Barclays 2014 Annual Report Download - page 238

236 I Barclays PLC Annual Report 2014 barclays.com/annualreport
Analysis of results by business
Financial review
Africa Banking
£3,664m
total income net of insurance claims
£984m
profit before tax
2014 compared to 2013
On a reported basisa, total income net of insurance claims decreased 9%
to £3,664m and profit before tax decreased 6% to £984m. Based on
average rates, the ZAR depreciated against GBP by 18% in 2014. The
deterioration was a significant contributor to the movement in the
reported results of Africa Banking. The discussion of business
performance below is based on results on a constant currency basisb
unless otherwise stated.
Profit before tax increased 13% to £984m, reflecting good growth in
Corporate and Investment Banking (CIB) and Retail and Business
Banking (RBB). CIB experienced strong income growth, driven by the
corporate banking business outside South Africa, and improved
investment banking trading performance across Africa. Continued
progress was made on the RBB South Africa turnaround strategy, with
increased net fee and commission income growth in the second half of
the year, and Wealth, Investment Management and Insurance (WIMI)
delivered strong growth outside South Africa due to expansion
initiatives.
Total income net of insurance claims increased 7% to £3,664m.
Net interest income increased 9% to £2,093m, primarily driven by higher
average loans and advances to customers in CIB and growth in customer
deposits in RBB in South Africa. Net interest margin on a reported basisa
increased 14bps to 5.95% following the rise in the South African
benchmark interest rate and the favourable impact of higher deposit
margins, partially offset by lower rates outside South Africa.
Net fee and commission income increased 2% to £1,086m mainly
reflecting increased RBB transactions in South Africa.
Credit impairment charges decreased 14% to £349m and on a reported
basis the loan loss rate improved 35bps to 93bps, driven by reduced
impairments in the South Africa mortgages portfolio and business
banking, partially offset by increased impairments in the card portfolio.
Notes
a Reported basis represents results in GBP using actual exchange rates.
b Constant currency results are calculated by converting ZAR results into GBP using the average 2014 exchange rate for the income statement and the closing 2014 exchange rate
for the balance sheet to eliminate the impact of movement in exchange rates between the two periods.
c RWAs are on a CRD IV fully loaded basis. CRD IV rules came into effect in 2013; therefore no 2012 comparatives are available.
Constant currencyb
2014
£m
2013
£m
2012
£m
2014
£m
2013
£m
Income statement information
Net interest income 2,093 2,245 2,313 2,093 1,912
Net fee and commission income 1,086 1,254 1,384 1,086 1,067
Net trading income 250 260 328 250 219
Net premiums from insurance contracts 337 374 432 337 316
Other income 68 91 65 68 78
Total income 3,834 4,224 4,522 3,834 3,592
Net claims and benefits incurred under insurance contracts (170) (185) (208) (170) (157)
Total income net of insurance claims 3,664 4,039 4,314 3,664 3,435
Credit impairment charges and other provisions (349) (479) (695) (349) (406)
Net operating income 3,315 3,560 3,619 3,315 3,029
Operating expenses (2,246) (2,451) (2,584) (2,246) (2,098)
UK bank levy (45) (42) (34) (45) (42)
Costs to achieve Transform (51) (26) – (51) (23)
Total operating expenses (2,342) (2,519) (2,618) (2,342) (2,163)
Other net income 11 8 18 11 7
Profit before tax 984 1,049 1,019 984 873
Attributable profit 360 356 347 360 289
Balance sheet information
Loans and advances to customers at amortised cost £35.2bn £34.9bn £41.2bn £35.2bn £33.6bn
Total assets £55.5bn £54.9bn £64.9bn £55.5bn £52.8bn
Customer deposits £35.0bn £34.6bn £39.7bn £35.0bn £33.3bn
Risk weighted assetsc£38.5bn £38.0bn n/a
Average tangible equity £2.8bn £3.2bn £3.5bn
Average equity £3.9bn £4.4bn £4.9bn