2013 Annual Report

An overview of our 2013 performance, strategic direction, and the businesses underpinning our strategy.

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Highlights

How is Barclays doing?

Our journey to ‘Go-To’

Antony Jenkins and Sir David Walker review the key events in 2013 and the direction Barclays is taking.

  • 2013 has seen considerable change at Barclays. I am pleased with our progress in starting to rebuild trust, repositioning the business for the future, and strengthening our balance sheet. One year into our plan to transform Barclays into the ‘Go-To’ bank, we are in a significantly stronger position and I feel confident about our prospects. While we have more work to do to achieve this goal, I believe that we begin 2014 in a better shape than we have been for many years.
    Sir David Walker, Chairman
  • Our goal of making Barclays the ‘Go-To’ Bank for all our stakeholders is making good headway across both our financial and non-financial promises. We have taken steps to de-risk the business, strengthened the balance sheet through bold management actions, and implemented multiple initiatives to increase the efficiency of our operations. We remain convinced of our ability to deliver a Return on Equity for the Group, in excess of the Cost of Equity during 2016.
    Antony Jenkins, Group Chief Executive

Selected financial highlights

  • Adjusted total income(1)

    £28,155m

  • Gross new lending to UK households and businesses

    £88bn

  • Dividends per share

    6.5p

Strategic approach

How will we achieve our objectives?

Barclays is one year into a fundamental change of strategy and approach

The opportunity for the business

  • The landscape for banks has fundamentally changed and will continue to evolve. It is characterised by:

    1. Subdued economic growth
    2. A tough regulatory environment
    3. Higher customer and client expectations
  • This changing landscape also presents a significant opportunity:

    To build a customer and client-focused, socially useful bank that generates superior and sustainable returns over the long term.

    We call this: ‘Building the ‘Go-To’ bank’.

Building the ‘Go-To’ bank

Transform – our progress so far

Commenced in 2012, the Transform programme is the way in which we deliver our strategy.

Transform diagram
  • Turnaround

    Completed:

    • Stabilised the business
    • Delivered our new Goal, Purpose, and Values
    • Established new Executive team
    • Set Transform financial commitments
  • Return to Acceptable Numbers

    Underway:

    • Firmer financial footing
    • De-risking and de-leveraging the business
  • Sustain FORward Momentum

    Underway:

    • Embedding Goal, Purpose and Values
    • Implementing Balanced Scorecard
    • Longer-term markers set in Culture, Rewards, Control, and Cost
  • Completed:

    • Stabilised the business
    • Delivered our new Goal, Purpose, and Values
    • Established new Executive team
    • Set Transform financial commitments
  • Underway:

    • Firmer financial footing
    • De-risking and de-leveraging the business
  • Underway:

    • Embedding Goal, Purpose and Values
    • Implementing Balanced Scorecard
    • Longer-term markers set in Culture, Rewards, Control, and Cost

What risks may affect our strategy?

  • Robert Le Blanc, Chief Risk Officer

    Robert Le Blanc, Chief Risk Officer

  • 2013 focus and overview

    Barclays constantly reviews its exposures in a number of areas including asset quality, industry and geography.

    Risk was realigned in 2013 through two main programmes. Transform adjusted the risk profiles of businesses in line with their revised strategies for becoming the ‘Go-To’ bank. We also introduced the Enterprise Risk Management Framework, which sets out a cohesive approach for the whole bank, all colleagues and all types of risk.

    Future priorities

    In times of significant change and uncertainty, we continue to keep our customers and clients at the forefront of our activities, meet new regulatory requirements, and improve risk management effectiveness. Our priorities for 2014 include:

    • Providing customers and clients with faster decisions and improved support.
    • Closely managing funding and liquidity risk including redenomination risk.
    • Meeting regulatory expectations in relation to the PRA Leverage Ratio.
    • Embedding the Enterprise Risk Management
    • Continuing to manage and control impairment across the firm.
    • Continuing to enhance and strengthen our operational risk management processes.
    • Enhancing Recovery and Resolution Planning
    • Barclays constantly reviews its exposures in a number of areas including asset quality, industry and geography.

