Barclays 2014 Annual Report Download - page 236

234 I Barclays PLC Annual Report 2014 barclays.com/annualreport
Analysis of results by business
Financial review
Barclaycard
£4,356m
total income
£1,339m
profit before tax
2014 compared to 2013
Profit before tax increased 13% to £1,339m. Strong growth in 2014 was
delivered through a diversified consumer and merchant business
model, with customer numbers increasing to 30m (2013: 26m) and
asset growth across all geographies generating a 6% increase in
income. Growth has been managed on a well-controlled cost base,
with the business focusing on scale through insourcing of services,
consolidation of sites and digitalisation, resulting in an improvement in
the cost to income ratio to 43% (2013: 45%). The business focus on
risk management is reflected in stable 30-day delinquency rates and
falling loan loss rates. The diversified and scaled business model has
allowed the business to deliver a strong return on average equity of
16.0% (2013: 15.5%).
Total income increased 6% to £4,356m reflecting growth in the UK
consumer and merchant, Germany and US businesses, partially offset
by depreciation of average USD against GBP.
Net interest income increased 8% to £3,044m driven by volume
growth. Net interest margin decreased to 8.75% (2013: 8.99%) due to
a change in product mix and the impact of promotional offers,
particularly in the US, partially offset by lower funding costs.
Net fee and commission income increased 2% to £1,286m due to
growth in payment volumes.
2014
£m
2013
£m
2012
£m
Income statement information
Net interest income 3,044 2,829 2,632
Net fee and commission income 1,286 1,256 1,166
Other income 26 18 18
Total income 4,356 4,103 3,816
Credit impairment charges and other provisions (1,183) (1,096) (1,000)
Net operating income 3,173 3,007 2,816
Operating expenses (1,727) (1,786) (1,669)
UK bank levy (29) (22) (15)
Costs to achieve Transform (118) (49) –
Total operating expenses (1,874) (1,857) (1,684)
Other net income 40 33 29
Profit before tax 1,339 1,183 1,161
Attributable profit 938 822 812
Balance sheet information
Loans and advances to customers at amortised cost £36.6bn £31.5bn £28.8bn
Total assets £41.3bn £34.4bn £32.9bn
Customer deposits £7.3bn £5.1bn £2.7bn
Risk weighted assetsa£39.9bn £35.7bn n/a
Average allocated tangible equityb£4.7bn £4.1bn £3.4bn
Average allocated equityb£5.9bn £5.3bn £4.5bn
Notes
a RWAs are on a CRD IV fully loaded basis. CRD IV rules came into effect in 2013; therefore no 2012 comparatives are available.
b 2012 returns calculated using average allocated equity based on CRD III RWAs and capital deductions.