Barclays Plc · LSE:BARC
Barclays — Investor Presentation (September 2009)
67 slides from Barclays's investor presentation, Sep 4, 2009
Slide 1: Investor Presentation Autumn 2009
Client: Barclays Project: IR Presentation Spring 2009 Date: 06-03-2009 WI No: Verbal Investor Presentation Autumn 2009 4 September 2009 www.barclays.com/investorrelations
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Slide 3: CEO statement: returns before growth in 2009
“In challenging market conditions, we have continued to benefit from our diversified business base. The investments we have made, particularly in our international businesses, are driving very strong income performance and allowing us to absorb the consequences of the economic downturn. Our capital
Slide 4: Another period of strong income growth and solid profitability
Another period of strong income growth and solid profitability… Half year ended June 2008 2009 change Profit before tax 2008 2009 change £m £m % £m £m % Income 11,843 16,253 37 UK Retail Banking 690 268 (61) Operating expenses (6,753) (8,747) 30 Barclays Commercial Bank 702 404 (42) Impairment charg
Slide 5: Leverage has been reduced
…whilst leverage has been reduced… Adjusted gross leverage Balance sheet management 31 Dec 07 31 Dec 08 30 Jun 09 31 Dec 08 30 Jun 09 Change £bn £bn £bn £bn £bn £bn Total assets 1,227 2,053 1,545 Total assets 2,053 1,545 (508) Derivative gross-up (215) (917) (507) Derivative assets 985 556 (429) AUM
Slide 6: Capital ratios strengthened
…and capital ratios strengthened Core Tier 1 % % Dec 08 Jun 09 Pro-forma Jun 09 11.7 1.7% 10.5 1.0% (0.2%) (0.2%) 8.8 8.6 0.4% 0.3% 7.1 1.2% 5.6 4.6% 7.1% 8.8% Core Tier 1 Tier 1 Jun 08 July Sep/Nov Liability MCN 08 Interim Profit Jun 09 Sale of Jun 09 Capital Capital Mgt Conversion Dividend and RWA
Slide 7: Improved asset margins offset liability margin compression
Improved asset margins across banking books offset liability margin compression GRCB & Barclays Wealth H1 2008 interest margins (bps) H2 2008 H1 2009 241 214 212 219 196 202 179 166 125 Asset Margin Liability Margin Net Interest Margin Hedging is expected to mitigate about half the impact of margin
Slide 8: Liquidity: no reliance on wholesale funding for GRCB and Wealth
Liquidity: no reliance on wholesale funding for GRCB and Barclays Wealth, overall liquidity profile improved in first half Improved liquidity profile Barclays Capital: movement in term of unsecured liabilities – Increased balance of secured vs Greater than one year unsecured liabilities Up to one mo
Slide 9: Maintained strong credit ratings through the crisis
Maintained strong credit ratings through the crisis Long term credit rating – Rating Agencies have highlighted the strong UK franchise, acquisition of businesses and strategy Barclays Bank PLC of diversification by product and geography as Standard & Poor’s AA- key strengths. Moody’s Aa3 – Barclays
Slide 10: Regulatory change is inevitable but Barclays is well placed
Regulatory change is inevitable as we emerge from the crisis but Barclays is well placed to meet new requirements – Turner Review anticipates changes to both the definition of capital and the calculation of risk weighted assets for UK regulated banks – Following the March 09 stress test (which Barcl
Slide 11: Global Retail and Commercial Banking
Global Retail and Commercial Banking Global Retail and Commercial Banking Investment Banking and Investment Management Frits Seegers Robert E Diamond Jr PBT: £1,256m PBT: £1,398m UK Retail Banking Barclays Capital Deanna Oppenheimer Jerry del Missier PBT: £268m PBT: £1,047m Barclays Commercial Bank
