Barclays 2005 Annual Report Download - page 157

Barclays PLC
Annual Report 2005 155
3.5
4 Principal transactions
2005 2004
£m £m
Rates related business 1,732 1,141
Credit related business 589 346
Net trading income 2,321 1,487
Gain from disposal of available for sale assets/investment securities 120 45
Dividend income on equity investments 22 17
Net gain from financial instruments designated at fair value 389 n/a
Income from assets backing insurance policies n/a 717
Other investment income 327 248
Net investment income 858 1,027
Principal transactions 3,179 2,514
Net trading income includes the profits and losses arising both on the purchase and sale of trading instruments and from the revaluation to market
value, together with the interest income earned from these instruments and the related funding cost.
The gain/loss from disposal of available for sale assets was calculated on an instrument by instrument basis.
Of the total net trading income, £498m (2004: £556m) was earned on securities and £340m (2004: £213m) was earned in dealings in
foreign currencies.
Rates, which includes fixed income, foreign exchange, commodities, emerging markets, money markets sales, trading and research, prime services
and equity products; Credit, which includes primary and secondary activities for loans and bonds for investment grade, high yield and emerging
market credits, as well as hybrid capital products, asset based finance, commercial mortgage backed securities, credit derivatives, structured capital
markets and large asset leasing.
Following the application of IAS 39 at 1st January 2005, certain assets and liabilities have been designated at fair value. Fair value movements on
these items have been reported within net trading income or within net investment income depending on the nature of the transaction.
The net gain on financial assets designated as at fair value and included within principal transactions was £391m (2004: n/a). The net loss on
financial liabilities designated at fair value and included within principal transactions was £666m (2004: n/a). In many cases these changes in fair
values were offset by changes in fair values of other financial instruments, or by transactions which have been realised.
5 Insurance premiums and insurance claims and benefits
2005 2004
£m £m
Gross premiums from insurance contracts 909 1,069
Premiums ceded to reinsurers (37) (27)
Net premiums from insurance contracts 872 1,042
2005 2004
£m £m
Gross claims and benefits paid on insurance contracts 694 1,275
Reinsurers’ share of claims paid (49) (16)
Net claims and benefits paid on insurance contracts 645 1,259
6 Other income
2005 2004
£m £m
Increase in fair value of assets held in respect of linked liabilities to customers under investment contracts 9,234 n/a
Increase in liabilities held in respect of linked liabilities to customers under investment contracts (9,234) n/a
Property rentals 54 46
Other income 93 85
Other income 147 131
Included in other income are sub-lease payments of £18m (2004: £12m).