Barclays PLC Sponsored ADR

Company Overview

Business Model: Barclays PLC is a British universal bank that operates a diversified business model, serving consumer and wholesale customers and clients globally. Its strategy is driven by a purpose of "working together for a better financial future," leveraging a universal banking model to generate a well-diversified income stream. The Group's operations are influenced by technology's impact on banking, capital markets as a global growth driver, and the transition to a low-carbon economy.

Market Position: Barclays PLC is positioned as a complex international banking peer, around the mid-point in size and complexity compared to its overall peer group, which includes large universal banks from continental Europe/UK and large US universal/investment banks. The Group has deep roots in the United Kingdom and a significant presence in the United States, operating a top-tier investment bank with a strong global ranking. Its Investment Bank maintained a #6 Dealogic global fee share ranking with a 3.3% fee share in 2024. The Barclays US Consumer Bank holds approximately a 2-3% share of the total US credit card market.

Recent Strategic Developments: In February 2024, Barclays PLC announced a three-year plan aiming to make the Group Simpler, Better, and More balanced, with targets including a Statutory Return on Tangible Equity (RoTE) of over 12% and a total payout of at least £10.0bn between 2024 and 2026. A significant development was the acquisition of Tesco Bank's retail banking business on November 1, 2024, which included credit cards, unsecured personal loans, deposits, and operating infrastructure, alongside a 10-year exclusive strategic partnership with Tesco Stores Limited. The Group also acquired Luxury Card in the US, sold its German consumer finance business, and disposed of its Italian retail mortgage portfolio. Operationally, Barclays decommissioned 210 legacy applications in 2024, contributing to a target of 450-500 over 2024-2026.

Geographic Footprint: Barclays PLC is incorporated in England with its principal executive offices in London. The Group's operations span across the United Kingdom, Europe, Americas, Africa and Middle East, and Asia. The United Kingdom and the United States are primary markets, with the United Kingdom generating £13,927m in income and the United States generating £8,614m in income in 2024.

Cross-Border Operations: The Group operates through a network of principal subsidiaries globally, including Barclays Bank PLC (UK), Barclays Bank UK PLC (UK), Barclays Bank Ireland PLC (Ireland), Barclays Capital Inc. (United States), Barclays Securities Japan Limited (Japan), Barclays US LLC (United States), and Barclays Bank Delaware (United States). It also has a 50% interest in Vaultex UK Limited, a joint venture incorporated in the United Kingdom. The acquisition of Tesco Bank included assets, liabilities, and responsibilities related to a credit card securitisation originated under the Tesco Bank brand, and a strategic partnership with Tesco Stores Limited for marketing and distribution of financial products. Financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board, and UK-adopted international accounting standards, with Pounds Sterling as the functional currency.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Return on average equity (Barclays Group): 9.1% (2024) vs. 7.6% (2023)
• Operating Margin: 30.27% (2024) vs. 25.84% (2023)
• Net Margin: 23.73% (2024) vs. 20.97% (2023)
• Group compensation costs as a % of total income: 32.7% (2024) vs. 34.4% (2023)

Investment in Growth:

• R&D Expenditure (capitalized as internally generated software): £875m (3.27% of total income) in 2024.
• Capital Expenditures: Net book value of property, plant and equipment increased by £187m to £3,604m in 2024.
• Strategic Investments: Barclays Climate Ventures invested £65m in climate tech start-ups in 2024, contributing to a cumulative £203m since 2020. The acquisition of Tesco Bank resulted in a £556m day 1 gain on acquisition.

Currency Impact Analysis:

• The Group's functional currency is Pounds Sterling. Exchange differences arising on the translation of foreign operations are recorded in the currency translation reserve within equity, which stood at £3,625m in 2024.
• Barclays PLC employs fair value hedge accounting, cash flow hedge accounting, and hedging of a net investment in a foreign operation to manage interest rate, currency, and contractually-linked inflation risks. Specific foreign exchange risk cash flow hedges were in place for JPY, USD, AUD, and CHF in 2024.

Business Segment Analysis

Barclays UK

Financial Performance:

• Total Income: £8,274m
• Operating Costs: (£4,235)m
• Profit Before Tax: £3,580m (+25% YoY)
• Return on Average Equity: 16.9%
• Return on Tangible Equity: 23.1%
• Key Growth Drivers: The acquisition of Tesco Bank contributed a £556m day 1 gain on acquisition and approximately £8bn increase in loans and advances to customers, and £7bn increase in customer deposits. New Home loan bookings increased 5% to £23,895m in 2024. Product Portfolio: UK Personal Banking, UK Business Banking, Barclaycard Consumer UK. From November 1, 2024, this includes Tesco Bank's credit cards, unsecured personal loans, savings, and operating infrastructure. Kensington Mortgages launched a new Step Down mortgage. Market Dynamics: Serves over 20 million customers, with nearly 5 billion Barclays app logins annually. Supported over 100,000 homebuyers and owners, and lent £2.17bn to SMEs. Achieved a 36% reduction in customer complaints and a Net Promoter Score (NPS) of +17. Geographic Revenue Distribution: Primarily focused on the United Kingdom.

