Barclays 2006 Annual Report Download - page 7

Barclays PLC
Annual Report 2006 3
Operating review
1
060504(a)
4,580
7,136
5,280
0
Profit before tax £m
8,000
7,000
6,000
5,000
3,000
4,000
2,000
1,000
060504(a)
51.0
71.9
54.4
0
Earnings per share pence
80
70
60
50
30
40
20
10
060504
24.0
26.6
0
Dividend per share pence
35
25
30
15
20
10
5
31.0
24.7%
Return on average
shareholders’ equity
7. 7 %
Tier 1 capital ratio
11. 7 %
Risk asset ratio
Note
(a) Does not reflect the application of IAS 32, IAS 39 and IFRS 4 which became effective from 1st January 2005.
54%
Increase in economic profit
to £2,704m
Investment Banking and Investment Management
Barclays Wealth
£93bn
Total client assets
Barclays Capital Barclays
Global Investors
US$409bn
Value of debt issued globally
US$1,814bn
Assets under management
Excellent financial results reflect the successful execution of strategy:
– Income up 25% to £21,595m
– Profit before tax up 35% to £7,136m
– Earnings per share up 32% to 71.9p
– Dividend per share up 17% to 31.0p
– Economic profit up 54% to £2,704m
– Return on average shareholders’ equity of 24.7%.
Excluding gains on business disposals of £323m:
– Profit before tax up 29% to £6,813m
– Earnings per share up 23% to 66.8p.
•Income growth of 25% was well ahead of expense growth of 20%.
Expense growth reflected significant investment in organic growth
across the business and performance related costs.
•In UK Retail Banking accelerated income momentum drove very
strong profit growth.
•UK Banking delivered a further three percentage points underlying
improvement in the cost:income ratio; the six percentage point
target for 2005-2007 has been achieved a year ahead of schedule;
we still target a further two percentage point improvement in 2007.
•Outstanding growth in Barclays Capital was driven by continued
expansion of the business, the success of past investment and the
focus of our client driven model.
•Barclays Global Investors delivered another year of excellent
growth. Assets under management increased US$301bn to
US$1.8trn.
•Absa’s first full year contribution was well ahead of the acquisition
business plan.
•Barclaycard profits were affected by industry-wide impairment
pressures in UK cards and unsecured loans; UK consumer credit
performance is beginning to improve.
•Capital ratios strengthened through retained earnings and active
balance sheet management; the Tier 1 capital ratio rose to 7.7%.
•We delivered a total shareholder return for 2006 of 25%.
•Approximately 50% of profits came from outside the UK.
“Barclays had an excellent year in 2006. We delivered outstanding performance in Barclays Capital and Barclays Global Investors. Momentum has
accelerated in UK Retail Banking and Absa has outperformed our acquisition business plan delivering very strong growth. Conditions in UK cards
and consumer loans were difficult but Barclaycard UK consumer credit performance is beginning to improve. We are well positioned to deliver
further growth in the years ahead.”
John Varley
Group Chief Executive