Barclays PLC AGM 2001
Barclays PLC
9 April 2001
BARCLAYS PLC ANNUAL GENERAL MEETING
STATEMENT BY THE CHAIRMAN
Welcome Ladies and Gentlemen, and may I give a particular welcome to former
Woolwich shareholders who join us for the first time.
As you have seen, the Woolwich acquisition has enabled us to add to the Board
some distinguished new directors. Sir Brian Jenkins, who was chairman of The
Woolwich, and Stephen Russell, who is chief executive of Boots, have become
non-executive directors; and Sir Brian is now a Deputy Chairman of Barclays.
John Stewart, who was chief executive officer of The Woolwich, is Deputy Chief
Executive of Barclays and has taken over responsibility for Retail Financial
Services from John Varley, John Varley is still with us - he has been
appointed Finance Director.
Mary Baker, who attended at these meetings for many years retired from the
Board in December after 18 years distinguished service.
Last year's Annual General Meeting did not take place in the best of
circumstances. There were a lot of concerns about branch closures, staff
losses, Mr Cruickshank's review of the banking industry and Barclays standing
in the press and with politicians. Bankers, not surprisingly expect some
criticism however they perform, but we readily acknowledged that we could have
handled things better.
The year 2000 as a whole has undoubtedly turned out well.
Financially, things went exceptionally well. Profit before tax grew by 42 per
cent to £3.58 billion. Earnings per share rose by 39 percent. Shareholders
gained from both a strong share price and a 16 per cent increase in the
dividend (to 58p).
These results compare well with our competitors both in the UK and overseas.
It's a standard we intend to maintain. By running a profitable business we
make a significant contribution to the economies and the social fabric of the
communities in which we operate. We are a major employer and a major taxpayer
in many countries around the globe. It's all too easy to forget in a UK
meeting just how many countries Barclays operates in. Barclays aims for the
highest standards for doing business wherever we bank.
Financial results are important. But they are certainly not the whole story.
The year has seen significant changes in the executive team and in the way the
business is organised and managed, and how our people are paid. We value
excellence - we are striving for excellence and our employees can expect
outstanding reward for outstanding performance. Everything is focused on
providing the best possible service to our growing customer base - which grew
across all our business groupings - and through them to you, the shareholders.
The external manifestation of all this has been pretty impressive this year:
- 15,000 more outlets in the UK following the arrangement with the Post
Office;
- we've introduced new accounts for the financially excluded;
- more branches in the UK as a result of the Woolwich acquisition;
- better looking and better branded branches throughout the world;
- increasing access to telephone banking;
- rapidly expanding internet capability;
- new products, new services and very high levels of customer
satisfaction.
All this is a good foundation for making progress in what is undoubtedly a
more uncertain world economic environment this year. In the UK the foot and
mouth outbreak is a terrible blow - especially to rural communities. We are
supporting and will continue to support all our customers - not just the
farmers - affected by the crisis. We are also working in partnership with
various trade support organisations and charities across the country to
provide targeted financial assistance to affected communities.
We are also continuing to work on the Competition Commission's investigation
into small and medium size enterprises. Our position is that this is a
competitive market, indeed a very competitive market and our customers get
good value for money from the service they get from us. We have some evidence
for that, the 97% satisfaction ratings which our customers accord us, which is
about as high as you can get.
Running a big global business brings big responsibilities. Barclays takes its
corporate responsibilities very seriously. There is increasing pressure on
companies to be more transparent, particularly about remuneration and about
the social and environmental impact of their activities. We welcome this and
believe that we meet the highest standards. There is a full statement on our
Remuneration Policy in the Report and Accounts, and we have just produced our
first combined Social and Environmental Report, copies of which are available
outside after the meeting if people want it.
We are very proud of our record of working in partnership with many
organisations on initiatives ranging from environmental improvement, economic
regeneration of deprived areas, enhancement of community life and the
inclusion into society of marginalised individuals. We provide funding,
advice, hands-on assistance for employee volunteers and financial support
through our community programme - which is one of the largest in the world.
