| Barclays delivered a return on tangible equity (RoTE) of 12.3% in Q324 and 11.5% for Q324 YTD, on track to deliver against 2024 and 2026 targets |
| C. S. Venkatakrishnan, Group Chief Executive, commented |
| “We continue to be focused on the disciplined execution of our three-year plan and are encouraged with progress to date. Whilst there is more work to do, the Group is on track to achieve its target of greater than 12% RoTE in 2026. In Q324 Barclays delivered a RoTE of 12.3%, supporting our target of greater than 10% in 2024. Tangible net asset value (TNAV) per share increased to 351p, up 11p versus the prior quarter and up 35p year-on-year. The acquisition of Tesco Bank, to be completed on 1 November 2024, forms part of our commitment to invest in the UK. We continue to exercise cost discipline and remain well capitalised with a Common Equity Tier 1 (CET1) ratio at the end of the quarter of 13.8%.” |
| • Group statutory RoTE of 12.3% in Q324 and 11.5% in Q324 YTD, 2024 Group RoTE targets remain unchanged |
| • Guidance for 2024 Group Net Interest Income (NII) excluding Investment Bank (IB) and Head Office increased from c.£11.0bn to greater than £11.0bn. Within this Barclays UK NII guidance increased from c.£6.3bn to c.£6.5bn1 |
| • Group cost: income ratio of 61% in Q324 and Q324 YTD, 2024 Group cost: income ratio target of c.63% remains unchanged– Delivered a further £0.3bn of gross cost efficiency savings in Q324 resulting in Q324 YTD savings of £0.7bn, on track to deliver c.£1bn of gross cost efficiency savings in 2024 |
| • Prudent risk management with Q324 loan loss rate (LLR) of 37bps and Q324 YTD LLR of 42bps, below the through-the-cycle target range of 50-60bps, with FY24 expected to be at the bottom of this range, inclusive of the Day 1 impact of the Tesco Bank acquisition |
| • Strong balance sheet with CET1 ratio of 13.8%, within the target range of 13-14% |
| • c.8.0p total distributions per share equivalent announced at H124: dividend of 2.9p now paid, and share buyback of £750m well progressed |
| • TNAV per share of 351p (December 2023: 331p) |
| Key financial metrics: |
|
Statutory |
Excluding inorganic activity2 |
|
Income |
Profit before tax |
Attributable profit |
Cost: income ratio |
LLR |
RoTE |
EPS |
TRAV
per share |
CET1
ratio |
RoTE |
| Q324 |
£6.5bn |
£2.2bn |
£1.6bn |
61% |
37bps |
12.3% |
10.7p |
351p |
13.8% |
12.3% |
| Q324 YTD |
£19.8bn |
£6.4bn |
£4.4bn |
61% |
42bps |
11.5% |
29.3p |
|
|
12.1% |
|
| Q324 Performance highlights: |
| • Group statutory RoTE was 12.3% (Q323: 11.0%) with profit before tax of £2.2bn (Q323: £1.9bn) – There were no inorganic transactions in Q324 |
| • Group income of £6.5bn was up 5% year-on-year, with Group NII excluding IB and Head Office of £2.8bn, of which Barclays UK NII was £1.7bn |
| – Barclays UK income increased 4%, as higher structural hedge income was partially offset by mortgage margin pressure and adverse product dynamics in deposits, which have stabilised throughout 2024 |
| – Barclays UK Corporate Bank (UKCB) income increased 1%, driven by higher average deposit balances |
| – Barclays Private Bank and Wealth Management (PBWM) income decreased by 3%, as growth in client balances was more than offset by the non-repeat of a timing-related one-off in Q323 |
| – Barclays Investment Bank (IB) income increased 6%. Global Markets income increased by 3%, with FICC and Equities both up by 3% respectively. Investment Banking income increased by 13%, as higher fee income in Advisory and Debt and Equity Capital Markets was partially offset by lower income in the International Corporate Bank |
| – Barclays US Consumer Bank (USCB) income decreased by 2% driven by the strengthening of GBP against USD, partially offset by higher balances |
