Barclays(US:BCS)2024-04-25 14:39Financial Performance - In Q1 2024, Barclays reported a return on equity (RoE) of 10.6% and a return on tangible equity (RoTE) of 12.3%[15]. - Group income for Q1 2024 was £7.0 billion, a decrease of 4% year-on-year, with net interest income (NII) of £3.1 billion[19]. - Barclays reported a profit before tax of £2,277 million for Q1 2024, down 12% from £2,598 million in Q1 2023, with an attributable profit of £1,550 million[27][33]. - Profit before tax decreased 6% to £705m, with a return on equity (RoE) of 13.4% compared to 14.8% in Q1 2023[43]. - Barclays Group's profit after tax for Q124 was £1,812 million, a substantial increase from £133 million in Q423, reflecting a year-over-year growth of 1,263%[62]. - Attributable profit for Q1 2024 was £1,550 million, a decrease of 13% compared to £1,783 million in Q1 2023[138]. - The Investment Bank segment generated an attributable profit of £899 million in Q1 2024, a significant decrease from £1,048 million in Q1 2023[143]. Cost Management - The cost-to-income ratio was 60%, with a target of approximately 63% for 2024 remaining unchanged[19]. - Barclays delivered £0.2 billion of the £1 billion gross cost efficiency savings target for 2024[19]. - Total operating expenses were £4,175 million for Q1 2024, slightly higher than £4,110 million in Q1 2023[147]. - Total operating expenses decreased 3% to £1,063m, driven by efficiency savings and the transfer of WM&I to PBWM[43]. - The cost-to-income ratio improved to 60% in Q124 from 88% in Q423, indicating better operational efficiency[62]. Capital and Liquidity - The Common Equity Tier 1 (CET1) ratio stood at 13.5%, within the target range of 13-14%[19]. - The CET1 ratio decreased to 13.5% as risk-weighted assets (RWAs) increased by £6.9 billion to £349.6 billion[33]. - The liquidity pool increased to £323.5 billion, driven by a strong deposit growth in the International Corporate Bank[33]. - Barclays plans to return at least £10 billion of capital to shareholders between 2024 and 2026, with a preference for share buybacks[24]. - The Group's CET1 capital decreased by £0.2 billion to £47.1 billion as of March 31, 2024, from £47.3 billion in December 2023, primarily due to £1.6 billion in distributions[121]. - The total regulatory capital ratio as of March 31, 2024, was 19.6%, down from 20.1% in December 2023[119]. Asset Quality and Impairments - Credit impairment charges were £0.5 billion, with a loan loss rate (LLR) of 51 basis points[19]. - Credit impairment charges for Barclays UK totaled £58 million in Q124, compared to £37 million in Q423[68]. - The annualised loan loss rate was 51 basis points after applying a total impairment charge of £513 million[87]. - The coverage ratio for Stage 3 loans was 36.7% as of March 31, 2024[85]. - The total impairment allowance stood at £5.721 billion, with retail credit cards accounting for £3.486 billion and corporate loans at £1.299 billion[98]. Business Segments Performance - Barclays UK income decreased by 7%, while Private Bank and Wealth Management (PBWM) income increased by 20%[19]. - Barclays Investment Bank reported a profit before tax of £1,339 million for Q1 2024, a decrease of 12% compared to £1,513 million in Q1 2023[55]. - Total income for Barclays Investment Bank decreased by 7% to £3,328 million, with Global Markets income down 8% to £2,287 million, while Equities income increased by 25% to £883 million[55]. - Barclays US Consumer Bank achieved a profit before tax of £59 million, down 24% from £78 million in Q1 2023, with total income increasing by 4% to £859 million[59]. - Barclays Private Bank and Wealth Management reported a 20% increase in total income to £312 million, with net fee income rising 76% to £137 million[48]. Market and Economic Outlook - In the Baseline scenario, UK GDP growth is projected at 1.0% for 2024, with unemployment expected to rise to 4.6%[100][105]. - Under the Downside 2 scenario, UK GDP is forecasted to decline by 0.9% in 2024, with unemployment potentially reaching 4.7%[101][105]. - The UK bank rate is expected to remain at 4.9% in 2024 under the Baseline scenario, while it could rise to 6.8% in the Downside 2 scenario[105]. - US unemployment is projected to rise to 4.2% by Q3 2024, with a federal funds rate of 5.0% in 2024[100][105]. Regulatory Requirements - The Group's overall capital requirement for CET1 remained at 12.0%, which includes a 4.5% Pillar 1 minimum and a 2.5% Capital Conservation Buffer[111]. - The MREL requirement, excluding the PRA buffer, was to hold £105.2 billion of own funds and eligible liabilities, equating to 30.1% of RWAs[119]. - The Pillar 2A requirement is set at 4.6%, with at least 56.25% needing to be met with CET1 capital[113]. - The Capital Conservation Buffer (CCB) requires an additional 2.5% of Common Equity Tier 1 capital above the 4.5% minimum requirement[189].