Barclays Plc · LSE:BARC
Barclays — Investor Presentation (February 2024)
35 slides from Barclays's investor presentation, Feb 20, 2024
Slide 1: Simpler, Better, More balanced
Barclays Simpler, Better, More balanced Investor Update: 20th February 2024
Slide 2: Barclays today
Barclays today Barclays Investor Update February 2024 27 Strong customer franchises in the UK and US >20m 25% 20m 330 years of innovation Barclays UK UK corporates US credit customers are clients1 card customers We have built a leading Global Markets and Investment Banking business Top 3 =#1 #1 Lead
Slide 3: Over the last decade we have become well-capitalised and leaner
Over the last decade we have become well-capitalised and leaner Barclays Investor Update February 2024 28 Strategy Update Non-priority business exits Investor Update May 20141 • Africa February 2024 139,600 92,400 • Commodities • Europe retail banking colleagues • Reduced non-CIB footprint in Asia c
Slide 4: Improved RoTE and increased distributions with room to grow
Improved RoTE and increased distributions with room to grow Barclays Investor Update February 2024 29 Strong Return on Tangible Equity in each of the last three years 10.6%1 SCA 1.6% Impact1 13.1% 10.4% 9.0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Increased shareholder distributions: distr
Slide 5: We know we need to do even better
We know we need to do even better Barclays Investor Update February 2024 30 Operationally Financially “Consistently excellent” Drive towards higher returns within our divisions Demonstrate stronger cost control Improve customer experience Invest RWAs in higher returning consumer and corporate busine
Slide 6: Which will deliver
Which will deliver Barclays Investor Update February 2024 31 Targets 2023 2024 2026 Statutory 9.0%1 >10% >12% RoTE £7.7bn At least £10bn Total Payout 2024-2026 2021-2023 c.50% of market cap2 Investment Bank RWAs 63%3 c.50% (% of Group) This multiyear plan is subject to supervisory and Board approval
Slide 7: Our journey to achieve Simpler, Better, More balanced
Our journey to achieve Barclays Investor Update February 2024 32 Simpler Better More balanced
Slide 8: What Simpler means
What Simpler means Barclays Investor Update February 2024 33 Simpler business Simpler organisation Simpler operations
Slide 9: Simpler business: five focused divisions
Simpler business: five focused divisions Barclays Investor Update February 2024 34 Ring-fenced bank Barclays International Barclays UK Consumer, Cards and Payments Corporate and Investment Bank Barclays UK (BUK) Private Bank & Wealth US Consumer Bank UK Corporate Bank Investment Bank Management (PBW
Slide 10: Simpler organisation and operations: continuing the journey
Simpler organisation and operations: continuing the journey Barclays Investor Update February 2024 35 Reduce organisational Continue to upgrade legacy Further uplift operational complexity technology controls Starting point We will continue Example actions Outcome BX1 c.70k FTEs2 Reposition c.30% Si
Slide 11: What Better means?
What Better means? Barclays Investor Update February 2024 36 Better returns Better investments Better quality income Better customer experience and outcomes
Slide 12: Better returns: our divisions contribute through growth and performance
Better returns: our divisions contribute through growth and performance Barclays Investor Update February 2024 37 Statutory RoTE 2021 2022 2023 2024 2026 Barclays UK 18% 19% 19% High teens % Barclays UK Corporate Bank 14% 19% 20% High teens % Barclays 36% 33% >25% Private Bank & Wealth Management 23
Slide 13: Better investments: facilitating growth in all divisions
Better investments: facilitating growth in all divisions Barclays Investor Update February 2024 38 Investments in businesses outside of the Investment Bank1 £bn cost spend (P&L) Barclays Investment Bank Barclays US Consumer Bank Investing more on driving future returns Barclays Private Bank and Weal
Slide 14: Better quality income: diverse sources of income to support growth
Better quality income: diverse sources of income to support growth Barclays Investor Update February 2024 39 Income (£bn) c.30 +c.15% 24.71 25.4 2.0 21.9 2.2 We have grown more Investment 4.3 stable income streams 3.7 banking fees 5.71 +14% +c.35% since 2021 +19% 2.9 4.3 Intermediation 2.9 More stab
Slide 15: Better customer experience and outcomes: where we need to do more
Better customer experience and outcomes: where we need to do more Barclays Investor Update February 2024 40 Barclays today Barclays tomorrow • Barclays UK Brand NPS ranked 8th1 • More resilient platforms • Tailored servicing model • Enhanced offerings • 56% of UK Corporate clients rate overall • Mor
Slide 16: What More balanced means?
