low 60s Guidance Q123 high point for Group and CIB operating costs2,3 Group (£bn) Excludes Q222 £1.1bn Over- ▪ Delivered lower QoQ operating costs, in line with guidance issuance L&C
Slide 11: Well provisioned balance sheet
Well provisioned balance sheet Balance sheet provisions for ECL1 (£bn) UK GDP2 UK unemployment3 Q123 6.3 Q223 4.6% 6.1 3.3% 4.3% 4.2% (0.1) (0.1) 3.7% Other ECL 1.2 4.4% 1.1 4.1% 4.2% Economic 1.6% uncertainty 0.3 0.3 0.9% adjustments 0.3% 1.6% 0.5% (0.6)% 2022 2023 2024 2025 2022 2023 2024 2025 Mod
Slide 12: Reiterating FY23 loan loss rate guidance of 50-60bps
Reiterating FY23 loan loss rate guidance of 50-60bps Loan loss rate (bps) Credit impairment charge (£m) 138 524 113 Group 372 BUK 53 57 55 52 ▪ No impairment charge in Q222 44 95 37 ▪ Cards repayment rates remain high 30 and delinquencies stable 200 371 CC&P ▪ US cards average balance growth (18) 14
Slide 13: Long-term prudent risk positioning on our credit card portfolios
Long-term prudent risk positioning on our credit card portfolios UK cards US cards ▪ Balances c.40% lower vs. FY19 with strong and stable credit quality ▪ Controlled portfolio growth with improved risk mix ▪ Repayment rates remain elevated across the risk spectrum ▪ Improved >660 FICO1 score of 89%
Slide 14: Resilient mortgage book with customers proactively locking in rates
Resilient mortgage book with customers proactively locking in rates Mortgage portfolio Maturity profile ▪ 52.8% average balance weighted LTV of mortgage stock ▪ <20% of c.£84bn 5+ years fixed balances maturing before FY24 1 o 39.2% average valuation weighted LTV ▪ Only 1.5% of FY23 and 2.2% of FY24
Slide 15: Commercial Real Estate exposure is modest and well managed
Commercial Real Estate exposure is modest and well managed 4.7%1 of customer loans and advances (L&A), with a weighted average LTV of 49%2 ▪ Well diversified portfolio across sectors and underlying counterparties ▪ Prudent lending policy for over three decades Customer L&A3 £349bn ▪ Further to the l
Slide 16: Barclays UK higher income driven by margin growth
Barclays UK higher income driven by margin growth Performance Income (£bn) Q223: Net interest margin 3.22% +4bps QoQ £2.0bn £1.1bn Income Costs +14% Q222: £1.7bn Q222: £1.1bn 0.08% (0.14%) 2.0 2.0 0.13% (0.10%) 0.07% 55% 1.7 £0.1bn YoY 0.5 0.5 Cost: income +26% Impairment ratio Q222: £0m 0.4 Include
Slide 17: FY23 NIM expected to be <3.20%, with a current view around 3.15%
FY23 NIM expected to be <3.20%, with a current view around 3.15% ▪ Recent macroeconomic developments are driving changes in customer behaviour o More persistent inflation o Higher base rate expectations o Increased swap rates Revised guidance ▪ Customers are managing their finances rationally by: Pr
Slide 18: Structural hedge income continuing to grow
Structural hedge income continuing to grow Tailwinds from higher yields expected to outweigh headwinds from any hedge notional declines H123 4.06% 5.03% GBP 5yr swap 0.67% 1.05% rate1 -0.01% H123 Average 1.26% ▪ Average yield continuing to grow as maturing hedges roll hedge yield 1.08% 0.94% 0.87% 0
Slide 19: Consumer, Cards & Payments strong income growth of 18% YoY
Consumer, Cards & Payments strong income growth of 18% YoY Performance Income (£bn) £1.3bn £0.8bn Income Costs +18% $29.5bn2 Q222: £1.1bn Q222: £0.7bn US cards: 1.3 1.3 End Net Receivables +12%2,3 (incl. Gap) vs Q222 62% £0.3bn 1.1 Cost: income Impairment ratio Q222: £0.1bn Q222: 62% YoY 0.9 0.8 +21
Slide 20: Corporate & Investment Bank delivered resilient performance
Corporate & Investment Bank delivered resilient performance Performance Income (£bn)1 Income by business (£m)1 £3.2bn £2.0bn -3%1 YoY % USD YoY %: Income Costs Q222: £3.3bn1 Q222: £2.0bn1 4.0 Markets -22% -22% Global YoY FICC, 1,186 £(13)m -14% -13% 63% 3.3 0.8 4 Equities, 563 Cost: income net relea
