Barclays Plc · LSE:BARC
Barclays — H1 2009 Earnings Presentation
50 slides from Barclays's earnings presentation, Aug 3, 2009
Slide 1: Interim Results 2009 Presentation
Barclays PLC Interim Results 2009 Presentation
Slide 2: 2009 Interim Results, 3rd August 2009
Barclays PLC 2009 Interim Results 3rd August 2009 1
Slide 3: Chris Lucas, Group Finance Director
Chris Lucas Group Finance Director 2
Slide 4: Group performance
Group performance Half year ended - June 2008 2009 % £m £m change Income 11,843 16,253 37 Operating expenses (6,753) (8,747) 30 Impairment charges (2,448) (4,556) 86 Profit before tax 2,754 2,984 8 Cost:income ratio 57% 54% Earnings per share 27.0p 17.5p Return on equity 14.9% 10.1% 3
Slide 5: GRCB: divisional performance
GRCB: divisional performance 2008 2009 PBT- half year ended June % change £m £m UK Retail Banking 690 268 (61) Barclays Commercial Bank 702 404 (42) Barclaycard 388 391 1 GRCB - Western Europe 115 31 (73) GRCB - Emerging Markets 52 (86) - GRCB - Absa 298 248 (17) GRCB Total 2,245 1,256 (44) 4
Slide 6: IBIM: divisional performance
IBIM: divisional performance 2008 2009 PBT- half year ended June % change £m £m Barclays Capital 524 1,047 100 Barclays Global Investors 265 276 4 Barclays Wealth 182 75 (59) IBIM Total 971 1,398 44 5
Slide 7: Barclays Capital: income
Barclays Capital: income Change June 2008 Dec 2008 June 2009 Half year ended H109 v £bn £bn £bn H108 Top-line income 4.8 5.1 10.5 119% Credit market losses (2.2) (4.1) (3.5) Own credit 0.8 0.8 (0.9) Reported income 3.4 1.8 6.1 79% Credit market (1.1) (0.7) (1.2) impairment Other impairment (0.1) (0.
Slide 8: BarCap: credit market exposures
BarCap: credit market exposures £bn 2009 movement Exposure Net Write- sales/ FX/ Other 30 Jun 09 downs payments Commercial Mortgages (0.6) (1.5) (0.9) 9.3 Monolines - (1.4) 0.3 7.3 Leveraged finance (3.2) (0.2) (0.1) 6.9 US Residential Mortgages (2.5) (1.5) (0.5) 6.3 Other - (0.1) (0.4) 0.7 (6.3) (4
Slide 9: Divisional performance
Divisional performance 2008 2009 PBT- half year ended June % change £m £m GRCB 2,245 1,256 (44) IBIM 971 1,398 44 Head Office & Other Operations (462) 330 - Total 2,754 2,984 8 8
Slide 10: GRCB & Barclays Wealth: margins
GRCB & Barclays Wealth: margins H1 2008 Interest margin (bps) H2 2008 H1 2009 241 219 212 214 196 202 179 166 125 Asset Liability Net Interest Margin Margin Margin 9
Slide 11: Balance sheet management
Balance sheet management £bn 31 Dec 08 30 June 09 change Total assets 2,053 1,545 (508) Derivative assets 985 556 (429) Loans & advances 510 465 (45) Other assets 558 524 (34) 10
Slide 12: Adjusted gross leverage
Adjusted gross leverage £bn 31 Dec 08 30 June 09 Total assets 2,053 1,545 Derivative gross-up (917) (507) AUM on balance sheet (69) (66) Settlement balances (30) (35) Goodwill & Intangible assets (10) (10) Adjusted tangible assets 1,027 927 Tier 1 capital 37 43 Adjusted gross leverage 28x 22x Profor
Slide 13: Liquidity
Liquidity • Increased balance of secured vs unsecured liabilities • Extended maturity of unsecured liabilities • £5bn unguaranteed benchmark issuance • Cash & liquid assets increased from £36bn to £88bn 12
Slide 14: Barclays Capital: unsecured liabilities
Barclays Capital : unsecured liabilities Average Term 200 15 mths 11 mths 150 Up to 1 Month Rebased 100 >1 Yr 50 0 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 13
Slide 15: Capital ratios
Capital ratios (%) Core Tier 1 Tier 1 11.7 10.5 8.8 8.6 7.1 5.6 Dec Jun Pro- Dec Jun Pro- 08 09 forma 08 09 forma Jun 09 Jun 09 14
Slide 16: Summary
Summary • £3bn profit • Strong capital ratios • Reduced balance sheet and leverage • Strong liquidity • Benefiting from the Universal Banking Model 15
Slide 17: Robert Le Blanc, Risk Director
Robert Le Blanc Risk Director 16
Slide 18: Topics
