Barclays 2009 Annual Report Download - page 60

58 Barclays PLC Annual Report 2009 www.barclays.com/annualreport09
Financial review
Analysis of results by business
Business performance – Global Retail and Commercial Banking
UK Retail Banking profit before tax decreased 55% to £612m as economic
conditions remained challenging. Income was down 11% reflecting the
impact of deposit margin compression net of hedges, partially offset by
good growth in Home Finance. Total loans and advances to customers
increased £4.7bn to £99.1bn. Gross new mortgage lending was £14.2bn
during 2009 and net new mortgage lending was £5.7bn. The average loan
to value ratio of the mortgage book remained conservative at 43%.
Impairment charges increased 55% due to the deteriorating economic
environment. Operating expenses continued to be tightly controlled and
decreased 3% reflecting a one-off credit from the closure of the UK final
salary pension scheme offset by a year on year increase in pension costs
and the non-recurrence of gains from the sale of property.
Barclays Commercial Bank profit before tax decreased 41% to £749m.
Income was broadly flat on 2008 with good growth in net fees and
commissions offset by lower income from principal transactions. Net interest
income was broadly flat as margin compression on the deposit book was
offset by higher lending and deposit volumes. New term lending extended
to UK customers during 2009 was £14bn. Operating expenses were tightly
controlled and fell 3% driven by a one-off credit from the closure of the UK
final salary pension scheme partially offset by an increase in pensions and
share-based payment costs and the non-recurrence of gains from the sale
of property. Impairment charges increased to £974m reflecting the impact
of the weak business environment with rising default rates and falling asset
values across all business segments.
Barclaycard profit before tax decreased 4% to £761m. Income growth
of 26% reflected strong growth across the businesses driven by increased
lending and improved margins. Average customer assets increased 19% to
£28.1bn. Impairment charges increased 64% due to the deteriorating global
economic environment, although the rate of growth in the second half of
the year was lower than in the first half. Impairment grew across both the
international and UK businesses. Cost growth of 5% was largely driven by
appreciation of the average value of the US Dollar and the Euro against
Sterling and growth in the card portfolios including acquisitions made
in 2008.
Global Retail and Commercial Banking – Western Europe profit before
tax fell 48% to £130m. Results included Barclays Russia, which incurred
a loss of £67m and reflected a gain of £157m on the sale of Barclays life
insurance and pensions business in Iberia. Income grew in all countries,
improving 18% as the expanded network continued to mature with
customer deposits increasing £7.8bn to £23.4bn. Costs increased 16%
reflecting the expansion of the Portuguese and Italian networks, the
investment in Barclays Russia, restructuring charges of £24m and reduced
gains from the sale of property. Impairment charges increased £370m to
£667m, largely driven by losses in Spain in commercial property,
construction and SME portfolios. However, delinquency trends improved
throughout the second half of 2009 in both retail and commercial portfolios.
Global Retail and Commercial Banking – Emerging Markets loss before
tax of £254m compared to a profit of £141m in 2008. Income increased 5%
with significant growth across Africa and the UAE, partially offset by lower
Analysis of results by business Head Office
UK Barclays GRCB – GRCB – Barclays Functions
Retail Commercial Western Emerging GRCB – Barclays Global Barclays and Other
Banking Bank Barclaycard Europe Markets Absa Capital InvestorsaWealth Operations
£m £m £m £m £m £m £m £m £m £m
Net interest income 2,624 1,741 2,723 1,182 743 1,300 1,598 43 504 (507)
Net fee and commission income 1,225 926 1,271 438 232 943 3,001 1,757 802 (418)
Principal transactions – (26) 22 123 68 123 7,021 98 20 (325)
Net premiums from insurance
contracts 198 – 44 544 – 294 5 – – 92
Other income 611228260–571,186
Total income 4,053 2,753 4,062 2,295 1,045 2,720 11,625 1,903 1,333 28
Net claims and benefits incurred
on insurance contracts (68) – (20) (572) – (171) ––––
Total income, net of
insurance claims 3,985 2,753 4,042 1,723 1,045 2,549 11,625 1,903 1,333 28
Impairment charges and other
credit provisions (936) (974) (1,798) (667) (471) (567) (2,591) – (51) (16)
Net income 3,049 1,779 2,244 1,056 574 1,982 9,034 1,903 1,282 12
Operating expenses (2,440) (1,030) (1,494) (1,113) (852) (1,469) (6,592) (1,154) (1,138) (570)
Share of post-tax results of
associates and joint ventures 3 – 8 4 – (4) 22 – – 1
Profit on disposal of subsidiaries,
associates and joint ventures – – 3 157 24 (3) – (1) 1 7
Profit on disposal of
discontinued operations –––––––6,331 – –
Gain on acquisitions –––26––––––
Profit before tax 612 749 761 130 (254) 506 2,464 7,079 145 (550)
As at 31st December 2009
Total assets 105,228 75,547 30,220 64,185 11,874 45,824 1,019,120 5,406 15,095 6,430
Total liabilities 102,934 68,108 5,543 48,049 9,836 25,769 951,192 416 41,648 66,848
Note
aContinuing and discontinued operations including profit on disposal.