Indicate
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Indicate
by check mark whether the registrant by furnishing the
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pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
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This
Report is a joint Report on Form 6-K filed by Barclays PLC and
Barclays
Bank
PLC. All of the issued ordinary share capital of Barclays Bank PLC
is
owned
by Barclays PLC.
This
Report comprises:
Information
given to The London Stock Exchange and furnished pursuant
to
General
Instruction B to the General Instructions to Form 6-K.
EXHIBIT
INDEX
Result
of AGM dated 10 May 2017
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, each of
the registrants has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Good
morning and welcome to Barclays' 2017 Annual General Meeting.
It was a pleasure meeting some of you earlier and I look forward to
meeting more of you over lunch.
Since
we met last year, I would like to introduce two new members of the
Board.
Firstly,
Mary Francis who has extensive board level experience across a
range of industries including in the past being on the board of the
Bank of England. She also had a distinguished executive career,
including twelve years at HM Treasury and also serving in the Prime
Minister's office.
Secondly,
Sir Ian Cheshire was appointed last month both as Non-Executive
Director and also Chairman-designate of Barclays ring-fenced
bank. When formed, this will comprise our UK Retail Banking,
Business Banking, Barclaycard and Wealth Management businesses.
There has been some comment in the press regarding Sir Ian's board
commitments and his previous position as a Non-Executive Director
of Bradford & Bingley. On the former, the Prudential
Regulatory Authority limits the number of other directorships that
can be held, and we have Ian's commitment that he will, over the
coming months, adjust his commitments to be fully compliant with
this requirement. We recently issued a notice to this
effect. On the latter, Ian stood down as a Director of
Bradford & Bingley over eight years ago and since has a track
record of success as a Chief Executive Officer and Chairman.
I am delighted that he agreed to join the Board and Chair our
ring-fenced new bank.
Steve
Thieke and Diane de Saint Victor are both retiring at this AGM and
I would like to thank them sincerely for their contribution to the
Group and the Board during their tenure.
I said
in my remarks to you at the AGM last year that Barclays and indeed
the banking industry faces incredible challenges. Despite this,
together with unforeseen events such as Brexit, we have taken
significant steps over the past twelve months to bring the company
to prosperity. That said, there remains more to
do.
The
single most accretive action we are taking is to run down the
non-core portfolio, which has caused a significant erosion of
earnings and shareholder value. When instituted, the Non-Core
portfolio consisted of £110 billion of risk weighted assets,
and over the past three years it has had average pre-tax losses of
£2.8 billion per year. The action of running down this
portfolio alone will significantly improve future profitability,
and will strengthen our regulatory capital ratio.
At the
same time we are taking action to improve significantly the
profitability of our core business, and Jes will say a little more
on this subject in a few minutes.
I also
said in my remarks to you last year that as a globally systemic
bank, we are subject to increased capital and liquidity
requirements. Whilst there is further to go, our Common Equity Tier
1 Ratio, the key measure of our capital strength, has continued to
increase, rising to 12.4% at the end of 2016 from 11.4% a year
earlier. We are also working hard to try and resolve the various
historical conduct matters that still face the Group.
The
actions we took last year to strengthen the senior management team
and focus the Group on of our strategic core are beginning to
generate results. The Group is now focused on our UK retail and
small business franchise, our domestic and international credit
card businesses and our international corporate and investment
banking business centred around our major businesses and trading
hubs in London and New York.
The
bank is now smaller and more focused, and by the time we sell down
our stake in Barclays Africa, we will have exited nearly 30
countries. As a consequence of this and other
initiatives, the Group balance sheet has almost halved from over
£2 trillion assets in 2008 to £1.2 trillion at the end of
March this year and will fall further this year. Our cost
reduction programme is also showing good results with total
operating expenses falling by over £2 billion in the
year.
However,
we have much more to do. The returns from our core business,
and particularly the corporate and investment banking segments, are
short of where we need them to be. So despite the significant
uplift in market value in the past year, the group is still trading
at a 40% discount to book value. Eliminating this discount is
our number one priority near-term but not the only
one.
We also
need to complete the restructuring of the Group. A year from
today we need to have in place and operating, the ring-fenced Bank
as required by legislation. This is a highly complex and
expensive task but we are on track.
