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Annual Report 2014

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Our 2014 Annual Report, Helping people achieve their ambitions - in the right way
Our 2014 Annual Report

Helping people achieve their ambitions - in the right way

Chief Executive's review of the year: A stronger, more balanced business

Antony Jenkins, Group Chief Executive

Barclays today is a stronger business, with better prospects, than at any time since the financial crisis.

Review of the year: Significant progress in 2014

Tushar Morzaria, Barclays Group Finance Director

I am encouraged by the significant progress we have made in 2014. We've improved financial performance, we've strengthened our capital ratios and we've continued to drive down costs.
Sir David Walker, Barclays Chairman

Chairman's review of the year

Sir David Walker, Barclays Chairman

Barclays is 325 years old this year. By any standard of corporate longevity this is a remarkable achievement. The relentless focus of your Board and the Executive team has been, and will continue to be, on ensuring that the bank is primed for success for many more generations to come.

With a focus on our stakeholders, we will achieve our goal of becoming the 'Go-To' bank

Our outcome statements help us focus on what becoming 'Go-To' means for all of our stakeholders

Barclays 5cs - Customer & Client, colleague, citizenship, conduct, company

Customer and Client

We are the bank of choice for our customers and clients.

Colleague

Our colleagues are fully engaged. We create a diverse and inclusive environment where they can fulfil their potential.

Citizenship

We have a positive impact on the communities in which we operate.

Conduct

Our products and services are designed and distributed to meet our clients' needs. We act with integrity in everything we do.

Company

We create sustainable returns above the cost of equity. We understand and effectively manage risk, and continuously improve control.

More information on this can be found on Barclays.comMore information on this can be found on Barclays.com (new window)

   

Operating environment and approach to risk

We continue to be proactive in adapting to the external environment

Economic enironment
Regulatory change
Technology and expectations
Trust and conduct

                                                                                                                                          

Arrow pointing downwards
Arrow pointing downwards

Our approach to value creation is consistent

Delivering our obligations to shareholders while meeting society’s needs in a responsible manner

Our approach delivers broader economic benefits and a more valuable service to our stakeholders in the unique way we do business

  • Superior service for customers and clients globally 
  • Challenging, meaningful and fulfilling careers for our people in a values-driven organisation
  • Long-term sustainable returns for our investors, based on diversification of income streams and risk
  • Employment and economic growth in the economies in which we operate
  • Engagement with governments and society to address social issues and needs
Our approach delivers broader value in the unique way we do business

 

Strategy

Our strategy remains on course: to build a stronger, fitter, better bank

Our Transform programme was launched in 2013 to deliver our strategy of reshaping Barclays to generate sustainable returns and to meet the needs of all our stakeholders.

Transform - where we are now

   

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Taking decisive action: proactive steps to adjust our strategy 

The combined effect of external factors impacting our operating environment led to decisive action in three areas announced on 8th May 2014

Identify core activities

Building further on our strengths by concentrating resources on our Core activities. Transform how we interact with customers and the experience we can deliver to them in our retail and corporate businesses, and shift our Investment Bank to be more driven by clients’ origination needs, bringing greater balance to Barclays. 

Invest for growth

A focus on Core parts of the Group where we see major opportunities – Barclaycard and Africa. We are commited to leading innovation in consumer payments; technology should enable us to achieve growth by reaching more customers. With 8.6m new customers in the last 3 years at Barclaycard, we’ll generate efficiencies and economies of scale through selective acquisition. 

Free up resources

Assets and activities no longer of strategic value, given structural shifts in the operating environment or their sub-scale nature, have been brought together within Barclays Non-Core, to be managed separately for capital efficient, yet rapid exit.  

Reshaping the business

With a focus on running down Non-Core operations to provide investment for the Core growth businesses

2013 Total Risk weighted assets (RWAs):
£440bn

FY 13 Total risk weighted assets (RWAs): £440bn

2016 Total Target RWAs:
c.£400bn
 

2016 Total RWAs £400bn

Barclays PLC Group has been repositioned, simplified and rebalanced

Our 2016 targets

We have set 2016 Transform targets to demonstrate our commitment towards our ultimate goal

Barclays Group

Capital
CRD IV Fully loaded CET1 ratio >11%

Leverage
Leverage ratio >4.0%

Dividend
Payout ratio 40-50%

Barclays Core

Returns
Adjusted Return on Equity >12%

Cost
Adjusted operating expenses <£14.5bn

Barclays Non-Core (BNC)

Returns
Drag on adjusted RoE <(3%)

 

Our businesses

Barclays group business structure

Reorganised to a simpler, more focused, more balanced and much stronger business structure

2014 Activity in the business units - overview

Adjusted total income

£25,728m

Adjusted profit before tax

£5,502m

Dividends per share

6.5p

Personal & Corporate Banking

Ashok Vashwami

Ashok Vaswani

Chief Executive, Personal & Corporate Banking
We are succeeding by putting our customers and clients at the centre of everything we do and by continuing to do this we will become the ‘Go-To’ financial partner.

