Barclays Plc · LSE:BARC

Barclays — Debt Investor Presentation (October 2023)

45 slides from Barclays's debt investor presentation, Oct 24, 2023

  1. Slide 1: Barclays PLC Q3 2023 Fixed Income Investor Presentation

    Barclays PLC Q3 2023 Fixed Income Investor Presentation 24 October 2023

  2. Slide 2: Performance

    Performance

  3. Slide 3: Q323 themes

    Q323 themes Income Statement  Delivered Q323 RoTE of 11.0% Q323 Q323 YTD Income £6.3bn £19.8bn  Mixed market activity and competitive environment for UK retail deposits CIR 63% 61% LLR 42bps 43bps  Evaluating material structural cost actions to help drive future returns PBT £1.9bn £6.4bn RoTE 11.

  4. Slide 4: Outlook

    Outlook Targeting a cost: income ratio percentage in the low 60s in 2023, investing for growth whilst progressing towards the Group’s Costs medium-term target of below 60%. Separately, the Group is evaluating actions to reduce structural costs to help drive future returns, which may result in materi

  5. Slide 5: Reset level of Group returns in the last three years

    Reset level of Group returns in the last three years Group RoTE  Group returns level reset and stabilised since 2021 10%  Continue to target above 10% RoTE in 20231 13.1% 12.5% 10.4%  Will set out our capital allocation priorities, as well as revised financial targets for costs, returns and share

  6. Slide 6: Q323 YTD: Group RoTE of 12.5% with profit before tax of £6.4bn

    Q323 YTD: Group RoTE of 12.5% with profit before tax of £6.4bn Performance Profit before tax (£bn) excluding the impact of the Over-issuance of Securities1 £19.8bn £12.0bn Income Costs Q322 YTD: Q322 YTD: 0.9 0.8 0.5 £18.9bn1 £11.8bn1 0.6 61% £7.8bn Cost: income Profit before ratio impairment Q322 Y

  7. Slide 7: Q323: Group RoTE of 11.0% with profit before tax of £1.9bn

    Q323: Group RoTE of 11.0% with profit before tax of £1.9bn Performance Profit before tax (£bn) excluding the impact of the Over-issuance of Securities in Q3221 £6.3bn £3.9bn Income Costs Q322: £6.4bn1 Q322: £4.1bn1 63% £2.3bn (0.2) (0.1) 0.2 Cost: income Profit before (0.0) ratio impairment Q322: 64

  8. Slide 8: Q323 Group income down 2% YoY

    Q323 Group income down 2%1 YoY Group income (£bn) excluding the impact of the Over-issuance of Securities in Q3221 -£159m | -2%1 Group 6.4 6.3 5.5 -£43m | -2% Barclays UK2 5.5 5.2 1.9  c.£60m transfer of UK Wealth to CC&P 1.9 1.6  Rates and structural hedge benefits partially offset by product dyn

  9. Slide 9: Q323 Group NII of £3.2bn; NIM of 3.98%

    Q323 Group NII of £3.2bn; NIM1 of 3.98% Group net interest income (£bn) Group NIM1 3.44% 2.89% 2.90% 3.85% 3.98% +£179m | +6% Group NIM: 3.98%1 (+13bps YoY) 3.2 3.1 2.4 +£17m | +1% BUK NIM: 3.04%(+3bps YoY) 1.6 2.1 1.6 1.9 1.5 +£64m | +7% CC&P2 NIM: 8.88%(+47bps YoY) 1.3 1.3 1.0 0.9 0.7 +£94m | +16%

  10. Slide 10: Delivered Q323 operating costs below Q123 high point, as guided

    Delivered Q323 operating costs below Q123 high point, as guided Group operating expenses (£bn) excluding the impact of the Over-issuance of Securities in Q3221 Group CIR 2023 Group cost: income ratio % in low 60s2 Guidance Q123 high point for Group and CIB operating costs2,3 64%1 57% 63% 63%  Focus

