Barclays 2015 Annual Report Download - page 7

We are making significant
progress in achieving our
strategic aim of a more simplified
and balanced business
approximately £55bn as at the end of 2015. We anticipate those
one-time additions will add approximately £600m to underlying Non-Core
costs, but we expect to exit the majority of these in the course of 2016.
Our Non-Core businesses act as a significant drag on our Group
profitability that must be eliminated as soon as possible.
The Board has therefore decided to adjust our near-term dividend to
give us the flexibility to accelerate our exit of Non-Core activities. It is our
intention to reduce our dividend to 3 pence, in 2016 and 2017. This will
help us accelerate the imperative rundown of Non-Core.
I recognise the importance of paying a meaningful dividend as part of
total shareholder returns and am committed to doing so in the future.
But for now, the reduction of the dividend is the right choice. These are
hard decisions, but we believe the shareholder value created by getting
Non-Core closed will greatly exceed the downside of cutting the
dividend for the next two years.
These strategic actions will bring forward the completion of our
restructuring and the emergence of a simpler and very profitable Barclays.
We are also changing the way in which we structure Barclays to further
simplify the Group and prepare early for UK ring-fencing requirements.
At the heart of Barclays’ strategy is to build on our strength as a
Transatlantic Consumer, Corporate and Investment bank, anchored in
the two financial centres of the world, London and New York.
Barclays will operate as two clearly defined divisions, Barclays UK and
Barclays Corporate & International. Barclays UK will include our leading
UK retail bank, our UK consumer credit card business, and play its
traditional role as a committed provider of lending and financial services
for small businesses up and down the UK.
The business has 22 million retail customers, and almost one million
business banking clients. We are one of the country’s leading business
banks. We are the second largest wealth manager in the UK, and
Barclaycard is the number one card issuer in Britain with close to
11 million UK card customers. Barclays UK will also continue to pioneer
innovation in the provision of consumer financial services.
This represents formidable strength. It will ultimately become our UK
ring-fenced bank, a resilient British bank, compliant with all regulatory
requirements.
Second, Barclays Corporate & International will comprise our market
leading Corporate banking business, our Barclaycard operations in
Europe and the US, our bulge bracket Investment Bank, and our
International Wealth offering.
Barclays Corporate & International has scale in wholesale banking and
consumer lending, strength in our key geographies, and good balance in
its revenue streams, delivering further resilience.
Barclays Corporate & International will ultimately become our
non-ringfenced bank. It will operate as a strong unit within the
Barclays Group, and is wholly complementary to Barclays UK. It is a
strategically coherent collection of franchises across corporate,
investment, and consumer banking, creating a robust and diversified
business for us.
Our revised strategic
focus will help create
commercial stability and
generate sustainable
shareholder returns Balanced business
...and resilience
to the external
environments
Simplified business
Optimising
the business
structures...
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