Barclays 2014 Annual Report Download - page 5

barclays.com/annualreport Barclays PLC Annual Report 2014 I 03
Our approach
Becoming ‘Go-To’
Chief Executive’s strategic review
Today’s Barclays is a stronger business with better
prospects than at any time since the financial crisis.
The execution of our Transform Strategy, which I set out in February
2013 and updated in May 2014, has created a focused international
bank, delivering on the right priorities for all of our stakeholders,
and positioned for growth.
Group adjusted profit before tax has increased by 12% in 2014.
Personal & Corporate Banking and Barclaycard continue to thrive
and grow, Africa has done well despite currency headwinds, and
we are starting to see the impact of the changes in strategy in our
Investment Bank.
While there is still work to do, we have made sustained and consistent
progress against our Transform 2016 targets during the year, providing
strong evidence that our strategy is working.
In our Core business, which represents the future of Barclays,
adjusted Return on Equity is at nearly 11% excluding Costs To Achieve
Transform, tracking well towards the 12% plus we are targeting for
2016. Barclays Non-Core run down is ahead of target, with Risk
Weighted Assets reducing by nearly £35bn in the year, and now
standing at just over £75bn.
I have repeatedly said that cost is, and will continue to be, a strategic
battleground for our industry, and working cost effectively is essential
to our future success. To this end, we have taken out nearly £1.8bn of
spend from our business in 2014. This remarkable achievement, with
further reductions to come in 2015, will enable Barclays to boost
returns and drive sustainable competitive advantages across the Group.
I am pleased that we have made substantial progress in strengthening
our capital position in the past year. Our fully loaded Common Equity
Tier 1 ratio has improved to 10.5%, taking into account the effect of the
disposal of our Spanish business completed on 2 January 2015, as well
as absorbing the impact of a further provision in the fourth quarter for
ongoing investigations and litigation relating to Foreign Exchange, and
compares to 9.1% a year ago. Equally important, our Leverage Ratio
increased to 3.7%. This means we are now very well positioned to
achieve the Transform 2016 targets of greater than 11% and 4%
respectively. In terms of dividends, we have declared a cash dividend
of 6.5p for 2014, despite the unwelcome impact of substantial conduct
provisions. We have a growing confidence in the capital position of
the Group and continue to target a 40%-50% dividend payout ratio
over time.
We are also performing well against the targets in our Balanced Scorecard.
Barclays measures performance today not just on the basis of what
we deliver but now also on how we deliver. You can read more about
the Balanced Scorecard and our progress on pages 11 to 16 of this
Strategic Report. While we still have work to do against those targets,
I have no doubt that this approach will support strong and sustainable
performance for shareholders, aligned with our Purpose and Values.
We remain focused on addressing outstanding conduct issues,
including those relating to Foreign Exchange trading. I regard the
behaviour at the centre of these investigations as wholly incompatible
with our values, and I share the frustration of colleagues and
shareholders that matters like these continue to cast a shadow over
our business. But resolving these issues is an important part of our plan
for Barclays and although it may be difficult, I expect that we will make
significant progress in this area in 2015.
This will be a year of continued delivery for our customers, clients, and
shareholders as we look to accelerate execution of our plans. Our work
is not complete, but we are on the right track, making steady progress
against our strategic targets, and with every colleague committed to
driving performance – as they are – we can have strong confidence in
our ability to deliver.
Thank you for your continued support.
Antony Jenkins
Group Chief Executive
By upholding clear values
and leading by example
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Respect signifies valuing those
we work with – our colleagues
and other stakeholders.
Integrity demands that we act
honestly, ethically and fairly.
Service means ensuring our
customers and clients are
always uppermost in our minds.
Excellence calls on us to use all
our energy, skills and resources
to deliver great service and
outstanding sustainable results.
Stewardship is about being
determined to leave things
better than we found them.
Barclays will
differentiate itself by
bringing our values to
life every day in the
way we behave
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