Barclays 2014 Annual Report Download - page 268

266 I Barclays PLC Annual Report 2014 barclays.com/annualreport
Notes to the financial statements
Performance/return
3 Net interest income continued
2014
Net interest income increased by 4% to £12,080m driven by improvements in PCB savings margins and volume growth in Barclaycard, partially
offset by a reduction in Africa Banking due to currency movements and the sale and run-down of assets in BNC. Interest income decreased by 5%
to £17,363m driven by a reduction in income from loans and advances to customers which fell 6% to £14,677m. Interest expense reduced 21% to
£5,283m, driven by a reduction in interest on customer accounts of £1,183m to £1,473m.
2013
Net interest income declined by 1% to £11,600m with lower net interest income in BNC, Head Office and Africa Banking offset by increases in
Barclaycard, PCB, and the Investment Bank. Interest income decreased by 5% to £18,315m driven by a reduction in income from loans and
advances to customers which fell 5% to £15,613m. Interest expense reduced 11% to £6,715m, driven by a reduction in interest on debt securities
in issue of £745m to £2,176m due to lower average balances and lower yields.
4 Net fee and commission income
Accounting for net fee and commission income
The Group applies IAS 18 Revenue. Fees and commissions charged for services provided or received by the Group are recognised as the services
are provided, for example on completion of the underlying transaction.
2014
£m
2013
£m
2012
£m
Fee and commission income
Banking, investment management and credit related fees and commissions 9,681 10,311 10,037
Foreign exchange commission 155 168 176
Fee and commission income 9,836 10,479 10,213
Fee and commission expense (1,662) (1,748) (1,677)
Net fee and commission income 8,174 8,731 8,536
2014
Net fee and commission income decreased £557m to £8,174m. This was driven by lower fees as a result of decreased debt underwriting fees and
declines in cash commissions reflecting lower volumes in the Investment Bank. Further decreases were caused by the launch of the revised PCB
overdraft proposition, which recognises the majority of the overdraft income as net interest income as opposed to fee income, and adverse
currency movements in Africa Banking. These movements were partly offset by increases in Barclaycard driven by growth in payment volumes.
2013
Net fee and commission income remained stable with a £195m increase to £8,731m. Higher fees as a result of increased volumes within
Barclaycard Business Payment and US portfolios, and growth in equity underwriting activity and a strong equity capital market deal calendar, were
offset by lower commissions mainly from syndicate and advisory business following concerns about potential slowing down of quantitative easing
and the impact of adverse currency movements in Africa Banking.