UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
August 17, 2015
Barclays PLC
(Name of Registrant)
1 Churchill
Place
London E14 5HP
England
(Address of
Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form
20-F x Form 40-F ¨
Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation
S-T Rule 101(b)(7): ¨
THIS REPORT ON FORM 6-K (EXCEPT FOR THE EXPECTED ISSUE RATINGS SPECIFIED
IN THE PRICING TERM SHEET AND FIXED INCOME INVESTOR PRESENTATION IN SCHEDULE III OF EXHIBIT 1.2 TO THIS FORM 6-K) SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT ON FORM F-3 (NO. 333-195645) OF BARCLAYS PLC AND TO BE A
PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.
The Report comprises the following:
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No. |
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Description |
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| 1.1 |
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Underwriting Agreement—Standard Provisions, dated as of September 4, 2014 (incorporated by reference to the Current Report on Form 6-K dated September 11, 2014 (Film No. 141097506)). |
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| 1.2 |
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Pricing Agreement between Barclays PLC and Barclays Capital Inc., dated August 10, 2015. |
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| 4.1 |
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Senior Debt Securities Indenture, dated as of November 10, 2014, between Barclays PLC and The Bank of New York Mellon, as Trustee (incorporated by reference to the Current Report on Form 6-K dated November 10, 2014
(Film No. 141207282)). |
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| 4.2 |
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Barclays PLC Officer’s Certificate pursuant to Sections 1.02, 3.01 and 3.03 of the Indenture, dated as of August 17, 2015. |
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| 4.3 |
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The form of Global Note for the 5.25% Fixed Rate Senior Notes due August 17, 2045 (incorporated by reference to Exhibit A to Exhibit 4.2 above). |
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| 5.1 |
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Opinion of Sullivan & Cromwell LLP, U.S. counsel to Barclays PLC, as to the validity of the securities. |
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| 5.2 |
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Opinion of Clifford Chance LLP, English counsel to Barclays PLC, as to the validity of the securities. |
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| 8.1 |
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Opinion of Sullivan & Cromwell LLP, U.S. counsel to Barclays PLC, as to certain matters of U.S. taxation. |
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| 8.2 |
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Opinion of Clifford Chance LLP, English counsel to Barclays PLC, as to certain matters of United Kingdom taxation (included in Exhibit 5.2 above). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
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BARCLAYS PLC
(Registrant) |
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| Date: August 17, 2015 |
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By: |
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/s/ Marie Smith |
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Name: Marie Smith |
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Title: Assistant Company Secretary |
Signature Page to Form 6-K
Exhibit 1.2
Pricing Agreement
August 10, 2015
Barclays Capital Inc.
As representative of the several Underwriters
named in Schedule I (the “Representative”)
Ladies and Gentlemen:
Barclays PLC (the “Company”) proposes to issue
US$1,500,000,000 aggregate principal amount of 5.25% Fixed Rate Senior Notes due 2045 (the “Notes”). Each of the Underwriters hereby undertakes to purchase at the subscription price set forth in Schedule II hereto, the amount of Notes set
forth opposite the name of such Underwriter in Schedule I hereto, such payment to be made at the Time of Delivery set forth in Schedule II hereto. The obligations of the Underwriters hereunder are several but not joint.
Each of the provisions of the Underwriting
Agreement—Standard Provisions, dated September 4, 2014 (the “Underwriting Agreement”), is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Agreement, except that each representation and warranty with respect to
the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation and warranty as of the date of the Prospectus and also a representation and warranty as of the date of this Agreement in relation to the Prospectus
as amended or supplemented relating to the Notes. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms
defined in the Underwriting Agreement are used herein as therein defined. The Representative designated to act on behalf of each of the Underwriters of Designated Securities pursuant to Section 14 of the Underwriting Agreement and the address
referred to in such Section 14 is set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Designated Securities, in the form heretofore delivered to you, is now proposed to be
filed with the Commission.
The Applicable Time
for purposes of this Pricing Agreement is 5:30 PM New York time on August 10, 2015. Each “free writing prospectus” as defined in Rule 405 under the Securities Act for which each party hereto has received consent to use in accordance
with Section 7 of the Underwriting Agreement is listed in Schedule III hereto and is attached as Exhibit A and Exhibit B hereto.
If the foregoing is in accordance with your understanding, please sign and return to us the counterpart hereof, and upon acceptance hereof
by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters on
the one hand and the Company on the other.
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| Very truly yours, BARCLAYS PLC |
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| /s/ Miray Muminoglu |
| Name: Miray Muminoglu
Title: Director, Capital markets Execution |
Accepted as of the date hereof
at New York, New York
On behalf of
itself and each of the other
Underwriters
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| BARCLAYS CAPITAL INC. |
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| /s/ Jim Glascott |
| Name: Jim Glascott
Title: Managing Director |
[Signature Page to Pricing
Agreement]
SCHEDULE I
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Principal Amount of the
Notes
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| Underwriter |
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| Barclays Capital Inc. |
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$ |
1,237,500,000 |
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| ANZ Securities, Inc. |
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$ |
15,000,000 |
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| Blaylock Beal Van, LLC |
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$ |
7,500,000 |
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| BMO Capital Markets Corp. |
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$ |
15,000,000 |
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| Capital One Securities, Inc. |
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$ |
15,000,000 |
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| CIBC World Markets Corp. |
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$ |
15,000,000 |
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| Drexel Hamilton, LLC |
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$ |
7,500,000 |
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| Fifth Third Securities, Inc. |
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$ |
15,000,000 |
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| Great Pacific Securities |
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$ |
7,500,000 |
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| ING Financial Markets LLC |
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$ |
15,000,000 |
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| Mischler Financial Group, Inc. |
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$ |
7,500,000 |
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| Mizuho Securities USA Inc. |
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$ |
15,000,000 |
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| Multi-Bank Securities, Inc. |
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$ |
7,500,000 |
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| Natixis Securities Americas LLC |
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$ |
15,000,000 |
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| PNC Capital Markets LLC |
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$ |
15,000,000 |
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| Samuel A. Ramirez & Company, Inc. |
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$ |
7,500,000 |
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| Scotia Capital (USA) Inc. |
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$ |
15,000,000 |
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| Skandinaviska Enskilda Banken AB (publ) |
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$ |
15,000,000 |
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| SMBC Nikko Securities America, Inc. |
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$ |
15,000,000 |
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| TD Securities (USA) LLC |
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$ |
15,000,000 |
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| Telsey Advisory Group LLC |
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$ |
7,500,000 |
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| U.S. Bancorp Investments, Inc. |
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$ |
15,000,000 |
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| Total |
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$ |
1,500,000,000 |
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SCHEDULE II
Title of Designated Securities:
US$ 1,500,000,000 5.25% Fixed Rate Senior Notes due 2045
Price to Public:
99.760% of principal amount
Subscription Price by Underwriters:
98.885% of principal amount
Form of Designated Securities:
The Notes will be represented by one or more global notes
registered in the name of Cede & Co., as nominee of The Depository Trust Company issued pursuant to the Senior Debt Securities Indenture dated November 10, 2014 between the Company and The Bank of New York Mellon acting through its
London Branch, as trustee (the “Trustee”)
Securities Exchange, if any:
The New York Stock Exchange
Maturity Date:
The stated maturity of the principal of the Notes will be August 17, 2045.
Interest Rate:
Interest will accrue on the Notes from the date of their issuance. Interest will accrue on the Notes at a rate of 5.25% per year from
and including the date of issuance.
Interest Payment Dates:
Interest will be payable on the Notes
semi-annually in arrear on February 17 and August 17 of each year, commencing on February 17, 2016 and ending on the Maturity Date.
Record Dates:
The Business Day immediately preceding each Interest Payment Date (or, if the Notes are held in definitive form, the 15th Business Day
preceding each Interest Payment Date).
Sinking Fund
Provisions:
No sinking fund provisions.
Redemption Provisions for Notes:
The Notes are redeemable, at the option of the Company, in
the event of various tax law changes that have specified consequences, as described further in, and subject to the conditions specified in, the prospectus supplement dated August 10, 2015 relating to the Notes.
Time of Delivery:
August 17, 2015 by 9:30 AM New York time.
Specified Funds for Payment of Subscription Price of Designated
Securities:
By wire transfer to a bank
account specified by the Company in same day funds.
Value Added Tax:
(a) If the Company is obliged to pay any sum to the
Underwriters under this Agreement and any value added tax (“VAT”) is properly charged on such amount, the Company shall pay to the Underwriters an amount equal to such VAT on receipt of a valid VAT invoice;
(b) If the Company is obliged to pay a sum to the
Underwriters under this Agreement for any fee, cost, charge or expense properly incurred under or in connection with this Agreement (the “Relevant Cost”) and no VAT is payable by the Company in respect of the Relevant Cost under paragraph
(a) above, the Company shall pay to the Underwriters an amount which:
(i) if for VAT purposes the Relevant Cost is consideration for a supply of goods or services made to the Underwriters, is equal to any input VAT incurred by the Underwriters on that supply of goods and
services, but only if and to the extent that the Underwriters are unable to recover such input VAT from HM Revenue & Customs (whether by repayment or credit) provided, however, that the Underwriters shall reimburse the Company for any
amount paid by the Company in respect of irrecoverable input VAT pursuant to this paragraph (i) if and to the extent such input VAT is subsequently recovered from HM Revenue & Customs (whether by repayment or credit);
(ii) if for VAT purposes the Relevant Cost is a disbursement
properly incurred by the Underwriters under or in connection with this Agreement as agent on behalf of the Company, is equal to any VAT paid on the Relevant Cost by the Underwriters provided, however, that the Underwriters shall use best endeavors
to procure that the actual supplier of the goods or services which the Underwriters received as agent issues a valid VAT invoice to the Company.
Closing Location: Linklaters LLP, One Silk Street, London EC2Y 8HQ, United Kingdom.
Name and address of Representative:
Designated Representative: Barclays Capital Inc.
Address for Notices:
Barclays Capital Inc.
745 Seventh Avenue
New York, NY 10019
Attn: Syndicate Registration
Selling Restrictions:
Each Underwriter of Designated Securities has represented,
warranted and agreed that:
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it has only communicated or caused to be communicated, and will only communicate or cause to be communicated, any invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the “FSMA”)) received by it in connection with the issue or sale of any Designated Securities in circumstances in which Section 21(1) of
the FSMA does not apply to the Company; and |
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b) |
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it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Designated Securities in, from or
otherwise involving the United Kingdom. |
With respect to sales of the Designated Securities in Canada, each Underwriter of Designated Securities represents to and agrees with the Company that, directly or indirectly, it shall sell the Designated
Securities only to purchasers purchasing as principal that are both “accredited investors” as defined in National Instrument 45-106 Prospectus and Registration Exemptions and “permitted clients” as defined in National
Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
Other Terms and Conditions:
As set forth in the prospectus supplement dated August 10, 2015 relating to the Notes, incorporating the
Prospectus dated May 2, 2014 relating to the Notes.
SCHEDULE III
Issuer Free Writing Prospectus:
Final Term Sheet for the Notes, dated
August 10, 2015, attached hereto as Exhibit A.
Barclays PLC
Fixed Income Investor Presentation: H1 2015 Interim Management Statement, dated July 29, 2015, attached hereto as Exhibit B.
Exhibit A
Final Term Sheet for the Notes, dated August 10, 2015
Free Writing Prospectus
Filed Pursuant to Rule 433
Reg-Statement No.
333-195645
USD 1.5bn 5.25% Fixed
Rate Senior Notes due 2045
Pricing Term
Sheet
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| Issuer: |
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Barclays PLC |
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| Notes: |
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USD 1.5bn 5.25% Fixed Rate Senior Notes due 2045 |
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| Expected Issue Ratings1: |
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Baa3 (Moody’s) / BBB (S&P) / A (Fitch) |
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| Status: |
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Senior Debt / Unsecured |
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| Legal Format: |
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SEC registered |
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| Principal Amount: |
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USD 1,500,000,000 |
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| Trade Date: |
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August 10, 2015 |
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| Settlement Date: |
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August 17, 2015 (T+5) |
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| Maturity Date: |
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August 17, 2045 |
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| Coupon: |
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5.25% |
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| Interest Payment Dates: |
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Semi-annually in arrear on February 17 and August 17 in each year, commencing on February 17, 2016 and ending on the Maturity Date |
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| Coupon Calculation: |
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30/360, following, unadjusted |
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| Business Days: |
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New York, London |
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| U.K. Bail-in Power Acknowledgement: |
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Yes. See section entitled “Description of Senior Notes—Agreement with Respect to the Exercise of U.K. Bail-in Power” in the Preliminary Prospectus Supplement dated
August 10, 2015 (the “Preliminary Prospectus Supplement”). |
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| Tax Redemption |
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If there is a Tax Event (as defined in the Preliminary Prospectus Supplement), the Issuer may, at its option, at any time, redeem the notes, in whole but not in part, at a
redemption price equal to 100% of their principal amount, together with any accrued but unpaid interest to (but excluding) the date fixed for redemption, as further described and subject to the conditions specified in the Preliminary Prospectus
Supplement. |
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| Benchmark Treasury: |
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T 2.5 02/15/45 |
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| Spread to Benchmark: |
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235bps |
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| Reoffer Yield: |
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5.266% |
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| Issue Price: |
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99.760% |
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| Underwriting Discount: |
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0.875% |
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| Net Proceeds: |
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USD 1,483,275,000 |
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| Sole Bookrunner: |
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Barclays Capital Inc. |
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Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
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| Co-managers: |
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ANZ Securities, Inc., Blaylock Beal Van, LLC, BMO Capital Markets Corp., Capital One Securities, Inc., CIBC World Markets Corp., Drexel Hamilton, LLC, Fifth Third Securities, Inc.,
Great Pacific Securities, ING Financial Markets LLC, Mischler Financial Group, Inc., Mizuho Securities USA Inc., Multi-Bank Securities, Inc., Natixis Securities Americas LLC, PNC Capital Markets LLC, Samuel A. Ramirez & Company, Inc., Scotia
Capital (USA) Inc., Skandinaviska Enskilda Banken AB (publ), SMBC Nikko Securities America, Inc., TD Securities (USA) LLC, Telsey Advisory Group LLC, U.S. Bancorp Investments, Inc. |
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| Risk Factors: |
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An investment in the notes involves risks. See “Risk Factors” section beginning on page S-6 of the Preliminary Prospectus Supplement. |
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| Denominations: |
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USD 200,000 and integral multiples of USD 1,000 in excess thereof |
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| ISIN/CUSIP: |
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US06738EAJ47 / 06738E AJ4 |
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| Settlement: |
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DTC; Book-entry; Transferable |
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| Documentation: |
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To be documented under the Issuer’s shelf registration statement on Form F-3 (No. 333-195645) and to be issued pursuant to the Senior Debt Indenture dated November 10, 2014
between the Issuer and The Bank of New York Mellon acting through its London Branch, as trustee (the “Trustee”) |
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| Listing: |
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We will apply to list the notes on the New York Stock Exchange |
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| Governing Law: |
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New York law |
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| Definitions: |
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Unless otherwise defined herein, all capitalized terms have the meaning set forth in the Preliminary Prospectus Supplement |
The Issuer has filed
a registration statement (including a prospectus dated May 2, 2014 (the “Prospectus”) and the Preliminary Prospectus Supplement) with the U.S. Securities and Exchange Commission (“SEC”) for this offering. Before you invest,
you should read the Prospectus and the Preliminary Prospectus Supplement for this offering in that registration statement, and other documents the Issuer has filed with the SEC for more complete information about the issuer and this offering. You
may get these documents for free by searching the SEC online database (EDGAR®) at www.sec.gov. Alternatively, you may obtain a copy of the Prospectus
and the Preliminary Prospectus Supplement from Barclays Capital Inc. by calling 1-888-603-5847.
