Barclays 2008 Annual Report Download - page 57

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Business review
Barclays PLC Annual Report 2008 55
Net fee and commission income increased 59% (£83m) to £223m
(2007: £140m), primarily driven by very strong growth in commercial
banking and treasury fee income.
Principal transactions increased £97m to £169m (2007: £72m),
reflecting higher foreign exchange income, a gain of £68m relating to
the Visa IPO and a gain of £14m from the sale of shares in MasterCard.
Impairment charges increased £127m to £166m (2007: £39m),
reflecting higher assets and delinquencies, particularly in India and
increased wholesale impairment in Africa.
Operating expenses increased 82% (£324m) to £719m (2007:
£395m), reflecting continued investment in new markets and expansion
of the business in existing markets, with investment in infrastructure and
the roll-out of global platforms.
2007/06
GRCB – Emerging Markets profit before tax decreased 74% to £100m
(2006: £384m). The performance in 2006 reflected the sale of First
Carribean International Bank which resulted in a profit of £247m in
December 2006. In addition, profits of £41m were generated by the
First Carribean business up to date of sale. Excluding First Carribean, the
performance reflected very strong income growth driven by a rapid growth
in distribution points to 550 (2006: 214), as well as the launch of new
businesses in India and UAE.
Income increased 35% (£137m) to £533m (2006: £396m) driven by
new business in India and UAE and excellent performances in Egypt, Kenya
and Ghana.
Net interest income increased 30% (£73m) to £319m
(2006: £246m). Total customer loans increased 89% (£2.4bn) to £5.1bn
(2006: £2.7bn) with lending margins improving with changing product
mix. Customer deposits increased 47% (£2.0bn) to £6.2bn (2006:
£4.2bn), driven by growth across the markets.
Net fee and commission income declined marginally (£1m) to £140m
(2006: £141m).
Principal transactions increased £68m to £72m (2006: £4m),
reflecting gains on equity investments and higher foreign exchange
income across markets.
Impairment charges rose 30% (£9m) to £39m (2006: £30m).
The increase reflected very strong balance sheet growth in 2006 and 2007.
Operating expenses grew 46% (£125m) to £395m (2006: £270m),
driven by the rapid expansion of the distribution network across all
markets and investment in people and infrastructure to support future
growth across the franchise.
GRCB – Emerging Markets
2008 2007 2006
£m £m £m
Income statement information
Net interest income 616 319 246
Net fee and commission income 223 140 141
Net trading income 78 56 3
Net investment income 91 16 1
Principal transactions 169 72 4
Net premiums from insurance contracts ––1
Other income 11 24
Total income 1,019 533 396
Impairment charges (166) (39) (30)
Net income 853 494 366
Operating expenses excluding amortisation of intangible assets (711) (391) (269)
Amortisation of intangible assets (8) (4) (1)
Operating expenses (719) (395) (270)
Share of post-tax results of associates and joint ventures –1 41
Profit on disposal of subsidiaries, associates and joint ventures –– 247
Profit before tax 134 100 384
Balance sheet information
Loans and advances to customers £10.1bn £5.1bn £2.7bn
Customer accounts £9.6bn £6.2bn £4.2bn
Total assets £14.7bn £9.2bn £5.2bn
Performance ratios
Return on average economic capital 9% 15% 103%
Cost:income ratio 71% 74% 68%
Cost:net income ratio 84% 80% 74%
Other financial measures
Risk Tendency £350m £140m £35m
Economic profit (£11m) £26m £308m
Risk weighted assetsa£15.1bn £10.5bn £3.3bn
Note
aRisk weighted assets for 2008 and 2007 are calculated under Basel II. 2006 is calculated under Basel I.