Barclays 2008 Annual Report Download - page 64

62 Barclays PLC Annual Report 2008 |Find out more at www.barclays.com/annualreport08
Investment Banking and
Investment Management
Barclays Wealth
Barclays Wealth focuses on high net worth, affluent and intermediary
clients worldwide. We are the UK’s leading wealth manager by client
assets. We have 7,900 staff in over 20 countries and have total client
assets of £145bn. We have offices across the Americas following the
acquisition of Lehman Brothers Private Investment Management in 2008.
What we do
Barclays Wealth provides international and private banking, fiduciary
services, investment management, and brokerage.
We work closely with all other parts of the Group to leverage synergies
from client relationships and product capabilities, for example, offering
world-class investment solutions with institutional quality products and
services from Barclays Capital and Barclays Global Investors.
Performance
2008/07
Barclays Wealth profit before tax grew 119% (£364m) to £671m (2007:
£307m). Profit before gains on disposal increased 12% (£38m) driven
by solid income growth and tight cost control, offset by an increase in
impairment charges. The closed life assurance business contributed
profit before tax of £104m (2007: £110m) prior to its sale in October
2008, which generated a profit on disposal of £326m.
Income increased 3% (£37m) to £1,324m (2007: £1,287m).
Net interest income increased 13% (£55m) to £486m (2007:
£431m) reflecting strong growth in both customer deposits and
lending. Average deposits grew 19% to £37.2bn (2007: £31.2bn).
Average lending grew 31% to £9.7bn (2007: £7.4bn). The assets margin
decreased seven basis points to 1.04% (2007: 1.11%) reflecting
changes in the product mix. The liabilities margin reduced by eight basis
points to 0.95% (2007: 1.03%) driven by changes in the product mix
and compression of margins as interest rates reduced during the second
half of the year.
Net fee and commission income decreased 3% (£19m) to £720m
(2007: £739m) driven by falling equity markets partially offset by
increased client assets.
Net investment income, net premiums from insurance contracts
and net claims and benefits paid on insurance contracts related wholly
to the closed life assurance business. Their overall net impact on income
increased marginally to £103m (2007: £95m). The decrease in net
investment income, driven by a fall in the value of unit linked contracts
and reduced premium income, were offset by reduced net claims and
benefits as a result of a fall in the value of linked and non-linked liabilities.
Impairment charges increased £37m to £44m (2007: £7m) from a
very low base. This increase reflected both the substantial increase in
the loan book over the last three years and the impact of the current
economic environment on client liquidity and collateral values.
Operating expenses decreased 4% to £935m (2007: £973m) with
significant cost savings including a reduction in performance related
costs partially offset by increased expenditure in upgrading technology
and operating platforms and continued hiring of client-facing staff.
Financial review
Analysis of results by business
Key facts
2008 2007 2006
Total client assets £145.1bn £132.5bn £116.1bn
Highlights
£1,32 4 m£671m
Income Profit before tax
Performance indicators
116
133
145
06 07
Total client assets £bn
08
181
188
176
06 07
Average net income generated
per member of staff £000
08