TIDMBARC
RNS Number : 2687M
Barclays PLC
07 May 2020
7 May 2020
Barclays PLC
AGM Statements
Chairman's 2020 AGM statement
Good morning, everybody.
This is my first annual general meeting of Barclays, and it's
clearly going to be quite a strange one. I was looking forward to
updating you in person on the progress that we've been making in
the delivery of our strategy, but instead we find ourselves
addressing you remotely, and I am sorry about that. I'm sure you
all appreciate, however, the importance of us prioritising
everybody's safety and complying with the law, so that we do our
bit to slow the spread of this dreadful virus.
We would've preferred, obviously, to be meeting in Glasgow where
we are developing a new strategic campus, but we are going to do
our best to ensure that shareholders' questions can be answered and
that your views are properly represented.
I'd like to start, if I may, by paying a tribute to all of my
colleagues in Barclays around the world who have been working so
hard to keep the bank running and providing vital support to
customers and clients. We have today 80% attendance at our call
centres in the UK. We have over 650 branches open for business
every day and critical staff working here, as I am at the moment,
in our office at Canary Wharf and in other buildings around the
country and the world.
Those colleagues and our tens of thousands of people working
from home know how important it is to continue to provide essential
financial services and support, and all of us are extremely
grateful for the dedication that they are showing.
Before I say something about our results for 2019, I would just
like to comment on two other aspects of the crisis, how resilient
the bank has been and how we are responding to the requirements of
customers and clients around the world.
As for resilience, we have been catapulted into the largest-ever
test of dynamic working, something none of us were fully prepared
for, and I'm very pleased to report that the experiment is working
well so far. People at this bank are doing amazing things out of
their living rooms, their kitchens, a reminder of how ingenious and
inventive we can be. And I hope that we will be able to look back
when this period has past and learn some lessons but also take
pride in the way in which the organisation and the infrastructure
of the bank has stood up.
Secondly, I'd like to just share with you that our main external
priority has, of course, been to help the countries where we
operate get through the pandemic and get on to the task of economic
recovery as quickly as possible. Here in the UK we are
participating in many government schemes designed to support
businesses and people impacted by the virus. In addition, we have
deployed formidable programmes of our own, including offering
repayment holidays, waiving banking fees and extending as much
credit as we can responsibly manage.
We are also directly helping those vulnerable communities most
impacted by the virus through Barclays donating an unprecedented
GBP100 million to charities working to support people through the
crisis. The creation of this Barclays Community Impact Fund is a
source of great pride for colleagues, pleased to see the bank
trying to play its part in alleviating the social effects of
COVID-19 as well as some of the economic effects. I know too from
feedback that we have had from shareholders that you also are very
supportive of this initiative.
Our 2019 results feel like a world away, but I would like to
comment on them nonetheless, as they were a clear indication that
our strategy is working and that the group has transformed itself
considerably over the last few years.
Underlying returns and cost efficiency have improved, and the
capital position is now secure. Group return on tangible equity was
9%, in line with the 2019 target. We have strengthened the control
environment and dealt with our major legacy conduct issues. At the
same time, we are ensuring the operational resilience of the
organisation, including our ability to deal with cyber threats,
which have unfortunately become part of everyday life.
As you are aware, on the advice of the PRA we did take the
difficult decision to cancel the full-year dividend that was due at
the beginning of April in respect of 2019, and we know that this
had an immediate and unwelcome impact on the shareholders, which of
course we deeply regret. But as we have said, the bank has a strong
capital base, could well have afforded the payment, but we felt
that it was prudent to take the step that we did as part of
ensuring that Barclays comes through the crisis strong and
resilient.
The board and management remain committed to returning capital
to shareholders over time, and I want to place on record that it
remains a priority as soon as it is reasonable to do so.
One more word on our financial performance. You would have seen
that we reported results for the first quarter of this year last
week with the Corporate and Investment Bank's performance improving
strongly. As the UK and US retail markets came under pressure, this
demonstrated very clearly to us again the benefit of our
diversified strategy. We are today a strong British universal bank,
and our distinctive model makes us the leading European player in
the US, which in today's world has real benefit.
We recognise that there is a lot more to do, and our target
remains to produce a group return on tangible equity consistently
above 10%. Of course, the global macroeconomic environment, fuelled
in large part by the challenges of COVID-19, make this target much
more difficult to achieve, but it remains our target and attainable
over time.
Let me just return, if I may, to where I started and add a few
more words about the relationship between the bank and society as a
whole.
Now, there's been a lot of talk over the past few years about
corporate purpose, and that's been true also internally at Barclays
where we have given an increasing amount of attention to our own
purpose and what it should mean in practice for how we operate and
the decisions we take, big and small.
