-

Our goal

Is to become the bank of choice for our clients, customers, colleagues and our stakeholders

Achieving this will enable us to build a lower-risk, better performing bank

Our purpose

Is to help people achieve their ambitions
in the right way

Individuals, corporations, countries and society need access to essential banking services

 

 

Review of the year: Significant progress in 2014

I am encouraged by the significant progress we have made in 2014. We've improved financial performance, we've strengthened our capital ratios and we've continued to drive down costs.

Tushar Morzaria

Barclays Group Finance Director

With a focus on our stakeholders, we will achieve our goal of becoming bank of choice

Our outcome statements help us focus on what becoming a bank of choice means for all of our stakeholders

Barclays 5cs Customer Client colleague citizenship conduct company

Customer and Client

We are the bank of choice for our customers and clients.

Colleague

Our colleagues are fully engaged. We create a diverse and inclusive environment where they can fulfil their potential.

Citizenship

We have a positive impact on the communities in which we operate.

Conduct

Our products and services are designed and distributed to meet our clients' needs. We act with integrity in everything we do.

Company

We create sustainable returns above the cost of equity. We understand and effectively manage risk, and continuously improve control.

More information on this can be found on home.barclays

Operating environment and approach to risk

We continue to be proactive in adapting to the external environment

Economic-environment
Regulatory-change
Technology-and-rising-expectations
Trust-and-conduct

A proactive approach

We continually take action to achieve our goal and deliver value to shareholders.  Proactive management of our Principal Risks ensures we are addressing the external factors that impact our operating environment.

Credit Risk: Financial loss should customers not fulfil contractual obligations to the Group.

Market Risk: Earnings or capital impact due to volatility of trading book positions or inability to hedge the banking book balance sheet.

Funding Risk: Failure to maintain capital ratios and liquidity obligations leading to inability to support normal business activity and meet liquidity regulatory requirements.

Our Principal Risks

Achieving this will enable us to build a lower-risk, better performing bank

Operational Risk: Losses or costs resulting from human factors, inadequate internal processes and systems or external events.

Conduct Risk: Detriment caused to our customers, clients, counterparties, or the Bank and its employees through inappropriate judgement in execution of business activities.

Reputation Risk: Damage to Barclays brand arising from any association, action or inaction perceived by stakeholders as inappropriate or unethical. From 1st January 2015, Reputation Risk will be combined with Conduct Risk.

Our approach to value creation is consistent

Delivering our obligations to shareholders while meeting society’s needs in a responsible manner

Our approach delivers broader economic benefits and a more valuable service to our stakeholders in the unique way we do businessSuperior service for customers and clients globally

  • Superior service for customers and clients globally
  • Challenging, meaningful and fulfilling careers for our people in a values-driven organisation
  • Long-term sustainable returns for our investors, based on diversification of income streams and risk
  • Employment and economic growth in the economies in which we operate
  • Engagement with governments and society to address social issues and needs
Our approach

Strategy

Our strategy remains on course: to build a stronger, fitter, better bank

Our Transform programme was launched in 2013 to deliver our strategy of reshaping Barclays to generate sustainable returns and to meet the needs of all our stakeholders.

Our Transform programme

Taking decisive action: proactive steps to adjust our strategy

The combined effect of external factors impacting our operating environment led to decisive action in three areas announced on 8th May 2014

Identify core activities

Building further on our strengths by concentrating resources on our Core activities. Transform how we interact with customers and the experience we can deliver to them in our retail and corporate businesses, and shift our Investment Bank to be more driven by clients’ origination needs, bringing greater balance to Barclays. 

Invest for growth

A focus on Core parts of the Group where we see major opportunities – Barclaycard and Africa. We are commited to leading innovation in consumer payments; technology should enable us to achieve growth by reaching more customers. With 8.6m new customers in the last 3 years at Barclaycard, we’ll generate efficiencies and economies of scale through selective acquisition. 

Free up resources

Assets and activities no longer of strategic value, given structural shifts in the operating environment or their sub-scale nature, have been brought together within Barclays Non-Core, to be managed separately for capital efficient, yet rapid exit.  

