Barclays 2015 Annual Report Download - page 25

home.barclays/annualreport Barclays PLC Annual Report 2015 I 23
 Barclays executed large strategic trades for clients including a large FX
trade off the back of Tesco’s Korean business disposal and the
structuring and issue of the largest MXN Development equity
certificate acquired by the Mexican Pension Funds
Review of the year
The Investment Bank continues to make progress on its origination led
strategy, building on leading positions in its home markets of the UK and
US, while driving cost savings and RWA efficiencies. Annual revenues
remained resilient at £7.6bn (2014: £7.6bn) and disciplined capital
deployment resulted in lower RWAs of £108bn (2014: £122bn). The PBT
for the year improved to £1.6bn (2014: £1.4bn).
We have continued to deliver for our clients by advising on some of the
most noteworthy transactions of the year and helping institutional
clients navigate the evolving markets landscape:
 Maintained number one position in Greenwich Associates’ annual
survey of European fixed income investors for the ninth year in a row
 Advised on several prominent deals of the year, including some of the
largest transactions in Consumer, Technology and Pharmaceutical
sectors
 Named ‘Bond House of the Year’ by IFR magazine in 2015
Through our business activities, we aim to have a positive impact on our
colleagues and the broader communities in which we operate. A few
notable results in 2015 are listed below:
 Barclays facilitates the flow of capital towards environmentally and
socially beneficial activity, with a range of business lines actively
involved in delivering solutions across product groups, geographies
and industry sectors. For example, the Investment Bank issued more
than £5.6bn (at share) of environmental financings that positively
contribute to the low carbon economy
 The Investment Bank participates in a three-year rotational
apprenticeship programme which runs across a number of areas of
Barclays in the UK. Apprentices will receive a degree-level qualification
and a permanent role upon completing the programme
 The internal Employee Survey demonstrates the progress we continue
to make in transforming the business and culture. The survey results
point to significant improvement in sense of personal
accomplishment, belief in Barclays’ goals and strategy, and the
likelihood of recommending Barclays as a good place to work
The Investment Bank remains focused on strengthening the Conduct
framework. The Conduct Risk committee and the relevant sub-
committees ensure conduct considerations are firmly embedded in all
business and strategic decisions. In-person and online Conduct Risk
training for colleagues is delivered throughout the year.
Our purpose
We enable the movement of capital between those who need it, for
example to grow their company or build new infrastructure, and those
looking to generate a return on investment. In doing so we fund and
facilitate global economic growth, helping people to achieve their
ambitions.
How the business is structured and what we provide to the Group
Our business is split into three core areas:
 Markets: provides execution, prime brokerage and risk management
services across the full range of asset classes including equity and
fixed income, currency and select commodity products
 Banking: provides long-term strategic advice on mergers and
acquisitions, corporate finance and strategic risk management
solutions, and equity and credit origination capabilities
 Research: provides multi-asset class and macro-economic research
delivering practical ideas to help our clients make informed investment
decisions
Through this range of business activities we can provide Barclays with a
diversity of income and risk, while delivering a full spectrum of advisory,
financing and market execution services for our corporate, government
and institutional clients.
Environment in which the business operates
The investment banking sector continues to change, driven by regulatory
evolution, higher capital requirements and changing client demands.
This has resulted in significant differences in the strategic responses
from industry peers.
The changes we have made following our strategy update in May 2014
have rebalanced our business mix towards core business lines in which
we have competitive strengths and can drive higher returns, while
ensuring that we continue to provide a holistic service to our target
clients. In January 2016 we announced several complementary initiatives
to further support the execution of this strategy (e.g. through certain
product and country exits). The Investment Bank continues to make
progress on earnings, capital and leverage as set out in the strategy
update.
Risks to this business model
The market environment remains challenging, marked by uncertain
macro conditions and resource constraints. Alongside structural
regulatory change, including new capital and leverage requirements, this
has put increasing pressure on the Investment Bank’s ability to deliver
returns.
Changes resulting from new and impending regulation will continue to
impact our business model. In particular, adapting our business
framework in response to structural reform will be a key focus over the
coming years as we seek to comply with global structural reform plans.
In addition the business continues to face conduct and litigation risk. We
continue to strengthen our control environment, evolve our culture and
simplify our products in order to minimise these risks.
Examples of innovations/deals this year
During 2015, the Investment Bank executed several transactions that
demonstrate its execution capabilities, connectivity to clients and the
strength of the franchise. A few notable examples are listed below.
 Barclays acted as a financial adviser to long-term client Teva
Pharmaceutical on its $40.5bn definitive agreement to acquire the
Actavis generics business from Allergan
 Barclays executed BHP Billiton’s $6.45bn equivalent five tranche, three
currency hybrid capital security
Risk review Financial review Financial statements Shareholder information