Barclays 2006 Annual Report Download - page 48

Barclays PLC
Annual Report 2006
44
Financial review
Results by nature of income and expense
Business margins
2006 2005 2004(a)
%%%
UK Retail Banking assets 0.84 0.92 0.78
UK Retail Banking liabilities 2.01 1.99 2.14
UK Business Banking assets 1.92 1.87 1.56
UK Business Banking liabilities 1.46 1.46 1.58
Barclaycard assets 6.47 6.59 6.84
Barclaycard assets – cards 8.73 7.96 7.34
Barclaycard assets – loans 4.11 4.96 6.27
IRCB – ex Absa assets(c) 1.28 1.36 1.56
IRCB – ex Absa liabilities(c) 2.04 2.02 2.06
IRCB – Absa assets(b,c) 2.95 3.52 –
IRCB – Absa liabilities(b,c) 2.29 2.39 –
Barclays Wealth assets 1.11 0.99 0.97
Barclays Wealth liabilities 1.11 1.04 1.07
Average balances
2006 2005 2004(a)
£m £m £m
UK Retail Banking assets 65,486 66,165 65,539
UK Retail Banking liabilities 79,188 73,473 69,653
UK Business Banking assets 52,018 43,985 36,764
UK Business Banking liabilities 44,839 40,545 37,442
Barclaycard assets 26,204 24,246 21,609
Barclaycard assets – cards 13,392 13,180 11,560
Barclaycard assets – loans 12,812 11,066 10,049
IRCB – ex Absa assets(c) 27,434 22,889 17,884
IRCB – ex Absa liabilities(c) 10,780 9,219 8,348
IRCB – Absa assets(b,c) 24,388 20,225 –
IRCB – Absa liabilities(b,c) 12,826 13,338 –
Barclays Wealth assets 5,140 4,395 3,580
Barclays Wealth liabilities 24,697 23,430 21,141
Business net interest income
2006 2005 2004(a)
£m £m £m
UK Retail Banking assets 552 609 510
UK Retail Banking liabilities 1,595 1,462 1,493
UK Business Banking assets 999 823 574
UK Business Banking liabilities 655 592 590
Barclaycard assets 1,696 1,598 1,478
Barclaycard assets – cards 1,169 1,049 848
Barclaycard assets – loans 527 549 630
IRCB – ex Absa assets(c) 352 311 279
IRCB – ex Absa liabilities(c) 220 186 172
IRCB – Absa assets(b,c) 719 308 –
IRCB – Absa liabilities(b,c) 294 138 –
Barclays Wealth assets 57 43 35
Barclays Wealth liabilities 273 244 227
Business net interest income 7,412 6,314 5,358
Results by nature of income and expense
Net interest income
2006 2005 2004(a)
£m £m £m
Interest income 21,805 17,232 13,880
Interest expense (12,662) (9,157) (7,047)
Net interest income 9,143 8,075 6,833
2006/05
Group net interest income increased 13% (£1,068m) to £9,143m
(2005: £8,075m). The inclusion of Absa contributed net interest income
of £1,138m (2005(b): £516m). Group net interest income excluding
Absa grew 6%.
A component of the benefit of free funds included in Group net interest
income is the structural hedge which functions to reduce the impact of
the volatility of short-term interest rate movements. The contribution of
the structural hedge decreased to £26m (2005: £145m), largely due to
the impact of relatively higher short-term interest rates and lower
medium-term rates.
Interest income includes £98m (2005: £76m) accrued on impaired loans.
2005/04
In 2005, Group net interest income increased 18% (£1,242m) to
£8,075m (2004: £6,833m). The inclusion of Absa added net interest
income of £516m in the second half of 2005. Group net interest income
excluding Absa grew 11% reflecting growth in average balances across
all businesses.
The contribution of the structural hedge decreased to £145m (2004:
£304m), largely due to the impact of higher short-term interest rates
and lower medium-term rates.
Interest income includes £76m accrued on impaired loans, reflecting
the application of IAS 32.
04 05 06
9.1
8.1 9.1
12.7 21.8
17.2
6.8 7.0 13.8
0
Net interest income £bn
24
20
16
12
8
4
Net interest income
Interest expense
Interest income
Notes
(a) Does not include IAS 32, IAS 39 or IFRS 4 which became effective from 1st January 2005.
(b) For 2005, this reflects the period from 27th July until 31st December 2005.
(c) International Retail and Commercial Banking business margins, average balances and business net interest income for 2004 and 2005 have been restated on a
consistent basis to reflect changes in methodology.