Barclays Plc · LSE:BARC
Barclays — Q1 2012 Earnings Presentation
36 slides from Barclays's earnings presentation, 2012
Slide 1: Investor Presentation First Quarter 2012
Investor Presentation First Quarter 2012
Slide 2: Performance highlights for the first quarter of 2012
Performance highlights for the first quarter of 2012 Barclays first quarter results are an encouraging start to the year and demonstrate continued progress across our execution priorities • Adjusted PBT1 of £2,445m, up 22%, with the non-Investment Bank businesses showing significant growth in adjust
Slide 3: Index – Q1 2012 Interim Management Statement
Index – Q1 2012 Interim Management Statement Slides Slides Financial highlights 4 IB income up 91% on Q411 14 Adjusted RoE rose to 12.2% 5 An encouraging start for the IB 15 Loan loss rate reduced to 63bps 6 Good progress in Corporate Banking 16 C:I ratio improved to 61% 7 Capital resources 17 Non-p
Slide 4: Financial highlights
Financial highlights Adjusted profits up 22% driven by strong performances in both Retail and Business Banking and Corporate and Investment Banking 2012 2011 Change Three months ended – March (£m) (£m) % Income (ex. own credit) 8,138 7,750 5 Impairment charges (778) (921) (16) Net operating income (
Slide 5: Adjusted return on equity rose to 12.2%
Adjusted return on equity rose to 12.2% We achieved an adjusted return on equity that exceeded 12%, driven by strong results in UK RBB, Barclaycard, and Wealth and Investment Management and Investment Management (£m) Q1 11 Q1 12 14.3% 12.2% 12.3% 10.2% 1.9% 1.5% RoE RoTE RoRWA 5 | Q1 Investor Presen
Slide 6: Loan loss rate reduced to 63bps
Loan loss rate reduced to 63bps Credit impairment charges reduced 16% to £778m with lower charges in most businesses bps 1992 250 property slump 200 Financial crisis period 150 Period including telecom 30 year 100 restructuring average 93bps Recovery period 63bps 50 0 90 95 00 05 10 Q1 12 6 | Q1 Inv
Slide 7: Cost to income ratio improved to 61%
Cost to income ratio improved to 61% Income growth of 5% while performance costs were held flat and non-performance costs increased slightly resulted in C:I ratio improving to 61% (2011: 62%) (£m) Non-performance costs (ex. PPI) +5% 8,138 Performance costs 7,750 4,949 4,842 PPI 300 3,946 4,051 896 8
Slide 8: Non-performance cost savings of £2bn by 2013
Non-performance cost savings of £2bn by 2013 Actuals Targets £17.5bn-£18bn 2010 Medium Term Plan £2bn £16.4bn Savings Target £15.5bn-£16bn Pre 2010 2010 2011 2012E 2013E Note: Non-performance costs exclude PPI provision, goodwill impairment and UK bank levy 8 | Q1 Investor Presentation
Slide 9: Rock solid capital, funding and liquidity
Rock solid capital, funding and liquidity Our rock solid capital, funding and liquidity positions remain a source of competitive advantage, enabling us to fund a substantial proportion of 2012 term funding requirements As at 31.03.12 31.12.11 Core Tier 1 ratio 10.9% 11.0% Risk weighted assets £394bn
Slide 10: Balanced income performance across Barclays in Q1
Balanced income performance across Barclays in Q1 Total income of £8.1bn was broadly based across our businesses and demonstrates the strength and diversification of the universal banking model Total income: £8,138m Corporate Banking Retail and Business Banking £824m Investment Banking £1,077m UK £2
Slide 11: Adjusted profit/(loss) before tax by business
Adjusted profit/(loss) before tax by business The non-Investment Bank businesses showed significant growth in adjusted profits 2012 2011 Change Three months ended – March (£m) (£m) % UK RBB 334 288 16 Europe RBB (43) (59) (27) Africa RBB 177 147 20 Barclaycard 349 296 18 Retail and Business Banking
Slide 12: Retail and Business Banking
Retail and Business Banking Continued earnings momentum despite difficult operating conditions Three months ended 31 March 2012 UK RBB Europe RBB Africa RBB Barclaycard Adjusted1 basis (£m) Income 1,077 243 830 990 Impairment charges (76) (72) (107) (232) Net operating income 1,001 171 723 758 Opera
