Barclays 2010 Annual Report Download - page 65

2010
£m
2009
£m
2008
£m
Income statement information
Net interest income/(expense) 35 (507) 182
Net fee and commission expense (389) (418) (486)
Net trading loss (434) (291) (245)
Net investment income/(loss) 491 (34) 27
Net premiums from insurance contracts 79 92 119
Gains on debt buy-backs and extinguishments – 1,164 –
Other income 39 22 26
Total (loss)/income (179) 28 (377)
Net claims and benefits incurred under insurance contracts 1– –
Total (loss)/income net of insurance claims (178) 28 (377)
Impairment charges and other credit provisions (2) (16) (30)
Net (loss)/income (180) 12 (407)
Operating expenses (579) (570) (451)
Share of post-tax results of associates and joint ventures – 1 –
Profit on disposal of associates and joint ventures – 7 –
Loss before tax (759) (550) (858)
Balance sheet information
Total assets £20.9bn £6.4bn £3.1bn
Risk weighted assets £0.6bn £0.9bn £0.4bn
Head Office Functions and Other Operations
Head Office Functions and Other Operations comprise
head office and central support functions, businesses
in transition and consolidation adjustments.
Performance
2010
Head Office Functions and Other Operations loss before tax increased
£209m to a loss of £759m (2009: loss of £550m). The results for 2009
reflected a net gain on debt buy-backs of £1,164m, while 2010 benefited
notably from a significant decrease in the costs of the central funding
activity and a reclassification of profit from the currency translation reserve.
Group segmental reporting is consistent with internal reporting to the
Executive Committee and the Board, with inter-segment transactions
being recorded in each segment as if undertaken on an arm’s length basis.
Adjustments necessary to eliminate inter-segment transactions are
included in Head Office Functions and Other Operations.
Gilts held as part of the structural hedge portfolio were disposed of during
the year realising net gains of approximately £500m, which were distributed
out to the businesses through net interest income as part of the allocation
of the share of the benefit of Group equity. In Head Office Functions and
Other Operations these gains were recognised in net investment income.
Income decreased to a loss of £178m (2009: income of £28m). Net
interest income improved to £35m (2009: £507m expense) with a
significant decrease in the costs of the central funding activity as the
money market dislocations eased. In addition, an increase of £336m from
the reclassification consolidation adjustment on hedging derivatives from
net trading loss was more than offset by the allocation to the businesses of
the profit on disposal of gilts. Net fee and commission expense improved
to £389m (2009: £418m) reflecting increases in fees for structured capital
market activities to £239m (2009: £191m) partially offset by a reduction
in fees paid to Barclays Capital for debt and equity raising and risk
management advice to £73m (2009: £174m). Net trading loss increased
to £434m (2009: £291m) due to the reclassification to net interest income
partially offset by the repatriation of capital from overseas leading to a
reclassification of £265m of profit from the currency translation reserve
to the income statement. Net investment income increased to £491m
(2009: loss of £34m) predominantly due to the gains on disposal of gilts.
Operating expenses increased to £579m (2009: £570m) principally due
to payment of a £194m settlement to US regulators in resolution of the
investigation into Barclays compliance with US economic sanctions (see
page 228), partially offset by a reduction in the bank payroll tax charge
to £96m (2009: £225m) and a reduction of £59m in Financial Services
Compensation Scheme charges.
Total assets increased to £20.9bn (2009: £6.4bn), largely due to a £7.4bn
net increase in gilts held for the equity structural hedge and £6.8bn of
covered bonds and other notes.
2009
Head Office Functions and Other Operations loss before tax reduced
to £550m (2008: loss of £858m).
Total income increased to £28m (2008: loss of £377m). Net interest
income decreased to a loss of £507m (2008: income of £182m) primarily
due to an increase in costs in central funding activity. Net fees and
commission expense decreased to £418m (2008: £486m) reflecting
adjustments to eliminate inter-segmental transactions, offset by increases
in fees for structured capital market activities to £191m (2008: £141m)
and in fees paid to Barclays Capital for debt and equity raising and risk
management advice to £174m (2008: £151m). Other income increased
£1,160m to £1,186m (2008: £26m), primarily reflecting gains on debt
buy-backs and extinguishments.
Operating expenses increased to £570m (2008: £451m) reflecting a
UK bank payroll tax charge of £190m (2008: £nil), partially offset by
a reduction of £55m in the costs relating to an internal review of Barclays
compliance with US economic sanctions to £33m (2008: £88m).
Total assets increased to £6.4bn (2008: £3.1bn).
Barclays PLC Annual Report 2010 www.barclays.com/annualreport10 63
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