Barclays : 2024 Q1 Results Call Management Speech

Q124 RoTE

1 Includes Head Office | 2 Refers to Tesco Bank's retail bankingbusiness |

Across the bank, and within each of our five divisions, we are driving an improved operational and financial performance to enhance returns, which Anna will cover in more detail shortly.

Our business re-segmentation and the framework of targets that we laid out on the 20th February, have helped to provide both internal and external transparency as well as accountability in our delivery. As Anna and I talk to our colleagues across Barclays, we are encouraged by how the organisation has embraced this plan.

In February we described a three-year plan of measured ambition and disciplined execution. As part of this, we have set up a Transformation Office which is responsible for monitoring our delivery across all aspects of the plan.

One important aspect was proceeding with the non-strategic business disposals that we announced at our Investor Update.

We have announced the sale of our performing Italian mortgage portfolio and we remain in advanced discussions on the sale of our German consumer business.

Turning to the financial side, overall we are where we expected to be at this stage. You can see on this slide the returns on tangible equity for each of our divisions and the Group for the quarter, alongside our 2026 targets. These are the most important metrics for me and the Executive management team, and Anna will take you through each of them shortly after I cover a few points of divisional execution.

In the Investment Bank, we are continuing our journey to improve returns. RoTE for the quarter was 12%, broadly in line with the Group. As with any quarter, there were some areas of strength, some areas of potential improvement and others where we should do better.

Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority

(Financial Services Register No. 122702).

Registered in England. Registered No. 1026167. Registered office: 1 Churchill Place, London E14 5HP.

On slide 6 we have laid out the Q1 financial highlights for Barclays, and you'll see the same throughout the presentation for each business.

I won't go through these slides, but have included them for ease of reference.

Starting on slide 7.

Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority

(Financial Services Register No. 122702).

Registered in England. Registered No. 1026167. Registered office: 1 Churchill Place, London E14 5HP.

15.0

The headline message is that Q1 was in line with the plan we laid out at the Investor Update in February.

We delivered a RoTE of 12.3% and Earnings Per Share of 10.3 pence in Q1.

There were a number of items driving the year-on-year RoTE move.

Income and returns were lower in the Investment Bank, compared to a strong prior year Q1 comparator.

Operating costs, which exclude bank levy and litigation & conduct, were down 3%, reflecting ongoing strong cost discipline as well as efficiency savings, including some benefit from the structural cost actions taken in Q4 2023.

Total costs were up 2% year-on-year at £4.2 billion, which included a £120 million charge in Q124 from the revised Bank of England levy scheme.

We expect this to be partially offset by increased income over the course of the year, resulting in a net annualised reduction in PBT of circa £50 million for 2024.

Impairment was broadly flat year-on-year.

And finally, TNAV per share increased 34 pence year-on-year to 335 pence, including the effect of a less negative cash flow hedge reserve, driven by the rate environment, as expected.

Overall, we continue to target a statutory RoTE of above 10% in 2024.

Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority

(Financial Services Register No. 122702).

Registered in England. Registered No. 1026167. Registered office: 1 Churchill Place, London E14 5HP.

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 |

At our Investor Update in February we emphasised the quality and stability of our income.

The more stable revenues we generate from Retail, Corporate and Financing in the Investment Bank provide ballast to our income profile.

I will talk about the individual business drivers shortly - together these contributed 68% of Group income in Q1, and are expected to continue to grow to above 70% by 2026.

Total income was down 4% year-on-year at £7 billion and Group Net Interest Income, excluding the IB and Head Office, was £2.7 billion, as you can see on slide 9.

Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority

(Financial Services Register No. 122702).

Registered in England. Registered No. 1026167. Registered office: 1 Churchill Place, London E14 5HP.

NII was broadly stable year-on-year even though the balance sheet composition and rate outlook are very different between these two points in time.

Our long-term structural hedge tailwinds offset the pressure on NII from deposit movements and mortgage margins, as well as rate headwinds going forward.

We still expect Group NII, ex Investment Bank and Head Office, of circa £10.7 billion for the full year …. and Barclays UK NII of circa £6.1 billion, excluding Tesco Bank, which we now

expect to complete in Q4 2024.

Deposit balances were impacted by seasonal reductions in Q1, in part due to tax payments. We expect underlying deposit trends to continue to slow after Q1 and loans to stabilise in the second half.

We expect the benefit from the structural hedge, which you can see on slide 10, to largely offset these product dynamics, …. resulting in broadly stable NII.

Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority

(Financial Services Register No. 122702).

Registered in England. Registered No. 1026167. Registered office: 1 Churchill Place, London E14 5HP.