Barclays 2010 Annual Report Download - page 37

2009
Net fee and commission income increased £1,927m to £8,418m (2008:
£6,491m). Banking and credit related fees and commissions increased
£2,370m to £9,578m (2008: £7,208m), primarily due to Barclays Capital
strong performance in Equities and Investment Banking.
Net trading income increased £5,662m to £7,001m (2008: £1,339m).
The majority of the Group’s trading income arises in Barclays Capital.
Fixed Income, Currency and Commodities drove the very strong increase
in trading income as the expansion of the business and client flows more
than absorbed gross credit market losses of £4,417m (2008: £6,290m)
and losses relating to own credit of £1,820m (2008: £1,663m gain).
Net investment income decreased £624m to £56m (2008: £680m) driven
by realised losses in commercial real estate equity investments and losses
in the principal investments business, partially offset by gains on disposal
of available for sale investments within Barclays Capital.
Net premiums from insurance contracts increased £82m to £1,172m
(2008: £1,090m) primarily reflecting expansion in Western Europe Retail
Banking and Absa, partially offset by the impact of the sale of the closed
life assurance business in the second half of 2008.
Gains on debt buy-backs and extinguishments includes £1,170m gains
relating to Upper Tier 2 perpetual debt and its corresponding hedge and
£85m (2008: £24m) from the repurchase of securitised debt issued by
Barclays Corporate.
Impairment charges and other credit provisions
2010
Impairment charges on loans and advances fell 24% to £5,625m (2009:
£7,358m), reflecting improving credit conditions in the main sectors and
geographies in which Barclays lends, which led to lower charges across
the majority of businesses. The largest reduction was in the wholesale
portfolios, due to lower charges against credit market exposures and
fewer large single name charges. This reduction was partially offset by
the impact of deteriorating credit conditions in the Spanish property and
construction sectors which resulted in an increase of £630m in impairment
against the Barclays Corporate loan book in Spain, and £532m impairment
relating to the Protium loan in Barclays Capital. In the retail portfolios,
impairment performance improved as delinquency rates fell across
Barclays businesses, most notably the UK, US, Spanish, Indian and
African portfolios.
As a result of this fall in impairment and the 1% rise in loans and advances,
the loan loss rate decreased to 118bps (2009: 156bps).
The impairment charges against available for sale assets and reverse
repurchase agreements fell by 93% to £47m (2009: £713m), principally
driven by lower impairment against credit market exposures.
2009
Impairment charges on loans and advances and other credit provisions
increased £2,445m to £7,358m (2008: £4,913m). The increase was
primarily due to economic deterioration and portfolio maturation,
currency movements and methodology enhancements, partially offset
by a contraction in loan balances.
Net Trading Income 2010
£m
2009
£m
2008
£m
Trading income/(loss) 7,017 8,139 (1,596)
Gain on foreign exchange dealings 670 682 1,272
Own Credit gain/(charge) 391 (1,820) 1,663
Net trading income 8,078 7,001 1,339
Net investment income 2010
£m
2009
£m
2008
£m
Net gain from disposal of available
for sale assets 1,027 349 212
Dividend income 116 6 196
Net gain/(loss) from financial
instruments designated at fair
value 274 (208) 33
Other net investment income/
(losses) 60 (91) 239
Net investment income 1,477 56 680
Impairment charges and other
credit provisions 2010
£m
2009
£m
2008
£m
Impairment charges on loans
and advances
– New and increased impairment
allowances 6,939 8,111 5,116
– Releases (1,189) (631) (358)
– Recoveries (201) (150) (174)
Impairment charges on loans and
advances 5,549 7,330 4,584
Charge in respect of provision for
undrawn contractually committed
facilities and guarantees provided 76 28 329
Impairment charges on loans
and advances and other credit
provisions 5,625 7,358 4,913
Impairment charges/(writebacks)
on reverse repurchase agreements (4) 43 124
Impairment charges on available
for sale assets 51 670 382
Impairment charges and other
credit provisions 5,672 8,071 5,419
Barclays PLC Annual Report 2010 www.barclays.com/annualreport10 35
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