Barclays 2005 Annual Report Download - page 8

Chairman’s statement
“
Matthew W Barrett
Chairman
Barclays continued to make good progress
in 2005. Profit before tax rose by 15%, driven
by strong income(a) growth of 23%. Return
on equity was 21.1% and economic profit(b)
increased 12% to £1,752m.
The year saw very strong performances
from Barclays Capital, Barclays Global
Investors, Barclays Wealth Management and
International Retail and Commercial Banking,
and a strong performance from UK Banking.
We also saw encouraging trends in
the UK Retail Bank as the transformation
programme already under way continued.
The one mainstream business with lower
profits this year was Barclaycard. While
business volume and revenue growth
were strong in Barclaycard, they were not
sufficient to offset an increase in credit card
loan losses in the UK.
We declared a final dividend for the year of
17.4p per ordinary share. This, combined
with the interim dividend of 9.2p per
ordinary share, gives a total payment for
the year of 26.6p, an increase of 11%.
The Group delivered a total shareholder
return (share price appreciation plus
dividend growth) of just under 9% for the
year. For the first two years of our current
four-year goal period (2004-2007), our
total shareholder return (TSR) was 34%(c).
In 2005, we took a controlling 57% stake
in Absa Group Limited. Absa is one of the
top banks in South Africa and has the
largest retail franchise in this important
marketplace. We aim to build the leading
financial services business in South Africa
and to become the pre-eminent bank in
sub-Saharan Africa. The Absa acquisition
was consistent with our strategic objective
of increasing Barclays non-UK earnings by
developing retail and commercial banking
operations in attractive overseas markets.
Corporate Governance
Corporate governance continued to be an
area of focus. Ensuring appropriate controls
and processes are in place is an important
role of the Board. Equally important is the
role the Board plays in providing advice to
management on achieving strategic goals.
The agendas for the Board meetings are
designed to enable it to fulfil both duties.
There were a number of Board changes
during 2005. Dr Jürgen Zech retired as
a non-executive Director at the Annual
General Meeting in April and Roger Davis
resigned as a Director in December. I paid
tribute to Dr Zech in last year’s Report and
Accounts and I would like to take the
opportunity to thank Roger for all his hard
work as Head of our UK Banking business.
Four new Directors joined the Board during
the year. Bob Diamond, President of Barclays
and Chief Executive, Investment Banking and
Investment Management, became an
executive Director on 1st June in recognition
of the increasing importance both of his own
role and of the contribution made by the
businesses he leads to the Group’s overall
profits and growth. John Sunderland,
Chairman of Cadbury Schweppes PLC and
President of the CBI, became a Director
during the year. John’s excellent track record
and wealth of business experience will be
invaluable to the Group. Robert Steel also
joined the Board in June. He was previously
Vice-Chairman of Goldman Sachs and brings
extensive knowledge and experience of
global financial services and US investment
banking to the Board. Finally, Dr Danie
Cronjé, Chairman of Absa Group Limited,
became a non-executive Director in
September following our successful
acquisition of a majority stake in Absa.
Fulvio Conti will be joining the Board with
effect from 1st April 2006. Fulvio is Chief
Executive Officer of Enel SpA, the Italian
energy group. These appointments provide
significant additional commercial and
“For the first two years of our
current four-year goal period
(2004-2007), our total
shareholder return was 34%.”