Exhibit B
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Free Writing Prospectus |
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Filed Pursuant to Rule 433 |
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Reg-Statement No. |
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333-195645 |
Barclays PLC
Fixed Income Investor Presentation
H1 2015 Interim Management Statement
29 July 2015
Continued good progress in H1
Increased Group adjusted pre-tax profits by 11%, with Core up 10%
Positive cost to income jaws: Group adjusted costs of £8.3bn, down 7%
Core business continued to perform well: PBT of £4.2bn and RoE of 11.1%
Further progress on Non-Core: £2.7bn of capital released and RWAs reduced to £57bn
Building capital: CET1 ratio increased to 11.1% and leverage ratio increased to 4.1%
Continued progress on resolving legacy litigation and conduct matters
2 | Barclays H1 2015 Fixed Income Investor Presentation
Accelerating delivery of shareholder value
1 Strategy – focus on what we are good at and where we are good at it
Focus on 3 major core markets – UK, US and South Africa
- With appropriate international network
Take advantage of increased synergies and cross selling between businesses
Accelerate Non-Core run-down
Build on strong
Investment Bank performance to generate sustainable economic returns
Continue to progress our UK and US
structural reform plans
Emphasise digital innovation and legacy platform improvements to drive efficiency and
customer penetration
2 Value Creation
Increase revenue growth to at least market growth
Reallocate capital to the core
Reallocate costs from unproductive activities
Resolve remaining conduct issues
New Non-Core guidance of c.£20bn RWAs in 2017, when we expect to re-integrate
A high and progressive dividend needs to make up a significant portion of annual shareholder return over time
- Prudent to hold dividend at 6.5p for 2015
Committed to other 2016 targets, and over time will:
- Continue to improve CET1 ratio to end-state
- Bring down our cost to income ratio into the mid ‘50s
- Generate a return on equity above the cost of equity
3 High performance ethic with strong values and customer focus
Evaluate the balance between customers and clients, staff, community and shareholders
Build a customer led culture
More external and
less internal focused
Streamline processes and increase individual accountability
Decentralise activities back into the businesses
Accelerate the work on culture and values
3 |
Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Performance Overview
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Summary Group financials:
H1 adjusted PBT up 11%
Six months ended – June (£m) 2014 2015 % change
Income 13,332 12,982 (3%)
Impairment (1,086) (973) 10%
Total operating
expenses (8,877) (8,262) 7%
– Costs to achieve (CTA) (494) (316) 36%
– Litigation and conduct (211) (134) 36%
Adjusted profit before tax 3,349 3,729 11%
Tax
(1,109) (1,077) 3%
NCI and other equity interests (480) (497) (4%)
Adjusted attributable profit 1,760 2,155 22%
Adjustments
– Own credit 52 410
– Gain on US Lehman acquisition assets – 496
– Gain on valuation of a component of the defined retirement benefit liability – 429
– Provisions for ongoing investigations and litigation primarily relating to Foreign Exchange – (800)
– Provisions for UK customer redress (900) (1,032)
– Loss on sale of Spanish business – (118)
Statutory profit before tax 2,501 3,114 25%
Statutory attributable profit 1,126 1,611 43%
Basic earnings per share1 10.9p 13.1p
Return on average shareholders’ equity1 6.5% 7.7%
Dividend per share 2.0p 2.0p
H1 financial
performance2
Group PBT increased 11% to £3.7bn reflecting improvements in all Core operating businesses
Income decreased 3% to £13.0bn due to Non-Core run-down
- Core income increased 2%, primarily driven by Barclaycard
Impairment improved 10% to £1.0bn; loan loss rate reduced 5bps to 40bps
Costs fell by 7% to £8.3bn primarily driven by savings from strategic cost programmes, especially in Non-Core and
the Investment Bank
- CTA and litigation and conduct charges also reduced
- Excluding CTA, total Group cost base was £7.9bn
Attributable profit was £2.2bn, resulting in RoE of 7.7% and EPS of 13.1p
- Core RoE was 11.1%, with dilution on Group RoE from Non-Core of 3.4%
Further provision of £850m for UK customer redress made in Q215
- £600m for PPI and £250m for Packaged Bank Accounts
Gain of £496m recognised in Q215 on the Lehman settlement
Statutory PBT increased 25% to £3.1bn, after conduct provisions and other adjusting items
Dividend of 1p declared for Q215
- 6.5p dividend planned for FY15, flat on FY14
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EPS and RoE calculations are based on adjusted attributable profit, also taking into account tax credits on AT1 coupons | 2 Adjusted metrics unless stated otherwise |
5 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Strengthening key
financial metrics
Fully Loaded CET1 ratio1
9.1% 9.5% 9.9% 10.2% 10.3% 10.6% 11.1%
Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15
RWAs (£bn) 442 436 411 413 402 396 377
Leverage ratio2
3.0% 3.1% 3.4% 3.5% 3.7% 3.7%
4.1%
Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15
Leverage exposure (£bn) 1,365 1,326 1,353 1,324 1,233 1,255 1,139
Liquidity and funding
L&A to customers Deposits from customers
89%
89% 88%
LDR3
309 349 310 347 306 347
Dec-14 Mar-15 Jun-15
Liquidity pool (£bn) 149 148 145
Estimated CRD IV liquidity coverage ratio 124% 122% 121%
NSFR4 102% 106%
Dec-14 Mar-15 Jun-15
Highlights
Progressive strengthening of key balance sheet metrics
RWAs reduced to £377bn, improving the CET1 ratio to 11.1%
Leverage exposure decreased by £116bn to £1,139bn (Mar 2015: £1,255bn), driving an increase in the
leverage ratio to 4.1%
Liquidity position remains robust with liquidity pool of £145bn and LCR of 121%
Funding profile remains conservative and well diversified
Overall funding requirements expected to reduce further as Non-Core is run down
Continued proactive transition in Q2 towards holding company capital and funding model:
- Raised $1bn of senior unsecured debt at Barclays PLC which was used to subscribe for senior unsecured debt at Barclays
Bank PLC
In H1 15, we issued £6bn of term debt, of which £5bn was public. This includes $4bn of
senior unsecured debt issued by Barclays PLC, a £1bn covered bond from Barclays Bank PLC, and $1bn from the Dryrock programme in Delaware
1 Based on Barclays interpretation of the final CRD IV text and latest EBA technical standards | 2 Jun-15 and Mar-15 based on end-point CRR definition of Tier 1 capital for the numerator
and the CRR definition of leverage exposure as adopted by the European Union delegated act. This is broadly consistent with the BCBS 270 definition, which was the basis of Jun-14, Sep-14 and Dec-14 comparatives. Dec-13 and Mar-14 not comparable to
the estimates as of Jun-14 onwards due to different basis of preparation: estimated ratio and T1 capital based on PRA leverage ratio calculated as fully loaded CRD IV T1 capital adjusted for certain PRA defined deductions, and a PRA adjusted
leverage exposure measure. | 3 Loan: deposit ratio for PCB, Barclaycard, Africa Banking and Non-Core retail | 4 NSFR based on the final guidelines published by the BCBS in October 2014. NSFR disclosed semi-annually
6 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION & STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Q2 Core performance: Positive jaws and PBT up 6%
Three months ended (£m) Jun-14 Jun-15 % change
Income 6,397 6,520 2%
Impairment (456) (488) (7%)
Total operating
expenses (3,975) (3,888) 2%
– Costs to achieve (237) (184) 22%
– Litigation and conduct (136) (41) 70%
Profit before tax 1,993 2,105 6%
Attributable
profit 1,171 1,273 9%
Financial performance measures
Average allocated equity £41.6bn £46.7bn
Return on average tangible equity 13.8% 13.3%
Return on average equity 11.3% 11.0%
Cost:income
ratio 62% 60%
Basic EPS contribution 7.2p 7.7p
Jun-14 Jun-15
CRD IV RWAs £324bn £320bn
Leverage
exposure £971bn £973bn
Financial performance
PBT increased 6% to £2.1bn driven by particularly strong performance in the Investment Bank
- Investment Bank PBT increased 35%
- PCB PBT increased 10%1
- Barclaycard PBT
increased 8%
- Africa Banking PBT remained broadly in line
Income rose 2% to £6.5bn driven by strong growth in Barclaycard and steady income across the other businesses
Impairment increased 7% driven by volume growth
- Remains low relative to historical levels, reflecting the improved UK economic environment
Total costs reduced 2% to £3.9bn reflecting reduced litigation and conduct charges, lower CTA and savings from
strategic cost programmes
- Remain focused on delivery of 2016 target
Attributable profit was £1.3bn with EPS contribution of 7.7p
RoE was 11.0% on a significantly increased capital base
- Average allocated equity grew £5bn year-on-year to £47bn
1 Excluding the impact of the loss on sale of the US Wealth business and US Wealth customer redress |
7 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION & STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Non-Core: Continued shrinkage and capital recycling
Three months ended (£m) Jun-14 Mar-15 Jun-15
– Businesses 245 122 153
– Securities and Loans 66 (73) (42)
–
Derivatives (26) (39) (79)
Income 285 10 32
Impairment (82) (29) (8)
Total operating expenses (468) (239) (282)
–
Costs to achieve (17) (11) (12)
– Litigation and conduct (10) (9) (36)
Loss before tax (337) (256) (256)
Attributable loss (294) (199) (203)
Financial
performance measures
Average allocated equity £13.7bn £10.3bn £9.3bn
Period end allocated equity £12.7bn £9.7bn £8.3bn
Return on average equity drag1 (4.9%) (3.4%) (3.2%)
Basic EPS contribution (1.8p) (1.2p) (1.2p)
Jun-14 Mar-15 Jun-15
CRD IV RWAs £87.5bn
£64.8bn £56.6bn
Leverage exposure £382bn £236bn £166bn
Highlights
Period end allocated equity reduced by £4.4bn year-on-year to
£8.3bn, including a £1.4bn reduction in Q215
RWAs reduced a further £8bn in the quarter, with derivative RWAs reducing £5bn and securities and loans RWAs reducing £3bn
Income was £32m, reflecting sales of income generating assets
Credit impairment improved to £8m, driven by the impact of the sale of the Spanish business and improved performance
in Europe retail
Costs reduced 40% year-on-year to £282m reflecting the exit of the Spanish, UAE,
commodities and several principal investment businesses
Attributable loss was £203m, but with the
continued reduction in allocated equity, the Non-Core drag on Group RoE reduced to 3.2%
1 Return on average
equity and average tangible equity for Barclays Non-Core represents its impact on the Group, being the difference between Barclays Group returns and Barclays Core returns. This does not represent the return on average equity and average tangible
equity of the Non-Core business |
8 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION & STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Capital & Leverage
PERFORMANCE
HOLDCO TRANSITION
CAPITAL & LEVERAGE
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
OVERVIEW
& STRUCTURAL REFORM
Continued strengthening
of CET1 ratio
Fully loaded (FL) CRD IV CET1 ratio progression1
+50bps
10.3%
10.6%
11.1%
>11%
9.1%
Dec-13
Dec-14
Mar-15
Jun-15
2016
Target
FL CRD IV CET1 ratio grew 50bps in Q2 2015 to 11.1% (Mar 2015: 10.6%), already meeting the end 2016 target
FL CRD IV CET1 capital increased by £0.2bn to £42.0bn in Q2, driven by £1.2bn profit for the quarter,
less £900m for own credit and dividends and a net £100m reduction for reserves and regulatory adjustments
While we expect to continue to grow our CET1 ratio over time, we expect to stay around 11% throughout the rest of 2015
Confident that our planned trajectory positions us well to meet expected future regulatory requirements
RWA reduction (£bn)1
(5%)
442
402
396
c.400
377
Dec-13
Dec-14
Mar-15
Jun-15
2016
Guidance
RWAs reduced by £19bn to £377bn in Q2 (Mar 15: £396bn), mainly driven by an £8bn reduction in Non-Core to £57bn, and foreign exchange impacts (which were
broadly hedged for CET1 ratio)
The reduction in Non-Core was primarily a result of reductions in fixed income
financing activities, derivatives compressions, and disposals
1 Based on Barclays interpretation of the final
CRD IV text and latest EBA technical standards. Following the full implementation of CRD IV reporting in 2014, the previously reported 31 December 2013 RWAs were revised by £6.9bn to £442bn and fully loaded CET1 ratio by (0.2%) to
9.1% |
10 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION & STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
RWAs: Closely managed to support business growth and capital ratio accretion
RWAs (£bn)1
396 8 8 1 5 377
Mar-15 Core 2 Non-Core2 Net model and methodology updates Other 3 Jun-15
Highlights
RWAs reduced by £19bn reflecting underlying trading book reductions in the Non-Core and Investment Bank
In Core, the Investment bank reduction was partially offset by business growth of mortgages in PCB and in the US for Barclaycard
Net Non-Core run-down of £8bn, reflecting the trading book reductions and also exit from Pakistan
Model and methodology driven updates resulted in a net £1.2bn increase due to a change in policy in relation to SFTs
1 Bridge items do not reconcile to start and end points due to rounding | 2 Excludes model and methodology
driven movements | 3 Includes foreign exchange movements of £4.6bn. This does not include movements for modelled counterparty risk or modelled market risk |
11 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION & STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Non-Core: Further RWA and leverage reductions
RWAs by type (£bn)
48% 110 752 65 18 11 57 10 31
31 26 c.20 16 15 12
9 8 9
Dec-13 Dec-14 Mar-15 Jun-15 2017
Guidance
Operational risk1 Securities and loans Derivatives Businesses
Leverage exposure by type (£bn)
57% 382
2772 18 Original 236 2016 13 guidance 114 £180bn 166 101 5 83
107 99 56 39 23 22 Jun-14 Dec-14 Mar-15
Jun-15
Businesses Securities and loans Derivatives Other
1 Operational risk plus DTAs | 2 Total reflects rounding |
12 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Continued progress on the
transition towards end-state capital structure
Evolution of capital structure
17.4% ³17%
Total capital ratio Total capital ratio
3.4% ³2.9%
(£12.8bn) T2 (incl. P2A)
T2
2.0%
1.8% (£6.7bn) AT1 (incl. P2A)
Legacy T1
c. 1.5%
1.1% (£4.2bn1) AT1 CCCB/ Internal buffer
Sectoral
buffers 2.0%
G-SII
2.5%
Capital
11.1% Conservation buffer
(£42.0bn) 1.6% P2A
CET1
4.5%
Barclays H1 15 capital structure (PRA Transitional) CET1 Barclays’ ‘target’ end-state capital structure
Fully loaded CRD IV capital position
Transitional and fully loaded total capital ratios increased by 60bps to
17.4% (Mar 15: 16.8%), and 60bps to 16.2% (Mar 15: 15.6%) respectively, primarily reflecting CET1 ratio progress
We continue to transition towards our end-state capital structure which currently assumes at least 17% of total capital
We aim to manage our capital structure in an efficient manner:
- Expect to build an additional 90bps of AT1 to reach 2% in end-state through balanced issuance over time
- Quantum of Tier 2 capital in end-state to maintain a total capital ratio of at least 17% will be informed by TLAC and
MREL rules, as well as relative pricing of Tier 2 and senior unsecured debt
Pillar 2A requirement2
Barclays 2015 Pillar 2A requirement as per the PRA’s Individual Capital
Guidance (ICG) is 2.8%. The ICG is subject to at least annual review
- CET1 of 1.6% (assuming 56% of total P2A requirement)
- AT1 of 0.5% (assuming 19% of total P2A requirement)
- T2 of 0.7% (assuming 25% of total P2A requirement)
The PRA consultation on the Pillar 2 framework (CP1/15), and Basel Committee consultations and reviews of approaches to
Pillar 1 and Pillar 2 risk might further impact the Pillar 2A requirement in the future
1 Net of other
regulatory adjustments and deductions relating to AT1s of £130m | 2 Point in time assessment made at least annually, by the PRA, to reflect idiosyncratic risks not fully captured under Pillar 1 |
13 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION & STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Significant management focus on maintaining robust capital buffers above future mandatory distribution restrictions
CET1 requirements1 (as at 1 January except H1)
Minimum CRD IV requirement Trajectory of fully loaded CET1 ratio, assuming >11% target by 2016 is met after which we
build towards c.12% in end state
Pillar 2A
Capital conservation buffer (CET1) Mandatory distribution restriction level3
G-SII buffer (CET1) Sliding scale of restrictions4
Estimated c.12%
11.1%
12.0% c.150bps
Management buffer
10.0% c.£16bn 10.6% 60%
2.0%
Capital (410bps) buffer 9.5% 1.5% 40%
8.0% 8.4% 1.0% 20%
7.2% 0.5% 1.3% 1.9% 2.5%
6.0% 0.6% 0%
1.6% 1.6% 1.6% 1.6% 1.6%
4.0%
2.0% 4.5% 4.5% 4.5% 4.5% 4.5%
0.0%
Jun-15 Jan-16 Jan-17 Jan-18 Jan-19
Estimated buffers1,2 (vs. AT1 7% trigger and 1 January MDA restrictions)
To AT1 c.£16bn c.£17bn c.£18bn c.£19bn c.£20bn
7% trigger
To MDA n/a c.£16bn c.£13bn c.£9bn c.£6bn
restriction
Maintained robust capital buffers
above minimum CET1 requirements and Contingent Capital triggers:
AT1 securities and PRA 7% expectation:
c.410bps or £16bn
T2 contingent capital: c.570bps or £21bn5
Expect to build towards c.12% in end-state, including an internal management buffer of c.150bps above the current
regulatory expectation of 10.6% in 20196
The internal management buffer is critical to guard against mandatory
distribution restrictions3, which are applicable from 1 Jan 2016 on a phased-in basis under CRD IV
The
internal management buffer, which is intended to absorb fluctuations in the CET1 ratio, is recalibrated frequently
The ‘target’ end-state CET1 ratio could be revised in case of changes to minimum CET1 requirement or internal reassessment
In addition to the internal management buffer, Barclays recovery plan actions are calibrated to take effect ahead of
breaching the CBR
(Combined Buffer Requirement)
1 This analysis is presented for illustrative purposes only and is not a forecast of Barclays’ results of operations