Slide 12: International income growth offset UK deposit margin pressure
Global Retail and Commercial Banking International income growth has helped offset deposit margin pressure in the UK… Income Contribution to income growth £ million % UK UK International International 8,051 7,039 18 16 6,132 6,252 4,679 4,513 4,343 4,333 82 84 3,372 2,526 1,789 1,919 H1 06 H1 07 H1
Slide 13: Underlying costs well controlled
Global Retail and Commercial Banking …underlying costs have been well controlled… Operating expenses Staff numbers £ million full-time equivalent Property gains 4,300 26 4,168 8 3,795 118,400 120,400 112 Increase reflects: 3,683 4,274 4,160 114,300 – Higher pension costs – Distribution growth – New
Slide 14: GRCB remains solidly profitable in a tough environment
Global Retail and Commercial Banking …as a result GRCB remains solidly profitable in a tough environment £ million +14% +13% +120% 477 1,010 1,453 2,245 (69) 1,256 H1 08 Income Cost Impairment JVs H1 09 PBT PBT 12 Investor Presentation Autumn 2009 | www.barclays.com/investorrelations
Slide 15: Step change in international footprint
Global Retail and Commercial Banking The step change in international footprint means GRCB is well placed to capitalise on the global economic recovery Number of customers Number of distribution points Million UK UK International International 49 4,780 4,864 43 37 22 3,749 1,759 1,765 3,627 34 22 20
Slide 16: UK Retail Banking
Global Retail and Commercial Banking UK Retail Banking Income impacted by liability margin ... while gaining new customers and compression,costs well controlled... increasing market share H1 08 Income Costs H2 08 Property credit Increased pension costs H1 09 672 824 816 13.0 660 2,176 11.7 12.0 2,12
Slide 17: UK Retail Banking: conservative risk profile
Global Retail and Commercial Banking UK Retail Banking: conservative risk profile in a difficult economic environment Loans and advances to customers Mortgage portfolio Unsecured – Average LTV on stock: 44% lending Local £8.2bn business – Average LTV on new H1 09 lending: 46% £3.5bn – 90 days arrear
Slide 18: Barclays Commercial Bank: diversification of the loan book
Global Retail and Commercial Banking Barclays Commercial Bank: continuing to benefit from the diversification of the loan book Loan portfolio by sector Income Government £ million 6% Business and 1,413 Wholesale and other services retail distribution 23% 1,349 and leisure 15% Energy 1,257 Transport
Slide 19: Barclays Commercial Bank: lower exposure to higher risk balances
Global Retail and Commercial Banking Barclays Commercial Bank: lower exposure to higher risk property and sponsor leveraged balances Impairment Core commercial Asset & sales Loan loss rate areas: finance and 143bps Larger business Property-based Sponsor £467m Medium business lending leveraged 77bps
Slide 20: Barclaycard: strong income and resilient profit
Global Retail and Commercial Banking Barclaycard: delivered strong income and resilient profit performance in challenging market conditions Income PBT Average extended Number of customers balances £ million £ million £ billion million UK UK UK International International International 2,009 391 16.6
Slide 21: GRCB – Western Europe
Global Retail and Commercial Banking GRCB – Western Europe: strong income growth absorbed continued impairment, restructuring costs and losses in Barclays Russia Distribution Loans and Customer £ million points advances accounts £bn £bn Income Costs Cost income ratio +23% +19% +45% 886 1,221 49.0 16
Slide 22: GRCB – Emerging Markets
