Welcome to the Barclays 2014 Full Year Results Analyst and Investor Presentation. During the call, Barclays' representatives may make forward-looking statements within the meaning of the U.S. securities laws. They can be identified by the fact that they relate to future events and circumstances and... Antony P. Jenkins - Group Chief Executive Officer & Executive Director: Well, good morning, ladies and gentlemen. Welcome to Barclays. Thank you very much for coming today. Today, Barclays is a stronger business with better prospects than at any time since the financial crisis. It's not quite a year since I set out the new shape for the group, and I said then that we needed to change Barclays fundamentally to meet the challenge of generating sustainable returns in a new operating environment, where capital requirements are higher and growth is harder to come by. I said as a result, we would no longer seek to do everything everywhere, but instead build on those areas where we have capability, scale and competitive advantage, that we would build a focused international bank stronger, much more balanced and ramp the returns. I also set out very clear 2016 financial targets against which we and you can track progress. We understood the scale of the challenge we were taking on, completely reshaping the group as a whole and making profound changes to the individual businesses within it. Since then, we've been working with pace and urgency to deliver our plan across the businesses. And I'm very grateful to all of my colleagues for their focus and commitment through a period of extraordinary change for Barclays. As a result of these efforts, I am pleased to report today steady performance against the measures I set out in May. Our fully loaded CET1 ratio has improved from 9.1% at the…

Ladies and gentlemen on the telephone lines only...

Hi. Good morning. It's Raul Sinha from JPMorgan Cazenove. Maybe I'll just focus on cost then. Obviously, you've done much better than – slightly better than your guidance of £17 billion in the previous year, and you probably didn't anticipate – I think this question was asked at Q3 as well – the impact of the Spanish sale in your forward-looking cost guidance. I think Tushar has already flagged the FX translation impact. Could you confirm two things? Firstly, is there any reason why your underlying cost progress shouldn't continue to be better than what you had said excluding the impact of FX? And then secondly, the impact of FX, as I understand, would be on your U.S. P&L, which if costs are higher, then revenues and PBT would also be higher. Is that broadly correct? Thanks. Antony P. Jenkins - Group Chief Executive Officer & Executive Director: Well, the second part is, of course, true that if FX works against us on cost, it should work for us on revenues and profit. The first part of your question, let me be clear. Cost is the strategic battleground for our industry. I think we've made very good progress in taking out £1.8 billion in the year. We think we have further and farther to go on the topic of costs. Tushar's said that we're not going to change our cost guidance for this year, recognizing that Spain comes out but then we've got the headwinds for FX. But the core issue here is really a strategic one. The automation of banking is critical for the success of any institution. You saw the chart for PCB with the CIR. (43:27) We've taken it down by 10 percentage points. We think there's opportunity to continue to drive that down as we automate…

So moving to the formal historian...

Indeed. A bit like the (46:05) the house or whatever that, in the House of Parliament. But anyway, John-Paul Crutchley from UBS. It's two related questions actually about the Investment Bank and sort of the same question. I mean, what you would see as clearly non-core has repositioned the Investment Bank within the size of the group in terms of size, shape, balance, et cetera. But the journey to decent returns still looks as distant as ever. And I wonder if you could maybe just walk us through about how you expect to bridge from where you are today to an ultimate destination where you're achieving your cost of equity. And related to that, I guess, one of the things, looking at these numbers, which really strikes me about the Investment Bank is, clearly, you've been repositioning it. It's a smaller business. The revenues are coming down, and you've talked about the cost side of the equation coming down as well. But the capital employment (46:45) business actually looks pretty much unchanged year-on-year in terms of risk assets and equity, too. So, I wonder if you can maybe just say a few words about the capital demand of that business, too, and whether that's actually pushing against you in terms of getting to the return on equity that you want to achieve. Antony P. Jenkins - Group Chief Executive Officer & Executive Director: I'll ask Tushar to pick up the detail on cost of capital in a minute. But let me just say how we're managing the group because we are managing the group's return. We have to deliver returns for our shareholders. The Investment Bank, of course, has been impacted most by all the regulatory changes, much bigger capital demand in running almost every activity in the Investment Bank.…

