Barclays 2007 Annual Report Download - page 43

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Business review
Barclays PLC Annual Report 2007 41
2006/05
Barclays Global Investors delivered another year of outstanding results.
Profit before tax increased 32% (£174m) to £714m (2005: £540m),
reflecting very strong income growth and higher operating margins.
The performance was broadly based across products, distribution
channels and geographies.
Net fee and commission income increased 27% (£354m) to £1,651m
(2005: £1,297m). This growth was attributable to increased management
fees, particularly in the iShares and active businesses, and securities
lending, offset by lower incentive fees. Incentive fees decreased 9% (£18m)
to £186m (2005: £204m). Higher asset values, driven by higher market
levels and good net new inflows, contributed to the growth in income.
Operating expenses increased 22% (£172m) to £951m (2005: £779m)
as a result of significant investment in key growth initiatives, ongoing
investment in product development and infrastructure and higher
performance-based expenses. The cost:income ratio improved two
percentage points to 57% (2005: 59%).
Total headcount rose 400 to 2,700 (2005: 2,300). Headcount increased
in all regions, across product groups and the support functions, reflecting
continued investment to support strategic initiatives.
Total assets under management increased 5% (£46bn) to £927bn
(2005: £881bn) primarily due to net new inflows of £37bn. The positive
market move impact of £98bn was largely offset by £89bn of adverse
exchange rate movements. In US$ terms assets under management
increased by US$301bn to US$1,814bn (2005: US$1,513bn), comprising
US$68bn of net new assets, US$177bn of favourable market movements
and US$56bn of positive exchange rate movements.
2007 2006 2005
£m £m £m
Income statement information
Net interest (expense)/income (8) 10 15
Net fee and commission income 1,936 1,651 1,297
Net trading income 522
Net investment (expense)/income (9) 24
Principal transactions (4) 46
Other income 2––
Total income 1,926 1,665 1,318
Operating expenses excluding amortisation of intangible assets (1,184) (946) (775)
Amortisation of intangible assets (8) (5) (4)
Operating expenses (1,192) (951) (779)
Profit before tax 734 714 540
Balance sheet information
Total assets £89.2bn £80.5bn £80.9bn
Performance ratios
Return on average economic capital 241% 228% 248%
Cost:income ratio 62% 57% 59%
Other financial measures
Economic profit £430m £376m £299m
Risk weighted assets £2.0bn £1.4bn £1.5bn
Average net income generated per member of staff (’000) £631 £666 £628