We need
to complete the sale of our remaining stake in Barclays Africa
Group Ltd.
We also
need to establish an enhanced presence inside the EU to handle our
European Union activities within the borders of the EU should this
be required as a result of the Brexit negotiations.
Contingency plans are in place for this eventuality.
We
therefore expect the restructuring of the bank will largely be
completed this year but further challenges remain. The
digital economy is evolving rapidly, which is likely to cannibalise
parts of our business system. This said, we believe we have
the best capability to take advantage of this. We need to
resolve a number of material historical legacy conduct
issues. Our technological and operating infrastructure needs
to be modernised and be cyber resilient, and we need to improve our
internal controls to avoid creating more issues in the future. We
also face an uncertain economic picture in the UK and the EU as a
result of Brexit.
I
believe we are up to the challenge, and am genuinely pleased by the
progress we have made over the last twelve months and confident we
will achieve satisfactorily the turnaround in the performance and
value of the Group.
I am
very conscious that we reduced the dividend last year. I do
appreciate the importance of sustainable dividend payments and can
see the time coming when we will have the capital strength and
earnings performance to raise the dividend. We will of course
update shareholders as soon as we can on dividend policy going
forward.
In
conclusion, my aim, as I stated last year, is to achieve a clean
and prosperous 2018 and beyond. I remain very confident of
this. Despite a few remaining dark patches, the light at the
end of the tunnel gets brighter with each step.
Let me
now hand over to the Chief Executive.
Chief Executive's 2017 AGM statement
Thank
you John, and good morning everyone.
I'm
pleased to be here today at my second AGM as Chief Executive of
your bank, and to have had the opportunity to meet some of you
personally before the meeting.
Before
I update shareholders on the performance of your company, I wanted
to take a moment to talk about the Board's recent announcement
regarding whistleblowing.
As you
know, this matter is currently subject to regulatory investigation,
and that means I am necessarily limited in what I can say about
it.
However,
I feel it is important that I acknowledge to you - our shareholders
- that I made a mistake in becoming involved in an issue which I
should have left to the business to deal with.
I have
apologised to the Board, and I would today like to apologise to you
as well, for that error.
Turning
now to the performance of your company.
Just
over a year ago, when I last spoke to this audience, I set out our
intention to accelerate the restructuring of Barclays; to refocus
our company as a transatlantic consumer, corporate, and investment
bank, anchored in the two financial capitals of the world, London
and New York.
To
achieve that, we announced a series of strategic actions
including:
●
the
reorganisation of our business into Barclays UK and Barclays
International;
●
the
renewal of our commitment to operate a leading global corporate and
investment bank;
●
the
reduction of our stake in Barclays Africa, over time, to a
non-consolidated level;
●
and,
lastly, the acceleration of the rundown of our Non-Core
Unit.
I
talked to you last April about the importance of finally finishing
the job of restructuring Barclays - setting out clearly what the
end-state of this business would look like, getting there as
quickly as possible, and thereby creating the ability to deliver
the returns shareholders rightly deserve.
As I
said then, you have been patient long enough on that
account.
I am
pleased therefore to report that we have made strong progress over
the past year on our strategy.
Looking
at our most recent Quarter, which we reported on the 28th of April, you can
see the clearest evidence so far of what your company is capable of
once the work of restructuring is done. We can deliver high quality
returns, and on a sustainable basis.
Our
Core businesses continue to produce improving
performance.
Together,
they delivered a combined Return on Tangible Equity of 11% in the
first quarter of 2017.
Within
that, Barclays UK produced another typically strong result, with an
impressive and increased Return on Tangible Equity of
21.6%.
Of
course, we continue to back the British economy, as you would want
us to.
From
January to March we lent some £4.5 billion in new mortgages to
families up and down the United Kingdom, including helping over
three and a half thousand first time buyers to get on the property
ladder.
The
number of loans which small and medium sized businesses accessed
through our digital channels doubled in the first quarter, as we
lent some £800 million to enterprises across the
country.
We are
particularly proud to have supported over 21,000 start-up ventures
in the first quarter - that's the equivalent of Barclays helping
235 fledgling companies in this country every day.
