Barclays 2012 Annual Report Download - page 200

The Key Performance Indicators presented below reflect the way in which the performance of the Group has been
measured during 2012. In 2013, these will be updated with certain new measures consistent with the new strategy
of the Executive Committee.
Returns KPIs
Definition Why is it important to the business and management
Return on average
shareholders’ equity (RoE)
RoE is calculated as profit for the year
attributable to equity holders of the parent
divided by average shareholders’ equity for
the year excluding non-controlling interests.
Shareholders’ equity is made up of share
capital, retained earnings and other reserves.
These measures indicate the returns
generated by the management of business
based on the RWAs and the shareholders’
equity. Achieving target returns demonstrates
the organisation’s ability to execute its
strategy and align interests of management
and shareholders.
Returns lie at the heart of our capital allocation
and performance management process.
Adjusted returns increased during 2012 with
improvements in most of our businesses.
The Group is targeting delivery of a return on
equity in excess of cost of equity by 2015.
Adjusted RoE
2012 – 7.8%
2011 – 6.6%
2010 – 6.8%
Statutory RoE
2012 – (1.9)%
2011 – 5.8%
2010 – 7.2%
Return on average tangible
shareholders’ equity (RoTE)
RoTE is calculated as profit for the year
attributable to equity holders of the parent
divided by average shareholders’ equity for
the year, excluding non-controlling interests,
goodwill and intangible assets.
Adjusted RoTE
2012 – 9.1%
2011 – 7.9%
2010 – 8.2%
Statutory RoTE
2012 – (2.2)%
2011 – 6.9%
2010 – 8.7%
Return on average risk
weighted assets (RoRWA)
RoRWA is calculated as profit after tax for the
year divided by average risk weighted assets
for the year.
Adjusted RoRWA
2012 – 1.3%
2011 – 1.1%
2010 – 1.1%
Statutory RoRWA
2012 – (0.1)%
2011 – 1.0%
2010 – 1.1%
Profit before tax Profit before tax and adjusted profit before tax
are the two primary profitability measures
used by management to assess performance.
Profit before tax is stated in accordance with
International Financial Reporting Standards
and represents total income less impairment
charges and operating expenses. Adjusted
profit before tax represents profit before tax
adjusted to exclude the impact on income and
costs of own credit, gains on debt buy-backs,
gain/loss on disposal of a portion of the
Group’s strategic investment in BlackRock,
Inc., the impairment of the investment in
BlackRock, Inc., the provision of PPI and
interest rate hedging products redress,
goodwill impairments, and gains and losses
on acquisitions and disposals of subsidiaries,
associates and joint ventures.
Profit before tax is a key indicator of financial
performance to many of our stakeholders.
Adjusted profit before tax is presented to provide
a consistent basis for company performance
between periods. In 2012 adjusted profit before
tax increased by 26% with an increase of 37% in
the Investment Bank and 52% in Wealth and
Investment Management.
Adjusted
2012 – £7,048m
2011 – £5,590m
2010 – £5,707m
Statutory
2012 – £246m
2011 – £5,879m
2010 – £6,065m
barclays.com/annualreport198 I Barclays PLC Annual Report 2012
Financial review
Key performance indicators