We have done a lot of thinking recently about how we can make a
real and positive difference to society, and I think this has
informed the way in which the bank has responded to the current
crisis and to customers and clients. We may not get everything that
we do right, but our intention is to get everything that we do
right.
This in part builds on the extraordinary breadth and depth of
activity undertaken by colleagues to help communities in which we
live and work, and I think I have said before how impressed I have
been by the depth and feeling behind our citizenship
activities.
This also extends to our role in the preservation of our
external environment. Barclays can and should play a leading role
in tackling climate change. The size and scale of our business
means that we can really help accelerate the transition to a
low-carbon economy.
Resolution 29 before this meeting sets out a powerful ambition
for Barclays to be net-zero by 2050 and commits the group to a
strategy with targets for alignment of its entire financing
portfolio to the goals of the Paris agreement. I believe that this
represents a substantial and necessary step on the journey to
Barclays becoming one of the leading banks globally in addressing
climate change.
I'm extremely grateful to the shareholders and other
stakeholders who have engaged with us so patiently and thoughtfully
over recent months as we have developed this new strategy. Along
with the rest of the board, I strongly encourage you to vote in
favour of this resolution.
I would just like to conclude with a few words of thanks. Again,
to thank all of our staff at Barclays for their normal commitment
to the company but also the extraordinary commitment which they are
showing today. I would like to thank my boardroom colleagues for
welcoming me and for the work that we have done together. Finally,
I would like to thank Jes and the senior management team for the
leadership skills which they deploy on a daily basis today in even
more extraordinary circumstances than ever before.
All of these people are making a huge contribution to Barclays'
success and will continue to do so however challenging the times
ahead of us.
I say also to all of you, to our shareholders, thank you for
your patience with us, for the quality of dialogue that we have
had, and I wish you all well over the coming months.
Thank you very much for listening.
Chief Executive's 2020 AGM statement
Good morning everyone. First of all, let me say that I hope you
and your loved ones have been keeping safe and well in these very
challenging times. Second, let me apologise for the fact that, due
to the extraordinary circumstances we find ourselves in today, we
cannot meet in person this year at our annual general meeting. But,
as you know, and I'm sure you appreciate, it's important that we
all comply with the law, prioritise each other's safety and
wellbeing, and take the steps needed to slow the spread of the
Coronavirus.
Whilst the arrangements for today's meeting are consequently not
as optimal as we would wish, we nevertheless have worked hard to
ensure that your views will be appropriately represented and
recorded. That said, let me now offer you my CEO's report.
The last time we met, it was a long time ago in a very different
world. Obviously, an event like the Covid-19 pandemic changes
priorities and, inevitably, makes individuals and companies like
ours focus on what's really important right now.
For us, that means running the bank safely and profitably,
helping our customers and clients through the difficulties they
face, supporting the UK economy and the communities where we live
and work, and taking care of our colleagues around the world. We've
been able to do that because of the underlying strength of our
business and the resilience of our diversified model. And I've been
especially proud of the way my colleagues across Barclays have
risen to the challenges of this extraordinary time.
So I want to start today by taking a few minutes to set out how
we've been responding to the crisis. Our business touches half the
households in the UK. We know that some of our customers are facing
very real and very daunting financial challenges. And this is a
worrying time for the vast majority, regardless of their
circumstances. We've moved quickly to give them the reassurance and
support they need.
To give you just a couple of examples, so far Barclays has
granted repayment holidays on 100,000 mortgages and on over 69,000
loans. And we're providing an interest-free buffer on overdrafts
for 5.4 million customers. And, beyond that, we've reduced and
capped charges until at least July. We've waived late payment fees
and cash advance fees for eight million Barclaycard customers and
granted some 112,000 payment holidays.
655 of our branches remain open across the UK, providing vital
banking services, while our teams are fielding some 260,000 calls a
week. That's 44 per cent higher than the typical volume. And I'm
really pleased that we've been able to proactively identify NHS and
key workers among our customer base and move them to the front of
call queues as their time is especially precious at this
moment.
Getting businesses through this period intact is crucial to give
the best chance of a rapid and sustainable economic recovery. And
it's also in our shareholders' interests. The UK government has put
huge resources into supporting that ambition, and it's the central
topic of almost every conversation I have with ministers. It is an
unprecedented effort by them, and by the Bank of England. And we're
committed to playing our full part to help get that support to the
businesses that need it.
