Barclays 2014 Annual Report Download - page 267

barclays.com/annualreport Barclays PLC Annual Report 2014 I 265
2 Segmental reporting
Presentation of segmental reporting
The Group’s segmental reporting is in accordance with IFRS 8 Operating Segments. Operating segments are reported in a manner consistent
with the internal reporting provided to the Executive Committee, which is responsible for allocating resources and assessing performance of
the operating segments, and has been identified as the chief operating decision maker. All transactions between business segments are
conducted on an arm’s length basis, with intra-segment revenue and costs being eliminated in Head Office. Income and expenses directly
associated with each segment are included in determining business segment performance.
The Group’s activities have been resegmented into Core and Non-Core business units as part of the Group strategy update announced in May
2014. Comparatives have also been updated. The Core business consists of Personal & Corporate Banking (PCB), Barclaycard, Africa Banking,
Investment Bank and Head Office. Barclays Non-Core (BNC) groups together businesses and assets that are no longer strategically attractive to
Barclays.
An analysis of the Group’s performance by business segment and income by geographic segment is included on pages 229 and 230. Further
details on each of the new segments are provided on pages 231 to 242.
3 Net interest income
Accounting for interest income and expense
The Group applies IAS 39 Financial Instruments: Recognition and Measurement. Interest income on loans and advances at amortised cost,
available for sale debt investments, and interest expense on financial liabilities held at amortised cost, are calculated using the effective interest
method which allocates interest, and direct and incremental fees and costs, over the expected lives of the assets and liabilities.
The effective interest method requires the Group to estimate future cash flows, in some cases based on its experience of customers’ behaviour,
considering all contractual terms of the financial instrument, as well as the expected lives of the assets and liabilities. Due to the large number
of product types (both assets and liabilities), in the normal course of business there are no individual estimates that are material to the results
or financial position.
2014
£m
2013
£m
2012
£m
Cash and balances with central banks 193 219 253
Available for sale investments 1,615 1,804 1,736
Loans and advances to banks 446 468 376
Loans and advances to customers 14,677 15,613 16,448
Other 432 211 399
Interest income 17,363 18,315 19,212
Deposits from banks (199) (201) (257)
Customer accounts (1,473) (2,656) (2,485)
Debt securities in issue (1,922) (2,176) (2,921)
Subordinated liabilities (1,622) (1,572) (1,632)
Other (67) (110) (263)
Interest expense (5,283) (6,715) (7,558)
Net interest income 12,080 11,600 11,654
Interest income includes £153m (2013: £179m; 2012: £211m) accrued on impaired loans.
Other interest income principally includes interest income relating to reverse repurchase agreements and hedging activity. Similarly, other interest
expense principally includes interest expense relating to repurchase agreements and hedging activity.
Included in net interest income is hedge ineffectiveness as detailed on page 278.
The notes included in this section focus on the results and performance of the Group. Information on the income
generated, expenditure incurred, segmental performance, tax, earnings per share and dividends are included here.
Notes to the financial statements
Performance/return
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