or capital position or otherwise. The analysis is based on certain assumptions, which cannot be assured and are subject to change, including: straight line progress towards meeting our CET1 ratio targets; constant RWAs of £400bn as per 2016
guidance from 1 Jan 2016 onwards; holding constant the P2A at 2015 level (which may not be the case as the requirement is subject to at least annual review); and CET1 resources not required to meet any shortfall to the AT1 or T2 components of the
minimum capital requirement. Proposals in the FSB Consultative Document on the “Adequacy of loss-absorbing capacity of global systemically important banks in resolution”, published 10 Nov 2014 not considered. While not impacting mandatory
distribution restrictions, this does not take into account any potential PRA buffer expectations | 2 Buffers (except Jun-15) calculated assuming straightline CET1 growth to 1 Jan 2019 expectation | 3 CRD IV rules on mandatory distribution
restrictions apply from 1 January 2016 onwards based on transitional CET1 requirements. As per CRD Art. 141, restrictions on distributions (dividends and other payments in respect of ordinary shares, payments on AT1 securities and variable
compensation) would apply in case of a breach of the Combined Buffer Requirement as defined in CRD Art 128(6) | 4 Calculated as profits multiplied by an MDA factor, both as defined in CRD Art. 141. and the PRA rule book implementing CRD IV | 5 Based
on the CRD IV CET1 transitional (FSA October 2012 statement) the ratio was 12.7% as at 30 June 2015 based on £47.9bn of transitional CRD IV CET1 capital and £377bn of RWAs | 6 Barclays current regulatory target is to meet a FL CRD
IV CET1 ratio of 9% by 2019, plus a Pillar 2A add-on (currently 1.6%). Pillar 2A requirements for 2015 held constant out to end-state for illustrative purposes. The PRA buffer is assumed to be below the combined buffer requirement of 4.5% in
end-state albeit this might not be the case. CCCB, other systemic and sectoral buffer assumed to be zero
14 |
Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Leverage ratio
strengthened further towards target
Leverage ratio progression1
+40bps
>4%
3.7% 3.7% 4.1%
3.0%
Dec-13 1 Dec-14 Mar-15 Jun-15 2016
Target
Leverage exposure (£trn)1
BCBS 270
impact
(9%)
1.36
1.26
1.23 1.14
Dec-13 Dec-14 Mar-15 Jun-15
Leverage ratio grew
by 40bps to 4.1% (Mar 2015: 3.7%), already meeting our 2016 target
The 40bps quarterly improvement was
primarily driven by a £116bn reduction in leverage exposure and fully loaded tier 1 capital growth of £0.2bn
Leverage ratio already in excess of expected 2019 regulatory minimum requirement of 3.7%
Leverage exposure decreased by £116bn in Q2 2015, primarily driven by reductions in Barclays Non-Core
The £70bn reduction in Barclays Non-Core was mainly a result of an accelerated reduction in fixed income financing activities and reductions in derivatives exposures
Leverage exposure in our Core businesses decreased by £46bn to £973bn, primarily driven by reductions in
derivatives exposure and trading portfolio assets due to a reduction in trading activity, portfolio optimisations and FX movements
1 Jun-15 and Mar-15 based on fully loaded CRR definition of Tier 1 capital for the numerator and the CRR definition of leverage exposure as adopted by the relevant European Union delegated
act. This is broadly consistent with the BCBS 270 definition, which was the basis of the Dec-14 comparative. Dec-13 is not comparable to the estimates as of Jun-14 onwards due to different basis of preparation: estimated ratio and T1 capital based
on PRA leverage ratio calculated as fully loaded CRD IV T1 capital adjusted for certain PRA defined deductions, and a PRA adjusted leverage exposure measure. |
15 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Leverage ratio increased
to 4.1%
Leverage exposure1 (£bn)
L&A and other assets2 Derivatives
SFTs Undrawn commitments
Leverage ratio1
4.1%
3.7% 3.7%
3.4%
1,353
105 1,233 1,255
228 115 114 1,139
157 170 112
117
288
271 262 226
732 690 709 684
Jun-14 Dec-14 Mar-15 Jun-15
Highlights
Improvement in leverage ratio driven by decrease in leverage exposure and growth in capital
Leverage exposures during Q2 15 decreased by £116bn to £1,139bn mainly driven by decrease in leverage exposure in Non-Core, reduction in the IB and foreign exchange movements
Leverage exposure in our Core businesses decreased by £46bn to £973bn, primarily driven by
reductions in derivatives exposure and trading portfolio assets due to a reduction in trading activity, portfolio optimisation and FX movements
Loans and advances and other assets decreased by £25bn to £684bn due to a reduction in trading portfolio assets
1 Jun-15 and Mar-15 based on end-point CRR definition of Tier 1 capital for the numerator and the CRR definition of
leverage exposure as adopted by the European Union delegated act. This is broadly consistent with the BCBS 270 definition, which was the basis of Jun-14 and Dec-14 comparatives | 2 Loans and advances and other assets net of regulatory deductions and
other adjustments |
16 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Holding company
transition and structural reform
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Barclays PLC parent
company accounts
Barclays PLC parent company balance sheet
Balance sheet
FY 14 H1 15
Notes £m £m
Assets
Investment in subsidiary 33,743 34,303
Loans and
advances to subsidiary 2,866 5,318
Derivative financial instrument 313 194
Other assets 174 184
Total assets 37,096 39,999
Liabilities
Deposits from banks 528 519
Subordinated liabilities 810 800
Debt securities
in issue 2,056 4,518
Other liabilities 10 -
Total liabilities 3,404 5,837
Shareholders’ equity
Called up share capital
4,125 4,193
Share premium account 16,684 17,330
Other equity instruments 4,326 4,326
Capital redemption reserve 394 394
Retained
earnings 8,163 7,919
Total shareholders’ equity 33,692 34,162
Total liabilities and shareholders’ equity 37,096 39,999
Notes
Barclays PLC is the holding company of the Barclays Group
The HoldCo’s primary assets currently are its investments in, and loans and advances made to, its sole subsidiary, Barclays Bank PLC, the operating company
As Barclays is committed to issuing most capital and term senior unsecured debt out of the HoldCo going forward, the
HoldCo balance sheet is expected to increase
Notes to the parent company balance sheet
Investment in subsidiary
The investment in subsidiary of £34,303m (2014: £33,743m) represents investments made into Barclays Bank PLC, including £4,326m (2014: £4,326m) of AT1 securities
Loans and advances to subsidiary and debt securities in issue
During H1 2015, Barclays PLC issued $4bn of Fixed Rate Senior Notes, accounted for as debt securities in issue. The
proceeds raised through these transactions were used to make $4bn of Fixed Rate Senior Loans to Barclays Bank PLC, with a ranking corresponding to the notes issued by Barclays PLC
18 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Refinancing out of
Holding Company supports achieving future Total Loss Absorbing Capacity (TLAC)1 requirements
(£bn)
Jun-15
PRA transitional Common Equity Tier 1 capital 42
PRA transitional Additional Tier 1 regulatory capital 11
Barclays PLC (HoldCo) 4
Barclays Bank PLC (OpCo) 7
PRA transitional Tier
2 regulatory capital 13
Barclays PLC (HoldCo) 1
Barclays Bank PLC (OpCo) 12
PRA transitional total regulatory capital 66
Barclays PLC (HoldCo) vanilla term senior unsecured debt2 5
Barclays Bank PLC (OpCo) vanilla term senior unsecured debt3 22
Total term vanilla senior unsecured debt 93
RWAs 377
Leverage exposure 1,139
Proxy risk-weighted TLAC ratio ~ 25%
Proxy leverage based TLAC ratio ~ 8%
Proactive
transition towards a HoldCo funding and capital model positions us well to meet potential future TLAC requirements
While requirements remain to be set, Barclays’ current expectation is a multi-year conformance period
Expect TLAC conformance to be achieved primarily through refinancing OpCo term senior unsecured debt out of the HoldCo
Based on Barclays current interpretation of TLAC requirements, our proxy TLAC ratio is 25%4 assuming that all Barclays
Bank PLC vanilla term senior unsecured debt is refinanced from HoldCo and in the future, subordinated to OpCo operating liabilities
– Around half of our OpCo vanilla term senior unsecured debt matures before 20195 and could therefore be refinanced at HoldCo
– Further flexibility to meet future requirements through partially refinancing our £33bn of OpCo structured
notes into vanilla HoldCo senior unsecured term debt
We currently do not intend to use HoldCo senior unsecured
debt proceeds to subscribe for OpCo liabilities on a subordinated basis until required to do so by end state TLAC requirements
The future TLAC-ratio should further benefit from CET1 capital growth and further debt issuance towards end-state expectations
As TLAC rules are finalised, and as we approach implementation date, we will assess the appropriate composition and
quantum of our future TLAC stack
Further clarity on MREL requirements expected from the Bank of England in
Q315 and final rules on TLAC from the FSB in Q415
1 For illustrative purposes only reflecting Barclays’
interpretation of the FSB Consultative Document on “Adequacy of loss-absorbing capacity of global systemically important banks in resolution”, published 10 November 2014, including certain assumptions on the inclusion or exclusion of
certain liabilities where further regulatory guidance is necessary. Evolving regulation, including the implementation of MREL beginning 1 Jan 2016 and any subsequent regulatory policy interpretations, may require a change to the current approach | 2
Barclays PLC issued term senior unsecured debt assumed to qualify for consolidated TLAC purposes | 3 Comprise all outstanding Barclays Bank PLC issued public and private vanilla term senior unsecured debt, regardless of residual maturity. This
excludes £33bn of notes issued under the structured notes programmes | 4 Including the 4.5% combined buffer requirement which needs to be met in CET1. The combined buffer requirement comprises a 2% G-SII buffer and 2.5% capital conservation
buffer on a fully phased in basis. | 5 Please see maturity profile of outstanding OpCo term senior unsecured debt on slide 48
19 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Managing the risk profile
of Holding Company term senior unsecured debt today and in end-state
Managing HoldCo term senior debt credit
profile in transition1
Barclays PLC (HoldCo) External term senior unsecured debt
Subscription of internal OpCo senior unsecured debt2
Barclays Bank PLC (OpCo) External term senior unsecured debt OpCo Operating Liabilities
We are currently using senior proceeds raised by Barclays PLC to subscribe for senior unsecured debt in Barclays Bank PLC
In a resolution scenario today, this should result in pari passu treatment between internally and externally
issued OpCo senior unsecured debt1
Senior HoldCo investors should also be supported by OpCo capital and
subordinated debt in current state
Delivering robust credit profile for HoldCo term senior unsecured investors
in end-state3
Barclays PLC (HoldCo) External term senior unsecured debt, plus refinanced OpCo term senior
unsecured debt
Subscription of internal “TLAC-eligible” debt4
Barclays Bank PLC (OpCo) Operating Liabilities less HoldCo refinanced term senior unsecured debt
Refinancing profile
OpCo Senior HoldCo Senior
Total capital Total
capital
Barclays Proxy TLAC ratio evolution4
As we transition towards a HoldCo capital and term funding model, quantum of HoldCo term senior unsecured debt increases
materially over time while outstanding OpCo term senior unsecured debt materially reduces
If HoldCo term
senior unsecured debt proceeds are used to subscribe for TLAC-eligible debt in an OpCo in end-state, the structural subordination that would arise for HoldCo creditors should be mitigated by the increasing balance of term senior unsecured debt at
the HoldCo and commensurate reducing balance of term senior unsecured debt at the OpCo
1 Barclays’
expectations of the creditor hierarchy in a resolution scenario; assumes internal subordination not imposed during transition | 2 HoldCo investments can be viewed in Barclays PLC parent company balance sheet, on slide 18 | 3 Assumes that most or all
of the term non-structured senior unsecured funding currently outstanding at Barclays Bank PLC has been refinanced out of Barclays PLC | 4 Barclays’ Proxy TLAC ratio as illustrated on slide 19 reflecting Barclays’ interpretation of the FSB
Consultative Document on “Adequacy of loss-absorbing capacity of global systemically important banks in resolution”, published 10 November 2014, including certain assumptions on the inclusion or exclusion of certain liabilities where
further regulatory guidance is necessary. Evolving regulation, including the implementation of MREL beginning 1 Jan 2016 and any subsequent regulatory policy interpretations, may require a change to the current approach
20 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Progressing with plans
for structural reform
Evolving group structure
Barclays PLC
UK ring-fenced bank
Newly established material UK
bank
Barclays’ provider of retail and corporate products to UK customers
Substantial presence in the UK market with over 16 million customers
Barclays Bank PLC & international entities
Existing banking entities
International
diversified business model, including international retail products, investment banking and corporate products
Will include Barclays Bank PLC, Barclays Africa and US IHC
Key strategic priority throughout Barclays Group
Continuous dialogue with key regulators to evolve plans
Maintaining financial robustness of all parts of the group critical in our planning
Does not signify a change to capital allocation strategy
We expect to be able to share more detail on our plans towards year end subject to our ongoing discussions with regulators
Implications for bondholders
Barclays PLC (HoldCo)
Progressive issuer of AT1
and Tier 2 capital
Expect material increase in term senior unsecured funding over time as Barclays Bank PLC
term senior unsecured debt is refinanced out of the HoldCo
Diversification post structural reform retained at
Barclays PLC
Barclays Bank PLC and other current and future operating subsidiaries
Capital and term senior unsecured funding needs expected to be met largely through internal TLAC
Secured funding to be issued out of the operating subsidiary holding the relevant assets
Barclays Bank PLC will continue to issue short-term wholesale funding (e.g. CDs, CPs and ABCPs) Areas of uncertainty
Location of issuance of structured notes dependant on final rules around TLAC-eligibility
Potential for some external issuance of capital and term senior unsecured debt in local markets to meet local funding and
regulatory requirements
21 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Liquidity & Funding
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Maintaining a robust
liquidity position, with pool well in excess of internal and external minimum requirements
High quality
liquidity pool (£bn)
127 149 145
22 27 28
62 85 86
43 37 31
Dec-13 Dec-14 Jun-15
Cash & Deposits at Central Banks Government Bonds Other Available Liquidity
Estimated CRD IV/Basel 3 liquidity ratios
Metric
Dec-14 Jun-15 Expected 100% requirement date
LCR1 124% 121% 1 January 2018
Surplus £30bn £26bn
NSFR2 102% 106% 1 January 2018
Surplus to 30-day
Barclays-specific LRA
Dec-14 Jun-15
LRA 124% 119%
Surplus £29bn £23bn
Key messages
Stable liquidity position with the Group liquidity pool at £145bn, providing a surplus to internal and external minimum requirements
Quality of the pool remains high:
- 80% held in cash, deposits with central banks and high quality government bonds
- 93% of government bonds are securities issued by UK, US, Japanese, French, German, Danish, Swiss and Dutch sovereigns
Even though not a regulatory requirement, the size of our liquidity pool is 2.1x that of wholesale debt maturing in less
than a year
1 LCR estimated based on the EU delegated act | 2 Estimated based on the final BCBS rules
published in October 2014 |
23 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
We maintain access to
stable and diverse sources of funding, across customer deposits and wholesale debt
Broadly self-funded retail
businesses1(£bn)
91% 89% 88%
351 321 349 309 347 306
Dec-13 Dec-14 Jun-15
Retail LDR Deposits from customers L&A to customers
Total funding
Customer deposits Secured term funding Sub. debt Short-term debt and other deposits Unsecured term funding
£522bn £508bn £490bn
14% 13%
12%
14% 13% 13%
7% 4% 8% 4% 7% 4%
62% 62% 64%
Dec-13 Dec-14 Jun-15
Key messages
Group Loan to Deposit Ratio (LDR)
and the LDR for PCB, Barclaycard and Africa Banking at 98% and 88% respectively1
Excess customer deposits in
PCB, Barclaycard and Africa Banking predominantly used to fund the liquidity buffer requirements for these businesses, making them broadly self funded
Overall funding requirements for the Group reducing as Non-Core assets are run down
2015 Funding Plan
We guided to issuance of a
gross amount of £10-15bn in 2015 across public and private senior unsecured, secured and subordinated debt. This is materially below term maturities of £23bn in 2015, of which £9bn remaining this year
In H1 15, we issued £6bn publicly against this plan, including $4bn of senior unsecured debt from the HoldCo in two
transactions, a £1bn covered bond from Barclays Bank PLC, and two tranches of $500m US cards securitisation from Barclays Bank Delaware
We intend to maintain access to diverse sources of wholesale funding, through different products, currencies, maturities and channels
We expect to be a measured issuer of AT1 securities over the next few years
1 LDR for PCB, Barclaycard, Africa Banking and Non-Core retail |
24 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO TRANSITION
& STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Continue to access
diverse wholesale funding sources across multiple products, currencies and maturities