  11. Slide 11: Barclays UK delivered 21.0% RoTE in Q323

    Barclays UK delivered 21.0% RoTE in Q323 Performance Income (£bn) £1.9bn £1.0bn -2% Income Costs +1% excluding UK Wealth transfer Business Banking £23.0bn Q322: £1.9bn Q322: £1.1bn 2.0 Total assets -16% vs Q3222 1.9 1.9 56% YoY £59m 0.4 0.5 Cost: income 0.5 +12% Impairment ratio Q322: £0.1bn Q322: 5

  12. Slide 12: Barclays UK deposit mix and FY23 NIM guidance

    Barclays UK deposit mix and FY23 NIM guidance BUK deposit balances and mix (£bn) Net interest margin bridge (0.05%) QoQ 0.16% (0.16%) +£52.5bn -£3.7bn -£4.5bn -£6.6bn (0.06%) Deposit pricing, volume (0.07%) and mix effects 258 254 (Q223: -6bps) 250 243 3.22% 3.04% 62 60 206 59 57 Business Banking 8

  13. Slide 13: Structural hedge income continuing to grow

    Structural hedge income continuing to grow Another quarter of locking in future gross hedge income Q323 4.06% 4.57% GBP 5yr swap 0.67% 1.05% rate1 -0.01%  >95% of expected income (c.£3.6bn) locked in for FY23 Q323 • £3.3bn at H123 Average 1.54% hedge yield 1.08% 0.94% 0.87% 0.69%  c.£3.4bn of inco

  14. Slide 14: Consumer, Cards & Payments income growth of 9% YoY

    Consumer, Cards & Payments income growth of 9% YoY Performance Income (£bn) £1.4bn £0.8bn Income Costs +9% $30.2bn Q322: £1.2bn Q322: £0.8bn +5% excluding UK US cards: Wealth transfer 1.4 1.3 End Net Receivables +11% vs Q322 1.2 60% £0.4bn Cost: income Impairment ratio Q322: £0.2bn YoY Q322: 67% 0.8

  15. Slide 15: Q223 combination of the Private Bank and Barclays UK Wealth business

    Q223 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 As at the point of transfer in Q223 Barclays UK Wealth CC&P Combined Combined entity transferred Private Bank entity as at Q323 Q323 YT

  16. Slide 16: Corporate & Investment Bank stable against a mixed backdrop

    Corporate & Investment Bank stable against a mixed backdrop Performance Income (£bn)1 Income by business (£m)1 £3.1bn £2.0bn YoY % USD YoY %: Income Costs Q322: £3.3bn1 Q322: £2.0bn1 -47% -43% Investment -6%1 Advisory, 80 Banking ECM, 62 +48% +57% 65% £(20)m release 3.3 Cost: income 3.2 3.1 DCM, 233

  17. Slide 17: Asset Quality

    Asset Quality

  18. Slide 18: Well provisioned balance sheet

    Well provisioned balance sheet Balance sheet provisions for ECL1 (£bn) Macro assumptions used for impairment modelling 6.4 UK GDP2 UK unemployment3 6.1 0.3 Q223 Other PMAs 0.4 0.3 Q323 3.3% 4.4% Economic 4.3% uncertainty 0.3 4.1% adjustments 4.2% 1.6% 3.7% 0.9% 0.4% 1.4% Allowance pre- 5.8 0.4% 0.3%

  19. Slide 19: Long-term prudent risk positioning in our credit card portfolios

    Long-term prudent risk positioning in our credit card portfolios UK cards US cards  Balances c.35% lower vs. FY19 with strong and stable credit quality  Controlled portfolio growth with improved risk mix  Repayment rates remain elevated across the risk spectrum  12% of outstandings <660 FICO1 sc

  20. Slide 20: Loan loss rate guidance of 50-60bps through the cycle

    Loan loss rate guidance of 50-60bps through the cycle Loan loss rate (bps) Credit impairment charges / (releases) (£m) 138 381 524 372 433 Group 113 BUK 59  Cards repayment rates remain high and 57 delinquencies stable 53 55 52 44 42 81 95 37 30 CC&P  US cards balance growth +11% YoY 371  Delinqu

