Barclays (NYSE:BCS) Conference Transcript

Barclays Conference Summary Company Overview - Company: Barclays (NYSE: BCS) - Date: November 19, 2025 Key Points Economic Environment - Both the U.K. and U.S. are experiencing softness in the labor market, but this is offset by real wage growth, leading to low and stable delinquency rates in consumer loans [4][5] - U.K. 90-day delinquencies in cards are at 20 basis points, and mortgages at 10 basis points, indicating strong demand and stability in the mortgage market [4][5] - 84% of surveyed corporates in the U.K. express confidence in their business models and plan to invest beyond the upcoming budget [5] Financial Performance and Targets - Barclays is on track to achieve greater than 11% return on equity (ROE) for the current year and greater than 12% for the next year [8] - The company emphasizes sustainable revenue growth and disciplined capital allocation, aiming for higher and more sustainable returns [9][10] - The corporate loan loss ratio in the U.K. is low at about 7 basis points, indicating strong credit quality [6] Lending and Growth Strategies - Barclays has seen five consecutive quarters of growth in mortgages, leveraging the Kensington capability to manage loan-to-value ratios [12] - The bank acquired 1 million new customers last year, with a higher run rate this year, utilizing multiple brands to access the market [13] - The launch of a new broker platform has significantly reduced mortgage application times, enhancing customer experience [13] Deposit and NII Strategy - Deposit growth in Barclays U.K. has been stable, with expectations for meaningful net interest income (NII) progress due to structural hedges and lending [15][16] - The maturing yield is projected to be 1.5% in 2026 and 2.1% in 2027, contributing to NII growth [15] Investment Banking (IB) Performance - The IB has maintained flat risk-weighted assets (RWAs) at approximately GBP 200 billion, with a return on RWAs improving to 6.3% [18] - Financing has been a significant contributor to growth, with a target of 5% compound annual growth rate (CAGR) from 2024 to 2026 [20] - The IB has seen year-on-year growth for six consecutive quarters, indicating strong market performance [19] Cost Management and Efficiency - Barclays is focused on cost discipline, aiming for a cost-to-income ratio (CIR) of 61% for 2025 and high 50s for 2026 [40][45] - The bank is leveraging AI to improve operational efficiency, with significant reductions in time for customer service tasks [42][43] Capital Management and Distribution - Barclays aims to maintain a capital ratio of 13-14%, operating towards the upper end due to regulatory requirements [50] - The bank plans to distribute at least GBP 10 billion between 2024-2026, with a shift to quarterly buybacks reflecting confidence in capital generation [56][57] M&A Strategy - The company emphasizes a largely organic growth strategy but remains open to acquisitions that enhance capability or scale, such as the recent acquisitions of Tesco Bank and Best Egg [59][60] - Future acquisitions will focus on high-returning U.K. businesses and maintaining a balance between the investment bank and retail operations [62] Opportunities for Growth - Barclays sees significant potential in the mass affluent wealth management sector, with an estimated $600 billion in savings that could be deployed into investments [73] - The bank aims to improve its corporate lending market share, currently at 9%, compared to a deposit share of over 20% [74] Conclusion - Barclays is positioned for sustainable growth through disciplined financial management, strategic acquisitions, and a focus on enhancing customer experience across its various business lines [9][10][12][19]