Barclays 2014 Annual Report Download - page 242

240 I Barclays PLC Annual Report 2014 barclays.com/annualreport
Analysis of results by business
Financial review
Head Office
2014 compared to 2013
Profit before tax of £97m improved from a loss of £15m in 2013.
Net operating income increased to £242m (2013: £145m)
predominantly due to net gains of £88m from foreign exchange
recycling arising from the restructure of group subsidiaries.
Total operating expenses decreased £22m to £142m mainly due to a
reduction in UK bank levy to £9m (2013: £29m), the non-recurrence of
costs associated with the Salz Review and the establishment of the
Transform programme in the prior year, partially offset by increased
litigation and conduct charges.
Total assets increased £22.5bn to £49.1bn reflecting an increase in the
Group liquidity pool assets.
RWAs decreased £10.6bn to £5.6bn, including receipt of certain
US Lehman acquisition assets and a £6.9bn revision to 2013 RWAs
following full implementation of CRD IV reporting, as disclosed in the
30 June 2014 Results Announcement.
Negative average allocated equity reduced to £0.4bn (2013: £7.0bn) as
the Group moved towards the allocation rate of 10.5% fully loaded CRD
IV CET1 ratio during the year, resulting in a reduction in excess equity
allocated to businesses.
2013 compared to 2012
Loss before tax of £15m moved from a profit of £190m in 2012.
Net operating income decreased 57% to £145m predominantly due to
the non-recurrence of gains related to hedges of employee share
awards in Q112 of £235m.
Total operating expenses were broadly in line at £164m (2012: £165m),
reflecting the non-recurrence of the £97m penalty arising from the
industry-wide investigation into the setting of inter-bank offered rates
recognised in 2012, mainly offset by costs to achieve Transform of
£22m (2012: £nil) and regulatory investigation and legal costs.
Notes
a US Lehman acquisition assets and RWAs for December 2013 and December 2012 of £1.6bn and £1.9bn respectively have been restated for the reclassification of these assets
from the Investment Bank to Head Office to more accurately reflect responsibility for the resolution of this matter.
b RWAs are on a CRD IV fully loaded basis. CRD IV rules came into effect in 2013; therefore no 2012 comparatives are available.
2014
£m
2013a
£m
2012
£m
Income statement information
Total income 242 142 341
Credit impairment releases/(charges) and other provisions – 3 (7)
Net operating income 242 145 334
Operating expenses (123) (113) (139)
UK bank levy (9) (29) (26)
Cost to achieve Transform (10) (22) –
Total operating expenses (142) (164) (165)
Other net (expense)/income (3) 4 21
Profit/(loss) before tax 97 (15) 190
Attributable profit/(loss) 112 (89) 23
Balance sheet information
Total assetsa£49.1bn £26.6bn £148.4bn
Risk weighted assetsa,b £5.6bn £16.2bn n/a
Average allocated tangible equity £(0.6)bn £(7.4)bn £2.9bn
Average allocated equity £(0.4)bn £(7.0)bn £3.4bn
Key facts
Number of employees (full time equivalent) 100 100 100