| • Group total operating expenses were stable at £4.0bn, with £0.3bn of cost efficiency savings more than offsetting inflation, enabling investment spending and business growth |
| • Credit impairment charges were £0.4bn (Q323: £0.4bn) with an LLR of 37bps (Q323: 42bps) |
| Q324 YTD Performance highlights: |
| • Group statutory RoTE was 11.5% (Q323 YTD: 12.5%) with profit before tax of £6.4bn (Q323 YTD: £6.4bn) |
| – Excluding the impact of inorganic activity1, Group RoTE was 12.1% |
| • Group income of £19.8bn was stable year-on-year, with Group NII excluding IB and Head Office of £8.2bn of which Barclays UK NII was £4.8bn |
| • Group total operating expenses were £12.1bn, up 1% year-on-year, including the £93m impact of the Bank of England (BoE) levy scheme2 |
| – Group operating costs were stable at £12.0bn, with £0.7bn of cost efficiency savings more than offsetting inflation, enabling investment spending and business growth |
| • Credit impairment charges were £1.3bn (Q323 YTD: £1.3bn) with an LLR of 42bps (Q323 YTD: 43bps) |
| • CET1 ratio of 13.8% (December 2023: 13.8%), with risk-weighted assets (RWAs) of £340.4bn (December 2023: |
| £342.7bn) and TNAV per share of 351p (December 2023: 331p) |
| Group Financial Targets and Outlook: |
| 2024 |
| • Returns: targeting RoTE of greater than 10% and c.10.5% excluding inorganic activity1 |
| – The cumulative impact of all inorganic activity on FY24 Group RoTE is currently expected to be broadly neutral, as an estimated net gain upon the completion of the Tesco Bank acquisition in Q424 should broadly offset the losses on disposals from our Italian retail mortgage portfolios as well as from the disposal of the German consumer finance business |
| • Income: targeting Barclays Group NII excluding IB and Head Office of greater than £11.0bn (previous target of c.£11.0bn), of which Barclays UK NII is now c.£6.5bn (up from a previous target of c.£6.3bn)3 |
| • Costs: targeting Group cost: income ratio of c.63%, which includes c.£1bn of gross efficiency savings in 2024 |
| • Impairment: expect an LLR of 50-60bps through the cycle |
| • Capital: expect to operate within the CET1 ratio target range of 13-14% |
| 2026 |
| • Returns: targeting a greater than 12% RoTE |
| • Capital returns: plan to return at least £10bn of capital to shareholders between 2024 and 2026, through dividends and share buybacks, with a continued preference for buybacks |
| – Plan to keep total dividend stable at 2023 level in absolute terms, with progressive dividend per share growth driven through share count reduction as a result of increased share buybacks |
| – Dividends will continue to be paid semi-annually. This multi-year plan is subject to supervisory and Board approval, anticipated financial performance and our published CET1 ratio target range of 13-14% |
| • Income: targeting Group total income of c.£30bn |
| • Costs: targeting total Group operating expenses of c.£17bn and a Group cost: income ratio of high 50s in percentage terms. This includes total gross efficiency savings of c.£2bn by 2026 |
| • Impairment: expect an LLR of 50-60bps through the cycle |
| • Capital: expect to operate within the CET1 ratio target range of 13-14% |
| – Targeting IB RWAs of c.50% of Group RWAs in 2026 |
| – Impact of regulatory change on RWAs in line with our prior guidance expected to be at the lower end of 5-10% of Group RWAs4 |
| – The previously estimated c.£16bn RWA impact from USCB moving to an Internal Ratings (IRB) model remains in line with prior guidance, with a change to timing and subject to model build and portfolio changes. c.£5bn of this to be reflected when Basel 3.1 is implemented in 2026 and the remainder to follow thereafter |
| – A modest increase in Pillar 2A is likely, applicable at some point in 2025 until model implementation |
| For the full document click the link below: |
| Barclays Plc |
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