Barclays 2008 Annual Report Download - page 47

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Business review
Barclays PLC Annual Report 2008 45
Analysis of results by business
For the year ended 31st December 2008
Barclays
Barclays Global Barclays
Capital Investors Wealth
£m £m £m
Net interest income 1,724 (38) 486
Net fee and commission income 1,429 1,917 720
Principal transactions 2,065 (43) (344)
Net premiums from insurance contracts ––136
Other income 13 8 26
Total income 5,231 1,844 1,024
Net claims and benefits incurred
on insurance contracts ––300
Total income, net of insurance claims 5,231 1,844 1,324
Impairment charges and other credit provisions (2,423) – (44)
Net income 2,808 1,844 1,280
Operating expenses (3,774) (1,249) (935)
Share of post-tax results of associates and joint ventures 6––
Profit on disposal of subsidiaries ––326
Gain on acquisition 2,262 ––
Profit before tax 1,302 595 671
As at 31st December 2008
Total assets 1,629,117 71,340 13,263
Total liabilities 1,603,093 68,372 45,846
Investment Banking and Investment Management
Barclays Capital profit before tax was £1,302m in a very challenging
market, down 44%, and included a gain on the acquisition of Lehman
Brothers North American businesses of £2,262m. Net income of £2,808m
was down 55% as the impact of market dislocation continued and
included gross losses of £8,053m, partially offset by related income and
hedges of £1,433m and gains of £1,663m from the general widening of
credit spreads on structured notes issued by Barclays Capital. There were
record performances in interest rate products, currency products,
emerging markets, prime services and commodities. Equities, credit
products, mortgages and asset backed securities and private equity were
significantly impacted by market dislocation and recorded lower income
than in 2007. Operating expenses, after absorbing Lehman Brothers
North American businesses, were 5% lower than in 2007 due to lower
performance related pay.
Barclays Global Investors profit before tax decreased 19% to £595m.
Income fell 4% to £1,844m due to lower incentive fees. Operating
expenses increased 5% and included charges of £263m (2007: £80m)
related to selective support of liquidity products. Total assets under
management were US$1,495bn, reflecting net new assets of US$99bn,
negative market moves of US$553bn and adverse exchange rate
movements of US$130bn.
Barclays Wealth profit before tax grew 119% to £671m, including a
£326m profit on disposal of the closed life business, which contributed
profit before tax of £104m before disposal. Income growth of 3% to
£1,324m reflected strong growth in customer deposits and lending,
partially offset by the impact of lower equity markets on fee income.
Operating expenses decreased 4% reflecting strong cost control. Total
client assets increased 10% (£12.6bn) to £145.1bn, with net new asset
inflows and the acquisition of Lehman Brothers North American
businesses offsetting the impact of negative market movements
and the sale of the closed life business.