Morning. This is Chiran from Bernstein. I had a question on the two important units which are coming up, which is the U.S. FBO and ring-fencing. So, looking at your core, the core balance sheet and P&L right now, it'd be great if you could give us some guidance to the impacts on cost capital funding with regards to that and where are you in the process? And are there any other costs that we should be worried about on both? Thanks. Antony P. Jenkins - Group Chief Executive Officer & Executive Director: Well, we're well in progress on establishing both the intermediate holding company in the U.S. and the ring-fenced bank in the UK. As you know, here in the UK, we have to submit our proposal on the ring-fenced bank to the PRA. We're in discussion with the PRA now about how that will work. Obviously, there is a lot of detail involved in both these units being established, and we have fought quite hard about what the capital of funding implications of these things are. The headline is that we believe that we can absorb the establishment of both of them and deal with any increased funding costs and capital requirements through the activities that we've already got underway in the group. And as we develop the plan for structural reform here in the UK, we'll come back and share that with all of you in detail. We won't be able to do that, I think, until the second half of the year, but we will do that in the second half of the year. Tushar, some more detail you want to add here? Tushar Morzaria - Executive Director & Group Finance Director: No, I think you covered it. I think on the funding side, maybe just to cover that off, you already see us moving to a single point of entry framework and you've seen us issue term funding out of the holding company. That's quite a sort of clean holding company. And we haven't seen new issuance spreads vary significantly from operating company and that's all downstream, down, that's more sort of a TLAC environment. We'll talk more about that on the fixed income call. But it's hard to know what the funding cost will ultimately be. We'll go to the credit rating sort of environment, stuff like that. But at the moment, we're not seeing significant pressures. Antony P. Jenkins - Group Chief Executive Officer & Executive Director: Let's take another one from this side.

Good morning. Thank you. It's Tom Rayner from Exane BNP Paribas. Just wanted to ask you on the dividend, please, really, why you held it flat when that kind of meant missing your own payout guidance. And I guess my question's really linked to the capital ratios in the end state, 12%. My suggestion is that 12% is actually tougher than it looks when you take into account RWA inflation with operational risk and market risk coming your way. I wonder if that might be part of the reason. And also, the actual target itself of 2012. I mean, I don't know whether that's included in the allowance for countercyclical off of the ring-fence buffer, the 3% on the ring-fenced part of your bank. So, I just wondered if linking all that together if that explains the dividend decision at all. Thank you. Antony P. Jenkins - Group Chief Executive Officer & Executive Director: Let me take the dividend part of your question, and I'll ask Tushar to talk about all those components that you referred to. On the dividend, we were basically at 38% with the £0.065 payout. A 40% payout would be £0.069. So, it's really de minimis in terms of the quantum of the extra dividend payout or the dividend per share. We just felt that while we continue to build capital, it was prudent to pay out at the same level as last year, nothing more than that. I will say that we believe that it is very important for the group to cross the thresholds that we've set and greater than 11% CET1 and greater than 4% leverage. We think once we've crossed those thresholds, then there are choices that open for us. We would expect to continue to build the capital position but more…

(58:21) unrelated part of that question on non-core... Antony P. Jenkins - Group Chief Executive Officer & Executive Director: It – I'm in a good mood, so okay.

Oh, thanks. Blimey, I didn't think I was going to get away with that. Slide 17, I think, sets out your non-core progression hopefully, yeah. Tushar, I think you mentioned Q4 is a better indicator of run rate revenue. I'm assuming you don't mean the £22 million that it shows there. (58:55) the sort of the revenue and how the different aspects, obviously, the assets run off, the revenue comes down. Is there any other issues in there to do with tail-ups (59:03) and complicated things like that? And then on the right-hand side of that slide, the costs, I'd like to get a better feel for how those costs run off in sort of in relation to the revenue? How that is expected to work? Antony P. Jenkins - Group Chief Executive Officer & Executive Director: Yeah. So, on revenues, we sort of said this in the third quarter, and you saw it in the fourth quarter. Income will drop off quite significantly as you've seen in the fourth quarter. And that will be a feature of next year. In some ways, it's kind of obvious why that is. We've sold a whole bunch of businesses that are income-generating. Those businesses will no longer be here. We sold a lot of line item securities and loans that are positive carry positions, so will no longer be used and (59:47) the capital reduced on the back of that. And you're left with still a relatively significant derivatives portfolio, which doesn't generate any income. The earlier part of 2014 was somewhat misleading because it was before the restructuring and, therefore, there was new business being printed there. So that drops off to zero and there's a slight funding drive which is carrying that derivatives portfolio. So I would expect to see much, much lower levels of income than you saw in 2014, and Q4 is probably more representative of what you may see into 2015. In terms of costs, we're not giving very specific guidance on costs apart from the group target. But we do expect to manage the dilution or the drag on the group returns, group ROE of between 3% and 6%. Now, obviously, as income reduces, that's going to be a function of a lower cost base and a lower capital allocation as we continue to drive capital down. But that's how we should – or how I think about it going forward. Antony P. Jenkins - Group Chief Executive Officer & Executive Director: Tom, I know you've been quite bear on capital requirements, so I just did want to make this point before we finish your section.

