Barclays 2007 Annual Report Download - page 44

Financial review
Analysis of results by business
42 Barclays PLC Annual Report 2007
Investment Banking and
Investment Management
Barclays Wealth
Who we are
Barclays Wealth focuses on high net worth, affluent and
intermediary clients worldwide. We have over 6,900 staff
in 20 countries and have total client assets of £133bn.
Barclays Wealth includes the closed life assurance activities
of Barclays and Woolwich, and Walbrook, an independent
fiduciary services company acquired in 2007.
What we do
Barclays Wealth provides private banking, asset and investment
management, stockbroking, offshore banking, wealth structuring and
financial planning services.
We work closely with all other parts of the Group to leverage synergies
from client relationships and product capabilities, for example, offering
world-class investment solutions with institutional quality products and
services from Barclays Capital and Barclays Global Investors.
Key facts 2007 2006 2005
Total client assets £132.5bn £116.1bn £97.5bn
Performance
2007/06
Barclays Wealth profit before tax showed very strong growth of 25%
(£62m) to £307m (2006: £245m). Performance was driven by broadly
based income growth, reduced redress costs and tight cost control,
partially offset by additional volume related costs and increased
investment in people and infrastructure to support future growth.
Income increased 11% (£127m) to £1,287m (2006: £1,160m).
Net interest income increased 10% (£39m) to £431m (2006: £392m)
reflecting strong growth in both customer deposits and lending. Average
deposits grew 13% to £31.2bn (2006: £27.7bn). Average lending grew
35% to £7.4bn (2006: £5.5bn) driven by increased lending to high net
worth, affluent and intermediary clients. Assets margin increased 3 basis
points to 1.11% (2006: 1.08%) reflecting changes in the product mix.
The liabilities margin reduced by 7 basis points to 1.03% (2006: 1.10%)
driven by competitive pricing of products.
Net fee and commission income grew 10% (£65m) to £739m (2006:
£674m). This reflected growth in client assets and higher transactional
income from increased sales of investment products and solutions.
Principal transactions decreased £101m to £55m (2006: £156m) as
a result of lower growth in the value of unit linked insurance contracts.
Net premiums from insurance contracts reduced £15m to £195m (2006:
£210m). These reductions were offset by a lower charge for net claims and
benefits incurred under insurance contracts of £152m (2006: £288m).
Operating expenses increased 7% to £973m (2006: £913m) with greater
volume related costs and a significant increase in investment partially
offset by efficiency gains and lower customer redress costs of £19m
(2006: £67m). Ongoing investment programmes included increased
hiring of client facing staff and improvements to infrastructure with the
upgrade of technology and operations platforms. The cost:income ratio
improved three percentage points to 76% (2006: 79%).
Total client assets, comprising customer deposits and client investments,
increased 14% (£16.4bn) to £132.5bn (2006: £116.1bn) reflecting strong
net new asset inflows and the acquisition of Walbrook, an independent
fiduciary services company, which completed on 18th May 2007.
Highlights
£1,2 87 m£307m
Income Profit before tax
Performance indicators
Average net income generated
per member of staff £000
Total client assets
£bn
06 07
181
05
167
188
06 07
116
05
98
133