Free Writing Prospectus
Filed Pursuant to Rule 433
Reg. Statement No. 333-173886
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Fixed Income Investor Presentation
H1 2013 Results
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Strategy and Results update
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Barclays overview
A global universal bank Key financial metrics as at 30 June 2013
Major global financial services provider
Total assets £1.5tr 3 main businesses:
– Retail, Business Banking and Barclaycard Core Tier 1 ratio (Basel 2.5) 11.1%
– Corporate and Investment Banking
– Wealth & Investment Management
FL CET1 ratio (CRD IV)1 8.1% Over 300 years of history and expertise in banking FL CRD IV leverage ratio2 2.5% Headquartered in the UK
Operates in over 50 countries, across Europe, Americas, Liquidity pool £138bn Asia and Africa Serves c.50m customers globally NSFR (Basel 3)3 105% Employs c.140,000 people LCR (Basel 3)4 111% Listed on London and New York stock exchanges
Rated A/A2/A/AA (S&P, Moodys, Fitch, DBRS)
Loan to Deposit ratio 102%
< 1 year wholesale funding £93bn
1 Fully loaded (FL) Common Equity Tier 1 (CET1) ratio calculated based on CRD IV text published in June 2013
5
2 Fully loaded (FL) CRD IV leverage ratio calculated based on CRD IV text published in June Wholesale funding WAM 61mths 2013
3 Net Stable Funding Ratio (NSFR)
4 Liquidity Coverage Ratio (LCR) based on Basel standards published in January 2013
5 Excluding liquidity pool
3 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
H1 2013 results highlights
“Our first half results demonstrate the strength of our business. We saw good momentum in our performance
and - five months on - the execution of our Transform plan is progressing well” (A. Jenkins, CEO)
Highlights
Adjusted income down 3%, with income growth across the majority of businesses offset by cost of funding deposit growth across the Group Credit impairment charges and other provisions down 5%, reflecting improvements in Corporate Banking and Africa RBB, partially offset by other businesses Adjusted operating expenses (excl. CTA Transform) decreased 4%, as a result of tight cost control management. Underlying (excl. CTA Transform) Cost:Income ratio of 61% Liquidity pool of £138bn (2012: £150bn), comfortably above internal and regulatory minimum requirements CT1 ratio improved 30bps to 11.1% (2012: 10.8%). CRD IV fully loaded CET1 estimated at 8.1% (2012: 8.2%)2 Stable RWAs result from reduction in legacy assets, offset by foreign currency movements
4 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Barclays Leverage Plan
Delivery of 3% PRA leverage ratio by June 2014
Leverage ratios (%)
The Leverage Plan agreed with the PRA to meet 3% target by 301 June 2014 comprise capital or capital equivalent
actions of £12.8bn:
Underwritten rights issue to raise £5.8bn (net of expenses)
Reduction of leverage exposure – £65-80bn (£2-2.5bn capital equivalent)
Already identified management actions with low execution risk
No material impact on revenue or profit before tax expected
Continue to support lending to customers and clients
Issuance of up to £2bn of CRD IV qualifying Additional Tier 1 securities
Retention of earnings (supported by conduct provisions taken in H1 2013) and other forms of capital accretion
1 Prudential Regulation Authority 2 Reflects already identified, low execution risk management actions; £2.0-2.5bn capital equivalent
5 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Revised Transform financial commitments
50% From
2014 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
6 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Diversified profit distribution across the Group
Composition of adjusted profit before tax (excl. CTA) demonstrates the diversification benefits inherent in the universal banking model
(£m) H1 2012 H1 2013
£4,339m1
£4,231m1
£309m
Head Office
& Other Ops
£2,242m Investment £2,558m Bank
£311m Corporate £443m £99m Bank £80m £183m W&IM £221m Africa RBB
£751m Barclaycard £780m
£592m UK RBB £659m
(£148m)
Europe RBB (£353m) Head Office (£157m)
& Other Ops
PBT up 14% to £2,558m driven by strong Equities, Prime Services and IBD performance and reduced operating expenses
PBT up 42% to £443m as a result of lower impairment charges and lower costs of exited businesses
PBT down 19% largely owing to increased credit impairment charges and provisions, offsetting a 4% growth in income
PBT up 21% to £221m despite currency depreciation, primarily due to lower credit impairment provisions in South Africa
PBT up 4% to £780m reflecting continued growth across the business, primarily in the UK and US
PBT up 11% to £659m, due to reduction in operating expenses and £25m gain on ING Direct UK acquisition
PBT slightly down to (£353m) due to continued challenging market conditions
1 Adjusted PBT excluding £640m of cost to achieve Transform in H1 2013
7 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Capital & Leverage
8 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Capital and leverage ratios over time
Our financial strength continues to serve us well in the current environment and remains a core component of our strategy going forward
Basel 2 Basel 2.5 Basel 2 Basel 2.5
Łbn
28x
11.0% 10.8% 11.1% 10.8% 10.0%
5.6% 433
383 398 391 387 387
38 43 43 42 43 24
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 H1 2013
CT 1 capital Risk Weighted Assets CT1 ratio
CT1 ratio has improved significantly since 2008, despite stricter capital and RWA definitions, to reach 11.1% at end of June 2013 CT1 capital increased c.£1.2bn in H1 2013 driven by exercise of warrants and earnings, partially offset by conduct costs RWA stable during the first half of the year at Ł387bn, reflecting a reduction in Exit Quadrant businesses, but offset by FX movements.
28x
17.0% 17.4% 16.6% 16.9% 16.4% 20x 20x 20x 19x 20x 13.6% 13.5% 13.2% 13.5% 13.0% 12.9%
8.6%
10.8% 11.0% 10.8% 11.1% 10.0%
5.6%
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 H1 2013
Total Capital Ratio T1 ratio CT1 ratio Adj Gross Levge
Barclays also continued to improve its overall capital position, as total capital ratio increased by 30bps during H1 2013 to 17.4% Barclays has deleveraged since 2008, as the Bank strengthens its capital position and tightly manages its balance sheet Barclays estimates its current CRD IV leverage ratios at 3.1% and 2.5% on a transitional and fully loaded bases respectively.