Last year we spent over £26 million on community and charitable donations,
benefiting communities in every continent in which we operate. As our profits
grow our contribution to the community also grows. We are part of a group who
return 1 percent of our UK pre tax profits to the community in charitable
giving. Much of it is channelled through our people. We have a deeply
committed and caring workforce actively involved in a vast range of community
projects.
Two main pillars of our community programme are support for people with
disabilities and the disadvantaged. We have just undertaken three new major
sponsorships totalling over £5 million over three years, under these areas:
1. Barclays is sponsoring Childline - the UK's only free national
help-line for children, which is opening a new counselling centre in
Birmingham, helping Childline to complete its development plan in the
Midlands.
2. We are sponsoring the Royal National Institute for the Deaf - RNID, to
develop an IT and training course for deaf people, called 'Together IT Works'.
3. In collaboration with the Royal National Institute for the Blind -
RNIB, we are sponsoring 'The Care Network' - a new range of free telephone
support services providing practical information and emotional support for
newly registered blind and partially sighted people.
Once again, if you would like more details about these sponsorships or any
other aspect of our Community Programme, we can supply these afterwards at our
help desks.
Finally, the last word should go to our people. Our employees throughout the
world have responded magnificently to the many challenges that face us, and
there are many. In the front line and in direct contact with our customers
they help to fashion the products and services which we offer. This has
underpinned our achievements. I hope you will join me in thanking our staff
for their hard work and dedication.
Thank you.
Now I propose to do what we did last year and ask Matthew Barrett, our Chief
Executive, to give an account of the progress the business has made since the
last Annual General Meeting.
Disclaimers re speeches at the 2001 AGM
1. The following statement should appear in italics 1) at the end of the
RNS announcement; and hence 2) at the end of the speeches as they appear on
the Website.
'This document contains certain forward-looking statements within the meaning
of the United States Private Securities Litigation Reform Act 1995 with
respect to certain of the Group's plans and its current goals and expectations
relating to its future financial condition and performance. By their nature,
forward-looking statements involve risk and uncertainty because they relate to
future events and circumstances, including UK domestic and global economic and
business conditions, market related risks such as interest rates and exchange
rates, the policies and actions of regulatory authorities and the impact of
competition, a number of which are beyond the Group's control. As a result,
the Group's actual future results may differ materially from the plans, goals
and expectations set forth in the Group's forward-looking statements'.
BARCLAYS PLC ANNUAL GENERAL MEETING
STATEMENT BY THE GROUP CHIEF EXECUTIVE
Thank you, Chairman, for the opportunity to address the annual general meeting
and my task this morning is to provide a brief account of management's
stewardship of your Bank for the year 2000.
Good morning ladies and gentlemen.
I am pleased to report significant progress in implementing our strategy.
We accelerated the pace of transformation throughout the bank and we
maintained significant momentum in all our businesses around the world.
Indeed, a great strength of Barclays is the fact that we are not isolated on
these islands, nor are we totally dependent on any one customer group or on a
narrow product line.
Barclays is one of the most famous brands in banking, with over 300 years of
history, a history of trust and integrity that constitutes a powerful calling
card around the world. We are present in some 60 countries and have over 600
branches outside the UK. It is on this global platform that we are building
for the future.
We are embracing change as an opportunity to develop breakout strategies that
will create a virtuous circle of superior service to customers, improved
careers for employees and enhanced returns to you our shareholders, while at
the same time contributing positively to the communities within which we work
and live.
Today, I will give a brief overview of progress in each of those areas.
First, you, our shareholders. We achieved pre-tax profits of £3.58 billion -
up 42% on 1999. Earnings per share increased by 39% to 163.3 pence. We
increased dividend payments to shareholders by 16% to 58 pence per share.
