Barclays Plc · LSE:BARC
Barclays — Q1 2017 Earnings Presentation
37 slides from Barclays's earnings presentation, Apr 28, 2017
Slide 1: Barclays PLC Q1 2017 Financial Results
Barclays PLC Q1 2017 Financial Results 28 April 2017
Slide 2: Jes Staley
Jes Staley Barclays Group Chief Executive Officer
Slide 3: Tushar Morzaria
Tushar Morzaria Barclays Group Finance Director
Slide 4: Our strategy is on track with further good progress in Q117
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% RWA reduction of £5bn in Q117 to £27bn Accelerated Non-Core rundown and on track for closure at 30 June 2017 Group cost: income ratio 62%
Slide 5: Group RoTE converging towards Core
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 Core performance, with Core PBT up 20%, and a Impairment (527) (443) (19%) materially reduced drag from Non-Core – Operating expenses (ex
Slide 6: Core RoTE improved 110bps to 11.0%
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 11.0%, on a higher tangible equity base – Average allocated tangible equity has increased by £4.9bn since Q116 Income 5,897 5,283 12% • PBT
Slide 7: Generating a consistently strong Core RoTE on an increasing tangible equity base
Generating a consistently strong Core RoTE on an increasing tangible equity base Core return on average allocated tangible equity1 Return on average allocated tangible equity RoTE RoTE excluding UK bank levy Q117 Q116 RoTE excluding UK bank levy and additional charge relating to 2016 compensation aw
Slide 8: Barclays UK: Robust RoTE of 21.6%
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 improved RoTE of 21.6%, with PBT broadly in line at £708m – Personal Banking 944 919 3% – Barclaycard Consumer UK • Income
Slide 9: Barclays UK: Improved NIM and growth in deposits
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 increased 7bps to 3.69% as NII grew 1% to £1.5bn – Net interest margin (NIM) 3.69% 3.62% – Growth in deposit balances and l
Slide 10: Barclays UK: Realising the opportunity with 24 million customers via digital and data
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 Leveraging our data 4.9m Income Mobile Active users +17% to drive meaningful growth Banking customer relationships 9.8m Digita
Slide 11: Barclays International: 12.5% RoTE with profit growth in CIB and CC&P
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 % change • PBT increased 32% to £1.4bn driven by encouraging CIB performance and continued momentum in CC&P, delivering an i
Slide 12: Barclays International: Corporate & Investment Bank
Barclays International: Corporate & Investment Bank Strong banking performance drove 13% PBT growth Business performance Q117 performance metrics Three months ended (£m) Mar-17 Mar-16 % change • Income growth of 7% to £2.8bn reflected strong performance in Banking, partially offset by lower income i
Slide 13: Barclays International: Consumer, Cards & Payments
Barclays International: Consumer, Cards & Payments Continued momentum and strong business growth Business performance Q117 performance metrics Three months ended (£m) Mar-17 Mar-16 % change • PBT increased by 74%, generating an RoTE of 36.4% • Income increased 48% driven by a gain of £192m relating
Slide 14: Non-Core: On track for closure at 30 June 2017
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 tax decreased to £241m due to lower operating expenses and improved income, partially offset by lower other net income – Businesses 51 (73)
Slide 15: Non-Core: Rundown guidance
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 FY16 FY17 FY18 Guidance Guidance Guidance Businesses Derivatives Securities and loans Operational risk plus DTAs Income Operating expenses
Slide 16: Strong liquidity metrics and good progress in MREL funding
Strong liquidity metrics and good progress in MREL funding and liability management LCR well above minimum requirements HoldCo MREL at 21.6% as at Mar-171 2022 requirements subject to BoE review by 28.0% end-2020 including the recapitalisation of P2A G-SIB: 1.5% 24.0% CCB: 2.5% G-SIB: 1.5% 140% 21.6
Slide 17: Barclays Africa selldown on track
Barclays Africa selldown on track Confident of executing BAGL selldown and achieving regulatory deconsolidation c.75bps in line with previously guided timeline of 1-2 years CET1 ratio benefit from regulatory deconsolidation1 No impact on CET1 capital or TNAV Impairment of Barclays’ holding in BAGL a
Slide 18: On track for end-state capital requirement
On track for end-state capital requirement Fully Loaded CET1 ratio Current expected capital requirements3 33bps 9bps 12.3-12.8% 34bps 1.5-2.0% Management buffer 10.8% Stress capacity Expected (incl. management Capital regulatory 2.5% buffer): c.4.0-4.5% conservation buffer • Series 3 USD preference
Slide 19: Transatlantic consumer, corporate and investment bank