(01:01:00) Antony P. Jenkins - Group Chief Executive Officer & Executive Director: When I took this job on in the summer of 2012, our CET1 ratio was 7.7%. So it moved from 7.7% to 10.5% in basically two and a half years. So, yeah, we think that the capital journey is well underway, if you like. And as we've said in our rather expansive comments on this particular topic, that we're comfortable we can continue to build that capital to the requirements. So, we feel very good about that actually. I think we've now got a track record on capital. Let's take question for this time we got. Yes.

Thank you. It's Michael Helsby from Bank of America Merrill Lynch. I just got one question. I just want to push, Tushar, a little bit more on the IB costs, if that's all right. Firstly, this doesn't count as a question, what's the core head count in the IB? You've referred to the change, but you never gave us the absolute number before. And then, you hopefully listed a few of the headwinds that you saw in terms of timing and legal costs. But if you back into the ROE that you need to get to, assuming that the tangible equity hasn't changed in that much, you need to see absolute cost reductions of north of £1 billion. That's what you're guiding us towards to get to that sort of cost. So there's actually quite a bit more than £1 billion. Tushar Morzaria - Executive Director & Group Finance Director: Yeah. So, on head count, the non-part of your question, we haven't disclosed head count. And I'm not a – look, I'm not a big fan and you'll see that you're going to talk less about it. (01:02:39) I'm not a big fan of disclosing head count simply because – take group head count, for example. That's down 5%, but it doesn't kind of mean anything because we in-sourced a ton of heads actually in Barclaycard, and you're seeing how good their cost performance. If I just talk about Barclaycard head count, you'll have seen heads go up quite substantially, yet cost stayed flat in your discretion. So, head count – so it's kind of an okay leading into ton of risk so it's much more stuff than head count going there. For example, we have a lot of focus in India, for example. And again, that's a totally different story to employing focus in Canary Wharf as well. So, a much more – I think it's better just to talk about the absolute expense level, that encompass – captures everything. The second question about how much cost need to be stripped out, you're absolutely right. I mean, it would have to be in the kind of order that you talked about, the masses and the difficult-to-work-out issues. You guys are better than me. I guess what I'm saying is a lot of cost can still come out. It won't be the complete answer, no doubt about it. I mean, we could be. We haven't talked about the operational improvements in cost. All I talked about is stuff that I can see rolling off just because it's – I know it's going to disappear. Let alone other improvements we will make. But we will have to improve, as Antony says, the optimization of all three levers to get the target ROE. And we see a part of how we're going to do that and are committed to that. It's just that the numbers at the moment can't quite...

Yeah, it's just when you look at your core cost target of less than £14.5 billion, I appreciate, is less than – but your ex-conducture (01:04:14) at £14.9 billion today and that order of magnitude that you need to do in the IB does suggest that it needs to be – the bank's core needs to be quite a lot lower than £14.5 billion. Tushar Morzaria - Executive Director & Group Finance Director: Assuming no other changes, yeah. And as you know, revenues and capital revenues are now going to – we'll do the best we can. It'll be hard to forecast them but we'll optimize on capital as well and we'll have that lever available. Antony P. Jenkins - Group Chief Executive Officer & Executive Director: I think the important thing, Michael, there is if you know that our ROE target for the core is greater than 12%, we were close to 11% ex-CTA last year. So we think that the combination of the core is easily going to get to that greater than 12%. We think that less than £14.5 billion is important on the cost side, and I can't go on enough about how excited I am personally about the topic of cost reduction because it is something – I know, don't laugh. I know it's something that our industry just hasn't focused on unlike other industries. And we are getting that structural takeout of costs now across each of the core units because you're really going to allow it to step down our total cost base, drive up CIR, drive up the returns. Tushar is absolutely right on the IB. We've got a track to deliver that, but we're also very confident on the core as a whole. Let's take some more questions, yeah, from –…