9 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
End-state capital structure
Our target capital structure embraces upcoming CRD IV requirements and ICB1 proposals
17.4% 17.0% Total capital ratio Total capital ratio
3.9% £15.2bn
T2 5.0%
T2 Senior Unsecured
2.4%
£9.2bn
2%
T1 (Traditional) 1.5% contingent
AT1 capital
1.5% 10.5%
Internal buffer
9%
2.0% G-SIFI
7%
11.1% 2.5% £42.9bn Capital CT1 Conservation Buffer
4.5% Equity
Barclays ‘target’ Barclays Q2 2013 CRD IV/ICB capital structure capital structure (Basel 2.5)
1 Independent Commission on Banking 2 Global Systemically Important Financial Institution
Capital plans delivering PRA adjusted 7% fully loaded CET1 ratio by December 2013 Fully loaded CRD IV CET1 ratio of 10.5% expected to be achieved in early 2015 Target capital structure anticipates:
– Expected 9.0% minimum CET1 ratio requirement under CRD IV, excluding counter-cyclical buffer, for G-SIFI2 banks
– 1.5% CET1 „internal capital management buffer
– 1.5% Additional Tier 1 (AT1) ratio, being the minimum CRD IV requirement
– 5% Tier 2 (T2)/senior unsecured debt capital to meet ICB 17% PLAC3 proposal
Significant role of contingent capital (currently targeting 2% of RWA) in efficiently achieving our capital goal:
– AT1 CoCos expected to count towards leverage ratio requirements (1.5% of RWA)
– T2 CoCos strengthen our capital position (0.5% of RWA)
Successful issuance of US$4bn Contingent Capital Notes (CCNs) across two transactions (in November 2012 and April 2013), contributing to the 0.5% T2 layer
Primary Loss Absorbing Capacity
10 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Estimated capital and RWAs
Barclays continues to manage its business to absorb the impact of changing regulation on capital and RWA
CET1 Transitional1 CET1 Fully-loaded1
30 June 2013
CRD IV impact on CT1 Capital:
Adjustments not impacted by transitional provisions
Conversion from securitisation deductions to RWA 0.8 0.8
Prudential Value Adjustments (PVA) (2.1) (2.1)
Other (0.2) (0.2)
Adjustments impacted by transitional provisions
Goodwill and intangibles 6.1 -
EL > impairment 0.4 (1.0)
Deferred tax assets deduction (0.4) (1.9)
Excess minority interest (0.2) (0.6)
Debit Valuation Adjustment (DVA) (0.1) (0.3)
Gains on available for sale equity and debt — 0.5
Non-significant holdings in Financial Institutions (0.5) (2.5)
Mitigation of non-significant holdings in Financial Institutions 0.5 2.5
CET1 Capital 47.2 38.1
CRD IV impact on RWA:
Credit Valuation Adjustment (CVA) 32.2
Securitisation 19.0
Central counterparty clearing 21.7
Other 11.4
Gross impact 84.3
RWAs (CRD IV) 471.5
CET1 Ratio 10.0% 8.1%
1 Estimated CET1 ratios subject to finalisation of regulation and market conditions
11 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Estimated CRD IV Capital and RWAs – notes
Estimated Capital Ratios are based on/subject to the following:
CRD IV, models and waivers
STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Estimated CRD IV Capital and RWAs – notes
Estimated Capital Ratios are based on/subject to the following:
CRD IV, models and waivers
12 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
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 (CCPs) will be deemed to be „Qualifying. The final determination of Qualifying status will be made by the European Securities and Markets Authority (ESMA) The estimated RWA increase from CRD IV includes 1250% risk weighting of securitisation positions while estimated capital includes an add back of 50/50 securitisations deducted under the current rules Estimated RWAs for definition of default assume that national discretion over 180 days definition of default remains for UK retail mortgages
„Other CRD IV impacts to RWAs include adjustments for withdrawal of national discretion of definition of default relating to non UK mortgage retail portfolios, Deferred Tax Assets, Significant Holdings in financial institutions, other counterparty credit risk and other items RWAs are sensitive to market conditions. The estimated impact on RWAs for all periods reflects market conditions as at 30 June 2013.
13 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
CRD IV / PRA Leverage ratios
(2.5%)
(0.0%) (0.3%)
(0.0%) (0.3%)
5.3%
2.8% 2.5%
2.2%
Dec-12 adj. FL CRD IV Dec-12 FL T1 Rebase to FL Revised CRD H1 13 Jun-13 FL PRA Jun-13 PRA gross leverage adjustments CRD IV CET1 leverage IV movements CET1 adjustments leverage ratio ratio 1 2 leverage ratio ratio 3 & other CRD IV refinements leverage ratio
We will continue to manage our balance sheet on average basis in order to reduce both volatility and absolute level of our adjusted gross leverage
Additional focus on optimising the business for fully-loaded CRD IV requirements.
1 Pre-restatement published on 16 April 2013 2 FL: fully loaded 3 Relates to Absa minority interest excluded from CET1 CRD IV leverage ratio
14 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Liquidity & Funding
15 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Balance sheet wholesale funding1
While the balance sheet totals £1.5tn, wholesale funding requirements are limited to £217bn as a consequence of its structure
(£bn)
Trading portfolio assets
Reverse repurchase agreements 259 = 259 Repurchase agreements
Reverse repurchase agreements 59 = 59 Trading portfolio liabilities
Derivative financial instruments 401 > 394 Derivative financial instruments
Liquidity pool 138 > 93 < 1 year wholesale debt
Other unencumbered assets 136 < 181 > 1 year wholesale debt and equity
Trading portfolio assets and reverse repurchase agreements largely funded in wholesale markets by repurchase agreements and trading portfolio liabilities
The majority of the reverse repurchase agreements are matched by repurchase agreements2. The remainder of reverse repurchase agreements are used to settle trading portfolio assets Derivative assets 3 and liabilities are largely matched Liquidity pool is funded by wholesale debt, the majority of which matures in less than one year Decreasing reliance on wholesale funding (£217bn as at 30 June 2013)
1 Figures on this slide exclude Absa
2 As at 30 June 2013, 80% (31 December 2012) of matched book activity was secured against highly liquid assets, limited to government bonds, US agency securities, and US agency mortgage-backed securities. Includes collateral swaps
16 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Liquidity pool
Barclays efficiently maintains a strong and high-quality liquidity pool consisting of unencumbered assets
£138bn liquidity pool, with 86% held in cash, deposits with central banks and high quality government bonds Although not a requirement, the pool exceeds wholesale funding maturing in less than one year £14bn surplus against both 1-month Barclays specific stress test and anticipated LCR
Barclays Basel 3 – excluding benefits
specific Basel 3 – LCR1 NSFR 1 month 1 month 1 year
30.06.2013 111% 111% 105%
31.12.2012 129% 126% 104%
£bn 154 152 150
138
18 11 110-130
127 19
20
12 36 40
46
34 47 c. 55%
43 105 96
81 85
11 71
2 c.45% 30
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 H1 2013 Projected 2015
1 In 2011, 2012 and 2013, over 80% from the UK, the US, Japan, France, Germany, Denmark, Switzerland and the Netherlands unencumbered assets 3 January 2013 revised text
2013-2015 strategy:
Right-size liquidity pool, in context of prevailing market conditions, without altering our Liquidity Risk Appetite (LRA) Optimise pool composition while maintaining conservative approach and investing only in very high quality assets Expect to reduce liquidity cost to less than £300m by 2015, excluding benefits from reduced funding cost in slide 18
Other Available Liquidity
1
Government Bonds
Cash & Deposits at Central Banks
Non cash and deposits with central banks 2
2 Government bonds and other highly liquid and
17 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Funding
Diverse funding sources, across customer deposits and wholesale debt, provide protection against unexpected fluctuations
£bn
138% 130%
124%
118%
110% 102%
462 470 460 420 428 432 424 365 385 336 322 346
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 H1 2013 Group L&A to Customers Group Deposits from Customers Group LDR
2011-2015 total funding (excl. Absa)
Total funding £540bn £552bn
14% 16%
18% c.35-40%
20%
7% 4% 7% 4%
53% 58% c.60-65%
Dec 2012 Jun 2013 Projected 2015
Customer deposits Sub. debt Secured term funding Short term debt and other deposits Unsecured term funding Wholesale debt
Group Loan to Deposit Ratio (LDR) has improved to 102% as at 30 June 2013 LDR improvement in H1 2013 driven by ING Direct UK acquisition and additional deposit taking, while continuing lending to customers Total funding increased as deposit growth exceeded reduction in wholesale funding
2013-2015 Strategy
Group LDR of c.103-107% ratio targeted by 2015 Optimisation of balance sheet funding through:
– Substitution of unsecured with secured debt
– Optimisation of term structure
– Refinancing at lower market spreads
– Replacement of wholesale debt with customer deposits
