Barclays 2009 Annual Report Download - page 63

www.barclays.com/annualreport09 Barclays PLC Annual Report 2009 61
Performance
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Key points
– 11.2m Personal customers with UK current accounts
– 13.2m Personal customers with UK savings accounts
– LTV of mortgage book of 43% and LTV of new mortgage
lending of 48%
– 686,000 Local Business customers
2008/07
UK Retail Banking profit before tax increased 7% (£94m) to £1,369m
(2007: £1,275m) through solid income growth and continued good control
of impairment and costs. The launch of new products and propositions
supported a significant increase in customer accounts, with Current
Accounts increasing 4% (0.4m) to 11.7m (2007: 11.3m), Savings Accounts
increasing 8% (0.9m) to 12.0m (2007: 11.1m) and Mortgage Accounts
increasing 8% (62,000) to 816,000 (2007: 754,000).
Income grew 4% (£185m) to £4,482m (2007: £4,297m) reflecting
strong growth in Home Finance and solid growth in Consumer Lending and
Local Business, partially offset by reduced income from Personal Customer
Savings Accounts due to the impact of the reductions in the UK base rates in
the second half of 2008.
Net interest income increased 5% (£138m) to £2,996m (2007:
£2,858m) driven by strong growth in loans and advances. Total average
customer deposit balances increased 5% to £85.9bn (2007: £81.8bn),
reflecting solid growth in Personal Customer and Local Business balances.
The average liabilities margin declined to 2.01% (2007: 2.15%) reflecting
the reductions in UK base rates in the second half of 2008.
Mortgage balances grew 18%, driven by increased share of new lending
and higher levels of balance retention. Mortgage balances were £82.3bn at
the end of the period (31st December 2007: £69.8bn), a market share of
7% (2007: 6%). Gross advances were stable at £22.9bn, with redemptions
of £10.4bn (2007: £15.0bn). Net new lending was £12.5bn (2007: £8.0bn),
a market shareaof 36% (2007: 8%). The average loan to value ratio of the
mortgage book (including buy-to-let) on a current valuation basis was 40%
(2007: 34%). The average loan to value ratio of new mortgage lending was
47% (2007: 49%). The assets margin increased to 1.25% (2007: 1.20%)
reflecting increased returns from mortgages.
Net fee and commission income increased 10% (£116m) to £1,299m
(2007: £1,183m) reflecting £116m settlements on overdraft fees in 2007.
Excluding this, net fees and commissions were stable.
Impairment charges increased 8% (£43m) to £602m (2007: £559m),
reflecting growth in customer assets of 15% and the impact of the current
economic environment. Mortgage impairment charges were £24m
(2007: release of £3m). Impairment charges within Consumer Lending
increased 3%.
Operating expenses increased 2% (£49m) to £2,519m (2007:
£2,470m) reflecting reduced gains from the sale of property of £75m
(2007: £193m). Continued strong and active management of expense
lines, including back-office consolidation and process efficiencies, funded
increased investment in product development and distribution channels.
The cost:income ratio improved one percentage point to 56%
(2007: 57%).
£3,985m£612 m
profit before taxtotal income net of
insurance claims
UK Retail Banking 2009 2008 2007
£m £m £m
Income statement information
Net interest income 2,624 2,996 2,858
Net fee and commission income 1,225 1,299 1,183
Net premiums from insurance contracts 198 205 252
Other income 617 47
Total income 4,053 4,517 4,340
Net claims and benefits on insurance contracts (68) (35) (43)
Total income net of insurance claims 3,985 4,482 4,297
Impairment charges (936) (602) (559)
Net income 3,049 3,880 3,738
Operating expenses excluding amortisation of intangible assets (2,400) (2,499) (2,461)
Amortisation of intangible assets (40) (20) (9)
Operating expenses (2,440) (2,519) (2,470)
Share of post-tax results of associates and joint ventures 387
Profit before tax 612 1,369 1,275
Balance sheet information
Loans and advances to customers £99.1bn £94.4bn £82.0bn
Customer accounts £92.5bn £89.6bn £87.1bn
Total assets £105.2bn £101.4bn £88.5bn
Performance ratios
Return on average economic capital 12% 27% 28%
Cost:income ratio 61% 56% 57%
Cost:net income ratio 80% 65% 66%
Other financial measures
Economic profit (£64m) £633m £617m
Risk weighted assets b£32.2bn £30.5bn £31.5bn
Notes
aExcludes Housing Associations.
bRisk weighted assets for 2009 and 2008 are calculated under Basel II. 2007 is calculated
under Basel I.