Barclays Plc · LSE:BARC
Barclays — H1 2013 Earnings Presentation
58 slides from Barclays's earnings presentation, Jul 30, 2013
Slide 1: Barclays PLC 2013 Interim Results and Leverage Plan
Barclays PLC 2013 Interim Results and Leverage Plan 30 July 2013
Slide 2: Antony Jenkins, Chief Executive
Antony Jenkins Chief Executive
Slide 3: Original Transform financial commitments
Original Transform financial commitments 2012 Restated Original 2015 Results Targets Return on 9.0% > CoE Equity Operating £16.8bn £18.6bn Expenses Focus on Cost:Income 63% mid-50s CET1 ratio as Ratio limiting Pro forma factor B3 RWAs £468bn £440bn Core Transitional 10.8% CET1 >10.5% Capital Ratio D
Slide 4: PRA capital adequacy review
PRA capital adequacy review Capital adequacy review of major UK banks and building societies – results announced 20 Jun 2013 Barclays‟ plan to meet 7% PRA stressed CET1 ratio by 31 Dec 2013 confirmed The PRA introduced a minimum 3% leverage ratio target, calculated on a PRA-adjusted CET1 capit
Slide 5: Leverage ratio movements to Jun 2013
Leverage ratio movements to 30 Jun 2013 Leverage ratios (%) 2.8 (0.0) (0.3) 2.5 (0.0) 2.5 (0.3) 2.2 Asset Additional valuation PVA adjustment deduction FY 12 Rebase to Revised FY 12 H1 13 H1 13 PRA H1 13 Fully loaded Fully loaded CRD IV & revised movements Fully loaded adjustments PRA leverage CRD I
Slide 6: Barclays Leverage Plan
Barclays Leverage Plan Leverage Plan agreed with the PRA to meet 3% target by 30 Jun 2014 Capital or capital equivalent actions of £12.8bn: 1. Underwritten rights issue to raise £5.8bn (net of expenses) 2. Reduction of leverage exposure – £65-80bn (£2-2.5bn capital equivalent) – Already identified m
Slide 7: Rights Issue details
Rights Issue details £5.8bn raise net of expenses Underwritten from today 1 new share for every 4 existing shares Issue price 185 pence per Barclays share Represents a 35% discount to theoretical ex-rights price on 29 Jul 2013 No shareholder approval required under existing annual resolu
Slide 8: Barclays Leverage Plan
Barclays Leverage Plan Leverage ratios (%) > 3.0 0.1 0.1 0.4 2.2 1 H1 13 Rights issue Deleveraging AT1 issuance Other capital Target H1 14 PRA net of expenses accretion & retained PRA leverage ratio earnings leverage ratio 1 Reflects already identified, low execution risk management actions; £2.0-2.
Slide 9: Revised Transform financial commitments
Revised Transform financial commitments Original 2015 Revised Dates Targets Targets Return on Equity > CoE > CoE in 2016 2016 Operating Expenses £16.8bn £16.8bn 2015 Cost:Income Ratio mid-50s mid-50s 2015 Pro forma B3 RWAs £440bn £440bn 2015 Transitional Fully loaded Early Core Capital Ratio >10.5%
Slide 10: H1 financial progress
H1 13 financial progress Solid first half performance Additional £2bn conduct provisions for PPI and IRHP reducing uncertainty around these conduct risks Costs to achieve Transform of £1.2bn planned in 2013: £640m in H1 Adjusted RoE excluding costs to achieve Transform of 9.5% Legacy asset
Slide 11: Other Transform progress in H1
Other Transform progress in H1 13 900,000 net new customers in Barclaycard UK mortgage market share1 has improved to 9.9% £42bn of FLS eligible lending to UK households and businesses Embedding our Purpose and Values – 133,000 employees have participated in Values workshops Launched Balanc
Slide 12: 2013 Interim Results, Chris Lucas
2013 Interim Results Chris Lucas, Group Finance Director
Slide 13: Adjusted financial highlights