Improved risk profile: more stable and diverse sources of funds Lower senior funding cost: projected annual savings of £400- 450m by 2015
18 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Wholesale funding
Despite reduced requirements for wholesale funding, Barclays maintains access to a variety of secured and unsecured funding sources across multiple currencies and maturities
2013 Diverse wholesale funding base1 (as at 30 Jun 2013)
By Product
Total wholesale funding of £217bn as at 30 June 2013 (2012: £240bn):
– £93bn matures in less than one year (2012: £102bn)
– £30bn matures within one month (2012: £29bn)
£7bn of term funding maturities for remaining of 2013 US$1bn contingent capital issuance in April 2013, in conjunction with liability management exercise targeting Tier 2 securities
2013-2015 Strategy
Reduction in wholesale funding requirements, due to increased deposit taking and legacy asset run-off Growing usage of secured funding, while maintaining customer L&A encumbrance levels below 25% (H1 2013: 14%)
Continued participation in Bank of Englands FLS
Continued support to a viable and scalable contingent capital market Stabilisation of WAM (excl. liquidity pool) at c.54-57 months Commitment to public benchmark issue
1 As defined in p.59 of Barclays PLC – 2013 Interim Results Announcement, 30 June 2013, see also slide 46
Diverse wholesale funding base1 (as at 30 June 2013)
By Product
Deposits from banks
7% 14% CDs and CPs 10% ABCPs
12% 18% Public benchmark MTNs Privately placed MTNs
2% Covered bonds / ABS
11%
26% Subordinated liabilities
2
Other
By Currency
USD EUR GBP Others
As at 30 June 2013 36% 34% 21% 9%
As at 31 December 2013 31% 38% 22% 9%
By remaining maturity: WAM excl. liquidity pool > 61 months
1 month
14% >1 mth but 3 mths 11% >3 mths but 6 mths
41%
>6 mths but 12 mths
7%
> 1 year but 2 years
11% > 2 years 16%
2Including gold repo (£7.4bn) and fair valued deposits (£5.7bn)
19 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Asset Quality
20 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Strong asset quality
Despite a challenging macroeconomic environment, retail and wholesale portfolios continue to perform well, as evidenced by limited Credit Risk Loans (CRLs) and declining loan loss rates
51.6%
53.8%
47.9%
48.9%
49.7%
39.0%1
4.8%
5.1%
4.4%
3.2%
2.8%
156 bps
118 bps
77 bps
70 bps
63 bps
FY 2009
FY 20101
FY 2011
FY 2012
H1 2013
CRLs % of Gross L&A
Loan Loss Rate
CRL Coverage
CRL Coverage (excl. Protium)
Continuous reduction in CRL balances reflecting Definitions:
Barclays conservative approach to credit risk
CRLs consist of impaired loans, accruing past due 90 days or management more and impaired or restructured loans
CRL balances decreased by 3% in H1 2013 reflecting annualised impairment charge improvements in both the wholesale and retail portfolios Loan loss rate = gross loans & advances
CRL coverage strengthened further to 53.8% impairment allowance
Loan Loss Rate continued to improve, due to the improved CRL coverage = Credit Risk Loans impairment performance coupled with an expansion in loan balances
1 1 FY 10 CRLs include £7,560m loan to Protium, with associated £532m impairment charge
21 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Impairments well contained
Reduction in credit impairment charges in H1 2013 reflects improvements in Corporate Banking and Africa RBB, partially offset by increases in other businesses
Loan loss rate (bps)1
Q1 12
Q2 12
Q3 12
Q4 12
Q1 13
Q2
Q2 13
13
Impairment
17
22
15
13
19
Investment Bank
(5)
£195m
117
124
125
127
74
76
Corporate
£128m
43
19
25
W&IM
16
16
17
£35m
186
204
202
148
146
122
Africa RBB
£94m
340
339
309
302
Barclaycard
295
294
£313m
25
27
26
19
21
21
UK RBB
£89m
61
61
64
70
70
51
Europe RBB
£72m
63
67
66
70
63
Group
56
£925m
1 1 Annualised
Stable loan loss rate (LLR) trend at group level reflecting Barclays well risk profile Group LLRs remain significantly below longer term average of 91bps Improved performance in wholesale lending in H1 2013 reflects lower charges in Corporate Banking in Europe despite the challenging nature of the economic conditions in that region Higher charges in retail businesses principally reflects
Increase in South Africa Card portfolios in Barclaycard, including the impact of portfolio acquisitions. Barclaycard LLRs in the UK and US trending at low levels
Increased impairments in UK RBB principally due to the non-recurrence of provision releases in 2012 Increase in the IB in Q2 2013 reflects a charge against a single name exposure, partially offset by a number of releases
22 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Reduced exposure to the Eurozone periphery
Barclays continues to manage down its direct exposures to the Eurozone periphery, while reducing redenomination risk in Spain and Portugal
Exposures by geography
£bn
£67.5bn
5.7
£59.0bn
£56.9bn
9.9
4.9
5.6
7.9
7.1
25.3
22.7
22.0
26.5
23.5
22.3
FY2011
FY 2012
H1 2013
Spain
Italy Portugal Ireland
£bn
Exposures by asset class
£67.5bn
7.5
£59.0bn
£56.9bn
6.2
6.3
34.3
32.5
33.3
12.5
9.2
9.0
6.0
5.7
5.6
7.1
5.4
2.7
FY2011
FY 2012
H1 2013
Sovereign
Financial Institutions
Corporate Residential Mortgages
Other Retail Lending
Active management of exposure to Eurozone periphery countries Exposure to Spain, Italy, Portugal and Ireland reduced to £56.9bn over H1 2013, as sovereign exposures decreased by 50% to £2.7bn Barclays repaid € 1.2bn of funding raised through the ECB s 3 year LTRO € 7bn in outstanding as at 30 June 2013 Spain and Portugal local net funding mismatches stable over H1 2013
– Spain; € 1.8bn funding surplus (2012: € 2.3bn)
– Portugal: € 4.4bn funding gap (2012: € 4.1bn)
– Italy: € 13.6bn funding gap (2012: € 11.8bn)1
1 Redenomination risk significantly lower in Italy where we also have collateral available to support additional secured funding should the risk increase
23 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Barclays Exit Quadrant
With a good track record in reducing legacy assets, we now focus on reducing our expanded Exit Quadrant portfolios
15
12
14
68
34
14
11
25
Targeted
5
34
24
reduction
36
in IB positions
Dec 12
Legacy
Derivatives
Jun 13
Target Dec 15
CRD IV RWAs
reduction 1
efficiencies
CRD IV RWAs
CRD IV RWAs
Portfolio assets excluding derivatives 2
Corporate monoline derivatives
Pre CRD-IV rates
Corporate Europe & ERBB legacy assets
As a result of the strategic review, the scope of assets targeted for active run-down was expanded to £94bn on an estimated CRD IV basis to include businesses that have become uneconomic and erode current returns
We target a reduction of the legacy positions in the Investment Bank to £36bn of estimated CRD IV RWAs by December 2015
Between 2008 and 2012, Barclays successfully managed down legacy assets, reducing the CME portfolio by c.80% based on total assets
In H1 2013, Exit Quadrant businesses CRD IV RWAs in the IB declined by £24bn driven by £10bn of legacy asset reductions and £14bn of derivatives optimisation
1 £10bn of the legacy reduction relates to the Investment Bank 2 Portfolio assets include credit market exposures and additional legacy assets
24 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Credit ratings
25 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Rating and outlook changes
Despite re-rating of sector by all main rating agencies strong and in line with peers
Barclays Bank plc
1 Jan 2012
31 Jul 2013
Standard & Poor s
Long Term
A+ (Stable)
A (Stable)
Short Term
A-1
A-1
Stand-Alone Credit Profile (SACP)
a-
bbb+
Moody s
Long Term
Aa3 (Negative)
A2 (Negative)
Short Term
P-1
P-1
Bank Financial Strength Ratio
c (Stable)
c (Stable)
(BFSR)
Fitch
Long Term
A (Stable)
A (Stable)
Short Term
F1
F1
Visibility Rating
a
a
DBRS
Long Term
AA High
AA
(Stable)
(Negative)
Short Term
R-1 High
R-1 High
(Stable)
(Negative)
Barclays ratings and outlooks impacted by:
– Global economic slowdown and prolonged crisis in the Eurozone area
– Credit rating agency reassessments of risks inherent with large and complex capital market operations
Current ratings reflect “historically low earnings “diverse revenue streams”, peers” and “sound financial
Opposite table reflects S&P 1-notch downgrade long-term and SACP ratings on 2 July 2013 resulting from its view of increased risk for some large Europe-based banks operating in investment-term rating of A-1 was affirmed
Barclays Leverage Plan viewed bondholders
26 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Credit rating management
Barclays prudently manages the impact of credit
Provision of relevant information to credit rating agencies so they take informed and independent views of Barclays credit worthiness
Potential outflows related to a multiple-notch credit downgrade are included in the Liquidity Risk Appetite (LRA)
Barclays reserves for potential rating action in its liquidity pool
The below table shows contractual collateral requirements and contingent obligations following potential future one and two notch long-term and associated short-term simultaneous downgrades across all credit rating agencies1
The S&P downgrade on 2 July 2013 did not have a significant impact on Barclays contractual exposure.
