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Strategy

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Our Strategy

In March 2016 the new management team 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.

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, BX.

Accelerated restructuring

To achieve our strategic objectives and lay the foundations for increased stability and improved performance, we accelerated restructuring, bringing forward completion after nearly a decade of costly restructuring 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 by the end of 2017, funded by a reduction in the dividend in 2016/17, and to sell down our controlling interest in Africa within three years to a non-controlling, deconsolidated position.

These actions have:  
Significantly simplified the Group
Reduced drag from non-core assets on Group profitability
Allowed us to organically recapitalised the company without raising more capital
Laid the foundation for Barclays to drive sustainable returns in all its businesses

Diversified Transatlantic Consumer and Wholesale Bank

Move from restructuring to shareholder returns
Restructuring completed
Africa sell down completed from  66% to 14.9% Exited investment banking in nine countries
Non-Core closed Reduced headcount by 56,000
Barclays Execution Services launched 30% reduction in headcount in Investment Bank since 2013
Structural reform on track Combined corporate and investment banks
Reduced RWAs by £95bn – 80% from IB Continued to reduce costs, by £6bn since the peak in 2013
Sold > 20 businesses inc all retail ops in continental Europe Resolved material legacy conduct issues
Created new ring-fenced bank in UK Created new intermediate holding company in US

Now focused on profitability and returning capital to shareholders

In 2017 we set the following Group targets, following our successful restructuring:

Group targets
RoTE1

>9% in 2019
>10% in 2020
CET1 ratio

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

£13.6-13.9bn in 20192
Cost: income ratio <60%
Revised dividend policy
2017: 3.0p dividend
2018: 6.5p dividend

Barclays understands the importance of the ordinary dividend for our shareholders.

Barclays is therefore committed to maintaining an appropriate balance between total cash returns to shareholders, investment in the business and
maintaining a strong capital position.

Going forward, Barclays intends to pay an annual ordinary dividend that takes into account these objectives and the medium-term earnings outlook of the Group4. It is also the Board’s intention to supplement the ordinary dividends with additional returns to shareholders as and when appropriate.

1 Excluding litigation and conduct and based on a CET1 ratio of c.13% |  2 Excluding litigation and conduct |  3 Barclays anticipates paying a total cash dividend of 6.5p per share for 2018, subject to regulatory approvals |  4 In determining any proposed distributions to shareholders, the Board will take into account Barclays’ commitments to all its stakeholders, such as those made in respect of pensions, and will also consider the expectation of servicing more senior securities |

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 is built around our operating companies Barclays UK and Barclays International, supported by the new Group Service Company, 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, essential Barclays UK and Barclays International, 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. Using 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 capital 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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