Barclays 2013 Annual Report Download - page 8

Strategy and operating environment
The landscape for banks has fundamentally changed and
will continue to evolve in the coming years. We believe
these changes are not cyclical but represent a structural
shift. Our Transform programme, launched in 2013, will
reshape Barclays to generate sustainable returns and to
meet the needs of all of our stakeholders.
Market and operating environment
Barclays is a global financial services provider with our home markets
in UK, US, and South Africa, and distribution and operations in a further
47 countries.
Banks are invariably exposed to the economies and markets in which
they operate. This exposure ranges from mortgage lending (dependent
on the ability of borrowers to repay and house price valuations) to
corporate advisory (which may reflect business confidence in the
economy). Prior to the financial crisis, global growth was supportive
with banks well-positioned to benefit from their exposure to the
upward trajectory of the global economy.
Global economic growth has faltered in recent years. This has
prompted unprecedented monetary policies across central banks, for
example quantitative easing and near zero interest rates. This policy
response has, in turn, posed new challenges for banks such as
compressed interest margins.
While global economic growth remained below the long-term trend in
2013, we saw improved consumer confidence and business sentiment
in both the UK and US. Even with these grass root recoveries emerging
in two of our home markets, we remain cognisant that global
economic growth is expected to be subdued for a prolonged period.
Financial regulatory frameworks are evolving, as global regulators
continue to respond to the issues that emerged during the financial
crisis. It is clear that intensive and intrusive regulation is here to stay.
Prudential reforms ranging from the UK Banking Reform Act to the US
Dodd Frank Act are fundamentally changing the way that banks
manage their capital, liquidity and risk.
A further challenge to the banking industry, and indeed to Barclays, in
recent years is one of poor conduct, damaging our reputation and causing
a loss of trust amongst our customers, clients and stakeholders. We
recognise the importance of rebuilding trust in Barclays as well as meeting,
and bettering, the developing needs of our customers and clients.
‘We will not be able to
generate sustainable
returns over the long term
unless we act at all times
with good values.’
Transform: delivering our strategy
The quality and commitment of the people at Barclays, combined with
our underlying financial strength, means we start our transformation
from a good position. The Barclays Strategic Review, commenced in
Q4 2012, is a part of a long-term programme to transform the culture
and performance of Barclays over the next three to five years.
The Transform programme is the way in which we will deliver
our strategy. With the initial ‘Turnaround’ phase complete,
we now look forward to ‘Return Acceptable Numbers’ and to
‘Sustain Forward Momentum’.
2013 2014 2015 2016 2017
0-3 years
Return Acceptable
Numbers
0-5 years
Sustain FORward
Momentum
Where we are now
0-9 months
Turnaround
Improve business returns, define and
execute the plan to deliver RoE above CoE
Become the ‘Go-To’ bank for our stakeholders –
customers and clients, colleagues, investors, and wider society
Stabilise the organisation, provide context for
the change to come, maintain short-term momentum
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06 Barclays PLC Annual Report 2013