Barclays 2007 Annual Report Download - page 50

Financial review
Results by nature of income and expense
48 Barclays PLC Annual Report 2007
Net fee and commission income
2007 2006 2005
£m £m £m
Brokerage fees 109 70 64
Investment management fees 1,787 1,535 1,250
Securities lending 241 185 151
Banking and credit related fees
and commissions 6,363 6,031 4,805
Foreign exchange commission 178 184 160
Fee and commission income 8,678 8,005 6,430
Fee and commission expense (970) (828) (725)
Net fee and commission income 7,708 7,177 5,705
2007/06
Net fee and commission income increased 7% (£531m) to £7,708m
(2006: £7,177m).
Fee and commission income rose 8% (£673m) to £8,678m (2006:
£8,005m) reflecting increased management and securities lending
fees in Barclays Global Investors, increased client assets and higher
transactional income in Barclays Wealth and higher income generated
from lending fees in Barclays Commercial Bank. Fee income in Barclays
Capital increased primarily due to the acquisition of HomEq.
2006/05
Net fee and commission income increased 26% (£1,472m) to £7,177m
(2005: £5,705m). The inclusion of Absa contributed net fee and
commission income of £850m (2005a: £334m). Group net fee and
commission income excluding Absa grew 18%, reflecting growth across
all businesses.
Fee and commission income rose 24% (£1,575m) to £8,005m (2005:
£6,430m). The inclusion of Absa contributed fee and commission income
of £896m (2005a: £386m). Excluding Absa, fee and commission income
grew 18%, driven by a broadly based performance across the Group,
particularly within Barclays Global Investors.
Fee and commission expense increased 14% (£103m) to £828m (2005:
£725m), reflecting the growth in Barclaycard US. Absa contributed fee and
commission expense of £46m (2005a: £52m).
Principal transactions
2007 2006 2005
£m £m £m
Rates related business 4,162 2,848 1,732
Credit related business (403) 766 589
Net trading income 3,759 3,614 2,321
Net gain from disposal
of available for sale assets 560 307 120
Dividend income 26 15 22
Net gain from financial
instruments designated at
fair value 293 447 389
Other investment income 337 193 327
Net investment income 1,216 962 858
Principal transactions 4,975 4,576 3,179
2007/06
Principal transactions increased 9% (£399m) to £4,975m
(2006: £4,576m).
Net trading income increased 4% (£145m) to £3,759m (2006: £3,614m).
The majority of the Group’s net trading income arises in Barclays Capital.
Growth in the Rates related business reflects very strong performances in
fixed income, commodities, foreign exchange, equity and prime services.
The Credit related business includes net losses from credit market
turbulence and the benefits of widening credit spreads on the fair
value of issued notes.
Net investment income increased 26% (£254m) to £1,216m (2006:
£962m). The cumulative gain from disposal of available for sale assets
increased 82% (£253m) to £560m (2006: £307m) largely as a result of
a number of private equity realisations and divestments. Net income from
financial instruments designated at fair value decreased by 34% (£154m)
largely due to lower growth in the value of linked insurance assets within
Barclays Wealth.
Fair value movements on insurance assets included within net investment
income contributed £113m (2006: £205m).
2006/05
Net trading income increased 56% (£1,293m) to £3,614m (2005:
£2,321m) due to excellent performances in Barclays Capital Rates and
Credit businesses, in particular in commodities, fixed income, equities,
credit derivatives and emerging markets. This was driven by higher volumes
of client – led activity and favourable market conditions. The inclusion of
Absa contributed net trading income of £60m (2005 a: £9m). Group net
trading income excluding Absa grew 54%.
Net investment income increased 12% (£104m) to £962m (2005:
£858m). The inclusion of Absa contributed net investment income of
£144m (2005a: £62m). Group net investment income excluding Absa
increased 3%.
The cumulative gain from disposal of available for sale assets increased
156% (£187m) to £307m (2005: £120m) driven by investment
realisations, primarily in Private Equity.
Fair value movements on certain assets and liabilities have been reported
within net trading income or within net investment income depending on
the nature of the transaction. Fair value movements on insurance assets
included within net investment income contributed £205m (2005:
£317m).
Note
aFor 2005, this reflects the period from 27th July until 31st December 2005.