Topics • Economic Environment • Overall Impairment Review • Portfolio Reviews • Market Risk • Trends and Outlook 17
Slide 19: Changing economic conditions
Changing economic conditions Consensus views for 2009 UK US Q4 08 Current Q4 08 Current View View View View GDP to decline 2% 4% 1-2% 2.5 - 3% Unemployment 8% 8.5% 8-9% 10% House Prices 12-15% 11-12% 10-12% 13% to fall 18
Slide 20: H1 09 Impairment review
H1 09 Impairment review H1 09 Outcome: 09 Planning Assumptions: £3.9bn Impairment 1. Economic conditions 2. Steady FX £3.7bn 3. Constant balance sheet £516bn LLR: 130 to 150 bps Comparable LLR 144 bps £3.4bn to £3.9bn (Reported LLR 165 bps) Impairment 19
Slide 21: GRCB and IBIM loans and advances
GRCB and IBIM loans and advances £515bn £473bn GRCB GRCB 294 284 IBIM IBIM 221 189 FY 08 H1 09 20
Slide 22: Total loan impairment charge
Total loan impairment charge H1 08 £2,261m H1 09 £3,903m BarCap Credit 5% BarCap Credit 18% Retail UK Retail UK 24% BarCap 27% BarCap CME CME 41% 13% Retail Intl Other Retail Intl 16% 1% 26% Comm. Comm. UK Intl 12% Other Comm. 6% 1% Comm. UK Intl 7% 3% 21
Slide 23: Mortgages – LTV at current market prices
Mortgages – LTV at current market prices £bn Portion Average 80 > 90% LTV South Africa 60 UK 12% 44% Spain Spain 3% 50% UK 40 South Africa 21% 43% H1 09 20 0 <70% 70%-80% 80%-90% 90%-100% 100%+ LTVs 22
Slide 24: UK mortgages – Arrears rate
UK mortgages – Arrears rate Percentage of loans >3 months in arrears Council of Mortgage 2.5% Lenders (CML) 2.0% 1.5% Barclays 1.0% 0.5% 0.0% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 23
Slide 25: UK mortgages – Repossession
UK mortgages – Repossession Percentage of properties taken into possession Council of Mortgage 0.12% Lenders (CML) 0.08% 0.04% Barclays 0.00% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 24
Slide 26: UK cards
UK cards 6.8% Annual Net Charge Off 6.1% 6.2% >90 Day 2.1% Delinquency 1.7% 1.6% Balances £10.4bn £10.6bn £10.6bn H1 08 H2 08 H1 09 25
Slide 27: UK unsecured consumer loans
UK unsecured consumer loans Annual 6.4% Net Charge Off 4.7% 4.6% >90 Day Delinquency 2.3% 2.7% 1.8% Balances £7.7bn £7.8bn £7.5bn H1 08 H2 08 H1 09 26
Slide 28: UK commercial bank impairment
UK commercial bank impairment Larger Asset & Sales Sponsor Business Finance Leveraged Medium Property-based Business Lending Loan Loss Rate 0%-1.5% 1.5% - 3% >3% Loan Balances £43.4bn £18.0bn £1.8bn PCRLs £1,083m £1,020m £124m 27
Slide 29: US cards
US cards 7.8% Annual Net Charge Off 5.4% 5.3% 3.2% >90 Day Delinquency 2.2% 2.3% Balances £7.8bn £6.9bn £3.4bn H1 08 H2 08 H1 09 28
Slide 30: GRCB international
GRCB international £809m Impairment Charges 295 £515m 222 £294m 301 Absa 125 WE 194 103 213 EM 66 99 H1 08 H2 08 H1 09 Annualised LLR (bps) 76 105 175 LLR based on loans to customers excluding banks 29
Slide 31: BarCap loans and impairment
BarCap loans and impairment Impairment £m H1 08 H2 08 H1 09 BarCap £176bn CME (excl. AFS) 986 532 706 Loans and other 54 365 525 68 Other Total (excl. AFS) 1,040 897 1,231 27 Cash Collateral AFS 186 300 643 Corp Loans Total Charge 1,226 1,197 1,874 81 Incl. CME H1 09 Watch List £bn 23.4 42.5 43.8 30
Slide 32: Group credit risk loans and coverage ratio
Group credit risk loans and coverage ratio 44.3 41.5 41.9 CRL Coverage £19.9bn Ratio (%) 39.1 3.6 £15.7bn £11.8bn 4.1 6.4 £9.6bn 3.9 4.1 ABS CDO 3.3 2.3 6.0 Wholesale 1.8 4.7 Unsecured 3.0 3.7 Mortgages 2.8 3.9 1.5 1.9 FY 07 H1 08 FY 08 H1 09 31
Slide 33: Credit market: Commercial mortgages
Credit market: Commercial mortgages £11.6bn 0.5bn Asia H1 09 UK 0.8bn £8.7bn Marks 0.4bn 91% Europe 4.0bn 69% 0.6bn 3.0bn 83% US 6.3bn 4.7bn 77% FY 08 H1 09 32
Slide 34: Monoline exposures & credit provisions
Monoline exposures & credit provisions $14.8bn $16.5bn Net $6.0bn $12.3bn Exposure $12.0bn $5.1bn $0.9bn Credit $2.5bn $4.5bn Provisions H1 08 FY 08 H1 09 33