  21. Slide 21: CRE exposure is modest and well managed - update as at H123

    CRE exposure is modest and well managed - update as at H123 June 2023: 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  Furt

  22. Slide 22: Macroeconomic variables

    Macroeconomic variables Q323 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 0.8% 4.0% 3.3% 0.6% 2.2% 2.4% 0.4% 0.4% 1.4% 0.3% (1.9)% (0.3)% 0.2% (4.2)% (2.1)% UK unemployment2 4.0% 3.7% 3.5% 4.1% 4.0% 3.9% 4.1% 4.4%

  23. Slide 23: 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.

  24. Slide 24: Impairment: September 2023 coverage ratios

    Impairment: September 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 Sep-23 Dec-22 Sep-23 Dec-22 Sep-23 Dec-22 Sep-23 Dec-22 Sep-23 Dec-22 Sep-23 Total 37.6 39.0 3

  25. Slide 25: Impairment: September 2023 coverage ratios

    Impairment: September 2023 coverage ratios UK cards US cards Gross loans (£bn) Coverage ratio Gross loans (£bn) Coverage ratio Dec-22 Sep-23 Dec-22 Sep-23 Dec-22 Sep-23 Dec-22 Sep-23 Total 9.9 10.2 7.6% 6.3% Total 25.8 26.7 8.1% 9.7% Stage 1 7.1 7.8 1.8% 2.1% Stage 1 21.8 22.1 1.5% 1.7% Stage 2 2.6

  26. Slide 26: Impairment: Q323 corporate loan exposure

    Impairment: Q323 corporate loan exposure Corporate loans and selected sector exposure Commentary Gross loans and Corporate loans (£bn)  c.38% synthetic protection2 against c.£51bn advances and debt £411bn Financial Institutions 44.3 of funded on-balance sheet exposure in the securities Other 50.9 C

  27. Slide 27: Capital & Leverage

    Capital & Leverage

  28. Slide 28: Strong CET1 ratio with significant headroom to MDA

    Strong CET1 ratio with significant headroom to MDA Q323 CET1 ratio movements Key messages 5bps (3bps) (9bps) 10bps 14.0% 37bps  Target RoTE of >10% translates to 13.8% (22bps) >c.150bps of annual CET1 ratio 13.6% accretion MDA o Generated c.130bps Q323 YTD hurdle 11.8%  UK countercyclical buffer (

  29. Slide 29: Risk weighted assets

    Risk weighted assets Q323 RWA movements (£bn) (0.2) 5.7 (0.6) 341.9 336.9 1 Jun-23 Book size FX Other Sep-23 Q323 YTD RWA movements (£bn) 0.7 (3.2) 2.2 5.7 341.9 336.5 1 Dec-22 Book size Acquisitions and disposals FX Other Sep-23 1 Foreign exchange movements does not include the impact of foreign ex

  30. Slide 30: CET1 ratio within 13-14% target range

    CET1 ratio within 13-14% target range CET1 minimum requirements UK leverage minimum requirements MDA1 11.8% CCyB 0.9% CCB 2.5% Reg Min 4.075% CCLB 0.3% G-SII 1.5% 14.0% G-SII 0.525% Pillar 2A 2.4% 5.0% 4.6% BoE minimum leverage 3.25% requirement Pillar 1 4.5% Sep-23 Sep-23 2 UK Leverage Sep-23 UK sp

  31. Slide 31: Operating with a prudent buffer to each tier of capital requirements

    Operating with a prudent buffer to each tier of capital requirements AT1 and T2 needs managed on a total capital basis Balanced total capital structure  Operating with prudent buffers at each part of the capital stack to Total capital manage FX and RWA movements ratio: 20.0%  Have flexibility in t

  32. Slide 32: Balance Sheet Management

    Balance Sheet Management

  33. Slide 33: MREL position well established

    MREL position well established MREL position as at Sep-231 HoldCo issuance 33.4%  2023 issuance plan complete (£114.3bn) o c.£12bn issued against a c.£11bn 2023 MREL issuance plan 29.6% (£101.1bn) across Senior, Tier 2 and AT1 CCyB: 0.9%  Additional pre-funding for 2024 may be explored subject to