Reshaping the business

With a focus on running down Non-Core operations to provide investment for the Core growth businesses

2013 Total Risk weighted assets (RWAs):
£440bn

2016 Total Target RWAs:
c.£400bn

total-risk-weighted-assets
Total-target-RWAs
 
Barclays PLC Group has been repositioned, simplified and rebalanced

Our 2016 targets

We have set 2016 Transform targets to demonstrate our commitment towards our ultimate goal

Barclays Group

Capital
CRD IV Fully loaded CET1 ratio >11%

Leverage
Leverage ratio >4.0%

Dividend
Payout ratio 40-50%

Barclays Core

Returns
Adjusted Return on Equity >12%

Cost
Adjusted operating expenses <£14.5bn

Barclays Non-Core (BNC)

Returns
Drag on adjusted RoE <(3%)

Our businesses

Barclays group business structure

Reorganised to a simpler, more focused, more balanced and much stronger business structure

  • Overview
    Contribution-to-total-income

    Adjusted total income

    £25,728m

    Adjusted profit before tax

    £5,502m

    Dividends per share

    6.5p

  • PCB

    Personal and Corporate Banking

    Ashok Vashwami

    We are succeeding by putting our customers and clients at the centre of everything we do and by continuing to do this we will become the partner of choice for the UK ecosystem.

    Ashok Vaswani

    Chief Executive, Personal and Corporate Banking

    What we do

    Personal and Corporate Banking (PCB) is a powerhouse with the potential to challenge the traditional UK banking landscape.
     

    • Personal Banking: provision of simple and transparent banking products to c.14m customers, with a focus on transforming customer interactions through automating routine transactions and humanising important moments
    • Mortgages: a single, highly automated, industrial strength engine to provide mortgage services to over 1.5m individuals
    • Corporate Banking: an end-to-end proposition and service continuum that supports nearly one million clients, from start-ups and small businesses, through FTSE100 companies, to partnering with the largest global corporations
    • Wealth: a differentiated wealth and investment management business for 35k high net worth and ultra-high net worth client focused on the UK ecosystem.
  • Barclaycard

    Barclaycard is a top 10 consumer payments provider globally. In a business where winning is dependent on scale, innovation, analytics and risk management, we have strength across the board.

    Valerie Soranno Keating

    Chief Executive, Barclaycard

    What we do

    • Barclaycard is a leading consumer payments business offering a broad array of products and services to consumers and merchants.
    • Operating across multiple geographies and distribution channels, Barclaycard is one of the few consumer payments businesses that is able to serve both buyers and sellers.
    • Our sector-leading solutions enable consumers and businesses to transact in the way they want, connecting the two in a way which adds value to both.
    • As consumers and businesses adopt more secure digital and online solutions, we continue to lead and innovate.
    • By providing simple solutions that offer clear value, work reliably and create emotional engagement we can become the ‘Go-To’ bank for consumer payments.
  • Africa Banking
    Maria Ramos

    Africa Banking is uniquely placed to promote economic development as we bring expertise and clients to Africa, and provide African customers with access to global markets.

    Maria Ramos

    Chief Executive, Africa Banking

    What we do

    • Africa Banking is a diversified, full-service financial services provider.
    • We offer an integrated set of products and services across retail and business banking, credit cards and insurance, corporate and investment banking and wealth management to 12 million customers in Africa.
    • With our long-standing presence in 12 African markets and integration with Barclays Group globally, we offer deep local knowledge and presence, combined with the expertise and support of a global bank.
    • We translate this competitive advantage into tangible benefits for our customers and clients and in doing so aim to become the bank of choice in Africa.
    • By helping our customers and clients achieve their ambitions we play a key role in empowering and developing Africa.
  • Investment Bank
    Thomas King

    From our unique position with dual home markets and truly global reach, we are transforming the Investment Bank so that we can continue to help our target clients achieve their ambitions.

    Thomas King

    Chief Executive, Investment Bank

    What we do

    • The Investment Bank is a leading provider of advice, financing and risk management solutions to companies, governments and institutions worldwide.
    • We enable the movement of capital between those who need it and those looking to generate a return on investment.
    • In doing so we fund and facilitate global economic growth, helping millions of people to achieve their ambitions.
    • Our business is split into three core areas: markets, banking and research.
    • We provide Barclays with a diversity of income and risk, and deliver market execution services for customers and clients within other parts of the Group.
  • Non-Core
    Thomas King

    Barclays Non-Core is responsible for the divestment of Barclays non-strategic assets and businesses.

    What we do

    • Barclays Non-Core (BNC) brings together businesses and assets that do not fit our client strategy, remain sub-scale with limited growth opportunities, or are challenged by the regulatory capital environment.
    • Non-Core assets comprise three main elements: principal businesses, securities and loans, and derivatives.
    • Several of the businesses managed within BNC are profitable and will be attractive to other owners.
    • All of BNC will be exited over time, through sale or run-off, reducing the capital and cost base, helping improve Group returns and delivering shareholder value.

