Barclays 2009 Annual Report Download - page 64

62 Barclays PLC Annual Report 2009 www.barclays.com/annualreport09
Financial review
Analysis of results by business
continued
Global Retail and Commercial Banking
Barclays Commercial Bank
Barclays Commercial Bank is one of the UK’s leading providers of
banking solutions to business customers and clients with an annual
turnover of more than £1m.
What we do
Barclays Commercial Bank provides banking services to customers via a
network of relationship, regional, industry-sector and product speacialists
across the UK.
Working closely with our clients to understand their needs, we
deliver financing, risk management, trade and cash management solutions
constructed from a comprehensive suite of products, expertise and services.
This includes specialist asset financing and leasing facilities.
Performance
2009/08
Barclays Commercial Bank profit before tax decreased 41% (£517m)
to £749m (2008: £1,266m), primarily driven by significantly higher
impairment charges. Income was flat, with strong performance from
net fees and commissions offset by lower principal transactions.
Income totalled £2,753m (2008: £2,745m). Net interest income fell 1%
(£16m) to £1,741m (2008: £1,757m) with the benefit of increased average
lending balances and higher deposit volumes offset by margin compression
in the deposit book of £220m. Average lending grew 3% (£1.6bn) to
£63.3bn (2008: £61.7bn) reflecting our continuing commitment to lend
to viable businesses. The asset margin increased 5 basis points to 1.60%
(2008: 1.55%). Average customer deposits grew 3% (£1.4bn) to £49.0bn
(2008: £47.6bn) benefiting from ongoing product initiatives. Deposit
margin fell 25 basis points to 1.22% (2008: 1.47%) reflecting the fall in
UK base rate.
Non-interest income comprised 37% of total income (2008: 36%).
Net fees and commissions income increased 8% (£65m) to £926m (2008:
£861m), driven by strong debt fees, trade guarantees and other fee income.
Principal transactions income decreased £48m to a loss of £26m (2008:
gain of £22m) as a result of investment writedowns and fewer opportunities
for equity realisation within the current market environment.
Other income grew 7% (£7m) to £112m (2008: £105m) reflecting
increased income from the repurchase of securitised debt issued of £85m
(2008: £24m), partially offset by lower rental income from operating leases
of £21m (2008: £29m). 2008 income included a £39m gain from the
restructuring of Barclays interest in a third party finance operation.
Impairment charges rose to £974m (2008: £414m), reflecting the
impact of the economic recession across the business with continued
pressure on corporate liquidity, rising default rates and lower asset values.
1.7
1.8
1.7
1.58
0.60
0.45
07 08
Interest income:
non-interest income
£bn
09
Impairment as %
of loans and advances
to customers and banks
07 08
09
1.0 1.0
0.8
2.1x
1.8x 1.8x
– Interest income
– Non-interest
income
Performance indicators