Slide 21: Franchise strength driving consistent capital and liquidity over time
Franchise strength driving consistent capital and liquidity over time Historical performance (%) 11.4% MDA1 hurdle 13.8% 13.8% CET1 ratio 13-14% target 2019 2020 2021 2022 Q223 82% 72% Loan: deposit ratio 2019 2020 2021 2022 Q223 155% 157% Average Liquidity >100% regulatory minimum Coverage Ratio2 2
Slide 22: Strong CET1 ratio with significant headroom to MDA
Strong CET1 ratio with significant headroom to MDA Q223 CET1 ratio movements Key messages ▪ Target RoTE of >10%: translates to >c.150bps of annual CET1 ratio accretion o Generated 92bps in H123 (8bps) 39bps (13bps) 8bps ▪ UK countercyclical buffer (CCyB): increase 13.8% (22bps) to 2%, adds c.40bps t
Slide 23: Diverse and stable franchise deposit base; total deposits stable
Diverse and stable franchise deposit base; total deposits stable Deposit mix shift driven by client deleveraging, FX and other macro factors 41% i ns ur CIB: Corporate Bank £170bn3, flat BUK: Personal Banking £191bn, -2% ed ▪ >20% insured4 ▪ 72% insured ▪ c.14% term (>30 day) ▪ >75% of relationships
Slide 24: Prudently managed LCR supported by a highly liquid balance sheet
Prudently managed LCR supported by a highly liquid balance sheet Average LCR1 80% of Liquidity Pool held in cash 2 rities 80% ecu HTC ca S £24bn bt sh FVOCI 7% De £43bn 160% 159% 13% 157% 156% 156% 157% 157% Liquidity Pool £331bn Q421 Q122 Q222 Q322 Q422 Q123 Q223 Cash Spot LCR £264bn ▪ >98% of cash
Slide 25: Outlook
Outlook Returns Targeting RoTE of greater than 10% in 2023 Diversified income streams continue to position the Group well for the current economic and market environment including higher interest rates. In 2023, Barclays UK Net Interest Margin is now expected to be less than 3.20%, with a current vi
Slide 26: Presenters and sections
i ii iii C.S. Venkatakrishnan Anna Cross Appendix: Financials Group CEO Group Finance Director
Slide 27: We continued to advance our ESG agendas in H123
We continued to advance our ESG agendas in H123 Environment • Updated our Forestry and Agricultural Commodities Statement in Q223, with enhanced requirements for forestry, palm oil and soy and the inclusion of South American beef • Extended Greener Home Reward pilot registrations until January 2024
Slide 28: H123: Group RoTE of 13.2% with statutory profit before tax of £4.6bn
H123: Group RoTE of 13.2% with statutory profit before tax of £4.6bn Performance Profit before tax excluding the impact of the Over-issuance of Securities1 £13.5bn £8.1bn Income Costs H122: £12.4bn1 H122: £7.7bn1 (0.8) 1.1 0.4 60% £5.5bn (0.6) Cost: income Profit before ratio impairment H122: 62%1 H
Slide 29: Combination of the Private Bank and Barclays UK Wealth business
Combination of the Private Bank and Barclays UK Wealth business Creating a Top 5 largest UK Private Bank and Wealth Management business and largest bank owned1 Barclays UK Wealth CC&P Combined entity transferred Private Bank Income per annum2 c.£0.2bn c.£1.0bn c.£1.2bn Client Assets & c.£28bn c.£146
Slide 30: BUK Q223 NII contributes 26% of Group income and 51% of Group NII
BUK Q223 NII contributes 26% of Group income and 51% of Group NII Total Barclays UK and Barclays International NIM Barclays UK NIM FY21: 2.93% FY22: 3.54% H123: 4.06% FY21: 2.52% FY22: 2.86% H123: 3.20% 4.06% 3.97% 4.06% 3.85% 3.24% 3.22% 3.06% 3.10% 3.18% 2.92% 2.94% 2.90% 2.95% 3.01% 2.54% 2.55% 2
Slide 31: Macroeconomic variables
Macroeconomic variables Q223 Upside 2 Upside 1 Baseline Downside 1 Downside 2 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 UK GDP1 1.2% 4.1% 3.2% 0.8% 2.5% 2.4% 0.3% 0.9% 1.6% (0.1)% (2.1)% 0.6% (0.5)% (5.0)% (0.4)% UK unemployment2 3.9% 3.6% 3.5% 4.0% 4.0% 3.9% 4.1% 4.
