Barclays (BARC) Q2 2024 Fixed Income earnings summary

Executive summary

• H1 2024 statutory RoTE was 11.1% (12.0% excluding inorganic activity), with Q2 RoTE at 9.9% (11.8% excl. inorganic), and profit before tax of £4.2bn; EPS was 18.6p.

• Group income was £13.3bn for H1 2024, with Q2 income at £6.3bn; income declined 2% year-over-year.

• Announced £1.2bn capital distributions for H1 2024, including a 2.9p dividend and up to £750m share buyback.

• Disciplined execution continues, with cost control and capital strength supporting strategic aims.

• Completed sale of Italian mortgage portfolio and announced sale of German consumer finance business; on track to acquire Tesco Bank in November 2024.

Financial highlights

• CET1 ratio was 13.6% at H1 2024, within the 13-14% target range; TNAV per share was 340p.

• Group cost:income ratio was 62% in H1 and 63% in Q2; total costs up 1% YoY in Q2.

• Q2 impairment charge was £309m, with a loan loss rate of 38bps; H1 credit impairment charges totaled £0.9bn, loan loss rate 45bps.

• Q2 2024 EPS was 8.3p; H1 2024 EPS was 18.6p.

• Group profit before tax was £4.2bn for H1 2024.

Outlook and guidance

• 2024 RoTE guidance remains above 10%, targeting 12%+ by 2026; 2024 NII guidance raised to c.£11.0bn.

• At least £10bn capital return to shareholders planned for 2024-2026.

• Group cost:income ratio target c.63% for 2024, aiming for high 50s% by 2026.

• Loan loss rate guidance maintained at 50-60bps through the cycle.

• CET1 ratio target range is 13-14%.