Barclays 2003 Annual Report Download - page 102

Total Assets and Liabilities
The Group’s balance sheet grew by 10% (£40bn) to £443bn
(31st December 2002: £403bn). Weighted risk assets rose by 9%
(£16bn) to £189bn (31st December 2002: £173bn).
Within Personal Financial Services, total assets increased 4% to £77.3bn
(31st December 2002: £74.6bn). Weighted risk assets increased by 3% to
£42.4bn (31st December 2002: £41.1bn). This was mainly attributable to
steady growth in UK residential mortgage balances, up 3% to £59.8bn
(2002: £57.8bn) and to good growth in unsecured lending.
Barclays Private Clients total assets (including the assets of the closed
life assurance activities) grew 52% (£7.7bn) to £22.5bn (31st December
2002: £14.8bn), primarily as a result of the growth of Openplan in Spain
and the inclusion of assets relating to the acquired business of Banco
Zaragozano. Weighted risk assets increased 29% to £15.1bn
(31st December 2002: £11.7bn), largely reflecting the growth in Openplan
assets in Spain and the impact of the acquisition of Banco Zaragozano.
Barclaycard total assets increased 15% to £12.5bn (31st December
2002: £10.9bn). Weighted risk assets decreased by 2% to £9.8bn
(31st December 2002: £10.0bn), reflecting the effect of securitised credit
card receivables.
Within Business Banking, total assets grew by 10% to £52.2bn
(31st December 2002: £47.4bn). Weighted risk assets increased by 9% to
£55.0bn (31st December 2002: £50.4bn) as a result of strong growth in
lending balances. Lending growth was directed towards higher quality
large and medium business customers.
Barclays Capital total assets grew 11% to £263.2bn (31st December
2002: £236.5bn) primarily due to increases in low risk, high quality
reverse repos and debt securities. Reverse repo balances, which are fully
collateralised, increased £17.1bn, driven by growth in client transactions.
The increase in debt securities of £6.7bn arose primarily in governments
and high-grade corporates. Total weighted risk assets increased 15%
(£7.8bn) to £61.3bn (31st December 2002: £53.5bn), broadly in line
with the growth in assets.
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2001 2002 2003£bn
350
450
Weighted risk assets
Assets
400
158.9 172.7 189.0
356.6
403.1
443.4
Capital Resources
The Group manages both its debt and equity capital actively. The Group’s
authority to buy back equity was renewed at the 2003 AGM to provide
additional flexibility in the management of the Group’s capital resources.
2003 2002 2001
restated restated
£m £m £m
Barclays PLC Group
Shareholders’ funds 16,473 15,201 14,485
Minority and other interests 283 156 134
16,756 15,357 14,619
Undated loan capital 6,310 6,678 5,054
Dated loan capital 6,029 4,859 4,933
Total capital resources 29,095 26,894 24,606
Total capital resources increased in the year by £2,201m.
Equity shareholders’ funds increased by £1,272m reflecting profit
retentions of £1,404m, net proceeds of share issues of £149m, offset
by share repurchases of £204m, exchange rate losses of £29m, shares to
QUEST of £36m and £12m other movements.
Loan capital rose by £802m reflecting raisings of £1,926m, offset by
redemptions of £974m, exchange rate movements of £146m and
amortisation of issue expenses of £4m.
2003 2002 2001
£m £m £m
Barclays Bank PLC Group
Shareholders’ funds 16,485 15,205 14,485
Minority interests 283 156 134
16,768 15,361 14,619
Undated loan capital 6,310 6,678 5,054
Dated loan capital 6,029 4,859 4,933
Total capital resources 29,107 26,898 24,606
Capital resources for Barclays Bank PLC Group differ from Barclays PLC
Group by £12m (2002: £4m).
Capital ratios
Capital adequacy and the use of regulatory capital are monitored by the
Group, employing techniques based on the guidelines developed by the
Basel Committee on Banking Supervision (the Basel Committee) and
European Community Directives, as implemented by the Financial
Services Authority (FSA) for supervisory purposes.
These techniques include the risk asset ratio calculation, which the FSA
regards as a key supervisory tool. The FSA sets ratio requirements for
individual banks in the UK at or above the internationally agreed minimum of
8%. The ratio calculation involves the application of designated risk weightings
to reflect an estimate of credit, market and other risks associated with broad
categories of transactions and counterparties. Regulatory guidelines define
three ‘Tiers’ of capital resources. Tier 1 capital, comprising mainly
shareholders’ funds and including Reserve Capital Instruments and Tier One
Notes, is the highest tier and can be used to meet trading and banking activity
requirements. Tier 2 includes perpetual, medium-term and long-term
subordinated debt, general provisions for bad and doubtful debts and fixed
asset revaluation reserves. Tier 2 capital can be used to support both trading
and banking activities. Tier 3 capital comprises short-term subordinated debt
with a minimum original maturity of two years. The use of tier 3 capital is
restricted to trading activities only and it is not eligible to support
counterparty or settlement risk. The aggregate of tiers 2 and 3 capital
included in the risk asset ratio calculation may not exceed tier 1 capital.
Financial Review
Total Assets and Liabilities and Capital Resources
100