What we do
 

  • Personal & Corporate Banking (PCB) is a powerhouse, with the potential to challenge the traditional UK banking landscape.
  • Bringing together Personal Banking, Wealth, Mortgages and Corporate Banking, PCB fulfils the fundamental banking needs of individuals and businesses.
  • We continue to transform customer and client interactions, enabling automated experiences for routine transactions across a choice of channels.
  • We are already at the forefront of digital change, transforming the nature of banking globally.
  • This unique configuration creates a significant opportunity for PCB to become the ‘Go-To’ financial partner for our customers and clients.
Download the full Annual Report to read more (PDF 944KB)Download the full Annual Report to read more (PDF 944KB)

Barclaycard

Valerie Soranno Keating

Valerie Soranno Keating

Chief Executive, Barclaycard
Barclaycard is a top 10 consumer payments provider globally. In a business where winning is dependent on scale, innovation, analytics and risk management, we have strength across the board.

What we do
 

  • Barclaycard is a leading consumer payments business offering a broad array of products and services to consumers and merchants.
  • Operating across multiple geographies and distribution channels, Barclaycard is one of the few consumer payments businesses that is able to serve both buyers and sellers.
  • Our sector-leading solutions enable consumers and businesses to transact in the way they want, connecting the two in a way which adds value to both.
  • As consumers and businesses adopt more secure digital and online solutions, we continue to lead and innovate.
  • By providing simple solutions that offer clear value, work reliably and create emotional engagement we can become the ‘Go-To’ bank for consumer payments.
Download the full Annual Report to read more (PDF 944KB)Download the full Annual Report to read more (PDF 944KB)

Africa Banking

Maria Ramos

Maria Ramos

Chief Executive, Africa Banking
Africa Banking is uniquely placed to promote economic development as we bring expertise and clients to Africa, and provide African customers with access to global markets.

What we do
 

  • Africa Banking is a diversified, full-service financial services provider.
  • We offer an integrated set of products and services across retail and business banking, credit cards and insurance, corporate and investment banking and wealth management to 12 million customers in Africa.
  • With our long-standing presence in 12 African markets and integration with Barclays Group globally, we offer deep local knowledge and presence, combined with the expertise and support of a global bank.
  • We translate this competitive advantage into tangible benefits for our customers and clients and in doing so aim to become the bank of choice in Africa.
  • By helping our customers and clients achieve their ambitions we play a key role in empowering and developing Africa.
Download the full Annual Report to read more (PDF)Download the full Annual Report to read more (PDF)

Africa Banking

Maria Ramos

Maria Ramos

Chief Executive, Africa Banking
Africa Banking is uniquely placed to promote economic development as we bring expertise and clients to Africa, and provide African customers with access to global markets.

What we do
 

  • Africa Banking is a diversified, full-service financial services provider.
  • We offer an integrated set of products and services across retail and business banking, credit cards and insurance, corporate and investment banking and wealth management to 12 million customers in Africa.
  • With our long-standing presence in 12 African markets and integration with Barclays Group globally, we offer deep local knowledge and presence, combined with the expertise and support of a global bank.
  • We translate this competitive advantage into tangible benefits for our customers and clients and in doing so aim to become the bank of choice in Africa.
  • By helping our customers and clients achieve their ambitions we play a key role in empowering and developing Africa.
Download the full Annual Report to read more (PDF 944KB)Download the full Annual Report to read more (PDF 944KB)

Investment Bank

Thomas King

Thomas King

Chief Executive, Investment Bank
From our unique position with dual home markets and truly global reach, we are transforming the Investment Bank so that we can continue to help our target clients achieve their ambitions.

What we do

  • The Investment Bank is a leading provider of advice, financing and risk management solutions to companies, governments and institutions worldwide.
  • We enable the movement of capital between those who need it and those looking to generate a return on investment.
  • In doing so we fund and facilitate global economic growth, helping millions of people to achieve their ambitions.
  • Our business is split into three core areas: markets, banking and research.
  • We provide Barclays with a diversity of income and risk, and deliver market execution services for customers and clients within other parts of the Group.