Adjusted financial highlights 2013 2012 Change Six months ended – June (£m) (£m) (%) Income 15,071 15,492 (3) Impairment charges (1,631) (1,710) (5) Net operating income 13,440 13,782 (2) Operating expenses excluding costs to (9,141) (9,520) (4) achieve Transform Costs to achieve Transform (640) - A
Slide 14: Adjusting items to profit before tax
Adjusting items to profit before tax 2013 2012 Change Six months ended – June (£m) (£m) (%) Statutory profit before tax 1,6771 871 Own credit (gain)/charge (86) 2,945 Gain on disposal of BlackRock investment - (227) Provision for PPI redress 1,350 300 Provision for interest rate hedging products red
Slide 15: Adjusted performance measures
Adjusted performance measures Six months ended – June 2013 2012 Return on average shareholders‟ equity 7.8% 10.6% Return on average tangible shareholders‟ equity 9.1% 12.5% Return on average risk weighted assets 1.3% 1.6% Cost:Income ratio1 65% 61% Basic earnings per share 16.2p 22.4p Dividend per s
Slide 16: Adjusted profit before tax by cluster
Adjusted profit before tax by cluster 2013 2012 Change Six months ended – June (£m) (£m) (%) UK RBB 632 592 7 Europe RBB (709) (148) Africa RBB 212 183 16 Barclaycard 775 751 3 Investment Bank 2,389 2,242 7 Corporate Banking 402 311 29 Wealth and Investment Management 47 99 (53) Head Office and Othe
Slide 17: Investment Bank
Investment Bank 2013 2012 Change Six months ended – June (£m) (£m) (%) Income 6,473 6,460 - Impairment charges (181) (202) (10) Net operating income 6,292 6,258 1 Operating expenses (excluding costs to (3,751) (4,044) (7) achieve Transform) Costs to achieve Transform (169) - Profit before tax 2,389
Slide 18: Investment Bank quarterly income
Investment Bank quarterly income (£m) Total Income Total income Q1 2012 • Q2 2013 vs. Q2 2012 flat Q2 2012 Q3 2012 • Q2 2013 vs. Q1 2013 down 13% Q4 2012 Q1 2013 Q2 2013 3,436 3,463 3,024 3,010 2,721 2,594 18 | Barclays 2013 Interim Results | 30 July 2013
Slide 19: Investment Bank quarterly income
Investment Bank quarterly income (£m) Q1 2012 Q2 2012 Q3 2012 2,319 Q4 2012 2,190 Q1 2013 1,761 Q2 2013 1,675 1,494 1,378 825 706 591 615 523 620 558 515 509 493 528 454 FICC Equities and Prime Services Investment Banking Q2 13 vs. Q2 12 (22%) 34% 4% Q2 13 vs. Q1 13 (37%) 17% (5%) 19 | Barclays 2013
Slide 20: Adjusted income by cluster
Adjusted income by cluster 2013 2012 Change Six months ended – June (£m) (£m) (%) UK RBB 2,202 2,184 1 Europe RBB 352 379 (7) Africa RBB 1,352 1,493 (9) Barclaycard 2,343 2,112 11 Investment Bank 6,473 6,460 - Corporate Banking 1,552 1,583 (2) Wealth and Investment Management 931 894 4 Head Office a
Slide 21: Net interest margin
Net interest margin Basis points (£m) H1 20121 H1 20131 Customer margin Customer income 4,891 5,105 Non-customer margin Non-customer income 617 523 Total 5,508 5,628 Average customer assets 317,673 327,129 Average customer liabilities 277,467 314,695 186 177 20 17 166 160 H1 2012 H1 2013 1 Numbers r
Slide 22: Impairment down 5% to £1,631m
Impairment down 5% to £1,631m (£m) H1 2013 1,710 H1 2012 616 1,631 492 431 314 258 208 202 181 178 122 125 142 49 19 UK RBB Europe RBB Africa RBB Barclaycard Investment Corporate Wealth and Group Bank Banking IM Loan Loss Rate 22 | Barclays 2013 Interim Results | 30 July 2013
Slide 23: Cost analysis
Cost analysis (£m) Non-performance costs Performance costs Costs to achieve Transform 9,520 9,781 (4%) 640 1,422 (10%) 1,276 9,141 8,098 (3%) 7,865 H1 2012 H1 2013 H1 2013 Costs Costs to achieve Transform 23 | Barclays 2013 Interim Results | 30 July 2013