Global Retail and Commercial Banking GRCB – Emerging Markets: well placed to deliver rapid profit growth as economic conditions improve in chosen markets Strong income growth across the region Common market characteristics – 29% increase in PBT in established African – Growing use of Financial Servi
Slide 23: Absa Group Limited: profitable and well capitalised
Global Retail and Commercial Banking Absa Group Limited: profitable and well capitalised in challenging macroeconomic environment Rand million – Resilient performance in tough conditions PBT Income – Diversified franchise protects earnings Costs – Retail impairments nearing peak Impairment 7,617 – C
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Slide 25: Investment Banking and Investment Management
Investment Banking and Investment Management Global Retail and Commercial Banking Investment Banking and Investment Management Frits Seegers Robert E Diamond Jr PBT: £1,256m PBT: £1,398m UK Retail Banking Barclays Capital Deanna Oppenheimer Jerry del Missier PBT: £268m PBT: £1,047m Barclays Commerci
Slide 26: Barclays Capital: very strong income performance
Investment Banking and Investment Management Barclays Capital: very strong income performance well ahead of prior year £ million CAGR (03 – 08) £ million H1 08 v H1 09 Income 13% Income 79% PBT 7% PBT 100% 7,119 6,267 6,089 5,231 4,505 3,518 3,411 2,841 2,216 2,335 1,431 1,302 930 1,142 1,047 524 03
Slide 27: Barclays Capital: underlying income driven by client franchise
Investment Banking and Investment Management Barclays Capital: underlying income driven by strong client franchise Cumulative Client Revenues: Top 500 Clients Top-line income £ million H1 09 600 Indexed client revenues 500 10,489 400 300 H1 08 H1 07 4,784 200 H1 06 100 0 0 100 200 300 400 500 H1 08
Slide 28: Barclays Capital: model delivers across cycles
Investment Banking and Investment Management Barclays Capital: model continues to deliver across cycles Top-line income £ million H1 09 2008 2007 10,489 9,858 8,678 2006 2005 6,267 2004 2002 2003 4,505 3,518 2,427 2,841 Interest rates Down – Up Up Up Down Down – Credit spreads Up Down Down Down Down
Slide 29: Barclays Capital: market positions and recognition
Investment Banking and Investment Management Barclays Capital: strong market positions and recognition of capabilities Recent Awards Rankings 03 04 05 06 07 08 H1 09 – Best Primary Debt House: Euromoney, June 2009 Global Debt, Equity & Equity-related 13 12 10 9 8 2 2 – Most Impressive Bank for Corpo
Slide 30: Barclays Capital: diversified product mix
Investment Banking and Investment Management Barclays Capital: diversified product mix has driven performance Top-line income £ billion H1 07 H1 08 H1 09 3.5 1.5 1.0 0.5 0 Rates Credit Equities Investment Commodities Emerging Mortgages Currency Prime Principal banking markets & ABS services investme
Slide 31: Barclays Capital: regional diversification
Investment Banking and Investment Management Barclays Capital: regional diversification Top-line income by geography RoW RoW Africa Africa 7% Asia 1% 6% 3% Pacific 7% UK Asia UK 25% Pacific 29% 11% H1 08 EU H1 09 £4,784m (ex UK) £10,489m 21% EU (ex UK) 19% US US 31% 40% 28 Investor Presentation Autu
Slide 32: Barclays Capital: cost management
Investment Banking and Investment Management Barclays Capital: cost management Cost: income ratio Cost: net income ratio 77% 75% 52% 49% H1 08 H1 09 H1 08 H1 09 +3 points -2 points 29 Investor Presentation Autumn 2009 | www.barclays.com/investorrelations
Slide 33: Barclays Capital: reduction in credit market exposures
