Barclays 2012 Annual Report Download - page 216

2012
Income declined 12% to £3,157m. Excluding currency movements,
income declined 2% reflecting non-recurrence of gains from the
disposal of Group hedging instruments in 2011 and downward
commercial property valuations with underlying businesses across
Africa remaining flat.
Net interest income declined 11% to £1,751m with the net interest
margin down 10bps to 312bps primarily due to lower income
generated through non customer related items partially offset by
increased higher margin business. Customer asset margin increased
34bps to 326bps reflecting a change in composition towards higher
margin business. Average customer assets decreased 10% to £34.1bn
driven by currency movements and a modest decline in the South
African mortgage book. Customer liability margin decreased 42bps to
234bps driven by a decline in South Africa partially offset by improving
margins across a number of other African countries. Average customer
liabilities decreased 6% to £22.1bn driven by currency movements as
deposits continued to grow in South Africa where Absa remains a
leader in retail deposits.
Non-interest income declined 12% to £1,406m driven largely by
adverse currency movements.
Credit impairment charges increased 39% to £646m. Excluding
currency movements impairment charges increased 57% principally
reflecting higher loss given default rates and higher levels of write-offs
in the South African home loans recovery book and the impact of one
large name in the commercial property portfolio in South Africa. Loan
loss rate increased to 194bps (2011: 129bps). However 90 day arrears
rate for home loans decreased by 168bps to 1.6% reflecting improved
new business and continuing low interest rate environment.
Operating expenses decreased 10% to £2,053m mainly due to currency
movements with underlying business growth broadly in line.
Profit before tax declined 44% to £468m and adjusted return on
average equity decreased to 3.8% (2011: 9.7%).
Loans and advances to customers decreased 8% to £31.7bn mainly
due to currency movements and a modest decline in the South African
mortgage book.
Customer deposits decreased 3% to £22.0bn. Excluding currency
movements customer deposits increased 7% mainly due to growth in
South African deposits.
Risk weighted assets decreased 11% to £27.0bn, principally due to
foreign exchange movements and a change in approach for sovereign
risk weightings, offset by an increased operational risk charge.
Africa Retail and Business Banking
Notes
a Adjusted profit before tax and adjusted performance measures excludes the impact of profit on disposals of subsidiaries, associates and joint ventures of £nil (2011:
£2m; 2010: £81m).
b Certain corporate banking activities in Africa, previously reported under Africa RBB, are now included within Corporate Banking. The 2010 and 2011 comparatives
have been restated. This restatement has no impact on the Group’s overall results.
2012
£m
2011b
£m
2010b
£m
Income Statement Information
Net interest income 1,751 1,978 1,914
Net fee and commission income 1,101 1,196 1,245
Net trading income 69 70 52
Net investment income 5 56 58
Net premiums from insurance contracts 417 432 400
Other income 21 54 57
Total income 3,364 3,786 3,726
Net claims and benefits incurred under insurance contracts (207) (215) (215)
Total income net of insurance claims 3,157 3,571 3,512
Credit impairment charges and other provisions (646) (466) (559)
Net operating income 2,511 3,105 2,953
Operating expenses (2,053) (2,279) (2,307)
Share of post-tax results of associates and joint ventures 10 6 3
Profit on disposal of subsidiaries, associates and joint ventures – – 81
Profit before tax 468 832 730
Adjusted profit before taxa 468 830 649
Balance Sheet Information
Loans and advances to customers at amortised cost £31.7bn £34.4bn £43.0bn
Customer accounts £22.0bn £22.6bn £23.3bn
Total assets £44.8bn £48.2bn £57.8bn
Risk weighted assets £27.0bn £30.3bn £35.0bn
barclays.com/annualreport214 I Barclays PLC Annual Report 2012
Financial review
Analysis of results by business continued