Slide 24: Capital, liquidity and funding
Capital, liquidity and funding As at 30 Jun 2013 31 Dec 2012 Core Tier 1 ratio 11.1% 10.8% Risk weighted assets £387bn £387bn Group liquidity pool £138bn £150bn Loan:Deposit ratio 102% 110% 24 | Barclays 2013 Interim Results | 30 July 2013
Slide 25: Core capital ratios
Core capital ratios (%) Reported ratio Transitional CRD IV ratio Fully loaded CRD IV ratio 10.8 11.1 10.0 2 8.1 1 1 31 Dec 12 30 Jun 13 30 Jun 13 CT1 CT1 Estimated CET1 (Basel 2.5) (Basel 2.5) (Basel 3) 1 For details and basis of calculation, see slides 32-34. 2 Reflects change in transitional metho
Slide 26: Becoming the 'Go-To' bank
2013 Interim results and Leverage Plan Becoming the „Go-To‟ bank Solid H1 results, Progress in our Decisive action with underlying Transform in implementing businesses in programme Leverage Plan good health 26 | Barclays 2013 Interim Results | 30 July 2013
Slide 27: Appendices
Appendices # BARCLAYS
Slide 28: Appendix 1: Leverage, Capital and Balance Sheet
Appendix 1 Leverage, Capital and Balance Sheet
Slide 29: Movements in CRD IV and PRA leverage ratios
Movements in CRD IV and PRA leverage ratios Revised CRD IV FY 12 FY 12 H1 13 H1 13 £bn & other revised Pillar 3 movements RA refinements estimate1 Derivative financial assets 469 - 469 (66) 403 Reverse repurchase agreements and other similar secured lending 177 - 177 46 223 Loans & advances and othe
Slide 30: Notes on exposure measure adjustments
Notes on exposure measure adjustments Derivatives netting adjustment: Regulatory netting applied across asset and liability mark-to-market derivative positions, pursuant to legally enforceable bi-lateral netting agreements and otherwise meeting the requirements set out in CRD IV Potential Future
Slide 31: Estimated CRD IV Capital and RWAs
Estimated CRD IV Capital and RWAs (£bn) 30 Jun 2013 CT1 Capital (FSA 2009 definition) 42.9 RWAs (Basel 2.5) 387.2 CT1 Ratio (Basel 2.5) 11.1% CET1 Transitional CET1 Fully-loaded CRD IV impact on CT1 Capital: Adjustments not impacted by transitional provisions Conversion from securitisation deduction
Slide 32: Estimated CRD IV Capital and RWAs – notes
Estimated CRD IV Capital and RWAs – notes Estimated Capital Ratios are based on/subject to the following: CRD IV, models and waivers We have estimated our CRD IV CET1 ratio, capital resources, RWAs and leverage based on the final CRD IV text assuming the rules applied as at 30 June 2013 on both a
Slide 33: Estimated CRD IV Capital and RWAs – notes
Estimated CRD IV Capital and RWAs – notes Estimated Capital Ratios are based on/subject to the following: RWAs It is assumed that corporates, pension funds and sovereigns that meet the eligibility conditions are exempt from CVA volatility charges It is assumed all Central Clearing Counterparties
Slide 34: Capital Resources
Capital Resources 30 Jun 13 31 Dec 12 As at (£m) (£m) Shareholders‟ equity (excluding NCIs) 51,083 50,615 Qualifying NCIs 2,281 2,450 Regulatory adjustments and deductions: Own credit cumulative loss/(gain)1 593 804 Unrealised (gains)/losses on available for sale debt securities1 (293) (417) Unreali
Slide 35: RWAs by Business
RWAs by Business 30 Jun 13 31 Dec 12 As at (£m) (£m) UK RBB 43,609 39,088 Europe RBB 16,733 15,795 Africa RBB 25,492 24,532 Barclaycard 38,801 37,836 Investment Bank 168,842 177,884 Corporate Banking 73,120 70,858 Wealth and Investment Management 16,979 16,054 Head Office and Other Operations 3,654
