Barclays Plc · LSE:BARC
Barclays — Debt Investor Presentation (October 2013)
57 slides from Barclays's debt investor presentation, Oct 30, 2013
Slide 1: Barclays PLC Fixed Income Investor Presentation Q3 2013 Results
Barclays PLC Fixed Income Investor Presentation Q3 2013 Results
Slide 2: Strategy and results update
STRATEGIC OVERVIEW STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Strategy and results update 1 | Barclays Q3 2013 Fixed Income Investor Presentation | 30 October 2013
Slide 3: Barclays overview
STRATEGIC OVERVIEW STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Barclays overview A global universal bank Key financial metrics as at 30 Sept 2013 Major global financial services provider 3 main businesses: Total assets £1.4tr – Retail, Business Ba
Slide 4: Q3 2013 results highlights
STRATEGIC OVERVIEW STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Q3 2013 results highlights “These results demonstrate the underlying strength of the Group, and the benefits of diversity, shown in the good progress made by several of our businesses in
Slide 5: Diversified profit distribution across the Group
STRATEGIC OVERVIEW STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Diversified profit distribution across the Group Composition of adjusted profit before tax (excl. CTA) demonstrates the diversification benefits inherent in the universal banking model £
Slide 6: Capital & Leverage
STRATEGIC OVERVIEW CAPITAL & CAPITAL & LEVERAGE LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Capital & Leverage 5 | Barclays Q3 2013 Fixed Income Investor Presentation | 30 October 2013
Slide 7: Capital and leverage ratios over time
STRATEGIC OVERVIEW CAPITAL & CAPITAL & LEVERAGE LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Capital and leverage ratios over time Our financial strength continues to serve us well in the current environment and remains a core component of our strategy going forward Basel 2 Base
Slide 8: End-state capital structure
STRATEGIC OVERVIEW CAPITAL & CAPITAL & LEVERAGE LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX End-state capital structure Our “target” capital structure anticipates the implementation of CRD IV, ICB1 and RRD2 proposals 17.8% Total capital ratio 17.0% Capital plans delivering PR
Slide 9: Estimated capital and RWAs
STRATEGIC OVERVIEW CAPITAL & CAPITAL & LEVERAGE LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Estimated capital and RWAs (£bn) 30 Sept 2013 CT1 Capital (FSA 2009 definition) 42.0 RWAs (CRD III) 371.1 CT1 Ratio (CRD III) 11.3% CRD IV impact on CT1 Capital: CET1 Transitional1 CET1
Slide 10: Estimated CRD IV capital and RWAs – notes
STRATEGIC OVERVIEW CAPITAL & CAPITAL & LEVERAGE LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Estimated CRD IV capital and RWAs – notes Estimated capital ratios are based on/subject to the following: CRD IV, models and waivers We have estimated our CRD IV CET1 ratio, capital re
Slide 11: Estimated CRD IV capital and RWAs – notes
STRATEGIC OVERVIEW CAPITAL & CAPITAL & LEVERAGE LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Estimated CRD IV capital and RWAs – notes Estimated capital ratios are based on/subject to the following: RWAs It is assumed that corporates, pension funds and sovereigns that meet the
Slide 12: Estimated CRD IV/PRA leverage ratios
STRATEGIC OVERVIEW CAPITAL & CAPITAL & LEVERAGE LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Estimated CRD IV/PRA leverage ratios Q3 13 H1 13 Proforma Leverage Leverage T1 Capital % for rights T1 Capital % Exposure Exposure issue % Estimated CRD IV leverage 1,482 47.4 3.2 3.6 1,
Slide 13: Focus on leverage exposure reduction
STRATEGIC OVERVIEW CAPITAL & CAPITAL & LEVERAGE LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Focus on leverage exposure reduction Leverage Exposure at Category 30 Sept 13 Comments (£bn) Overall balance sheet Refine capital allocation framework → risk-weighted 1,481 management
Slide 14: Liquidity & funding
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & LIQUIDITY & FUNDING FUNDING ASSET QUALITY CREDIT RATING APPENDIX Liquidity & funding 13 | Barclays Q3 2013 Fixed Income Investor Presentation | 30 October 2013
Slide 15: Balance sheet funding
