Barclays 2003 Annual Report Download - page 82

Competition and outlook
The UK financial services market remains highly competitive and
innovative. Competition comes both from incumbent players and a
steady stream of new market entrants. Barclays remains at the forefront
of market innovation to introduce new propositions to the market.
The landscape is expected to remain highly competitive in all our
businesses. We are confident that the integrated business model
employed by the Group, combined with rigorous application of
managing for value principles, will stand the Group in good stead to
meet the challenges ahead.
The Group believes that the UK domestic economy is likely to perform
well relative to the rest of Europe. A strong pick-up in external economic
conditions – particularly from the United States – should help to bolster
economic activity in the UK further and encourage a modest recovery in
the Eurozone.
Financial markets recovered somewhat from the very low points reached
in 2002, also reflecting the global economic recovery. Interest rates in
the US and UK bottomed out in the latter part of 2003, creating
conditions for modest rises over the next 12 months.
Group structure
Within Barclays Private Clients, the contribution recognised from the
closed life assurance activities is reported separately to provide
increased transparency.
The Group identified certain non-strategic operations in the Middle East
which were previously reported within Barclays Capital. These are now
separately managed with the objective of maximising the recovery from
the assets concerned. These operations, together with South American
Corporate Banking, which was separately identified in 2002, and residual
balances from other Transition Businesses, are collectively reported as
Transition Businesses within Head office functions and other operations.
The structural changes in the Group’s organisation announced on
9th October 2003 took effect from 1st January 2004.
Business Description
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Head office functions and other operations
Head office functions comprise all the Group’s central activities,
including Group Executive, Group Finance, Marketing and
Communications, Human Resources, Group Strategy and Planning,
Internal Audit, Marketing, Legal, Corporate Secretariat, Tax, Compliance
and Risk. Central function costs incurred wholly on behalf of the
business units are recharged to them.
Transition Businesses comprise discontinued South American and
Middle Eastern corporate banking businesses and other centrally
managed Transition Businesses. These non-core relationships are now
being managed separately with the objective of maximising the recovery
from the assets concerned.
Central items include internal fees charged by Barclays Capital for
structured capital markets activities, income from the management of
the Group’s operational premises, property related services and other
central items including activities which support the operating business
and provide central information technology services.