Barclays Plc · LSE:BARC
Barclays — Investor Presentation (2012)
40 slides from Barclays's investor presentation, 2012
Slide 1: Spring 2012 Investor Presentation
Spring 2012 Investor Presentation
Slide 2: CEO statement and execution priorities
“We are proud of what our people at Barclays achieved in 2011. Against the backdrop of challenging economic and market conditions, we maintained our focus on clients and customers while supporting the real economy, as well as the needs of our shareholders, colleagues and the communities in which we
Slide 3: Index
Index Slides Slides Performance highlights 4 Balance sheet 19 Group performance 5 Funding and liquidity 20 Adjusted profit before tax 6-7 Capital strength 21 Performance measures 8 Basel 3 Core Tier 1 pro forma 22 Adjusted RoE by business 9 Citizenship 23-24 Credit impairment improvement 10 Summary
Slide 4: 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 5: Group performance
Group performance Adjusted profits were down only 2% despite the weak income environment with prudent risk management and strong cost control delivering significant improvements 2011 2010 Change Year ended £m £m % Income 28,454 31,049 (8) Impairment charges (3,802) (5,672) (33) Net operating income
Slide 6: Adjusted profit before tax by business
Adjusted profit before by business Our universal banking model enabled us to generate adjusted profit before tax of £5.6bn, driven by increased profits in the majority of our businesses FY 11 FY 10 5% 3% 35% 49% 46% 62% Corporate and Investment Banking (CIB) Retail and Business Banking (RBB) Wealth
Slide 7: Adjusted profit before tax
Adjusted profit before tax Our universal banking model enabled us to generate adjusted profit before tax of £5.6bn, driven by increased profits in the majority of our businesses 2011 2010 Change Year ended £m £m % Profit before tax 5,879 6,065 (3) Own credit (gain)/loss (2,708) 391 nm Gains on debt
Slide 8: Performance measures
Performance measures Adjusted return on equity was below the goal of 13% by 2013 but we continue to focus on business performance, cost reductions and income growth to deliver 13% over time Year ended 2011 2010 Adjusted return on equity 6.6% 6.8% Adjusted return on tangible equity 7.9% 8.2% Adjusted
Slide 9: Adjusted Return on Equity (RoE) by business
Adjusted Return on Equity (RoE) by business The strength of our universal banking model helped to achieve balanced profits across our retail and investment banking businesses 2010 RoE by business 2011 RoE by business 9.9% UK RBB 14.9% (1.0%) Europe RBB (6.0%) 9.0% Africa RBB 10.0% 12.5% Barclaycard
Slide 10: Credit impairment improvement
Credit impairment improvement Impairment charges down 33% reflecting significant improvements across all businesses (£m) Wealth CIB 5,672 RBB 48 (33%) 3,802 2,239 (45%) 41 1,242 3,383 (26%) 2,520 2010 2011 10 Spring 2012 Investor Presentation
Slide 11: 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 12: 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 13: RBB – business performance
RBB – business performance RBB had a strong performance with all businesses achieving profit growth1 2011 2010 Change Year ended £m £m % UK 1,420 889 60 Europe (234) (168) 39 Africa 908 723 26 Barclaycard 1,208 791 53 Adjusted profit before tax2 3,302 2,235 48 1 Based on adjusted profits and excludi
Slide 14: Barclays Capital
Barclays Capital Although returns are below our goal, it was a good performance relative to the industry and we were one of the few firms able to deliver double digit returns in a tough environment 2011 2010 Change Year ended £m £m % Total income 10,335 13,209 (22) Impairment charges (93) (543) (83)
Slide 15: Barclays Capital quarterly income
Barclays Capital quarterly income Income in the fourth quarter was impacted by very challenging market conditions, however, we continued to grow market share (£m) Q1 11 Q2 11 Q3 11 Q4 11 2,201 1,715 1,438 971 545 563 612 520 506 338 389 305 FICC Equities Investment banking 15 Spring 2012 Investor Pr
Slide 16: Barclays Corporate
Barclays Corporate The business made a significant move from negative to positive returns during 2011 with a resilient performance in the UK and performance outside the UK improving dramatically UK Europe Other 2011 2010 Change Year ended £m £m £m £m £m % Income 2,199 440 273 2,912 2,974 (2) Impairm
Slide 17: Wealth
Wealth The business delivered a third successive year of double digit income growth and profits grew 27% despite continued investment to position the business in the industry’s top tier 2011 2010 Change Year ended £m £m % Total income 1,744 1,560 12 Impairment charges (41) (48) 15 Net operating inco
Slide 18: Head Office and Other Operations
