Barclays PLC

Welcome to the Barclays Q3 2020 Results Analyst and Investor Conference Call. I will now hand you over to Jeff Staley, Group Chief Executive, and Tushar Nazaria, Group Finance Director.

Good morning. As the COVID-19 pandemic grew and the global economy began to contract, Barclays focused on three things. First, to preserve the financial integrity of the bank. If we're to maximize our support for the economy and society in this time of challenge, Barclays must first be a strong, profitable business. Second, we wanted to be there for our customers and clients. So we did things like waiving charges and interest payments to help people cope during a very difficult period. And we worked with governments, particularly the UK government, to deliver programs to help businesses, big and small, to weather the storm. And third, Barclays needs to embrace and support our colleagues within the bank, recognizing the challenges that we all face on a personal level and on a professional level. To the first point, Barclays generated a pre-tax profit in the third quarter of 1.1 billion pounds, which means we've earned 2.4 billion pounds of profit before tax in the first three quarters of this year. In the face of extreme stress for the UK and US economies, for Barclays to maintain its profitability through the first nine months of the year clearly supports the basis of our strategy as a diversified, developed markets universal bank. With tangible equity of some 48 billion pounds, we close the quarter with a CET1 ratio of 14.6%, representing the highest level of capitalization in the bank's history. Distribution of excess capital to shareholders remains a priority for this management team, and the Board will decide on full-year dividend and capital returns policies in February. Our liquidity coverage ratio stands at 181%, And we have impairment reserves today of some 9.6 billion pounds. Barclays is today highly capitalized, liquid, well-reserved for impairments, diversified in its business, and profitable. In the third quarter, Barclays UK returned to profitability following its loss in Q2 to generate a modest 196 million pounds of profit before tax. While revenue was still off some 16% versus the same quarter last year, it improved slightly versus the second quarter. With reduced impairment to 233 million pounds, Barclays UK produced a return on tangible equity of 4.5% for the quarter. The profitability of Barclays UK will most likely be the principal challenge facing the profitability of Barclays as a group in the near term. close to zero interest rates, that we provide many core banking services for free, lower charges for overdrafts, and the elimination of certain banking fees will all challenge our business. The strategic conundrum for major banks in the UK today is not new market entrance, but maintaining profitability given the state of the industry in which we operate.

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