Barclays 2012 Annual Report Download - page 246

5 Net trading income
Accounting for net trading income
In accordance with IAS 39, trading positions are held at fair value and the resulting gains and losses are included in the income statement,
together with interest and dividends arising from long and short positions and funding costs relating to trading activities.
Income arises from both the sale and purchase of trading positions, margins which are achieved through market-making and customer
business and from changes in fair value caused by movements in interest and exchange rates, equity prices and other market variables.
Own credit gains/losses arise from the fair valuation of financial liabilities designated at fair value through profit or loss. See Note 17 Financial
liabilities designated at fair value.
2012
£m
2011
£m
2010
£m
Trading income 7,604 4,952 7,687
Own credit (losses)/gains (4,579) 2,708 391
Net trading income 3,025 7,660 8,078
Included within net trading income were gains of £656m (2011: £16m loss, 2010: £32m gain) on financial assets designated at fair value and
losses of £3,980m (2011: £3,850m gain, 2010: £903m loss) on financial liabilities designated at fair value.
2012
Net trading income decreased 61% to £3,025m, primarily reflecting a £7,287m variance in own credit (2012: £4,579m charge; 2011: £2,708m gain)
as a result of improved credit spreads on Barclays issued debt. This was offset partially by a £2,652m increase in underlying trading income,
reflecting increased liquidity and higher client volumes across a number of product areas in FICC and an improved performance in cash equities
and equity derivatives in Equities and Prime Services.
2011
Net trading income decreased £418m to £7,660m. Trading income, which primarily arises in the Investment Bank, decreased 36% to £4,952m
reflecting lower contributions from Commodities and Fixed Income Rates and Credit, partially offset by an increase in Currency that benefitted
from market volatility and strong client volumes. The impact from difficult trading conditions was partially offset by a gain on own credit of
£2,708m (2010: £391m).
6 Net investment income
Accounting for net investment income
Dividends are recognised when the right to receive the dividend has been established. Other accounting policies relating to net investment
income are set out in Note 16, Available for sale investments, and Note 14, Financial assets designated at fair value.
2012
£m
2011
£m
2010
£m
Net gain from disposal of available for sale investments 452 1,645 1,027
Dividend income 42 129 116
Net gain from financial instruments designated at fair value 206 287 274
Other investment income 117 244 60
Net investment income 817 2,305 1,477
2012
Net investment income decreased by £1,488m to £817m largely driven by the non-recurrence of gains on disposal of the economic structural
hedge portfolio during 2011 and a reduction in dividends following the disposal of the Group’s stake in BlackRock, Inc. during the first half of 2012.
2011
Net investment income increased by £828m to £2,305m due to the gains on the sale of hedging instruments held as part of the economic
structural hedge portfolio and increases in income from investment properties.
barclays.com/annualreport244 I Barclays PLC Annual Report 2012
Notes to the financial statements
For the year ended 31 December 2012 continued