Contractual credit rating downgrade exposure (as at 30 June 2013)
One-notch
Two-notch
Total cumulative cash outflow
£bn
£bn
Securitisation derivatives
7
9
Contingent liabilities
6
6
Derivatives margining
—
1
Liquidity facilities
1
1
Total
14
17
1These numbers do not include the potential liquidity impact from loss of unsecured funding, such as from money market funds or loss of secured funding capacity
27 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Summary
Business Model
A major global financial services provider with strong customer focus and client franchise
Diversified businesses, in multiple geographies, delivering resilient underlying earnings
Solid capital position with clear plan to deliver fully loaded CRD IV CET1 ratio in excess of
Capital
10.5% by December 2015
Making good progress in delivery of RWA optimisation plans, to offset the impact of new
regulation and grow selected businesses
Acceleration of actions to deliver a PRA-defined leverage ratio of 3% by June 2014, with no
Leverage
material impact on our revenue
Rights issue included in leverage plans would result in a 123bps increase in our estimated
CET1 ratios
Diversified funding base, combining customer deposits and wholesale funding, in multiple
Liquidity & Funding
currencies and different maturities
Sound liquidity position, already compliant with anticipated CRD IV requirements –Liquidity
Coverage Ratio (LCR), Net Stable Funding Ratio (NSFR)
Strengthening financial position and processes to maximise business stability and continuity
Regulation
Proactive and practical approach to managing regulatory changes, including structural
reform
28 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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STRATEGIC OVERVIEW CAPITAL & LEVERAGE LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Appendix
29 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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PERFORMANCE CAPITAL ASSET QUALITY LIQUIDITY & FUNDING REGULATION
Resilient performance
£m
8,771
8,167
8,081
8,108
7,440
7,445
7,287
7,563
7,238
7,750
7,549
7,384
7,734
7,337
7,001
7,002
6,867
6,213
2,395
1,569
1,754
1,822
1,977
1,694
1,944
1,865
1,786
1,805
1,090
1,256
1,141
1,273
1,471
1,310
1,395
501
Q1-09
Q2-09
Q3-09
Q4-09
Q1-10 Q2-10
Q3-10
Q4-10 Q1-11
Q2-11
Q3-11 Q4-11 Q1-12 Q2-12
Q3-12
Q4-12
Q1-13
Q2-13
Adjusted Income1,2
Adjusted PBT
Bank Levy (2012: £345m; 2011: £325m)
1 Net of insurance claims 2011 2 Please see slide 33 for adjusting items and respective quarterly reports for further details
30 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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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, Corporate Banking and
5,628
5,508
Wealth and Investment Management
Investment Bank
86
364
Head Office and Other Operations
(137)
257
Group net interest income
5,577
6,129
1 Includes RBB, Barclaycard, Corporate Banking and Wealth and Investment Management
31 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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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
1.60
5,105
£132,778
40,129
28,925
35,984
67,168
22,145
327,129
Average customer liabilities
124,312
14,124
18,722
3,226
95,875
58,436
314,695
(£m)
Six months ended –June 2012
Net interest margin (%):
1.38
0.78
3.23
8.99
1.27
1.25
1.86
5,508
Of which customer margin (%)
1.03
0.46
3.01
9.71
1.15
0.98
1.66
4,891
£122,343
41,207
32,386
32,832
69,768
19,137
317,673
Average customer liabilities
£110,540
15,523
19,783
n/m
83,357
48,264
277,467
1 Includes RBB, Barclaycard, Corporate Banking and Wealth and Investment Management
32 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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PERFORMANCE CAPITAL ASSET QUALITY LIQUIDITY & FUNDING REGULATION
Adjusting items to profit before tax1
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 productsredress
650
450
Adjusted profit before tax
3,5911
4,339(17)
1 Includes costs to achieve Transform of £640m
33 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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PERFORMANCE CAPITAL ASSET QUALITY LIQUIDITY & FUNDING REGULATION
Adjusted profit before tax by cluster1
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 Other Operations
(157)
309
Group
3,591
4,339
(17)
1 Includes costs to achieve Transform of £640m
34 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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PERFORMANCE CAPITAL ASSET QUALITY LIQUIDITY & FUNDING REGULATION
Impact of costs to achieve Transform
Six months ended –June
Return on
Costs to
Profit before
Cost:Income
Adjusted performance measures by business,
achieve
tax
average
ratio
excluding costs to achieve Transform
Transform
equity
(£m)
(£m)
(%)
(%)
UK RBB
(27)
659
12.7
63
Europe RBB
(356)
(353)
(25.6)
120
Africa RBB
(9)
221
3.6
68
Barclaycard
(5)
780
19.5
41
Investment Bank
(169)
2,558
16.5
58
Corporate Banking
(41)
443
7.8
55
Wealth and Investment Management
(33)
80
4.5
87
Head Office and Other Operations
—
(157)
(2.2)
(18)
Group excluding costs to achieve Transform
(640)
4,231
9.5
61
35 | H1 2013 Fixed Income Investor Presentation 2013 | 30 July 2013
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PERFORMANCE CAPITAL ASSET QUALITY LIQUIDITY & FUNDING REGULATION
Transform – costs update
Over the next 3 years, results will be affected by and customer proposition beyond 2015
(£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
36 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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PERFORMANCE CAPITAL ASSET QUALITY LIQUIDITY & FUNDING REGULATION
Adjusted Return on Equity (RoE)
RoE improvements in three of seven businesses, with the Investment Bank achieving 15.4% and Barclaycard 19.3%
(%)
H1 2012 RoE
H1 2013 RoE 1
10.6%
Group
7.8%
12.2%
UK RBB
12.2%
(10.9%)
Europe RBB
(49.1%)
2.5%
Africa RBB
3.0%
20.1%
Barclaycard
19.3%
13.4%
Investment Bank
15.4%
3.8%
Corporate Banking
7.1%
7.3%
Wealth and Investment Mgmt
2.5%
1 Includes effect of costs to achieve – for RoE excluding costs to achieve, see slide 35
37 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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PERFORMANCE CAPITAL ASSET QUALITY LIQUIDITY & FUNDING REGULATION
Movements in CRD IV and PRA leverage ratios
Revised CRD
FY 12
FY 12
H1 13
H1 13
(£bn)
IV & other
revised
Pillar 3
movements
RA
refinements
estimate1
Derivative financial assets
469
—
469
(66)
403
Reverse repurchase agreements and other similar secured
177
—
177
46
223
lending
Loans & advances and other assets
844
(2)
842
65
907
Total assets (IFRS balance sheet)
1,490
(2)
1,488
45
1,533
Derivatives netting adjustment
(390)
—
(390)
66
(324)
Potential future exposure (PFE) add-on
161
126
287
21
308
SFT adjustments
(5)
(53)
(58)
(72)
(130)
Undrawn commitments
179
8
187
3
190
Regulatory deductions and other adjustments
(22)
6
(16)
(2)
(18)
CRD IV exposure measure adjustments
(77)
87
10
16
26
Fully loaded CRD IV leverage exposure measure
1,413
85
1,498
61
1,559
CRD IV fully loaded Tier 1 capital
40.0
(2.5)
37.5
0.8
38.3
CRD IV fully loaded leverage
2.8%
2.5%
2.5%
CRD IV fully loaded CET1 capital
39.8
(2.5)
37.3
0.8
38.1
Additional Prudential Value Adjustment
(2.1)
Other valuation adjustments
(2.0)
PRA CET1 adjustments
(4.1)
PRA adjusted fully loaded CET 1 capital
34.0
PRA leverage ratio
2.2%
CET1 capital gap to 3% PRA leverage target
12.8
Leverage exposure gap to 3% PRA leverage target
427
1 Represents revised estimate of leverage incorporating changes following the issuance of the final CRD IV text in June 2013, including updates to methodology arising from changes in the text and other refinements to the calculations, applied as at 31 December 2012
38 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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PERFORMANCE CAPITAL ASSET QUALITY LIQUIDITY & FUNDING REGULATION
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 Exposure (PFE) add-on: Regulatory add on for potential future credit exposure on both exchange traded and OTC derivative contracts, calculated by assigning a standardised percentage (based on underlying risk category and residual trade maturity) to the gross notional value of each contract. PFE measure recognises some netting benefits where legally enforceable bi-lateral netting agreements are in place, but these are floored at 40% of gross PFE by netting set, regardless of whether a positive or negative mark-to market exists at the individual trade level. Identified low risk management actions to reduce PFE add-ons are expected through improved application of existing legal netting agreements and further data quality enhancements
Securities Financing Transactions (SFT) adjustments: under CRD IV the IFRS exposure measure for SFTs (e.g. repo/reverse repo) is replaced with the Financial Collateral Comprehensive Method (FCCM) measure. FCCM is calculated as exposure less collateral, taking into account legally enforceable master netting agreements, with standardised adjustments to both sides of the trade for volatility and currency mismatches. Identified low risk management actions to reduce SFT leverage exposure under CRD IV are expected through improvements in the application of collateral and enhanced trade and counterparty data
Undrawn Commitments: Regulatory add on relating to off balance sheet undrawn commitments based on a credit conversion factor of 10% for unconditionally cancellable commitments and 100% for other commitments. The rules specify additional relief to be applied to trade finance related undrawn commitments which are medium/low risk (20%) and medium risk (50%).
