Press extracts, etc following prelims

Full announcement at
http://www.investorrelations.barclays.co.uk/INV/A/Content/Files/2007_Barclays_Results_Announcement_web.pdf

Archived webcast of presentation following announcement at
http://pres.investorrelations.barclays.co.uk/barclays059/default3.asp?Media=

Webcast of interview with John Varley at
http://w3.cantos.com/cantos/dyn/org.php
(Log in and search for "Barclays" in "Banks")

Spring investor pack
http://www.investorrelations.barclays.co.uk/INV/A/Content/Files/Barclays_Spring_Investor_Presentation.pdf


Extracts from articles, with links to full articles, appearing in the press following preliminary results announcement on 19 Feb 08:

FT - Maggie Urry
http://www.ft.com/cms/s/d6811b38-dec4-11dc-91d4-0000779fd2ac.html

Profits were in line with forecasts and it announced a near 10 per cent increase in its dividend.

Impairment charges relating to the credit market turmoil amounted to £1.6bn for the year, only £300m higher than the £1.3bn Barclays reported in a trading update in November. The figure benefited from a £658m gain on the fair value of debt issues by Barclays Capital

Tier 1 capital ratio was 7.8 per cent at year-end – ahead of its 7.25 per cent target. Pre-tax profits were £7.08bn, down from £7.14bn, but Mr Varley said profits were up 3 per cent if disposals were excluded.

Mr Varley said ... “We feel right on top of our risk – we know where our risk is,”

The group revealed a £1.34bn exposure to US monoline insurers, but the bank had “put our best risk management people on that” and hedges were in place against it.

Bob Diamond ... said that ... the subprime exposure could take two to three years to work out ...
He said the first half of 2008 was likely to be “difficult and challenging” but he felt that action taken in the US meant the downturn “could be shallower and shorter than consensus.”

Mr Varley said the bank’s diversification had paid off and now two-thirds of profits were made outside the UK banking business.

Mr Varley said 40 per cent of the [credit] cards issued now were outside the UK.

He also highlighted the performance of the Asian business, where profits more than doubled and now contributed 9 per cent of the group total, compared with 1 per cent five years ago.

The group had set itself new targets to generate a total economic profit ... annual rate of increase of 5 to 10 per cent.

FT - Lex
http://www.ft.com/cms/s/1/287f5300-decf-11dc-91d4-0000779fd2ac.html

On the basis of Barclays’ 2007 results, there appear few reasons why it cannot be aggressive. Numbers were more or less in-line and sub-prime related writedowns were tame versus the explosions at some rivals. With a forward price/earnings ratio of just 6.5 times, investors, however, are sceptical. But that is the same across the industry, with many banks trading at least as cheaply. That makes all-share deals possible even if conditions worsen. Either Barclays backs itself and goes for it, or rivals may move first.

The Canadian Press
http://www.blogger.com/post-edit.g?blogID=7307405163503936190&postID=672224387782583872

John Varley said the company's writedown had been "prudently marked" but he couldn't rule out further losses due to the credit market crisis.
"We've been able to absorb writedowns of 1.6 billion pounds and still generate profit in 2007 in Barclays Capital, ahead of the record profit of 2006," he added.

FT - Peter Thal Larsen
http://www.ft.com/cms/s/0/9c80317a-df56-11dc-91d4-0000779fd2ac.html

... footnote 18, where the bank spelled out its continuing exposure to the securities most affected by the credit market turmoil.
... first, that investors are not convinced banks have recognised all the pain they have suffered in the past seven months in their profit statements. Second, investors are concerned there may be more to come.

The bank yesterday reported writedowns of £1.635bn ($3.2bn). However, this included a £658m gain on the carrying value of the bank's own debt - an accounting sleight-of-hand widely used in the financial sector in recent months.

...£7.37bn of loans to private equity groups stuck on its balance sheet. So far, Barclays has written off fees of £130m and taken a £58m loss on its portfolio - much less than some of its rivals. This is in spite of many leveraged loans now changing hands at less than 90 per cent of their original face value.

Barclays insists that its accounting is prudent. Executives believe the bank deserves praise for managing its risks more effectively than some rivals. "The risk exposure and the way in which banks have managed their risk is not generic," John Varley, Barclays' chief executive, said yesterday.

... Bob Diamond ... signalled the bank would take advantage of the disarray among some of its competitors to expand its operations in the US. Mr Diamond also voiced his belief that the downturn in the US would be "shorter and shallower" than suggested by forecasts.