Hi. It's Manus Costello from Autonomous. I just want to ask about the future shape of the IB please, because if I look at that business, it's increasingly on the equities and the Investment Banking segment. And my understanding is that Barclays is overweight the U.S. in both of those areas. And so I was wondering, going forward, how are you going to maintain that momentum in those positions given the compensation restrictions that you're going to face relative to your key peers? And more broadly, Antony, how do you think about how that fits within the Barclays' group because having a high-performing U.S. advisory and U.S. equities business doesn't seem to fit with the UK retail and commercial bit of your business? Antony P. Jenkins - Group Chief Executive Officer & Executive Director: Well, let me address that part of your question first. So, the way I think about the group is that every component within the group, the four core businesses has to have competitive advantage, has to have capability, has to have scale and has to be capable of delivering the returns our shareholder seek. So that's the first point of the strategy. The second point is, of course, together they also have to make sense as a set because they may pass all the first tests I described but they could just as easily add more value outside the group. So that's how we think about strategy. Now, when we think about the Investment Bank, there are clear connectivities between our Investment Bank with some of our other businesses. So with our corporate clients, for example, they want to do Investment Banking business with wealth clients and so on. But the important thing for us with the Investment Bank is this focus on the origination-driven business,…

Hi. Peter Toeman from HSBC. Your RWAs are just over the £400 billion mark, which was your – I think your target for 2016, and you haven't updated us or given the new targets, which sort of might've helped to relieve concern about the capital position. So, are we to assume that items like trading book review are going to push up RWAs to compensate for the run-off of non-core and more efficient capital usage in the Investment Bank? Antony P. Jenkins - Group Chief Executive Officer & Executive Director: No. I don't think you should assume that at all. I think we've been very clear that we see £120 billion of risk-weighted assets, about 30% of the total of core that we've allocated to the IB as being a cap essentially. And so, if there are more demands on risk-weighted assets, they will have to be accommodated inside the business model. As Tushar said, we've become quite adept at absorbing those changes as they come into play. But it will be very important, and it goes back to the return on equity conversation we've been having about the IB that we manage the capital that it consumes because obviously that's a key lever for us. So we're confident at the £400 billion for the group. We're confident at the £120 billion for the IB, and we will absorb what we need to along the way. Tushar Morzaria - Executive Director & Group Finance Director: Yeah. The only other thing – I agree with all of it. The only other thing I'd add is obviously, we've been reducing RWAs at quite a steady pace, particularly non-core. We'd like to reinvest those RWAs in our more traditional banking franchises. But you wouldn't expect asset growth to be as quick as that sort of rundown. So it wouldn't surprise me if there's a sort of a timing mismatch. We could run down the price a bit quicker than we can reinvest. So we may bounce around that £400 billion, we may undershoot it but that will be obviously capital accretive at those points until we can put those assets back to work. So you may see a little bit of that as we go through the year. Antony P. Jenkins - Group Chief Executive Officer & Executive Director: Yeah. The gentleman.

Hi. Thank you. Chintan Joshi from Nomura. I have two half questions, just completing what Tom and Chris were asking. So, on Tom's question on the non-core, fair enough you don't want to talk about costs. But you did give us some hints by saying backlog Spanish, then 50/50 retail, non-retail. And I suspect the non-retail falls off faster. And then, actually, the point here should be non-core bottom line. Your impairments were much lower as well. So how should we think about the bottom line rather than revenues, cost and all that into play? And then just to complete Chris' question, the NIM in cards started the year in the 9%s and ended the year in the lower 8%s. I'm just trying to think if that exit NIM is something we should be thinking about as we look into 2015. Thank you. Tushar Morzaria - Executive Director & Group Finance Director: Want me to take them? So, non-core. Look, I know you'd love me to give you a non-bottom line sort of target, which I'm not going to do. And the reason, look – and I understand why it's difficult, but the reason why it's not sensible for me to do that is it's important. We want to get through this as quickly as we can and we want to have all the levers available to do that. And that will be accelerating capital reductions where we can. It may even be incurring losses to accelerate capital reductions where we can. Spain is a good example where we can see good capital accretion, but it will bring our statutory profits down. We should reserve that optionality to get through this as quick as we can, that's in the best interest of our shareholders. Soon as I pluck out sort…

Okay. And so within the UK business and within the U.S. business, NIMs are broadly stable. It's the interplay in the mix. Tushar Morzaria - Executive Director & Group Finance Director: Generally, yeah. Now, that's the scheming of broadly stable rate environment, which I think someone else asked earlier. I mean, as rate environment changes, we will update you.

Thank you. Antony P. Jenkins - Group Chief Executive Officer & Executive Director: Okay. So let's take a couple from this side, please.