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & LIQUIDITY & FUNDING FUNDING ASSET QUALITY CREDIT RATING APPENDIX Balance sheet funding While the balance sheet totals £1.4tn (excl. Absa), wholesale funding requirements are limited to £198bn as a consequence of its structure Total balance sheet, £1,
Slide 16: Liquidity pool
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & LIQUIDITY & FUNDING FUNDING ASSET QUALITY CREDIT RATING APPENDIX Liquidity pool Barclays efficiently manages a strong and high-quality liquidity pool consisting of unencumbered assets Q3 2013 update 2013-2015 strategy £130bn liquidity pool, with 85
Slide 17: Funding
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & LIQUIDITY & FUNDING FUNDING ASSET QUALITY CREDIT RATING APPENDIX Funding Diverse funding sources, across customer deposits and wholesale debt, provide protection against unexpected fluctuations £bn Group Loan to Deposit Ratio (LDR) improved to 100%
Slide 18: Wholesale funding
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & LIQUIDITY & FUNDING FUNDING ASSET QUALITY CREDIT RATING APPENDIX Wholesale funding Despite reduced requirements for wholesale funding, Barclays maintains access to a variety of secured and unsecured funding sources across multiple currencies and matu
Slide 19: Asset quality
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY ASSET QUALITY CREDIT RATING APPENDIX Asset quality 18 | Barclays Q3 2013 Fixed Income Investor Presentation | 30 October 2013
Slide 20: Strong asset quality
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY ASSET QUALITY CREDIT RATING APPENDIX Strong asset quality Despite a challenging macroeconomic environment, retail and wholesale portfolios continue to perform well, as evidenced by limited Credit Risk Loans (CRLs) and declining
Slide 21: Impairments well contained
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY ASSET QUALITY CREDIT RATING APPENDIX Impairments well contained Reduction in credit impairment charges in the first nine months of 2013 reflects improvements in Corporate Banking and Africa RBB, partially offset by increases in
Slide 22: Reduced exposure to the Eurozone periphery
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY ASSET QUALITY CREDIT RATING APPENDIX Reduced exposure to the Eurozone periphery Barclays continues to manage down its direct exposures to the Eurozone periphery, while reducing redenomination risk in Spain and Portugal £bn Expos
Slide 23: Barclays Exit Quadrant
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY ASSET QUALITY CREDIT RATING APPENDIX Barclays Exit Quadrant With a good track record in reducing legacy assets, we now focus on reducing our expanded Exit Quadrant portfolios £bn 94 15 15 11 25 53 34 13 4 16 Targeted reduction 3
Slide 24: Credit ratings
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING CREDIT RATING APPENDIX Credit ratings 23 | Barclays Q3 2013 Fixed Income Investor Presentation | 30 October 2013
Slide 25: Rating and outlook changes
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING CREDIT RATING APPENDIX Rating and outlook changes Despite re-rating of sector by all main rating agencies in the last 24 months, Barclays‟ rating remains strong and in line with peers‟ Barclays Bank plc 1 Jan 2012
Slide 26: Credit rating management
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING CREDIT RATING APPENDIX Credit rating management Barclays prudently manages the impact of credit ratings on the Group‟s funding and liquidity positions Provision of relevant information to credit rating Contractua
Slide 27: Summary
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING CREDIT RATING APPENDIX Summary A major global financial services provider with strong customer focus and client franchise Business Model Diversified businesses, in multiple geographies, delivering resilient underly
Slide 28: Appendix
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX APPENDIX Appendix 27 | Barclays Q3 2013 Fixed Income Investor Presentation | 30 October 2013
Slide 29: Resilient performance
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Resilient performance £m 8,771 8,167 8,081 8,108 7,563 7,750 7,734 7,440 7,445 7,287 7,549 7,384 7,337 7,238 7,001 7,002 6,867 6,213 6,445 2,395 1,754 1,822 1,977 1,944 1,865 1,786 1,805 1,569 1,471 1,694 1,256 1,273 1,310 1
Slide 30: Analysis of Net Interest Income