For Barclays, this relief is not estimated to be material
39 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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RWAs by Business
ASSET QUALITY
LIQUIDITY & FUNDING
REGULATION
Risk weighted assets were broadly flat; increase in business activity offset by currency movements, methodology and model changes
As at 30 Jun 13 31 Dec 12
(Łm) (Łm)
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 5,326
Total RWAs 387,230 387,373
40 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
PERFORMANCE CAPITAL ASSET QUALITY LIQUIDITY & FUNDING REGULATION
|
|
Stable exposure to the Eurozone periphery1
Default;Fixed Income Investor PresentationLonnqvist, Sofia : Investor Relations
1 Total net on-balance sheet exposure as at 30 Jun 2013 for Cyprus and Greece was £207m and £69m respectively
As at 30 June 2013
Spain
(£m)
Italy
(£m)
Portugal
(£m)
Ireland
(£m)
Total
(£m)
Sovereign
292
1,967
388
26
2,673
Corporate
4,976
1,489
1,357
1,144
8,966
Residential mortgages
13,546
16,034
3,595
108
33,283
Financial institutions
1,028
390
30
4,194
5,639
Other retail lending
2,436
2,072
1,720
114
6,342
Total1
22,278
21,952
7,090
5,586
56,906
Total as at 31 December 2012
23,463
22,725
7,900
4,928
59,016
41 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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Spanish exposures
Retail
Gross mortgage exposure by location of outstanding balances2
Average balance weighted marked to market LTV of 65.7%
0.7% of home loans greater than 90 days in arrears1.
Corporate Barcelona c.13%
£3.1bn net lending to corporates and £1.0bn impairment providing 58% coverage on £1.7bn CRLs This includes £1.7bn net lending to property and construction with £0.7bn impairment providing CRL
Madrid coverage of 61%. c.29%
Sovereign
Sovereign holdings of £0.3bn largely consist of holdings in government bonds held at fair value through profit and loss
Redenomination
Local net funding surplus decreased from £2.3bn to
€1.8bn during H1 2013 driven by partial repayment of the LTRO
1 Greater than 90 days in arrears exclude recovery balances 2 As at 31 December 2012
42 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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PERFORMANCE CAPITAL ASSET QUALITY LIQUIDITY & FUNDING REGULATION
Portuguese exposures
Retail Gross mortgage exposure by location of
Average balance weighted LTVs of 79.7% outstanding balances2 0.4% of home loans greater than 90 days in arrears1
Corporate
£1.1bn net lending to corporates and £0.3bn impairment providing 58% coverage on £0.5bn CRLs
Porto
This includes £0.3bn net lending to property and c.15% construction
PERFORMANCE CAPITAL ASSET QUALITY LIQUIDITY & FUNDING REGULATION
Portuguese exposures
Retail Gross mortgage exposure by location of
Average balance weighted LTVs of 79.7% outstanding balances2 0.4% of home loans greater than 90 days in arrears1
Corporate
£1.1bn net lending to corporates and £0.3bn impairment providing 58% coverage on £0.5bn CRLs
Porto
This includes £0.3bn net lending to property and c.15% construction
Sovereign
Sovereign holdings of £0.4bn largely consist of AFS government bonds. No impairment and £5m (December 2012: £4m loss) cumulative fair value gain held in the AFS reserve
Lisbon
Redenomination c.40%
Local net funding mismatch increased from €4.1bn to
€4.4bn during H1 2013 driven by partial repayment of the LTRO
1 Greater than 90 days in arrears exclude recovery balances 2As at 31 December 2012
43 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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PERFORMANCE CAPITAL ASSET QUALITY LIQUIDITY & FUNDING REGULATION
Italian exposures
Retail Gross mortgage exposure by location of outstanding balances2
Average valuation weighted marked to market LTVs of 46.6%
1.0% of home loans greater than 90 days in arrears1
Milan c.10%
Corporate
£1bn net lending to corporates focused on large corporate clients with very limited exposure to property sector Balances in early warning lists broadly stable, excluding the inclusion of a single counterparty
Sovereign
Sovereign holdings of £1.2bn largely consist of government bonds held at fair value through profit and loss and AFS government bonds with a £14m cumulative fair value gain in the AFS reserve
Rome
Redenomination c.19%
Local net funding mismatch increased from €11.8bn to
€13.6bn during H1 2013
1 Greater than 90 days in arrears exclude recovery balances 2 As at 31 December 2012
44 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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PERFORMANCE
Liquidity & funding management framework
Barclays has developed a dynamic liquidity framework and a diversified funding base, while maintaining protection against unexpected fluctuations
Liquidity risk framework
Liquidity framework meets the Prudential Regulation Authority (PRA) standards Liquidity framework ensures that sufficient financial resources of appropriate quality are maintained Barclays manages its liquidity pool at Group level and allocates costs to businesses based on their liquidity risk appetite Barclays has established the Liquidity Risk Appetite (LRA) providing a Group-wide perspective LRA is measured with reference to the liquidity pool as a percentage of anticipated stressed net outflows for each of the following three scenarios:
– a Barclays-specific stress event (1 month) – a market-wide stress event (3 months) – a combination of the two (1 month)
Under normal market conditions, the liquidity pool must exceed 100% of anticipated outflows Since June 2010, Barclays reports its liquidity against
PRAs Individual Liquidity Guidance (ILG)
Funding structure
Barclays maintains access to a variety of alternative funding sources (deposits, secured and unsecured debt capital markets), in order to:
– Avoid over reliance on any particular funding source
– Optimise the use of its high quality assets and low level of encumbrance
– Minimise cost of funding
Retail and Business Banking, Corporate Banking and Wealth & Investment Management activities largely funded by customer deposits, with remainder covered by secured funding Investment Bank activities primarily funded through wholesale markets Absa funding position separately managed due to local currency and funding requirements Barclays prudently manages its liabilities, while aligning its interests with investors
|
|
45 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
PERFORMANCE
LIQUIDITY & FUNDING
Wholesale funding composition
1 month >1 month >3 months >6 months Total >1 year but >2 years Total
As at 30 June 2013 but 3 but 6 but 12 1 year 2 years
months months months
(£bn) (Łbn) (Łbn) (Łbn) (Łbn) (Łbn) (Łbn) (Łbn)
Deposits from banks 16.0 5.2 1.7 0.8 23.7 6.0 1.8 31.5
Certificates of deposit and
commercial paper 6.5 13.0 9.5 6.0 35.0 1.8 1.2 38.0
Asset backed commercial paper 2.9 1.6 —— 4.5 4.5
——
Senior unsecured MTNs (public
benchmark) — 0.5 — 6.1 6.6 4.7 11.8 23.1
Senior unsecured MTNs (private
placement) 0.8 2.5 2.3 6.9 12.5 11.2 32.1 55.8
Covered bonds / ABS — 0.1 0.1 1.3 1.5 9.3 15.5 26.3
Subordinated liabilities —— 0.1 — 0.1 0.2 21.3 21.6
Other 4.1 1.7 1.2 2.4 9.4 1.2 5.1 15.7
Total 30.3 24.6 14.9 23.5 93.3 34.4 88.8 216.5
Of which secured 5.1 3.3 1.3 2.5 12.2 9.9 16.0 38.1
Of which unsecured 25.2 21.3 13.6 21.0 81.1 24.5 72.8 178.4
Total as at 31 December 2012 29.4 39.4 17.5 15.4 101.7 28.3 109.7 239.7
Of which secured 5.9 4.0 2.4 1.3 13.6 5.2 21.6 40.4
Of which unsecured 23.5 35.4 15.1 14.1 88.1 23.1 88.1 199.3
46 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
PERFORMANCE
CAPITAL
ASSET QUALITY
LIQUIDITY & FUNDING
REGULATION
|
|
Term funding plans1
Commitment to maintain access to a diversified funding base, across different products and multiple currencies Reduced funding requirements due:
– Higher than expected deposit growth
– Run down of legacy assets
– Pre-funding of 2013 requirements in 2012
