Barclays 2011 Annual Report Download - page 173

Financial review
Balance sheet commentary
Total assets
Total assets increased £74bn to £1,564bn principally due to an increase
in the fair value of interest rate derivatives partially offset by a decrease
in reverse repurchase agreements.
Cash, balances at central banks and items in the course of collection
increased £9.7bn contributing to the Group liquidity pool. Trading portfolio
assets decreased £16.7bn, and reverse repurchase and other similar
secured lending decreased £52.1bn.
Derivative financial assets increased £118.6bn principally reflecting
increases in the mark-to-market positions in interest rate derivatives
due to movements in forward interest rate curves.
Loans and advances to banks and customers increased £13.6bn
principally due to an increase in lending to retail customers and market
volatility resulting in a rise in cash collateral balances.
Available for sale financial investments increased £3.4bn primarily driven
by purchase of government bonds increasing the Group’s liquid assets.
This was partially offset by a £0.5bn reduction in the fair value of the
Group’s investment in BlackRock, Inc.
Total liabilities
Total liabilities increased £71bn to £1,498bn.
Deposits and items in the course of collection and customer accounts
increased £33bn reflecting customer deposit growth across the Group
as well as market volatility resulting in a rise in cash collateral balances.
Financial liabilities designated at fair value decreased £9.7bn and debt
securities in issue decreased £26.9bn due to managed changes in the
funding composition.
Trading portfolio liabilities decreased £26.8bn, and repurchase
agreements and other similar secured borrowing decreased £18.2bn.
Derivative financial liabilities increased £122.4bn broadly in line with
the increase in derivative assets.
Subordinated liabilities decreased £3.6bn primarily reflecting the early
retirement of capital that does not qualify under Basel 3.
Shareholders’ equity
Total shareholders’ equity increased £2.9bn to £65.2bn, Share capital and
share premium remained relatively stable at £12.4bn. Retained earnings
increased £2.6bn to £39.4bn with profit attributable to the equity holders
of the Parent of £3bn partially offset by dividends paid of £0.7bn.
Available for sale reserve increased £1.4bn, largely driven by £2.7bn gains
from changes in fair value, offset by £1.6bn of net gains transferred to the
income statement after recognition of £1.8bn impairment on the Group’s
investment in BlackRock, Inc. Currency translation reserve movements of
£1bn were largely due to the appreciation in the US Dollar, offset by the
depreciation in the Euro, Rand and Indian Rupee.
Non-controlling interests decreased £1.8bn to £9.6bn, primarily reflecting
currency translation movements of £0.6bn relating to the Rand, and the
redemption of £1.5bn reserve capital instruments.
Net asset value per share increased 9% to 456p and net tangible asset
value per share increased 13% to 391p.
Balance sheet leverage
Barclays continues to operate within limits and targets for balance sheet
usage as part of its balance sheet management activities.
The adjusted gross leverage was 20x (2010: 20x) principally reflecting a
£3.1bn decrease in Tier 1 capital offset by a £52.8bn decrease in adjusted
total tangible assets. At month ends during 2011 the ratio moved in
a range from 20x to 23x, with fluctuations arising primarily within
collateralised reverse repurchase lending and high quality trading
portfolio assets.
The ratio of total assets to total shareholders’ equity was 24x as at 31
December 2011 (2010: 24x). The ratio moved within a month end range
of 24x to 28x, driven by trading activity fluctuations including changes
in derivatives and settlement balances.
Barclays PLC Annual Report 2011 www.barclays.com/annualreport 171
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