Nearly
£58 billion of transactions for UK merchants were processed
through our Barclaycard Payment Solutions system in the quarter,
that's up 11% on the comparable period last year.
And we
were also delighted to announce in April, the creation of nearly
750 new jobs in our operations and technology centres in Radbroke,
Northampton and Glasgow, alongside a further 250 roles looking
after customers and clients around the country.
These
are the first steps in a programme which will see Barclays create
2,000 new jobs in the United Kingdom over the next three years.
This is part of a conscious decision to shift the mix of our
work-force in operations and technology away from contractors and
other temporary staff, towards full time Barclays
employees.
We're
doing this because we believe that technology must be a core
competency of any global financial institution, and we intend to be
a leader in the industry. These new colleagues will help us in that
effort and I look forward to welcoming them to the
company.
Barclays'
commitment to supporting United Kingdom consumers, businesses, and
the economy more broadly remains resolute, as it has since the
Brexit vote of last June - and I know everyone in this room will
want us to continue to do so.
Finally
on Barclays UK, this quarter also saw us secure a banking licence
for that entity. This is an important milestone as we prepare for
the stand-up of our ring-fenced bank here in the second Quarter of
next year.
Barclays
International is also doing quite well, producing an increased
Return on Tangible Equity of 12.5% in the first Quarter of this
year.
Within
that division, our Consumer, Cards and Payments business remains a
growth engine for the Group, producing another very strong
performance.
The
Corporate & Investment Bank's Return on Tangible Equity of 8.2%
represents a year on year improvement. But the Corporate &
Investment Bank is still not where we need it to be in terms of
profitability.
In
Banking, we did see continued market share gains across Mergers
& Acquisitions, Debt Capital Markets, and Equity Capital
Markets.
In the
Markets business we held share. But we didn't do quite as well as
we would have liked, particularly in US rates trading - and that
did dent performance on a dollar basis.
While
we are progressing then, we still have a lot more work to do, and
we are already implementing plans to further strengthen
performance. We look forward to seeing the fruits of that work in
quarters and years to come.
While
on the subject of the Investment Bank, I want to briefly touch on
the question of 'passporting' and how the Brexit vote might affect
our European operations, because I know that is of interest to
shareholders.
The
first thing to say is that we see this as a wholly manageable
challenge.
Our
investment banking activities in Europe are certainly important to
Barclays, and to our strategy, and we are committed to remaining a
strong participant in that marketplace.
To be
clear, we believe the development of a single market for financial
services in Europe, with the full participation of banks based in
the UK, remains the best option for the UK economy and the best
option for the European Union economy.
Nevertheless,
we recognise that there are a range of possible outcomes of the
negotiations in the next 23 months, and we have looked closely at
our options as to what we would do in various scenarios. We are
confident that we have multiple choices for how we might continue
to serve our customers and clients regardless of the
outcome.
But I
have to say that compared to the complexity of standing up our US
Intermediate Holding Company, as we did on July 1st of last year, let
alone establishing a ring-fenced bank in the UK from scratch, as we
are currently doing, any of the options we might need to pursue are
by comparison straightforward, and significantly less
costly.
Finally,
we do not currently see a need in our options to shift British jobs
or significant operations elsewhere. If we require a build-up of
capability in another European Union jurisdiction as part of our
plans then we can do so, and we will.
In
aggregate then, the good Core performance across both of our
divisions - Barclays UK and Barclays International - demonstrates
once again the quality of the earnings power of the Group, and the
value in the diversification we have built into our
model.
But of
course, as I have said repeatedly since I became Group CEO, the key
to you, our shareholders, fully benefitting from that Core strength
lies in minimising the drag produced by Barclays' Non-Core assets.
And that is why the acceleration of that objective has been so
central to our strategy.
The
good news is that Non-Core closure is now less than two months
away.
Our
most recent results showed that Risk Weighted Assets in the unit
are down by a further £5 billion, and now are very close to
our anticipated exit target of some £25
billion.
Importantly,
we are seeing materially lower losses before tax versus last year,
as the drag from Non-Core is so much smaller.
The
team in Non-Core continues to stay focused on their strategically
critical work.