Wholesale funding by
product
7% 12% 11% 25%
13% 15% 4% 13%
Depostis from banks CDs and CPs
ABCPs Public benchmark MTNs Privately placed MTNs Covered bonds / ABS Suborindated liabilities1 Other2
By
remaining maturity1: WAM net of liquidity pool ³ 120 months
24%
21% 13% 12% 7% 7% 12% 4%
£ 1 month > 1 mth but £ 3 mths > 3 mths but £ 6 mths > 6 mths but £ 9 mths > 9 mths but
£ 12 mths > 1 year but £ 2 years > 2 years but £ 5 years1 > 5 years2
By currency1 USD EUR GBP Others
As at 30 June 2015 39% 31% 17% 13%
As at 31
December 2014 35% 32% 25% 8%
Key messages
Overall funding requirements for the Group reducing as we de-lever the balance sheet. Total wholesale funding (excluding
repurchase agreements) decreased in H1 15 to £157bn, by £14bn from 31 December 2014
-
£68bn matures in less than one year, while £20bn matures within one month (31 December 2014: £75bn and £17bn respectively)
£6bn of term funding (net of early redemptions) issued in 2015. Activity includes:
- $4bn public benchmark senior unsecured debt issued by Barclays PLC
- £1bn of Covered bonds issued by Barclays Bank PLC
We have £23bn of term funding maturing in 2015 (£9bn remaining for July to December) and £13bn maturing in 2016
We expect to issue a gross amount of £10-15bn in 2015 across public and private senior unsecured, secured and
subordinated debt and to maintain a stable and diverse funding base by type, currency and distribution channel
1 Given different accounting treatments, AT1 capital is not included in outstanding subordinated liabilities, while T2
contingent capital notes are included | 2 Primarily comprised of fair valued deposits (£5bn) and secured financing of physical gold (£4bn) |
25 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO
TRANSITION & STRUCTURAL REFORM
LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX Asset
quality
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Continued strong Core asset quality
Impairment
charge (£m)
44 41 45
LLR (bps)
(7%)
456 448 488
Q214 Q115 Q215
Highlights
Impairment increased 7% year-on-year to £488m
- LLR remained broadly flat at 45bps reflecting stable retail performance and a lack of any notable single name charges in
wholesale
PCB impairment increased 4%, though remains at relatively low levels due to the improving UK
economic environment, with LLR of 18bps
Barclaycard impairment increased 2%, accompanied by loans and advances
growth of 11%. LLR reduced 26bps to 283bps
Africa Banking impairment increased 3% reflecting wholesale
impairments in CIB, partially offset by lower impairment in RBB
PCB
17 14 18
LLR (bps)
(4)%
95 79 99
Q214 Q115 Q215
Barclaycard
309 305 283
(2)%
268 290 273
Q214 Q115 Q215
Africa Banking
111 94 112
(3)%
100 90 103
Q214 Q115 Q215
Impairment (£m)
27 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Group impairment below long-term trends
Retail
loan loss rate (LLR) (bps)
Dec-14 Jun-15
308 293
138 152
85 84 75 58 85 84
16 18
Personal & Corporate Banking Africa Banking Barclaycard Core Barclays Non-Core Group
Increasing Group Credit Risk Loans (CRLs) coverage and stable LLR
58% 60%
CRL coverage
2.00%
1.80%
46bps 40ps Dec-14 Jun-15
CRLs % of gross L&A Loan Loss rate
Wholesale loan loss rate (LLR) (bps)
Dec-14
Jun-15
48 33 30
13 14 12 14
8 5 (1) (13) (1)
Personal & Corporate Banking Africa Banking Investment Bank Core Barclays Non-Core Group
Definitions
A loan becomes a CRL when evidence of deterioration has been observed. A loan may be reported in one of three categories: impaired loans, accruing past due 90 days or more, impaired or
restructured loans. These may include loans which, while impaired, are still performing but have associated individual impairment allowances raised against them
LLR is the impairment charge (annualised) as a proportion of gross loans and advances
28 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW CAPITAL & LEVERAGE HOLDCO
TRANSITION & STRUCTURAL REFORM LIQUIDITY & FUNDING ASSET QUALITY CREDIT RATING APPENDIX
Reduced
exposure to Eurozone periphery
Exposures by geography (£bn)1
Spain Italy Portugal Ireland
59.0 4.9 7.9 22.7 23.5 2012 52.8 6.7 6.3 20.6 19.2 2013 43.2 4.8 4.8 18.0 15.6 2014 25.5 3.5 4.2 15.5 2.3
Jun-15
Key Messages
The vast majority of the exposures to Spain have been disposed of as of 2 January 2015
Exposure to Spain, Italy, Portugal and Ireland reduced further, down 41% to £25.6bn in June 2015 in line with
Non-Core strategy
Total net exposure to Greece is £35m (2014: £27m)
Local net funding mismatches decreased
- Portugal: €1.7bn funding gap (2014: €1.9bn)
- Italy: €4.8bn funding gap (2014: €9.9bn)
We continue to explore options to exit our other European retail and corporate exposures or materially reduce the capital they consume
Exposures by asset class (£bn)
Sovereign Financial institutions Corporate Residential mortgages Other retail lending
59.2 6.3 32.5 9.3 5.7 5.4 2012 53.1 5.9 31.4 7.1 6.5 2.2 2013 43.2 2.6 16.6 4.3 17.7 2.0 2014 25.6 2.3 14.6 3.7 3.3 1.6
Jun-15
1 Net on balance sheet |
29 | Barclays H1 2015
Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Credit ratings
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Recent industry-wide credit rating agency (CRA) actions reflect evolving bank resolution frameworks
Ratings1 S&P Moody’s Fitch
Standalone
rating bbb+ Baa2 a
Barclays PLC (B PLC - HoldCo)
Senior long-term BBB / Stable Baa3 / Stable A / Stable
Senior short-term A-2 P-3 F1
Tier 2 BB+ Baa3 A-
AT1 B+ n/a BB+
Barclays Bank PLC (BB PLC - OpCo)
Senior long-term A- / Stable A2 / Stable A / Stable
Senior short-term A-2 P-1 F1
T2 CoCos BB+ - BBB-
UT2 BB+ Ba1 BBB
LT2 BBB- Baa3/Ba1 A-
Tier 1 BB Ba1/Ba2 BBB-/BB+
Rating action
YTD 2015 – Industry wide
Actions taken on certain UK, German, Austrian and Swiss non-operating holding companies and operating companies following reassessment of government support and review of “Additional
Loss Absorbing Capacity” (ALAC)
Bank rating actions globally following implementation of new bank rating
methodology and reassessment of the likelihood of sovereign support
Actions taken on banks in the EU, global
systemically important banks in the US and Switzerland, and on banks in Hong Kong on 19 May 2015
Rating action
B PLC:
B PLC:
B PLC and BB PLC:
YTD 2015 –
3 Feb 2015: long-term senior rating
28 May 2015:
long-term senior rating
19 May 2015: long-
Barclays specific
downgraded by two notches to BBB
downgraded by
three notches to Baa3
and short-term senior
due to removal of government support
and short-term by one notch to P-3 due
ratings
affirmed as
9 June 2015: AT1 securities upgraded
to removal of sovereign support
Barclays standalone
by one notch to B+
28 May 2015: subordinate ratings
credit rating was rated
upgraded by one notch to
Baa3 due to
at the previous
BB PLC:
application of “loss given
failure”
Sovereign Support
9 June 2015: senior long- and short-
analysis
Floor and therefore did
term ratings downgraded by one notch
not benefit
from
to A-/A-2 due to removal of
BB PLC:
sovereign support
government support, partially offset by
17 Mar 2015: senior ratings affirmed
uplift
ALAC
and outlook changed to Stable
Barclays carries a
stable outlook with S&P,
Moody’s and Fitch
Recent industry-wide CRA announcements were driven by evolving resolution frameworks which involved:
The reassessment of the likelihood of sovereign support for senior creditors resulting in downward pressure on senior
credit ratings
Rating methodology updates and changes to reflect cushion of junior debt that would absorb
losses ahead of senior bank creditors that partially or fully offset sovereign support notch removal
There was
no impact on Barclays’ standalone credit ratings
Action on bank HoldCos more punitive:
No uplift for loss absorbing capacity provided to senior creditors to offset sovereign support notch removal, and/or
Expected increase in thickness of the senior layer which will benefit LGD over time not taken into account
As implementation of bank resolution frameworks are progressing at different paces across jurisdictions,
timelines for CRA action differ
1 Definitions of securities classes for comparison purposes and not
necessarily in line with the respective CRA’s own definitions |
31 | Barclays H1 2015 Fixed Income
Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Barclays manages and reserves for potential rating actions in the liquidity pool
Contractual credit rating downgrade exposure
Total cumulative cash outflow
(£bn)
One-notch
Two-notch
Securitisation derivatives
2
3
Contingent liabilities
2
2
Derivatives margining
0
0
Liquidity facilities
1
2
Total
5
7
Key Messages
Barclays now has a stable outlook
with all credit rating agencies
Total contractual credit rating downgrade exposure reduced by £9bn from
£16bn at December 2014, prior to the S&P rating downgrade
The table on the left hand side shows
contractual collateral requirements and contingent obligations following potential future one and two notch long-term and associated short-term simultaneous downgrades of Barclays Bank PLC across all credit rating agencies1
1 These numbers do not include the potential liquidity impact from loss of unsecured funding, such as from money market
funds or loss of secured funding capacity |
32 | Barclays H1 2015 Fixed Income Investor Presentation
Summary1
Diversified international bank focused on delivering more sustainable and
Strategy driving simpler, focused improved returns and balanced Group structure
Focused on high growth businesses where we have competitive advantage, eliminating marginal or declining businesses
Core businesses delivered adjusted Return on Equity (RoE) of 11.1%
Core businesses performing well
On track to deliver a reduction in costs to <£14.5bn in 2016
Solid CET1 ratio of 11.1% and good track record of managing RWAs as we Capital and leverage ratios run-down Barclays Non-Core (BNC) and reinvest in core businesses continue to improve
Leverage ratio of 4.1%. Additional planned reductions in leverage exposure mainly through reductions in BNC
Robust liquidity position and well
Robust liquidity position with 121% Liquidity Coverage Ratio (LCR) diversified funding profile
Diversified funding base, combining customer deposits and wholesale funding, in multiple currencies, formats and tenors
Progressing plans on structural reform
Regulation
Proactive and practical approach to
managing regulatory changes
Established track record of adapting to regulatory developments
1 Figures as at Jun-15 unless otherwise stated
33 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Appendix
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
PCB: PBT up 10% excluding impact of US Wealth1
Three months ended (£m) Jun-14 Jun-15 % change
– Personal 1,027 1,005 (2%)
– Corporate 889 970 9%
– Wealth 272 235
(14%)
Income 2,188 2,210 1%
Impairment (95) (99) (4%)
Total operating
expenses (1,314) (1,352) (3%)
– Costs to achieve (58) (97) (67%)
– Litigation and conduct (9) (23) (156%)
Profit before tax2 780 709 (9%)
Attributable
profit 559 500 (11%)
Financial performance measures
Average allocated equity £17.2bn £18.1bn
Return on average tangible equity 17.5% 14.9%
Return on average equity 13.1% 11.2%
Cost:income
ratio 60% 61%
Loan loss rate 17bps 18bps
Net interest margin 2.93% 2.99%
Jun-14
Jun-15
Loans and advances to customers £216.7bn £217.5bn
Customer deposits £298.3bn £298.5bn
CRD IV RWAs £117.9bn £120.6bn
Impact
of the US Wealth business1 –
Illustrative
Illustrative
Jun-15
Three months ended (£m) Jun-15 %
change
Income (12) 2,222 2%
Total operating expenses (83) (1,269) 3%
Costs to
achieve (56) (41) 29%
Litigation and conduct (20) (3) 67%
Other net (expenses)/income (55) 5 n/a
Profit before tax (150) 859 10%
Cost:income ratio
57%
Financial performance
PCB results were impacted by £150m of charges relating to the announced disposal of the US Wealth business and customer redress in the US
Excluding £12m of charges to income, £83m to operating expenses and £55m loss on sale, PBT would have
increased 10%
Excluding the impact of US Wealth1, total income increased 2%
Personal income reduced 2% driven by mortgage margin pressure from existing customer rate switching and a reduction in fee
income, partially offset by balance growth and improved savings margins
Corporate income increased 9% due to
balance growth in both lending and deposits and improved deposit margins, partially offset by reduced margins in the lending business
Impairment increased 4% due to loan growth
Costs
fell 3% excluding the impact of US Wealth1, reflecting savings from restructuring of the branch network and technology improvements to increase automation
1 Relates to the loss on sale of the US Wealth business and US Wealth customer redress | 2 Q215 includes (£50m) of other net expenses |
35 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Barclaycard: Continued growth with PBT up 8%
Three months ended (£m)
Jun-14
Jun-15
% change
Income
1,082
1,222
13%
Impairment
(268)
(273)
(2%)
Total operating expenses
(443)
(527)
(19%)
– Costs to achieve
(23)
(31)
(35%)
Profit before tax
396
429
8%
Attributable profit
285
307
8%
Financial performance measures
Average allocated
equity
£5.8bn
£6.3bn
Return on average tangible equity
24.7%
24.9%
Return on average equity
19.7%
19.7%
Cost:income ratio
41%
43%
Loan loss rate
309bps
283bps
Net interest margin
8.92%
9.31%
Jun-14
Jun-15
Loans and advances to customers
£33.2bn
£36.9bn
Customer deposits
£5.9bn
£7.7bn
CRD IV RWAs
£37.7bn
£40.3bn
Financial performance
PBT increased 8% resulting
in an RoE of 19.7%
Income grew 13% to £1.2bn driven by business growth and favourable FX movements in US
Cards, partially offset by the impact of rate capping from European Interchange Fee Regulation
Impairment
increased 2%, while loans and advances grew 11%
Delinquency rates remained stable and LLR improved 26bps to
283bps
Costs increased 19% to £527m reflecting continued investment in business growth, adverse FX
movements and the impact of one-offs, including certain marketing costs and non-recurrence of VAT refund in Q214
Excluding these one-offs, operating expenses increased 8%
Total income (£m) – Q215
300
504
418
Loans and advances to customers at amortised cost (£bn) – Jun-15
7.3
15.8
13.8
UK Cards US Cards Other1
1 Includes Barclaycard
Business Solutions, Germany and Southern Europe Cards business |
36 | Barclays H1 2015 Fixed Income Investor
Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Africa Banking: RoE increased to 9.7% and RoTE of 13.2%
Three months ended (£m)
Jun-14
Jun-15
% change
Income
895
910
2%
Impairment
(100)
(103)
(3%)
Total operating expenses
(553)
(564)
(2%)
– Costs to achieve
(8)
(7)
13%
Profit before tax
244
245
-
Attributable profit
78
96
23%
Financial performance measures
Average allocated equity2
£3.8bn
£3.9bn
Return on average tangible equity2
11.3%
13.2%
Return on average equity2
8.1%
9.7%
Cost:income ratio
62%
62%
Loan loss rate
111bps
112bps
Net interest margin
5.83%
5.87%
Jun-14
Jun-15
Loans and advances to customers
£33.8bn
£33.8bn
Customer deposits
£33.2bn
£34.4bn
CRD IV RWAs
£36.5bn
£36.4bn
Financial performance1
Based on average rates, ZAR depreciated against GBP by 4% in Q215 against Q214. Comments on business performance are based
on reported results in GBP:
PBT was broadly flat at £245m, though RoE increased to 9.7% and RoTE to
13.2% driven by a 23% increase in attributable profit
Income increased 2%
Growth in Retail and Business Banking (RBB) in South Africa and in the Wealth, Investment Management and Insurance (WIMI)
business
Corporate and Investment Banking (CIB) was impacted by lower trading performance
Impairment increased 3% reflecting wholesale impairments in CIB and additional coverage on performing loans, partially
offset by lower impairment in RBB
Costs increased 2% reflecting inflationary pressures, resulting in higher
staff costs, partially offset by the benefits of strategic cost programmes
1 Africa Banking business unit
performance based on BAGL results in addition to Egypt and Zimbabwe | 2 Barclays share of the statutory equity of the BAGL entity (together with that of the Barclays Egypt and Zimbabwe businesses which remain outside the BAGL corporate entity), as
well as the Barclays’ goodwill on acquisition of these businesses. The tangible equity for RoTE uses the same basis but excludes both the Barclays’ goodwill on acquisition and the goodwill and intangibles held within the BAGL statutory
equity |
37 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION & STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Investment Bank: PBT up 35% with double digit RoE
Three months ended (£m)
Jun-14 Jun-15 % change
Banking 727 708 (3%)
Markets 1,403 1,442 3%
Credit 270 272 1%
Equities 629 616 (2%)
Macro 504 554 10%
Income1 2,154 2,150 -
Impairment release/(charge)
7 (12) >(100)%
Total operating expenses (1,594) (1,373) 14%
Costs to achieve (152) (32) 79%
Litigation and conduct (85) (13) 85%
Profit
before tax 567 765 35%
Attributable profit 204 417 >100%
Financial performance measures
Average allocated equity £15.5bn £14.8bn
Return on average tangible equity 5.6% 12.2%
Return on average equity 5.3% 11.5%
Cost:income ratio 74% 64%
Jun-14 Jun-15
CRD IV RWAs £123.9bn £115.3bn
Financial performance
The returns focused strategy generated strong performance, as income remained consistent, while efficient use of capital and a 14% reduction in costs led to a significant increase in RoE
to 11.5%
Income was in line at £2.2bn
Banking decreased 3% driven by lower debt and equity underwriting income, partly offset by higher financial advisory fees
Credit increased 1% driven by higher income in credit flow trading, partially offset by lower income in
securitised products
Equities decreased 2% due to reductions in equity derivatives and cash equities,
partially offset by increased income in equity financing
Macro increased 10% due to higher income in rates and
currency products, reflecting increased market volatility
Costs decreased 14% due to lower CTA, compensation
costs, and savings from strategic cost programmes through business restructuring and operational streamlining
Cost to income ratio was 64% for the quarter
1 Includes ‘Other’ income |
38 |
Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION & STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Double digit returns in the Core business on a higher equity base, and reduced Non-Core drag
RoE RoTE
Core 11.3% 11.0% 41.6
46.7 13.8% 13.3% 38.6 34.0
Q214 Q215
RoE Average allocated RoTE Average
allocated equity (£bn) tangible equity (£bn)
Non Core 13.7
13.5
9.3 9.1
RoE RoTE
(3.2%) Average allocated (4.2%) Average allocated
(4.9%) equity (£bn) (6.3%) tangible equity (£bn)
Group 55.3 56.0 47.5 47.7
7.8% 9.1%
6.4% 7.5%
RoE Average shareholders’ RoTE Average tangible shareholders’ equity (£bn) equity (£bn)
39 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION & STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Double digit returns in the Core business and improved IB returns
Q214 Q215
24.7% 24.9%
19.7% 19.7%
17.5%
14.9%
13.8%
13.1% 13.2% 13.3%
12.2%
11.2% 11.3% 11.5% 11.3%
11.0%
9.7%
8.1%
5.3% 5.6%
RoE RoTE RoE RoTE RoE RoTE RoE RoTE RoE
RoTE
PCB Barclaycard Africa Banking Investment Bank Core
40 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION & STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Group adjusted operating expenses - delivery to date
Year-on-year progress – excluding CTA (£bn)
8.4 0.4
0.1 0.1 0.1
7.9
H114 Non-Core Investment PCB Head Africa Barclaycard H115 Bank Office Banking
Quarterly progression – excluding UK Bank Levy (£bn)
66% 64% Cost: income ratio
5.2
6%
4.5 4.4
4.4 4.4 4.4
4.3
4.2
4.1
Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215
41 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION & STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Group and Core cost targets
Group cost guidance1
(£bn)
18.7
c.16.3
16.9
Non-Core
Core
FY13 FY14 FY15 Target
Costs to achieve £1.2bn £1.2bn c.£0.7bn2 (CTA)
Core cost target1 (£bn)
16.4
15.1
<14.5
FY13 FY14 // FY16 Target
1 Excludes provisions
for UK customer and FX redress, goodwill impairment and CTA | 2 2016 CTA target of c.£0.2bn |
42 |
Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION & STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Continued reduction in Core operating expenses
Core operating expenses1 (£bn)
2%
4.0 3.9 3.9
0.2 0.1 0.2
1.3 1.3 1.3
2.4 2.4 2.4
Q214 Q115 Q215
Staff costs Other operating expenses CTA
Highlights
Core costs reduced 2% year-on-year to £3.9bn driven by savings from strategic cost programmes principally in the Investment Bank and PCB
PCB costs increased 3%, though excluding the impact of US Wealth2, costs fell 3% reflecting savings from restructuring of
the branch network and technology improvements to increase automation
Barclaycard costs increased 19%
reflecting continued investment in business growth, higher CTA and adverse FX movements. Excluding one-off items, costs increased 8%
Africa Banking costs increased 2% reflecting inflationary pressures, resulting in higher staff costs, partially offset by the benefits of strategic cost programmes
Investment Bank costs reduced 14% driven by lower CTA, litigation and conduct charges, and benefits from restructuring,
building exits and IT system rationalisation, despite adverse FX movements
PCB
Operating expenses (£bn)
(3%)
1.31 1.28 1.35
Q214 Q115 Q215
Barclaycard
(19%)
0.44 0.49 0.53
Q214 Q115 Q215
Africa Banking
(2%)
0.55 0.57 0.56
Q214 Q115 Q215
Investment Bank
14%
1.59 1.49
1.37
Q214 Q115 Q215
1 Totals in graph reflect rounding
| 2 Relates to the loss on sale of the US Wealth business and US Wealth customer redress |
43 | Barclays H1
2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Wholesale funding composition1
>1 month but £3
3 months but £6
6 months but £12
9 months but £12
Total £1 year
>1 year but £2 years
>5 years
As at 30 June 2015 (£bn)
<1 month
>2 years but £5 years
Total
months
months
months
months
Barclays PLC
Senior unsecured MTNs
- - - - - - - 2.5 2.0 4.5
(public benchmark)
Subordinated liabilities
- - - - - - - 0.8 0.8
Barclays Bank PLC
Deposits from banks
11.4 6.3 1.2 0.7 0.5 20.1 0.5 - 0.4 21.0
Certificates of deposit and commercial paper
1.1 6.2 6.3 4.2 2.3 20.1 0.8 1.8 0.7 23.4
Asset
backed commercial paper
3.2 1.9 0.6 - - 5.7 - - -
5.7
Senior unsecured MTNs
(public benchmark)
- 1.0 - 1.3 - 2.3 4.8 5.4 3.6 16.1
Senior unsecured MTNs
(private placement)2
1.8 1.7 2.0 2.1 2.7 10.3 6.9 11.4 10.5 39.1
Covered bonds / ABS
- 1.1 0.2 0.9 1.1 3.3 4.1 6.2 4.0 17.6
Subordinated liabilities
- - - - - - - 3.0 15.3 18.3
Other3
2.9 0.9 1.1 1.0 0.2 6.1 1.7 1.1 1.6 10.5
Total
20.4 19.1 11.4 10.2 6.8 67.9 18.8 32.2 38.1
157.0
Total as at 31 March 2015
21.9 23.2 17.8 9.2 9.4 81.5 16.3 38.3 41.9 178.0
1 The composition of wholesale funds comprises the balance sheet reported Deposits from Banks, Financial liabilities at
Fair Value, Debt Securities in Issue and Subordinated Liabilities, excluding cash collateral and settlement balances. It also does not include collateral swaps, including participation in the Bank of England’s Funding for Lending Scheme| 2
Includes structured notes of £33bn, £9bn of which matures within one year | 3 Primarily comprised of fair value deposits £5bn and secured financing of physical gold £4bn |
44 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
OpCo senior unsecured debt maturity profile
Expect to refinance £22bn of OpCo vanilla term unsecured debt out of the HoldCo over time, around half of which
matures by 1 Jan 2019
Additional flexibility to meet future TLAC-requirement through partial refinancing of
OpCo structured notes out of the HoldCo in TLAC-eligible form
Annual HoldCo senior debt issuance expected to
be below combined OpCo term vanilla and structured senior unsecured debt maturities
BB PLC structured notes
(£33bn total)
BB PLC term senior unsecured debt (£22bn total)
9.5
6.3 2.6
3.9
5.2
5.2 2
3.9 4.3 0.3
2.6 3.7
1.4 1.5 1.6 0.4
0.2
0.5
H2 2015 2016 2017 2018 2019 2020 2021 2022 2023+
45 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
In line with the European Bank Recovery & Resolution Directive the UK Banking Act now includes a statutory bail-in power
Overview
Statutory bail-in of debt is a key part of the regulatory response to the financial crisis, aimed at avoiding the bail-out of failing financial institutions with tax-payer funds
European Bank Recovery and Resolution Directive (“BRRD”): a European-wide framework for the recovery
and resolution of credit institutions and investment firms:
Statutory “bail-in” power in respect of
eligible liabilities, to be implemented in home state legislation by no later than 1 January 2016 (Article 130)
Requirement for eligible liabilities governed by non-EEA laws to include a contractual recognition by creditors that they
are bound by any exercise of the statutory bail-in power (Article 55)
UK Banking Act: in line with the BRRD,
the UK Banking Act was amended in January 2015 to include a “bail-in option” available to the UK resolution authority, enabling it to recapitalise a failed institution by allocating losses to its shareholders and unsecured creditors by
writing down and/or converting their claims to equity:
Certain liabilities excluded from scope, such as
insured deposits, secured liabilities (Section 48B(8))
Powers to be exercised broadly in a manner that
respects the CRR capital hierarchy, and otherwise in accordance with the hierarchy of claims in liquidation
Principle that at least senior creditors should receive no less favourable treatment than they would have received in an
insolvency
Considerations for Bondholders
Under Depositor Preference, the BRRD introduces seniority of deposits from natural persons and SMEs over wholesale
liabilities
The scope of the UK bail-in power extends to include all outstanding unsecured wholesale
liabilities of original tenor greater than 7 days
Liabilities issued prior to the introduction of the
statutory bail-in power, including those issued under non-EEA governing laws, may be subject to bail-in irrespective of issuance date, unless they are ‘excluded liabilities’ (i.e. all outstanding unsecured liabilities with an original
tenor greater than 7 days may be subject to bail-in). Guiding principle is that the bail-in power should be exercised in accordance with the CRR capital hierarchy, and otherwise in accordance with ordinary creditor hierarchy and that creditors
holding eligible liabilities of equal rank should be treated equally
In accordance with rules made by the PRA
(reflecting Article 55 of the BRRD), Barclays has begun including in the terms of its wholesale term debt securities, governed by non-EEA laws, a provision whereby investors acknowledge the scope of, and agree to be bound by, the UK bail-in power
Note, the inclusion of such an acknowledgement is not intended to change the ranking or treatment of such
non-EEA law governed instruments relative to EEA law governed instruments in respect of a UK bail-in, rather it clarifies that all such instruments should be treated equally in the event of a UK bail-in
46 | Barclays H1 2015 Fixed Income Investor Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Repositioning and simplifying Barclays
Rightsizing and focusing the Investment Bank
Establishing a dedicated Non-Core unit and a new Personal and Corporate Banking business
Allocating capital to growth businesses
Delivering a structurally lower cost base
Generating higher and more sustainable returns
As
presented at the Group Strategy Update on 8th May 2014
47 | Barclays H1 2015 Fixed Income Investor
Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Reducing and reallocating RWAs to drive growth and returns
2013 pre-resegmentation (£bn)
Leverage
exposure £1.4tn
2013 post-resegmentation estimate (£bn)
£1.4tn
2016 guidance (£bn)
c.£1.1tn1
RWAs £436bn
Retail and Commercial
49%
214
Investment
Bank 51% 222
£436bn c.£400bn
c.55%
Non-Core Non-Core
26% c.115 c.50 <15%
+15%
Core Core
46% excl. IB) (excl. IB) c.55% c.200 c.230
Maintained Core IB Core IB
28% c.120 £30% c.120
The Core Investment Bank will represent no more than 30% of
the Group’s RWAs
1 2016 leverage exposure estimated on the basis of calculation methodology set out in
BCBS Jan-14 proposals. All other regulatory metrics calculated on a CRD IV basis
Preliminary numbers as
presented at the Group Strategy Update on 8th May 2014
48 | Barclays H1 2015 Fixed Income Investor
Presentation
PERFORMANCE OVERVIEW
CAPITAL & LEVERAGE
HOLDCO TRANSITION
& STRUCTURAL REFORM
LIQUIDITY & FUNDING
ASSET QUALITY
CREDIT RATING
APPENDIX
Core Investment Bank: Building on competitive advantages
Core Investment Bank
FY 20131
RWAs: c.£120bn Leverage exposure: c.£490bn
Markets
Global equities
Cash equities Equity derivatives
Equity prime
Global credit
Credit products Securitised products Municipals
Right-sized macro
Foreign exchange Rates
Fixed income secondary
trading to be standard, cleared and collateralised, short term and executed on the electronic flow platform where relevant
Banking
ECM
DCM
Advisory
Origination led
Build on leading positions in our home markets of the UK and the US, where we are already well positioned
Exit those products with low returns under new regulatory rules
Structurally lower the cost base through infrastructure efficiencies and refining the client proposition
Improve capital efficiency of Markets businesses
Non-Core Investment Bank
RWAs: c.£90bn
Leverage exposure: c.£340bn
Markets
Exit Quadrant Assets
Most physical commodities
Certain Emerging
Markets products
Capital intensive Macro transactions
Principal Businesses
Investments
Credit
Banking
Front-to-back efficiency driven headcount reductions
1 CRD IV basis |
Preliminary numbers as presented
at the Group Strategy Update on 8th May 2014
49 | Barclays H1 2015 Fixed Income Investor Presentation
Contact – Debt Investor Relations Team
Lisa Bartrip
+44 (0)20 7773 0708
lisa.bartrip@barclays.com
Sofia Lonnqvist
+44 (0)20 7116 5716
sofia.lonnqvist@barclays.com
Dan Colvin
+44 (0)20 7116 6533
daniel.colvin@barclays.com
Website:
barclays.com/barclays-investor-relations.html
50
| Barclays H1 2015 Fixed Income Investor Presentation
Disclaimer
Important Notice
The information, statements and opinions contained in this presentation do not constitute a public offer under any applicable legislation, an offer to sell or solicitation of any offer to
buy any securities or financial instruments, or any advice or recommendation with respect to such securities or other financial instruments.
Forward-looking Statements
This presentation
contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to the Group. Barclays cautions readers
that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. These forward-looking
statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as ‘may’, ‘will’, ‘seek’, ‘continue’, ‘aim’,
‘anticipate’, ‘target’, ‘projected’, ‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’, ‘achieve’ or other words of similar meaning.
Examples of forward-looking statements include, among others, statements regarding the Group’s future
financial position, income growth, assets, impairment charges and provisions, business strategy, capital, leverage and other regulatory ratios, payment of dividends (including dividend pay-out ratios), projected levels of growth in the banking and
financial markets, projected costs or savings, original and revised commitments and targets in connection with the strategic cost Programme and the Group Strategy Update, run-down of assets and businesses within Barclays Non-Core, estimates of
capital expenditures and plans and objectives for future operations, projected employee numbers and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future
events and circumstances. These may be affected by changes in legislation, the development of standards and interpretations under International Financial Reporting Standards, evolving practices with regard to the interpretation and application of
accounting and regulatory standards, the outcome of current and future legal proceedings and regulatory investigations, future levels of conduct provisions, the policies and actions of governmental and regulatory authorities, geopolitical risks and
the impact of competition. In addition, factors including (but not limited to) the following may have an effect: capital, leverage and other regulatory rules (including with regard to the future structure of the Group) applicable to past, current
and future periods; UK, US, Africa, Eurozone and global macroeconomic and business conditions; the effects of continued volatility in credit markets; market related risks such as changes in interest rates and foreign exchange rates; effects of
changes in valuation of credit market exposures; changes in valuation of issued securities; volatility in capital markets; changes in credit ratings of any entities within the Group or any securities issued by such entities; the potential for one or
more countries exiting the Eurozone; the implementation of the strategic cost Programme; and the success of future acquisitions, disposals and other strategic transactions. A number of these influences and factors are beyond the Group’s
control. As a result, the Group’s actual future results, dividend payments, and capital and leverage ratios may differ materially from the plans, goals, and expectations set forth in the Group’s forward-looking statements. Additional risks
and factors which may impact the Group’s future financial condition and performance are identified in our filings with the SEC (including, without limitation, our Annual Report on Form 20-F for the fiscal year ended 31 December 2014), which are
available on the SEC’s website at http://www.sec.gov.
Subject to our obligations under the applicable
laws and regulations of the United Kingdom and the United States in relation to disclosure and ongoing information, we undertake no obligation to update publicly or revise any forward looking statements, whether as a result of new information,
future events or otherwise.
51 | Barclays H1 2015 Fixed Income Investor Presentation
Disclaimer (continued)
Barclays has filed a registration statement (including a prospectus) and has filed, or will file, a prospectus supplement
with the U.S. Securities and Exchange Commission (“SEC”) for the offering of securities to which this document relates. Before you invest, you should read the prospectus in that registration statement, the prospectus supplement relating to
the offering of the Securities (when filed) and other documents that Barclays will file with the SEC. You may get these documents for free by searching the SEC online database (EDGAR®) at www.sec.gov. Alternatively, you may obtain a copy of the
prospectus from Barclays Capital Inc. by calling 1-888-603-5847.
Certain non-IFRS Measures
Barclays management believes that the non-International Financial Reporting Standards (non-IFRS) measures included in this
document provide valuable information to readers of its financial statements because they enable the reader to identify a more consistent basis for comparing the business’ performance between financial periods, and provide more detail
concerning the elements of performance which the managers of these businesses are most directly able to influence or are relevant for an assessment of the Group. They also reflect an important aspect of the way in which operating targets are defined
and performance is monitored by Barclays management. However, any non-IFRS measures in this document are not a substitute for IFRS measures and readers should consider the IFRS measures as well. As management reviews the adjusting items described
below at a Group level, segmental results are presented excluding these items in accordance with IFRS 8; “Operating Segments”. Statutory and adjusted performance is reconciled at a Group level only. Key non-IFRS measures included in
this document and the most directly comparable IFRS measures are described below. Quantitative reconciliations of these measures to the relevant IFRS measures are included in Exhibit 99.1 of the Barclays’ Form 6-K filed with the SEC on
July 29, 2015 (Film No. 15811411) (the “July 29 Form 6-K”) (available at http://www.sec.gov/Archives/edgar/data/312069/000119312515268091/d55989dex991.htm) and such quantitative reconciliations are incorporated by reference into
this document.