Investment Banking and Investment Management Barclays Capital: significant reduction in credit market exposures Credit market exposures £ billion Dec 2008 Jun 2009 42.1 12.3 29.8 9.3 9.4 8.4 7.3 6.2 4.3 3.1 3.4 2.3 2.3 1.7 1.0 0.6 Total exposure ABS CDO Other Alt-A SIVs and Monoline Commercial Lever
Slide 34: Barclays Global Investors: solid results in a challenging market
Investment Banking and Investment Management Barclays Global Investors: delivered solid results in a challenging market £ million CAGR (04 – 08) H1 09 v H1 08 Income Revenue 20% Revenue (2%) PBT 15% PBT 4% PBT BGI/BlackRock deal costs 1,926 1,844 1,665 1,318 987 963 893 714 734 540 595 336 382 265 1
Slide 35: BGI: increased AUMs and market leadership
Investment Banking and Investment Management Barclays Global Investors: increased AUMs and maintained market leadership positions $bn 05 06 07 08 H1 09 Net new assets 88 68 86 99 108 Total AUM 1,513 1,814 2,079 1,495 1,678 iShares AUM 193 287 408 325 385 Rank World’s Largest Asset Manager 1st Global
Slide 36: BGI: assets under management
Investment Banking and Investment Management Barclays Global Investors: assets under management $ billion Market index a 2,079 1,814 1,678 1,513 1,495 1,362 1,070 784 802 769 746 619 500 410 96 97 98 99 00 01 02 03 04 05 06 07 08 H1 09 Net new assets $bn b 20 40 75 49 73 97 106 88 68 86 99 108 a Com
Slide 37: BGI: BlackRock transaction overview
Investment Banking and Investment Management Barclays Global Investors: BlackRock transaction overview Strategic Rationale Take advantage of investment banking / asset Foster ongoing / expanded commercial relationship management convergence through strong partnerships between Barclays and the enlarg
Slide 38: BGI: BlackRock transaction key elements and timeline
Investment Banking and Investment Management Barclays Global Investors: BlackRock transaction overview Key elements of the deal Transaction timeline – Consideration of $13.5bn at time of announcement Timeframe Key Milestone on 12 June 2009 12 June 2009 Announced receipt of binding offer – $6.6bn in
Slide 39: Barclays Wealth: income flat despite headwinds
Investment Banking and Investment Management Barclays Wealth: income flat year on year despite significant economic headwinds £ million CAGR (05 – 08) H1 09 v H1 08 £ million Underlying H1 09 v H1 08 Income 8% (6%) Income 0% b PBT 28% a (59%) PBT (4%) b Gains on sale of closed life assurance busines
Slide 40: Barclays Wealth: building client franchise
Investment Banking and Investment Management Barclays Wealth: continuing to build client franchise H1 08 H1 09 Recent Awards – Global Investor, Wealth Manager of the Year 2009 Loans & Advances (£bn) 9.4 12.0 – Euromoney: Best UK Local Bank 2009 Client Assets (£bn) 132.5 134.1 Client Facing Professio
Slide 41: Barclays Wealth: momentum in building global presence
Investment Banking and Investment Management Barclays Wealth: strong strategic momentum in building global presence 2005 2006 2007 2008 H1 09 – Significantly UK centric – Launched Barclays – Acquired Walbrook – Acquired Lehman PIM – Preliminary agreement Private Bank in Spain business business Barcl
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Slide 43: Appendices
Appendices 39 Investor Presentation Autumn 2009 | www.barclays.com/investorrelations
Slide 44: Barclays is a major global financial services provider
Listed in London (BARC) and New York (BCS) Barclays is a major global financial services provider engaged in retail and commercial banking, credit cards, investment banking, wealth management and investment management services with an extensive international presence in Europe, the United States, Af
