• Return on Tangible Equity (RoTE): 10.5% for 2024, meeting the target of greater than 10%.
• Capital Distributions: GBP3 billion announced, including GBP1.2 billion in dividends and GBP1.75 billion in buybacks.
• CET1 Ratio: 13.6%, within the target range of 13% to 14%.
• Revenue Growth: Top line grew by GBP1.4 billion or 6% year on year during 2024.
• Net Interest Income (NII): Increased by 3% to GBP11.3 billion for FY24.
• Cost-to-Income Ratio: 62% for the full year 2024, better than the guidance of circa 63%.
• Loan Loss Rate: 46 basis points for the year, below the target range of 50 to 60 basis points.
• Efficiency Savings: GBP1 billion achieved in 2024, with GBP300 million in Q4.
• Barclays UK RoTE: 23% for the year.
• Investment Bank RoTE: 8.5% for 2024, up 1.5% year on year.
• US Consumer Bank RoTE: Improved to 9% from 4% as impairment charges normalized.
• Profit Before Tax: GBP8.1 billion for the full year, up 24%.
• Total Group Income: Increased by 6% to GBP26.8 billion for the year.
• Structural Hedge Income: Increased by GBP1.1 billion to GBP4.7 billion during the year.
• Barclays UK NII: Rose 1% to GBP6.5 billion.
• Impairment Charge: GBP2 billion for FY24, including a day one charge for Tesco Bank of GBP209 million.
• Barclays UK Loan Loss Rate: 16 basis points for 2024.
• US Consumer Bank Impairment Charge: Down 10% year on year at GBP1.3 billion.
• Gross Mortgage Lending: Strengthened throughout the year, with 15% to higher LTV borrowers.
• Barclaycard Customers: Acquired 1 million new customers, up 58% year on year.
• Investment Bank Income: Up 28% year on year in Q4.
• Markets Income: Up 36% year on year in Q4.
• Investment Banking Fees: Rose 22% in Q4.
• US Deposit Balances: Grew by circa 90% year on year.
• TNAV per Share: Increased by 26p during 2024 to 357p.

• Warning! GuruFocus has detected 5 Warning Sign with BCS.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Barclays PLC (NYSE:BCS) achieved all of its financial targets for 2024, including a return on tangible equity of 10.5%, meeting its target of greater than 10%.
• The company announced GBP3 billion in capital distributions, including GBP1.2 billion in dividends and GBP1.75 billion in buybacks, with a plan to distribute at least GBP10 billion by 2026.
• Barclays UK delivered a strong return on tangible equity of 23% for the year, supported by the acquisition of Tesco Bank, which is expected to drive further growth.
• The structural hedge provides a predictable source of net interest income growth, contributing to a 6% increase in total group income for the year.
• Barclays PLC (NYSE:BCS) achieved GBP1 billion in gross efficiency savings in 2024, demonstrating strong cost discipline and operational efficiency improvements.

Negative Points

• The Investment Bank's return on tangible equity was 8.5% for 2024, which, while improved, still lags behind the group's target of greater than 12% by 2026.
• The US Consumer Bank's RoTE improved to 9% from 4%, but it remains below the mid-teens target, with challenges in maintaining growth as the American Airlines partnership ends.
• Barclays PLC (NYSE:BCS) faces regulatory headwinds, including potential RWA inflation and changes in regulatory requirements, which could impact capital allocation and growth strategies.
• The acquisition of Tesco Bank, while strategic, comes with high integration costs and a current high cost-to-income ratio of around 90%, which may take time to optimize.
• Barclays PLC (NYSE:BCS) anticipates a cost increase in 2025 due to inflation and investment needs, which could pressure margins before expected efficiencies are realized in 2026.

Q & A Highlights

Q: On Barclays UK (BUK), the guidance for 2025 seems conservative given volume growth and hedge contributions. Are you being conservative, or are there factors like competition affecting this? A: We are guiding to GBP7.4 billion NII for 2025, reflecting strong growth momentum. Our assumptions include a reinvestment rate of 3.5% and four base rate reductions. We expect continued income momentum in BUK into 2025 and beyond, with some offset in liability margins due to migration.

Q: Why haven't you upgraded your 2026 targets given the better-than-expected environment? A: Our focus is on executing the operational plan without surprises. We emphasize the "greater than" in our targets, aiming for realistic assumptions. If market conditions allow, we will monetize those opportunities.

Q: With the exit of the American Airlines (AA) partnership, how do you view the US cards business? Will there be a J-curve impact on RoTE? A: We remain confident in the US cards business, focusing on organic and inorganic growth. The AA exit provides a short-term gain on sale in 2026, offsetting lower profitability. We continue to work on cost efficiency, capital efficiency, and NIM improvements.

Q: Regarding the fixed income business, what are the market share gains, and what needs to happen for further improvement? A: We have focused on securitized products and European rates. While credit was a smaller part of the wallet last year, we expect improvement as macro conditions change. We track our penetration with top clients and aim to improve our fixed income market share.

Q: How do you plan to achieve the Investment Bank's RoTE target of over 12% by 2026? A: We focus on revenue growth, revenue stability, capital discipline, and cost efficiency. The Investment Bank has delivered positive jaws and aims for a high 50%s cost-income ratio by 2026. We are confident in our ability to improve RoTE through these measures.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.