Barclays 2014 Annual Report Download - page 11

barclays.com/annualreport Barclays PLC Annual Report 2014 I 09
How we are doing
Three strategic shifts
The combined effect of the external factors discussed
on page 05 has led to decisive action in three areas
announced on 8 May 2014:
Identify core activities: Building further on our strengths by
concentrating resources on our Core activities. In our sector-leading
retail and corporate businesses we will invest in technology and
process enhancements to transform how we interact with customers
and the experience we can deliver to them.
In our Investment Bank, focusing on US and UK, we are shifting from a
business dependent on balance sheet commitment to one 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 committed to
leading innovation in consumer payments; technology should enable
us to achieve growth by reaching more customers. Having added 8.6m
customers in the last 3 years at Barclaycard, we continue to have an
appetite for selective expansion and portfolio acquisition where we
can generate efficiencies and economies of scale.
Free up resources: Assets and activities no longer of strategic
importance, 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.
Aligned to Transform targets
With these actions in mind we have set 2016 Transform targets to
demonstrate our commitment and our journey towards our ultimate
goal of becoming the ‘Go-To’ bank by 2018. While Group figures
continue to include the impact of Non-Core, both Core and Non-Core
have individual targets.
Our return on equity goal remains the same – to achieve a return on
equity above our cost of equity. We will also maintain our focus on
capital, leverage and dividend performance. Our 2016 capital target
is a fully loaded CET1 ratio above 11%, as we move towards end-state
capital requirements.
We continue to target a dividend payout ratio of 40% to 50% over time.
In our Core business, we aim to achieve a sustainable adjusted ROE
above 12% by 2016, underpinned by an adjusted cost base of less than
£14.5bn, down from £16.2bn at end 2013.
In Non-Core, our focus is on reducing the drag on the Core business.
We are targeting a drag on ROE from Non-Core of less than 3% in 2016.
For an update on how we
performed against our 2016 targets
see page 32
Becoming ‘Go-To’
Taking decisive action
Proactive steps to adapt our strategy
External
factors
Our 2016 targets
Barclays Group
Capital:
CRD IV Fully loaded CET1 ratio
>11.0%
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%)
Economic
environment
Regulatory
change
Trust and
conduct
Technology
and rising
expectations
We continually take action to achieve our
goal and deliver value to our shareholders
A proactive approach:
Identify core activities
Invest in them for growth
Free up resources
Lorem ipsum Reshaping the business
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