Adjusted profit before tax is the non-IFRS equivalent of profit before tax as it excludes the
impact of own credit, goodwill impairment, provisions for UK customer redress, gain on US Lehman acquisition assets, provisions for ongoing investigations and litigation primarily relating to Foreign Exchange, loss on sale of the Spanish business;
Education, Social Housing, and Local Authority (ESHLA) valuation revision, and gain on valuation of a component of the defined retirement benefit liability. A reconciliation to IFRS is presented on page 3 of the July 29 Form 6-K;
Adjusted profit after tax represents profit after tax, excluding the impact of tax on adjusting items. A reconciliation to
IFRS is presented on page 3 of the July 29 Form 6-K;
Adjusted attributable profit represents adjusted
profit after tax less profit attributable to non-controlling interests. The comparable IFRS measure is attributable profit;
Adjusted income and adjusted total income net of insurance claims represents total income net of insurance claims excluding the impact of own credit. A reconciliation to IFRS is presented
on page 3 of the July 29 Form 6-K;
52 | Barclays H1 2015 Fixed Income Investor Presentation
Disclaimer (continued)
Adjusted total operating expenses represents operating expenses excluding goodwill impairment, provisions for UK customer
redress, provisions for ongoing investigations and litigation primarily relating to Foreign Exchange and gain on valuation of a component of the defined retirement benefit liability. A reconciliation to IFRS is presented on page 3 of the
July 29 Form 6-K;
Adjusted litigation and conduct represents litigation and conduct excluding provisions
for UK customer redress and provisions for ongoing investigations and litigation primarily relating to Foreign Exchange. A reconciliation to IFRS is presented on page 3 of the July 29 Form 6-K;
Adjusted cost: income ratio represents cost: income ratio excluding the impact of own credit; the provisions for PPI
redress; gain on US Lehman acquisition assets; provision for investigations and litigation primarily relating to Foreign Exchange and gain on valuation of a component of the defined retirement benefit liability. The comparable IFRS measure is cost:
income ratio, which represents operating expenses to income net of insurance claims. A reconciliation to IFRS is presented on page 9 of the July 29 Form 6-K;
Adjusted basic earnings per share represents adjusted attributable profit divided by the basic weighted average number of shares in issue. The comparable IFRS measure is basic earnings per
share, which represents profit after tax and non-controlling interests, divided by the basic weighted average number of shares in issue;
Adjusted return on average shareholders’ equity represents annualised adjusted profit after tax for the period attributable to ordinary shareholders, including an adjustment for the
tax credit in reserves in respect of other equity instruments, as a proportion of average shareholders’ equity, excluding non-controlling interests, the impact of own credit on retained earnings, and other equity instruments. The comparable
IFRS measure is return on average shareholders’ equity which represents annualised profit after tax for the period attributable to ordinary shareholders, including an adjustment for the tax credit in reserves in respect of other equity
instruments, as a proportion of average shareholders’ equity, excluding non-controlling interests and other equity instruments;
Adjusted return on average tangible shareholders’ equity represents annualised adjusted profit after tax for the period attributable to ordinary shareholders, including an adjustment
for the tax credit in reserves in respect of other equity instruments, as a proportion of average shareholders’ equity excluding non-controlling interests, the impact of own credit on retained earnings, and other equity instruments adjusted for
the deduction of intangible assets and goodwill. The comparable IFRS measure is return on average tangible shareholders’ equity which represents annualised profit after tax for the period attributable to ordinary shareholders, including an
adjustment for the tax credit in reserves in respect of other equity instruments, as a proportion of average shareholders’ equity excluding non-controlling interests and other equity instruments adjusted for the deduction of intangible assets
and goodwill;
Barclays Core results are non-IFRS measures because they represent the sum of five Operating
Segments, each of which is prepared in accordance with IFRS 8 Operating Segments: Personal and Corporate Banking, Barclaycard, Africa Banking, Investment Bank and Head Office. A reconciliation to the corresponding statutory Group measures is
provided on page 4 of the July 29 Form 6-K;
53 | Barclays H1 2015 Fixed Income Investor Presentation
Disclaimer (continued)
Liquidity Coverage Ratio (LCR) is calculated according to the Commission Delegated Regulation of October 2014 that
supplements Regulation (EU) 575/2013 (CRDIV) published by the European Commission in June 2013. The metric is a ratio that is not yet fully implemented in local regulations and, as such, represents a non-IFRS measure;
Net Stable Funding Ratio (NSFR) is calculated according to the definition and methodology detailed in the standard
provided by the Basel Committee on Banking Supervision. The original guidelines released in December 2010 (‘Basel III: International Framework for Liquidity Risk Measurement, Standards and Monitoring’, December 2010) were revised for in
October 2014 (‘Basel III: The Net Stable Funding Ratio’, October 2014). The metric is a regulatory ratio that is not yet finalised in local regulations and, as such, represents a non-IFRS measure. This definition and the methodology used
to calculate this metric is subject to further revisions ahead of the implementation date and our interpretation of this calculation may not be consistent with that of other financial institutions;
Transitional CET1 ratio according to FSA October 2012. This measure is calculated by taking into account the statement of
the Financial Services Authority, the predecessor of the Prudential Regulation Authority, on CRD IV transitional provisions in October 2012, assuming such provisions were applied as at 1 January 2014. This ratio is used as the relevant measure
starting 1 January 2014 for purposes of determining whether the automatic write-down trigger (specified as a Transitional CET1 ratio according to FSA October 2012 of less than 7.00%) has occurred under the terms of the Contingent Capital Notes
issued by Barclays Bank PLC on November 21, 2012 (CUSIP: 06740L8C2) and April 10, 2013 (CUSIP: 06739FHK0). Please refer to page 37 of the July 29 Form 6-K for a reconciliation of this measure to CRD IV CET1 ratio; and
The estimate of “Proxy Total Loss Absorbing Capacity (TLAC) ratio” reflects Barclays’ current understanding
of how the Financial Stability Board’s Consultative Document on “Adequacy of loss-absorbing capacity of global systemically important banks in resolution” may be implemented in the United Kingdom. The estimate reflects certain
assumptions on the inclusion or exclusion of certain liabilities where further regulatory guidance is necessary. Evolving regulation, including the implementation of MREL beginning 1 Jan 2016 and any subsequent regulatory policy interpretations, may
require a change to the current approach. As such metric is subject to further regulatory guidance and it is not yet implemented in local regulations, the estimate of this metric represents a non-IFRS measure and is presented in this document for
illustrative purposes only.
54 | Barclays H1 2015 Fixed Income Investor Presentation
Exhibit 4.2
BARCLAYS PLC
Officer’s
Certificate
In connection with the issuance of $1,500,000,000 aggregate principal amount of 5.25% Fixed Rate Senior Notes due 2045
(the “Securities”) of Barclays PLC (the “Company”), I, Miray Muminoglu, hereby certify pursuant to Sections 1.02, 3.01 and 3.03 of the Senior Debt Securities Indenture (the “Indenture”), dated as of November 10,
2014, between the Company and The Bank of New York Mellon acting through its London Branch, as Trustee (the “Trustee”), in connection with the request contained in the accompanying Authentication Order of an even date herewith (the
“Authentication Order”) that the Trustee authenticate and deliver the Securities as therein provided, as follows:
1. I have
read the conditions and any applicable covenants provided for in the Indenture relating to the issuance and authentication and delivery of the Securities, including Sections 1.02, 2.01, 3.01 and 3.03 thereof, and in respect of compliance with which
this certificate is being delivered, and the definitions in the Indenture relating thereto;
2. The statements contained in this
Certificate are based on my review of the Authentication Order and (i) the minutes of a meeting of the board of directors of the Company (the “Board”) held on December 12, 2013, (ii) the minutes of a meeting of the Board
held on December 12, 2013, as amended by resolutions of the Board adopted at a meeting held on June 19, 2014, (iii) the approval of the Group Finance Director and the written resolutions of the Treasury Committee of the Company (the
“Treasury Committee”) passed on May 1, 2014 and June 13, 2014, (iv) the minutes of a meeting of the Board held on December 11, 2014 and (v) the written resolution of the Treasury Committee passed on August 13,
2015 and pursuant to such resolutions, minutes and approval, I hereby confirm that the form and terms of the Securities (as set forth in Annex A) were established in conformity with the provisions of the Indenture;
3. In my opinion, I have made such examination and investigation as is necessary to enable me to express an informed opinion as to whether or
not such conditions and any applicable covenants have been complied with; and
4. I am of the opinion that such conditions and any applicable covenants, and all conditions
precedent provided for in the Indenture relating to the request contained in the Authentication Order that the Trustee authenticate and deliver the Securities as therein provided, have been complied with and the form and terms of the Securities have
been established in conformity with the provisions of the Indenture.
Dated: August 17, 2015
|
|
|
|
|
|
|
/s/ Miray Muminoglu |
| Name: |
|
Miray Muminoglu |
| Title: |
|
Director, Capital Markets Execution |
Signature Page to Officer’s Certificate pursuant to 1.02, 3.01 and 3.03 of the Indenture
Annex A
Form and Terms of the Securities
|
|
|
| Title of Securities: |
|
5.25% Fixed Rate Senior Notes due 2045 |
|
|
| Issue Price: |
|
99.760% |
|
|
| Aggregate Principal
Amount of Securities: |
|
$1,500,000,000 |
|
|
| Maturity Date: |
|
August 17, 2045 |
|
|
| Interest Rate: |
|
5.25% per annum, accruing from August 17, 2015 |
|
|
| Form of Securities: |
|
The Securities will be issued in the form of global notes that will be deposited with The Depository Trust Company on the closing date. Each global note will be registered in the name of Cede & Co. and executed and delivered
in substantially the form attached hereto as Exhibit A. |
|
|
| Issue Date of Securities: |
|
August 17, 2015 |
|
|
| Denomination: |
|
$200,000 and integral multiples of $1,000 in excess thereof |
|
|
| Depositary |
|
The Depository Trust Company |
|
|
| Initial Holder |
|
Cede & Co. |
|
|
| Interest Payment Dates: |
|
February 17 and August 17 of each year, commencing on February 17, 2016 and ending on the relevant Maturity Date,
provided that if such Interest Payment Date is not a Business Day, the Interest Payment Date shall be postponed to the next Business Day, but interest on that payment will not accrue during the period from and after the scheduled Interest
Payment Date. If the relevant Maturity Date would fall on a day that is not a Business Day, the payment of interest and principal will be made on the next succeeding Business Day, but interest on that payment will not accrue during the period from
and after such Maturity Date. “Business Day” means any weekday, other than
one on which banking institutions are authorized or obligated by law or executive order to close in London, England or in the City of New York, United States. |
|
|
|
|
|
| Day Count: |
|
30/360, Following, Unadjusted |
|
|
| Currency of payment of principal, interest and Additional Amounts: |
|
United States Dollars |
|
|
| Corporate Trust Office: |
|
The Bank of New York Mellon acting through its London Branch
One Canada Square London E14 5AL, United Kingdom |
|
|
| Place of Payment and Paying Agent: |
|
Corporate Trust Office of the Trustee, London, England.
The Bank of New York Mellon acting through its London Branch. |
|
|
| Ranking: |
|
The ranking of the Securities shall be as set forth in the Prospectus Supplement dated August 10, 2015 (the “Prospectus Supplement”). |
|
|
| Regular Record Dates: |
|
The Business Day immediately preceding each relevant Interest Payment Date (or, if the Securities are held in definitive form, the 15th Business Day preceding each relevant Interest Payment Date). |
|
|
| U.K. Bail-In Power Acknowledgment: |
|
No repayment of the Principal Amount of the Securities or payment of interest on the Securities shall become due and payable after the exercise of any U.K. Bail-In Power by the Relevant U.K. Resolution Authority unless such
repayment or payment would be permitted to be made by the Company under the laws and regulations of the United Kingdom and the European Union applicable to the Company. |
|
|
|
|
|
|
|
By its acquisition of the Securities, each Holder and beneficial owner of the Securities acknowledges, agrees to be bound by and consents to the exercise of any U.K. Bail-In Power by the Relevant U.K. Resolution Authority that
may result in the cancellation of all, or a portion, of the Principal Amount of, or interest on, the Securities and/or the conversion of all, or a portion of, the Principal Amount of, or interest on, the Securities into shares or other securities or
other obligations of the Company or another person, including by means of a variation to the terms of the Securities, in each case, to give effect to the exercise by the Relevant U.K. Resolution Authority of such U.K. Bail-In Power. Each Holder and
beneficial owner further acknowledges and agrees that the rights of Holders and beneficial owners of the Securities are subject to, and will be varied, if necessary, so as to give effect to, the exercise of any U.K. Bail-in Power by the Relevant
U.K. Resolution Authority. |
|
|
|
|
By its acquisition of the Securities, each Holder and beneficial owner (i) acknowledges and agrees that the exercise of the U.K. Bail-In Power by the Relevant U.K. Resolution Authority with respect to the Securities shall not
give rise to a default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the U.S. Trust Indenture Act of 1939, as amended, (ii) to the extent permitted by the Trust Indenture Act,
waives any and all claims against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either case in
accordance with the exercise of the U.K. Bail-In Power by the Relevant U.K. Resolution Authority with respect to the Securities, (iii) acknowledges and agrees that, upon the exercise of any U.K. Bail-In Power by the Relevant U.K. Resolution
Authority, (a) the Trustee shall not be required to take any further directions from Holders or beneficial owners of the Securities under Section 5.12 of the Indenture and (b) the Indenture shall impose no duties upon the Trustee whatsoever with
respect to the exercise of any U.K. Bail-In Power by the Relevant U.K. Resolution Authority (notwithstanding the foregoing in (iii), if, following the completion of the exercise of the U.K. Bail-In Power by the Relevant U.K. Resolution Authority,
the Securities remain outstanding, then the Trustee’s duties under the Indenture shall remain applicable with respect to the Securities following such completion to the extent that the Company and the Trustee shall agree pursuant to a
supplemental indenture), and (iv) shall be deemed to have (a) consented to the exercise of any U.K. Bail-In Power as it may be imposed without any prior notice by the Relevant U.K. Resolution Authority of its decision to exercise such power with
respect to the Securities and (b) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Securities to take any and all necessary action, if required, to implement the exercise of
any U.K. Bail-In Power with respect to the Securities as it may be imposed, without any further action or direction on the part of such Holder and such beneficial owner or the Trustee. |
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Upon the exercise of the U.K. Bail-In Power by the Relevant U.K. Resolution Authority with respect to the Securities, the Company shall
provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. Bail-In Power for purposes of notifying Holders and beneficial owners of such occurrence. The Company shall also deliver a copy of such notice to the Trustee
for information purposes. The exercise of the U.K. Bail-In Power by the Relevant U.K.
Resolution Authority with respect to the Securities shall not constitute an Event of Default under the Indenture.
The Company’s obligations to indemnify the Trustee in accordance with Section 6.07 of the Indenture shall survive any exercise of the U.K. Bail-In Power
by the Relevant U.K. Resolution Authority with respect to the Securities. Each Holder
and beneficial owner that acquires its Securities in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the same provisions specified in the provisions above and in the Securities to the same extent as the
Holders and beneficial owners of the Securities that acquire the Securities upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Securities,
including in relation to the U.K. Bail-In Power. |
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“U.K. Bail-In Power” means any statutory write-down and/or conversion power existing from time to time under any laws,
regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or other
members of the Group, including but not limited to any such laws, regulations, rules or requirements that are implemented, adopted or enacted within the context of the European Union directive 2014/59/EU of the European Parliament and of the Council
establishing a framework for the recovery and resolution of credit institutions and investment firms of May 15, 2014, as amended, and/or within the context of a U.K. resolution regime under the U.K. Banking Act 2009, as amended, or otherwise,
pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled and/or converted into shares or other securities or obligations of the obligor or any other
person (and a reference to the “Relevant U.K. Resolution Authority” is to any authority with the ability to exercise a U.K. Bail-In Power).
“Group” refers to the Company (or any successor entity) and its consolidated
subsidiaries. |
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| Early Redemption at the Option of the Company: |
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The Securities shall be redeemable prior to the relevant Maturity Date solely pursuant to the terms specified in Section 11.09 of the
Indenture. For the avoidance of doubt, the provisions of Section 11.08 of the
Indenture shall not apply to the Securities. |
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| Notice of Redemption: |
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Before the Company may redeem the Securities pursuant to Section 11.09 of the Indenture, the Company shall deliver via DTC (or, if the
Securities are definitive Securities, to the Holders at their addresses shown on the Senior Debt Security Register) prior notice of not less than thirty (30) days, nor more than sixty (60) days, to the Holders of the Securities. The Company shall
deliver written notice of such redemption of the Securities to the Trustee at least five (5) Business Days prior to the date on which the relevant notice of redemption is sent to Holders (unless a shorter notice period shall be satisfactory to the
Trustee). The content of such notice shall be in accordance with Section 11.04 of the Indenture and such notice shall be irrevocable except in the limited circumstance described in below.
If the Company has delivered a notice of redemption pursuant to this provision, but prior
to the payment of the redemption amount with respect to such redemption the Relevant U.K. Resolution Authority exercises its U.K. Bail-in Power in respect of the Securities, such redemption notice shall be automatically rescinded and shall be of no
force and effect, and no payment in respect of the redemption amount shall be due and payable.
If the event specified above occurs, the Company shall promptly deliver notice to the Holders of the Securities via DTC (or, if the Securities are definitive
Securities, to the Holders at their addresses shown on the Senior Debt Security Register) and to the Trustee directly, specifying the occurrence of the relevant event.