Performance

Our Balanced Scorecard

Measures progress and performance against our goal

  • Overview

    Stakeholders and metrics

    We have agreed eight key measures categorised into the 5Cs against which our stakeholders can hold us to account. We are committed to monitoring and reporting on our progress annually. 

    Stakeholders and metrics

    Metric

    Actual 2013

    Actual 2014

    Target 2018

    Customer & Client

    PCB, Barclaycard and Africa Banking weighted average ranking of Relationship Net Promoter Score© (NPS) vs. peer sets

    3rda

    4th

    1st

    Customer & Client

    Client Franchise Rank: Weighted average ranking of wallet share or customer satisfaction with priority clients in the Investment Bank

    N/A

    5th

    Top 3

    Colleagues

    Sustained engagement of colleagues score

    74%

    72%

    87-91%

    Colleagues

    % women in senior leadership

    21%

    22%

    26%

    Citizenship

    Citizenship Plan - initiatives on track or ahead

    10/11

    11/11

    Plan targets

    Conduct

    Conduct Reputation (YouGov survey)

    5.2/10

    5.3/10

    6.5/10

    Company

    Adjusted Return on Equity

    4.1%b

    5.1%

    >Cost of equity

    Company

    Fully loaded CRD IV CET1 ratio

    9.3%c

    10.3%

    >11%d

    Notes
    a Revised due to creation of PCB as part of the May 2014 Strategy Update. Corporate clients now contribute to the NPS metric, and no longer contribute to the Client Franchise
    Rank.
    b Revised from 4.5%, post the Q213 £259m gain relating to assets not yet received from the US Lehman acquisition being treated as an adjusting item.
    c Revised from 9.3%, post full implementation for CRD IV reporting in 2014.
    d Revised from >10.5% following the Strategy Update.

    Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.  Under the Companies Act 2006, we are also required to report on the gender breakdown of our employees and ‘senior managers’. Of our global workforce of 132,300 (65,200 male, 67,100 female), 732 were senior managers (596 male, 136 female), which include Oficers of the Group, certain direct reports of the Chief Executive, heads of major business units, certain senior managing directors and directors on the boards of undertakings of the Group, but exclude individuals who sit as directors on the board of the Company.

  • Customer & Client

    For our Customers and Clients

    We aim to be the bank of choice.

    Customer & Client

    Metric

    Actual 2013

    Actual 2014

    Target 2018

    PCB, Barclaycard and Africa Banking weighted average ranking of Relationship Net Promoter Score© (NPS) vs. peer sets

    3rda

    4th

    1st

    Client Franchise Rank: Weighted average ranking of wallet share or customer satisfaction with priority clients in the Investment Bank

    N/A

    5th

    Top 3

    Notes
    a Revised due to the creation of PCB as part of the May 2014 Strategy Update. Corporate clients now contribute to the NPS metric, and no longer contribute to the Client Franchise Rank

    Fired up team beats blaze in Kenya

    Within three days of a fire destroying the Barclays branch at Jomo Kenyatta International Airport in Nairobi, the local team had set up a temporary branch - in a tent.  A shining example of putting customers first.

    Read further case studies of Barclays 5Cs in action

    Our-Customers-and-Clients
  • Colleague

    For our Colleagues

    We create an environment where they can fulfil their potential.

    For our Customers and Clients

    Metric

    Actual 2013

    Actual 2014

    Target 2018

    Sustained engagement of colleagues score

    74%

    72%

    87-91%

    % women in senior leadership

    21%

    22%

    26%

    The campaign to challenge cultural silence

    The 'This is me' campaign, launched in May 2014, has given colleagues the freedom to talk about mental health and their personal story, and created access to resources, support, advice and information. 

    Read further case studies of Barclays 5Cs in action

    Our-Colleagues
  • Citizenship

    For Citizenship

    We have a positive impact on the communities in which we operate.

    For our Customers and Clients

    Metric

    Actual 2013

    Actual 2014

    Target 2018

    Citizenship Plan - initiatives on track or ahead

    10/11

    11/11

    Plan targets

    Helping invest $34 trillion more sustainably

    Over 1000 investors, with over $34 trillion in assets, have signed up to the UN Principles of Responsible Investment. These principles aim to encourage investors to invest in a socially-responsible manner.

    Read further case studies of Barclays 5Cs in action

    Citizenship-image
  • Conduct

    For Conduct

    We aim to act with integrity in everything we do.

    For our Customers and Clients

    Metric

    Actual 2013

    Actual 2014

    Target 2018

    Conduct Reputation (YouGov survey)

    5.2/10

    5.3/10

    6.5/10

    An extra pair of eyes keeps client emails safe

    Protecting our clients' money and financial information, we can't be 'too careful'. We have even introduced an automated email checker to identify the potential risk of even a single misplaced click.

