Barclays 2008 Annual Report Download - page 48

46 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
UK Retail Banking comprises Personal Customers, Home Finance, Local
Business, Consumer Lending and Barclays Financial Planning. We have
one of the largest branch networks in the UK with around 1,700 branches
and an extensive network of cash machines.
What we do
We are transforming Barclays to be the best bank in the UK by designing
innovative, simple and transparent propositions, streamlining operating
platforms and further leveraging Barclays Group capabilities.
Our cluster of businesses aims to build broader and deeper
relationships with customers. Personal Customers and Home Finance
provide a wide range of products and services to retail customers,
including current accounts, savings and investment products, mortgages
branded Woolwich and general insurance. Barclays Financial Planning
provides banking, investment products and advice to affluent customers.
Local Business provides banking services to small businesses. UK
Retail Banking is also a gateway to more specialised services from other
parts of Barclays such as Barclays Stockbrokers.
Our business serves 15.2 million UK customers.
Performance
2008/07
UK Retail Banking profit before tax increased 7% (£94m) to £1,369m
(2007: £1,275m) through solid income growth and continued good
control of impairment and costs. The launch of new products and
propositions supported a significant increase in customer accounts, with
Current Accounts increasing 4% (0.4m) to 11.7m (2007: 11.3m), Savings
Accounts increasing 8% (0.9m) to 12.0m (2007: 11.1m) and Mortgage
Accounts increasing 8% (62,000) to 816,000 (2007: 754,000).
Income grew 4% (£185m) to £4,482m (2007: £4,297m) reflecting
strong growth in Home Finance and solid growth in Consumer Lending
and Local Business, partially offset by reduced income from Personal
Customer Savings Accounts due to the impact of the reductions in the UK
base rates in the second half of 2008.
Net interest income increased 5% (£138m) to £2,996m (2007:
£2,858m) driven by strong growth in loans and advances. Total average
customer deposit balances increased 5% to £85.9bn (2007: £81.8bn),
reflecting solid growth in Personal Customer and Local Business balances.
The average liabilities margin declined to 2.01% (2007: 2.15%) reflecting
the reductions in UK base rates in the second half of 2008.
Mortgage balances grew 18%, driven by increased share of new
lending and higher levels of balance retention. Mortgage balances were
£82.3bn at the end of the period (31st December 2007: £69.8bn), a
market share of 7% (2007: 6%). Gross advances were stable at £22.9bn,
with redemptions of £10.4bn (2007: £15.0bn). Net new lending was
£12.5bn (2007: £8.0bn), a market sharebof 36% (2007: 8%). The average
loan to value ratio of the mortgage book (including buy-to-let) on a
current valuation basis was 40% (2007: 34%). The average loan to value
ratio of new mortgage lending was 47% (2007: 49%). The assets margin
increased to 1.25% (2007: 1.20%) reflecting increased returns from
mortgages.
Net fee and commission income increased 10% (£116m) to £1,299m
(2007: £1,183m) reflecting £116m settlements on overdraft fees in 2007.
Excluding this, net fees and commissions were stable.
Impairment charges increased 8% (£43m) to £602m (2007: £559m),
reflecting growth in customer assets of 15% and the impact of the current
economic environment. Mortgage impairment charges were £24m
(2007: release of £3m). Impairment charges within Consumer Lending
increased 3%.
Key facts
2008 2007 2006
Personal Customers
Number of UK current accountsa11.7m 11.3m 11.5m
Number of UK savings accounts 12.0m 11.1m 11.0m
Total UK mortgage balances £82.3bn £69.8bn £61.7bn
Local Business
Number of Local Business customers 660,000 643,000 630,000
Highlights
£4,482m£1,369m
Income Profit before tax
Performance indicators
82.3
87.1
89.6
06 07
Customer deposits £bn
08
2
8
36
06 07
Mortgages – Net new lending
market share %b
08
Notes
aDecrease in 2007 reflects the consolidation of Woolwich and Barclays current accounts.
bExcludes Housing Associations.
Financial review
Analysis of results by business