Barclays PLC (BCS) Q1 2022 Earnings Call Transcript

For the period ending March 31, 2022

April 28, 2022 4:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Welcome to Barclays Q1 '22 Analysts and Investor Conference Call. I will now hand you over to C.S. Venkatakrishnan, Group Chief Executive and Anna Cross, Chief Finance Director.

C.S. Venkatakrishnan

Good morning. I am pleased to report a strong first quarter for 2022 for Barclays. Our strategy is delivering and we saw income growth in all three of our main operating businesses. Group income was up 10% to £6.5 billion for this quarter. Profit before tax was £2.2 billion, and group return on tangible equity was 11.5%.

This comes after absorbing an increase in costs. And that increase was driven in particular by the remediation of a legacy portfolio, as well as an over issuance of securities in the U.S., something which I will talk about in a moment.

Our group income has benefited from broadly improved performance in our consumer businesses, Barclays UK and consumer costs and payments, assisted by rising rates. Global markets has also performed well as we helped clients navigate the volatility of the first quarter, both before and after the appalling invasion of Ukraine.

Unsecured lending balances remain well below pre-pandemic levels and impairment was £141 million for the quarter. We remain well capitalized with a CET1 ratio of 13.8% comfortably within our target range of 13% to 14%.

Before Anna and I continue talking about the highlights of our quarterly performance, let me start by addressing two matters. The first, is the over issuance of securities in the U.S., and the second is our exposure to Russia.

As part of our structured products business, Barclays is a frequent issuer of structured notes, and exchange traded notes in the U.S. as well as elsewhere. In March, we identified that the Securities offered and sold under our U.S. shelf registration statement had exceeded the registered amount for a period of about a year. As a result, we will be conducting a recession offer to eligible purchasers of these affected securities. Details of this will be published in due course.

The quantum of the pretax loss due to this recession is about £500 million. Anna will take you through the impact on our financial statement, including the allocation of these losses between 2021 and the first quarter of 2022. This situation was entirely avoidable, and I'm deeply disappointed that it occurred. The necessity of a strong controls culture has never been clearer to me. In fact, we have made considerable progress in improving our controls since 2016. And so the fact that this happened is particularly upsetting.