Slide 36: RWA Bridge
RWA Bridge (£bn) 4.2 (11.0) 7.1 (0.5) 387 387 31 Dec Foreign Methodology Business Change in risk 30 Jun 2012 exchange changes activity parameters 2013 36 | Barclays 2013 Interim Results | 30 July 2013
Slide 37: Balance sheet summary
Balance sheet summary 30 Jun 13 31 Dec 12 As at (£bn) (£bn) Total assets 1,533 1,488 Including Derivative financial instruments 403 469 Loans and advances to customers 470 424 Total liabilities 1,473 1,428 Including Derivative financial instruments 396 463 Customer accounts 460 385 Shareholders‟ equ
Slide 38: Barclays Exit Quadrant
Barclays Exit Quadrant With a good track record in reducing legacy assets, we now focus on reducing our expanded Exit Quadrant portfolios £bn 94 15 12 14 68 34 14 11 25 Targeted 5 reduction 34 36 24 in IB positions Dec 12 Legacy Derivatives Jun 13 Target Dec 15 1 CRD IV RWAs reduction efficiencies C
Slide 39: Appendix 2: Business Results
Appendix 2 Business Results # BARCLAYS
Slide 40: Adjusted Return on Equity (RoE)
Adjusted Return on Equity (RoE) (%) H1 2012 RoE H1 2013 RoE1 7.8% 10.6% Group 12.2% 12.2% UK RBB Europe RBB (49.1%) (10.9%) 3.0% 2.5% Africa RBB 19.3% 20.1% Barclaycard Investment Bank 15.4% 13.4% 7.1% 3.8% Corporate Banking 2.5% 7.3% Wealth and Investment Mgmt 1 Includes effect of costs to achieve
Slide 41: Impact of costs to achieve Transform
Impact of costs to achieve Transform Six months ended – June Costs to Profit before Return on Cost:Income Adjusted performance measures by business, achieve tax average equity ratio excluding costs to achieve Transform Transform (£m) (£m) (%) (%) UK RBB (27) 659 12.7 63 Europe RBB (356) (353) (25.6)
Slide 42: Transform – costs update
Transform – costs update (£bn) Adjusted operating expenses Cost to achieve Operating expenses 19.7 1.2 18.5 5% 1.0 17.3 4% 0.5 18.5 18.5 17.5 16.8 2012 2013 2014 2015 Estimate Estimate Target 42 | Barclays 2013 Interim Results | 30 July 2013
Slide 43: UK Retail and Business Banking
UK Retail and Business Banking 2013 2012 Change Six months ended – June (£m) (£m) (%) Income 2,202 2,184 1 Impairment charges (178) (122) 46 Net operating income 2,024 2,062 (2) Operating expenses (excluding costs to achieve (1,393) (1,470) (5) Transform and provision for PPI redress) Costs to achie
Slide 44: Europe Retail and Business Banking
Europe Retail and Business Banking 2013 2012 Change Six months ended – June (£m) (£m) (%) Income 352 379 (7) Impairment charges (142) (125) 14 Net operating income 210 254 (17) Operating expenses (422) (409) 3 (excluding costs to achieve Transform) Costs to achieve Transform (356) - Other net expens
Slide 45: Africa Retail and Business Banking
Africa Retail and Business Banking 2013 2012 Change Six months ended – June (£m) (£m) (%) Income 1,352 1,493 (9) Impairment charges (208) (314) (34) Net operating income 1,144 1,179 (3) Operating expenses (926) (999) (7) (excluding costs to achieve Transform) Costs to achieve Transform (9) - Profit
Slide 46: Barclaycard
Barclaycard 2013 2012 Change Six months ended – June (£m) (£m) (%) Income 2,343 2,112 11 Impairment charges (616) (492) 25 Net operating income 1,727 1,620 7 Operating expenses (excluding costs to achieve (963) (886) 9 Transform and provision for PPI) Costs to achieve Transform (5) - Adjusted profit
Slide 47: Investment Bank
