Barclays 2010 Annual Report Download - page 50

2010
£m
2009
£m
2008
£m
Income statement information
Net interest income 2,814 2,723 1,786
Net fee and commission income 1,136 1,271 1,299
Net trading (loss)/income (8) (1) 2
Net investment income 39 23 80
Net premiums from insurance contracts 50 44 44
Other income 1 1 21
Total income 4,032 4,061 3,232
Net claims and benefits incurred under insurance contracts (8) (20) (11)
Total income net of insurance claims 4,024 4,041 3,221
Impairment charges and other credit provisions (1,688) (1,798) (1,097)
Net income 2,336 2,243 2,124
Operating expenses excluding amortisation of intangible assets (1,481) (1,445) (1,386)
Amortisation of intangible assets (89) (82) (61)
Operating expenses (1,570) (1,527) (1,447)
Share of post-tax results of associates and joint ventures 25 8 (3)
Profit on disposal of subsidiaries, associates and joint ventures – 3 –
Gain on acquisition –– 92
Profit before tax 791 727 766
Balance sheet information
Loans and advances to customers at amortised cost £26.6bn £26.5bn £27.4bn
Total assets £30.3bn £30.3bn £31.0bn
Risk weighted assets £31.9bn £30.6bn £27.3bn
Global Retail Banking
Barclaycard
Barclaycard is an international payments business which
manages about £200bn in annual payment value and offers
a broad range of payment solutions to consumer and
business customers in 22 countries throughout the world.
Performance
2010
Barclaycard profit before tax increased 9% to £791m (2009: £727m).
Barclaycard’s international businesses reported strong growth in profit
before tax, particularly in Absa Card and the US. Absa Card increased 85%
to £176m (2009: £95m) primarily through lower underlying impairment.
The US business was profitable following adoption of the requirements of
the Credit Card Accountability, Responsibility and Disclosure Act in the US
(US Credit Card Act).
Income was £4,024m (2009: £4,041m) with the impact of the US Credit
Card Act broadly offset by balanced growth across the business. Over
20% of income was generated from products other than consumer credit
cards. Barclaycard’s UK businesses reported income at £2,453m (2009:
£2,493m) reflecting the continued run-off of the FirstPlus secured lending
portfolio and lower insurance-related income. International income
increased 1% to £1,571m (2009: £1,548m) despite the impact of the
US Credit Card Act.
Net interest income increased 3% to £2,814m (2009: £2,723m) reflecting
growth in UK consumer card extended credit balances, up 4% to £8.8bn
(2009: £8.5bn), and the appreciation of the average value of the Rand
against Sterling, partially offset by lower net interest income due to the
impact of the US Credit Card Act and the continued run-off of the FirstPlus
portfolio. The asset margin improved to 906bps (2009: 897bps),
with the net interest margin at 977bps (2009: 969bps).
Net fee and commission income decreased 11% to £1,136m (2009:
£1,271m) primarily due to the impact of the US Credit Card Act.
Investment income of £39m included a gain of £38m from the sale
of Visa shares and MasterCard shares (2009: £20m).
Impairment charges reduced 6% to £1,688m (2009: £1,798m) reflecting
focused risk management and improving economic conditions. As a result,
loan loss rates improved to 570bps (2009: 604bps). In addition, the 30-day
delinquency rates for consumer card portfolios in the UK of 3.4% (2009:
4.2%), in the US of 4.6% (2009: 6.1%) and in Absa of 4.9% (2009: 6.7%)
all reduced compared to 2009.
Operating expenses increased 3% to £1,570m (2009: £1,527m).
Excluding increased pension costs and the appreciation of the average
value of the Rand against Sterling, operating expenses decreased
compared to the prior year.
Total assets were flat at £30.3bn (2009: £30.3bn) reflecting the
appreciation of the US Dollar and the Rand against Sterling offset by
the continued run-off of the First Plus portfolio.
Risk weighted assets increased 4% to £31.9bn (2009: £30.6bn), reflecting
securitisation redemptions and the appreciation of the US Dollar and the
Rand against Sterling.
Return on average equity of 13% (2009: 14%) and return on average
tangible equity of 19% (2009: 21%) decreased due to the requirement
to hold an increased amount of regulatory capital. Return on average risk
weighted assets increased to 1.9% (2009: 1.8%) reflecting increased profit
after tax, offset by increased average risk weighted assets.
Financial review
Analysis of results by business continued
48 Barclays PLC Annual Report 2010 www.barclays.com/annualreport10