Slide 13: Adjusted Return on Equity (RoE) – Retail and Business Banking
Adjusted Return on Equity (RoE) – Retail and Business Banking Adjusted returns growth with UKRBB and Barclaycard at targets 2011 RoE by business Q1 2012 RoE by business 14.9% UK RBB 15.0% -6.0% Europe RBB -6.0% 10.0% Africa RBB 10.2% 17.4% Barclaycard 19.6% 13 | Q1 Investor Presentation
Slide 14: Investment Bank income up 91% on Q411
Investment Bank income up 91% on Q411 Increased FICC income driven by improved performances in Rates and Emerging Markets; Equities broadly in line with prior year despite lower volumes in equity markets; and Investment Banking affected by muted issuance environment (£m) Q1 11 Q2 11 Q3 11 Q4 11 Q1 1
Slide 15: An encouraging start to the year for the Investment Bank
An encouraging start to the year for the Investment Bank Total income increased 3% and cost to net operating income ratio of 63%, within the 60-65% target range 2012 2011 Change Three months ended – March (£m) (£m) % Income 3,464 3,366 3 Impairment charges (75) 31 Net operating income 3,389 3,397 -
Slide 16: Good progress in Corporate Banking
Good progress in Corporate Banking Excluding £78m of fair value gains, profit before tax of £141m (2011: £28m) reflected improved impairment charges, lower costs and growth in Cash Management products 2012 2011 Change Three months ended – March (£m) (£m) % Income 824 751 10 Impairment charges (207)
Slide 17: Capital resources
Capital resources 31.03.12 31.12.11 As at £m £m Shareholders’ equity (ex. NCIs) 54,405 55,589 Net NCIs 2,667 2,661 Regulatory adjustments and deductions: Goodwill and intangible assets (7,597) (7,560) Own credit cumulative gain (net of tax) (702) (2,680) Defined benefit pension adjustment (1,500) (1
Slide 18: RWAs by business
RWAs by business 31.03.12 31.12.11 As at £bn £bn UK RBB 34.5 34.0 Europe RBB 17.5 17.4 Africa RBB 30.9 30.2 Barclaycard 33.2 34.2 Investment Bank 191.1 186.7 Corporate Banking 71.9 72.8 Wealth and Investment Management 13.2 13.1 Head Office and Other Operations 2.0 2.5 Total RWAs 394.5 391.0 18 | Q1
Slide 19: Investment Bank credit market exposures
Investment Bank credit market exposures Three months ended 31.03.12 FV (losses) Imp. (charge) Total (losses) 31.03.12 31.12.11 As at / gains / release / gains £m £m £m £m £m ABS CDO Super Senior 1,747 1,842 (7) (3) (10) US sub-prime and Alt-A 1,237 1,381 39 3 42 Commercial real estate loans and prop
Slide 20: Sovereign exposures to Spain, Italy, Portugal, Ireland and Greece reduced by 16%
Sovereign exposures to Spain, Italy, Portugal, Ireland and Greece reduced by 16% £bn As at 31.12.11 3.5 As at 31.03.12 3.0 2.5 2.2 0.8 0.6 0.2 0.2 Spain Italy Portugal Ireland Exposure to Greece remains minimal, with sovereign exposures of £4m (2011: £14m) 20 | Q1 Investor Presentation
Slide 21: Exposures to Spain, Italy, Portugal, Ireland and Greece
Exposures to Spain, Italy, Portugal, Ireland and Greece Spain Italy Portugal Ireland Greece Total As at 31 March 2012 £m £m £m £m £m £m Sovereign 2,159 2,988 594 218 4 5,963 Financial institutions 1,297 672 58 3,592 1 5,620 Residential mortgages 14,266 15,968 3,637 93 5 33,969 Corporate 5,016 2,597
Slide 22: Index – 2011 Full Year Results
Index – 2011 Full Year Results Slides Slides Performance highlights 23 Capital strength & management 31 Income by geographic segment 24 RWAs by risk 32 Mortgage book – delinquency & LTVs 25 Basel 3 CT1 pro forma 33 Credit cards & unsecured – delinquency 26 Notes 34 Operating expenses 27-28 Legal dis
Slide 23: Performance highlights for full year 2011
Performance highlights for full year 2011 We have delivered a strong set of results, both financially and in terms of our execution priorities • Total income up 3% to £32.3bn, adjusted income excluding own credit and debt buy-backs down 8% • Profit before tax of £5.9bn down 3%, adjusted profit befor
Slide 24: Income by geographic segment
Income by geographic segment FY 11 FY 10 1,274 1,159 4% 4% 4,967 4,997 15% 16% 12,714 40% 15,819 49% 6,025 19% 7,742 25% 4,207 4,828 13% 15% UK Europe Region Americas Africa and Middle East Asia 24 | Q1 Investor Presentation
