BARCLAYS PLC Q1 2024 Fixed Income Investor Presentation
25th April 2024
Why Barclays
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Barclays Q1 2024 Results | 2 | |
April 2024 |
High returning UK retail and corporate franchises
Top-tier global Investment Bank with focus and scale, operating in core UK and US markets
Multiple levers to allocate capital in a disciplined way to drive growth
within higher returning divisions and greater RWA productivity in the Investment Bank
Reset level of returns, delivering double-digit RoTE, targeting >12% by 2026
Growing capital return to shareholders; at least £10bn1 2024-2026
1 This multiyear plan is subject to supervisory and Board approval, anticipated financial performance and our published CET1 ratio target range of 13-14% |
Performance
We set out financial targets and are on the path to delivery
Barclays Q1 2024 Results April 2024
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Targets
Statutory RoTE
Total payout
Investment Bank RWAs
(% of Group)
CET1 ratio
Supporting targets and guidance
Income
Group NII excl. Investment Bank and Head Office2
Q124 | 2024 | 2026 | ||
12.3% | >10% | >12% | ||
Broadly in line with 2023 | At least £10bn1 | |||
2024-2026 | ||||
57% | c.50% | |||
13.5% | 13-14% | 13-14% | ||
Q124 | 2024 | 2026 | ||
£7.0bn | c.£30bn | |||
£2.7bn | c.£10.7bn |
Barclays UK NII2
Cost: income
Loan Loss Rate (LLR)
£1.5bn | c.£6.1bn |
60% | c.63% |
51bps | 50-60bps |
Through the cycle | |
High 50s%
50-60bps
Through the cycle
1 This multi-year plan is subject to supervisory and Board approval, anticipated financial performance and our published CET1 ratio target range of 13-14% | 2 NII guidance excludes planned acquisition of Tesco Bank's retail banking business expected in Q424 |
Q124 performance division by division
Barclays Q1 2024 Results | 5 | |
April 2024 |
Barclays UK
UK Corporate Bank
Private Bank & Wealth Management
Investment Bank
US Consumer Bank
Group1
Q124 RoTE
18.5%
FY26 target: high teens%
15.2%
FY26 target: high teens%
28.7%
FY26 target: >25%
12.0%
FY26 target: in line with Group
5.3%
FY26 target: in line with Group
12.3%
FY26 target:>12%
Execution progress
Realised £0.2bn of c.£1bn FY24 gross cost efficiency savings
Announced sale of performing Italian mortgage book portfolio
Sale of $1.1bn US Consumer Bank credit card receivables to Blackstone
Announced acquisition of Tesco Bank2, expected to complete in Q424
1 Includes Head Office | 2 Refers to Tesco Bank's retail banking business |
Group Q124 | April 2024 |
Barclays Q1 2024 Results |
£7.0bn | £4.2bn |
Income | Costs |
Q123: £7.2bn | Q123: £4.1bn |
60% | £2.8bn |
Cost: income ratio | Profit before |
Q123: 57% | impairment |
Q123: £3.1bn | |
£0.5bn | 51bps |
Impairment | Loan loss rate |
Q123: £0.5bn | Q123: 52bps |
10.3p | 12.3% |
EPS | RoTE |
Q123: 11.3p | Q123: 15.0% |
13.5% | 335p |
CET1 ratio | TNAV per share |
Dec-23: 13.8% | Dec-23: 331p |
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Q124 Group RoTE of 12.3%; FY24 RoTE target >10%
Group RoTE (%)
Barclays Q1 2024 Results April 2024
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15.0
(1.8)
0.3
Reduced FICC income - lower client activity levels and non- repeat of Q123 inflation benefit in Financing1
£120m BoE levy
(0.7) | |||||
0.1 | |||||
(0.6) | |||||
Headwind includes less | |||||
negative cash flow | |||||
hedge reserve |
12.312.3
Q123 RoTE | Income | Costs (excl. BoE levy) | BoE levy | Impairment | Book value growth | Q124 RoTE |
1 Financing income has decreased in part due to the impact of reduced UK inflation. Q123 Financing income included c.£100m due to inflation linked fixed income financing positions. Excluding inflation, FICC income would be down 17% | Note: Charts may not sum due to rounding |
Income down 4% YoY; more stable income streams 68% of Group income | April 2024 |
Barclays Q1 2024 Results |
Group income (£bn)
More stable income streams | -4% YoY | More stable income | More stable income | |||
7.2 | streams contribute | streams expected to | ||||
7.0 | 68% of Group income in | contribute >70% of | ||||
