Barclays 2011 Annual Report Download - page 187

£2,965m
profit before tax
£10,335m
total income
Risk weighted assets down 2% to £187bn, reflecting lower levels of client
activity, risk reduction and reduction in credit market exposures, more
than offsetting the impact of CRD3.
Return on average equity decreased to 10.4% (2010: 13.5%) and return on
average risk weighted assets to 1.2% (2010: 1.5%), reflecting difficult
market conditions.
2010
Barclays Capital profit before tax increased 2% to £4,389m.
Net operating income for 2010 increased 17% to £12,666m reflecting
significant reduction both in credit market losses taken through income
to £124m (2009: £4,417m) and in impairment charges to £543m (2009:
£2,591m).
Fixed Income, Currency and Commodities income declined 6% to
£8,687m, reflecting lower contributions particularly from Rates and
Commodities despite significant reductions in credit market losses.
Higher funding costs also led to a reduction in net interest income.
Equities and Prime Services decreased 6% to £2,040m due to the
subdued market activity in European equity derivatives, partially offset by
improved client flow in cash equities and equity financing, as the benefits
of the build-out of the cash equities business started to come through.
Investment Banking, which comprises advisory businesses and equity and
debt underwriting, increased 3% to £2,243m as a result of continued
growth in banking activities.
Fee and commission income increased 12% to £3,347m across
Investment Banking and Equities with a higher contribution from Asia.
Principal Investments generated income of £239m which contributed to
AdjustedaStatutory
2011 2010 2009 2011 2010 2009
Performance Measures
Return on average equityb10.4% 13.5% 13.3% 10.4% 13.5% 13.3%
Return on average tangible equityb10.8% 14.1% 14.0% 10.8% 14.1% 14.0%
Return on average risk weighted assets 1.2% 1.5% 1.4% 1.2% 1.5% 1.4%
Loan loss rate (bps) 8 42 115 8 42 115
Cost: income ratio 71% 63% 49% 71% 63% 49%
Cost: net operating income ratio 71% 65% 61% 71% 65% 61%
Compensation: income ratio 47% 43% 33% 47% 43% 33%
Average income per employee (000s) £424 £529 £596 £424 £529 £596
Other measures
Average DVaR (95%) £57m £53m £77m
Number of employees (full time equivalent) 24,000 24,800 23,200
Notes
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.
b Return on average equity and return on average tangible equity comparatives have been revised to use 10% of average risk weighted assets (previously 2010: 9%; 2009: 8%) in the
calculation of average equity and average tangible equity.
the increase in net investment income to £752m in addition to an increase
in income from the disposal of available for sale assets and a reduction in
fair value losses on assets held at fair value.
Credit impairment charges of £543m included credit market impairment
of £621m (2009: £1,669m) primarily relating to the difference between
the carrying value of the Protium loan and the fair value of the underlying
assets supporting the loan which followed a reassessment of the expected
realisation period. Non-credit market related impairment was a release of
£78m (2009: charge of £922m).
Operating expenses increased 26% to £8,295m which largely reflected
investment in our sales, origination, trading and research activities,
increased charges relating to prior year compensation deferrals and
restructuring costs. The cost: net operating income ratio was 65%
(2009: 61%).
Total assets increased 7% to £1,095bn. The increase reflected the net
depreciation in the value of Sterling relative to other currencies in which
our assets are denominated, growth in reverse repurchase trading and
an increase in the liquidity pool to £154bn (2009: £127bn).
Assets contributing to adjusted gross leverage increased 8% to £668bn.
Risk weighted assets increased 6% to £191bn due to changes in
methodology and the impact of foreign exchange rate movements,
offset by reductions resulting from capital management efficiencies.
Return on average equity increased to 13.5% (2009: 13.3%), return on
average tangible equity increased to 14.1% (2009: 14.0%) and return on
average risk weighted assets increased to 1.5% (2009: 1.4%) reflecting
increased profit after tax.
Analysis of Total Income Year ended 31 December
2011
£m
2010
£m
2009
£m
Fixed Income, Currency and Commodities 6,325 8,687 9,235
Equities and Prime Services 1,751 2,040 2,165
Investment Banking 2,027 2,243 2,188
Principal Investments 232 239 (143)
Total income 10,335 13,209 13,445
Barclays PLC Annual Report 2011 www.barclays.com/annualreport 185
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