Barclays (BARC) J.P. Morgan UK Leaders Conference summary

Strategic progress and financial targets

• On track to achieve over 12% RoTE by 2026, with 11.5% year-to-date and 12.3% in Q3, supported by stable income growth and cost efficiency initiatives.

• Targeting more than GBP 10 billion in shareholder distributions and rebalancing risk-weighted assets so the investment bank comprises about 50% of the group.

• Delivered GBP 700 million of GBP 1 billion cost savings targeted for 2024, with a total GBP 2 billion gross efficiency program planned through 2026.

• Strong organic capital generation of 125 basis points year-to-date, supporting distribution commitments.

• Group revenue target of GBP 30 billion by 2026, with consensus currently slightly below this level.

UK and US market dynamics

• UK and US economies have shown greater resilience than expected, with lower inflation and unemployment than forecasted.

• UK market seen as attractive due to credit resilience, regulatory maturity, and political stability, with growth focus in mortgages, cards, and corporate lending.

• US exposure is significant, with 30-40% of revenues from the US and 68% of investment banking income derived from the US market.

• Anticipates three UK rate cuts (two already occurred), with structural hedge providing a tailwind to NII.

Divisional performance and growth plans

• UK retail expects asset growth in mortgages, cards, and SME, with the Tesco acquisition adding GBP 400 million annualized NII.

• Deposit migration from current to term deposits has stabilized across retail, corporate, and private banking.

• Ambitious GBP 30 billion RWA growth plan in UK retail, leveraging new capabilities from acquisitions and partnerships.

• Investment bank focused on efficient RWA deployment, cost control, and expanding M&A and ECM capabilities, aiming for 12%+ RoTE.

• US cards business targets RoTE of 12%+ by 2026, with focus on impairment normalization, NIM improvement, retail funding, and operational digitization.