Barclays 2005 Annual Report Download - page 127

Barclays PLC
Annual Report 2005 125
3.3
Capital Management
Barclays operates a centralised capital management model, considering
both regulatory and economic capital. The capital management
strategy is to continue to maximise shareholder value through
optimising both the level and mix of capital resources in order to:
•Meet the individual capital ratios required by our regulators plus
a prudent buffer.
•Maintain an AA credit rating.
•Generate sufficient capital to support asset growth.
•Manage the currency exposure to its overall Sterling equivalent
capital requirement.
Decisions on the allocation of capital resources are based on a number
of factors including return on economic and regulatory capital. This is
conducted as part of the strategic planning review.
Capital Resources
The Group manages both its debt and equity capital actively. The
Group’s authority to buy-back equity shares was renewed at the 2005
AGM to provide additional flexibility in the management of the Group’s
capital resources.
2005 2004
£m £m
Barclays PLC Group
Shareholders’ equity
excluding minority interests 17,426 15,870
Minority interests 7,004 894
Shareholders’ equity 24,430 16,764
Undated loan capital 4,397 6,149
Dated loan capital 8,066 6,128
Total capital resources 36,893 29,041
The authorised share capital of Barclays PLC is £2,500m (2004:
£2,500m) comprising 9,996 million (2004: 9,996 million) ordinary
shares of 25p each and 1 million (2004: 1 million) staff shares
of £1 each. Called up share capital comprises 6,490 million
(2004: 6,454 million); ordinary shares of 25p each and 1 million
(2004: 1 million) staff shares of £1 each.
Total capital resources increased £7,852m to £36,893m since 2004.
Shareholders’ equity, excluding minority interests, increased £1,556m
since 2004. The increase primarily reflected the impact of the adoption
of IAS 32, IAS 39 and IFRS 4, profits attributable to equity holders of
the parent of £3,447m, offset by dividends of £1,581m.
Loan capital rose £186m reflecting capital raisings of £1,283m,
acquisition of Absa Group Limited’s loan capital of £669m, interest
charge of £210m and exchange rate movements of £207m; offset by
redemptions of £464m, fair value adjustments of £43m and amortisation
of issue expenses of £5m, and IFRS adjustments of £1,671m.
Minority interests increased £6,110m since 2004, primarily reflecting:
the purchase of Absa Group Limited with minority interest of £1,351m,
the IFRS reclassification of £2,493m of certain capital instruments from
loan capital to minority interests and the following issuances of
Preference Shares by Barclays Bank PLC during 2005:
•140,000 Preference Shares of nominal ¤100 each (Principal amount:
¤1.4bn; £978m) with a 4.75% dividend issued on 15th March 2005.
•100,000 Preference Shares of nominal US$100 each (Principal
amount: US$1.0bn; £551m) with a 6.278% dividend issued on
8th June 2005.
•75,000 Preference Shares of nominal £100 each (Principal amount:
£750m) with a 6% dividend issued on 22nd June 2005.
The capital instruments reclassified under IFRS and the Preference
Shares issued are included within Shareholders’ equity excluding
minority interests in Barclays Bank PLC Group.
2005 2004
£m £m
Barclays Bank PLC Group
Shareholders’ equity
excluding minority interests 22,665 16,638
Minority interests 1,578 211
Shareholders’ equity 24,243 16,849
Undated loan capital 4,397 6,149
Dated loan capital 8,066 6,128
Total capital resources 36,706 29,126
Capital resources for Barclays Bank PLC Group were £187m lower than
for Barclays PLC Group (2004: £85m higher).
Financial review
Capital management and resources