27 annual alm conference - uk alma

27th Annual ALM Conference Macro Update:

The Future is Built on the Foundations of the Past

Michael Manna

MD, Head of Barclays UK Funding & Investments

31st January 2020 Contributions From Frank Kenny & Bill Yuan

This is not a product of Barclays Research

Restricted - External

Table of Contents

1. Legacy of 2010s “Reeling in the Years”

Policymakers were busy…

2. Consequences?

3. So how did we close the decade?

4. How do we start the next decade?

5. Legacy Issues and New Challenges

6. Bringing it Home the UK Outlook

Legacy of 2010s “Reeling in the Years”Policymakers were busy…


Regulations: New Rules for the Road….

15

18

21

24

27

30

0

50

100

150

200

250

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

VaR ($mn) Top 25 Banks in Developed Economies

Total Value at Risk (LHS) IFRS - Total Assets (RHS)

Total Assets ($tn)

Source: Bloomberg

Following the collapse of the Lehman

Brothers. Regulators changed their approach

Guided by the lessons learned and

acknowledging the importance of the banks

and their contribution to financial stability.

Regulators pivoted from a more passive,

decentralized, and trusting relationship to

one which is now globally centralized,

prescriptive and is supported by active

surveillance

Regulations not only dictate the amount and

quality of capital needed to support risk

taking, but it also capped leverage and

acknowledged that liquidity won’t always be

there

It went further to even prescribe the types of

activities Banks can undertake and how they

must service their clients

Resulting in winners & losers, shifting the

balance of power, and has had a profound

effect on the how the financial ecosystem

operates.

Source: Bloomberg

1


Central Banks pushed the limits of Conventional Policy & Adopted Unconventional Policy

Source: Federal Reserve, BoE, ECB Source: Federal Reserve, BoE, ECBNote: adjusted for annual FX movements

-1

0

1

2

3

4

5

6

-1

0

1

2

3

4

5

6

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

Rate (%)Rate (%)

Effective Fed Funds Rate ECB Depo Rate

BoE Bank Rate

0

2,000

4,000

6,000

8,000

10,000

12,000

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

Fed ECB BoEAssets ($bn)

G3 Central Bank Assets G3 Central Bank Rates

2


Households have De-Levered,While Governments have Levered-Up

70

75

80

85

90

95

100

105

110

70

75

80

85

90

95

100

105

110

De

c-0

8

Jul-

09

Feb

-10

Sep

-10

Ap

r-1

1

No

v-1

1

Jun

-12

Jan

-13

Au

g-1

3

Ma

r-1

4

Oct

-14

Ma

y-1

5

De

c-1

5

Jul-

16

Feb

-17

Sep

-17

Ap

r-1

8

No

v-1

8

Pct %Pct % US Debt Comparison

US Household Debt to GDP US Gov't Debt to GDP

Source: IMF

50

60

70

80

90

100

50

60

70

80

90

100

De

c-0

8

Jul-

09

Feb

-10

Sep

-10

Ap

r-1

1

No

v-1

1

Jun

-12

Jan

-13

Au

g-1

3

Ma

r-1

4

Oct

-14

Ma

y-1

5

De

c-1

5

Jul-

16

Feb

-17

Sep

-17

Ap

r-1

8

No

v-1

8

Pct %Pct % UK Debt Comparison

UK Household Debt to GDP UK Gov't Debt to GDP

Source: IMF

Households de-levered as central banks gave them space

Bank bailouts – governments catching the falling knife

Expansion of the social welfare to help those impacted

Source: IMF Source: IMF

3

Consequences?


Global Asset Prices have Risen Dramatically

Source: Bloomberg, Barclays, Liv-ex

0

2

4

6

8

10

12

14

16

18

20

95

105

115

125

135

145

155

165

Spread vs 10Y UST (%)

Share Price ($) UST ETF and Credit Spreads

iShare 10-20Y Treausry ETF (LHS)Bloomberg US BBB - 10Y UST Spread Index (RHS)Barclays US HY - 10Y UST Spread Index (RHS)

100

150

200

250

300

350

400

20

05

20

05

20

06

20

07

20

07

20

08

20

09

20

09

20

10

20

11

20

11

20

12

20

13

20

13

20

14

20

15

20

15

20

16

20

17

20

17

20

18

20

19

20

19

Index Liv-ex 100 Benchmark Fine Wine Index

Note: Tracks the price movement of 100 of the most sought-after fine wines for which there is a strong secondary market

100

110

120

130

140

150

160

Index UK House Prices (2005 = 100)

0

10

20

30

40

50

60

70

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Index (pts)Index (pts) US Equity and Volatility

S&P 500 (LHS) VIX (RHS)

4


Companies Opted to use Labour Over Capital

Labour market dynamics caused businesses to favour labour over capital

Resulting in a lack of capital investment which…..