Slide 32: Macroeconomic variables
Macroeconomic variables Q123 Upside 2 Upside 1 Baseline Downside 1 Downside 2 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 2023 2024 2025 UK GDP1 1.7% 4.1% 3.1% 0.5% 2.2% 2.3% (0.6)% 0.5% 1.6% (1.3)% (2.2)% 1.3% (2.0)% (4.8)% 1.0% UK unemployment2 3.6% 3.4% 3.4% 3.9% 4.0% 3.8% 4.3% 4.
Slide 33: Impairment: June 2023 coverage ratios
Impairment: June 2023 coverage ratios Retail credit cards Corporate loans Impairment allowance Impairment allowance Gross loans (£bn) Coverage ratio Gross loans (£bn) Coverage ratio (£bn) (£bn) Dec-22 Jun-23 Dec-22 Jun-23 Dec-22 Jun-23 Dec-22 Jun-23 Dec-22 Jun-23 Dec-22 Jun-23 Total 37.6 37.1 3.0 3.
Slide 34: Impairment: June 2023 coverage ratios
Impairment: June 2023 coverage ratios UK cards US cards Gross loans (£bn) Coverage ratio Gross loans (£bn) Coverage ratio Dec-22 Jun-23 Dec-22 Jun-23 Dec-22 Jun-23 Dec-22 Jun-23 Total 9.9 10.0 7.6% 7.1% Total 24.6 25.1 8.1% 9.0% Stage 1 7.1 7.5 1.8% 2.2% Stage 1 20.5 20.8 1.5% 1.4% Stage 2 2.6 2.3 1
Slide 35: Impairment: Q223 corporate loan exposure
Impairment: Q223 corporate loan exposure Corporate loans and selected sector exposure Commentary ▪ >30% of the Wholesale book is secured, Corporate loans (£bn) Gross loans and increasing to >60% for the selected sectors £407bn Financial Institutions 40.3 advances ▪ c.35% synthetic protection2 agains
Slide 36: Risk weighted assets
Risk weighted assets Q223 RWA movements (£bn) 3.0 (4.8) 0.3 338.4 336.9 1 Mar-23 Book size FX Other Jun-23 H123 RWA movements (£bn) 0.7 6.2 (8.8) 2.4 336.5 336.9 1 Dec-22 Book size Acquisitions and disposals FX Other Jun-23 1 Foreign exchange movements does not include the impact of foreign exchange
Slide 37: CET1 ratio within 13-14% target range
CET1 ratio within 13-14% target range CET1 minimum requirements UK leverage minimum requirements MDA1 11.8% 11.4% CCyB 0.5% 1.0% CCB 2.5% 2.5% Reg Min 3.975% CCLB 0.2% G-SII 1.5% 1.5% G-SII 0.525% 13.8% Pillar 2A 2.4% 2.4% 5.1% 4.8% BoE minimum leverage 3.25% requirement Pillar 1 4.5% 4.5% 2 Jun-23
Slide 38: Operate with a prudent buffer to each tier of capital requirements
Operate with a prudent buffer to each tier of capital requirements AT1 and T2 needs managed on a total capital basis Balanced total capital structure ▪ Operate with prudent buffers at each part of the capital stack to 20.5% total manage FX and RWA movements capital ratio ▪ Announced the call of the
Slide 39: Business strategy supported by comprehensive liquidity framework
Business strategy supported by comprehensive liquidity framework Stress tests are applied across multiple scenarios Rigorous liquidity risk stress testing framework 30 days combined market-wide and Barclays-specific stress event Bespoke Group and all 30 days Barclays-specific stress event material l
Slide 40: TNAV per share
TNAV per share QoQ TNAV movements (pence per share) 8 2 (12) (4) (4) 301 291 Mar-23 Attributable profit Share buyback Cash flow hedge reserve Pension remeasurement Currency translation Jun-23 reserve YTD TNAV movements (pence per share) 3 (7) 20 (5) (5) (3) (3) (2) (2) 295 291 Dec-22 Attributable Sh
Slide 41: Q223 Group Financial Highlights
Q223 Group Financial Highlights Three months ended (£m) Jun-23 Jun-22 % change The prior year includes impacts from the Over-issuance of Securities; £0.8bn income Income 6,285 6,708 -6% – Operating costs (3,919) (3,682) -6% gain and £1.1bn litigation and conduct charges – Litigation and conduct (33)
Slide 42: Q223 Barclays UK Financial Highlights