Slide 25: Mortgage book – delinquency & LTV summary
Mortgage book – delinquency & LTV summary >90 day MTM New Proportion Gross L&A As at 31 December 2011 arrears LTV LTV >85% LTV £m % % % % UK 107,775 0.3 44.3 54.0 9.6 South Africa 17,585 3.2 45.2 61.2 24.2 Spain 14,918 0.5 60.1 61.3 15.6 Italy 15,935 1.0 46.9 59.6 2.3 Portugal 3,891 0.6 69.6 67.7 25
Slide 26: Credit cards, overdrafts and unsecured loans – delinquency summary
Credit cards, overdrafts and unsecured loans – delinquency summary >30 day >90 day Gross Recoveries imp. Gross L&A As at 31 December 2011 arrears arrears charge-off rates coverage ratio £m % % % % UK cards 13,162 2.7 1.2 6.0 85.2 US cards 8,303 3.1 1.5 7.6 92.1 UK personal loans 5,166 3.4 1.7 6.5 82
Slide 27: Operating expenses
Operating expenses To look at underlying performance we have adjusted operating expenses as shown Operating expenses (£m) 20,777 1,000 597 19,180 325 18,855 2011 Statutory PPI Provision Goodwill Impairment 2011 Adjusted Bank Levy1 2011 Adjusted excl Bank Levy 1 The bank levy is not considered an adj
Slide 28: Operating expenses
Operating expenses We remain focused on cost efficiency and undertook restructuring for which we are already seeing the benefits – we have increased our cost savings target to £2bn from £1bn Operating expenses (£m) Net Y-o-Y Net Y-o-Y Acquisitions Performance 2010 Restructuring FX Impact & Investmen
Slide 29: Balance sheet
Balance sheet Whilst the balance sheet totals £1.5tn, wholesale funding requirements are limited to £265bn as a consequence of its structure £1,501bn1 £536bn £525bn Assets Liabilities £328bn £328bn £341bn £296bn £130bn £152bn £135bn £144bn £87bn Total Gross Derivative Repo financing, Customer Custom
Slide 30: Wholesale debt maturity table as at 31.12.11
Wholesale debt maturity table as at 31.12.11 < 3 months 3-12 months Total < 1 year Total > 1 year Total £bn £bn £bn £bn £bn Deposits from banks 34.1 1.8 35.9 2.0 37.9 Certificates of deposit and commercial paper 35.0 11.5 46.5 2.9 49.4 Asset backed commercial paper 8.9 0.2 9.1 - 9.1 Senior unsecured
Slide 31: Capital management
Capital management Full year 2011 movement in Core Tier 1 ratio Underlying RWAs & Increase in Securitisation RWAs from Deductions CRD3 0.9% (0.9%) Movement in BlackRock share price to Retained Other $148 Pension Profit 0.2% (0.3%) Contribution 0.7% (0.3%) Published Published Basis Basis 11.0% 10.8%
Slide 32: RWAs by risk
RWAs by risk 31.12.11 31.12.10 As at £bn £bn Credit risk 245.2 261.0 Counterparty risk: Internal model method 33.1 29.5 Non-model method 5.0 14.4 Market risk: Modelled – VaR 26.6 9.2 Modelled – charges add-on and non-VaR 17.6 3.8 Standardised 27.8 48.1 Operational risk 35.7 32.1 Total RWAs 391.0 398
Slide 33: Basel 3 Core Tier 1 pro forma
Basel 3 Core Tier 1 pro forma Pro forma ratio of 11.1% gives capacity of £47bn of RWAs above10.0%. We see this as suitable to manage business growth, regulatory uncertainty and volatile market conditions Core Tier 1 Ratio under Basel 3 / CRD4 RWA effect from Consensus retained Basel 3 incl. earnings
Slide 34: Notes
Notes Slide – Basel 3 Core Tier 1 pro forma (page 33) • 2013 pro forma Core Tier 1 ratios are presented for illustrative purposes only • Consensus estimates for retained earnings are from 20 sell-side analysts, reflecting consensus dividend payout. Barclays neither endorses nor verifies the estimate
Slide 35: Legal disclaimers
Legal disclaimers Important Notice The information, statements and opinions contained in this document do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of any offer to buy any securities or financial instruments or any advice or recommendation wit
Slide 36: Investor Relations contact information
Investor Relations contact information Charlie Rozes +44 (0)20 7116 5752 [email protected] Richard Caven James Johnson +44 (0)20 7116 2809 +44 (0)20 7116 7233 [email protected] [email protected] Maritz Carvalho John Desgranges +44 (0)20 7116 5711 +44 (0)20 7116 8171 maritz