Source: OECD Note: China is not part of the OECD

OECD Unemployment Rate OECD Average Investment Growth YoY

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

Percent

-12

-10

-8

-6

-4

-2

0

2

4

6

8

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

OECD Average Investment Growth YoY

Source: OECD

Percent

5


Has Led to a Decline in Productivity

Source:Source: ONS, Bundesbank, Bureau of Labor Statistics (BLS)

-6

-4

-2

0

2

4

6

-6

-4

-2

0

2

4

6

Growth YoY (%) Productivity Growth in Developed Economies

UK US Germany

6


Resulting in Anaemic Growth

Source:Source: ONS, Federal Statistical Office of Germany (Destatis), Bureau of Economic Analysis (BEA)

-8

-6

-4

-2

0

2

4

6

-8

-6

-4

-2

0

2

4

6

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Percent Real GDP Growth

US Germany UK

7


Throughout the DecadeCorporate earnings have Consistently Risen

Source: Bloomberg

8

0

20

40

60

80

100

120

140

160

180

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

USD/Share

S&P 500 Earnings per Share


… and Corporates Borrowedwith the Help of Loose Monetary Policy

Companies’ debt-to-EBITDA Ratios have Increased

Source: McKinsey and Company, Bloomberg

9


So Where has the Money Gone?

Outlays of US Companies

Source: Bloomberg

10


Central bank Score Card: How has Policy Performed?

Unemployment

Inflation

Growth

11


Unemployment – GreatInflation – Not so Good

Since the 2008:

PCE was above 2% for two short periods (2011, 2018)

Eurozone HICP flirted with deflation several times 2014-16

UK inflation in the UK shot up post-Brexit but has since trended lower

Source: Federal Reserve, BoE, ECB

Note: PCE = Personal Consumption Expenditure, HICP = Harmonised Index of Consumer Prices,

CPI = Consumer Price Index

-0.5

0

0.5

1

1.5

2

2.5

3

3.5

4

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

20

08

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

US PCE UK CPI Eurozone HICP

YoY Chg (%)

Source: BLS, ONS, Eurostat

3

4

5

6

7

8

9

10

11

12

13

3

4

5

6

7

8

9

10

11

12

13

20

07

20

08

20

09

20

10

20

11

20

12

20

12

20

13

20

14

20

15

20

16

20

17

20

17

20

18

20

19

Percent

US UK Eurozone

Inflation Unemployment

12


Not All Job are Equal: Quality vs. Quantity

Low to negative wage growth

Low job security

Little/no safety net (benefits)

Low Prospects

Has this helped fuel the support for populism?

UK Labour Market & Zero Hour Contracts US Job Quality Index

Source: ONS

3

4

5

6

7

8

9

3

4

5

6

7

8

9

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Percent

Unemployment Rate Unemployment Rate ex Zero Hour Contract

Source: Cornell

Note: The index tracks the ratio of “high-quality” jobs versus “low-quality” jobs as defined by the

researchers. A value of 100 indicates there are equal number of the two groups. A reading of

81 (now) implies that there are 81 high-quality jobs for every 100 low-quality jobs

13


Income vs. Wages

Poor Jobs = Rising Inequality

Capital Gain vs No Capital to Gain

Shelter is a Basic need

Has this further contributed to the support for Populism?