 

Download the full Annual Report to read more (PDF 944KB)Download the full Annual Report to read more (PDF 944KB)

Barclays Non-Core

Non-core
Barclays Non-Core is responsible for the divestment of Barclays non-strategic assets and businesses.

What we do

  • Barclays Non-Core (BNC) brings together businesses and assets that do not fit our client strategy, remain sub-scale with limited growth opportunities, or are challenged by the regulatory capital environment.
  • Non-Core assets comprise three main elements: principal businesses, securities and loans, and derivatives.
  • Several of the businesses managed within BNC are profitable and will be attractive to other owners.
  • All of BNC will be exited over time, through sale or run-off, reducing the capital and cost base, helping improve Group returns and delivering shareholder value.

 

Download the full Annual Report to read more (PDF 944KB)Download the full Annual Report to read more (PDF 944KB)

   

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Performance

Our Balanced Scorecard

Measures progress and performance against our goal

Stakeholders and metrics

We have agreed eight key measures categorised into the 5Cs against which our stakeholders can hold us to account.  We are committed to monitoring and reporting on our progress annually. 

  Metric Actual 2013 Actual 2014 Target 2018

Customer & Client

PCB, Barclaycard and Africa Banking weighted average ranking of Relationship Net Promoter Score© (NPS) vs. peer sets 3rda 4th 1st
Client Franchise Rank: Weighted average ranking of wallet share or customer satisfaction with priority clients in the Investment Bank N/A 5th Top 3

Colleagues

Sustained engagement of colleagues score 74% 72% 87-91%
% women in senior leadership 21% 22% 26%

Citizenship

Citizenship Plan - initiatives on track or ahead 10/11 11/11 Plan targets

Conduct

Conduct Reputation (YouGov survey) 5.2/10 5.3/10 6.5/10

Company

Adjusted Return on Equity 4.1%b 5.1% >Cost of equity
Fully loaded CRD IV CET1 ratio 9.3%c 10.3% >11%d

Notes
a Revised due to creation of PCB as part of the May 2014 Strategy Update. Corporate clients now contribute to the NPS metric, and no longer contribute to the Client Franchise
Rank.
b Revised from 4.5%, post the Q213 £259m gain relating to assets not yet received from the US Lehman acquisition being treated as an adjusting item.
c Revised from 9.3%, post full implementation for CRD IV reporting in 2014.
d Revised from >10.5% following the Strategy Update.

Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.  Under the Companies Act 2006, we are also required to report on the gender breakdown of our employees and ‘senior managers’. Of our global workforce of 132,300 (65,200 male, 67,100 female), 732 were senior managers (596 male, 136 female), which include Of销cers of the Group, certain direct reports of the Chief Executive, heads of major business units, certain senior managing directors and directors on the boards of undertakings of the Group, but exclude individuals who sit as directors on the board of the Company.

For our Customers and Clients

We aim to be the bank of choice.

Metric Actual 2013 Actual 2014 Target 2018
PCB, Barclaycard and Africa Banking weighted average ranking of Relationship Net Promoter Score© (NPS) vs. peer sets 3rda 4th 1st
Client Franchise Rank: Weighted average ranking of wallet share or customer satisfaction with priority clients in the Investment Bank N/A 5th Top 3

Notes
a Revised due to the creation of PCB as part of the May 2014 Strategy Update. Corporate clients now contribute to the NPS metric, and no longer contribute to the Client Franchise Rank

For our Customers and Clients it means

Fired up team beats blaze in Kenya

Within three days of a fire destroying the Barclays branch at Jomo Kenyatta International Airport in Nairobi, the local team had set up a temporary branch - in a tent.  A shining example of putting customers first.

Read further case studies of Barclays 5Cs in actionRead further case studies of Barclays 5Cs in action (new window)

For our Colleagues

We create an environment where they can fulfil their potential.

Metric Actual 2013 Actual 2014 Target 2018
Sustained engagement of colleagues score 74% 72% 87-91%
% women in senior leadership 21% 22% 26%
For our Colleagues it means

The campaign to challenge cultural silence

The 'This is me' campaign, launched in May 2014, has given colleagues the freedom to talk about mental health and their personal story, and created access to resources, support, advice and information. 

Read further case studies of Barclays 5Cs in actionRead further case studies of Barclays 5Cs in action (new window)

For Citizenship

We have a positive impact on the communities in which we operate.

Metric Actual 2013 Actual 2014 Target 2018
Citizenship Plan - initiatives on track or ahead 10/11 11/11 Plan targets
For Citizenship it means

Helping invest $34 trillion more sustainably

Over 1000 investors, with over $34 trillion in assets, have signed up to the UN Principles of Responsible Investment. These principles aim to encourage investors to invest in a socially-responsible manner.