    Read further case studies of Barclays 5Cs in action

    For our Conduct it means
  • Company

    For our Company

    We seek to effectively manage risk and create sustainable returns.

    For our Customers and Clients

    Metric

    Actual 2013

    Actual 2014

    Target 2018

    Adjusted Return on Equity

    4.1%b

    5.1%

    >Cost of equity

    Fully Loaded CRD IV CET1 ratio

    9.1%c

    10.3%

    >11%d

    Notes

    b Revised from 4.5%, post the Q213 £259m gain relating to assets not yet received from the US Lehman acquisition being treated as an adjusting item.

    c Revised from 9.3%, post full implementation for CRD IV reporting in 2014.

    d Revised from >10.5% following the Strategy Update.

    Pushpak: so innovative we’re pursuing a global patent

    We developed an automated system to test new apps across hundreds of handsets that ensures our mobile innovations are in our customers’ hands quickly and reliably.

    Read further case studies of Barclays 5Cs in action

    For our Company

Your Board has set a clear priority

The Board sets direction and provides oversight and control, acting as an independent check and balance to the Executive team, whose responsibility it is to run the business. Our role is to:

Economic growth
Regulatory change
Monitoring performance
Risk management

Remuneration

Implementing fair and appropriate financial reward

Remuneration for executive Directors continues to be tied closely to our strategy and performance

  • Exec Directors

    The table shows a single total figure for 2014 remuneration in respect of qualifying service for each executive Director.

    Read the full remuneration report in the Annual Report (PDF 4.9MB)

    Exec Directors

    2015 (£000)

    Salary

    Role Based Pay

    Taxable benefits

    Annual bonus

    LTIP

    Pension

    Total

    Antony Jenkins

    1,100

    950

    100

    1,100

    1,854

    363

    5,467

    Tushar Morzaria

    800

    750

    95

    900

    -

    200

    2,745

  • Chairman and Non-exec Directors

    Remuneration for non-executive Directors reflects their responsibility and time commitment and the level of fees paid to non-executive Directors of comparable major UK companies.

    Chairman

    Exec Directors

    2014 (£000)

    Fees

    Benefits

    Total

    Notes

    Sir David Walker

    750

    598

    598

    John McFarlane joined the Board as a non-executive Director with effect from 1 January 2015 and as Chairman from 24 April 2015. The total includes non-executive Director fees of £78,000 for the period from 1 January 2015 to 24 April 2015

    Non-executive Directors

    Exec Directors

    2014 (£000)

    Fees

    Benefits

    Notes

    Mike Ashleya  

    213

    -

    213

    Tim Breedon 

    240

    -

    240

    Fulvio Contib

    37

    -

    37

    Simon Fraserc

    47

    -

    47

    Crawford Gilliesd

    91

    -

    91

    Reuben Jeffery III

    160

    -

    160

    Wendy Lucas-Bull

    105

    -

    105

    Dambisa Moyo 

    151

    -

    151

    Frits van Paasschenf 

    80

    -

    80

    Sir Michael Rake

    250

    -

    250

    Diane de Saint Victorg

    135

    -

    135

    Sir John Sunderland

    190

    -

    190

    Steve Thiekeh

    131

    -

    131

    David Boothi

    -

    -

    -

    Sir Andrew Likiermanj

    -

    -

    -

    Non-executive directors are reimbursed expenses that are incurred for business reasons. Any tax that arises on these reimbursed expenses is paid by Barclays.nThe Chairman is provided with private medical cover and the use of a company vehicle and driver when required for business purposes.

    Notes
    a Mike Ashley joined the Board as a non-executive Director with effect from 18 September 2013.
    b Fulvio Conti retired from the Board as a non-executive Director with effect from 24 April 2014.
    c Simon Fraser retired from the Board as a non-executive Director with effect from 24 April 2014.
    d Crawford Gillies joined the Board as a non-executive Director with effect from 1 May 2014.
    e Wendy Lucas-Bull joined the Board as a non-executive Director with effect from 19 September 2013.
    f Frits van Paasschen joined the Board as a non-executive Director with effect from 1 August 2013.
    g Diane de Saint Victor joined the Board as a non-executive Director with effect from 1 March 2013.
    h Steve Thieke joined the Board as a non-executive Director with effect from 7 January 2014.
    i David Booth retired from the Board as a non-executive Director with effect from 31 December 2013.
    j Sir Andrew Likierman retired from the Board as a non-executive Director with effect from 25 April 2013