Source: Economic Policy Institute Source: ONS

UK Housing Affordability RatioCumulative % Change in Real Annual Earnings

Note: This is the ratio of median price paid for residential property to the

median workplace-based gross annual earnings for full-time workers

2

3

4

5

6

7

8

9

10

2

3

4

5

6

7

8

9

10

Newly-built

Existing

14


Rise of populism

UK – Corbyn

US – Trump/Sanders

Germany – AfD (Alternative for Germany)

France – Yellow Vests Movement

Italy - The League / Five Star

Austria - Austrian People's Party (OVP)

Hong Kong – Umbrella Movement

Source: The Guardian, Chan Lowe

15


The Enemy of Populism: Free Markets & Open Borders

Value of Exported Good as a % of Global GDP

Source: CEPII, Foreign Policy

2

7

12

17

22

27

19

04

19

09

19

14

19

19

19

24

19

29

19

34

19

39

19

44

19

49

19

54

19

59

19

64

19

69

19

74

19

79

19

84

19

89

19

94

19

99

20

04

20

09

20

14

Percent

Been here before …

16


While Protectionism is Occurring Demographics Creates further friction in Society

Italy 1950 Italy 2020 Italy 2070

Source: UN World Population Prospectus

17


Disruption: What we use & How Service are Delivered

In 2019:

Tesla delivered 365,000 cars

Ford sold 2.41million cars

GM sold 2.9 million cars

Source: Bloomberg, Ford, GM, Tesla

Automakers by Market Capitalisation

30

40

50

60

70

80

90

100

110

30

40

50

60

70

80

90

100

110

Oct

-18

No

v-1

8

De

c-1

8

Jan

-19

Feb

-19

Ma

r-1

9

Ap

r-1

9

Ma

y-1

9

Jun

-19

Jul-

19

Au

g-1

9

Sep

-19

Oct

-19

No

v-1

9

De

c-1

9

Jan

-20

USD (bn)

Ford GM Tesla

Source: Bloomberg

Top 10 Companies by Market Capitalisation

1,826

1,3781,258

995911

616 563 550474 422

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

USD (bn)

18

So how did we close the decade?


Central Bank Attempted to Normalise Policy

Source: Goldman Sachs, Bloomberg

Policy Mistake?

1

2

3

4

5

6

7

3,700,000

3,750,000

3,800,000

3,850,000

3,900,000

3,950,000

4,000,000

4,050,000

4,100,000

4,150,000

4,200,000

Rate (%)USD (mn)

Fed Total Assets GC Index

Managing Reserves Post QE & Regulation

Source: Federal Reserve, CTCC

Note: Index is the weighted average of the interest rates paid each day for the 3

most traded CUSIPs of General Collateral Finance Repos.

1.3

1.5

1.7

1.9

2.1

2.3

2.5

98

99

99

100

100

101

Jan

-18

Feb

-18

Ma

r-1

8

Ap

r-1

8

Ma

y-1

8

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

Jan

-19

Feb

-19

Ma

r-1

9

Ap

r-1

9

Ma

y-1

9

Jun

-19

Jul-

19

Au

g-1

9

Sep

-19

Oct

-19

No

v-1

9

De

c-1

9

Jan

-20

Rate(%)Index (pts)

Goldman Sachs Financial Conditions Index (LHS) Effective Fed Funds (RHS)

Note: Financial Conditions Index takes into account of policy rate, long term risk-

free rate, credit spreads, exchange rate and equity prices

19


Frustration turned into Policy: Trade was the Target

Source: World Bank, howmuch.net Source: J.P. Morgan, Markit, China Federation of Logistics and Purchasing

Manufacturing Purchasing Managers’ Index

40

42

44

46

48

50

52

54

56

58

60

40

42

44

46

48

50

52

54

56

58

60

Index

Global US UK Germany China

2019

20


Central Bank Took Action…..Again

Source: Bloomberg

-0.8

-0.3

0.2

0.7

1.2

1.7

2.2

2.7

3.2

-0.8

-0.3

0.2

0.7

1.2

1.7

2.2

2.7

3.2

Feb

-18

Ma

r-1

8

Ap

r-1

8

Ma

y-1

8

Jun

-18

Jul-

18

Au

g-1

8

Sep

-18

Oct

-18

No

v-1

8

De

c-1

8

Jan

-19

Feb

-19

Ma

r-1

9

Ap

r-1

9

Ma

y-1

9

Jun

-19

Jul-

19

Au

g-1

9

Sep

-19

Oct

-19

No

v-1

9

De

c-1

9

Jan

-20

Yield (%) 10Y Government Bonds

US UK Germany

Source: Morgan Stanley

21

How do we start the next decade?


