Barclays 2005 Annual Report Download - page 111

Barclays PLC
Annual Report 2005 109
3.3
Operating expenses excluding amortisation of intangible assets
2005 2004
£m £m
Staff costs (Note 9) 6,318 5,227
Administrative expenses 3,443 2,766
Depreciation (Note 29) 362 297
Impairment loss – intangible assets (Note 28) 99
Operating lease rentals 316 215
Operating expenses excluding amortisation
of intangible assets 10,448 8,514
Operating expenses increased 23% (£1,934m) to £10,448m (2004:
£8,514m). The inclusion of Absa added operating expenses of £622m
to the second half of 2005. Group operating expenses excluding Absa
grew 15% reflecting higher business activity.
Administrative expenses increased 24% (£677m) to £3,443m (2004:
£2,766m). The inclusion of Absa added administrative expenses of
£257m in the second half of 2005. Group administrative expenses
excluding Absa grew 15% principally as a result of higher business
activity in Barclays Capital and Barclays Global Investors and the
inclusion of Barclaycard US for the full year. There was a strong focus
on cost control across the business, with particularly good results in
UK Retail Banking.
Administrative expenses included non-recurring costs relating to the
write-down of capitalised IT related assets held centrally of £60m
(2004: £nil). Impairment losses of £9m (2004: £9m) reflected a further
charge for the impairment of certain capitalised IT related assets
following a review of their likely future economic benefit.
Operating lease rentals increased 47% (£101m) to £316m (2004:
£215m). The inclusion of Absa added operating lease rentals of £27m
in the second half of 2005. Operating lease rentals excluding Absa
increased primarily as a consequence of the double occupancy costs
associated with the head office relocation to Canary Wharf.
The Group cost:income ratio remained steady at 61%. This reflected
improved productivity in UK Banking, Barclays Global Investors and
Wealth Management; and a stable performance by International Retail
and Commercial Banking, offset by an increase in non-recurring
operating expenses in Head office and other functions.
The Group cost:net income(a) ratio was 67% (2004: 66%).
Staff costs
Other operating expenses – staff costs
2005 2004
£m £m
Salaries and accrued incentive payments 5,036 4,098
Social security costs 412 339
Pension costs 347 327
Post-retirement health care 27 29
Other staff costs 496 434
Staff costs 6,318 5,227
Included in salaries and accrued incentive payments is £338m (2004:
£204m) arising from equity settled share-based payments.
Staff costs increased 21% (£1,091m) to £6,318m (2004: £5,227m).
The inclusion of Absa added staff costs of £296m during the second
half of the year. Excluding the impact of Absa, staff costs increased 15%.
Salaries and accrued incentive payments rose 23% (£938m) to
£5,036m (2004: £4,098m), principally due to increased headcount in
Barclays Capital and performance related payments primarily in
Barclays Capital and Barclays Global Investors and the inclusion of
Absa. Excluding Absa salaries and accrued incentive payments of
£276m, salaries and accrued incentive payments rose 16% (£662m).
Pension costs comprise all UK and international pension schemes.
Included in pension costs is a charge of £276m (2004: £261m) in
respect of the Group’s main UK pension schemes.
Staff numbers
2005 2004
UK Banking 39,900 41,800
UK Retail Banking 31,900 34,400
UK Business Banking 8,000 7,400
Barclays Capital 9,000 7,800
Barclays Global Investors 2,300 1,900
Wealth Management 7,200 7,200
Barclaycard 7,800 6,700
International Retail and Commercial
Banking 46,200 12,100
International Retail and Commercial
Banking – ex Absa 12,700 12,100
International Retail and Commercial
Banking – Absa 33,500 –
Head office functions and other operations 900 900
Total Group permanent and
fixed-term contract staff worldwide 113,300 78,400
Agency staff worldwide 7,000 4,300
Total including agency staff 120,300 82,700
Staff numbers are shown on a full-time equivalent basis. Total Group
permanent and contract staff comprise 59,100 (2004: 60,000) in the
UK and 54,200 (2004: 18,400) internationally.
Note
(a) The cost:net income ratio is defined as operating expenses compared to total income net of insurance claims, less impairment charges.