“DTC” means The Depository Trust Company, or any successor clearing system. |
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| Additional Amounts and FATCA Withholding Tax: |
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The terms specified in “Payment of Additional Amounts” in the Prospectus Supplement and the section titled “Description of
Debt Securities—Payment of Debt Security Additional Amounts” in the Base Prospectus with respect to Debt Security Additional Amounts (as defined in the Base Prospectus) shall apply to the Securities and shall replace in their entirety the
provisions specified in Section 10.04 of the Indenture. Any amounts to be paid by the
Company or the Paying Agent on the Securities shall be paid net of any deduction or withholding imposed or required pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or
future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into
in connection with the implementation of such Sections of the Code (or any law implementing such an intergovernmental agreement) (a “FATCA Withholding Tax”), and the Company and the Paying Agent shall not be required to pay Additional
Amounts on account of any FATCA Withholding Tax. |
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With respect to the Securities, any Paying Agent shall be entitled to make a deduction or withholding from any payment which it makes
under the Securities and the Indenture for or on account of (i) any present or future taxes, duties or charges if and to the extent so required by any applicable law and (ii) any FATCA Withholding Tax (together, “Applicable Law”). In
either case, the Paying Agent shall make any payment after a deduction or withholding has been made pursuant to Applicable Law and shall report to the relevant authorities the amount so deducted or withheld. However, such deduction or withholding
will not apply to payments made under the Securities and the Indenture through the relevant clearing systems. In all cases, the Paying Agent shall have no obligation to gross up any payment made subject to any deduction or withholding pursuant to
Applicable Law. In addition, amounts deducted or withheld by the Paying Agent under this paragraph will be treated as paid to the Holder of Securities, and the Company will not pay Additional Amounts in respect of such deduction or withholding,
except to the extent the provisions in this “Additional Amounts and FATCA Withholding Tax” section, the section titled “Payment of Additional Amounts” in the Prospectus Supplement and the section titled “Description of Debt
Securities—Payment of Debt Security Additional Amounts” in the Base Prospectus explicitly provide otherwise.
The Company agrees, to the extent the Company has actual knowledge of such information, to provide the Paying Agent with sufficient information about any
modification to the terms of the Securities for the purposes of determining whether FATCA Withholding Tax applies to any payment of principal or interest on the Securities. |
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| Section 3.07 of the Indenture: |
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Section 3.07 of the Indenture shall apply to the Securities. |
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| Subsequent Repurchases: |
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The Company or any member of the Group may purchase or otherwise acquire any of the Outstanding Securities at any price in the open market or otherwise. |
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| Definitions: |
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All capitalized terms that are not defined herein shall have the meaning ascribed to such terms in the Indenture. |
EXHIBIT A
Form of Global Note
THIS SECURITY IS A
GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO
TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
This Security is one of a duly authorized issue of securities of the Company (as defined below) (herein called the “Securities” and each, a
“Security”) issued and to be issued in one or more series under and governed by the Senior Debt Securities Indenture, dated as of November 10, 2014 (the “Indenture”), and under an Officer’s Certificate
pursuant to Sections 1.02, 3.01 and 3.03 of the Indenture dated August 17, 2015 (the “Officer’s Certificate”).
The exercise of any
U.K. Bail-In Power by the Relevant U.K. Resolution Authority may result in the (i) cancellation of all, or a portion, of the principal amount of, or interest on, the Securities and/or (ii) the conversion of all, or a portion of, the
principal amount of, or interest on, the Securities into shares or other securities or other obligations of the Company or another person, including by means of a variation to the terms of the Securities, in each case, to give effect to the exercise
by the Relevant U.K. Resolution Authority of such U.K. Bail-In Power. The rights of Holders and beneficial owners of the Securities are subject to, and will be varied, if necessary, so as to give effect to, the exercise of any U.K. Bail-in Power by
the Relevant U.K. Resolution Authority.
BARCLAYS PLC
5.25% Fixed Rate Senior Notes due 2045
CUSIP NO. 06738EAJ4
ISIN NO. US06738EAJ47
BARCLAYS
PLC, a company duly incorporated and existing under the laws of England and Wales (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co., or registered assigns, the principal sum of US$ [ ] on August 17, 2045 (the “Maturity Date”), except as otherwise
provided herein, and to pay interest thereon, in accordance with the terms hereof. Interest shall accrue on this Security from August 17, 2015 or from the most recent Interest Payment Date (as defined below) to which interest has been paid or
duly provided for, and shall be paid semi-annually in arrear on February 17 and August 17 of each year (each, an “Interest Payment Date”), commencing on February 17, 2016 and ending on the Maturity Date, except as
otherwise provided herein, at the rate of 5.25% per annum, until the principal hereof is paid or made available for payment.
If any
Interest Payment Date is not a Business Day, the Interest Payment Date shall be postponed to the next Business Day, and no further interest or other payment shall be owed or made in respect of such delay. If the Maturity Date would fall on a day
that is not a Business Day, the payment of interest and principal will be made on the next succeeding Business Day, but interest on that payment will not accrue during the period from and after such Maturity Date. If a date of redemption is not a
Business Day, the Company may pay interest (if any) and principal on the next succeeding Business Day, but interest on that payment will not accrue during the period from and after the date of redemption. A “Business Day” means any
weekday, other than one on which banking institutions are authorized or obligated by law or executive order to close in London, England or in the City of New York, United States.
Subject to the limitations specified on the reverse of this Security, interest on the Securities shall be computed and payable in arrear and
on the basis of a year of 360 days consisting of twelve (12) months of thirty (30) days each and, in the case of an incomplete month, the actual number of days elapsed.
The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest which shall be the Business Day immediately preceding each Interest Payment Date (or,
if the Securities are held in definitive form, the 15th Business Day preceding each Interest Payment Date). Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in
said Indenture.
No repayment of the principal amount of the Securities or payment of interest on the Securities shall become due and
payable after the exercise of any U.K. Bail-In Power by the Relevant U.K. Resolution Authority unless such repayment or payment would be permitted to be made by the Company under the laws and regulations of the United Kingdom and the European Union
applicable to the Company.
Payments of principal of and interest, if any, on the Securities shall be made in such coin or currency of the
United States of America as at the time of payment is legal tender for payment of public and private debts and such payments shall be made through one or more Paying Agents appointed under the Indenture to the Holder or Holders of this Security.
Initially, the Paying Agent and the Senior Debt Security Registrar for the Securities shall be The Bank of New York Mellon acting through its London Branch, One Canada Square, London E14 5AL, United Kingdom and the Place of Payment in respect of the
Securities shall be the Corporate Trust Office of the Trustee, which as of the date hereof is the office or agency of the Trustee located at said address. The Company may change the Paying Agent or, subject to Section 3.01 of the Indenture, the
Place of Payment without prior notice to the Holders of the Securities, and in such an event the Company may act as Paying Agent or Security Registrar. Payments of principal of and interest on the Securities shall be made by wire transfer of
immediately available funds; provided, however, that in the case of payments of principal, this Security is first surrendered to the Paying Agent.
This Security shall be governed by and construed in accordance with the laws of the State of New York.
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture, as defined herein.
THIS SECURITY IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED
STATES FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY OF THE UNITED STATES OR THE UNITED KINGDOM.
Unless the
certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual signature of an authorized signatory, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
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BARCLAYS PLC |
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By: |
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Name: |
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Trustee’s Certificate of Authentication
This is one of the Securities of the series designated herein referred to in the Indenture.
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THE BANK OF NEW YORK MELLON,
as Trustee |
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By: |
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Authorized Signatory |
Signature Page to Global Note
(Reverse of Security)
This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities” and each, a
“Security”) issued and to be issued in one or more series under and governed by the Senior Debt Securities Indenture, dated as of November 10, 2014 (herein called the “Indenture”), between the Company and The
Bank of New York Mellon acting through its London Branch, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture) and under an Officer’s Certificate pursuant to Sections 1.02,
3.01 and 3.03 of the Indenture dated August 17, 2015 (the “Officer’s Certificate”), and reference is hereby made to the Indenture, the terms of which are incorporated herein by reference, for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the Trustee, the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. Insofar as the provisions of the Indenture
and the Officer’s Certificate may conflict with the provisions set forth in this Security, the former shall control for purposes of this Security.
This Security is one of the series designated on the face hereof, limited to an aggregate principal amount of US$1,500,000,000, which amount
may be increased at the option of the Company if in the future it determines that it may wish to sell additional Securities of this series. References herein to “this series” mean the series designated on the face hereof.
For purposes of this Security:
“DTC” means The Depository Trust Company, or any successor clearing system.
“Group” refers to the Company (or any successor entity) and its consolidated subsidiaries.
“U.K. Bail-In Power” means any statutory write-down and/or conversion power existing from time to time under any laws,
regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or other
members of the Group, including but not limited to any such laws, regulations, rules or requirements that are implemented, adopted or enacted within the context of the European Union directive 2014/59/EU of the European Parliament and of the Council
establishing a framework for the recovery and resolution of credit institutions and investment firms of May 15, 2014, and/or within the context of a U.K. resolution regime under the U.K. Banking Act 2009, as amended, or otherwise, pursuant to
which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled and/or converted into shares or other securities or obligations of the obligor or any other person (and a
reference to the “Relevant U.K. Resolution Authority” is to any authority with the ability to exercise a U.K. Bail-In Power).
Any amounts to be paid by the Company on the Securities shall be made without deduction or withholding for, or on account of, any and all
present or future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Taxes”) now or hereafter imposed, levied, collected, withheld or assessed by, or on behalf of, the United
Kingdom or any U.K. political subdivision or authority thereof or therein having the power to tax (each a “Taxing Jurisdiction”), unless such deduction or withholding is required
by law. If any such Taxes shall at any time be required by any Taxing Jurisdiction to be deducted or withheld, the Company shall, subject to the exceptions and limitations set forth herein, pay such additional amounts of, or in respect of, the
principal of, and any interest on, the Securities (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders of the Securities, after such deduction or withholding, shall equal the respective
amounts of principal and interest that would have been payable in respect of such Securities had no such deduction or withholding been required.
Any amounts to be paid by the Company or the Paying Agent on the Securities shall be paid net of any deduction or withholding imposed or
required pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to
Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (or any law
implementing such an intergovernmental agreement) (a “FATCA Withholding Tax”), and neither the Company nor the Paying Agent shall be required to pay Additional Amounts on account of any FATCA Withholding Tax.
Any Paying Agent shall be entitled to make a deduction or withholding from any payment which it makes under the Securities and the Indenture
for or on account of (i) any present or future taxes, duties or charges if and to the extent so required by any applicable law and (ii) any FATCA Withholding Tax (together, “Applicable Law”). In either case, the Paying
Agent shall make any payment after a deduction or withholding has been made pursuant to Applicable Law and shall report to the relevant authorities the amount so deducted or withheld. However, such deduction or withholding will not apply to payments
made under the Securities and the Indenture through the relevant clearing systems. In all cases, the Paying Agent shall have no obligation to gross up any payment made subject to any deduction or withholding pursuant to Applicable Law. In addition,
amounts deducted or withheld by the Paying Agent as described in this paragraph will be treated as paid to the Holder of the Securities, and the Company will not pay Additional Amounts in respect of such deduction or withholding, except to the
extent the provisions in this paragraph explicitly provide otherwise.
The Company agrees, to the extent the Company has actual knowledge
of such information, to provide the Paying Agent with sufficient information about any modification to the terms of the Securities for the purposes of determining whether FATCA Withholding Tax applies to any payment of principal or interest on the
Securities.
The Company may, at any time, at the Company’s option, redeem the Securities, in whole but not in part at a redemption
price equal to 100% of the principal amount of the Securities then Outstanding, together with any accrued but unpaid interest to (but excluding) the date fixed for redemption, if the Company determines that as a result of a change in, or amendment
to, the laws or regulations of any Taxing Jurisdiction, including any treaty to which the relevant Taxing Jurisdiction is a party, or a change in an official application or interpretation
of those laws or regulations on or after the Issue Date, including any decision of any court or tribunal, which becomes effective on or after the Issue Date (and, in the case of a successor
entity, which becomes effective on or after the date of such successor entity’s assumption of the Company’s obligations): (a) the Company will or would be required to pay Additional Amounts to Holders of the Securities, (b) the
Company would not be entitled to claim a deduction in respect of any payments in computing the Company’s taxation liabilities or the amount of the deduction would be materially reduced, or (c) the Company would not, as a result of the
Securities being in issue, be able to have the losses or deductions set against the profits or gains, or profits or gains offset by the losses or deductions, of companies with which the Company is or would otherwise be so grouped for applicable
United Kingdom tax purposes (whether under the group relief system current as at the Issue Date, or any similar system or systems having like effect as may from time to time exist), (each of (a), (b) and (c) above, a “Tax
Event”); provided, however, that the Securities may only be redeemed pursuant to this paragraph if, in the case of each Tax Event, the consequences of the Tax Event cannot be avoided by the Company taking reasonable measures available to the
Company.
Prior to the delivery of any notice of redemption, the Company shall deliver to the Trustee an opinion of independent counsel of
recognized standing, chosen by the Company, in a form satisfactory to the Trustee confirming that the Company is entitled to exercise its right of redemption under Section 11.09 of the Indenture.
Before the Company may redeem the Securities pursuant to any of the preceding paragraphs relating to the Company’s rights of redemption,
the Company shall deliver prior notice of not less than thirty (30) days, nor more than sixty (60) days to the Holders of the Securities. The Company shall deliver written notice of such redemption of the Securities to the Trustee at least
five (5) Business Days prior to the date on which the relevant notice of redemption is sent to Holders (unless a shorter notice period shall be satisfactory to the Trustee). Such notice shall specify the Company’s election to redeem the
Securities and the date fixed for such redemption and shall be irrevocable except in the limited circumstances described in this paragraph. If the Company has delivered a notice of redemption pursuant to this paragraph, but prior to the payment of
the redemption amount with respect to such redemption the Relevant U.K. Resolution Authority exercises its U.K. Bail-in Power in respect of the Securities, such redemption notice shall be automatically rescinded and shall be of no force and effect,
and no payment in respect of the redemption amount shall be due and payable. If the event specified in the preceding sentence occurs, the Company shall promptly deliver notice to the Holders of the Securities via DTC and to the Trustee directly,
specifying the occurrence of the relevant event.
The Company or any member of the Group may purchase or otherwise acquire any of the
Outstanding Securities at any price in the open market or otherwise.
All authority conferred or agreed to be conferred by each Holder and
beneficial owner pursuant to this Security, including the consents given by such Holder and beneficial owner, shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of such
Holder and beneficial owner.
By its acquisition of the Securities, each Holder and beneficial owner of the Securities
acknowledges, agrees to be bound by and consents to the exercise of any U.K. Bail-In Power by the Relevant U.K. Resolution Authority that may result in the cancellation of all, or a portion, of the principal amount of, or interest on, the Securities
and/or the conversion of all, or a portion of, the principal amount of, or interest on, the Securities into shares or other securities or other obligations of the Company or another person, including by means of a variation to the terms of the
Securities, in each case, to give effect to the exercise by the Relevant U.K. Resolution Authority of such U.K. Bail-In Power. Each Holder and beneficial owner further acknowledges and agrees that the rights of Holders and beneficial owners of the
Securities are subject to, and will be varied, if necessary, so as to give effect to, the exercise of any U.K. Bail-in Power by the Relevant U.K. Resolution Authority.
By its acquisition of the Securities, each Holder and beneficial owner (i) acknowledges and agrees that the exercise of the U.K. Bail-In
Power by the Relevant U.K. Resolution Authority with respect to the Securities shall not give rise to a default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default)
of the U.S. Trust Indenture Act of 1939, as amended, (ii) to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that
the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the U.K. Bail-In Power by the Relevant U.K. Resolution Authority with respect to the Securities,
(iii) acknowledges and agrees that, upon the exercise of any U.K. Bail-In Power by the Relevant U.K. Resolution Authority, (a) the Trustee shall not be required to take any further directions from Holders or beneficial owners of the
Securities under Section 5.12 of the Indenture and (b) the Indenture shall impose no duties upon the Trustee whatsoever with respect to the exercise of any U.K. Bail-In Power by the Relevant U.K. Resolution Authority (notwithstanding the
foregoing in this clause (iii), if, following the completion of the exercise of the U.K. Bail-In Power by the Relevant U.K. Resolution Authority, the Securities remain outstanding, then the Trustee’s duties under the Indenture shall remain
applicable with respect to the Securities following such completion to the extent that the Company and the Trustee shall agree pursuant to a supplemental indenture), and (iv) shall be deemed to have (a) consented to the exercise of any
U.K. Bail-In Power as it may be imposed without any prior notice by the Relevant U.K. Resolution Authority of its decision to exercise such power with respect to the Securities and (b) authorized, directed and requested DTC and any direct
participant in DTC or other intermediary through which it holds such Securities to take any and all necessary action, if required, to implement the exercise of any U.K. Bail-In Power with respect to the Securities as it may be imposed, without any
further action or direction on the part of such Holder and such beneficial owner or the Trustee.
Each Holder and Beneficial Owner that
acquires its Securities in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the same provisions specified in the Indenture to the same extent as the Holders and Beneficial Owners of the Securities that
acquire the Securities upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Securities, including in relation to the U.K. Bail-In Power.
