Barclays 2005 Annual Report Download - page 9

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Barclays PLC
Annual Report 2005 7
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international experience to the Board.
Sir David Arculus will be retiring from the
Board at the Annual General Meeting, having
served as a Director for just over nine years.
His experience and wise counsel will be
greatly missed. Finally, it is with great
sadness that I report the death of Sir Nigel
Mobbs during the year. Sir Nigel served with
great distinction as a Director for 23 years
until his retirement in 2004.
Corporate Responsibility
We continued to make substantial progress
in pursuit of the Board’s objective of ensuring
that Barclays is a leading company in the field
of corporate responsibility. For the seventh
successive year we are producing a separate
Corporate Responsibility report, reflecting
the importance your Board attaches to this
increasingly complex agenda. Corporate
responsibility is, first and foremost, about
responsible business conduct. For us, it
is founded on the principles, ethics and
values that Barclays has embodied for
over 300 years.
In the area of financial inclusion, our work
was recognised by research conducted by
the Corporate Citizenship Company, which
commented: “Barclays has done most to
advance both thinking and action in Financial
Inclusion and its efforts put it ahead of other
banks assessed worldwide.” Barclays
remained the only financial services company
in the world to play a role in the Business
Leaders’ Initiative on Human Rights and we
retained our membership of both the Dow
Jones Sustainability and FTSE4Good Indices.
In terms of environmental management,
Barclays entered the ‘premier league’ of
companies for the first time, ranking in the
top 20 of 300 FTSE companies. We continued
to expand our extensive community
programme, launching our flagship UK
community programme, Barclays Spaces for
Sports, with two main sites and 40 local sites
completed. This programme will invest £30m
(a) Total income net of insurance claims.
(b) Economic profit comprises profit after tax and
minority interests, less a charge representing
the Group’s cost of capital.
(c) This positions Barclays in the second quartile
of its peer group. For further information,
please see page 34.
over three years to create sustainable sports
facilities in communities across the UK.
Economic Outlook
Global growth slowed to a more sustainable
pace of just above 4% in 2005 after reaching
nearly 5% in the previous year. Nevertheless,
the past two years represent one of the
fastest periods of back-to-back annual
expansion in the global economy since the
1970s. Moreover, the outlook for 2006 is
equally positive, with global growth again
expected to exceed 4%. The coming year
should also see some modest rebalancing
of demand with slower growth in the United
States offset by a faster pace of expansion in
Europe and Japan. Growth in the UK also
slowed in 2005 to 1.8%, mainly in response
to higher interest rates. However, both
unemployment and inflation have remained
largely stable although we have seen some
pressure on household cash flows which has
led to a deterioration in consumer credit
quality. The outlook is for UK economic
growth to increase during 2006 although
conditions in the consumer credit sector
are expected to remain challenging.
Strategy Execution
The strategy we pursue of diversifying
both our portfolio of businesses and the
geographies in which we compete has proved
to be sound. The growing contribution of our
global businesses and of our International
Retail and Commercial Banking businesses
has reduced our dependence on the home
market. This shift is evident in this year’s
results. It continues to be our goal to generate
at least 50% of our earnings from outside the
UK while improving the contribution from our
UK-based businesses. We are making very
good progress towards this goal. Our overall
strategy remains unchanged.
Matthew W Barrett
Chairman