We have now approved 5,270 CBILS loans(1) , with a total value
of just over one billion pounds and we expect those numbers to
increase rapidly in the coming weeks. So, in addition to the CBILS
programme, on Monday, we launched the Bounce Back programme with
Her Majesty's Treasury. On the first day, for 20,000 small
businesses across the United Kingdom, we approved loans that
totalled GBP670 million. Behind those numbers are stories of
businesses and jobs surviving this crisis.
Take the Titanic Brewery, up in Staffordshire. It's a local
favourite, selling three million pints in a normal year through its
chain of pubs and beyond. We helped them secure a GBP1 million
CBILS loan and put in place a 12-month payment holiday on an
existing loan they had with us. That has allowed the business to
keep producing and selling beers online, protecting jobs and
allowing them to pay their furloughed workers full wages.
Or take the Queensbury Hotel and Olive Tree restaurant in Bath,
which I've been to. This is a family-run, four-star hotel that's
had to shut its doors due to the Coronavirus. But with our help
they were able to get a GBP450,000 CBILS loan quickly. That loan
means that they can cover running costs, their staff are able to be
furloughed rather than laid off, and they'll be able to retain
their hard-earned Michelin star, which would have been forfeited if
they had been in closure.
Make no mistake, interventions like these are making the
difference between survival and failure for businesses and we're
pleased to be playing our part in keeping them going. We've also
been absolutely central, because of our strong investment banking
capabilities, to helping larger businesses to access the Bank of
England and Treasury's CCFF programme. So far, we have arranged
GBP7.2 billion of commercial paper for UK corporates over the past
few weeks, representing 45 per cent of this total market.
In addition to our backing for those government schemes, we've
also been able to provide significant help on our own to our
business clients. For example, we've waived everyday banking fees
and overdraft interest or charges until June for 650,000 of our
small business customers. And we've put in place 12-month capital
repayment holidays for most SMEs with loans of over GBP25,000.
We're continuing to extend credit to companies and there is GBP50
billion of lending limits available to our UK clients.
But we're not stopping there, we also continue to evolve our
approach and offering to clients big and small, to help them
through the crisis. Because it is crucial that we preserve as many
businesses and jobs as we can to aid the recovery when it
ultimately comes. As you know, Barclays has deep roots in the
communities where we live and work, and I'm proud of everything our
colleagues do, year-round, to support their local areas, never more
so than now.
That includes going above and beyond for our customers, to help
them any way we can. Whether that's our colleague, Glynis Wilson,
who's in a contact centre in Sunderland. She was helping a customer
in dire straits to access charitable support. Then we made a
goodwill payment to see that this customer got through a very tight
spot. Or our colleague, Heena Mistry in Hyde, ringing vulnerable
customers to see how they're doing and then getting an ambulance
for an elderly man who was obviously having difficulty breathing.
Or our colleague, Caroline Pearson, in Harrow and Edgware branch,
helping an 80-year old customer keep a special promise to her
grandson by guiding her through buying on his birthday a pair of
trainers online. These are just three stories of hundreds up and
down the country where our people are working beyond their
professional obligations to support vulnerable customers.
We are carrying on delivering our core citizenship programmes,
such as Life Skills and Connect with Work, with a particular focus
now on helping mitigate the impacts of Covid-19. But we're trying
to do even more. For example, where we can, we're now offering
colleagues four weeks' paid leave to volunteer to support health or
social care work and helping those that are vulnerable.
And we've launched a 100 million Community Aid Package, made up
of GBP50 million in grants for charity partners in the UK and our
international markets, and GBP50 million to match colleague
donations. That equates to up to GBP150 million from Barclays and
our colleagues, deployed to help the communities and people
hardest-hit by the crisis from providing food to vulnerable
families to purchasing protective equipment for NHS staff.
We understand that our fortunes are intertwined with those of
the communities and economies we serve. And at time like these,
more than ever, our obligation is to support them. And we're going
to continue to do that and prioritise that effort through this
crisis.
Finally today I want to briefly set out some overall thoughts on
our performance, both in 2019 and in the first quarter, which we
reported on the 29(th) April. Barclays finished 2019 in a very good
position. The group return on tangible equity, our ROTE, was nine
per cent, meeting our target for the year and almost double what it
was a couple of years' ago.
We also met the cost guidance we had set out, coming in at the
lower end of the range, at GBP13.6 billion. Our liquidity ratio, at
160 per cent, was among the highest we've ever had. And the bank's
CET1 capital ratio, the key measure of our financial strength and
stability, stood at 13.8 per cent at year-end, the highest in our
company's history.
We were pleased with that performance in and of itself, but more
importantly, Barclays was in a really robust state going into what
has become an extraordinary period of social and economic stress.
The impact of Covid-19 came late in what was, until that point, a
pretty good quarter. That said, the performance of the business
since then, has demonstrated clearly the resilience of our
universal banking model - rooted in diversification by business
line and geography and currency.
