Barclays Plc · LSE:BARC
Barclays — Investor Presentation (February 2009)
66 slides from Barclays's investor presentation, Feb 23, 2009
Slide 1: Investor Presentation Spring 2009
www.barclays.com/investorrelations Investor Presentation Spring 2009 23 February
Slide 2: Strategic priorities and 2008 milestones
“Our strategy is to achieve good growth through time by diversifying our business base and increasing our presence in markets and segments that are growing rapidly.” John Varley Group Chief Executive Strategic priorities 2008 milestones Build the best bank in the UK 36% of net new mortgages in UK Ac
Slide 3: Reshaping Barclays into a diversified global universal bank
Executing on this strategy is reshaping Barclays from a UK clearing bank into a diversified global universal bank Profit diversification by geography (excluding Profit diversification by business unit significant items) GRCB UK IB&IM Non-UK Wealth 10% UKRB 20% BGI 9% 51% 61% 39% £8.5bn £8.1bn £6.1bn
Slide 4: In a difficult environment, Barclays has been solidly profitable
In a difficult environment, Barclays has been solidly profitable FY07 FY08 % FY07 FY08 % £m £m change £m £m change Income 23,000 23,115 1 UK Retail Banking 1,275 1,369 7 Impairment charges (2,795) (5,419) 94 Barclays Commercial Bank 1,357 1,266 (7) Operating expenses (13,199) (14,366) 9 Barclaycard
Slide 5: Results reflect solid operating profit and significant items
Results reflect solid operating profit and significant items 2008 2009 – Record income enabled solid profitability in 2008 – Strong capital ratios and earnings momentum provides – Material increase in capital loss absorption capability – We understand the risks in our portfolio – Competitive landsca
Slide 6: Strong funding position with self-funded retail and commercial balance sheet
Strong funding position with self-funded retail and commercial balance sheet and a flexible wholesale balance sheet As at 31 December 2008 Assets Liabilities – Adjusted tangible assets increased from £889bn £bn £bn at the end of 2007 to £1,027bn Retail & commercial balances – Loans and Advances incr
Slide 7: We intend to reduce adjusted gross leverage further
We intend to reduce adjusted gross leverage further 31 Dec 07 31 Dec 08 – Reduction in 2008 reflects issuance of capital, £bn £bn increased retained earnings and reduced repo and Total assets 1,227 2,053 trading balances Derivative gross-up (215) (917) AUM on balance sheet (93) (69) – Expect ratio t
Slide 8: Capital ratios and shareholders' equity
Capital ratios Shareholders’ equity We expect to maintain our Equity Tier1ratio and Tier1 ratio at levels which significantly exceed the current £bn minimum requirements of the UK Financial Services 31 Dec 2007 23.3 Authority for the duration of the current period of Equity raisings 5.0 financial an
Slide 9: Low volumes of debt capital maturing in 2009
We have low volumes of debt capital maturing in 2009 and are well-placed to meet re-financing needs for 2010 Debt capital maturing or hitting first call Maturing Debt Capital £ million date in 2009/2010 c.1,730 2009 a – 22 March SAR3.1bn AB02 Notes – 6 April Euro31m Lower Tier 2 Notes – 7 July FRF1b
Slide 10: Costs have been carefully controlled
Costs have been carefully controlled Investment £ million Acquisition Net Growth in Liquidity Costs Variable Costs GRCB EM Support 285 (403) & GRCB WE Change in 180 14,366 Goodwill & 600 FSCS & US Property Credits Intangibles Compliance 120 220 165 13,199 2007 2008 Reduced performance related pay ha
Slide 11: Productivity benchmarking
Productivity benchmarking % FY08 Peer Group Top Quartile CIR FY07 Barclays Business CIR FY08 Barclays Business CIR 134 134 72 76 71 65 63 68 68 64 57 62 56 52 45 50 49 39 39 43 44 39 36 34 UK Retail Barclays Barclaycard GRCB Western Absa b Barclays Capital c BGI Barclays Wealth Bankinga Commercial E
Slide 12: Slide 12
Slide 13: 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 UK Retail Banking Barclays Capital Deanna Oppenheimer Jerry del Missier PBT: £1,369m PBT: £1,302m Barclays Commercial Bank Barclays Global Investor
Slide 14: GRCB increased profits by growing income by 17%