If the monoline bond insurers were to collapse entirely - an outcome few think likely - Barclays would have to write off an additional £1.3bn.

The strongest signal of Barclays' caution is the bank's new long-term growth targets. It is aiming to achieve growth in economic profit - a risk-weighted measure of profit used for internal purposes - of 5-10 per cent a year until 2011, compared with growth of 16 per cent since 2004.

Forbes
http://www.forbes.com/markets/feeds/afx/2008/02/19/afx4669568.html

[Bob Diamond] added that BarCap was preparing for 'very challenging' conditions in the first half of 2008, although he stressed that the climate might improve in the second half if US economic growth accelerates.

The Stockmarket Reporter

Barclays said it expected 2008 economic growth in the UK and the US to be below the trend of recent years and it would respond by demonstrating discipline in its risk management and adopt a rigorous approach to lending. Chief Executive John Varley added, “Our experience of 2007 gives us confidence, and we enter 2008 with a strong capital base, a consistent strategic direction, a well diversified set of businesses and significant opportunities for growth in the medium term”.

Guardian - Fiona Walsh
http://www.guardian.co.uk/business/2008/feb/19/barclaysbusiness.creditcrunch

Varley said he believes the gloom has been "somewhat overstated" in the media and that Barclays has continued to increase its share of the UK mortgage market. "You get the impression that banks have stopped lending. But this bank has certainly not stopped lending," he said.

The Scotsman - Peter Macmahon
http://thescotsman.scotsman.com/business/Barclays-promises-tougher-approach-to.3794096.jp

Varley cautioned that Barclays would "have to be disciplined in our risk management and rigorous in our approach to lending" over the year ahead.

The Herald
http://www.theherald.co.uk/business/news/display.var.2056016.0.Barclays_reveals_1_6bn_credit_crunch_hit.php
Arrears and defaults within its retail banking and Barclaycard arm "significantly" improved, down 7% to £2.01 billion, according to the group.

Alex Potter, analyst at Collins Stewart, said "The prospect of further write-downs cannot be discounted but a dividend increase and the 'confident' outlook gives us comfort."

The Sun - Ian King
http://www.thesun.co.uk/sol/homepage/news/money/city/article244711.ece

BARCLAYS yesterday pledged to out-gun Wall Street in 2008 like never before.
Britain’s No 3 bank said current market turmoil presented a golden opportunity to out-grow the might of GOLDMAN SACHS, CITIGROUP and MERRILL LYNCH.
Bob Diamond, head of investment banking arm Barclays Capital, said: “The single biggest opportunity is in the US. Look at the players who are pulling back — that’s a great opportunity for Barclays.
“I don’t want to look back in two or three years time and say we had the opportunity to develop in the US and I flinched. I won’t say that.”

The Times - Christine Seib
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3399497.ece

Analysts praised the plan to enter the US in areas of business such as commodities, which BarCap specialised in. “It makes sense - you’re not going to get a chance like that often,” one analyst said.

Telegraph - Philip Aldrick
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/02/20/cnbarclays120.xml

"Only two or three investment banks finished 2007 better than 2006," Mr Diamond added. "We are one. That gives us the license to grow."

Profits improved at Goldman Sachs and JP Morgan but Citi, Merrill Lynch, Bear Stearns and Morgan Stanley all needed cash injections after sub-prime writedowns decimated their balance sheets. Mr Diamond, who is on target for a £15m pay package, wants BarCap beating Wall Street's finest on their home turf within a few years.

He has already built Europe's top commodities, foreign exchange and interest rates businesses and wants to replicate that success in the US, which accounts for less than 40pc of BarCap's revenues. An acquisition is "very unlikely", Mr Diamond said, but Barclays will recruit talent from rivals

"The maintenance of our policy of growing dividends... reflects the board's confidence," [Varley] said

Barclays retains significant exposure to the credit markets, with its total exposure remaining at £29.1bn and "potential credit risk loans" doubling to £11.4bn last year. However, Mr Diamond insisted the £1.64bn writedown amounted to 70pc of affected assets

The Times - Damian Reece
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/02/20/ccom120.xml

...a raft of changes made by Varley in 2006, including the appointment of Frits Seegers to run retail and commercial banking globally. Excluding South Africa, where the rand fell 12pc, his division saw income rise 28pc. This includes Deanna Oppenheimer's improving UK performance (another 2006 intake). Others revitalising Barclays include Anthony Jenkins at Barclaycard and Tom Kalaris at wealth management. The bank probably has more talent now than at any time in the past