Barclays 2005 Annual Report Download - page 120

International Retail and Commercial Banking – Absa
2005
Period from 27th July until 31st December 2005 £m
Net interest income 514
Net fee and commission income 334
Net trading income 9
Net investment income 62
Principal transactions 71
Net premiums from insurance contracts 98
Other income 39
Total income 1,056
Net claims and benefits on
insurance contracts (44)
Total income, net of insurance claims 1,012
Impairment charges and other
credit provisions (20)
Net income 992
Operating expenses excluding amortisation
of intangible assets (622)
Amortisation of intangible assets (42)
Operating expenses (664)
Share of post-tax results of associates and
joint ventures 7
Profit before tax and minority interest 335
Absa’s profit before tax for the period from 27th July 2005 was £335m.
On consolidation into Barclays results, a charge of £42m has been
taken for the amortisation of intangible assets and is included within
operating expenses. The consolidated results for Absa represent 100%
of earnings, 43.4% of which is attributable to minority interests. This is
deducted from Barclays results as profit attributable to minority interests.
Absa Group Limited experienced good net interest income growth
in the period since acquisition from the personal, commercial and
wholesale businesses. The areas of strongest balance sheet growth
were mortgages, credit cards and instalment finance as the retail credit
environment remained strong.
The performance in net fees and commission income was driven
by good retail customer transaction volume growth and a strong
performance from insurance related activities. This growth was partly
offset by income reclassification due to the implementation of IFRS.
Principal transactions growth was predominantly driven by higher
treasury trading income.
Impairment charges for the period were low, reflecting the benign
credit environment, a reduction in non-performing loans and a higher
level of releases and recoveries.
Operating expenses grew as Absa Group Limited invested in the
expansion and improvement of the branch and ATM network and
in customer service initiatives, including increased staff numbers.
Expense growth also reflected higher volumes and regulatory
programme expenditure.
Barclays PLC
Annual Report 2005
118
Financial review
Analysis of results by business