Read further case studies of Barclays 5Cs in actionRead further case studies of Barclays 5Cs in action (new window)

For Conduct

We aim to act with integrity in everything we do.

Metric Actual 2013 Actual 2014 Target 2018
Conduct Reputation (YouGov survey) 5.2/10 5.3/10 6.5/10
For our Conduct it means

An extra pair of eyes keeps client emails safe

Protecting our clients' money and financial information, we can't be 'too careful'. We have even introduced an automated email checker to identify the potential risk of even a single misplaced click.

Read further case studies of Barclays 5Cs in actionRead further case studies of Barclays 5Cs in action (new window)

For our Company

We seek to effectively manage risk and create sustainable returns.

Metric Actual 2013 Actual 2014 Target 2018
Adjusted Return on Equity 4.1%b 5.1% >Cost of equity
Fully Loaded CRD IV CET1 ratio 9.1%c 10.3% >11%d

Notes
b Revised from 4.5%, post the Q213 £259m gain relating to assets not yet received from the US Lehman acquisition being treated as an adjusting item.
c Revised from 9.3%, post full implementation for CRD IV reporting in 2014.
d Revised from >10.5% following the Strategy Update.

For our Company it means

Pushpak: so innovative we’re pursuing a global patent

We developed an automated system to test new apps across hundreds of handsets that ensures our mobile innovations are in our customers’ hands quickly and reliably.

Read further case studies of Barclays 5Cs in actionRead full case study (new window)

Your Board has set a clear priority

The Board sets direction and provides oversight and control, acting as an independent check and balance to the Executive team, whose responsibility it is to run the business. Our role is to:

 

Economic growth
Regulatory change
Technology and expectations
Trust and conduct

 

Remuneration

Implementing fair and appropriate financial reward

Remuneration for executive Directors continues to be tied closely to our strategy and performance

2014 (£000) Salary Role Based Pay Taxable benefits Annual bonus LTIP Pension Total
Antony Jenkins 1,100 950 100 1,100 1,854 363 5,467
Tushar Morzaria 800 750 95 900 - 200 2,745

The table shows a single total figure for 2014 remuneration in respect of qualifying service for each executive Director.

Read the full remuneration report in the Annual Report (PDF 4.9MB)Read the full remuneration report in the Annual Report (PDF 4.9MB)
2014 (£000) Fees Benefits Total
Chairman      
Sir David Walker 750 19 769
Non-executive Directors      
Mike Ashleya   213 - 213
Tim Breedon 
240 - 240
Fulvio Contib 
37 - 37
Simon Fraserc 
47 - 47
Crawford Gilliesd 
91 - 91
Reuben Jeffery III 
160 - 160
Wendy Lucas-Bulle 
105 - 105
Dambisa Moyo 
151 - 151
Frits van Paasschenf 
80 - 80
Sir Michael Rake 
250 - 250
Diane de Saint Victorg 
135 - 135
Sir John Sunderland 
190 - 190
Steve Thiekeh 
131 - 131
David Boothi 
- - -
Sir Andrew Likiermanj - - -

Non-executive directors are reimbursed expenses that are incurred for business reasons. Any tax that arises on these reimbursed expenses is paid by Barclays.
The Chairman is provided with private medical cover and the use of a company vehicle and driver when required for business purposes.
Notes
a Mike Ashley joined the Board as a non-executive Director with effect from 18 September 2013.
b Fulvio Conti retired from the Board as a non-executive Director with effect from 24 April 2014.
c Simon Fraser retired from the Board as a non-executive Director with effect from 24 April 2014.
d Crawford Gillies joined the Board as a non-executive Director with effect from 1 May 2014.
e Wendy Lucas-Bull joined the Board as a non-executive Director with effect from 19 September 2013.
f Frits van Paasschen joined the Board as a non-executive Director with effect from 1 August 2013.
g Diane de Saint Victor joined the Board as a non-executive Director with effect from 1 March 2013.
h Steve Thieke joined the Board as a non-executive Director with effect from 7 January 2014.
i David Booth retired from the Board as a non-executive Director with effect from 31 December 2013.
j Sir Andrew Likierman retired from the Board as a non-executive Director with effect from 25 April 2013.

Remuneration for non-executive Directors reflects their responsibility and time commitment and the level of fees paid to non-executive Directors of comparable major UK companies.

Read the full remuneration report in the Annual ReportRead the full remuneration report in the Annual Report
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