Barclays 2010 Annual Report Download - page 62

2010
£m
2009
£m
2008
£m
Income statement information
Net interest income 678 503 485
Net fee and commission income 869 792 709
Net trading income/(loss) 11 7 (11)
Net investment income/(loss) 2 13 (333)
Net premiums from insurance contracts – – 136
Other income – 7 26
Total income 1,560 1,322 1,012
Net claims and benefits incurred on insurance contracts – – 300
Total income net of insurance claims 1,560 1,322 1,312
Impairment charges and other credit provisions (48) (51) (44)
Net income 1,512 1,271 1,268
Operating expenses excluding amortisation of intangible assets (1,320) (1,105) (907)
Amortisation of intangible assets (29) (24) (16)
Operating expenses (1,349) (1,129) (923)
Profit on disposal of subsidiaries, associates and joint ventures – 1 326
Profit before tax 163 143 671
Balance sheet information
Loans and advances to customers £16.1bn £13.0bn £11.4bn
Customer accounts £44.8bn £38.4bn £42.3bn
Total assets £17.8bn £14.9bn £13.2bn
Risk weighted assets £12.4bn £11.4bn £10.3bn
Barclays Wealth
Barclays Wealth is the wealth management division of
Barclays. It focuses on private and intermediary clients
worldwide, providing international and private banking,
investment management, fiduciary services and brokerage.
It has offices in Europe, North America, Asia and Africa.
Performance
2010
Barclays Wealth profit before tax increased 14% to £163m (2009: £143m).
Income increased 18% to £1,560m (2009: £1,322m) principally from
growth in the High Net Worth businesses and higher attributable net
interest income from the revised internal funds pricing mechanism.
Net interest income increased 35% to £678m (2009: £503m), mostly due
to changes in internal funds pricing which gives credit for the behaviourally
long-term deposits held by Barclays Wealth. The net interest margin
increased to 122bps (2009: 102bps). This reflects the increase in the
liabilities margin from 96bps to 129bps as well as the reduction in the
asset margin from 101bps to 81bps. Customer accounts grew 17% to
£44.8bn (2009: £38.4bn) and loans and advances to customers grew 24%
to £16.1bn (2009: £13.0bn).
Net fee and commission income increased 10% to £869m (2009: £792m)
primarily driven by higher transactional activity with High Net Worth
clients.
Impairment charges reduced to £48m (2009: £51m).
Operating expenses increased 19% to £1,349m (2009: £1,129m). This was
principally due to the impact of the growth in High Net Worth business
revenues on staff and infrastructure costs and the start of Barclays
Wealth’s strategic investment programme. Expenditure in this programme
was £33m in the first half of 2010 and £79m for the second half. This
programme is focused on hiring client-facing staff to build productive
capacity and investment in the facilities and technology required to
develop our delivery to clients.
Total client assets, comprising customer deposits and client investments,
were £163.9bn (2009: £151.2bn) with underlying net new asset inflows of
£6bn. Risk weighted assets increased 9% to £12.4bn (2009: £11.4bn)
reflecting growth in loans and advances, impact of exchange rate
movements and collateral management.
Stable returns on average equity and average tangible equity, and the
improved return on average risk weighted assets reflected the strong
performance of the business offset by the cost of strategic investment and
the increase in capital allocation.
2009
Barclays Wealth profit before tax reduced 79% to £143m (2008: £671m).
The reduction in profit was principally due to the sale of the closed life
assurance business in 2008 (2008: profit before tax of £104m and profit
on disposal of £326m). Results were also affected by the integration of
Lehman Brothers North American businesses (Barclays Wealth Americas),
which made a loss of £39m.
Total income increased 1% to £1,322m (2008: £1,312m).
Financial review
Analysis of results by business continued
60 Barclays PLC Annual Report 2010 www.barclays.com/annualreport10