Barclays 2010 Annual Report Download - page 58

2010
£m
2009
£m
2008
£m
Income statement information
Net interest income 1,121 1,598 1,724
Net fee and commission income 3,347 3,001 1,429
Net trading income 8,377 7,185 1,506
Net investment income/(loss) 752 (164) 559
Other income 3 5 13
Total income 13,600 11,625 5,231
Impairment charges and other credit provisions (543) (2,591) (2,423)
Net income 13,057 9,034 2,808
Operating expenses excluding amortisation of intangible assets (8,151) (6,406) (3,682)
Amortisation of intangible assets (144) (186) (92)
Operating expenses (8,295) (6,592) (3,774)
Share of post-tax results of associates and joint ventures 18 22 6
Gains on acquisitions –– 2,262
Profit before tax 4,780 2,464 1,302
Profit/(loss) before tax (excluding own credit) 4,389 4,284 (361)
Balance sheet information
Loans and advances to banks and customers at amortised cost £149.7bn £162.6bn £206.8bn
Total assets £1,094.8bn £1,019.1bn £1,629.1bn
Assets contributing to adjusted gross leverage a £668.1bn £618.2bn £681.0bn
Risk weighted assets £191.3bn £181.1bn £227.4bn
Liquidity pool £154bn £127bn £43bn
Barclays Capital
Barclays Capital is the investment banking division of
Barclays. It provides large corporate, government and
institutional clients with a full spectrum of solutions to
meet their strategic advisory, financing and risk
management needs. Barclays Capital has a global presence
providing advisory services and distribution power to meet
the needs of issuers and investors worldwide.
Performance
2010
Barclays Capital profit before tax increased to £4,780m (2009: £2,464m).
Excluding own credit, profit before tax increased 2% to £4,389m (2009:
£4,284m). Top-line income of £13,333m (2009: £17,862m) was down
25% on the very strong prior year performance, reflecting a more
challenging market environment. Top-line income in the fourth quarter of
2010 was £3,380m, up 20% on the third quarter of 2010 reflecting higher
activity levels and contributions from Equities and Prime Services up 74%
and Investment Banking up 45%. Fourth quarter FICC top-line income,
which benefited from non-recurring gains, was broadly in line with the
prior quarter with higher contributions from Rates, Currency and
Commodities. Net income for 2010, excluding an own credit gain of
£391m (2009: loss of £1,820m), increased 17% to £12,666m (2009:
£10,854m). There was a significant reduction both in credit market losses
taken through income to £124m (2009: £4,417m) and in impairment
charges to £543m (2009: £2,591m).
Income increased 17% to £13,600m (2009: £11,625m). The impact on
top-line income of difficult trading conditions from the second quarter
onwards was more than offset by the significant reduction of credit market
losses in income and the impact of the gain in own credit in 2010. Fixed
Income, Currency and Commodities top-line income declined 35% to
£8,811m (2009: £13,652m), reflecting lower contributions particularly from
Rates and Commodities. Higher funding costs also led to a reduction in net
interest income. Equities and Prime Services decreased 6% to £2,040m
(2009: £2,165m) due to the subdued market activity in European equity
derivatives, partially offset by improved client flow in cash equities and
equity financing, as the benefits of the build-out of the cash equities
business started to come through. Investment Banking, which comprises
advisory businesses and equity and debt underwriting, increased 3% to
£2,243m (2009: £2,188m) as a result of continued growth in banking
activities. Fee and commission income increased 12% to £3,347m
(2009: £3,001m) across Investment Banking and Equities with a higher
contribution from Asia. Principal Investments generated income of £239m
(2009: loss of £143m) which contributed to the increase in net investment
income to £752m (2009: loss of £164m) in addition to an increase in
income from the disposal of available for sale assets and a reduction
in fair value losses on assets held at fair value.
Impairment charges of £543m (2009: £2,591m) included credit market
impairment of £621m (2009: £1,669m) primarily relating to the difference
between the carrying value of the Protium loan and the fair value of the
underlying assets supporting the loan which follows a reassessment of
the expected realisation period. Non-credit market related impairment
was a release of £78m (2009: charge of £922m).
Operating expenses increased 26% to £8,295m (2009: £6,592m) which
largely reflected investment in our sales, origination, trading and research
activities, increased charges relating to prior year compensation deferrals
and restructuring costs. Excluding the impact of own credit, the cost: net
income ratio was 65% (2009: 61%) and compensation costs represented
43% of income (2009: 33%).
Total assets increased 7% to £1,095bn (2009: £1,019bn). The increase
reflected the net depreciation in the value of Sterling relative to other
currencies in which our assets are denominated, growth in reverse
repurchase trading and an increase in the liquidity pool to £154bn (2009:
£127bn). Assets contributing to adjusted gross leverage increased 8% to
£668bn (2009: £618bn). Risk weighted assets increased 6% to £191bn
(2009: £181bn) due to changes in methodology and the impact of foreign
exchange rate movements, offset by reductions resulting from capital
Financial review
Analysis of results by business continued
Note
a 31st December 2010 uses a revised definition.
56 Barclays PLC Annual Report 2010 www.barclays.com/annualreport10