Q223 Barclays UK Financial Highlights Three months ended (£m) Jun-23 Jun-22 % change Income up 14% YoY capturing the benefit from rising interest rates – Personal Banking 1,244 1,077 +16% – Barclaycard Consumer UK 237 265 -11% − NIM increased +4bps QoQ to 3.22% – Business Banking 480 382 +26% Income
Slide 43: Q223 Barclays International Financial Highlights
Q223 Barclays International Financial Highlights Three months ended (£m) Jun-23 Jun-22 % change Income down 13% . Excluding the impact of the Over-issuance of Securities in the prior Income 4,440 5,116 -13% – Operating costs (2,747) (2,537) -8% year income is up 2% – Litigation and conduct (33) (1,3
Slide 44: Q223 Corporate & Investment Bank Financial Highlights
Q223 Corporate & Investment Bank Financial Highlights Three months ended (£m) Jun-23 Jun-22 % change CIB income is down 22%. Excluding the impact of the Over-issuance of Securities in the – FICC 1,186 1,529 -22% – Equities 563 1,411 -60% prior year income is down 3% Global Markets 1,749 2,940 -41% –
Slide 45: Q223 Consumer Cards & Payments Financial Highlights
Q223 Consumer Cards & Payments Financial Highlights Three months ended (£m) Jun-23 Jun-22 % change Income up 18% with growth across International Cards & Consumer Bank and Private – International Cards & Consumer Bank 835 691 +21% – Private Bank 295 245 +20% Bank – Payments 148 147 − International C
Slide 46: Q223 Head Office Financial Highlights
Q223 Head Office Financial Highlights Three months ended (£m) Jun-23 Jun-22 % change Income of £(116)m Income (116) (132) +12% – Operating costs (82) (60) -37% − Primarily reflecting hedge accounting and treasury items – Litigation and conduct (5) 1 Total operating expenses (87) (59) -47% Operating
Slide 47: H123 Group Financial Highlights
H123 Group Financial Highlights Six months ended (£m) Jun-23 Jun-22 % change The prior year includes impacts from the Over-issuance of Securities; £0.8bn income Income 13,522 13,204 +2% – Operating costs (8,030) (7,270) -10% gain and £1.5bn litigation and conduct charges – Litigation and conduct (32
Slide 48: H123 Barclays UK and Barclays International
H123 Barclays UK H123 Barclays International Six months ended (£m) Jun-23 Jun-22 % change Six months ended (£m) Jun-23 Jun-22 % change – Personal Banking 2,497 2,099 +19% Income 9,722 9,940 -2% – Barclaycard Consumer UK 484 541 -11% – Operating costs (5,703) (5,042) -13% – Business Banking 941 733 +
Slide 49: H123 CIB and CC&P
H123 CIB H123 CC&P Six months ended (£m) Jun-23 Jun-22 % change Six months ended (£m) Jun-23 Jun-22 % change – FICC 2,974 3,173 -6% – International Cards & Consumer Bank 1,734 1,229 +41% – Equities 1,267 2,463 -49% – Private Bank 554 459 +21% Global Markets 4,241 5,636 -25% – Payments 296 281 +5% –
Slide 50: H123 Head Office Financial Highlights
H123 Head Office Financial Highlights Six months ended (£m) Jun-23 Jun-22 % change Income (122) (109) -12% – Operating costs (145) (145) – Litigation and conduct (5) - Total operating expenses (150) (145) -3% Other net expenses (11) (16) +31% Loss before impairment (283) (270) -5% Credit impairment
Slide 51: Exchange rates and share count information
Exchange rates and share count information YTD % YoY % Exchange rates Jun-23 Dec-22 Jun-22 change change Period end – USD/GBP 1.27 1.21 1.22 5% 4% 6 month average – USD/GBP 1.23 1.18 1.30 4% (5)% 3 month average – USD/GBP 1.25 1.17 1.26 7% (1)% Period end – EUR/GBP 1.16 1.13 1.16 3% — 6 month averag
Slide 52: 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