2012 Maturities 2012 Issuances 2013 Maturities 2013 Issuances 2014 Maturities 2014 Issuances 2015 Maturities 2015 Issuances
Term funding maturities Unsecured term funding (senior public & private, and subordinated debt) Secured term funding (excl. FLS)
1 Projections based on market conditions prevailing at end of June 2013, net of buy backs
Commitment to maintain access to a diversified funding base, across different products and multiple currencies
Reduced funding requirements due:
–Higher than expected deposit growth
–Run down of legacy assets
–Pre-funding of 2013 requirements in 2012
Term funding plans1 47 | Barclays Fixed Income Investor 2012 Results Call | 13 February 2013 H1 2013 Fixed Income Investor Presentation | 30 July 2013 2015 Maturities
2015 Issuances
2014 Maturities
2014 Issuances
2013 Maturities
2013 Issuances
2012 Maturities
2012 Issuances
Term funding maturities
Unsecured term funding (senior public & private, and subordinated debt)
Secured term funding (excl. FLS) c.£22bn c.£18bn £1-3bn1 c.£24bn c.£27bn
£8-10bn1
£6-8bn1
c.£27bn
Term funding maturities Unsecured term funding (senior public & private, and subordinated debt) Secured term funding (excl. FLS)
1 Projections based on market conditions prevailing at end of June 2013, net of buy backs
47 || Barclays H1 2013Fixed FixedIncome IncomeInvestor Investor2012 Presentation Results Call | 30 | 13 July February 2013 2013
PERFORMANCE
|
|
Unsecured medium-term notes and subordinated liabilities
Barclays is a major Medium-Term Notes (MTNs) issuer, with private and public MTNs and subordinated liabilities representing c.46% of its total wholesale funding, or £100.5bn, as at 30 June 2013
Senior
Subordinated
MTN programme is an important component of Barclays diversified wholesale funding base
Barclays is committed to continue issuing MTNs, even though its wholesale funding needs are decreasing At end of June 2013, senior MTNs outstanding amounted to
£78.9bn
56% of MTNs mature in more than 2 years
Subordinated liabilities represent an important component of Barclays diversified wholesale funding base Barclays is committed to continue issuing subordinated liabilities, even though its wholesale funding needs are decreasing At 30 June 2013, outstanding subordinated liabilities amounted to £21.6bn In April, Barclays issued a further US$1.0bn of Tier 2 contingent capital notes and repurchased existing Tier 2 instruments for a similar amount, as a step in transitioning towards its end state CRD IV capital structure
Barclays’ senior unsecured spreads
Barclays 4.0% due on 20 Jan 2017 (Z-Spread to Maturity)
5-yr iTraxx SovX Western Europe
5-yr iTraxx senior financials Barclays 5-yr EUR senior CDS
Source: Barclays Live –
48 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
PERFORMANCE
CAPITAL
ASSET QUALITY
LIQUIDITY & FUNDING
REGULATION
|
|
Secured funding
High-quality assets and contained encumbrance levels allow Barclays to maintain access to secured funding
Secured term funding backed Highlights by prime assets, including Wholesale secured funding residential mortgages, credit cards and corporate loans, with focus on highly rated term issuance 12% ABCP (all 1yr)
4%
Barclays remain committed to the BoE Funding for Lending
Covered bonds/ABS ( 1yr)
Scheme (FLS). In H1 2013, an estimated £42bn of FLS eligible 19% gross new lending to UK households and businesses was Gold repo made 65%
Covered bonds/ABS (> 1yr)
First securitisation programme backed by US domiciled credit card receivables registered with SEC in Q4 2012
Total: £38.1bn (excluding Absa)
Prudent customer L&A encumbrance level of 14%.
Public secured funding platforms 2005-2013 Public secured term funding issuance as at H1
13 (£bn)
UK Mortgages UK/US Cards 6.0
2.4
UK Covered Gracechurch Gracechurch Dryrock 0.3 Cards 4.5 Bonds RMBS (US Cards) 5.0 (UK Cards) 5.6
6.0 6.0
3.5 3.7
144a/Reg S 144a/Reg S 144a/Reg S SEC 3.0
1.8 1.8
0.1 0.3
€/£/$/CHF €/£/$ €/£/$ $ 2005 2006 2007 2008 2009 2010 2011 2012 2013
UK Cards Covered bond RMBS FLS
Additional information on secured funding, including monthly reports, available on Barclays.com
49 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
PERFORMANCE
CAPITAL
ASSET QUALITY
LIQUIDITY & FUNDING
REGULATION
|
|
Contingent Capital Notes (CCNs)
Barclays sees significant value in contingent capital notes and has issued US$4.0bn of this subordinated debt as the Group transitions to its end-state CRD IV / ICB capital structure
Build a 2% CCN layer, comprising 1.5% of Additional Tier 1 and
0.5% of Tier 2 in end-state capital structure
Support development of a stable and viable contingent capital market, that is required to efficiently transition banks capital position to CRD IV compliant structures.
Key features
Key features
Terms of the April 2013 trade were similar to the previous CCN issuance but, in addition, included acknowledgement of a prospective statutory UK bank resolution bail-in power
Subordinated USD-denominated Tier 2 instruments
Permanent write-down feature when Barclays PLCs CT1 / transitional CET1 (post-CRD IV implementation) falls below 7% (trigger event)
100% benefit towards the Groups nominal loss absorbing capital requirements SEC registered Listed on London Stock Exchange BB+1 / BBB- rating from S&P and Fitch respectively.
US$4.0bn of CCNs raised through two global Distribution trades
Pricing Maturity Orderbook Accounts
US$3.0bn raised in 7.625% 10-year
> US$17bn >600 November (ms+600bp) bullet
2012 US$1.0bn
7.750% raised in 10NC5 >US$3.5bn >240
(ms+683bp)
April 2013
Combined allocation by geography
c. 5%
c.15%
US Europe c. 50% Asia Other c. 30%
1 Pre the downgrade on 2 July 2013, S&P rated the securities BBB- (see slide 27 for more information on the S&P downgrade
50 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
PERFORMANCE CAPITAL ASSET QUALITY LIQUIDITY & FUNDING REGULATION
|
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Barclays funding cost
5-year USD Z-spread (as at 30 June 2013)1
272 231 242 245 195 196 144 156 120 126 131
94 102 105 87
HSBC UBS Bank Sachs RBS Suisse Morgan Paribas Stanley Nomura Barclays Generale CitigroupAmerica
JP of Macquarie Credit Deutsche BNP Societe Goldman Bank Morgan
5-year CDS vs. iTraxx
iTraxx, 5-yr EUR senior fin
Barclays, 5-yr EUR senior CDS
1 Exact maturities of bonds included in comparison may differ somewhat due to which spreads are not fully comparable
51 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
PERFORMANCE
CAPITAL
ASSET QUALITY
LIQUIDITY & FUNDING
REGULATION
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UK banking reform
Barclays backs initiatives to improve stability of the UK banking system and support a sustainable economy, however, requires alignment with international regulation and careful consideration of implementation costs
Proactively thinking about structural reforms / ring-fenced structure recommended by ICB1 and HM Treasury
Regulatory timeline
Sep 2011: Jun 2012: Oct 2012: Dec 2012: June 2013: Jan 2013 – May 2015: Jan 2019:
Publication of ICB Publication of HM Publication of the FSA Publication of PCBS2 Publication of PCBS2 Expected enactment of Implementation of Recommendations Treasury White Paper Banking Reform Bill first report final report Banking Reform Bill banking reforms
Retail ring-fence
Objective: “isolate banking activities where continuous provision of service is vital to the economy and to a banks customers”
Ring-fenced entity would essentially take deposits from and provide payment services to individuals and SMEs, and would not be permitted to provide certain services such as complex derivatives Ring-fenced bank would be subject to capital and liquidity requirements on a standalone basis Even though Barclays anticipates the size of its ring-fenced bank to be relatively small (c.10% of its balance sheet), it is supportive of a ring-fenced structure that offers sufficient flexibility to maintain diversification benefits inherent to the universal banking model.
