Barclays (BARC) Q2 2024 earnings summary

Executive summary

• Q2 and H1 2024 statutory ROTE was 9.9% and 11.1% respectively; underlying ROTE ex-disposals was 11.8% in Q2 and 12.0% in H1, with a >10% ROTE target for 2024 and >12% by 2026.

• Group income was £6.3bn in Q2 and £13.3bn in H1, with Q2 income flat YoY and H1 income down 2% YoY.

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

• Completed sale of Italian mortgage portfolio (loss of £220m) and announced sale of German consumer finance business (loss of £20m); on track to acquire Tesco Bank in November 2024.

• Disciplined execution continues, with cost control, income stability, and robust capital position highlighted.

Financial highlights

• Q2 profit before tax was £1.9bn; H1 profit before tax was £4.2bn; H1 attributable profit was £2.8bn.

• Q2 ROTE: 9.9%; H1 ROTE: 11.1%; underlying ROTE ex-disposals: 11.8% in Q2, 12.0% in H1.

• Cost-to-income ratio: 63% in Q2, 62% in H1; Q2 costs were £4.0bn, flat YoY.

• CET1 ratio: 13.6%, within 13%-14% target; TNAV per share: 340p.

• Loan loss rate: 38bps in Q2, 45bps in H1; UK charge only £8m in Q2; US Consumer Bank: 438bps.

Outlook and guidance

• 2024 ROTE target remains >10%, with >12% targeted by 2026.

• 2024 Group NII guidance raised to ~£11bn; Barclays UK NII to ~£6.3bn.

• Cost-to-income ratio expected around 63% for 2024; target in high 50s% by 2026.

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

• Capital return plan of at least £10bn by 2026 reiterated.