Barclays PLC (BCS) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 27, 2023, 04:30 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

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

C.S. Venkatakrishnan

Good morning. Thank you for joining Anna and me on today's call. Let me start by saying we continue to deliver a consistent strong performance quarter-on-quarter. In particular, our second quarter results show resilience against a mixed macroeconomic backdrop and against the viewed market activity.

This performance again demonstrates the stability and strength of the franchise, which we have built over many years. We generated GBP 6.3 billion in income in the second quarter of up '23, up 6% year-on-year, excluding last year's impact from the Over-issuance of securities. This growth reflects the diverse sources of income, which we have built across the group.

Our focus on cost discipline delivered a cost-to-income ratio of 63% for this quarter, putting us on track to meet our guidance of low 60s in 2023. Our deliberate and prudent approach to risk management over many years it's providing protection against macroeconomic uncertainty. As a result, our credit performance continues to be in line with our expectations. Together, these foundations have generated a profit before tax for the bank of GBP 2 billion in the second quarter, earnings per share of 8.6p and a return on tangible equity of 11.4%. This second quarter performance means that we have delivered for the first half of 2023. And income, which is up 9% year-on-year, again, excluding the over-issuance. And a return on tangible equity for the first half of 13.2%, again, in line with our target of above 10% for the year.

Despite the mixed macroeconomic backdrop, we continue to invest thoughtfully where we see opportunities to build competitive advantage and to service our customers and clients more effectively. In Investment Banking, building on our strength in the U.S., we are growing our market share in the U.K. and in Europe, and we have risen to #1 ranking in fee share in the U.K and a #2 position in Germany for the second quarter of 2023 as well as our sixth position globally.

While announced volumes have been muted, client consideration of M&A alternatives remains active in anticipation of improved market conditions, and we have been deeply engaged in a full range of risk transfer activity. For example, Barclays was exclusive provider of financing for Ares’'s $3.6 billion deal with PacWest Bancorp in the last quarter.