Global Retail and Commercial Banking GRCB increased profits in the face of challenging macro-economic conditions by growing income by 17% £ million +17% +17% +18% +51% +6% 1,130 2,233 1,102 982 119 4,128 4,367 2007 Income Cost Operating Impairment JVa 2008 PBT Margin PBT a includes gains on aquisiti
Slide 15: Significantly increased UK consumer lending, healthy risk profile
Global Retail and Commercial Banking We have significantly increased UK consumer lending, whilst the portfolio risk profile remains healthy Loans & Advances to Customers grew 16% Portfolio Risk Profile remains healthy and £ billion well positioned for 2009 % UK Loans Charge UK Cards Charge Off Rate
Slide 16: Staying close to our UK commercial clients
Global Retail and Commercial Banking We are staying close to our UK commercial clients Loans & Advances to Customers …while rebalancing the portfolio …and maintaining low exposure grew 14%… towards lower risk assets to high risk segments £ billion % RWAs as a % of Total Assets % of Barclays Commerci
Slide 17: 14 million new customers through distribution franchise
Global Retail and Commercial Banking We have attracted 14 million new customers through transforming our distribution franchise Distribution points Number of customers million UK Non-UK 3,158 48 +809 1,177 +9 2,349 Absa 39 1,705 +644 1,001 +5 Emerging 34 836 Markets 838 550 214 Western 1,145 653 798
Slide 18: Progressively broadened the business base
Global Retail and Commercial Banking ... and have progressively broadened the business base v UK Non-UK Non-UK 2006 2008 Growth in 2008 46% v Distribution points 35% 65% 4,882 100% +20% 45% v Customers 46% 54% 48m 28% 72% +23% 29% v Income 62% 38% £15,091m 28% 72% +17% 28% v PBT 73% 27% £4,367m 37%
Slide 19: UK Retail Banking: leading market share and controlling risk
Global Retail and Commercial Banking UK Retail Banking: achieving leading market share and controlling risk carefully Share of net new mortgage lending % UK mortgage asset quality 36 LTV % of balance band 07 08 <75% 90 78 >75% & <80% 5 6 >80% & <85% 3 6 >85% & <90% 2 5 8 >90% & <95% 1 3 2 >95% 0 3 B
Slide 20: Barclays Commercial Bank: diversified loan portfolio
Global Retail and Commercial Banking Barclays Commercial Bank: diversified loan portfolio facilitating strong credit risk performance Loan portfolio by sector £ billion Wholesale and retail Customer assetsa distribution and Customer accounts leisure 14% Business and other services 21% Transport 3% 8
Slide 21: Barclaycard: profit increase driven by international growth
Global Retail and Commercial Banking Barclaycard: profit increase driven by strong international income growth and reduced UK impairment charges £ million Customers PBT million UK Non-UK 789 11.7 0.6 Europe UK 10.1 9.8 603 UK UK 522 0.7 7.5 US 0.6 5.2 3.6 3.5 Absa 1.8 1.8 06 07 08 06 07 08 +51% Loan
Slide 22: GRCB – Western Europe: distribution led growth
Global Retail and Commercial Banking GRCB – Western Europe: distribution led growth in customer assets and liabilities Distribution Loans and Customer Income Distribution Points Customers (000s) outlets advances accounts £m 07 08 07 08 £bn £bn France 60 120 172 176 +43% +53% +63% +53% 1,145 53.5 15.
Slide 23: GRCB – Emerging Markets: rapid expansion
Global Retail and Commercial Banking GRCB – Emerging Markets: rapid expansion driving income growth Distribution outlets Loans and advances Customer accounts Income £m 2007: Launch of full retail and £bn £bn commercial banking Distribution Points Customers (000s) +52% +98% +55% +91% FY07 FY08 FY07 F
Slide 24: Absa Group Limited: sound financial performance
Global Retail and Commercial Banking Absa Group Limited: sound financial performance in a year characterised by significant global financial market turbulence and challenging macro-economic conditions in South Africa Rand million – The wholesale banking businesses produced robust PBT operating perfo
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 UK Retail Banking Barclays Capital Deanna Oppenheimer Jerry del Missier PBT: £1,369m PBT: £1,302m Barclays Commercial Bank Barclays Global
