Barclays 2005 Annual Report Download - page 112

Since 2004 permanent and contract staff numbers increased by
34,900, primarily as a result of the acquisition of Absa Group Limited,
offset in part by the implementation of restructuring programmes
resulting in a decrease of 2,400 staff.
UK Banking staff numbers fell by 1,900 to 39,900 (2004: 41,800),
reflecting the cost management programme in UK Retail Banking
partially offset by an increase in UK Business Banking frontline staff and
the inclusion of 200 Iveco Finance staff.
Barclays Capital staff numbers rose by 1,200 to 9,000 (2004: 7,800),
reflecting the continued expansion of the business.
Barclays Global Investors increased staff numbers by 400 to 2,300 to
support strategic initiatives (2004: 1,900).
Barclaycard staff numbers rose by 1,100 to 7,800 (2004: 6,700),
reflecting growth of 300 in Barclaycard US, an increase of 200 in other
international operations and growth in customer facing staff in the UK.
International Retail and Commercial Banking increased staff numbers
by 34,100, primarily due to the inclusion of 33,500 Absa staff.
International Retail and Commercial Banking excluding Absa increased
staff numbers by 600 to 12,700 (2004: 12,100), mainly due to growth
in continental Europe, including over 100 from the acquisition of the
ING Ferri business in France.
Head office functions and other operations staff numbers remained
stable at 900 (2004: 900).
The increase in agency staff worldwide largely reflects the inclusion of
3,300 temporary staff at Absa.
The number of staff under notice at 31st December 2005, was 2,400.
Depreciation, impairment and amortisation
2005 2004
£m £m
ˆ
Depreciation
Property depreciation 92 86
Equipment depreciation 268 210
Assets under operating lease depreciation 21
Depreciation 362 297
Impairment
Intangible assets 99
Impairment 99
Amortisation of intangible assets
2005 2004
£m £m
Internally generated software 20 19
Other software 3–
Brands 9–
Customer lists 27 –
Licences 13 3
Core deposit intangibles 7–
Amortisation of intangible assets 79 22
The increase in the amortisation of intangible assets primarily reflects
the inclusion of Absa in the second half of 2005.
Impairment charge and other credit risk provisions/provisions for
bad and doubtful debts
2005 2004
£m £m
Impairment charge for loans and advances 1,574 n/a
Specific provision charge n/a 1,310
General provision release n/a (206)
1,574 1,104
Available for sale impairment charge 4n/a
1,578 1,104
Other credit risk provisions (7) (11)
Impairment charge and other credit risk
provisions/provisions for bad and
doubtful debts 1,571 1,093
Period-on-period comparison is affected by the adoption of IAS 39
on 1st January 2005, which has changed the absolute value and
calculation basis of the impairment charges and Potential Credit Risk
Loans (PCRLs). In addition, following the adoption of IAS 39 on
1st January 2005, wholesale and corporate charges now include the
impairment of private equity investments.
Total impairment charges and other credit provisions increased 44%
(£478m) to £1,571m (2004: £1,093). This reflected some large one-off
releases and recoveries in 2004, the impact of acquisitions in 2005 and
changes in methodology.
In the UK, pressure on household cash flows due to a range of factors
and the high level of household indebtedness have led to a greater
strain on personal budgets. This has resulted in a deterioration in
consumer credit quality which has been evident from higher average
delinquency balances and shorter periods between delinquency
and charge-off. Smaller business customers have also shown some
limited deterioration in credit quality. Wholesale and corporate credit
conditions remained steady. In other key markets for the Group, the
US consumer and corporate credit markets remained robust while the
consumer and SME markets in Iberia remained well underpinned by
strong economic growth. In South Africa, good economic growth has
led to buoyant domestic demand for credit, whilst rising debt:income
ratios were underpinned by growth in household income and low
interest rates.
As a result of an increase in impairment charges to the retail portfolios,
and to a lesser extent in the wholesale and corporate portfolios, the
impairment charges for the Group (excluding Absa charges of £20m)
for the full-year were £1,551m (2004: £1,093m). Impairment charges
excluding Absa amounted to 0.57% (2004: 0.48%), as a percentage of
period-end total non-trading loans and advances.
Retail impairment charges, excluding Absa charges of £19m, increased
to £1,235m (2004: £811m), accounting for just under 80% of the
Group’s impairment charges. Excluding Absa, retail impairment charges
amounted to 1.05% (2004: 0.72%) of the period-end total non-trading
loans and advances. The increase was predominantly in the UK cards
and consumer loans portfolios.
Barclays PLC
Annual Report 2005
110
Financial review
Results by nature of income and expense