Barclays 2008 Annual Report Download - page 46

Analysis of results by business
For the year ended 31st December 2008
UK Barclays GRCB – GRCB –
Retail Commercial Western Emerging GRCB –
Banking Bank Barclaycard Europe Markets Absa
£m £m £m £m £m £m
Net interest income 2,996 1,757 1,786 856 616 1,104
Net fee and commission income 1,299 861 1,299 383 223 762
Principal transactions – 22 82 165 169 111
Net premiums from insurance contracts 205 – 44 352 – 234
Other income 17 105 19 39 11 113
Total income 4,517 2,745 3,230 1,795 1,019 2,324
Net claims and benefits incurred
on insurance contracts (35) – (11) (365) – (126)
Total income, net of insurance claims 4,482 2,745 3,219 1,430 1,019 2,198
Impairment charges and other credit provisions (602) (414) (1,097) (296) (166) (347)
Net income 3,880 2,331 2,122 1,134 853 1,851
Operating expenses (2,519) (1,063) (1,422) (929) (719) (1,305)
Share of post-tax results of associates and joint ventures 8 (2) (3) ––5
Profit on disposal of subsidiaries –––––1
Gains on acquisitions ––92 52 ––
Profit before tax 1,369 1,266 789 257 134 552
As at 31st December 2008
Total assets 101,384 84,029 30,925 64,732 14,653 40,391
Total liabilities 104,640 64,997 3,004 37,250 10,517 20,720
44 Barclays PLC Annual Report 2008 |Find out more at www.barclays.com/annualreport08
Financial review
Analysis of results by business
Global Retail and Commercial Banking
UK Retail Banking profit before tax grew 7% to £1,369m. Income grew
4% to £4,482m, reflecting strong growth in Home Finance and minimal
settlements on overdraft fees. Loans and advances grew 15% driven by
a market share of net new mortgage lending of 36%. Operating expenses
showed a modest increase of 2% reflecting active management of the
cost base and reduced gains from the sale of property. The cost:income
ratio improved one percentage point. Impairment charges increased 8%
reflecting strong growth in assets and a deteriorating economic
environment.
Barclays Commercial Bank profit before tax decreased 7% to
£1,266m. Income growth of 7% principally reflected increased sales of
treasury products. Loans and advances to customers increased 14%
to £80.5bn. Costs increased 14% driven by lower gains on the sale of
property, further investment in new payments capability, and growth in
the operating lease business. Impairment charges increased 42% as the
deteriorating economic environment caused higher delinquency and
lower recovery rates on corporate credit.
Barclaycard profit before tax increased 31% to £789m, including
£260m from Barclaycard International. Income growth of 27% reflected
strong growth in Barclaycard International, the income related to Goldfish
since acquisition, and gains relating to the Visa IPO and the sale of
MasterCard shares. Costs increased 30% reflecting continued
international growth, increased marketing expenditure and the impact of
Goldfish. Impairment charges increased 33% reflecting growth in charges
in the international businesses and the acquisition of Goldfish, partly offset
by lower impairment in the other UK businesses.
GRCB – Western Europe profit before tax grew 31% to £257m.
Income grew 53%, driven by very strong growth in deposits, mortgages
and commercial lending across the expanded franchise, as well as
gains of £82m relating to the Visa IPO and the sale of MasterCard
shares. Costs increased 38% reflecting the expansion of the network
by 347 distribution points to 1,145 and continued strategic
investment in the Premier and core retail businesses. Impairment
charges increased £220m to £296m, largely driven by deteriorating
trends in Spain which led to losses in property-related commercial
banking exposures and credit cards.
GRCB – Emerging Markets profit before tax increased 34%
to £134m. Income increased 91%, driven by retail expansion in
India, entry into new markets in Russia and Pakistan and strong
performances in Africa, as well as gains of £82m relating to the Visa
IPO and sale of MasterCard shares. Operating expense growth of 82%
reflected continued investment in business infrastructure, distribution
and new markets. Distribution points increased 286 to 836.
Impairment charges increased £127m to £166m reflecting
asset growth, and increased wholesale impairment in Africa.
GRCB – Absa profit before tax decreased 8% to £552m. Income
growth of 10% was driven by higher fees and commissions, balance
sheet growth as well as a gain relating to the Visa IPO. Operating
expenses increased 3%, well below the rate of inflation, reflecting
investment in new distribution points, which increased 176 to 1,177,
offset by good cost control. This led to a four percentage point
improvement in the cost:income ratio to 59%. Impairment charges
rose £201m to £347m, mainly due to prolonged high interest rates
and inflation rates and increased customer indebtedness resulting in
higher delinquency levels in the retail portfolios.