Slide 26: Barclays Capital: strong underlying performance
Investment Banking and Investment Management Barclays Capital: strong underlying performance despite market conditions £ million CAGR (03 – 08) Income 13% PBT 7% 7,119 6,267 5,231 4,505 3,518 2,841 2,216 2,335 1,431 1,302 930 1,142 03 04 05 06 07 08 24 Investor Presentation Spring 2009 | www.barclay
Slide 27: Lehman acquisition accelerated strategy
Investment Banking and Investment Management Lehman acquisition accelerated strategy and created a top-tier global franchise Barclays Capital (post-Lehman acquisition) Top 3 Global Businesses Top 3 US Businesses Priority for Global Build Out – Commodities – Equity Cash Trading – Equities – Foreign E
Slide 28: Barclays Capital: gaining market share
Investment Banking and Investment Management Barclays Capital: gaining market share Recent Awards Rankings 03 04 05 06 07 08 – Best Structured Products House – Euromoney 2008 Global All Bonds 8 3 2 1 2 1 Awards for Excellence US Investment Grade 10 10 5 7 10 3 – Interest Rate Derivatives House of th
Slide 29: Barclays Capital: diversified product mix
Investment Banking and Investment Management Barclays Capital: diversified product mix has driven performance in challenging markets Income £m 2006 2007 2008 2,500 2,000 1,500 1,000 500 0 (4,000) Interest rate Emerging Currency Commodities Prime Private Credit Equity Advisory Mortgages products mark
Slide 30: Barclays Capital: regional diversification
Investment Banking and Investment Management Barclays Capital: regional diversification Income by geography (excluding net credit market losses)a RoW 8% RoW 10% Africa 4% UK 24% Africa 4% UK 36% Asia Pacific 14% Asia Pacific 12% £7.9bn £8.4bn EU (ex UK) EU (ex UK) 19% 16% US 34% US 19% FY 07 FY 08 a
Slide 31: Barclays Capital: cost management
Investment Banking and Investment Management Barclays Capital: cost management Operating costs Cost:income ratio £ million 3,973 72% 3,774 56% 2007 2008 2007 2008 –5% +16 points 29 Investor Presentation Spring 2009 | www.barclays.com/investorrelations
Slide 32: Significant reduction in credit market exposures
Investment Banking and Investment Management Barclays Capital: significant reduction in credit market exposures $ billion Dec 2007 Dec 2008 76.5 24.8 62.8 18.0 18.1 15.2 12.3 9.4 10.1 9.8 6.3 4.5 5.0 2.7 1.6 1.4 Total ABS CDO Other Alt-A SIVs and Monoline Commercial Leverageda exposure Sub-Prime SIV
Slide 33: 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) 04 05 06 07 08 Revenue 20% Operating margin (%) 38 41 43 38 32 PBT 15% Net new assets ($bn) 106 88 68 86 99 1,926 Total AUM ($bn) 1,362 1,513 1,814 2,079 1
Slide 34: Barclays Global Investors: business diversification
Investment Banking and Investment Management Barclays Global Investors: business diversification Income by product AUMs by product Index iShares 27% 22% iShares 45% £1,844m £1,040bn Active 15% Index 63% Active 28% 32 Investor Presentation Spring 2009 | www.barclays.com/investorrelations
Slide 35: Barclays Global Investors: a global market leader
Investment Banking and Investment Management Barclays Global Investors: a global market leader Active $231bn iShares $325bn Index $939bn Assets under management Total $1,495bn Toronto Montreal $45bn $5bn London $347bn Boston Amsterdam Tokyo $21bn $44bn $168bn San Francisco $812bn Munich $23bn HK/Sin
Slide 36: Barclays Global Investors: assets under management
Investment Banking and Investment Management Barclays Global Investors: assets under management AUM $ billion Market index a 2,079 1,814 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 Net new assets $bn b 24 20 40 75 49 73 97 106 88 68 86 99 a Composite we
Slide 37: Barclays Wealth: growth continuing through the cycle
Investment Banking and Investment Management Barclays Wealth: growth continuing through the cycle… £ million CAGR (04 – 08) Performance 04 05 06 07 08 Income 9% Operating PBT 39% a Cost:Income Ratio (%) 90 84 79 76 71 1,287 1,324 Loans & Advances (£bn) 4.4 5.0 6.2 9.0 11.4 1,160 Client Assets (£bn)
Slide 38: Funding investment on a 'pay as you go' basis
