Barclays 2011 Annual Report Download - page 169

Operating expenses
2011
£m
2010
£m
2009
£m
Staff costs 11,407 11,916 9,948
Administration and general
expenses
6,356 6,585 5,560
Depreciation 673 790 759
Amortisation of intangible assets 419 437 447
Impairment of goodwill 597 243 1
Provision for PPI redress 1,000 – –
Bank levy 325 – –
Operating expenses 20,777 19,971 16,715
2011
Operating expenses increased 4% to £20,777m driven by the £1,000m
provision for PPI redress and the £325m UK bank levy, which came into
effect during the year. The impairment of goodwill includes the write off
of £550m Spanish goodwill, following the annual impairment assessment.
The depreciation charge reduced 15% to £673m, principally reflecting the
extended period over which certain categories of fixed assets are utilised.
2010
Operating expenses increased 19% to £19,971m driven by increases
in staff costs, administration and general expenses and impairment of
goodwill. The impairment of goodwill reflected the write off of the goodwill
relating to Barclays Bank Russia of £243m.
Staff costs
2011
£m
2010
£m
2009
£m
Performance costs 2,527 3,350 3,055
Salaries 6,277 6,151 4,893
Other share based payments 167 168 133
Social security costs 716 719 606
Post-retirement benefits 727 528 207
Total compensation costs 10,414 10,916 8,894
Bank payroll tax 76 96 225
Other 917 904 829
Non compensation costs 993 1,000 1,054
Staff costs 11,407 11,916 9,948
2011
Staff costs decreased 4% to £11,407m, largely due to a 25% reduction
in performance costs partially offset by the non-recurrence of a £304m
credit in 2010 relating to post retirement benefits. Charges relating to prior
year deferrals were £1bn. The Group incentive awards granted (which
exclude charges relating to prior year deferrals but include current year
awards vesting in future years) were down 26% to £2.6bn. Barclays
Capital incentive awards were down 35% to £1.7bn.
Salaries increased 2% to £6,277m against a moderately declining average
headcount. As at 31 December, staff numbers decreased 4% year on year
primarily due to restructuring activities across the businesses.
The UK Government applied a bank payroll tax of 50% to all discretionary
bonuses over £25,000 awarded to UK bank employees between 9
December 2009 and 5 April 2010. The total bank payroll tax paid was
£437m, of which £321m was recognised between 2009 and 2010.
For 2011, a charge of £76m has been recognised in relation to prior year
deferrals, with the remaining £40m to be recognised over the period 2012
to 2013.
2010
Staff costs increased 20% to £11,916m largely due to a £1,258m increase
in salaries and a £295m increase in performance costs. These increases
primarily relate to charges for prior year awards, the build-out in Equities
and Investment Banking at Barclays Capital in 2010 and strategic growth
initiatives at Barclays Wealth. Charges relating to prior year deferrals were
£0.9bn. The Group performance awards granted (which exclude charges
relating to prior year deferrals but include current year awards vesting in
future years) were down 6% to £3.5bn. Barclays Capital incentive awards
were down 10% to £2.7bn.
The post retirement benefit charge increased by £321m reflecting the
non-recurrence of the £371m one-off credit arising on closure of the final
salary scheme in 2009 offset by the credit in 2010 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.
Administration and general expenses
2011
£m
2010
£m
2009
£m
Property and equipment 1,763 1,813 1,641
Outsourcing and professional
services
1,869 1,705 1,496
Operating lease rentals 659 637 639
Marketing, advertising and
sponsorship
585 631 492
Communications, subscriptions,
publications and stationery
740 750 695
Travel and accommodation 328 358 273
Other administration and general
expenses
400 566 263
Impairment of property,
equipment and intangible assets
12 125 61
Administration and general
expenses
6,356 6,585 5,560
2011
Administration and general expenses decreased £229m to £6,356m,
principally reflecting the benefits of restructuring and the non-recurrence
of the one-off provision in respect of the resolution of a review of Barclays
compliance with US economic sanctions that occurred in 2010. These
reductions have been offset by an increase in outsourcing and professional
services as a result of Barclaycard acquisitions, restructuring charges and
increased regulatory costs.
2010
Administration and general expenses increased £1,025m to £6,585m.
The increase was principally due to greater regulatory related costs across
the Group, investment in technology and infrastructure, acquisitions and
adverse impacts of foreign currency movements. Impairment charges
on property, equipment and intangible assets of £125m (2009: £61m)
were principally driven by restructuring.
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