6.5 | 0.6 | |||||
Investment | 0.6 | Q124, flat YoY | Group income by 2026 | |||
0.6 | 5.6 | |||||
banking fees | 1.7 | |||||
1.6 | ||||||
0.5 | ||||||
Intermediation | 2.1 | |||||
0.8 | 0.6 | 0.7 | More stable income streams | |||
0.6 | ||||||
Financing | ||||||
Financing1 | 0.6 | |||||
• Down 13% YoY driven by non-repeat of Q123 inflation benefit3 | ||||||
Retail & | 4.1 | 3.9 | 4.0 | Retail & Corporate | ||
3.2 | • Structural hedge benefit offset by adverse product dynamics in | |||||
Corporate2 | deposits, in line with seasonality expectations, and mortgage | |||||
margin pressure | ||||||
Q122 | Q123 | Q423 | Q124 |
c.40% of Group income in USD4
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1 Global Markets Financing includes income related to client financing in both FICC and Equities. In FICC this includes fixed income securities repurchase agreements, structured credit, warehouse and asset backed lending. In Equities this includes prime brokerage margin lending, securities lending, quantitative prime services, futures clearing and settlement, synthetic financing, and equity structured financing. All other items are considered intermediation | 2 Retail & Corporate consists of income from Barclays UK, Barclays UK Corporate Bank, Barclays Private Bank and Wealth Management, the International Corporate Bank within the Investment Bank, Barclays US Consumer Bank and Head Office | 3 Financing income has decreased in part due to the impact of reduced UK inflation. Q123 Financing income included c.£100m due to inflation linked fixed income financing positions. Excluding inflation, Financing income would be broadly flat YoY | 4 Based on an average of FY21, FY22 and FY23 income currency mix. Percentage may vary depending on business mix and macroeconomic environment and historical outcomes may not be indicative of future currency mix | Note: Charts may not sum due to rounding |
Q124 Group NII of £2.7bn1 stable YoY; FY24 Group NII guidance £10.7bn1,2 | April 2024 |
Barclays Q1 2024 Results |
Net interest income (£bn)
Broadly stable YoY
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UK Corporate Bank,
Private Bank & Wealth
Management and
US Consumer Bank
Barclays UK
Investment Bank
- Head Office NII (£bn)
2.7 | 2.7 | 2.7 | |
2.0 | 1.1 | 1.1 | 1.1 |
0.7 | |||
1.3 | 1.6 | 1.6 | 1.5 |
Q122 | Q123 | Q423 | Q124 |
0.3 | 0.3 | 0.5 | 0.4 |
Group NII (excluding IB and HO) c.£10.7bn 2024 guidance1,2
- £2.7bn Group NII in Q124
Barclays UK NII c.£6.1bn 2024 guidance2
- £1.5bn Barclays UK NII in Q124
- Strong structural hedge momentum offsetting deposit and rate headwinds
- Balances have reduced as anticipated
- Expect deposit migration impacts to reduce
1 Excludes NII from the Investment Bank and Head Office | 2 NII guidance excludes planned acquisition of Tesco Bank's retail banking business expected in Q424 | Note: Charts may not sum due to rounding |
£1.1bn structural hedge income in Q124
Gross hedge income expected to continue to grow
10.0
Barclays Q1 2024 Results April 2024
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09.0
08.0
GBP 5yr 07.0 swap rate1 06.0
Average 05.0 hedge yield2 04.0
03.0
02.0
Gross hedge 01.0 income (£bn) 00.0
3.4% | Q124: 3.8% | |||||
4.1% | ||||||
Q124: 1.8% | ||||||
1.0% | 0.9% | |||||
1.5% | ||||||
0.7% | ||||||
3.6 | 4.0 | 3.1 | ||||
(FY23: 3.8) | 2.2 | |||||
2.2 | (FY23: 2.9) | |||||
1.4 | (FY23: 1.9) | |||||
2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
Gross contribution resilient to marginal changes in rates and notionals
Income locked in by Q1243
Average maturing yield of c.1.5% on c.£170bn maturing
Average duration across the programme of c.2.5 years | Two-thirds of gross hedge income within Barclays UK
1 UK Pound Sterling SONIA OIS Zero 5 Year Point (Refinitiv: GBPOIS5YZ=R) | 2 Gross hedge income divided by period end hedge notional | 3 Refers to the impact to NII of hedges that have already been executed |
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Disclaimer
Barclays plc published this content on 25 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2024 06:58:06 UTC.