Investment Banking and Investment Management ...funding investment on a ‘pay as you go’ basis... Cost:income ratio Investment – Key areas of focus: % – Client facing professionals 90 – Client service facilities 84 – Client reporting 79 76 – Consolidation and development of operating 71 platforms for
Slide 39: Sale of Barclays Life, a non-core asset
Investment Banking and Investment Management Successfully executed the sale of Barclays Life, a non-core asset Barclays Life Assurance Company The Transaction and Impact – Combined life assurance business of Barclays and – Announced the sale of Barclays Life Assurance Woolwich Company to Swiss Reins
Slide 40: Barclays Wealth: leveraging group relationships
Investment Banking and Investment Management Barclays Wealth: leveraging group relationships – Delivery of leading edge product capability – Market leading structured product and derivative capability through Barclays Capital Competitive – Access to Barclays Private Equity – Collaboration with Barcl
Slide 41: Appendices
Appendices 39 Investor Presentation Spring 2009 | www.barclays.com/investorrelations
Slide 42: Barclays group overview and management
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 43: UK Retail Banking
FY 08 FY 07 Change UK Retail Banking £m £m % Total income net of insurance claims 4,482 4,297 4 Impairment charges (602) (559) 8 Net income 3,880 3,738 4 Operating expenses (2,519) (2,470) 2 Share of results of associates and JVs 8 7 14 1,724 12.0m Profit before tax 1,369 1,275 7 branches savings ac
Slide 44: Barclays Commercial Bank
FY 08 FY 07 Change BarclaysCommercialBank £m £m % Total income net of insurance claims 2,745 2,564 7 Impairment charges (414) (292) 42 Net Income 2,331 2,272 3 Operating expenses (1,063) (929) 14 Share of results of associates and JVs (2) – – 81,200 982 Profit on disposal of subsidiaries, associates
Slide 45: Barclaycard
FY 08 FY 07 Change Barclaycard £m £m % Total income net of insurance claims 3,219 2,530 27 Impairment charges (1,097) (827) (33) Net Income 2,122 1,703 25 Operating expenses (1,422) (1,093) 30 Share of results of associates and JVs (3) (7) (57) 23.3m 11.6m Profit on disposal of subsidiaries, associa
Slide 46: GRCB – Western Europe
FY 08 FY 07 Change GRCB – Western Europe £m £m % Total income net of insurance claims 1,430 937 53 Impairment charges (296) (76) 289 Net Income 1,134 861 32 Operating expenses (929) (673) 38 Business operates in Share of results of associates and JVs – 8 – Spain, Portugal, Italy 10,900 Profit on dis
Slide 47: GRCB – Emerging Markets
FY 08 FY 07 Change GRCB – Emerging Markets £m £m % Total income net of insurance claims 1,019 533 91 Impairment charges (166) (39) 326 Net Income 853 494 73 Operating expenses (719) (395) 82 Share of results of associates and JVs – 1 – 2.2m 836 Profit before tax 134 100 34 new customers distribution
Slide 48: GRCB – Absa
FY 08 FY 07 Change GRCB – Absa £m £m % Total income net of insurance claims 2,198 1,999 10 Impairment charges (347) (146) 138 Net Income 1,851 1,853 0 Operating expenses (1,305) (1,267) 3 Share of results of associates and JVs 5 6 (17) 10.4m 8,719 Profit on disposal of subsidiaries, associates and J
Slide 49: Barclays Capital
FY08 FY07 Change Barclays Capital £m £m % Total income 5,231 7,119 (27) Impairment charges (2,423) (846) 186 Net Income 2,808 6,273 55 Operating expenses (3,774) (3,973) (5) Share of results of associates and JVs 6 35 (83) 1,000+ 25 % Gain on acquisition 2,262 – >£1m revenue clients YoY growth in >£
Slide 50: Barclays Global Investors
FY08 FY07 Change Barclays Global Investors £m £m % Total income 1,844 1,926 (4) Net income 1,844 1,926 (4) Operating expenses (1,249) (1,192) 5 $1,495bn $325bn Profit before tax 595 734 (19) assets under ETF assets under management management Dec-08 Dec-07 Total assets £71.3bn £89.2bn $99bn 360 Retu
Slide 51: Barclays Wealth
FY08 FY07 Change Barclays Wealth £m £m % Total income net of insurance claims 1,324 1,287 3 Impairment charges (44) (7) 529 Net Income 1,280 1,280 0 Operating expenses (935) (973) (4) Leading No.9 Profit on disposal of subsidiaries, associates and JVs 326 – – UK wealth manager for in Private Asset M