Slide 45: UK Retail Banking
UK Retail Banking H1 09 £m H1 08 £m Change % Total income net of insurance claims 2,007 2,176 (8) Impairment charges (469) (288) 63 Net income 1,538 1,888 (19) Operating expenses (1,272) (1,202) 6 Share of results of associates and JVs 2 4 (50) 1,720 13.0m Profit before tax 268 690 (61) branches sav
Slide 46: Barclays Commercial Bank
BarclaysCommercialBank H1 09 £m H1 08 £m Change % Total income net of insurance claims 1,413 1,349 5 Impairment charges (467) (148) 216 Net Income 946 1,201 (21) Operating expenses (542) (498) 9 Share of results of associates and JVs – (1) – 79,600 £7.4bn Profit before tax 404 702 (42) UK customers
Slide 47: Barclaycard
Barclaycard H1 09 £m H1 08 £m Change % Total income net of insurance claims 2,009 1,418 42 Impairment charges (915) (477) 92 Net Income 1,094 941 16 Operating expenses (708) (641) 10 Share of results of associates and JVs 2 (1) (300) 23.7m £8.5bn Gain on acquisition – 89 – credit card customers UK a
Slide 48: GRCB – Western Europe
GRCB – Western Europe H1 09 £m H1 08 £m Change % Total income net of insurance claims 886 641 38 Impairment charges (301) (103) 192 Net Income 585 538 9 Operating expenses (554) (423) 31 2.5m customers 1,451 ATMs Profit before tax 31 115 (73) 1,221 38% Loans and advances to customers Jun-09 £49.0bn
Slide 49: GRCB – Emerging Markets
GRCB – Emerging Markets H1 09 £m H1 08 £m Change % Total income net of insurance claims 529 410 29 Impairment charges (213) (66) 223 Net Income 316 344 (8) Operating expenses (419) (292) 43 217,000 805 Profit before tax (86) 52 (265) current and savings in H1 2009 distribution accounts added in poin
Slide 50: GRCB – Absa
GRCB – Absa H1 09 £m H1 08 £m Change % Total income net of insurance claims 1,207 1,047 15 Impairment charges (295) (125) 136 Net Income 912 922 (1) Operating expenses (665) (627) 6 Share of results of associates and JVs – 3 – 11m 102,000 Profit on disposal of subsidiaries, associates and JVs 1 – –
Slide 51: Barclays Capital
Barclays Capital H1 09 £m H1 08 £m Change % Total income net of insurance claims 6,089 3,411 79 Impairment charges (1,874) (1,226) 53 Net Income 4,215 2,185 93 Operating expenses (3,176) (1,679) 89 Share of results of associates and JVs 8 18 (56) 840 67% Profit before tax 1,047 524 100 >£1m revenue
Slide 52: Barclays Global Investors
Barclays Global Investors H1 09 £m H1 08 £m Change % Total income net of insurance claims 963 987 (2) Operating expenses (687) (722) (5) Profit before tax 276 265 4 $1,678bn $385bn assets under ETF assets under Jun-09 Dec-08 Jun-08 management management Total assets £67.8bn £71.3bn £79.0bn $108bn 38
Slide 53: Barclays Wealth
Barclays Wealth H1 09 £m H1 08 £m Change % Total income net of insurance claims 627 668 (6) Impairment charges (21) (12) 75 Net Income 606 656 (8) Operating expenses (532) (474) 12 Leading £134bn Profit on disposal of subsidiaries, associates and JVs 1 – – UK wealth manager client assets Profit befo
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Slide 55: Risk management
Risk management Robert Le Blanc Risk Director 3 August 2009 50 Investor Presentation Autumn 2009 | www.barclays.com/investorrelations
Slide 56: Changing economic conditions
Topics Changing economic conditions Consensus views for 2009 Economic Environment UK US Overall Impairment Review Q4 08 Current Q4 08 Current View View View View Portfolio Reviews GDP to decline 2% 4% 1-2% 2.5 - 3% Market Risk Trends and Outlook Unemployment 8% 8.5% 8-9% 10% House Prices 12-15% 11-1
Slide 57: H1 09 impairment review and group loans and advances
