Barclays 2014 Annual Report Download - page 244

242 I Barclays PLC Annual Report 2014 barclays.com/annualreport
Analysis of results by business
Financial review
Barclays Non-Core continued
Total operating expenses improved 29% to £2,011m reflecting savings
from Transform programmes, including lower headcount and the
results of the previously announced European retail restructuring. In
addition, costs to achieve Transform reduced 61% to £212m.
Loans and advances to banks and customers reduced 22% to £63.9bn
due to a £12.9bn reclassification of loans relating to the Spanish
business, which was held for sale, and a reduction in Europe retail
driven by a run-off of assets.
Trading portfolio assets reduced 48% to £15.9bn due to the sale and
run-down of legacy portfolio assets.
Derivative financial instrument assets and liabilities increased 19% to
£285.4bn and 21% to £277.1bn respectively, driven by decreases in
major forward interest rates.
Total assets decreased 8% to £471.5bn with reduced reverse
repurchase agreements and other similar secured lending, and trading
portfolio assets, due to the run-down of legacy portfolio assets, offset
by an increase in derivative financial instrument assets. BCBS 270
leverage exposure reduced to £277bn.
RWAs decreased £34.6bn to £75.3bn and average allocated equity
decreased £3.7bn to £13.4bn, reflecting the disposal of businesses,
run-down and exit of securities and loans, and derivative risk
reductions.
2013 compared to 2012
Loss before tax of £1,562m moved from a profit of £220m in 2012.
Total income net of insurance claims decreased 29% to £2,293m.
Businesses income reduced 20% to £1,498m primarily driven by
increased funding costs and reduced trading income from legacy
portfolio assets. Securities and Loans decreased 44% to £642m
primarily driven by reduced income from legacy products and
wholesale loan portfolios. Derivatives income decreased 13% to £153m
reflecting reduced income from the traded legacy derivatives portfolio,
partially offset by hedging activities.
Credit impairment charges decreased 6% to £900m primarily driven by
ongoing action to reduce exposure to the property and construction
sector and the impact of changes concerning government subsidies in
the renewable energy sector in Spain, partially offset by a charge
against single name exposures.
Operating expenses increased 36% to £2,845m reflecting costs to
achieve Transform of £538m (2012: £nil), primarily due to the
significant downsizing of the European retail distribution network, and
increased litigation and conduct charges.
Other net expense of £110m moved from net income of £65m in 2012
due to a valuation adjustment recognised in respect of contractual
obligations to trading partners based in locations affected by European
retail distribution network restructuring plans.
Notes
a As at 31 December 2014 loans and advances included £51.6bn (2013: £70.8bn) of loans and advances to customers (including settlement balances of £1.6bn (2013: £2.6bn)
and cash collateral of £22.1bn (2013: £14.5bn)) and loans and advances to banks of £12.3bn (2013: £11.1bn) (including settlement balances of £0.3bn (2013: £0.8bn) and cash
collateral of £11.3bn (2013: £9.5bn)).
b RWAs are on a CRD IV fully loaded basis. CRD IV rules came into effect in 2013; therefore no 2012 comparatives are available.
c Return on average equity and average tangible equity for Barclays Non-Core represents its impact on the Group, being the difference between Barclays Group returns and Barclays
Core returns.
2014
£m
2013
£m
2012
£m
Balance sheet information
Loans and advances to banks and customers at amortised costa£63.9bn £81.9bn £99.1bn
Loans and advances to customers at fair value £18.7bn £17.6bn £20.2bn
Trading portfolio assets £15.9bn £30.7bn £45.2bn
Derivative financial instrument assets £285.4bn £239.3bn £364.9bn
Derivative financial instrument liabilities £277.1bn £228.3bn £354.6bn
Reverse repurchase agreements and other similar secured lending £49.3bn £104.7bn £98.6bn
Total assets £471.5bn £511.2bn £651.8bn
Customer deposits £21.6bn £29.3bn £31.9bn
Risk weighted assetsb£75.3bn £109.9bn n/a
Average allocated tangible equity £13.2bn £16.8bn £10.5bn
Average allocated equity £13.4bn £17.1bn £10.8bn
Key facts
Number of employees (full time equivalent) 8,900 9,900 11,400
Performance measures
Return on average tangible equityc(5.4%) (9.6%) (1.8%)
Return on average equityc(4.1%) (7.2%) (1.1%)
Loan loss rate (bps) 31 107 93
Analysis of total income
Businesses 1,101 1,498 1,876
Securities and Loans 117 642 1,155
Derivatives (168) 153 176
Total income 1,050 2,293 3,207