Barclays 2014 Annual Report Download - page 269

barclays.com/annualreport Barclays PLC Annual Report 2014 I 267
5 Net trading income
Accounting for net trading income
In accordance with IAS 39, trading positions are held at fair value, and the resulting gains and losses are included in the income statement,
together with interest and dividends arising from long and short positions and funding costs relating to trading activities.
Income arises from both the sale and purchase of trading positions, margins which are achieved through market-making and customer
business and from changes in fair value caused by movements in interest and exchange rates, equity prices and other market variables.
Own credit gains/losses arise from the fair valuation of financial liabilities designated at fair value through profit or loss. See Note 17 Financial
liabilities designated at fair value.
2014
£m
2013
£m
2012
£m
Trading income 3,297 6,773 7,926
Own credit gains/(losses) 34 (220) (4,579)
Net trading income 3,331 6,553 3,347
Included within net trading income were losses of £1,051m (2013: £914m gain; 2012: £656m gain) on financial assets designated at fair value and
losses of £65m (2013: £684m loss; 2012: £3,980m loss) on financial liabilities designated at fair value.
2014
Net trading income decreased 49% to £3,331m, primarily reflecting a £2,666m decrease in trading income, as lower volatility and subdued trading
activity combined with tighter spreads reduced income across a number of businesses. Disposals and running down of certain BNC businesses
and the £935m fair value reduction on the ESHLA portfolio (see Note 18 for further details) also contributed to the lower income. This was partially
offset by a £254m favourable variance in own credit gains/losses.
2013
Net trading income increased 96% to £6,553m, primarily reflecting a £4,359m variance in own credit (2013: £220m charge; 2012: £4,579m
charge) as a result of improved credit spreads on Barclays’ issued debt. This was offset partially by a £1,153m decrease in underlying trading
income, reflecting market uncertainty around central banks’ tapering of quantitative easing programmes across a number of product areas.
6 Net investment income
Accounting for net investment income
Dividends are recognised when the right to receive the dividend has been established. Other accounting policies relating to net investment
income are set out in Note 16 Available for sale financial assets and Note 14 Financial assets designated at fair value.
2014
£m
2013
£m
2012
£m
Net gain from disposal of available for sale investments 620 145 452
Dividend income 9 14 42
Net gain from financial instruments designated at fair value 233 203 233
Other investment income 466 318 117
Net investment income 1,328 680 844
2014
Net investment income increased by £648m to £1,328m. This was largely driven by an increase in disposals of available for sale investments due to
favourable market conditions and increases in other investment income as a result of greater certainty regarding the recoverability of certain
assets not yet received from the 2008 US Lehman acquisition (2014: £461m gain; 2013: £259m gain).
2013
Net investment income decreased by £164m to £680m. This was largely driven by lower gains on disposal of available for sale investments
partially offset by increases in other investment income as a result of greater certainty regarding the recoverability of certain assets not yet
received from the 2008 US Lehman acquisition.
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