Barclays 2003 Annual Report Download - page 95

Barclays PLC Annual Report 2003 93
Barclays Africa
2003 2002 2001
£m £m £m
Net interest income 187 160 176
Net fees and commissions 133 114 130
Other operating income 516
Operating income 325 275 312
Goodwill amortisation (1) (1) (1)
Other operating expenses (185) (159) (164)
Operating expenses (186) (160) (165)
Operating profit before
provisions 139 115 147
Provisions for bad and
doubtful debts (27) (27) (25)
Operating profit 112 88 122
Profit from joint ventures –––
Profit on ordinary activities
before tax 112 88 122
Barclays Africa operating profit increased 27% (£24m) to £112m
(2002: £88m) driven by strong customer lending.
Operating income increased 18% (£50m) to £325m (2002: £275m).
Net interest income increased 17% (£27m) to £187m (2002: £160m), the
growth being largely attributable to the acquisition of BNPI Mauritius
and expansion in selected markets. There was a 20% increase in
customer lending to £1.8bn (2002: £1.5bn) and a 12% rise in customer
deposits to £2.8bn (2002: £2.5bn).
Net fees and commissions rose 17% (£19m) to £133m (2002: £114m),
reflecting growth in fee-based services, treasury profits and the impact
of the acquisition of BNPI Mauritius in 2002.
Operating expenses increased 16% (£26m) to £186m (2002: £160m),
due to increased infrastructure investment, further development of the
business and the relocation of Head office functions. Operating expense
included goodwill of £1m (2002: £1m).
Provisions remained steady at £27m, notwithstanding strong lending
growth, and reflected improved portfolio quality and recoveries.
Operating profit in 2002 decreased 28% to £88m (2001: £122m)
primarily attributable to the situation in Zimbabwe.
Operating income in 2002 fell 12% to £275m (2001: £312m) primarily
attributable to the situation in Zimbabwe.
Operating expenses in 2002 fell 3% to £160m (2001: £165m).
Provisions in 2002 increased 8% to £27m (2001: £25m).
Net interest income increased 2% (£39m) to £1,665m (2002: £1,626m).
Average lending balances increased 11% to £47.0bn (2002: £42.3bn) and
average deposit balances increased 5% to £46.2bn (2002: £43.9bn).
Lending margins were maintained and lending growth was concentrated
towards higher quality large and medium business customers. The
impact of the Competition Commission Inquiry transitional pricing
remedy and the lower interest rate environment contributed to lower
deposit margins.
Net fees and commissions increased 7% (£61m) to £925m
(2002: £864m), driven by lending related fees which rose strongly,
reflecting the growth in the balance sheet. Foreign exchange commission
income grew due to increased business volumes. Money transmission
income fell as a result of the alternative offer made in response to the
Competition Commission Inquiry transitional pricing remedy and the
targeted migration of transactions to electronic channels.
Operating expenses of £1,080m (2002: £1,082m) were flat relative to
2002. Business as usual costs reduced, with cost savings from the
back office more than offsetting the impact of the pension charge of
£50m (2002: credit £26m). Headcount fell to 9,000 (2002: 9,700).
Strategic investment spend increased, and was focused on improving
direct channels, realising cost savings and enhancing the shared
technology infrastructure. Operating expenses included goodwill of
£9m (2002: £21m).
Provisions increased 10% (£23m) to £249m (2002: £226m). The
increase was in line with lending growth. The lending portfolio remained
well diversified by sector and the overall quality of the portfolio, as
defined by risk grade, was maintained.
Business Banking operating profit in 2002 increased by 15% to
£1,206m (2001: £1,049m) reflecting improved income growth and
tight cost management.
Net interest income in 2002 increased 5% to £1,626m (2001: £1,553m)
partly as a result of increased volumes.
Net fees and commissions in 2002 increased 4% to £864m
(2001: £833m). Lending related fees increased strongly and included
an increased contribution from leveraged finance. Money transmission
income fell as a result of price competition and a reduction in average
fee levels due to the migration to more efficient, lower cost, electronic
payment mechanisms. Foreign exchange related income was flat despite
a reduction in volumes.
Operating expenses in 2002 fell 4% to £1,082m (2001: £1,123m).
Included in operating expenses was goodwill of £21m (2001: £12m).
Provisions in 2002 increased 8% to £226m (2001: £210m).