Barclays 2010 Annual Report Download - page 38

Financial review
Income statement commentary continued
As a result of this increase in impairment and the fall in loans and
advances, the impairment charges as a percentage of period end
Group total loans and advances increased to 156bps (2008: 95bps).
The impairment charges against available for sale assets and reverse
repurchase agreements increased £207m to £713m (2008: £506m),
driven by impairment against credit market exposures.
Operating expenses
2010
Operating expenses increased 19% to £19,971m (2009: £16,715m)
driven by increases in staff costs, administration and general expenses
and impairment of goodwill.
The impairment of goodwill reflects the write off of the goodwill relating
to Barclays Bank Russia of £243m as our activities there are refocused.
2009
Operating expenses increased 25% to £16,715m (2008: £13,391m).
The increase was driven by a 38% increase in staff costs to £9,948m
(2008: £7,204m).
Amortisation of intangibles increased £171m to £447m (2008: £276m)
primarily related to the intangible assets arising from the acquisition of
the Lehman Brothers North American businesses.
Staff costs
2010
Staff costs increased 20% to £11,916m (2009: £9,948m). This was driven
by a 13% increase in salaries and accrued performance costs and a £574m
increase in share based payments. These increases are primarily due to
increased charges relating to prior year awards, the continued build-out in
Equities and Investment Banking at Barclays Capital and strategic growth
initiatives at Barclays Wealth.
The UK Government applied a bank payroll tax of 50% to all discretionary
bonuses over £25,000 awarded to UK bank employees between
9th December 2009 and 5th April 2010. The total bank payroll tax paid
was £437m, of which £225m was recognised in 2009 in respect of 2009
cash awards and certain prior year deferrals distributed during the taxable
period. For 2010 a charge of £96m has been recognised in relation to prior
year deferrals, with the remaining £116m recognised over the period 2011
to 2013.
The defined benefit post retirement charge increased by £246m reflecting
the non-recurrence of the benefit of the £371m one-off credit arising on
closure of the final salary scheme in 2009 offset by the credit of £250m
resulting from amendments to the treatment of minimum defined benefits
and £54m relating to the Group’s recognition of a surplus in Absa, as well
as favourable investment returns over the period.
Operating expenses 2010
£m
2009
£m
2008
£m
Staff costs 11,916 9,948 7,204
Administration and general
expenses 6,585 5,560 5,193
Depreciation 790 759 606
Amortisation of intangible assets 437 447 276
Impairment of goodwill 243 1 112
Operating expenses 19,971 16,715 13,391
Staff costs 2010
£m
2009
£m
2008
£m
Salaries and accrued performance
costs 8,809 7,795 5,562
Share based payments 860 286 225
Social security costs 719 606 444
Bank payroll tax 96 225 –
Post-retirement benefits
– defined contribution plans 297 224 221
– defined benefit plans 213 (33) 89
– other post-retirement benefits 18 16 1
Other 904 829 662
Staff costs 11,916 9,948 7,204
36 Barclays PLC Annual Report 2010 www.barclays.com/annualreport10