Barclays 2012 Annual Report Download - page 27

Your Finance Director’s Review
The Group Finance Director is responsible for monitoring the
Bank’s financial performance and position and communicating
this to both internal and external stakeholders. Below he discusses
the Bank’s performance during 2012 and its year end position as
at 31 December 2012.
Total assets reduced 5% to £1,490bn, principally reflecting lower
derivative assets as spreads tightened within the credit derivative
portfolio. This was partially offset by increased reverse repurchase
agreements and other similar secured lending due to higher matched
book trading.
Total shareholders’ equity (including non-controlling interests) reduced
£2.2bn to £63.0bn, driven by the loss for the year, dividends paid and
currency translation differences due to depreciation of US Dollar and
South African Rand against Sterling.
Capital Management
Core Tier 1 ratio was 10.9% (2011: 11.0%), reflecting a 2% reduction
in Core Tier 1 capital to £42.1bn partially offset by a 1% reduction in
risk weighted assets to £387bn.
Risk weighted assets reduced 1% to £387bn principally due to
reductions in risk exposures, including the sell-down of legacy assets,
and the impact of foreign exchange movements, largely offset by an
increased operational risk charge and methodology and model changes.
We have estimated our proforma CRD IV Common Equity Tier 1 (CET1)
ratio on both a transitional and fully loaded basis, reflecting our current
interpretation of the rules and assuming they were applied as at 1
January 2013. As at that date Barclays proforma transitional CET1 ratio
would be approximately 10.6% and the fully loaded CET1 ratio would
be approximately 8.2%.
Funding and Liquidity
The Group maintained a strong liquidity position throughout 2012.
The liquidity pool was £150bn (2011: £152bn) remaining well within
our liquidity risk appetite.
The loan to deposit ratio for the Group was 110% (2011: 118%) and
for Retail and Business Banking, Corporate Banking and Wealth and
Investment Management was 102% (2011: 111%).
Total wholesale funding outstanding (excluding repurchase
agreements) was £240bn (2011: £265bn), of which £101bn matures
in less than one year (2011: £130bn).
The wholesale funding requirement supporting retail and wholesale
businesses reduced with the continued increase in customer deposits
and further reduction of legacy assets. £6bn was raised through
Barclays participation in the Bank of England’s FLS supporting lending
into the real economy to individuals, households and private non-
financial companies.
Conclusion
To summarise, we’re reporting good results for 2012. Adjusted profits
grew 26% to £7.0bn, income was up 2%, impairment improved 5%, and
we reduced costs by 3%. Our capital, liquidity and funding remain strong
with a Core Tier 1 ratio of 10.9%. All of which allowed us to pay a total
declared dividend for 2012 of 6.5p per share.
Chris Lucas
Group Finance Director
Distribution of earnings
We believe that the best way to support our stakeholders is
by operating a strong, profitable and growing business, which
creates jobs and contributes to the economic success of the
communities in which we live and work. The charts below detail
how the earnings generated by our businesses are distributed
to a number of key stakeholders.
6.5p
6.0p
5.5p
Dividend per share
19%
22%
19%
Dividend payout ratioa
Shareholders
2012
2011
2010
£3,234m
£3,341m
£3,138m
Taxes borneb
£2,856m
£3,078m
£3,011m
Taxes collectedc
Government
2012
2011
2010
38%
42%
43%
Compensation
to adjusted net
operating income
20%
29%
34%
Bonus pool as
% adjusted profit
Staff
2012
2011
2010
Notes
a Calculated as dividend per share divided by adjusted Earnings Per Share (EPS).
b Taxes borne are the Company’s own tax contribution, representing taxes paid
by the Company in the year.
c Taxes collected are those collected from employees and customers on behalf
of governments.
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