Rates will Remain: Lower for Longer

Source: Bloomberg

-1

0

1

2

3

4

5

6

-1

0

1

2

3

4

5

6

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

Rate (%)Rate (%)

Effective Fed Funds Rate ECB Depo Rate

BoE Bank Rate

G3 Central Bank RatesG4 Central Bank Assets as Share of GDP

33.0

34.0

35.0

36.0

37.0

Percent

Source: Bloomberg

22


Monetary Policy: Pushed to the limit

QE extending

Extend QE to more asset classes; RMBS,

Equities?

Yield curve control?

Deeper negative rates?

Helicopter Money?

Source: Financial Times

23


Is it Time for Fiscal Policies to Take Over?

“Governments with fiscal space should be ready to act in an effective and

timely manner”

Mario Draghi, September ECB Meeting

Christine Lagarde, January ECB Meeting

24


Populism’s New Target: Central Banks

25

Legacy Issues and New Challenges


Trade: Detente for Now Inflation Remains Elusive

Trade tensions & impact remain despite détente

Can’t un-ring a bell

Inflation forwards pointing to low inflation despite extraordinary

policy accommodation

Source: OECD Source: Bloomberg

1.0

1.5

2.0

2.5

3.0

3.5

4.0

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Jan

-15

Ap

r-1

5

Jul-

15

Oct

-15

Jan

-16

Ap

r-1

6

Jul-

16

Oct

-16

Jan

-17

Ap

r-1

7

Jul-

17

Oct

-17

Jan

-18

Ap

r-1

8

Jul-

18

Oct

-18

Jan

-19

Ap

r-1

9

Jul-

19

Oct

-19

Jan

-20

Rate (%) 5y5y Inflation Swap Forward

UK Euro US

26


Demographics Continue to Worsen& Mother Nature Strikes Back

Global Labour Force Aging Rapidly Environmental Disasters can have a Profound Impact

Source: Morgan Stanley Source: IMF

27


..but Maybe the Biggest Headwind is Here Already: Coronavirus

10Y UST Yield Change

Indexed to start of outbreakConfirmed Coronavirus Cases

(as of Jan 27, 2020)

Source: J.P. MorganSource: Goldman Sachs

28


US Election: Next Term is 40% if this Decade

Super Tuesday March 3, 2020

Source: Bloomberg, Predictit

2020 Democratic Nomination Probability

0

10

20

30

40

50

0

10

20

30

40

50

Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19

Percent

Biden Sanders Warren

Source: Goldman Sachs

29

Bringing it Home the UK Outlook


Election Uncertainty Removed: Boris Broke the Red Wall

2019 GE 2017 GE

Was It Brexit or Corbyn?

Source: BBC

30


Business Confidence Bounced Post-Election

Source: Markit Source: Deloitte, Haver Analytics, Barclays Research

UK Business Sentiment Bounce in Optimism in the Latest Deloitte CFO Survey

46

47

48

49

50

51

52

53

54

55

56

46

47

48

49

50

51

52

53

54

55

56

Index

UK Manufacturing PMI UK Services PMI UK Composite PMI

31


Will Political Certainty Stimulate Investment?

Source:

32


Consumer Weakens Despite Strong Labour Market Conditions

Source: ONS, GfK, Haver Analytics, Barclays Research

December retail sales disappoint

3

3.5

4

4.5

5

5.5

6

6.5

7

7.5

8

8.5

9

-0.5

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Percent

Average Weekly Earnings Growth (RHS)

UK CPI (RHS)

UK Unemployment Rate (LHS)

Chg YoY (%)

UK Labour Market

Source: ONS

33


Revisiting Demographic: The UK isn’t Immune

Post-Brexit migration policies could shape future demographics

UK 1950 UK 2020 UK 2070

Source: UN World Population Prospects

34


Government and BoE: Ready to Act

• “I really need to see an imminent and significant improvement in the UK data to justify waiting a little bit longer.”

• Gertjan Vlieghe, January 2020

• “All told, a reasonable judgment is that the combined conventional and unconventional policy space is in the neighborhood

of the 250 basis points cut to bank rate seen in pre-crisis easing cycles.”