Head Office and Other Operations Adjusting for own credit and the UK bank levy, losses were broadly flat year on year 2011 2010 Change Year ended £m £m % Total income (334) (178) 88 Own credit 2,708 391 nm Gains on debt buy-backs 1,130 - nm Operating expenses (448) (579) (23) Incl. bank levy (325) -
Slide 19: 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 20: Funding and liquidity
Funding and liquidity 2011 term issuance of £30bn compared to maturities of £25bn and with around 10% of customer L&A secured against external funding, there is headroom for further issuance Year ended 2011 2010 Term issuance £30bn £35bn Period ended 31 Dec 11 31 Dec 10 Group liquidity pool £152bn £
Slide 21: Capital strength
Capital strength Our Core Tier 1 ratio remains robust and we have managed RWAs tightly. Together with the lower levels of market activity, this has more than offset the impact of CRD3 of £30bn Period ended 31 Dec 11 31 Dec 10 Core Tier 1 capital £43.1bn £42.9bn Core Tier 1 ratio 11.0% 10.8% Adjusted
Slide 22: Basel 3 Core Tier 1 pro forma
Basel 3 Core Tier 1 pro forma Pro forma ratio of 11.1% gives capacity of £50bn 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 23: Citizenship
Citizenship Focus on Citizenship is critical to delivering sustainable returns for all our stakeholders Contributing to growth in the real economy • Delivered £43.6bn of gross new lending to UK businesses, including £14.7bn to SMEs, exceeding Project Merlin targets • Achieved net lending growth to p
Slide 24: Citizenship
Citizenship Focus on Citizenship is critical to delivering sustainable returns for all our stakeholders The way we do business • Reduced banking complaints by up to 30% in the UK over 2010 • Improved customer satisfaction ranking in UK RBB to 4th (versus 11th in 2007) • Paid dividends to shareholder
Slide 25: Summary
Summary • Resilient profit before tax • Underlying income growth in RBB and Wealth businesses • Continued improvement in impairment • Significant cost reductions • Rock solid capital, liquidity and funding 25 Spring 2012 Investor Presentation
Slide 26: Appendix
Appendix Slides Slides Income by geographic segment 27 Credit cards and unsecured lending 34 Capital management 28 Credit Market Exposures (CMEs) 35 Capital resources 29 Exposure to select Eurozone countries 36 RWAs by risk 30 Wholesale debt maturity 37 RWAs by business 31 Notes 38 Calculation of ad
Slide 27: 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 27 Spring 2012 Investor Presentation
Slide 28: 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 29: Summary of capital resources
Summary of capital resources 31 Dec 11 31 Dec 10 As at £bn £bn Shareholders’ equity (excluding NCIs) 55.6 50.9 NCIs net of adjustments 2.7 2.9 Regulatory adjustments: Own credit cumulative gain (2.7) (0.6) Defined benefit pension adjustment (1.2) 0.1 Unrealised losses on AFS debt securities 0.6 0.3
Slide 30: RWAs by risk
RWAs by risk 31 Dec 11 31 Dec 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 3
Slide 31: RWAs by business
RWAs by business 31 Dec 11 31 Dec 10 As at £bn £bn UK RBB 34.0 35.3 Europe RBB 17.4 17.3 Africa RBB 33.4 38.4 Barclaycard 34.2 31.9 Barclays Capital 186.7 191.3 Barclays Corporate 69.7 70.8 Barclays Wealth 13.1 12.4 Investment Management 0.1 0.1 Head Office Functions and Other Operations 2.4 0.6 Tot
Slide 32: Calculation of adjusted gross leverage
Calculation of adjusted gross leverage 31 Dec 11 31 Dec 10 As at £bn £bn Total assets 1,563.5 1,489.6 Counterparty netting (440.6) (340.5) Collateral on derivatives (51.1) (37.3) Net settlement balances and cash collateral (61.9) (48.1) Goodwill and intangible assets (7.8) (8.7) Customer assets held
Slide 33: 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 34: 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 35: Barclays Capital Credit Market Exposures
Barclays Capital Credit Market Exposures Year ended 31.12.11 FV (losses) Imp. Release Total (losses) 31.12.11 31.12.10 As at / gains / (charge) / gains £m £m £m £m £m Protium assets 2,272 7,028 (555) 223 (332) ABS CDO Super Senior 1,842 1,992 (29) (6) (35) US sub-prime and Alt-A 416 662 (4) 35 31 Co
Slide 36: Exposure to Spain, Italy, Portugal, Ireland and Greece
Exposure to Spain, Italy, Portugal, Ireland and Greece Spain Italy Portugal Ireland Greece As at 31 December 2011 £m £m £m £m £m Sovereign 2,530 3,493 810 244 14 Financial institutions 987 669 51 4,311 2 Residential mortgages 14,654 15,934 3,651 94 5 Corporate 5,345 2,918 3,295 977 67 Other retail l
Slide 37: Wholesale debt maturity table as at 31 Dec 11
Wholesale debt maturity table as at 31 Dec 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 unsecure
Slide 38: Notes
Notes Slide – Basel 3 Core Tier 1 pro forma (page 22) • 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 39: 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 40: 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