Barclays PLC (BCS) Q1 2023 Earnings Call Transcript

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Welcome to Barclays Q1 2023 Results Analyst and Investor Conference Call. I will now hand you over to C.S. Venkatakrishnan, Group Chief Executive; and Anna Cross, Group Finance Director.

Venkatakrishnan

Good morning. Thank you for joining us on today's call. Let me start by saying how pleased I'm with our first quarter's performance for 2023. This was a record quarter of profitability for the bank. We generated 11.3 pence of earnings per share, which is well above the 8.4 pence of EPS in the first quarter of 2022, and our profit before tax of £2.6 billion for this quarter, is up 16% year-on-year.

We grew income by 11% or £741 million year-on-year, to £7.2 billion. This has demonstrated the broad-based and high quality sources of income, which we have across the Group's businesses. Supporting this income momentum, we maintained our focus on costs and our disciplined approach to investment, resulting in a cost to income ratio of 57%.

We have delivered a 15% return on tangible equity, with all three of our operating businesses generating a double-digit return. And what this means is that we are very confident of being above 10% for the full-year RoTE, in line with our group target. I'm especially proud that we delivered this strong performance while supporting our customers and clients through what has been a challenging environment for the banking sector globally.

As you think about these results, I would like to emphasize three factors, which I think have driven it. The first factor is our risk management approach, developed over a number of quarters and years, which has helped to underpin this performance. The second is a series of disciplined investments over recent years, which have helped to drive top-line growth. And third, our approach to capital management which continues to support attractive shareholder returns.

Let me begin first with the risk management. We have highlighted before that we have intentionally positioned the Group's balance sheet to protect against downside risk in a volatile macro-economic and market environment. This risk management has shown itself in different ways. In our Markets business to begin with, we have maintained a defensive risk profile since the start of 2022 and managed our risk well and adroitly throughout.

In interest rate risk in our banking book, we have successfully positioned ourselves for rising rates and minimized the capital impacts from the large moves in interest rates which we have experienced. In our credit portfolios, we have maintained robust coverage ratios and limited our risk appetite in specific products and sectors, and added first loss protection to our portfolios where appropriate.