What More balanced means? Barclays Investor Update February 2024 41 More balanced allocation of RWAs More balanced geographical footprint
Slide 17: Capital allocation to our highest returning divisions
Capital allocation to our highest returning divisions Barclays Investor Update February 2024 42 Statutory RoTE RWA% of Group RWA 2023 Growth Drivers FY21-FY23 average 2023 2026 vs. 2023 Barclays UK 19% 21% £74bn Allocation of RWAs across the three Barclays UK Corporate Bank 18% 6% £21bn +c.£30bn hig
Slide 18: Barclays Investment Bank c.50% of Group RWAs by 2026
Barclays Investment Bank c.50% of Group RWAs by 2026 Barclays Investor Update February 2024 43 Investment Bank competitive and at scale Corporate & Investment Bank Investment Bank Investment Bank 2023 2023 2026 63% 58% c.50% % of Group RWA Re-segmented Group Includes Global Markets and Investment Ba
Slide 19: Now is the right time to grow in our UK home market
Now is the right time to grow in our UK home market Barclays Investor Update February 2024 44 1. Deep rooted presence and brand 2. UK economy remains resilient to geopolitical events 3. Strong and trusted regulatory environment 4. London is our global financial centre Aim to become the UK-centred le
Slide 20: Simpler Better More balanced Outcome
Barclays Investor Update 45 February 2024 Simpler Better More balanced Outcome
Slide 21: Statutory RoTE: driving to above 12% by 2026
Statutory RoTE: driving to above 12% by 2026 Barclays Investor Update February 2024 46 >5% <(0.5%) c.(0.5%) Investment Bank c.(2.0%) FY23 c.(0.5%) Retail & adjusted >1.5% c.(0.0%) Corporate2 <(1.5%) Includes: RoTE: 10.6%1 1.6% Cash flow hedge reserve amortisation c.>(0.5)% Includes: Incremental equi
Slide 22: Income: deploying c.£30bn of RWA to our home UK market
Income: deploying c.£30bn of RWA to our home UK market Barclays Investor Update February 2024 47 Income (£bn) Lending growth underpinned by c.£30bn RWA deployment c.30 Product 2023 Action 25.4 PBWM 1.2 6% Grow presence High LTV mortgages UKC 1.8 total book1 Leverage Kensington2 Grow Business Banking
Slide 23: Income: predictable uplift from the structural hedge
Income: predictable uplift from the structural hedge Barclays Investor Update February 2024 48 10.0 4.1% 09.0 3.4% Gross contribution 08.0 resilient to marginal 07.0 changes in rates and notionals 06.0 1.5% 1.1% Average hedge yield1 1.1% 0.9% 0.9% 05.0 5-year swap rate2 0.7% 0.7% 04.0 0.0% 03.0 02.0
Slide 24: Income: realistic assumptions underpin Investment Bank growth
Income: realistic assumptions underpin Investment Bank growth Barclays Investor Update February 2024 49 • Markets broadly flat 18.0 252 • Banking reverting 300.0 218 204 to 10-year average 16.0 c.200 172 178 200.0 Combined 14.0 Wallet $bn1 12.0 100.0 0.0 Investment 10.0 2.2 2.7 Banking 08.0 3.7 2.0
Slide 25: Costs: c.£2bn cost efficiency by 2026
Costs: c.£2bn cost efficiency by 2026 Barclays Investor Update February 2024 50 CIR CIR 63%1 High 50s% £bn Q423 0.9 SCAs 1.7 • Efficiency savings more than offsetting c.0.2 c.(0.1) inflation c.(2.0) 1.2 o c.£0.5bn in 2024 from £1.0bn of structural cost actions in 2023 o c.£1.5bn driven by prior and
Slide 26: Costs: lower regulatory change spend facilitates investments in growth