It is a
remarkable feat to think that in the period since we began the
accelerated run down of the Unit - the first Quarter of 2016 - we
have halved the Risk Weighted Assets in Non-Core, completed the
sales of 15 businesses, disposed of billions of pounds in
derivatives, and closed operations in nine countries.
We will
continue to eliminate the remaining assets following the Unit's
closure, but after the 30th of June we will
have made such progress that operating a separate unit, or treating
any residual drag as an exceptional item, is no longer
warranted.
And if
you want to see the clearest demonstration to date of the benefit
of all of that effort for Barclays as a company, then you only need
to look at the relative Returns on Tangible Equity for our Core,
and for the Group, in this last quarter.
In
March of last year I made the convergence of Group Return on
Tangible Equity with our Core Return on Tangible Equity a central
objective of our strategy. A year ago the gap between those two
numbers was over 6%.
Today,
if you look through the one-off goodwill write down we booked in
relation to the Africa disposal at Q1, that gap is just 2%: an 11%
Return on Tangible Equity in Core, versus 9% for the Group,
including Non-Core.
The
achievement of that convergence is crucial, and it is the most
important indicator that our strategy is working.
It is a
product of the restructuring of the bank we have been engaged on
for the past 16 months, and which we plan to complete this
year.
Now
turning to Africa, where we are on track for our exit.
As I
said in February at our full year results, we have reached an
agreement with the local management of Barclays Africa on the terms
of separation between our two businesses, which is an essential
step in order to proceed with the next stage of our sell down
toward regulatory deconsolidation.
This
agreement is now with the relevant regulators as part of our formal
request for permission to reduce our position to its end-state
level. We remain engaged with officials in South Africa and
elsewhere as we work through the details of that approval
process.
Following
their approval we will be free to proceed with our sell down within
the timeframe previously indicated.
Costs
are well under control.
We
printed a Group cost to income ratio of 62% for the quarter, a
figure which is also converging well with our current Core cost to
income ratio of 59%.
This is
driven largely by the elimination of costs within Non-Core, but
also by positive jaws in the Core. We remain on track to deliver on
our commitment of having a Group cost to income ratio of below 60%
over time.
This is
an important driver of overall returns and that is why we pay such
attention to it.
I am
also pleased to report that Barclays' Capital position has never
been stronger.
We
posted a Core Equity Tier 1 ratio of 12.5% at the first Quarter,
and that was after we had taken actions such as paying for the
retirement of very expensive capital instruments we had issued
during the financial crisis.
At the
appropriate time we will of course update you, our shareholders,
and the market, on our approach to investing and distributing the
sustainable ongoing excess capital we will generate as a
business.
I want
to be clear - as I was when we met last year - that we are
determined to get the dividend up to the level you deserve at the
earliest opportunity, and as a management team we will not rest
until that is achieved.
There
remain some significant headwinds to be dealt with, particularly in
the resolution of some outstanding legacy conduct matters, and I
don't want to minimise or ignore those.
But,
what is in our complete control is the execution of our strategy,
and that is going well.
Our
Core businesses continue to produce improving
performance.
Non-Core
closure is now less than two months away.
Exiting
Africa is on track.
Costs
are well under control.
And our
capital position has never been stronger.
Consequently,
I feel optimistic about our prospects as a business, and I look
forward to the now close day when we can declare our restructuring
complete, and emerge as a simplified Transatlantic Consumer,
Corporate and Investment Bank, capable of generating the returns
which you, our shareholders, deserve.
Thank
you for your time, for your continued support in my role as CEO of
this iconic British company, and I look forward to any questions
you may have.
- Ends -
For further information, please
contact:
Investor
Relations
Media
Relations
Kathryn
McLeland
Tom
Hoskin
+44 (0)
20 7116 4943
+44
(0) 20 7116 4755
About Barclays
Barclays
is a transatlantic consumer, corporate and investment bank offering
products and services across personal, corporate and investment
banking, credit cards and wealth management, with a strong presence
in our two home markets of the UK and the US.
With
over 325 years of history and expertise in banking, Barclays
operates in over 40 countries and employs approximately 120,000
people. Barclays moves, lends, invests and protects money for
customers and clients worldwide.
For
further information about Barclays, please visit our website
home.barclays
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Entity Identifier Code
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