Barclays 2011 Annual Report Download - page 186

Financial review
Analysis of results by business continued
2011
£m
2010
£m
2009
£m
Income Statement Information
Net interest income 1,177 1,121 1,598
Net fee and commission income 3,026 3,347 3,001
Net trading income 5,264 7,986 9,005
Net investment income/(loss) 873 752 (164)
Other income (5) 3 5
Total income 10,335 13,209 13,445
Credit impairment charges and other provisions (93) (543) (2,591)
Net operating income 10,242 12,666 10,854
Operating expenses (7,289) (8,295) (6,592)
Share of post-tax results of associates and joint ventures 12 18 22
Profit before taxa2,965 4,389 4,284
Adjusted profit before taxa2,965 4,389 4,284
Balance Sheet Information
Loans and advances to banks and customers at amortised cost £158.6bn £149.7bn £162.6bn
Customer deposits £83.1bn £70.3bn £66.3bn
Total assets £1,158.4bn £1,094.8bn £1,019.1bn
Assets contributing to adjusted gross leverage £604.0bn £668.1bn £618.2bn
Risk weighted assets £186.7bn £191.3bn £181.1bn
Liquidity pool £152bn £154bn £127bn
2011
Barclays Capital profit before tax declined to £2,965m (2010: £4,389)
driven by a 22% reduction in income to £10,335m in a challenging market
environment, partially offset by reduced credit impairment charges and
operating expenses, including compensation costs.
Fixed Income, Currency and Commodities (FICC) declined 27% to
£6,325m, reflecting lower contributions from Rates, Credit, and
Commodities in a challenging trading environment. Currency improved
27% on 2010, benefiting from market volatility and strong client volumes.
Equities and Prime Services declined 14%, with reduced performance
in cash equities and equity derivatives offset by improved client flow
in equity financing.
Investment Banking reduced 10%. Equity underwriting was in line with
the prior year, while financial advisory and debt underwriting were
impacted by lower deal activity.
Note
a The impact of own credit movements in the fair value of structured note issuance of £2,708m (2010: £391m; 2009: loss of £1,820m) is now included within the results of Head Office
Functions and Other Operations, rather than Barclays Capital. This reflects the fact that these fair value movements relate to the credit worthiness of the issuer as a whole, rather than
Barclays Capital in particular, and are not included within any assessment of Barclays Capital’s underlying performance. Furthermore, delays to planned changes in accounting standards
will mean own credit movements are likely to continue to be reflected in the income statement for the foreseeable future.
Credit impairment charge of £93m reflecting charges primarily relating
to leveraged finance, offset by a release of £223m of the impairment
allowance relating to the Protium loan.
Operating expenses reduced 12% to £7,289m, reflecting a decrease in
both non-compensation and compensation costs. The 2011 bonus pool
decreased 32% to £1.5bn compared to a decrease in headcount of 3%.
Assets contributing to adjusted gross leverage decreased 10% to £604bn
primarily due to a reduction in reverse repurchase transactions. Total
assets increased 6% to £1,158bn, reflecting increases in the fair value
of gross interest rate derivative assets offset by a reduction in reverse
repurchase agreements.
Credit market exposures of £15.2bn, reduced by £8.7bn primarily driven
by sale of assets formerly held as Protium collateral and commercial real
estate loans and properties.
Barclays Capital
184 Barclays PLC Annual Report 2011 www.barclays.com/annualreport