As we've said in the past, there's a kind of cyclicality between
the consumer business and the wholesale business. So in this
economic crisis, while you would expect returns were down in
Barclays UK and in Consumer Cards and Payments, where their ROTE's
went single-digits or below, the Corporate and Investment Bank
performed strongly in the first quarter, producing a double-digit
return on tangible equity of 12.1 per cent.
And this was particularly done as we supported our clients
during a period of extreme volatility in our capital markets
business, which roughly doubled its revenue in the first quarter.
Sustained cost discipline and positive jaws in our CIB delivered a
group cost income ratio of 52 per cent. That's better than our
target of less than 60 per cent over time, and our lowest quarterly
group cost interim ratio since 2011.
Overall, the group return on tangible equity for the quarter was
5.1 per cent. Given the uncertainty around the developing economic
downturn and the low interest rate environment, 2020 is expected to
be challenging for our business. That said, we continue to believe
that a sustainable group ROTE above 10 per cent is the right target
for Barclays and is attainable over time.
Importantly, we've taken a 2.1 billion credit impairment charge
in the quarter, of which 1.4 billion is a result of applying a very
challenging forecast to our credit models. We think this is very
prudent. Even after this, Barclays generated GBP913 million of
profit before tax, three and a half pence of earnings per share,
and attributable profit of GBP605 million in the quarter.
Your group remains well capitalised, with a CET1 ratio of 13.1
per cent. And we will manage our capital position through this
crisis in a way which enables us to support customers and clients
whilst maintaining an appropriate headroom for regulatory
requirements. As you know, in response to a request by the
Prudential Regulation Authority, we cancelled the 2019 full-year
dividend payment.
The board will make a decision about future dividends and
capital returns policy at the end of 2020, when the full impact of
Covid-19 on our bank is clear. But let me say, for the avoidance of
doubt, there remains a management priority to generate and
distribute attractive returns for shareholders and we want to do so
again as soon as we can.
So to conclude, and in summary, my colleagues and I are today
primarily focused on what matters right now, which is supporting
our customers and clients, our communities, and the wider economy,
to navigate the pandemic. The strength of our business and the
resilience of our model means we can run this bank safely and
profitably and provide that support until this crisis passes.
And I believe that your bank will emerge on the other side in a
strong position to support the recovery and leave a reputation as
having stood with the citizens of Great Britain in this time of
crisis.
Thank you.
(1) As at Monday 4 May 2020
- ENDS -
For further information, please contact:
Investor Relations Media Relations
Chris Manners Tom Hoskin
+44 (0)20 7773 2136 +44 (0)20 7116 4755
About Barclays
Barclays is a British universal bank. We are diversified by
business, by different types of customer and client, and geography.
Our businesses include consumer banking and payments operations
around the world, as well as a top-tier, full service, global
corporate and investment bank, all of which are supported by our
service company which provides technology, operations and
functional services across the Group. For further information about
Barclays, please visit our website home.barclays
Forward-looking statements
This document 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. Forward-looking statements can be made in writing
but also may be made verbally by members of the management of the
Group (including, without limitation, during management
presentations to financial analysts) in connection with this
document. Examples of forward-looking statements include, among
others, statements or guidance regarding or relating to the Group's
future financial position, income growth, assets, impairment
charges, provisions, business strategy, capital, leverage and other
regulatory ratios, payment of dividends (including dividend payout
ratios and expected payment strategies), projected levels of growth
in the banking and financial markets, projected costs or savings,
any commitments and targets, estimates of capital expenditures,
plans and objectives for future operations, projected employee
numbers, IFRS impacts 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.
The forward-looking statements speak only as at the date on which
they are made and such statements may be affected by changes in
legislation, the development of standards and interpretations under
IFRS, including 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 applicable to
past, current and future periods; UK, US, Eurozone and global
macroeconomic and business conditions; the effects of any
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 entity within the Group or any securities issued by
such entities; direct and indirect impacts of the coronavirus
(COVID-19) pandemic; instability as a result of the exit by the UK
from the European Union and the disruption that may subsequently
result in the UK and globally; 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 financial position, future results,
dividend payments, capital, leverage or other regulatory ratios or
other financial and non-financial metrics or performance measures
may differ materially from the statements or guidance 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 2019 and our Q1 2020 Results Announcement
for the three months ended 31 March 2020 filed on Form 6-K), which
are available on the SEC's website at www.sec.gov .
Subject to our obligations under the applicable laws and
regulations of any relevant jurisdiction, (including, without
limitation, the UK and the US), 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.
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END
AGMVDLBBBELEBBV
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