Barclays 2010 Annual Report Download - page 46

Business performance
Global Retail Banking
Global Retail Banking (GRB) performance exhibited encouraging signs
of growing momentum against a challenging backdrop. Overall profit
before tax was £1,829m (2009: £1,821m) with strong profit growth in
UK Retail Banking and Barclays Africa, good growth in Barclaycard and
a loss in Western Europe Retail Banking. Total GRB income increased 1%
to £10,507m (2009: £10,374m) reflecting business growth, increased net
interest margins in Barclaycard and Barclays Africa, a stable margin in
UK Retail Banking and a lower margin in Western Europe Retail Banking.
Risk appetite remained consistent with improved collections and better
economic conditions leading to lower impairment which drove an
improved risk adjusted net interest margin. Operating expenses increased
10% to £6,020m (2009: £5,490m) primarily due to higher pension costs,
the impact of acquisitions and higher regulatory-related costs. Overall GRB
return on average risk weighted assets improved to 1.7% (2009: 1.5%)
and GRB’s loan to deposit ratio improved to 140% (2009: 144%). The
performance of the businesses within GRB is summarised below:
UK Retail Banking
UK Retail Banking (UKRB) profit before tax increased 39% to £989m
(2009: £710m), including a £100m gain on the acquisition of Standard Life
Bank, with good income growth and lower impairment charges more than
offsetting an increase in operating expenses. Income increased 6% to
£4,518m (2009: £4,276m). Impairment charges decreased 21% to £819m
(2009: £1,031m), reflecting good risk management and improving
economic conditions. As a result, net income grew 14% to £3,699m
(2009: £3,245m). Operating expenses increased 11% to £2,809m
(2009: £2,538m), reflecting higher pension costs, the impact of the
acquisition of Standard Life Bank and increased regulatory-related costs.
Excluding these items, operating expenses were in line with prior year.
Financial review
Analysis of results by business
Analysis of results by business UK
Retail
Banking
£m
Barclaycard
£m
Western
Europe
Retail
Banking
£m
Barclays
Africa
£m
Absa
£m
Barclays
Capital
£m
Barclays
Corporate
£m
Barclays
Wealth
£m
Investment
Manage-
ment
£m
Head Office
Functions
and Other
Operations
£m
As at 31st December 2010
Total income net of insurance
claims 4,518 4,024 1,164 801 2,899 13,600 2,974 1,560 78 (178)
Impairment charges and other
credit provisions (819) (1,688) (314) (82) (480) (543) (1,696) (48) – (2)
Net income 3,699 2,336 850 719 2,419 13,057 1,278 1,512 78 (180)
Operating expenses (2,809) (1,570) (1,033) (608) (1,810) (8,295) (1,907) (1,349) (11) (579)
Share of post-tax results of
associates and joint ventures (1) 25 15 – 3 18 (2) – – –
Profit on disposal of subsidiaries,
associates and joint ventures –––774–––––
Gain on acquisitions 100–29–––––––
Profit /(loss) before tax from
continuing operations 989 791 (139) 188 616 4,780 (631) 163 67 (759)
Total assets (£bn) 121.6 30.3 53.6 7.9 52.4 1,094.8 85.7 17.8 4.6 20.9
Risk Weighted Assets (£bn) 35.3 31.9 17.3 8.0 30.4 191.3 70.8 12.4 0.1 0.6
As at 31st December 2009
Total income net of insurance
claims 4,276 4,041 1,318 739 2,553 11,625 3,181 1,322 40 28
Impairment charges and other
credit provisions (1,031) (1,798) (338) (121) (567) (2,591) (1,558) (51) – (16)
Net income 3,245 2,243 980 618 1,986 9,034 1,623 1,271 40 12
Operating expenses (2,538) (1,527) (887) (538) (1,451) (6,592) (1,466) (1,129) (17) (570)
Share of post–tax results of
associates and joint ventures 3 8 4 – (4) 22 – – – 1
Profit/(loss) on disposal of
subsidiaries, associates and
joint ventures – 3 157 24 (3) – – 1 (1) 7
Gain on acquisitions ––26–––––––
Profit/(loss) before tax from
continuing operations 710 727 280 104 528 2,464 157 143 22 (550)
Total assets (£bn) 109.3 30.3 51.0 7.9 45.8 1,019.1 88.8 14.9 5.4 6.4
Risk Weighted Assets (£bn) 35.9 30.6 16.8 7.6 21.4 181.1 76.9 11.4 0.1 0.9
44 Barclays PLC Annual Report 2010 www.barclays.com/annualreport10