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Slide 53: Risk management
Risk management Robert Le Blanc Risk Director 9 February 2009 50 Investor Presentation Spring 2009 | www.barclays.com/investorrelations
Slide 54: Credit Market Exposures Impairment Model
Credit Market Exposures Impairment Model 40% 2007 Loss Market Valuations X Illustration • Fair values 2006 Loss X 2004 Delinquencies Risk Governance 2005 Loss X 20% • Independent risk function 2004 Loss • Impairment X • Board oversight • Auditor review 0% 0 12 24 36 48 60 72 Months since origination
Slide 55: ABS CDO Super Senior; Other Sub-prime and Alt-A
ABS CDO Super Senior Other Sub-prime and Alt-A 2008 2008 Liquidations £2.3bn Losses £1.5bn Balance £3.1bn Disposals £1.8bn Losses £3.7bn Balance £7.7bn Ratings 50% RMBS collateral rated AAA/AA Ratings £4.0bn securities - 48% AAA Marks range from 9% to 43% Asset Quality 72% 2005 or earlier, no mezzan
Slide 56: Commercial Mortgages and Monolines
Commercial Mortgages Monolines 2008 Disposals £2.2bn Losses £1.1bn Balance £12.3bn Disposals nil Total Reserves £1.7bn Exposure £8.4bn US Germany UK Other MTM Balances £6.3bn £2.5bn £0.8bn £2.0bn Notional Rating Exposure Reserve Asset Quality (LTV) 81% 79% 78% 85% CLO & other 76% 98% AAA/AA £5.8bn £
Slide 57: Sponsored Leveraged Finance
Sponsored Leveraged Finance 2008 Planning - Risk Appetite 2008 UK GDP Project Meta Balance £10.4bn Net Loss nil Repayment £3.1bn 4% Consensus view • UK, US, Spain, South Africa 3% Asset Quality Alltel repaid Jan 09 • 300+ Immediate actions 2% Remaining US book very small 1% • 100+ Strategic actions
Slide 58: Loans and Advances to Customers; UK Mortgages LTVs
Loans and Advances to Customers UK Mortgages - LTVs 165 80% Category Book LTV 96 Balances 69 Residential £76bn - 93% 39% 60% (£bn) 30 BTL £6bn - 7% 56% UKRB B'card BCB BarCap 40% £82bn - 100% 40% LLR 07 (bp) 67 397 45 84 20% LLR 08 (bp) 63 369 60 115 0% LLR 08 Trend <70 70-80 80-90 90-100 100+ 55 In
Slide 59: UK Loans and UK Cards
UK Loans UK Cards 7.4% 7.0% 1.4% Annual 5.5% Charge Off Delinquency 0.8% after 3 months 0.6% >30 Day on book Delinquency 3.5% 3.0% 2.8% 667k 736k £8.2bn £7.6bn £7.8bn Approved 585k Balances Accounts 06 07 08 06 07 08 56 Investor Presentation Spring 2009 | www.barclays.com/investorrelations
Slide 60: UK Cards and US Cards
UK Cards US Cards Industry Industry 7.8% 7.1% 5.6% 6.4% Annual 4.4% 4.0% Charge Off > 30 Day 5.1% 6.9% 6.5% 5.4% Delinquency 3.9% Barclaycard UK Barclaycard US 2.7% Goldfish Goldfish New Partnerships £8.7bn £8.7bn £10.6bn Balances Balances £7.8bn £2.0bn £3.3bn 06 07 08 06 07 08 57 Investor Presentat
Slide 61: UK Company Gearing; Commercial Bank Limits
UK Company Gearing and Insolvencies Barclays Commercial Bank Limits Insolvencies Comm Property 4% 5% 5% • Single Name Risk Leveraged 4% 3% 3% • Sector Limits £98bn £80bn £82bn 10 • Commercial Property 9 16 Asset Finance 8 Medium Business 16 15 • Financial Sponsor Gearing Leverage 72 88 91 94 97 00 0
Slide 62: Other Areas of Focus; Credit Risk Loans and Coverage Ratio
Other Areas of Focus Credit Risk Loans and Coverage Ratio Western Emerging CRL Absa Europe Markets Coverage 39.1% 41.9% Customer Ratio 33 54 Balances £15.7bn (£bn) 12 £11.8bn 4.1 £9.6bn LLR 07 (bp) 48 22 58 3.9 4.1 ABS CDO 3.3 2.3 LLR 08 (bp) 104 54 143 Wholesale 1.8 4.7 3.0 3.6 Unsecured Mortgages
Slide 63: Market Risk; Consensus Economic Forecast 2009
Market Risk Consensus Economic Forecast – 2009 UK US Lehman bankruptcy Unemployment ~8% 8-9% House Prices to fall 12-15% 10-12% VIX GDP to decline ~2% 1-2% 95% DVaR • Low inflation • Commodity prices • Low interest rates • Low consumer confidence 07 08 09 60 Investor Presentation Spring 2009 | www.b
Slide 64: Impairment Outlook Planning Assumptions
Impairment Outlook Planning Assumptions 1.5% Retail 1.0% Group Loan Loss Rate 0.5% Wholesale 0.0% 06 07 08 09 61 Investor Presentation Spring 2009 | www.barclays.com/investorrelations
Slide 65: 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 66: 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] Bojana Flint +44 (0)20 7116 8171 [email protected] 63 Investor Presentation Spring 2009 | w