Transitioning to an ICB compliant capital structure
ICB recommends large UK banks hold Primary Loss-Absorbing Capacity (PLAC) of at least 17%, consisting of capital and long-term bail-in-able senior unsecured debtBarclays end-state capital structure embraces ICB proposals and CRD IV, with a 17% total capital ratio and a minimum CET1 ratio of 10.5%
Strengthening our processes to maximise business continuity in a resolution scenario
Barclays continue to work with the authorities to help them achieve their goals in a way that minimises impacts for all our stakeholders
1 Independent Commission of Banking, established in June 2010 to consider reforms to the UK banking sector 2 Parliamentary Commission on Banking Standards, appointed to conduct pre-legislative scrutiny of the FSA Banking Reform Bill before going through Parliament. On 19 June 2013, the PCBS published its final report on the UK Banking sector. Recommendations include: (i) a new “senior” persons regime to ensure full accountability for decisions made; (ii) reforms to the remuneration of senior management and other influential bank staff to better align risk and reward; and (iii) sanctions and enforcement, including a new criminal offence of reckless misconduct. The UK Government published its response to the PCBSs report on 8 July 2013, in which it endorses the reports principal findings and commits to implementing a number of its recommendations.
52 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
PERFORMANCE
CAPITAL
ASSET QUALITY
LIQUIDITY & FUNDING
REGULATION
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REGULATION
PERFORMANCE
CAPITAL
ASSET CAPITAL
LIQUIDITY & FUNDING
Basel 3
Regulatory Timeline
Initial timeframe mentioned below is delayed in the EU – alternative dates have yet to be communicated
1 Jan
H1 2010 1 Jan 2012 1 Jan 2013 1 Jan 2014 1 Jan 2015 1 Jan 2016 1 Jan 2017 1 Jan 2018 1 Jan 2019 2011
Capital
Phased-in capital requirements
Requirements
CRD IV Leverage Supervisory Parallel run (Jan 2013 – Jan 2017) Pillar I Ratio monitoring Disclosures starts in Jan 2015 requirement Introduction of
Net Stable Funding
Observation period minimum
Ratio (NSFR) requirement
60% Full
Liquidity Coverage Minimum requirement increasing in equal
compliance compliance
Ratio (LCR)1 required steps by10% per year2 required2
Intraday liquidity Introduction of
monthly
monitoring tools reporting3
FSA/PRA’s
Introduction of
Individual Liquidity
4 ILG
Guidance (ILG)
Main requirements
Capital: minimum of 4.5% CET1 + 1.5% AT1 + 2% T2. In addition, banks are subject to a countercyclical buffer of 0-2.5%, a capital conservation buffer of 2.5% (outside periods of stress) and a SIFI buffer of up to 2.5% (2% for Barclays) to be satisfied with CET1
CRD IV Leverage: Minimum requirement still to be determined
NSFR: available amount of stable funding to exceed required amount of stable funding, over a stress 1-year period (NSFR > 100%)
LCR: stock of unencumbered high quality liquid assets to exceed net stressed cash outflow over 30 days (LCR > 100%)
1 As per “Basel III: the Liquidity Coverage Ratio and liquidity risk monitoring tools”, January 2013
2 CRD IV requires a phase-in implementation of the LCR in Europe. Full compliance under CRD IV is required by 1 Jan 2018 therefore, the increase in from 2017 to 2018 is 20% rather than 10%.
3 As per “Monitoring tools for intraday liquidity management”, April 2013 4 Short-term liquidity stress test, broadly comparable to the LCR under Basel 3
53 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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Debt investor relations contact information
Richard Caven Oihana Bessonart Sofia Lonnqvist +44 (0)20 7116 2809 +44 (0)20 7116 6327 +44 (0)20 7116 5716 richard.caven@barclays.com oihana.bessonart@barclays.com sofia.lonnqvist@barclays.com
Website: group.barclays.com/about-barclays/investor-relations#debt-investors
54 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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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 with respect to such securities or other financial instruments.
Information in this document in relation to the rights issue is not for publication, release or distribution, directly or indirectly, in whole or in part, in or into any jurisdiction in which it would be unlawful to do so. The distribution or release, directly or indirectly, of this document or information referred to herein other than in the United Kingdom may be restricted by law and therefore persons into whose possession this document and/or any related documents comes should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdictions.
This document is an advertisement and does not constitute a prospectus or a prospectus equivalent document and is for information purposes only and does not constitute or form part of any offer or invitation to sell, or an invitation to induce an offer or issue, or any solicitation of any offer to acquire any securities of Barclays, in any jurisdiction in which such an offer or solicitation is unlawful. You should not subscribe or purchase any securities except on the basis of the information in the prospectus, which is to be published in due course.
Notice to US investors and ADS holders. In the United States, the rights issue will be made pursuant to a U.S. prospectus that Barclays expects to file with the US Securities and Exchange Commission (the “SEC”) in September 2013. The U.S. prospectus will describe, among other things, how ADS holders will be able to participate in the rights issue. Barclays has filed a registration statement on Form F-3 (including a base prospectus) (Registration No. 333-173886) with the SEC relating to its ordinary shares and for the offering to which this document relates. Before you invest, you should read the base prospectus in that registration statement, as it may be amended from time to time, the U.S. prospectus (when it is filed) and other documents Barclays has filed, and will file, with the SEC for more complete information about Barclays and the rights issue. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov or by accessing Barclays website at www.barclays.com. Alternatively, copies of the base prospectus and, when available, the U.S. prospectus may be obtained by contacting Barclays, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, telephone (888) 603-5847 or e-mail a request to barclaysprospectus@broadridge.com.
55 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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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’s (the “Group”) plans and its current goals and expectations relating to its future financial condition and performance.
Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as “may,” “will,” “seek,” “continue,” “aim,” “anticipate,” “target,” “expect,” “estimate,” “projected,” “intend,” “plan,” “goal,” “believe,” “achieve” or other words of similar meaning. Examples of forward-looking statements include, among others, statements regarding the Group’s future financial position, income growth, assets, impairments, charges, business strategy, capital ratios, leverage, payment of dividends, including dividend pay-out ratios, projected levels of growth in the banking and financial markets, projected costs, original and revised commitments and targets in connection with the Transform programme, deleveraging actions (including the Leverage Plan), estimates of capital expenditures, and plans and objectives for future operations and other statements that are not historical fact.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, U.K. domestic, Eurozone and global macroeconomic and business conditions, the effects of continued volatility in credit markets, market related risks such as changes in interest rates and foreign exchange rates, effects of changes in valuation of credit market exposures, changes in valuation of issued securities, volatility in capital markets, particularly as it may affect the timing and cost of planned capital raisings, the policies and actions of governmental and regulatory authorities (including, among others, requirements regarding capital and Group structures, regulatory approval for any dividend it proposes, and the potential for one or more countries exiting the Eurozone), changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards (“IFRS”) applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS and prudential capital rules, the outcome of current and future legal proceedings, future levels of conduct provisions, the success of future acquisitions and other strategic transactions and the impact of competition, a number of which factors are beyond the Group’s control. As a result of these uncertain events and circumstances, the Group’s actual future results, dividend payments and capital and leverage ratios may differ materially from the plans, goals and expectations set forth in such forward-looking statements. The list above is not exhaustive and there are other factors that may cause the Group’s actual results to differ materially from the forward-looking statements contained in this document. Additional risks and factors are identified in Barclays filings with the SEC, including in the Barclays PLC and Barclays Bank PLC Annual Report on Form 20-F for the fiscal year ended 31 December 2012, which is available on the SEC’s website at http://www.sec.gov. You are also advised to read carefully the additional risks and other factors that will be identified in the applicable U.K. prospectus and the applicable U.S. prospectus before making any investment decision in the rights issue.