Costs: lower regulatory change spend facilitates investments in growth Barclays Investor Update February 2024 51 Total investment (including structural cost actions) £bn cost spend (P&L) Structural cost actions Investments (income growth and protection and cost efficiency) Regulation and control 2.3
Slide 27: Costs: better CIRs and opportunity vs. best in class
Costs: better CIRs and opportunity vs. best in class Barclays Investor Update February 2024 52 c.£2bn cost efficiency savings by business1 Cost: income ratio Top quartile peer benchmark as at FY222 2024-26 2021 2022 20234 2026 68% Barclays UK c.£0.7bn 60% 56% c.50% Barclays UK Corporate Bank c.£0.1b
Slide 28: Impairment: lending growth to maintain loan loss rate of 50-60bps
Impairment: lending growth to maintain loan loss rate of 50-60bps Barclays Investor Update February 2024 53 Significant risk transfers provide loss protection £348bn Customer loans 36% protection against c.£50bn of exposure1 £328bn and advances Maintaining risk discipline as we grow unsecured lendin
Slide 29: Plan returns based on realistic scenarios
Plan returns based on realistic scenarios Barclays Investor Update February 2024 54 Unemployment Inflation 7.4% 4.8% 4.7% 4.8% UK Statutory RoTE UK 4.3% US 4.3% 4.3% 4.3% US 3.0% 4.1% 3.7% 2.1% 2.1% 2.7% 2.0% 2023 2024 2026 1.9% 2023 2024 2025 2026 2023 2024 2025 2026 UK rates Markets & Banking wall
Slide 30: Capital distributions: prioritising returns to shareholders
Capital distributions: prioritising returns to shareholders Barclays Investor Update February 2024 55 1. Regulatory capital 2. Shareholder distributions 3. Investment Protect our customers, Increase returns to our Grow our business for the clients and investors shareholders benefit of all our stakeh
Slide 31: Capital distributions: greater free capital available to shareholders
Capital distributions: greater free capital available to shareholders Barclays Investor Update February 2024 56 RoTE targets will drive higher Shareholders to receive greater capital generation proportion of capital generated Statutory RoTE Capital generation1 Capital generation from 2024-26 Reg cha
Slide 32: Capital distributions: plan to return at least £10bn 2024-2026
Capital distributions: plan to return at least £10bn1 Barclays Investor Update February 2024 57 2024-2026 2025-2026 Plan to return 2023 2024 at least Progressive £3.0bn Broadly in line increase £10bn with 2023 £1.8bn buyback 2024-261 £1.2bn dividend c.15% of market cap2 c.50% of market cap2 Capital
Slide 33: Our financial goals for the next three years
Our financial goals for the next three years Barclays Investor Update February 2024 58 Targets 2023 2024 2026 Statutory RoTE 9.0% >10% >12% Total payout £7.7bn > At least £10bn1 2021-2023 2024-2026 Investment Bank RWA 63%2 > c.50% (% of Group) Supporting targets 2023 2024 2026 Income £25.4bn > c.£30
Slide 34: Why Barclays?
Why Barclays? Barclays Investor Update February 2024 59 1 High returning UK retail and corporate franchises 2 Top-tier global Investment Bank with focus and scale, operating in core UK and US markets 3 Multiple levers to allocate capital in a disciplined way to drive growth within higher returning d
Slide 35: 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