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Analysis of Net Interest Income 2013 2012 Nine months ended – September (£m) (£m) Customer assets 5,360 4,974 Customer liabilities 2,406 2,352 Total customer income1 7,766 7,326 Product structural hedge 644 731 Equity struct
Slide 31: Net interest margins and volumes
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Net interest margins and volumes UK Europe Africa Barclay- Corporate Wealth Nine months ended – Sept 2013 Total1 RBB RBB RBB card Banking and IM Net interest margin (%) 1.28 0.79 3.14 8.36 1.24 1.04 1.77 Of which customer ma
Slide 32: Adjusting items to profit before tax
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Adjusting items to profit before tax 2013 2012 Nine months ended – September (£m) (£m) Statutory profit before tax 2,8511 962 Own credit charge 125 4,019 Gain on disposal of BlackRock investment - (227) Provision for PPI red
Slide 33: Adjusted income and profit/(loss) before tax by cluster
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Adjusted income and profit/(loss) before tax by cluster Income Profit/(loss) before tax 2013 2012 Change 2013 2012 Change Nine months ended – September (£m) (£m) (%) (£m) (£m) (%) UK RBB 3,374 3,307 2 983 950 3 Europe RBB 51
Slide 34: Revised Transform financial commitments
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Revised Transform financial commitments Original 2015 Revised Dates Targets Targets Return on Equity > CoE > CoE in 2016 2016 Operating Expenses £16.8bn £16.8bn 2015 Cost:Income Ratio mid-50s mid-50s 2015 Pro forma B3 RWAs £
Slide 35: Impact of costs to achieve Transform
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Impact of costs to achieve Transform Nine months ended – September 2013 Costs to Profit before Return on Cost: income Adjusted performance measures by business, achieve tax average equity ratio excluding costs to achieve Tra
Slide 36: Cost targets
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Cost targets £bn Costs to achieve Transform Adjusted operating expenses 19.7 1.2 18.5 5% 1.0 17.3 4% 0.5 18.5 18.5 17.5 16.8 2012 2013 2014 2015 Estimate Estimate Target 35 | Barclays Q3 2013 Fixed Income Investor Presentati
Slide 37: Cost analysis
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Cost analysis £m Costs to achieve Transform Corporate Performance costs 54 Africa RBB UK RBB 11 Non-performance costs 56 Barclaycard 14,144 11 Wealth 741 77 1,714 13,403 11,689 Europe RBB IB 357 175 Q3 YTD 2013 Q3 YTD 2013 C
Slide 38: Barclays Leverage Plan (as at 30 June 2013)
PERFORMANCE CAPITAL&&LEVERAGE CAPITAL LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Barclays Leverage Plan (as at 30 June 2013) Delivery of 3% PRA leverage ratio by June 2014 Leverage ratios (%) > 3.0 0.4 0.1 0.1 2.2 H1 2013 Rights issue Deleveraging 2 AT1 issuance Other capital accretion &
Slide 39: Estimated CRD IV Leverage Ratio
PERFORMANCE CAPITAL&&LEVERAGE CAPITAL LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Estimated CRD IV Leverage Ratio Q3 13 (£bn) 31 Dec 121 30 Jun 13 movements 30 Sept 13 Total assets (IFRS balance sheet) 1,488 1,533 (128) 1,405 Derivative financial IFRS assets 469 403 356 Derivatives netting
Slide 40: Notes on exposure measure adjustments
PERFORMANCE CAPITAL&&LEVERAGE CAPITAL LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Notes on exposure measure adjustments Derivatives netting adjustment: Regulatory netting applied across asset and liability mark-to-market derivative positions, pursuant to legally enforceable bi-lateral ne
Slide 41: RWAs by Business
PERFORMANCE CAPITAL&&LEVERAGE CAPITAL LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION RWAs by Business 30 Sept 13 30 June 13 As at (£m) (£m) UK RBB 43,209 43,609 Europe RBB 16,836 16,733 Africa RBB 24,148 25,492 Barclaycard 38,739 38,801 Investment Bank 157,185 168,842 Corporate Banking 70,544
Slide 42: Liquidity & funding management framework
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Liquidity & funding management framework Barclays has developed a dynamic liquidity framework and a diversified funding base, while maintaining protection against unexpected fluctuations Liquidity risk framework Funding stru
Slide 43: Wholesale funding composition (as at June 2013)
