Barclays 2010 Annual Report Download - page 51

2010 2009 2008
Performance Measures
Return on average equity 13% 14% n/a
Return on average tangible equity 19% 21% n/a
Return on average risk weighted assets 1.9% 1.8% n/a
Loan loss rate (bps) 570 604 n/a
1 month arrears rates – UK cards 3.4% 4.2% n/a
1 month arrears rates – US cards 4.6% 6.1% n/a
1 month arrears rates – Absa cards 4.9% 6.7% n/a
Cost: income ratio 39% 38% 45%
Cost: net income ratio 67% 68% 68%
Key Facts
Number of Barclaycard UK customers 11.2m 10.4m 11.7m
Number of Barclaycard International customers 10.5m 10.8m 11.8m
Total number of Barclaycard customers 21.7m 21.2m 23.5m
UK credit cards – average outstanding balances £11.2bn £10.8bn £10.2bn
International – average outstanding balances £9.7bn £9.7bn £6.5bn
Total – average outstanding balances £20.9bn £20.5bn £16.7bn
UK credit cards – average extended credit balances £8.8bn £8.5bn £8.0.bn
International – average extended credit balances £8.2bn £7.9bn £5.2bn
Total – average extended credit balances £17.0bn £16.4bn £13.2bn
Loans – average outstanding balances £5.5bn £6.0bn £5.9bn
Number of retailer relationships 87,000 87,000 89,000
£791m
profit before tax
£4,024m
total income net of insurance claims
2009
Barclaycard profit before tax decreased 5% to £727m (2008: £766m).
Strong income growth across the portfolio driven by increased lending,
improved margins and foreign exchange gains, was offset by higher
impairment charges, driven by the deterioration in the global economy
in 2009.
International businesses’ profit before tax decreased 59% to £107m
(2008: £261m) driven by the US business. Strong income growth driven
by higher average extended credit balances was more than offset by
impairment growth, especially in the US and South African businesses,
and increased operating expenses. In the UK our businesses benefited
from an improvement in margins and growth in average extended
balances leading to income increasing 18% to £2,493m (2008: £2,114m).
Income growth was partially offset by the growth in impairment as
worsening economic conditions impacted delinquencies.
Income increased 25% to £4,041m (2008: £3,221m) reflecting strong
growth across the portfolio, especially in the international businesses
through higher extended credit balances, lower funding rates and the
appreciation of the average values of the US Dollar and the Euro against
Sterling.
Net interest income increased 52% to £2,723m (2008: £1,786m) driven
by strong growth in international average extended credit card balances,
up 52% to £7.9bn (2008: £5.2bn), and lower funding rates as margins
improved to 8.97% (2008: 6.92%).
Net fee and commission income decreased 2% to £1,271m (2008:
£1,299m) through lower volumes in FirstPlus due to the decision taken
to stop writing new business in 2008 and lower volumes in the UK card
portfolios partially offset by growth in the international businesses.
Investment income of £23m (2008: £80m) included a £20m gain from
the sale of MasterCard shares (2008: £16m). Investment income in 2008
included a £64m gain from the Visa IPO.
Other income in 2008 included an £18m gain on the sale of a portfolio
in the US.
Impairment charges increased 64% to £1,798m (2008: £1,097m).
The rate of growth in the second half of 2009 was lower than that in the
first half. Impairment charges in the international businesses increased
£444m, driven by higher delinquencies due to deteriorating economic
conditions growth in average receivables and the appreciation of the
average values of the US Dollar and the Euro against Sterling. UK portfolio
charges were higher as a result of rising delinquencies due to the
economic deterioration, especially in the loan portfolios, and the inclusion
of Goldfish in UK Cards.
Operating expenses increased 6% to £1,527m (2008: £1,447m), due to
the appreciation in the average value of the US Dollar and the Euro against
Sterling and growth in the portfolios including the acquisitions made in the
UK, US and South Africa in 2008.
The purchase of Goldfish resulted in a gain on acquisition of £92m in 2008.
Total assets decreased 2% to £30.3bn (31st December 2008: £31.0bn)
reflecting the depreciation in the US Dollar and Euro against Sterling,
the decision to stop writing new business in FirstPlus and tighter lending
criteria. Risk weighted assets increased 12% to £30.6bn (31st December
2008: £27.3bn) due to higher volumes and the impact of moving toward
an advanced risk measurement methodology offset by favourable foreign
exchange and lower secured lending balances in FirstPlus.
Barclays PLC Annual Report 2010 www.barclays.com/annualreport10 49
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