Barclays 2003 Annual Report Download - page 5

Our priorities in 2003 were to: drive profitable
revenue growth; maintain tight cost control;
retain our prudent and considered approach to
risk management; and accelerate the execution
of our strategic agenda.
These priorities were all met.
Financial performance was strong, with a record set of results. We
achieved a 20% increase in profit before tax. Return on equity was 17%
and earnings per share increased by 26%. Capital remained strong with
a tier 1 ratio of 7.9%. Our long-term credit rating continued to be
Aa1/AA/AA+. We increased the dividend by 12%.
2003 marked the end of our four-year (2000 to 2003) goal performance
cycle. At the outset, the goals were communicated to shareholders. The
primary goal of delivering top quartile total shareholder return relative
to a global peer group1was achieved. Total shareholder return for the
four-year cycle was 31%, resulting in a ranking of third out of twelve.
This compared favourably to the 16% total average return for the peer
group and with the decline of 28% for the FTSE 100 Index. A more
complete report on performance versus all goals is outlined in the
‘Financial Performance’ section on page 6.
Four years ago we embarked on a strategy to become one of the world’s
top ten banks. This has been achieved. We ranked 9th in the world by
market capitalisation at the end of 2003. In achieving this, our primary
focus was, and continues to be, on organic growth. A secondary focus
was on in-fill acquisitions, joint ventures and strategic alliances to
accelerate strategy execution for each of the businesses. The rate of
corporate development activity has accelerated during this period with
an increasingly strong track record in integration.
2003 was also a year where we continued to make good progress in
advancing our strategic priorities.
Core UK Banking
2003 was an important year for Personal Financial Services (PFS),
where the ongoing repositioning of the business resulted in stronger
financial performance. Our three priorities for PFS in 2003 were to:
deliver value to customers through more integrated banking; improve
productivity; and improve the customer service to make Barclays easier
to do business with.
We made improvements to the full range of consumer finance products
and we are, as a result, much better placed to meet our customers’
needs. The response from our customers has been positive and
encourages us to accelerate our efforts. For example, the scale of
demand for our new savings range pushed Barclays branded savings
into a leading position in the UK market for new savings flow.
The Woolwich, now fully integrated within Barclays, has positioned us
as a major player in the mortgage market. In 2003, this enabled us to
deliver a good profit performance from the mortgage business while
maintaining a commitment to prudent lending and developing attractive
product features for customers. We extended the Openplan proposition,
pioneered by The Woolwich, across the Barclays franchise. With
2.6 million customers already signed up in the UK, Openplan has become
the spearhead of our strategy to deliver integrated banking services,
where we reward customers who bring us more of their business.
Business Banking is our largest single business and operates in markets
that are critical to wealth generation and job creation in the UK. It serves
over 730,000 businesses, ranging from small businesses with turnover
of less than £500,000 to large enterprises with turnover of greater
than £10 million.
Business Banking delivered a strong financial performance in 2003,
a clear indication that customers liked what we have been doing.
We broadened our products and services and increased our
specialisation in the sectors we serve. We also maintained our focus
on improving efficiency. Our risk management processes are integrated
within the day-to-day business activity, which enables us to manage
the overall portfolio in a prudent manner.
In October 2003, we announced the creation of UK Banking, which
comprises most of PFS, Business Banking and most of UK Premier
(previously managed within Barclays Private Clients). This new grouping,
led by Roger Davis, will allow us to offer a more integrated service to our
UK personal and business customers.
Barclays PLC Annual Report 2003 3
Group Chief Executive’s Statement
Note
1Peer group for 2003: Abbey, ABN Amro, BBVA, BNP Paribas, Citigroup, Deutsche
Bank, HBOS, HSBC, Lloyds TSB, Royal Bank of Scotland and Standard Chartered.