      Risk was realigned in 2013 through two main programmes. Transform adjusted the risk profiles of businesses in line with their revised strategies for becoming the ‘Go-To’ bank. We also introduced the Enterprise Risk Management Framework, which sets out a cohesive approach for the whole bank, all colleagues and all types of risk.

    • In times of significant change and uncertainty, we continue to keep our customers and clients at the forefront of our activities, meet new regulatory requirements, and improve risk management effectiveness. Our priorities for 2014 include:

      • Providing customers and clients with faster decisions and improved support.
      • Closely managing funding and liquidity risk including redenomination risk.
      • Meeting regulatory expectations in relation to the PRA Leverage Ratio.
      • Embedding the Enterprise Risk Management
      • Continuing to manage and control impairment across the firm.
      • Continuing to enhance and strengthen our operational risk management processes.
      • Enhancing Recovery and Resolution Planning

The value Barclays brings

  • Society’s need for banking

    Barclays helps to create, grow and protect wealth, benefiting individuals and societies alike.

  • How we are different

    As a globally diversified full-service universal bank, Barclays offers customers and clients an integrated set of products and services across retail banking, wealth management, commercial and investment banking.

  • The value we bring

    Meeting customer needs via exceptional people who sustainably deliver innovative, world-class products and services over the long term.

Operational overview

How are we doing?

Understanding performance and activity in our businesses

Serving all our stakeholders

Activity in our businesses

  • Adjusted
    total income(1)

    £28,155m

    Adjusted
    total income(1)

    £28,155m

Our financial results in summary

  • A demonstration of strong financial fundamentals across funding and liquidity, capital, credit risk management and margins should stand the bank in good stead for generating sustainable returns going forward.
    Tushar Morzaria, Group Finance Director

    Use our interactive charts to compare selected key financials 2009-13

  • Adjusted total income(1)

    Adjusted total income(1) (£m)

    Adjusted profit before tax(1)

    Adjusted profit before tax(1) (£m)

    Dividends per share

    Dividends per share (pence)

Governance

How are we running the business?

Rebuilding trust: setting the direction and risk appetite and providing oversight and control

Underpinning ‘Go-To’ with good Governance

  • Developments in policy and process

    Our Board Committees continued to support the delivery of strategic priorities during 2013.

    Estimating customer redress provisions, in particular PPI redress, represented a particular area of focus. We also invested time on developing our approach to Conduct Risk, establishing what it means for Barclays and how we will manage it to ensure positive outcomes for customers and clients. As the possibility of a Eurozone crisis remained, Barclays also continued to reduce its exposure to redenomination risk.

  • Barclays employees in discussion

    Activity in 2013

    The Board and its committees focused on two key areas: dealing with issues arising from conduct failings, and the ongoing implementation of Transform.

    Barclays employee at computer

    Priorities for 2014

    In 2014 we will continue our work to rebuild trust through effective governance and the ongoing implementation of our strategy to become the ‘Go-To’ bank.

  • Our Board Committees continued to support the delivery of strategic priorities during 2013.

    Estimating customer redress provisions, in particular PPI redress, represented a particular area of focus. We also invested time on developing our approach to Conduct Risk, establishing what it means for Barclays and how we will manage it to ensure positive outcomes for customers and clients. As the possibility of a Eurozone crisis remained, Barclays also continued to reduce its exposure to redenomination risk.

  • The Board and its committees focused on two key areas: dealing with issues arising from conduct failings, and the ongoing implementation of Transform.

  • In 2014 we will continue our work to rebuild trust through effective governance and the ongoing implementation of our strategy to become the ‘Go-To’ bank.

Rewarding appropriately

  • Barclays signage
  • Our aim is to deliver a greater share of the income we generate to shareholders while remaining competitive on pay.

    We remain fully committed to reducing the ratio of compensation to adjusted net operating income over time.

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