Barclays (BARC) Status Update summary

Strategic Direction, Business Integration, and Core Strengths

• Focused on leveraging global scale, with 55% of income from the Americas between 2021 and 2023, and a strategy to diversify income across products and geographies.

• Integrated investment banking and international corporate banking to streamline client coverage, align resources, and reduce business silos, aiming to deepen client relationships and enhance recurring revenues.

• Barclays Investment Bank operates at scale with a focus on Global Markets and Investment Banking, ranking as a leading non-US investment bank with diversified, stable income and strong client relationships.

Financial Performance, Targets, and Capital Management

• Investment Bank income reached £11.0bn in 2023, targeting high single-digit CAGR through 2026, with over £700 million incremental income from management actions and further gains from industry wallet normalization.

• ROTE was 11% in 2023, with 2026 targets set above 12% in line with the group.

• Cost-to-income ratio improved to 59% in 2023, with a target in the high 50s% by 2026.

• RWAs in the investment bank to remain broadly stable, with a reduction in group RWA share from 58% in 2023 to about 50% by 2026, achieved by reallocating capital to higher-returning areas.

Execution Initiatives, Operational Improvements, and Investment

• Four key initiatives: simplifying client engagement (treasury coverage), improving capital stewardship, focusing client footprint, and rebalancing revenue mix toward advisory and ECM.

• Treasury coverage model has doubled U.S. dollar deposits at the New York branch in consecutive years, demonstrating early success in cross-selling and client penetration.

• Enhanced capital discipline through tighter approval processes, higher return expectations, and proactive recycling of capital to higher-return opportunities, with portfolio rotation every three years.

• Modest cost growth is expected, driven by £3.0bn invested from 2021-2023, two-thirds in Markets technology, with efficiency savings offsetting inflation and performance costs.

• Over 60% of 2023 senior hires were in focus sectors and products.