Any forward-looking statements made herein speak only as of the date they are made. Except as required by the Prudential Regulation of growth in the banking and financial markets, projected costs, commitments in connection with the Transform Programme, estimates of capital Authority, the Financial Conduct Authority, the London
Stock Exchange plc (the “LSE”) or applicable law, Barclays expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Barclays’ expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any additional disclosures that Barclays has made or may make in documents it has published or may publish via the Regulatory News Service of the LSE and/or has filed or may file with the SEC.
Nothing in this document is intended, or is to be construed as a profit forecast or to be interpreted to mean that earnings per Barclays share for the current or future financial years will necessarily match or exceed the historical published earnings per Barclays share.
56 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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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 and requirements of the Prudential Regulation Authority (“PRA”). The CRD IV-based measures have been calculated on the basis of the Group‘s current interpretation of CRD IV. These regulatory measurements are not yet in force and are not yet required to be disclosed by the Group and, as such, represent non-IFRS measures. Measures presented on a “transitional” basis are calculated by taking into account the
FSA‘s statement on CRD IV transitional provisions in October 2012, assuming they were applied as at 30 June 2013. Measures presented on a “fully loaded” basis are calculated without applying CRD IV transitional provisions and assume that the phase-in of the transitional provisions is complete and all of CRD IV applied in the form that the Group currently expects it to apply. The final impact of CRD IV is dependent on technical standards to be finalised by the European Banking Authority and on the final
UK implementation of the rules. The Group‘s interpretation of CRD IV and the basis of the Group‘s calculation of CRD IV-based measures may be different from those of other financial institutions. This document includes the following CRD IV-based metrics, which are described in more detail in this document and in the Group‘s announcement (Barclays PLC Announces Leverage Plan) dated 30 July 2013.
CRD IV CET1 capital on a transitional and fully loaded basis. See the “Estimated Impact of CRD IV – Capital and RWAs” table in this document for a reconciliation of CRD IV CET1 capital to Core Tier 1 capital, which is calculated on the basis that currently applies to the Group under applicable regulatory requirements.
CRD IV risk weighted assets (“RWAs”) on a transitional and fully loaded basis. See the “Estimated Impact of CRD IV – Capital and RWAs” table in this document for a reconciliation of CRD IV RWAs to RWAs as calculated on the basis that currently applies to the Group under applicable regulatory requirements.
CRD IV CET1 ratio on a transitional and fully loaded basis, which represents CRD IV CET1 capital divided by CRD IV RWAs. See the “Estimated Impact of CRD IV–
Capital and RWAs” table in this document for a reconciliation of the components of the CRD IV CET1 ratio to the respective components of Core Tier 1 ratio, as calculated on the basis that currently applies to the Group under applicable regulatory requirements.
CRD IV leverage exposure on a fully loaded basis. CRD IV leverage exposure makes certain adjustments to Total assets under IFRS in accordance with the Group‘s interpretation of CRD IV requirements. See the “Movements in CRD IV and PRA leverage ratios” table in this document for a reconciliation of CRD IV leverage exposure to Total assets under IFRS.
CRD IV leverage ratio on a fully loaded basis, which represents CRD IV CET1 capital divided by CRD IV leverage exposure. See the “Estimated Impact of CRD IV –
Capital and RWAs” table in this document for a reconciliation of CRD IV CET1 capital to Core Tier 1 capital, and see the “Movements in CRD IV and PRA leverage ratios” table in this document for a reconciliation of CRD IV leverage exposure to Total assets.
With respect to the metrics reflecting the PRA adjustments – PRA-adjusted fully loaded CET1 capital and PRA leverage ratio – included in this document, these metrics apply the PRA adjustments to the Group‘s fully loaded CRD IV CET1 capital and CRD IV leverage ratio, respectively. Reconciliations of the PRA-adjusted fully loaded CET1 capital to the Group‘s CRD IV CET1 capital on a fully loaded basis and of the PRA leverage ratio to the Group‘s CRD IV leverage ratio are shown in the table entitled “Movements in CRD IV and PRA leverage ratios” in this document.
57 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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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 readers of its financial statements because they enable the reader to identify a more consistent basis for comparing the business‘ performance between financial periods, and provide more detail concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined and performance is monitored by Barclays management. However, any non-IFRS measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. Key non-IFRS measures included in this document, and the most directly comparable IFRS measures are described below. Quantitative reconciliations of these measures to the relevant IFRS measures are included in Exhibit 99.1 of the Group’s Form 6-K filed with the SEC on 30 July 2013 (File No. 001-09246, Film No. 13996454) with respect to the Group’s half-year results, and such quantitative reconciliations are incorporated by reference into this document. Exhibit 99.1 to the Form 6-K is available at http://www.sec.gov/Archives/edgar/data/312069/000119312513310377/d574282dex991.htm.
Adjusted profit/(loss) before tax is the non-IFRS equivalent of profit/(loss) before tax as it excludes the impact of own credit; gains on debt buy-backs; impairment and disposal of the investment in BlackRock, Inc.; the provision for Payment Protection Insurance redress payments and claims management costs (“PPI redress”); the provision for interest rate hedging products redress and claims management costs (interest rate hedging products redress); goodwill impairments; and gains and losses on acquisitions and disposals. The regulatory penalties relating to the industry-wide investigation into the setting of interbank offered rates have not been excluded from adjusted measures. A reconciliation of IFRS and Adjusted profit/(loss) before tax is presented on slide 14 of this document.
Adjusted attributable profit represents adjusted profit/(loss) after tax less profit attributable to non-controlling interests. The comparable IFRS measure is profit attributable to equity holders of the parent.
Adjusted income and total income/(expense) net of insurance claims on an adjusted basis represents total income/(expense) net of insurance claims excluding the impact of own credit and gains on debt buy-backs.
Adjusted operating expenses represents operating expenses excluding the provision for PPI redress, provision for interest rate hedging product redress and goodwill impairment.
Adjusted cost: income ratio represents Cost:Income ratio excluding the impact of own credit, gains on debt buy-backs, gain on disposal of strategic investment in
BlackRock, Inc., the provision for PPI redress, provision for interest rate hedging product redress, and goodwill impairment. The comparable IFRS measure is cost: income ratio, which represents operating expenses to income net of insurance claims.
Adjusted basic earnings per share represents adjusted profit attributable to equity holders of the parent divided by the basic weighted average number of shares in issue. The comparable IFRS measure is basic earnings per share, which represents profit after tax and non-controlling interests, divided by the basic weighted average number of shares in issue.
Adjusted return on average shareholders equity represents adjusted profit attributable to equity holders of the parent divided by average equity. The comparable IFRS measure is return on average shareholders equity, which represents profit after tax and non-controlling interests, divided by average equity.
Adjusted return on average tangible shareholders equity represents adjusted profit attributable to equity holders of the parent divided by average tangible equity. The comparable IFRS measure is return on average tangible shareholders equity, which represents profit after tax and non-controlling interests, divided by average tangible equity.
58 | H1 2013 Fixed Income Investor Presentation | 30 July 2013
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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 average risk weighted assets.
Adjusted gross leverage is a non-IFRS measure representing the multiple of adjusted total tangible assets over total qualifying Tier 1 capital. Adjusted total tangible assets are total assets adjusted to allow for derivative counterparty netting where the Group has a legally enforceable master netting agreement, assets under management on the balance sheet, settlement balances and cash collateral on derivative liabilities, goodwill and intangible assets. This measure has been presented as it provides for a metric used by management in assessing balance sheet leverage. Barclays management believes that disclosing a measure of balance sheet leverage provides useful information to readers of Barclays financial statements as a key measure of stability, which is consistent with the views of investors. The comparable IFRS measure is the ratio of total assets to total shareholders equity.
59 | H1 2013 Fixed Income Investor Presentation | 30 July 2013