Transatlantic consumer, corporate and investment bank Benefits of diversification by customer, product and geography showing through Group returns converging with attractive Core returns On track to close Non-Core at 30 June 2017 with c.£25bn of RWAs Resilience from high asset quality across our por
Slide 20: Barclays PLC Q1 2017 Financial Results
Barclays PLC Q1 2017 Financial Results 28 April 2017
Slide 21: Appendices
Appendices
Slide 22: Core income and margins – Q117
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 NII increased 1% to £1.5bn as growth in deposits and liability – Barclays UK 1,511 1,501 1% repricing initiatives offset he
Slide 23: Barclays UK and Barclays International analysis
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 1,356 1,351 1,841 944 178 498 123 4,138 Split of loans and advances to customers (£bn) Split of customer deposits (£bn) 1,393
Slide 24: Head Office and Africa Banking summary financials
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-17 Mar-16 Income 1,082 818 32% Income (82) (33) Impairment (106) (111) 5% Impairment - 1 Operating expenses (1,537) (477) –
Slide 25: Barclays Africa selldown on track
Barclays Africa selldown on track Impairment CET1 ratio guidance • Per IFRS5, impairment is assessed based on the difference between carrying value (CV) of a • Estimate c.75bps CET1 ratio benefit from regulatory disposal group and its fair value less costs to sell (FV) deconsolidation based on BAGL
Slide 26: Underlying stable trends reflect prudent approach to credit risk management
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 increased on Q116 primarily reflecting an increase in Consumer, Cards & Payments due to a change in portfolio mix in US Cards,
Slide 27: Stable UK Cards portfolio with flat underlying impairment trends
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 unemployment rate of 4.7% • Remain comfortable with underlying UK impairment trends and risk positioning 0% Balance Transfers <30%, of
Slide 28: Actively managed US Cards growth, including shifts in portfolio mix
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 weighted towards a co-brand model, with a smaller proportion made up of branded cards 3.0% • In both segments emphasis has been on
Slide 29: Tangible Net Asset Value movements
Tangible Net Asset Value movements TNAV (pence per share) – Dec-16 to Mar-17 Q117 highlights • TNAV increased by 2p per share in the quarter to 292p − Profit after tax contributed 6p per share 2 3 − Pension related reserve movements had a 2p per share 3 positive impact 6 − The vesting of shares unde
Slide 30: Common Equity Tier 1 ratio progression
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 Share Net impact Dividends paid Other qualifying Other Mar-17 the period redemption purchase of pensions and foreseen reserve
Slide 31: Managing evolving future minimum CET1 levels
Managing evolving future minimum CET1 levels Illustrative evolution of minimum CET1 requirements and buffers Minimum CRD IV CET1 requirement CRDIV Mandatory distribution restrictions hurdle • End-state expectation of 12.3-12.8%: 2017 Pillar 2A CET1 requirement BoE stress test systemic reference poin
Slide 32: Managing capital position above mandatory distribution restrictions and stress test hurdles
Managing capital position above mandatory distribution restrictions and stress test hurdles Barclays’ expected MDA thresholds and systemic reference points for 2017 BoE stress test Minimum CRD IV CET1 requirement Distribution restrictions and management 2017 Pillar 2A CET1 requirement • Maintaining
Slide 33: Manageable MREL requirements through proactive issuance
Manageable MREL requirements through proactive issuance HoldCo MREL position and requirements including requisite buffers Well advanced on 20171 HoldCo issuance plan Incremental • In Q117 the BoE communicated our non-binding indicative MREL HoldCo issuance requirements at the consolidated Group leve
Slide 34: Progress on Group legal structure
Progress on Group legal structure Barclays PLC Barclays UK Barclays International constructs Divisional UK consumer and business bank Diversified transatlantic wholesale differentiated by scale and digital innovation and consumer bank Group Service Company Provides critical services to Barclays UK a
Slide 35: Structural reform plan is on track achieving critical milestones as planned
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 completed Legal entity repositioned and rated Barclays UK and Barclays International established as operating divisions
Slide 36: Ratings are a key strategic priority
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 investment grade ratings • We intend to create as much stability in the ratings of Barclays PLC and Barclays Bank PLC as we can – B
Slide 37: Disclaimer
Disclaimer Important Notice 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 buy any securities or financial instruments, or any advice or recommendation with re