Investment Bank 2013 2012 Change Six months ended – June (£m) (£m) (%) Income 6,473 6,460 - Impairment charges (181) (202) (10) Net operating income 6,292 6,258 1 Operating expenses (3,751) (4,044) (7) (excluding costs to achieve Transform) Costs to achieve Transform (169) - Profit before tax 2,389
Slide 48: Corporate Banking
Corporate Banking 2013 2012 Change Six months ended – June (£m) (£m) (%) Income 1,552 1,583 (2) Impairment charges (258) (431) (40) Net operating income 1,294 1,152 12 Operating expenses (excluding provision for interest rate (852) (839) 2 hedging products redress and costs to achieve Transform) Cos
Slide 49: Wealth and Investment Management
Wealth and Investment Management 2013 2012 Change Six months ended – June (£m) (£m) (%) Income 931 894 4 Impairment charges (49) (19) Net operating income 882 875 1 Operating expenses (810) (775) 5 (excluding costs to achieve Transform) Costs to achieve Transform (33) - Profit before tax 47 99 (53)
Slide 50: Head Office and Other Operations
Head Office and Other Operations 2013 2012 Six months ended – June (£m) (£m) Total adjusted (expense)/income (134) 387 Impairment (charges)/release 1 (5) Adjusted net operating (expense)/income (133) 382 Operating expenses (24) (98) Adjusted (loss)/profit before tax1 (157) 309 1 Adjusted (loss)/prof
Slide 51: Net interest income
Net interest income 2013 2012 Six months ended – June (£m) (£m) Customer assets 3,506 3,320 Customer liabilities 1,599 1,571 Total customer income1 5,105 4,891 Product structural hedge 433 487 Equity structural hedge 149 154 Other (59) (24) Total non-customer income1 523 617 Total RBB, Barclaycard,
Slide 52: Net interest margins and volumes
Net interest margins and volumes Total UK Europe Africa Barclay- Corporate Wealth interest Six months ended – June 2013 Total1 RBB RBB RBB card Banking and IM income1 (£m) Net interest margin (%): 1.27 0.81 3.11 8.36 1.23 1.08 1.77 5,628 Of which customer margin (%) 1.03 0.45 2.94 8.61 1.14 0.94 1.6
Slide 53: Stable exposure to the Eurozone periphery
Stable exposure to the Eurozone periphery Spain Italy Portugal Ireland As at 30 Jun 2013 (£m) (£m) (£m) (£m) Sovereign 292 1,967 388 26 Corporate 4,976 1,489 1,357 1,144 Residential mortgages 13,546 16,034 3,595 108 Financial institutions 1,028 390 30 4,194 Other retail lending 2,436 2,072 1,720 114
Slide 54: 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 55: Legal disclaimers
Legal disclaimers 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 Barclays Group‟
Slide 56: Legal disclaimers
Legal disclaimers Certain non-IFRS measures This document includes certain non-IFRS measures. These non-IFRS measures are important to understanding the background of, and rationale for, the rights Issue as well as the Group‟s capital and leverage position in light of the implementation of CRD IV an
Slide 57: Legal disclaimers
Legal disclaimers Certain non-IFRS measures (continued) This document includes certain non-IFRS measures in connection with the Group‟s results for the half-year ended 30 June 2013. Barclays management believes that the non- IFRS measures included in this document provide valuable information to rea
Slide 58: Legal disclaimers
Legal disclaimers Certain non-IFRS measures (continued) Adjusted return on average risk weighted assets represents adjusted profit after tax, divided by average risk weighted assets. The comparable IFRS measure is return on average risk weighted assets, which represents profit after tax divided by a