Upon the exercise of the U.K. Bail-In Power by the Relevant U.K. Resolution Authority with
respect to the Securities, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. Bail-In Power for purposes of notifying Holders and beneficial owners of such occurrence. The Company shall also
deliver a copy of such notice to the Trustee for information purposes.
The Company’s obligations to indemnify the Trustee in
accordance with Section 6.07 of the Indenture shall survive any exercise of the U.K. Bail-In Power by the Relevant U.K. Resolution Authority with respect to the Securities.
The exercise of the U.K. Bail-In Power by the Relevant U.K. Resolution Authority with respect to the Securities shall not constitute an Event
of Default under the Indenture.
The Securities shall constitute the Company’s direct, unconditional, unsecured and unsubordinated
obligations and shall at all times rank pari passu among themselves. In the event of a winding-up or administration of the Company, the Securities shall rank pari passu with all other outstanding unsecured and unsubordinated
obligations of the Company, present and future, except such obligations as are preferred by operation of law.
The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of not less than a majority in aggregate in principal amount of the Securities then Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of a
majority in aggregate principal amount of the Securities of each series then Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past Event
of Defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have any right to institute any
proceeding, judicial or otherwise, with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of
Default with respect to the Securities of this series, the Holders of not less than 25% in aggregate principal amount of the Securities of this series then Outstanding shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered to the Trustee security or indemnity satisfactory to the Trustee in its sole discretion against the costs, expenses and liabilities to be incurred in compliance with such request, the Trustee
shall not have received from the Holders of a majority in principal amount of Securities of this series then Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for sixty (60) days
after receipt of such notice, request and offer of indemnity.
Notwithstanding any contrary provisions in this Security, nothing shall impair the right of a
Holder of this Security under the Trust Indenture Act, absent such Holder’s consent, to sue for any payments due but unpaid with respect to this Security.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Senior
Debt Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of this Security is payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Senior Debt Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing. Thereupon one or more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
This Security, and
any other Securities of this series and of like tenor, are issuable only in registered form without coupons in initial denominations of $200,000 and increments of $1,000 thereafter. The denominations cannot be changed without the consent of the
Trustee.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
This Security shall be governed by and
construed in accordance with the laws of the State of New York.
Exhibit 5.1
[Letterhead of Sullivan & Cromwell LLP]
August 17, 2015
Barclays PLC,
1 Churchill Place,
London E14 5HP,
United Kingdom.
Ladies and Gentlemen:
In connection with the
registration under the Securities Act of 1933 (the “Act”) of $1,500,000,000 5.25% Fixed Rate Senior Notes due 2045 (the “Securities”) of Barclays PLC, a public limited company organized under the laws of England and Wales (the
“Issuer”), issued in global form pursuant to the Senior Debt Securities Indenture, dated as of November 10, 2014 (the “Indenture”), between the Issuer and The Bank of New York Mellon acting through its London Branch, as
Trustee (the “Trustee”), we, as your United States counsel, have examined such corporate records, certificates and other documents, and such questions of United States federal and New York state law, as we have considered necessary or
appropriate for the purposes of this opinion. Upon the basis of such examination, we advise you that, in our opinion, the Securities constitute valid and legally binding obligations of the Issuer, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.
Barclays PLC
The foregoing opinion is limited to the federal laws of the United States and the laws of the State of New York, and we are expressing no
opinion as to the effect of the laws of any other jurisdiction. In rendering the foregoing opinion, we have assumed, without independent verification, that (i) the Issuer has been duly organized and is an existing company under the laws of
England and Wales and (ii) the Securities and the Indenture have been duly authorized, executed and delivered in accordance with the laws of England and Wales. We note that with respect to all matters of English law relevant to the validity and
legality of the Securities, you are receiving the opinion, dated the date hereof, of Clifford Chance LLP.
In rendering the foregoing
opinion, we are not passing upon, and assume no responsibility for, any disclosure in the Registration Statement on Form F-3 (File No. 333-195645) (the “Registration Statement”) or any related prospectus or other offering material
regarding the Issuer or the Securities or their offering and sale.
We have relied as to certain factual matters on information obtained
from public officials, officers of the Issuer and other sources believed by us to be responsible, and we have assumed, without independent verification, that the Indenture has been duly authorized, executed and delivered by the Trustee, that the
Securities conform to the specimen examined by us, that the Trustee’s certificates of authentication of the Securities have been manually signed by one of the Trustee’s authorized officers, and that the signatures on all documents examined
by us are genuine, assumptions which we have not independently verified.
-2-
Barclays PLC
We hereby consent to the filing of this opinion as an exhibit to a Current Report on Form 6-K to be incorporated by reference in the
Registration Statement and the reference to us under the heading “Validity of Securities” in the Prospectus Supplement relating to the Securities, dated August 10, 2015. In giving such consent, we do not thereby admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Sullivan & Cromwell LLP
-3-
Exhibit 5.2
[Letterhead of Clifford Chance LLP]
|
|
|
|
|
| To |
|
Barclays PLC 1 Churchill Place
London E14 5HP |
|
Our ref: SS/70-40601577/MDE
Direct Dial: +44 207 006 2977 E-mail:
simon.sinclair@cliffordchance.com |
17 August 2015
Dear Sirs
Barclays PLC
US$1,500,000,000 5.25% Fixed Rate Senior Notes due 2045
(the “Notes”)
We have acted as
English legal advisers to Barclays PLC (the “Issuer”) in connection with the issue by the Issuer of the Notes under the senior debt securities indenture entered into on 10 November 2014 (the “Indenture”)
between the Issuer and The Bank of New York Mellon, London Branch as trustee (the “Trustee”).
| |
This Opinion relates to the Notes. |
| |
1.2.1 |
Terms defined or given a particular construction in the Indenture shall have the same meaning in this Opinion unless a contrary indication appears. |
| |
1.2.2 |
Headings in this Opinion are for ease of reference only and shall not affect its interpretation. |
| |
1.2.3 |
All references in this Opinion to paragraphs mean paragraphs in this Opinion. |
| |
In connection with the creation and issue of the Notes and the giving of this Opinion: |
| |
1.3.1 |
we have reviewed the documents referred to in Schedule 1 (Documents); |
CLIFFORD CHANCE LLP IS A LIMITED
LIABILITY PARTNERSHIP REGISTERED IN ENGLAND AND WALES UNDER NO. OC323571. THE FIRM’S REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS IS AT 10 UPPER BANK STREET LONDON E14 5JJ. THE FIRM USES THE WORD “PARTNER” TO REFER TO A MEMBER OF
CLIFFORD CHANCE LLP OR AN EMPLOYEE OR CONSULTANT WITH EQUIVALENT STANDING AND QUALIFICATIONS. THE FIRM IS AUTHORISED AND REGULATED BY THE SOLICITORS REGULATION AUTHORITY.
| |
1.3.2 |
we have not verified the facts or the reasonableness of any statements (including statements as to foreign law) contained in the Prospectus, save as expressly specified in paragraph 2.2; |
| |
1.3.3 |
we have not been responsible for ensuring that the Prospectus contains all material facts; and |
| |
1.3.4 |
we have not been responsible for ensuring that the Prospectus or the Form 6-K comply with the requirements of any competent authority. |
| |
This Opinion is governed by English law, relates only to English law as applied by the English courts as at today’s date and does not extend to the laws of any other jurisdiction (save as described in paragraph
1.5). All non-contractual obligations and any other matters arising out of or in connection with this Opinion are governed by English law. |
| |
We express no opinion on any taxation matter, and none is implied or may be inferred, save as expressly specified in paragraph 2.2. In respect of those tax matters this Opinion is confined to, and given on the basis of,
English law, United Kingdom tax law and Her Majesty’s Revenue and Customs (“HMRC”) practice in force or applied in the United Kingdom as at today’s date. |
| 1.6 |
Assumptions and Reservations |
| |
This Opinion is given on the basis of the assumptions set out in Schedule 2 (Assumptions) and is subject to the reservations set out in Schedule 3 (Reservations). This Opinion is strictly limited to the
matters stated in paragraph 2 and does not extend to any other matters. |
- 2 -
| |
We are of the opinion that: |
| |
The issue of the Notes has been duly authorised by or on behalf of the Issuer. |
| 2.2 |
Taxation statements in the Base Prospectus |
| |
The statements in the Base Prospectus under the heading “Tax Considerations – United Kingdom Taxation of Debt Securities” are, insofar as they are relevant to the Notes, correct in all material respects.
|
| 3. |
ADDRESSEES AND PURPOSE |
| |
3.1.1 |
The scope and content of this Opinion solely have regard to the interests of the Issuer in accordance with its instructions. This Opinion is provided in connection with the filing of the Form 6-K and is addressed to and
is solely for the Issuer and it may not, without our prior written consent, be relied upon for any other purpose or be disclosed to or relied upon by any other person save as provided below. |
| |
3.1.2 |
We hereby consent to the filing of this opinion with the United States Securities and Exchange Commission (the “SEC”) as an exhibit to a Current Report on Form 6-K to be incorporated by reference into
the Form F-3 Registration Statement filed with the SEC on 2 May 2014, and the reference to us under the headings “Tax Considerations – United Kingdom Taxation of Debt Securities”, “Service of Process and Enforcement of
Liabilities” and “Validity of Securities” in the Base Prospectus and “Validity of Notes” in the Prospectus Supplement. In giving this consent, we do not admit that we are in the category of persons whose consent is required
under Section 7 of the US Securities Act of 1933, as amended or the rules and regulations of the SEC thereunder. |
Yours faithfully,
/s/ Clifford Chance LLP
- 3 -
SCHEDULE 1
DOCUMENTS
| (a) |
The prospectus dated 2 May 2014 relating to, inter alia, the Notes (the “Base Prospectus”). |
| (b) |
The prospectus supplement dated 10 August 2015 relating to the Notes (the “Prospectus Supplement” and, together with the Base Prospectus, the “Prospectus”). |
| (c) |
The final form of the Form 6-K expected to be filed with the SEC on 17 August 2015 relating to the Notes (the “Form 6-K”). |
| (d) |
A copy of the Indenture. |
| (e) |
A copy of an Officer’s Certificate dated 17 August 2015 pursuant to Sections 1.02, 3.01 and 3.03 of the Indenture relating to the Notes (including the form of global note). |
| (f) |
A copy of the certificate of incorporation of the Issuer dated 20 July 1896. |
| (g) |
A copy of the certificate of incorporation on re-registration of the Issuer dated 15 February 1982. |
| (h) |
A copy of the certificate of incorporation on change of name of the Issuer dated 1 January 1985. |
| (i) |
A copy of the articles of association of the Issuer as adopted by special resolution passed on 30 April 2010 and amended by special resolution passed on 25 April 2013, certified a true copy by Charles Curran.
|
| (j) |
A copy of extracts from the minutes of a meeting of the board of directors of the Issuer held on 12 December 2013, certified a true copy by Patrick Gonsalves. |
| (k) |
A copy of extracts from the minutes of a meeting of the board of directors of the Issuer held on 12 December 2013, as amended by resolutions of the board of directors adopted at a meeting held on 19 June 2014,
certified a true copy by Patrick Gonsalves. |
| (l) |
A copy of the approvals by the Group Finance Director and written resolutions of the Treasury Committee of the Issuer passed on (i) 1 May 2014, certified a true copy by Ben Rumble and (ii) 13 June
2014, certified a true copy by Jessica Cameron. |
- 4 -
| (m) |
A copy of extracts from the minutes of a meeting of the board of directors of the Issuer held on 11 December 2014, certified a true copy by Patrick Gonsalves. |
| (n) |
A copy of a written resolution of the Treasury Committee of the Issuer passed on 13 August 2015, certified a true copy by Jessica Cameron. |
- 5 -
SCHEDULE 2
ASSUMPTIONS
| 1. |
ORIGINAL AND GENUINE DOCUMENTATION |
| |
(a) |
All signatures (including electronic signatures), stamps and seals are genuine, all original documents are authentic, all deeds and counterparts were executed in single physical form and all copy documents supplied to
us as photocopies or in portable document format (PDF) or other electronic form are genuine, accurate, complete and conform to the originals. |
| |
(b) |
The copies of the certificate of incorporation, certificate of incorporation on change of name, certificate of re-registration and articles of association of the Issuer provided to us are accurate and complete as of the
date of this Opinion. |
| |
(a) |
In resolving to create and issue the Notes the directors of the Issuer acted in good faith to promote the success of the Issuer for the benefit of its members and in accordance with any other duty. |
| |
(b) |
Each director of the Issuer has disclosed any interest which he or she may have in the issue of the Notes in accordance with the provisions of the Companies Act 2006 and the Issuer’s articles of association and
none of the directors has any interest in the issue of the Notes except to the extent permitted by the Issuer’s articles of association. |
| |
(c) |
The resolutions of the Issuer’s board of directors as set out in the minutes referred to in Schedule 1 (Documents) were duly passed at a properly constituted and quorate meeting of duly appointed directors
of the Issuer and have not been amended or rescinded and are in full force and effect. |
| |
(d) |
The resolutions in writing of the Treasury Committee of the Issuer referred to in Schedule 1 (Documents) were duly adopted by a properly constituted Treasury Committee, have not been amended or rescinded and are
in full force and effect. |
| |
(e) |
That, as at 10 November 2014, Timothy Allen held the position of Director in the Capital Markets Execution (formerly Treasury Execution Services) team of Barclays Treasury and as at 17 August 2015, Miray
Muminoglu held the position of Director in the Capital Markets Execution (formerly Treasury Execution Services) team of Barclays Treasury. |
- 6 -
| |
(f) |
The person, if other than the person whose signature it purports to be, who attached any electronic signature to any of the documents listed in Schedule 1 (Documents) on behalf of another person, had the
authority of the latter person to do so. |
| |
(g) |
The Issuer is in compliance with the securities issuance and redemption funding limits prescribed by its corporate authorisations referred to in Schedule 1 (Documents) paragraphs (j) to (n).
|
| 3. |
CORPORATE CAPACITY OF THE PARTIES |
| |
Each party to the Indenture has the capacity, power and authority to enter into and to exercise its rights and to perform its obligations under the Indenture. |
| 4. |
EXECUTION OF INDENTURE |
| |
Each party to the Indenture has duly executed and delivered the Indenture. |
| 5. |
DOCUMENTS NOT GOVERNED BY ENGLISH LAW |
| |
(a) |
The obligations expressed to be assumed by the Issuer under the Indenture and the Notes constitute the Issuer’s legal, valid, binding and enforceable obligations under the laws of the State of New York and words
and phrases used in the Indenture have the same meaning and effect as they would if the Indenture was governed by English law. |
| |
(b) |
The submission to the jurisdiction of any state and federal court in the City and State of New York by the Issuer contained in the Indenture is legal, valid and binding under the laws of the State of New York.
|
| |
(c) |
The choice of the laws of the State of New York to govern the Indenture is a valid choice under the laws of the State of New York. |
| |
Save for those listed in Schedule 1 (Documents) there is no other agreement, instrument, other arrangement or relationship between any of the parties to the Indenture which modifies, supersedes or conflicts with
the Indenture. |
| |
The Issuer is resident only in the United Kingdom for United Kingdom tax purposes. |
- 7 -
SCHEDULE 3
RESERVATIONS
| |
The opinions set out in this letter are subject to any limitations arising from any measures taken pursuant to the stabilisation powers under the special resolution regime under the Banking Act 2009. For more
information, please see “Risk Factors” in the Prospectus Supplement. |
| |
(a) |
The confirmation provided in paragraph 2.2 is subject to the following specific reservations: |
| |
(i) |
We give no confirmation as to any section of the Prospectus other than the confirmation set out in paragraph 2.2; |
| |
(ii) |
The confirmation is given solely on the basis set out in paragraph 2.2 and in particular is limited to matters governed by English law, the tax law of the United Kingdom and HMRC’s practice in force or applied in
the United Kingdom as at today’s date; and |
| |
(b) |
With regards to the statements under the heading “Tax Considerations – United Kingdom Taxation of Debt Securities” in the Base Prospectus, were we drafting them today, we might have expressed certain
matters in relation to European Council Directive 2003/48/EC on the taxation of savings income in a different manner or with a different emphasis. |
- 8 -
Exhibit 8.1
[Letterhead of Sullivan & Cromwell LLP]
August 17, 2015
Barclays PLC,
1 Churchill Place,
London E14 5HP,
United Kingdom.
Ladies and Gentlemen:
We have acted as your
United States tax counsel in connection with the registration under the Securities Act of 1933 (the “Act”) of $1,500,000,000 of 5.25% Fixed Rate Senior Notes due 2045 (the “Notes”) of Barclays PLC, an English public limited
company (the “Bank”). We hereby confirm to you that our opinion is as set forth under the caption “U.S. Federal Income Tax Considerations” in the prospectus supplement dated August 10, 2015 (the “Prospectus
Supplement”) to the prospectus dated May 2, 2014, included in the Registration Statement on Form F-3 relating to the Notes.
Barclays PLC
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us under the heading
“U.S. Federal Income Tax Considerations” in the Prospectus Supplement. In giving such consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Sullivan & Cromwell LLP
-2-
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