  34. Slide 34: Issued c.£12bn YTD

    Issued c.£12bn YTD 2023 HoldCo issuance Annual HoldCo issuance volume (£bn) and currency1,2 Jan-23: GBP 1.0bn Senior 15.0 12.1 11.5 12.1 12.0 11.0 8.6 Mar-23: GBP 1.5bn AT1 7.8 10.7 6.1 9.3 10.2 9.0 4.0 8.4 5.5 2.9 1.1 1.0 Mar-23: SGD 400m AT1 1.7 1.6 1.2 2.5 3.5 1.2 3.2 1.1 1.9 1.1 1.1 1.7 2016 201

  35. Slide 35: Diverse and stable franchise deposit base

    Diverse and stable franchise deposit base CIB Corporates: £208bn3, +5% BUK: Personal Banking £186bn, -3%  CIB: Corporate Bank £169bn  72% insured o >20% insured4  >75% of relationships 5+ years o c.60% of UK relationships 5+ years o No sector concentration >16% Corporates Total CC&P: Private Bank

  36. Slide 36: Prudently managed LCR supported by a highly liquid balance sheet

    Prudently managed LCR supported by a highly liquid balance sheet Average LCR1 81% of Liquidity Pool held in cash HTC £20bn FVOCI 6% £44bn 13% Liquidity Pool £335bn Cash £271bn 160% 159% 157% 156% 156% 157% 157% 159%  >98% of cash placed with BoE, US Fed, ECB, BoJ, SNB  Debt securities mostly held

  37. Slide 37: Wholesale funding composition as at June 2023

    Wholesale funding composition as at 30 June 20231 1-3 3-6 6-12 Total 1-2 2-3 3-4 4-5 As at 30 June 2023 (£bn) <1 month >5 years Total months months months <1 year years years years years Barclays PLC (the Parent company) Senior unsecured 0.2 0.6 0.9 1.5 3.2 7.2 6.8 5.7 3.3 17.7 43.9 (public benchmar

  38. Slide 38: Strong legal entity capital and liquidity positions

    Strong legal entity capital and liquidity positions Continue to manage legal entity capital ratios with appropriate headroom to requirements Barclays PLC Accounting and regulated sub-group Accounting sub-group Barclays Bank UK PLC (BBUKPLC) sub-group Barclays Bank PLC (BBPLC) sub-group Barclays Bank

  39. Slide 39: Credit Ratings

    Credit Ratings

  40. Slide 40: Strong momentum with 2023 credit rating upgrades

    Strong momentum with 2023 credit rating upgrades 2023 upgrades Current Senior long and short term ratings Moody’s Standard & Poor’s Fitch Moody’s Two upgrades in just over three years Baa1 BBB+ A Stable Stable Stable Barclays PLC P-2 A-2 F1 Standard & Poor’s Upgraded in May 2023 A1 A+ A+ Stable Stab

  41. Slide 41: Barclays rating composition for senior debt

    Barclays rating composition for senior debt Moody’s Standard & Poor’s Fitch BBUK BBUK BBUK BPLC BBPLC BPLC BBPLC BPLC BBPLC PLC PLC PLC Adjusted Baseline baa1 baa1 a3 Stand-Alone Credit Profile a- Viability Rating2 a a a Credit Assessment Macro profile Strong+ Strong+ Strong+ Anchor bbb+ Operating e

  42. Slide 42: Appendix

    Appendix

  43. Slide 43: We continued to advance our ESG agendas - update as at H123

    We continued to advance our ESG agendas - update as at 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 J

  44. Slide 44: Contacts – Debt Investor Relations Team

    Contacts – Debt Investor Relations Team Dan Colvin Joanne Cash Justin Lutterbuese +44 (0)20 7116 6533 +44 (0)20 7116 4215 +44 (0)20 7116 6021 daniel.colvin@barclays.com joanne.cash@barclays.com justin.lutterbuese@barclays.com 44 | Barclays Q3 2023 Results | 24 October 2023

  45. Slide 45: 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

Barclays — Debt Investor Presentation (October 2023) on 6ix