Revenue growth was very strong, our productivity improved and strategic
investment doubled.
Our TSR in 2000 was 21% - that was bettter than the FTSE 100 and better than
the All Bank Index. However, our goal is for our TSR to rank in the top
quartile of a dozen of the world's best banks, including our major UK
competitors. And while we are in line with the median performance of the group
in the year 2000, we were not in the top quartile. So there is more to do.
Despite volatile markets and weakness in the world's two leading economies, we
have made a solid start to the year, building on our success in 2000. On the
outlook for the UK economy, our view remains unchanged: there is reason for
caution, but not for alarm.
Customers. In 2000, we made progress toward transforming everything we do for
customers to achieve superiority in service quality, range and value
proposition.
As a result, we acquired new customers and we won new business from existing
customers. The average number of products per current account customer
increased to 2.3. Our UK card business attracted 740,000 new customers, and
the number of current account customers increased by 200,000.
Two transactions we executed addressed our goal of broadening and deepening
relationships with customers through expanding the range and quality of our
products and services.
Our acquisition of The Woolwich has brought new strength in mortgages, liquid
savings, independent financial advice, and the Open Plan proposition.
Our strategic alliance with Legal & General announced in the 1st quarter was
also a significant move towards our being able to meet our customers' needs by
offering the broadest possible array of high quality long-term savings and
investment products - whether we manufacture them or not.
As the year unfolded, we substantially expanded distribution and access
channels. We ended the year with a bank more accessible and more convenient
for customers. With the acquisition of The Woolwich, the number of ATMs in
the UK rose in 2000 by 600 to 3,800 and the number of UK branches rose from
1,899 at the start of the year to 2,129. Our personal customers now also have
access to basic banking services through the country's 15,000 post offices.
Barclays remains the UK's biggest internet bank, and we continue to broaden
and improve the range of services available through this channel. Currently,
2 million Barclays customers are registered with our online service - that's
the largest number in the UK - up from 500,000 at the end of 1999.
Our telephone banking now serves some 1.2 million customers, up from 1 million
at the end of 1999. Now this is an area where frankly we underestimated the
growth in demand and where response times have not been good enough as a
result. This is receiving priority attention and considerable improvements
can be expected this year in our telephone banking service.
Accessibility is also about increasing access to banking regardless of
economic or social status. To this end, we launched a new cash card account in
October, and over 31,000 were opened in the first 4 months. This is just one
of a number of initiatives to help combat the problem of financial exclusion.
So the successes in the personal sector I'm happy to report were mirrored
across other sectors as well.
Our Wealth Management business, which already has over 1 million customers,
performed strongly and Barclays was voted the most recognised brand in the
sector by customers in continental Europe.
In Corporate Banking, the number of business customers taking advantage of
online banking by Barclays rose by 45%. Lending balances and deposit balances
also increased during the year. Independent research among mid-corporates
across the UK in 2000 showed that Barclays remains the most popular bank with
customers, ranking number one in 22 out of 24 categories, including quality of
service, quality of advice, quality of people, and value for money.
In Barclays Capital, we expanded our market share of capital raising for
customers in the loan and bond markets outside the US by 41%, that was the
fastest rate of organic growth of any of the top ten banks, and it contributed
to a 30 per cent rise in operating profit. Barclays Capital has a robust
business model, a scaleable platform and one of the lowest break-even points
in the industry, giving the means to invest in further client service.
In Barclays Global Investors, our US based investment management company, 2000
was a milestone year - we saw solid evidence of the payoff from past
reinvestments of earnings in the business as revenue grew by 37%. At the end
of 2000, BGI was the largest institutional fund manager in the world and the
second largest overall, with £550 billion under management.
These are all good results. They show that we are making strides to give
customers what they want, when and where they want it. But banking in the
21st century is no place for the complacent or the lethargic - so 2001 will
see Barclays continue to transform itself for the benefit of ours customers.