H1 09 Impairment review Group loans and advances H1 09 Outcome: 09 Planning Assumptions: £3.9bn Impairment £516bn 1. Economic conditions £474bn 2. Steady FX £3.7bn 3. Constant GRCB GRCB balance sheet £516bn 294 284 IBIM LLR: 130 to 150 bps Comparable LLR IBIM 221 189 144 bps £3.4bn to £3.9bn (Report
Slide 58: Total loan impairment charge; mortgages LTV
Total loan impairment charge Mortgages – LTV at current market prices £bn H1 08 £2,261m H1 09 £3,903m Portion Average 80 > 90% LTV BarCap South Credit Africa 5% BarCap Credit 60 UK 12% 44% Spain 18% Retail UK Retail UK 24% Spain 3% 50% BarCap 27% BarCap UK CME CME 40 South Africa 21% 43% 41% 13% Ret
Slide 59: UK mortgages arrears and repossession
UK mortgages – Arrears rate UK mortgages – Repossession Percentage of loans >3 months in arrears Percentage of properties taken into possession Council of Mortgage Council of Mortgage Lenders (CML) 0.12% Lenders (CML) 2.5% 2.0% 0.08% 1.5% Barclays 1.0% 0.04% Barclays 0.5% 0.0% 0.00% Q1 08 Q2 08 Q3 0
Slide 60: UK cards and unsecured consumer loans
UK cards UK unsecured consumer loans 6.8% Annual Annual 6.4% Net Charge Off 6.1% 6.2% Net Charge Off 4.7% 4.6% >90 Day 2.1% >90 Day Delinquency 1.7% 1.6% Delinquency 2.3% 2.7% 1.8% Balances £10.4bn £10.6bn £10.6bn Balances £7.7bn £7.8bn £7.5bn H1 08 H2 08 H1 09 H1 08 H2 08 H1 09 55 Investor Presenta
Slide 61: UK commercial bank impairment and US cards
UK commercial bank impairment US cards 7.8% Larger Asset & Sales Sponsor Annual Business Finance Leveraged Net Charge Off 5.4% 5.3% Medium 3.2% Property-based Business >90 Day Lending Delinquency 2.2% 2.3% Loan Loss Rate 0%-1.5% 1.5% - 3% >3% Loan Balances £43.4bn £18.0bn £1.8bn Balances £7.8bn £6.9
Slide 62: GRCB international BarCap loans and impairment
GRCB international BarCap loans and impairment £809m Impairment Impairment £m H1 08 H2 08 H1 09 Charges 295 BarCap £515m £176bn CME (excl. AFS) 986 532 706 Loans and other 54 365 525 222 68 Other £294m 301 Total (excl. AFS) 1,040 897 1,231 Absa 27 Cash 125 Collateral AFS 186 300 643 WE 194 103 213 C
Slide 63: Group credit risk loans and coverage ratio
Group credit risk loans and coverage ratio Credit market: Commercial mortgages 44.3 £11.6bn 41.5 41.9 0.5bn CRL Coverage £19.9bn Asia H1 09 39.1 Ratio (%) 3.6 UK 0.8bn £8.7bn Marks £15.7bn 0.4bn 91% Europe 4.0bn 0.6bn 69% £11.8bn 4.1 6.4 3.0bn 83% £9.6bn 3.9 4.1 ABS CDO 3.3 2.3 6.0 US 6.3bn Wholesal
Slide 64: Monoline exposures and market risk DVaR trends
Monoline exposures & credit provisions Market risk – DVaR trends $14.8bn $16.5bn 150 120 (Hypothetical position) 130 FX $ / £ DVaR Net 100 DVaR £m $12.3bn FTSE 100 DVaR $6.0bn $12.0bn Exposure Index 110 $5.1bn 80 90 $0.9bn Credit $2.5bn Actual BarCap DVaR $4.5bn Provisions 70 60 Jan 09 Feb 09 Mar 09
Slide 65: Market risk P&L distribution; trends and outlook
Market risk – P&L distribution Trends and Outlook 50 H1 09 Total Income Retail credit trends 40 Trading Days Wholesale credit trends 30 Trading P&L 20 Impairment outlook 10 0 <-30 -30 to 0 0 to 30 30 to 60 60 to 90 > 90 £m 60 Investor Presentation Autumn 2009 | www.barclays.com/investorrelations
Slide 66: Forward-looking statements
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 Securities Act of 1933, as amended, with respect to certain of the Group's plans and its current goa
Slide 67: Investor Relations
Investor Relations Stephen Jones +44 (0)20 7116 5752 [email protected] Neil Temple +44 (0)20 7116 2928 [email protected] Matt Sheppard +44 (0)20 7116 5724 [email protected] James Johnson +44 (0)20 7116 7233 [email protected] 62 Investor Presentation Autumn 2009 |