Barclays 2010 Annual Report Download - page 40

Financial review
Income statement commentary continued
Administration and general expenses
2010
Administration and general expenses increased £1,025m to £6,585m
(2009: £5,560m). The increase is principally due to greater regulatory-
related costs across the Group (including a settlement in resolution of
the investigation into Barclays compliance with US economic sanctions),
investment in technology and infrastructure, the acquisitions of Standard
Life Bank within UK Retail Banking and the Portuguese and Italian credit
card businesses of Citigroup within Western Europe Retail Banking and
adverse impacts of foreign currency movements. Impairment charges on
property, equipment and intangible assets of £125m (2009: £61m) were
principally driven by restructuring in Barclays Corporate – New Markets
and Barclays Capital.
In June 2010, the UK Government announced its intention to introduce
a bank levy, which will apply to elements of the Group’s consolidated
liabilities and equity held as at 31st December 2011. The draft legislation is
expected to be enacted by the UK Parliament later this year. Based on the
31st December 2010 balance sheet position and the draft requirements,
we estimate that the bank levy would result in an annual charge to the
income statement of approximately £400m from 2011 onwards.
2009
Administration and general expenses grew £367m to £5,560m (2008:
£5,193m) reflecting the impact of acquisitions made during 2008, the
costs of servicing an expanded distribution network across Global Retail
Banking, and expenses relating to the Financial Services Compensation
Scheme. There were also decreases of £119m in gains from sale of
property (included in other administration and general expenses)
as the Group wound down its sale and leaseback programme.
Share of post-tax results of associates and joint ventures
2010
The share of post-tax results of associates and joint ventures increased
£24m to £58m (2009: £34m), reflecting a £24m increase in results from
joint ventures largely from Barclaycard and Absa. Results from associates
remained constant at £19m (2009: £19m) since the prior year.
2009
The share of post-tax results of associates and joint ventures increased
£20m to £34m (2008: £14m), reflecting a £23m increase in results from
joint ventures largely from Barclaycard and Barclays Capital, and a £3m
decrease in results from associates, mainly due to reduced contributions
from private equity instruments.
Profit on disposals and gain on acquisitions
2010
The profit on disposal of £81m (2009: £188m) is largely attributable
to the £77m profit arising from sale of Barclays Africa custody business
to Standard Chartered Bank.
On 1st January 2010, the Group acquired 100% ownership of Standard Life
Bank PLC realising a gain on acquisition of £100m. On 31st March 2010,
the Group acquired 100% of the Italian credit card business of Citibank
International PLC realising a gain on acquisition of £29m. On 26th July
2010 the Group acquired 86% of Tricorona recognising goodwill of £13m.
2009
The profit on disposal of £188m (2008: £327m) is largely attributable
to the sale of 50% of Barclays Vida y Pensiones Compañía de Seguros
(£157m), and the 7% sale of Barclays Africa Botswana business (£24m).
Share of post-tax results of
associates and joint ventures 2010
£m
2009
£m
2008
£m
Profit from associates 19 19 22
Profit/(loss) from joint ventures 39 15 (8)
Share of post-tax results of
associates and joint ventures 58 34 14
Profit on disposals and gain on
acquisitions 2010
£m
2009
£m
2008
£m
Profit on disposal of subsidiaries,
associates and joint ventures 81 188 327
Gain on acquisitions 129 26 2,406
Administration and general
expenses 2010
£m
2009
£m
2008
£m
Property and equipment 1,813 1,641 1,356
Outsourcing and professional
services 1,705 1,496 1,472
Operating lease rentals 637 639 520
Marketing, advertising and
sponsorship 631 492 591
Subscriptions, publications and
stationery 584 519 458
Travel and accommodation 358 273 275
Other administration and general
expenses 732 439 491
Impairment of property,
equipment and intangible assets 125 61 30
Administration and general
expenses 6,585 5,560 5,193
38 Barclays PLC Annual Report 2010 www.barclays.com/annualreport10