Barclays 2010 Annual Report Download - page 44

Shareholders’ equity
Total shareholders’ equity increased £3.8bn to £62.3bn (2009: £58.5bn),
with share capital and share premium increasing £1.5bn to £12.3bn as
a result of the issue of new ordinary shares. Retained earnings increased
£2.9bn to £36.8bn (2009: £33.8bn). Profit attributable to the equity
holders of the Parent of £3.6bn were partially offset by dividends paid
to shareholders of £0.5bn.
Significant movements in other reserves comprise: available for sale
reserve movement of £1.2bn, primarily due to the decrease in the fair value
of the Group’s investment in BlackRock Inc. of £0.8bn and a decrease of
£0.3bn of hedged foreign exchange movements related to this investment
that have been transferred to the income statement. Currency translation
reserve movement of £0.7bn is largely due to the appreciation in the Rand
and US Dollar, offset by the depreciation in the Euro.
Non-controlling interests increased £0.2bn to £11.4bn (2009: £11.2bn).
The increase primarily reflects profit for the year attributable to non-
controlling interests of £1.0bn and currency translation differences of
£0.4bn, offset by distributions of £0.8bn and the redemption of £0.5bn
reserve capital instruments.
Adjusted gross leverage
Barclays continues to operate within limits and targets for balance sheet
usage as part of its balance sheet management activities.
The adjusted gross leverage was 20x as at 31st December 2010 (2009:
20x) principally as a result of a £3.9bn increase in Tier 1 Capital to £53.5bn
offset by the impact of a £84.6bn increase in adjusted total tangible assets.
At month ends during 2010 the ratio moved in a range from 20x to 24x,
with fluctuations arising as a result of normal trading activities, primarily
due to increases in reverse repurchase trading and changes in holdings
of trading portfolio assets.
The ratio of total assets to total shareholders equity was 24x as at
31st December 2010 (2009: 24x). The ratio moved within a month end
range of 24x to 29x, driven by trading activity fluctuations noted above, as
well as changes in gross interest rate derivatives and settlement balances.
The Basel Committee of Banking Supervisors (BCBS) issued final
guidelines for ‘Basel III: a global regulatory framework for more resilient
banks and banking systems’ in December 2010. The guidelines include
a proposed leverage metric, to be implemented by national supervisors
in parallel run from 1st January 2013 (migrating to a Pillar 1 measure
by 2018). Based on our interpretation of the current BCBS proposals the
Group’s Basel III leverage ratio as at 31st December 2010 would be within
the proposed limit of 33x.
Further details on leverage are provided on page 128.
Financial review
Balance sheet commentary continued
42 Barclays PLC Annual Report 2010 www.barclays.com/annualreport10