• Mark Carney, January 2020

Source: Office for Budget and Responsibility, Barclays Research Source: Barclays

BoE Rate Path Expectations (MPC-dated SONIA swaps)

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

0.90%

0.30%

0.40%

0.50%

0.60%

0.70%

0.80%

0.90%

Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24

28-Jan-20 27-Oct-19 27-Jan-19

May-20 MPC

Expected change in public spending and saving profile

35


BoE Policy Options…

Source: Bank of England

TFS

QE

Counter-

Cyclical

Buffer

• Current loans remaining = £108bn (peak = £127bn)

• Barclays estimate £53bn due for repayment by end-1Q21

• If they chose simply to allow it to mature:

• Influence the cost mortgages and slow the market?

• Extend QE to include UK RMBS purchases?

• APF maintained £435bn (21% of UK GDP)

• Restart APF?

• Changes the capital mix - more regulatory flex in a stress

• Will require more CET1, most expensive component of the capital stack and

impacts leverage

• If the cost of raising capital is prohibitive, then risk needs to be reduced

• Subject to the starting point this could reduce aggregate credit capacity in the

banking sector, is that what was intended ?

36


Closing Thoughts….

History is a continuum, every decade will leave its legacy on the next

2010s legacy on the 2020 is one of recovery from new lows, greater influence from policy makers,

experimentation, rehabilitation, and the introduction of imbalances in both our economy and society

We start the next decade with policy makers and politicians together facing new immediate challenges and

historical slower evolving ones still developing

Solutions will need to address correcting the imbalances in the economy, society and our environment

Finding solutions won’t be difficult, implementation and acceptance of their consequence will be the

challenge.

37


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Barclays is acting solely as principal and not as fiduciary. Barclays does not provide, and has not provided, any investment advice, nor any investment recommendation or personal recommendation to you in relation to the transactionand/or any related securities described herein and is not responsible for providing or arranging for the provision of any general financial, strategic or specialist advice, including legal, regulatory, accounting, model auditing or taxation adviceor services or any other services in relation to the transaction and/or any related securities described herein. Accordingly Barclays is under no obligation to, and shall not, determine the suitability for you of the transaction described herein.You must determine, on your own behalf or through independent professional advice, the merits, terms, conditions and risks of the transaction described herein. Neither Barclays nor any of their respective directors, officers, employees,representatives or agents, accepts any liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this communication or its contents or reliance on the information containedherein, except to the extent this would be prohibited by law or regulation.

Barclays is not responsible for information stated to be obtained or derived from third party sources or statistical services. Any past or simulated past performance, including back-testing, modelling or scenario analysis contained herein isno indication as to future performance. No representation is made as to the accuracy of the assumptions made within, or the completeness of any modelling, scenario analysis or back-testing. All opinions and estimates are given as of thedate hereof and are subject to change. The value of any investment may also fluctuate as a result of market changes. Barclays is not obliged to inform the recipients of this communication of any change to such opinions or estimates.

Barclays may at any time acquire, hold or dispose of long or short positions (including hedging and trading positions) and trade or otherwise effect transactions for their own account or the account of their customers in the products referredto herein which may impact the performance of a product. Barclays may have investment and commercial banking, lending, asset management and other relationships with parties which are or may become involved in the transactionsreferred to herein and/or which may have interests which could potentially conflict with the interests of the recipient hereof. Barclays has in place policies and procedures to restrict the flow of information and to identify, consider andmanage such potential conflicts of interest. Accordingly, you acknowledge and agree that no part of Barclays is required to restrict its activities as a result of the provision of this communication and that all parts of Barclays may undertakeany activities without further consultation with or notification to you. Barclays shall not be required to account to you for any revenue or profits obtained in connection with any activities of Barclays as referred to herein.

