Barclays 2009 Annual Report Download - page 69

www.barclays.com/annualreport09 Barclays PLC Annual Report 2009 67
Performance
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In September 2009, Barclays established a long-term life insurance
joint venture in Spain, Portugal and Italy with CNP Assurances SA (CNP).
As part of this transaction Barclays sold a 50 per cent stake in Barclays Vida y
Pensiones Compañía de Seguros to CNP. The transaction gave rise to a gain
of £157m. Barclays share of the results of the joint venture with CNP are
reported within share of post-tax results of associates and joint ventures.
Barclays acquired the Citigroup cards business in Portugal in December
2009. This resulted in the acquisition of approximately 400,000 customers
and loans and advances to customers of £550m. The transaction generated
a gain on acquisition of £26m.
2008/07
GRCB – Western Europe profit before tax grew 28% (£54m) to £250m
(2007: £196m), despite challenging market conditions in Spain in 2008 and
accelerated investment in the expansion of the franchise. Distribution points
increased 383 to 1,181 (2007: 798), including 149 in Italy. Strong income
growth including gains of £82m from the Visa IPO and the sale of shares in
MasterCard was partially offset by increased impairment and higher
operating costs. Profit before tax was favourably impacted by the 16%
appreciation in the average value of the Euro against Sterling.
Income increased 55% (£518m) to £1,455m (2007: £937m), reflecting
growth in both net interest income and net fee and commission income.
Net interest income increased 66% (£348m) to £875m (2007: £527m),
driven by a 66% increase in customer liabilities to £15.6bn (2007: £9.4bn)
and a 54% increase in customer assets to £53.9bn (2007: £35.0bn).
Net fee and commission income increased 21% (£67m) to £389m
(2007: £322m). Increased fees in retail and in the life insurance businesses
were offset by lower market-related investment revenue.
Principal transactions grew £48m to £154m (2007: £106m) including
gains from the Visa IPO (£65m) and the sale of shares in MasterCard
(£17m) which enabled GRCB – Western Europe to invest in the expansion
of the business.
Impairment charges increased £221m to £297m (2007: £76m).
This increase was principally due to higher charges in Spanish commercial
property (£82m) and deterioration of the Spanish credit card portfolio
(£66m) as a consequence of the rapid slowdown in the Spanish economy.
Operating expenses increased 43% (£287m) to £960m (2007:
£673m), reflecting the rapid expansion of the retail distribution network
and the strengthening of the Premier segment. Operating expenses also
included £55m (2007: £22m) gains from the sale of property.
Gain on acquisition of £52m (2007: £nil) arose from the purchase
of the Italian residential mortgage business of Macquarie Bank Limited
in November 2008.
GRCB – Western Europe 2009 2008c2007c
£m £m £m
Income statement information
Net interest income 1,182 875 527
Net fee and commission income 438 389 322
Net trading income –(7) 13
Net investment income 123 161 93
Principal transactions 123 154 106
Net premiums from insurance contracts 544 352 145
Other income 850 7
Total income 2,295 1,820 1,107
Net claims and benefits incurred under insurance contracts (572) (365) (170)
Total income net of insurance claims 1,723 1,455 937
Impairment charges (667) (297) (76)
Net income 1,056 1,158 861
Operating expenses excluding amortisation of intangible assets (1,075) (941) (665)
Amortisation of intangible assets (38) (19) (8)
Operating expenses (1,113) (960) (673)
Share of post-tax results of associates and joint ventures 4––
Profit on disposal of subsidiaries, associates and joint ventures 157 –8
Gain on acquisition 26 52 –
Profit before tax 130 250 196
Balance sheet information
Loans and advances to customers £52.7bn £53.9bn £35.0bn
Customer accounts £23.4bn £15.6bn £9.4bn
Total assets £64.2bn £65.5bn £43.7bn
Performance ratios
Return on average economic capitala4% 18% 11%
Cost:income ratioa65% 66% 72%
Cost:net income ratioa105% 83% 78%
Other financial measures
Economic profita, b (£234m) £155m £16m
Risk weighted assets £32.4bn £37.0bn £25.0bn
Key points
– 2.8m Customers
– 1,318 Distribution points
£1,7 2 3 m£130m
profit before taxtotal income net of
insurance claims
Notes
aDefined on page 338 to 342.
b2008 includes £139m release of a deferred tax liability.
cFigures have been restated to include Barclays Russia, which was transferred from
GRCB – Emerging Markets to GRCB – Western Europe during 2009.