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Barclays Non-Core

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Barclays Non-Core

Barclays Non-Core (BNC) was established to reduce assets and businesses that, although valuable, simply do not form part of Barclays’ future.

This run-down is having a positive financial impact by removing costs from the Group business and allowing capital to be redeployed for higher returns. We are ahead of schedule in our reduction of risk weighted assets (RWAs) and are well placed to complete the run-down by the end of 2017.

What?

BNC was established in May 2014 to identify and reduce assets which simply do not form part of Barclays’ future.

 

Who?

BNC is led by Harry Harrison and the team is based around the world, dedicated to executing on BNC’s objectives.

Why?

We want to exit non-strategic assets and businesses, so capital can be deployed for higher returns and to support innovation within our core business. Since inception, we have more than halved the size of the BNC RWAs.

How?

Each sale decision focuses not only on finding the right buyer at the right price, but considers the impact on customers, clients, colleagues and our business. Stewardship is central to how we work.

The challenge

Assets and businesses placed in BNC comprise of those that:

  • do not fit with our strategic customer franchise or our sources of competitive advantage; and
  • are resource and cost intensive, therefore dilutive to Group returns.

There are three main elements:

  • all of Europe retail;
  • parts of the Corporate bank in Europe and the Middle East; and
  • parts of the Investment Bank.

Risk weighted assets (RWAs) are a measure of a bank’s assets, adjusted for their associated risks. The measurement is in accordance with global and local regulator rules. The reduction of BNC RWAs shows continued progress towards our goal of improving Group returns.

 

One time increase

The additional businesses and assets added at Q4 2015 are planned to be exited over 2016 and 2017 and relate to the exiting of nine countries and certain product lines from the Investment Bank, Egypt and Zimbabwe businesses from Africa Banking, the Asian Wealth business from Barclays UK and the Southern European credit cards business from Barclaycard.

Given the success to date, in the 1 March 2016 strategy announcement a number of additional businesses and assets were moved into BNC, increasing the RWA total to £54bn at Q4 2015.

Continuing progress

Over the two years since inception, we have reduced BNC RWAs by more than 50% and despite the Q4 2015 increase to £54bn RWAs, our plans to fold back just £20bn RWAs into core in December 2017 remain unchanged. The RWAs will continue to be reported in their sections of principal businesses, securities and loans, and derivatives.

By keeping the things that work, and improving or removing the ones that don’t, we’ll get closer to achieving our vision for the brighter, better Barclays of the future. The run-down of BNC is a key and critical step in Barclays’ strategy and is central to the creation of the Barclays of the future.

BNC news articles

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