Barclays 2007 Annual Report Download - page 48

Financial review
Results by nature of income and expense
46 Barclays PLC Annual Report 2007
Results by nature of income and expense
Net interest income
2007 2006 2005
£m £m £m
Cash and balances with central banks 145 91 9
Available for sale investments 2,580 2,811 2,272
Loans and advances to banks 1,416 903 690
Loans and advances to customers 19,559 16,290 12,944
Other 1,608 1,710 1,317
Interest income 25,308 21,805 17,232
Deposits from banks (2,720) (2,819) (2,056)
Customer accounts (4,110) (3,076) (2,715)
Debt securities in issue (6,651) (5,282) (3,268)
Subordinated liabilities (878) (777) (605)
Other (1,339) (708) (513)
Interest expense (15,698) (12,662) (9,157)
Net interest income 9,610 9,143 8,075
2007/06
Group net interest income increased 5% (£467m) to £9,610m (2006:
£9,143m) reflecting balance sheet growth across a number of businesses.
Group net interest income reflects structural hedges which function to
reduce the impact of the volatility of short-term interest rate movements
on equity and customer balances that do not re-price with market rates.
The contribution of structural hedges relative to average base rates
decreased to £351m expense (2006: £26m income), largely due to the
smoothing effect of the structural hedge on changes in interest rates.
Other interest expense principally includes interest on repurchase
agreements and hedging activity.
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 (2005b: £516m). Group net interest income excluding Absa
grew 6%.
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.
Business margins
2007 2006 2005
%%%
UK Retail Banking assets 1.20 1.32 1.43
UK Retail Banking liabilities 2.15 2.05 2.02
Barclays Commercial Bank assets 1.80 1.92 1.87
Barclays Commercial Bank liabilities 1.49 1.46 1.46
Barclaycard assets 6.59 7.13 7.11
IRCB – ex Absa assets 1.32 1.29 1.36
IRCB – ex Absa liabilities 1.91 2.06 2.03
IRCB – Absa assets 2.86 2.95 3.52
IRCB – Absa liabilitiesa3.25 2.90 2.39
Barclays Wealth assets 1.11 1.08 0.96
Barclays Wealth liabilities 1.03 1.10 1.04
Average balances
2007 2006 2005
£m £m £m
UK Retail Banking assets 78,502 73,593 74,138
UK Retail Banking liabilities 81,848 76,498 71,003
Barclays Commercial Bank assets 53,600 52,018 43,985
Barclays Commercial Bank liabilities 46,367 44,839 40,545
Barclaycard assets 19,191 17,918 16,102
IRCB – ex Absa assets 33,321 27,210 22,743
IRCB – ex Absa liabilities 12,484 10,423 8,983
IRCB – Absa assets 26,132 24,388 20,225
IRCB – Absa liabilitiesa11,659 11,071 13,388
Barclays Wealth assets 7,403 5,543 4,712
Barclays Wealth liabilities 31,151 27,744 26,136
Business net interest income
2007 2006 2005
£m £m £m
UK Retail Banking assets 939 970 1,062
UK Retail Banking liabilities 1,763 1,566 1,436
Barclays Commercial Bank assets 963 999 823
Barclays Commercial Bank liabilities 693 655 592
Barclaycard assets 1,266 1,278 1,144
IRCB – ex Absa assets 439 349 310
IRCB – ex Absa liabilities 238 216 183
IRCB – Absa assets 746 719 308
IRCB – Absa liabilitiesa379 321 138
Barclays Wealth assets 82 60 45
Barclays Wealth liabilities 320 306 273
Business assets total net
interest income 4,435 4,375 3,692
Business liabilities total net
interest income 3,393 3,064 2,622
Business net interest income 7,828 7,439 6,314
Reconciliation of business interest
income to Group net interest income
2007 2006 2005
£m £m £m
Business net interest income 7,828 7,439 6,314
Other:
– Barclays Capital 1,179 1,158 1,065
– Barclays Global Investors (8) 10 15
– Other 611 536 681
Group net interest income 9,610 9,143 8,075
Notes
aIRCB-Absa liabilities business margins, average balances and business net interest
income for 2006 have been restated to reflect changes in Group structure.
bFor 2005, this reflects the period from 27th July until 31st December 2005.
05 06 07
9.1
8.1 9.1
12.7 21.8
9.6 15.7 25.3
17.2
Net interest income £bn
Net interest income
Interest expense
Interest income