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Wholesale funding composition (as at 30 June 2013) ≤1 month >1 month >3 months >6 months Total >1 year but >2 years Total As at 30 June 2013 but ≤3 but ≤6 but ≤12 ≤1 year ≤2 years months months months (£bn) (£bn) (£bn) (£bn)
Slide 44: Term funding plans (as at June 2013)
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Term funding plans1 (as at 30 June 2013) Commitment to maintain access to a diversified funding base, across different products and multiple currencies Reduced funding requirements due: – Higher than expected deposit gro
Slide 45: Unsecured MTNs and subordinated liabilities
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Unsecured MTNs and subordinated liabilities Barclays is a major Medium-Term Notes (MTNs) issuer, with private and public MTNs and subordinated liabilities representing c.46% of its total wholesale funding, or £100.5bn, as at
Slide 46: Secured funding
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Secured funding High-quality assets and contained encumbrance levels allow Barclays to maintain access to secured funding Highlights Wholesale secured funding (as at 30 June 2013) Secured term funding backed by prime asset
Slide 47: Contingent Capital Notes (CCNs)
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Contingent Capital Notes (CCNs) Barclays sees significant value in contingent capital notes and has issued US$4.0bn of this subordinated debt as the Group transitions to its end-state CRD IV / ICB capital structure Strategy
Slide 48: Barclays funding cost
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Barclays funding cost 5-year USD Z-spread1 235 251 218 137 149 118 127 131 101 103 104 113 80 90 95 Macquarie JP Morgan RBS HSBC BNP Paribas Societe Generale Citigroup Goldman Sachs Barclays Nomura Bank of America Morgan Sta
Slide 49: Stable exposure to the Eurozone periphery
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Stable exposure to the Eurozone periphery1 As at 30 September Spain Italy Portugal Ireland Total Total 2013 (£m) (£m) (£m) (£m) (£m) Jun 2013 Sovereign 316 2,495 357 49 3,217 2,673 Corporate 3,474 1,472 1,087 1,165 7,198 8,9
Slide 50: Spanish exposures (as at June 2013)
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Spanish exposures (as at 30 June 2013) Retail Gross mortgage exposure by location Average balance weighted marked to market LTV of 65.7% of outstanding balances2 0.7% of home loans greater than 90 days in arrears1. Barce
Slide 51: Portuguese exposures (as at June 2013)
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Portuguese exposures (as at 30 June 2013) Retail Gross mortgage exposure by location Average balance weighted LTVs of 79.7% of outstanding balances2 0.4% of home loans greater than 90 days in arrears1. Corporate £1.1bn
Slide 52: Italian exposures (as at June 2013)
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Italian exposures (as at 30 June 2013) Retail Gross mortgage exposure by location Average valuation weighted marked to market LTVs of of outstanding balances2 46.6% Milan 1.0% of home loans greater than 90 days in arrear
Slide 53: UK banking reform
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION REGULATION UK banking reform Barclays backs initiatives to improve stability of the UK banking system and support a sustainable economy, however, requires alignment with international regulation and careful consideration of
Slide 54: Basel 3 Regulatory Timeline
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION REGULATION Basel 3 Regulatory Timeline Timeframe based on Capital Requirements Regulation (CRR) and Capital Requirements Directive (CRD) published in June 2013 H1 2010 1 Jan 2011 1 Jan 2012 1 Jan 2013 1 Jan 2014 1 Jan 2015 1
Slide 55: Debt investor relations contact information
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Debt investor relations contact information Richard Caven Oihana Bessonart Sofia Lonnqvist +44 (0)20 7116 2809 +44 (0)20 7116 6327 +44 (0)20 7116 5716 richard.caven@barclays.com oihana.bessonart@barclays.com sofia.lonnqvist@
Slide 56: Legal disclaimers
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Legal disclaimers 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 b
Slide 57: Legal disclaimers
PERFORMANCE CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY REGULATION Legal disclaimers Forward-looking statements This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securi