Sentiment Score: -13

Sentiment Change: -47

Want to dig deeper on Barclays PLC and thousands of companies?

Rapidly search an extensive universe of public and private content — earnings transcripts, company filings, equity research, trade journals, and more.

Request a Free Trial

Companies by industry

Aerospace & Defense Automobile Components Automobiles Banks Beverages Biotechnology Broadline Retail Capital Markets Chemicals Communications Equipment Consumer Finance Consumer Staples Distribution & Retail Containers & Packaging Electric Utilities Electronic Equipment, Instruments & Components Energy Equipment & Services Entertainment Financial Services Food Products Ground Transportation Health Care Equipment & Supplies Health Care Providers & Services Hotels, Restaurants & Leisure Household Durables Household Products IT Services Industrial Conglomerates Industrial REITs Insurance Interactive Media & Services Life Sciences Tools & Services Machinery Media Metals & Mining Multi-Utilities Oil, Gas & Consumable Fuels Personal Care Products Pharmaceuticals Semiconductors & Semiconductor Equipment Software Specialized REITs Specialty Retail Technology Hardware, Storage & Peripherals Textiles, Apparel & Luxury Goods Tobacco Wireless Telecommunication Services

Barclays PLC Earnings - Analysis & Highlights for Q4 2024

Overview

PositivesNegativesOutlook

NII from the hedge increased £1.1 billion during the year to £4.7 billion.
The mortgage market looks pretty robust.
The balance sheet continues to be strong.

Q4 2024 Earnings Call - Fixed Income

The loan loss rate in the US Consumer Bank is expected to be similar to 2024, including the lagged effect of higher delinquencies in the past 12 to 18 months and the anticipated day 1 effect of bringing the General Motors partnership onboard in Q3 2025.
The swap rate component shows the impact of rolling the hedge onto lower rates, which compounds over time, while the base rate component mainly reflects the impact of the timing lag between base rate cuts and changes in customer rates in year one.
Spending is still lagging inflation in Private Banking and Wealth.
The shape of the yield curve means that one-year fixed rates may look less attractive optically.

Q4 2024 Earnings Call - Fixed Income

The company expects to operate towards the upper half of the CET1 target range, which is around 13.5%.
The company aims to qualify as single A composite across all indices for Barclays PLC senior.
The company expects to improve the group cost to income ratio to circa 61%.
The company remains well-capitalized, ending the year with a CET1 ratio of 13.6%, within the 13% to 14% target range.

Q4 2024 Earnings Call - Fixed Income

Q&A Highlights from Barclays PLC Earnings Call Q4 2024

Analyst asked about the reasons behind the 50% target for the Investment Bank and why the company would not be more aggressively looking to allocate capital elsewhere.
- The company believes that the IB at the same level as group, which is greater than 12%, is at the lowest end of group, but it's not its expected final destination. The company thinks there's still more to go on capital utilization and many of the areas that they are looking at are capital-light in growth terms. They also believe that the UK businesses can grow the UK Corporate Bank, Private Banking, and Wealth into 2026 and beyond, and the IB is generating capital for the company to either distribute or invest in the UK.
Analyst asked about the CET1 benefit the company gets from SRTs and under what circumstances the capital benefit could disappear suddenly.
- The company gives the notional that is subject to protection, which is £57 billion. The company doesn't give the RWAs or capital associated with that. They believe that there's a risk of a sudden loss of capital treatment for these instruments. The company thinks they've made good progress in reducing the amount of legacy capital, and these legacy instruments are better in that they're not from the resolution entity.
Analyst asked about the company's plan to call legacy transactions and if it's sensible to assume that the proportion of AT1 and Tier 2 sub debt in this year's supply will be greater than it has been over the last couple of years due to the need to replace AT1 later in the year.
- The company believes that the proportion of AT1 and Tier 2 sub debt in this year's supply will be greater than it has been over the last couple of years due to the need to replace AT1 later in the year.
Analyst asked about Barclays PLC's buffers and how they compare to other European banks.
- The company has a MDA point at 12.2% and is targeting a CET1 target range of 13.5%, which is a 130 basis points buffer. They consider the right level of buffers when thinking about their capital positioning, and they think about it in the context of the CET1 organic capital generation that they have each quarter, as well as how dynamically they are able to manage the balance sheet. They also consider the UK regulatory environment, which has a 2% countercyclical buffer, and the fact that they have a ring-fenced bank in the UK.
Analyst asked about customers starting to want to term out deposits and how it affects Barclays PLC's hedge.
- The company has seen a lot of terming out over the last couple of years, but they are seeing stabilization of that trend in recent quarters. They have the flexibility to consider data and events as they unfold and make decisions about their structural hedge. They also think about the amortization schedule when issuing Tier 2 instruments.
Analyst asked about contractual maturities and calls on Tier 2.
- The company thinks about Tier 2 issuances more on the amortization schedule, not the exact amount. They will issue these instruments for capital even though they provide funding, and their issuance plan will be more keyed around bullet maturities or when the instruments are amortizing out.

Q4 2024 Earnings Call - Fixed Income