This material has not been produced by Barclays research department and does not constitute investment research or investment recommendations for the purposes of the Financial Conduct Authority rules or a research report under U.S.law. Barclays‘ research analysts and research departments are independent from Barclays’ banking business (“Banking”) and are subject to certain regulations and internal policies. Barclays’ research analysts may hold and makestatements or investment recommendations and/or publish research reports with respect to any company referred to herein, the transactions contemplated herein or any person involved therein or related thereto that differ from or areinconsistent with the views or advice communicated by Banking. Furthermore, any preliminary valuation summary presented herein represents the views of Banking. In the course of vetting potential transactions and pursuant to Barclays’internal preliminary valuation, diligence and compliance procedures, Banking may obtain the independent views of our firm’s research department regarding the company and merits of a proposed transaction. However, our researchdepartment is independent and, in accordance with U.S. rules, Banking is not permitted to make any representation regarding the views of the research analyst who has been, or may be, assigned by research management toindependently evaluate the company and any proposed transaction. Accordingly, you should not infer that any preliminary valuation summary presented by Banking reflects the views of the research department and nothing herein orotherwise should be construed as a promise or offer of favorable coverage or an indication of a specific rating or price target that may be assigned in the future by any Barclays’ research analyst.

This communication is being directed at persons who are professionals and is not intended for retail customer use.

Barclays may disclose any information relating to any securities or transaction described herein which is required by regulators.

Benchmarks have been the subject of recent national, international and other regulatory guidance for reform. For example, in 2017, the FCA announced that it will no longer persuade or compel banks to submit rates for the calculation ofthe London interbank offered rate (“LIBOR”) benchmark after 2021. This announcement indicates that the continuation of LIBOR (including US$ LIBOR) on the current basis cannot and will not be guaranteed after 2021. The FCA hasstressed that “the base case assumption for firms’ planning should be no LIBOR publication after end-2021”. EURIBOR has been reformed in 2019 and is expected to continue to be published after end-2021. Central banks have identifiedreplacement rates, but the timing of and mechanisms for implementation have not yet been confirmed. Accordingly, it is not currently possible to determine whether, or to what extent, any such changes would affect you. Structuring aninstrument that relies on a calculation of an IBOR to determine its value or return of interest or principal includes certain risks that you should be aware of, including, but not limited to: (i) risks relating to the value, return or performance ofthe instrument; (ii) risks relating to any changes required to your documentation in the future; (iii) litigation and conduct risk relating to your ability to meet your obligations under the instrument and/or any related economic losses sufferedby holders as a result of LIBOR (including US$ LIBOR), EURIBOR or other IBOR or benchmark discontinuation (iv) regulatory risk relating to compliance with future legislative or regulatory requirements and (v) operational risks relating tothe cost and ability to deliver against any changes in the transitional period. We encourage you to seek independent legal advice if you are concerned about the risks your business faces in light of benchmark reform. More information isavailable in Barclays FAQs which are at https://home.barclays/libor-transition/.

Barclays offers premier investment banking products and services to its clients through Barclays Bank PLC. Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and thePrudential Regulation Authority and is a member of the London Stock Exchange. Barclays Bank PLC is registered in England No. 1026167 with its registered office at 1 Churchill Place, London E14 5HP. [Barclays Bank PLC QFC Branchmay only undertake the regulated activities that fall within the scope of its existing QFCRA authorisation. Principal place of business in Qatar: Burj Doha, Level 21 West Bay, PO Box 27110, Doha, Qatar.] [The QFC strapline should onlybe included when (1) Qatari clients are involved and (2) the Barclays QFC SEO is involved in the relevant transaction. If in doubt please contact the Middle East Legal Team ([email protected])] BarclaysBank PLC in the Dubai International Financial Centre (Registered No. 0060) is regulated by the Dubai Financial Services Authority (the “DFSA”) . Barclays Bank PLC (DIFC Branch) may only undertake the financial services activities thatfall within the scope of its existing DFSA licence. Principal place of business in the DIFC: Dubai International Financial Centre, The Gate Village Building No. 4, Level 4, PO Box 506504, Dubai, U.A.E. This information has been distributedby Barclays Bank PLC. Related financial products or services are only available to Market Counterparties, as defined by the DFSA [and/or Business Customers or Market Counterparties, as defined by the Qatar Financial Centre RegulatoryAuthority (as applicable)]. Copyright Barclays, 2019 (all rights reserved).

This communication is confidential and is for the benefit and internal use of the recipient for the purpose of considering the securities/transaction described herein, and no part of it may be reproduced, distributed or transmitted without theprior written permission of Barclays.

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