Barclays UK Corporate Bank

Financial Performance:

• Total Income: £1,780m (broadly stable YoY)
• Operating Costs: (£935)m
• Profit Before Tax: £731m (-17% YoY)
• Return on Average Equity: 16.0%
• Return on Tangible Equity: 16.0%
• Key Growth Drivers: Attracted 550 new clients and achieved total loan growth of £1bn (adjusted for perimeter changes). Launched the Business Prosperity Fund, making £22bn funding available for 2025. Product Portfolio: Corporate Lending, Transaction Banking (cash management, trade, working capital, risk management, payment services internationally). Implemented Trade360 in the UK. Market Dynamics: Named Best Trade Finance Bank in the UK in 2024. Overall Client Satisfaction (OSAT) was 62% 'Excellent' or 'Very Good', a 6% increase since 2023. Geographic Revenue Distribution: Primarily focused on the United Kingdom.

Barclays Private Bank and Wealth Management

Financial Performance:

• Total Income: £1,309m (+8% YoY)
• Operating Costs: (£911)m
• Profit Before Tax: £383m (-6% YoY)
• Return on Average Equity: 25.7%
• Return on Tangible Equity: 28.1%
• Key Growth Drivers: Client assets and liabilities increased by £26.0bn to £208.9bn. Smart Investor opened 58,000 new accounts in 2024, a 141% increase from 2023. Product Portfolio: Private Banking UK (investable assets £3m+), Private Banking International (investable assets £5m+, £3m+ for India), UK Affluent (£250k-£3m investable assets), UK Digital Investing (Smart Investor). Launched new Private Markets solutions and a unitised fund. Market Dynamics: Smart Investor has over 331,000 active customers with access to 8,500 securities and funds. Piloting UK Affluent service for 2025 launch. Geographic Revenue Distribution: Serves UK and international private banking clients, with an International Private Bank presence across Europe, the Middle East, and Asia wealth corridors. Plans to establish a new Private Bank booking centre in Singapore.

Barclays Investment Bank

Financial Performance:

• Total Income: £11,805m (+7% YoY)
• Operating Costs: (£7,666)m
• Profit Before Tax: £3,774m (+18% YoY)
• Return on Average Equity: 8.5%
• Return on Tangible Equity: 8.5%
• Key Growth Drivers: Global Markets revenue growth of 4%. Equities income increased 21% to £2,875m, including a £125m fair value gain on Visa B shares. Investment Banking income increased 12% YoY. Product Portfolio: Global Markets (execution services, ideas, risk management across Equities, Credit, Rates, FX, Securitised Products, Research). Investment Banking (advisory, solutions, capital access, International Corporate Banking). Market Dynamics: Maintained #6 Dealogic global fee share ranking (3.3%). RoTE increased 150bps to 8.5%. Research team rankings include #3 Global Fixed Income, #5 European Equity Research, and #8 US Equity Research. DCM strengths include #6 Investment Grade and #5 Leveraged Finance. ECM ranking improved to #7. Geographic Revenue Distribution: Global operations, serving FTSE 350, multinationals, and financial institution clients internationally.

Barclays US Consumer Bank

Financial Performance:

• Total Income: £3,326m (+2% YoY)
• Operating Costs: (£1,612)m
• Profit Before Tax: £407m
• Return on Average Equity: 8.1%
• Return on Tangible Equity: 9.1%
• Key Growth Drivers: Added approximately 3 million new customers organically in 2024. Mobile users increased 26% from 2023. Launched new co-branded card program with Breeze Airways and extended partnerships with Hawaiian Airlines, Frontier, and RCI. Selected as new issuing partner for General Motors card program (launch H1 2025). Product Portfolio: Co-branded, small business, and private label credit cards, instalment loans, online savings accounts, and Certificates of Deposits. Launched Barclays Tiered Savings product. Market Dynamics: Holds approximately 2-3% share of the total US credit card market, with partnerships with 20 major brands. Digital engagement reached 71.1%. Geographic Revenue Distribution: Primarily focused on the United States.

Head Office

Financial Performance:

• Total Income: £294m
• Operating Costs: (£836)m
• Profit Before Tax: (£767)m
• Key Growth Drivers: Income decreased due to a £220m loss on sale of the performing Italian retail mortgage portfolio and a £9m negative impact from the disposal of the German consumer finance business. Q424 included a £90m provision for historical motor finance commission arrangements. Product Portfolio: Central support, central treasury operations, Barclays Execution Services assets, legacy businesses, and the merchant acquiring component of the Payments business. Market Dynamics: Includes businesses held for sale. Geographic Revenue Distribution: Centralized functions supporting global operations.

International Operations & Geographic Analysis

Revenue by Geography: