Barclays 2012 Annual Report Download - page 218

2012
Income increased 2% to £4,170m reflecting continued growth across the
business and contributions from portfolio acquisitions. This was partially
offset by higher funding costs, non-recurrence of gains from the disposal
of hedging instruments in 2011 and depreciation of Rand against Sterling.
UK income increased 1% to £2,616m including contribution from 2011
portfolio acquisitions and business growth offset by increased funding
costs. International income improved 7% to £1,554m driven by higher US
outstanding balances and contribution from portfolio acquisitions.
Net interest income remained flat at £2,854m. Contributions from
business growth and acquisitions were offset by lower net interest
margin of 846bps (2011: 944bps) which stabilised in the second half of
the year. Average customer assets increased 7% to £32.5bn due to
portfolio acquisitions and business growth. Customer asset margin was
down 13bps to 939bps due to higher funding costs.
Non-interest income improved 7% to £1,316m driven by increased
volumes in the Business Payment and US portfolios.
Credit impairment charges decreased 22% to £979m resulting from
improved delinquency, lower charge-offs and better recovery rates,
primarily in the first half of 2012. Loan loss rate improved by 109bps
to 282bps (2011: 391bps). 30 day arrears rates for consumer cards in
UK down to 2.5% (2011: 2.7%), in the US down to 2.4% (2011: 3.1%)
and in South Africa up to 5.2% (2011: 4.9%).
Adjusted operating expenses increased 3% to £1,715m reflecting
portfolio acquisitions, provision for certain other insurance products
and investment spend.
Adjusted profit before tax improved 25% to £1,506m. Statutory profit
before tax increased by £525m to £1,086m after £420m (2011: £600m)
provision for PPI redress.
Adjusted return on average equity improved to 22.1% (2011: 17.4%).
Total assets increased 11% to £37.5bn primarily driven by business
growth and acquisitions.
Customer deposits increased by £2.2bn to £2.8bn due to business
funding initiatives in the US and Germany.
Risk weighted assets increased 7% to £36.5bn, principally due to
growth in assets and an increased operational risk charge.
Barclaycard
Note
a Adjusted profit before tax and adjusted performance measures excludes the impact of the provision for PPI redress of £420m (2011: £600m; 2010: £nil), and goodwill
impairment in FirstPlus secured lending portfolio of £nil (2011: £47m; 2010: £nil).
2012
£m
2011
£m
2010
£m
Income Statement Information
Net interest income 2,854 2,860 2,814
Net fee and commission income 1,271 1,171 1,136
Net trading loss (9) (7) (8)
Net investment income – 10 39
Net premiums from insurance contracts 36 42 50
Other income 19 20 1
Total income 4,171 4,096 4,032
Net claims and benefits incurred under insurance contracts (1) (1) (8)
Total income net of insurance claims 4,170 4,095 4,024
Credit impairment charges and other provisions (979) (1,259) (1,688)
Net operating income 3,191 2,836 2,336
Operating expenses (excluding provision for PPI redress and goodwill impairment) (1,715) (1,659) (1,570)
Provision for PPI redress (420) (600) –
Goodwill impairment – (47) –
Operating expenses (2,135) (2,306) (1,570)
Share of post-tax results of associates and joint ventures 30 31 25
Profit on disposal of subsidiaries, associates and joint ventures –– –
Profit before tax 1,086 561 791
Adjusted profit before taxa1,506 1,208 791
Balance Sheet Information
Loans and advances to customers at amortised cost £32.9bn £30.1bn £26.6bn
Customer deposits £2.8bn £0.6bn £0.6bn
Total assets £37.5bn £33.8bn £30.3bn
Risk weighted assets £36.5bn £34.2bn £31.9bn
barclays.com/annualreport216 I Barclays PLC Annual Report 2012
Financial review
Analysis of results by business continued