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Strategy

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Our Strategy

In March 2016 we set out our strategy: to build on our strength as a transatlantic consumer and wholesale bank, anchored in our two home markets of the UK and US, with global reach.

Barclays PLC
Barclays UK Barclays International
UK consumer business bank differentiated by scale and digital innovation Diversified wholesale and consumer bank
Personal Banking Barclaycard Consumer UK Wealth, Entrepreneurs & Business Banking Corporate & Investment Bank (CIB) Consumer, Cards & Payments
UK ring-fenced Bank Non-ring-fenced Bank
Barclays Execution Services (BX)
Enabling world-class services for our customers and clients while driving efficiency and operational leverage

Our two operating divisions, Barclays UK and Barclays International, provide diversification across business lines and geographies, reducing volatility of income and earnings, and delivering consistent and sustainable returns through the economic cycle. They are supported by a single service company, Barclays Execution Services (BX).

Accelerated restructuring

To reach our strategic objectives and achieve increased stability and improved performance, we accelerated restructuring, bringing forward completion so we could begin to generate attractive and distributable returns, with strong growth potential for the future.

We set stretching targets to complete the run-down of Barclays Non-Core to <£25bn RWAs by the end of 2017, funded by a reduction in the dividend in 2016/17, and to sell down our controlling interest in Barclays Africa Group Limited within three years to a non-controlling, deconsolidated position.

Non-core disposals radically reduced the size of the Investment Bank (£bn)

1 Dec-13 RWAs are on a pre-restatement basis i.e. excluding c.£8bn of RWAs added to Non-Core in Q116

Strategic actions completed by 2018

Africa sell down completed from 66% to 14.9% Reduced headcount by 56,000
Non-Core unit closed, June 2017 30% reduction in headcount in Investment Bank since 2013
Reduced RWAs by £95bn – 80% from IB Combined Corporate and Investment Banks
Sold > 20 businesses inc all retail in continental Europe Continued to reduce costs, down £6bn since the peak in 2013
Created new ring-fenced bank in UK Resolved material legacy conduct issues
Barclays Execution Services (BX) launched Created new Intermediate Holding Company in US
Exited investment banking in nine countries Reduced our end-state CET 1 Capital range

Now focused on profitability and returning capital to shareholders

These actions have significantly simplified the group and reduced drag from Non-Core assets on Group profitability. This has allowed us to organically recapitalise the company without raising more capital, laying the foundation for Barclays to drive sustainable returns in all businesses and returning a greater proportion of earnings to shareholders, starting with restoring the 2018 dividend to 6.5p.

In 2017 we set the following Group targets:

Group targets
RoTE1

>9% in 2019
>10% in 2020
CET 1 ratio

c.13%
150-200 bps above regulatory minimum level
Costs

£13.6-13.9bn in 20192
Cost: income ratio <60% over time

1 Excluding litigation and conduct and based on a CET1 ratio of c.13% |  2 Excluding litigation and conduct

Delivering the Barclays of the future

With restructuring complete and the right model in place, our focus is now on building the Barclays of the future which will deliver sustained attractive returns for shareholders.

Barclays of the future comprises our operating companies Barclays UK and Barclays International, supported by the new group service company, Barclays Execution Services (BX).

BX changes the way Barclays operates and means we can permanently reduce the cost base, achieving a cost:income ratio of <60% over time. It is simplifying and standardising processes and removing duplication, enabling the delivery of world class services to customers and clients through a more standardised global operating model.

That greater operating efficiency will allow us to grow earnings while investing for growth in our operating businesses, with targeted spending which supports growth in areas such as technology, and targeted investment in businesses offering higher returns.

In Barclays UK, where we already have a strong digital proposition with Barclays Mobile Banking, we have a clear opportunity to use technology to deliver deeper customer relationships by transforming the way we interact with customers and harnessing data to give customers greater control and choice.

In Barclays International, technology is one of three drivers for revenue growth, alongside investing in talent and allocating resources where we see the most attractive risk-adjusted returns and opportunities to expand our market share. We are rebuilding our technology platforms to grow market share and assert our position as market-leader for client execution.

In Consumer Cards and Payments, our geographic and business diversification presents significant opportunities to leverage our extensive experience and expertise in UK retail banking, cards and payments to grow our market share in the US. On the consumer side, mobile payment solutions offer opportunities for growth in the UK. In the US, we see opportunity to build on our position of 9th largest credit card issuer, as our targeted partnership model drives continued growth, assisted by strong Corporate and Investment Bank client relationships. We are investing in our US consumer banking proposition, where we have a growing, own-brand and prime-focused digital banking offering.

As we make progress with our strategy, you can follow our stories here:

Investing in Technology for the Investment Bank

An interview with John O'Callaghan, Rates and James Hassett, FX

 

Growing our US Cards Market

An interview with Barry Rodrigues, CEO Barclaycard International

 

Investing in Blockchain Technology

An interview with Lee Braine

 

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