Barclays 2011 Annual Report Download - page 129

Net Interest Margin
The net interest margin for RBB, Corporate and Wealth remained stable at 2.04% (2010: 2.03%). Consistent with prior periods the net interest margin is
expressed as a percentage of the sum of average customer assets and liabilities, to reflect the impact of the margin generated on retail and commercial
banking liabilities.
The net interest margin expressed as a percentage of average customer assets only, improved to 3.77% (2010: 3.67%).
An analysis is provided below for RBB, Corporate and Wealth for each of the component parts of net interest income.
UK RBB
%
Europe RBB
%
Africa RBB
%
Barclaycard
%
Barclays
Corporate
%
Barclays
Wealth
%
Total RBB,
Corporate
and Wealth
%
2011
Customer asset margin 1.22 0.87 3.11 9.52 1.35 0.77 2.20
Customer liability margin 0.87 0.65 2.27 – 1.00 0.99 1.06
Non-customer generated margin 0.46 0.47 0.32 (0.08) 0.29 0.36 0.36
Net interest margin 1.51 1.28 3.07 9.44 1.46 1.29 2.04
Average customer assets (£m) 118,503 43,749 38,877 30,289 68,667 17,546 317,631
Average customer liabilities (£m) 107,761 17,702 29,473 – 70,632 44,536 270,104
2010
Customer asset margin 1.26 1.02 3.12 9.35 1.43 0.81 2.25
Customer liability margin 0.68 0.11 2.25 – 0.76 0.87 0.86
Non-customer generated margin 0.47 0.41 0.18 0.42 0.41 0.37 0.40
Net interest margin 1.45 1.16 2.94 9.77 1.53 1.22 2.03
Average customer assets (£m) 113,713 41,509 41,328 28,811 69,831 14,529 309,721
Average customer liabilities (£m) 104,508 17,263 27,731 – 60,946 40,985 251,433
The customer asset margin is presented as a percentage of interest earned on customer assets (excluding the impact of hedging), relative to the
average internal funding rate divided by average customer assets. The customer liability margin is calculated as the interest on customer liabilities
(excluding the impact of hedging), relative to the average internal funding rate, divided by average customer liabilities.
The non-customer generated margin is calculated as non-customer interest income (principally comprising the impact of both the product and equity
structural hedge) as a percentage of the sum of average customer assets and liabilities, consistent with the presentation of the net interest margin.
The Group’s internal funding rate prices intra-group funding and liquidity to appropriately give credit to businesses with net surplus liquidity and to
charge those businesses in need of wholesale funding at a rate that is driven by prevailing market rates including a term premium. The objective is
to price internal funding for assets and liabilities in line with the cost of alternative funding, which ensures there is consistency between retail and
wholesale sources.
Barclays PLC Annual Report 2011 www.barclays.com/annualreport 127
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