Employees. Human capital in a knowledge business such as ours is something to
get right or nothing else matters. We are working aggressively to build an
unrivalled workforce, management and leadership team.
We are placing a much stronger emphasis on training. We already invest around
£70 million a year in training at Barclays worldwide, and we are building on
this by creating our own corporate university to support self-development,
enhance employability and open up new opportunities for all our people.
During the year, we launched an important initiative to eliminate artificial
barriers to advancement and to boost diversity at Barclays. Talent is scarce
and expensive. So we must do all we can to nurture, reward and retain the
best and brightest people.
We have improved our policies to ensure a better work/life balance for
employees. In 2000, we introduced progressive policies such as extended
maternity breaks, parental leave, and carer and adoption breaks, placing us at
the forefront in these areas in the UK.
We have also made good progress in implementing all the elements of
performance-based culture. This ensures that merit and merit alone will
determine advancement and reward in the future.
Last year, we signed a historic agreement with the banking union, UNIFI. These
Partnership Principles demonstrate a joint commitment by both parties to make
Barclays a more successful business and a better place to work. We are very
very proud of this industry-leading agreement and we firmly believe that it is
a cornerstone of our efforts to transform Barclays.
We have also made strides in reshaping our management. For example, 8 of 10
Executive Committee members are either new or have different roles. At the
next level down, we have hired 48 outsiders while promoting 76 insiders into
the senior executive ranks. And of course the acquisition of The Woolwich
also gave us an infusion of very high-quality talent. So we are pulling
together a top quality, world class team at all levels, and one that shares a
passion to create something special for customers and shareholders.
The community. Sir Peter has already spoken about our community programmes.
So I won't go over the same ground. I wish only to add my thanks to the
thousands of community-minded employees who give their time and effort to
community work. We are very proud of their efforts - indeed they set an
example to us all.
Philanthropy is a vital aspect of our community support, but it is only one.
Running a large and successful business - especially one that touches as many
lives as Barclays - contributes in many other ways to the general welfare
through the jobs it creates, the business it provides to its many suppliers,
and of course the taxes it pays.
And of course, a successful business brings independence, security and peace
of mind to the many millions of people from all walks of life that are its
shareholders, whether directly or indirectly. Indeed, in this age of Pension
Fund Capitalism, millions of people own Barclays shares through their pension
funds or unit trusts, and when we do well, we are helping to secure the
retirement of millions of men and women across the country.
We also play a vital role in maintaining the strength of the UK economy, not
least through helping small businesses to start-up and grow. We help tackle
social issues - such as financial exclusion - and provide expertise and
resources to credit unions, to money advice groups and regional development
agencies.
Now all of this activity is more than philanthropy and more than good business
sense. It is simply right. It is right that an organization of Barclays
stature and prominence gives back to the communities in which it operates,
helping them to thrive and prosper.
To sum up: Barclays has made good progress in its strategy to transform
everything it does to deliver value for all its stakeholders.
Therefore, Mr Chairman I am pleased to report a healthy business. And most
importantly, on behalf of management, the determination and capability to do
more.
Thank you Mr Chairman.
Disclaimers re speeches at the 2001 AGM
1. The following statement should appear in italics 1) at the end of the
RNS announcement; and hence 2) at the end of the speeches as they appear on
the Website.
'This document contains certain forward-looking statements within the meaning
of the United States Private Securities Litigation Reform Act 1995 with
respect to certain of the Group's plans and its current goals and expectations
relating to its future financial condition and performance. By their nature,
forward-looking statements involve risk and uncertainty because they relate to
future events and circumstances, including UK domestic and global economic and
business conditions, market related risks such as interest rates and exchange
rates, the policies and actions of regulatory authorities and the impact of
competition, a number of which are beyond the Group's control. As a result,
the Group's actual future results may differ materially from the plans, goals
and expectations set forth in the Group's forward-looking statements'.
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