Slide 35: Market risk – DVaR trends
Market risk – DVaR trends 150 120 (Hypothetical position) 130 FX $ / £ DVaR 100 FTSE 100 DVaR DVaR £m Index 110 80 90 Actual BarCap DVaR 70 60 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 34
Slide 36: Market risk – P&L distribution H1
Market risk – P&L distribution 50 H1 09 Total Income 40 Trading Days 30 Trading P&L 20 10 0 <-30 -30 to 0 0 to 30 30 to 60 60 to 90 > 90 £m 35
Slide 37: Trends and Outlook
Trends and Outlook • Retail credit trends • Wholesale credit trends • Impairment outlook 36
Slide 38: John Varley, Group Chief Executive
John Varley Group Chief Executive 37
Slide 39: 2009: Objectives
2009: Objectives • Staying close to customers and clients – Income • Managing our risks – Capital • Maintaining strategic momentum – Shape of the Barclays Group 38
Slide 40: 2009: Returns before growth
2009: Returns before growth • RWAs and RoRWAs • Balance sheet size and leverage • Growing customer liabilities • Positive ‘jaws’ • Strong capital ratios 39
Slide 41: Barclays Capital: top-line income up 119%
Barclays Capital: top-line income up 119% Income £bn H1 07 H1 08 2,000 3.5 H1 09 1.5 1,500 1.0 1,000 0.5 500 00 -500 Rates Credit Equity Investment Commodities Emerging Mortgages Currency Prime Principal Banking Markets & ABS Services Investments 40
Slide 42: Barclays Capital: recent client activity
Barclays Capital: recent client activity • Her Majesty’s Government • London Stock Exchange • The Kingdom of Spain • John Lewis • The Republic of France • Network Rail • The Republic of South Africa • Sumitomo Mitsui Banking • Roche Corporation • Pfizer • Premier Oil • Sainsbury’s • Harvard Universi
Slide 43: Goals
Goals • Output goal: unchanged • Input goal: increased scorecard • Key tests – Top quartile TSR – RoE ≥ CoE 42
Slide 44: Appendices
Appendices 43
Slide 45: Divisional margins - assets
Divisional margins - assets H1 2008 Interest margin (bps) H2 2008 H1 2009 906 704 677 510 474 475 316 257 274 140 143 160 150 162 109 113 123 129 102 105 113 UK Retail Barclays Barclaycard GRCB GRCB GRCB Barclays Banking Commercial Western Emerging Absa Wealth Bank Europe Markets 44
Slide 46: Divisional margins - liabilities
Divisional margins - liabilities H1 2008 Interest margin (bps) H2 2008 H1 2009 343 292 244 243 229 212 189 189 148 146 126 129 128 118 95 96 80 68 UK Retail Barclays GRCB GRCB GRCB Barclays Banking Commercial Western Emerging Absa Wealth Bank Europe Markets 45
Slide 47: Divisional net interest margins
Divisional net interest margins H1 2008 Interest margin (bps) H2 2008 H1 2009 979 775 737 446 414 414 292 259 257 169 171 143 165 156 153 158 173 190 100 107 99 UK Retail Barclays Barclaycard GRCB GRCB GRCB Barclays Banking Commercial Western Emerging Absa Wealth Bank Europe Markets 46
Slide 48: Mortgage asset quality
Mortgage asset quality UK Spain South Africa LTV band H2 08 H1 09 H2 08 H1 09 H2 08 H1 09 <=75% 78 71 87 84 61 57 >75% & <=80% 6 6 5 5 8 7 >80% & <=85% 6 6 4 4 7 7 >85% & <=90% 5 5 2 3 8 7 >90% & <=95% 3 4 1 2 7 8 >95% 3 8 2 2 11 14 MTM LTV % 40 44 48 50 41 43 Avg. LTV on New 47 46 63 55 58 54 Mortg
Slide 49: Productivity benchmarking
Productivity benchmarking (%) FY08 Peer Group Top Quartile CIR H108 Barclays Business CIR 134 H109 Barclays Business CIR 85 77 75 73 71 71 66 68 63 63 64 60 55 55 50 45 45 39 37 38 39 34 35 UK Retail Barclays Barclaycard GRCB Absa1 Barclays BGI Barclays Banking Commercial Western Capital 2 Wealth Ba
Slide 50: Barclays Capital: model continues to deliver across cycles
Barclays Capital: model continues to deliver across cycles £10,489 – H1 09 9,858 8,678 6,267 4,505 2,841 3,518 Top-line income (£m) 2,427 2002 2003 2004 2005 2006 2007 2008 2009 Interest Rates Down Up Up Up Down Down Credit Spreads Up Down Down Down Down Up Up Down Volatility Up Down Down Down Down