Good morning. It's Andrew Coombs from Citigroup. Perhaps, first, if I could just complete the last question. In terms of the card outlook, could you comment on the interchange fee caps coming in probably this year and certainly by next year? And then my further question would just be on the 1Q outlook you've given to the Investment Bank. You talked about approaching the levels in last year. Perhaps you could just talk a bit about the trends between macro credit and equities within that. Thank you. Antony P. Jenkins - Group Chief Executive Officer & Executive Director: So if you take the second question... Tushar Morzaria - Executive Director & Group Finance Director: Yeah. Antony P. Jenkins - Group Chief Executive Officer & Executive Director: ...I'll deal with the interchange caps. Actually, our lending in Barclaycards here in the UK is a lending business and we're less dependent on the interchange rates. We don't have a lot of high interchange products like some of our competitors. So we think that that is absorbable number for us and we've had it in our medium-term planning. So it shouldn't make a tremendous difference to the business going forward. Tushar Morzaria - Executive Director & Group Finance Director: Yeah. Andrew, I'm not going to say much more on outlook than what's written. So I probably won't really be able to answer your question, otherwise I'll be triggering an RNS, which I don't really want to do today. So leave it at Q1 revenues will be better than Q4, probably everybody expect that but approaching Q1 last year. The only thing we did talk about was a strong Investment Banking pipeline, and that does feel pretty good. The calendar looks pretty reasonable now, the capital markets activities, deals need to print and markets need to hold up so it's very hard to extrapolate too far in the forward. But the calendar and the pipeline does look pretty good. So we should get approaching to Q1 2013 levels in the aggregate. I'm not going to give you more color on individual asset costs, unfortunately.

Okay. Arturo de Frías - Santander Investment Bolsa Sociedad de Valores SA: Thank you. Arturo de Frías from Santander. One more question on non-core, please. You were saying – answering to a previous question that you want to reserve that optionality of selling quicker and taking more provisions in order to do so. But I was wondering whether that's an optionality or you're going to be nearly forced to do that. And I'm asking that because of the increasing capital intensity of the risk-weighted assets that are left in the non-core division. As you sell non-core, the percentage of capital versus RWA or the CET1 that is in non-core is going up. Now, we have £75 billion of RWAs, £11 billion equity, that's probably slightly more than 15% capital ratio in those assets which is going up. That obviously would – could suggest that the quality of the assets that remain are – or is less – or more difficult when it comes to selling them. So I would like to hear your views in terms of do you think you will need to provision more heavily in 2015, 2016 in order to run down non-core? And if you think you have to, will you be willing to do so or will you choose to sort of not punish the short-term P&L because you think you will recover that equity anyway? I mean, those £11 billion of equity are probably worth the weight of all right now given the rollout environment. So, I guess that balance between provisions and capital is very, very important. Thank you. Antony P. Jenkins - Group Chief Executive Officer & Executive Director: So, let me start to answer your question and then Tushar, can add some color, too. Firstly, we are very confident of the…

Hi. It's Sandy Chen from Cenkos. And firstly, I want to thank you for publishing the full Pillar 3 document and the full Annual Report and Accounts as well. Does that give another question as well? Antony P. Jenkins - Group Chief Executive Officer & Executive Director: No, that's it. Thank you.

Okay. My question is really a follow-on on Manus' question with the Investment Bank. I mean, on a return on RWA basis, it looked like last year was – the return on RWAs is about 34 bps where kind of any hurdle I would imagine you're setting has got to the 100 bps, maybe 150 bps of return on risk-weighted assets and it's an 82% cost income ratio business right now. But actually within that, is there kind of equities business and advisory business that's running at, let's say, 60% cost income ratios covered up by macro and credits business that's running at far higher cost income ratio? It certainly feels that way from the sell-side, I must say. And the – and could that then lead you to a point of being really quite radical in change with entity level disposals within the Investment Bank? Antony P. Jenkins - Group Chief Executive Officer & Executive Director: Yeah. So I had a sense of where you were going to do with this question when you started. Look, we've been very clear. We're running the core business to deliver greater than 12% ROE. Each business within the core has to deliver its own piece of that. Three out of our four businesses are there or thereabouts. With the Investment Bank, the Investment Bank will have to deliver 12% ROE through the cycle. That is our goal. We will do whatever it takes to optimize the levers of capital, cost and revenue to deliver that. We think we are on a path to do that for the reasons that Tushar described, but we won't hesitate, as I said, to take whatever action is necessary to get to those returns. And I think I'm going to leave it there on that point. Antony P. Jenkins - Group Chief Executive Officer & Executive Director: Ladies and gentlemen, I just wanted to say thank you very much for coming today. I regard 2014 as a year of very substantive progress on our agenda of building the go-to bank. We are well on track to deliver the 2016 commitments. We intend to deliver those. Thank you very much for your time and attention today. Thank you.

Thank you. That concludes today's conference call.