Barclays 2011 Annual Report Download - page 178

Financial review
Analysis of results by business continued
2011
£m
2010
£m
2009
£m
Income Statement Information
Net interest income 3,413 3,165 2,842
Net fee and commission income 1,157 1,255 1,299
Net trading loss – (2) –
Net investment income 17 – –
Net premiums from insurance contracts 92 130 198
Other (expense)/income (1) 1 5
Total income 4,678 4,549 4,344
Net claims and benefits incurred under insurance contracts (22) (31) (68)
Total income net of insurance claims 4,656 4,518 4,276
Credit impairment charges and other provisions (536) (819) (1,031)
Net operating income 4,120 3,699 3,245
Operating expenses (excluding provision for PPI redress) (2,702) (2,809) (2,538)
Provision for PPI redress (400) – –
Operating expenses (3,102) (2,809) (2,538)
Share of post-tax results of associates and joint ventures 2 (1) 3
Gains on acquisition – 100 –
Profit before tax 1,020 989 710
Adjusted profit before taxa1,420 889 710
Balance Sheet Information
Loans and advances to customers at amortised costb£121.2bn £115.6bn £103.0bn
Customer accountsb£111.8bn £108.4bn £96.8bn
Total assets £127.8bn £121.6bn £109.3bn
Risk weighted assets £34.0bn £35.3bn £35.9bn
Retail and Business Banking
UK Retail and Business Banking
2011
UK Retail and Business Banking adjusted profit before tax improved 60%
to £1,420m. Including £400m provision for PPI redress and £100m gain
on acquisition of Standard Life Bank in 2010 profit before tax improved
3% to £1,020m.
Income increased 3% to £4,656m driven by mortgages and personal
savings.
Net interest income increased 8% to £3,413m with the net interest margin
rising to 151bps (2010: 145bps) and risk adjusted net interest margin up
to 127bps (2010: 108bps). Customer asset margin declined to 122bps
(2010: 126bps) with average customer assets increasing 4% to £118.5bn.
Customer liability margin improved to 87bps (2010: 68bps) reflecting
the increase in the cost of funds and therefore the value generated from
customer liabilities with average customer liabilities increasing 3%
to £107.8bn.
Notes
a Adjusted profit before tax excludes the impact of the provision for PPI redress of £400m (2010: £nil; 2009: £nil) and gains on acquisitions of £nil (2010: £100m; 2009 £nil).
b In 2010 the acquisition of Standard Life Bank contributed £5.9bn loans and advances and £5.2bn customer accounts.
Net fee and commission income decreased 8% to £1,157m following
closure of the branch-based element of the financial planning business.
Credit impairment charges decreased 35% to £536m with annualised
loan loss rate of 44bps (2010: 70bps), Personal unsecured lending
impairment improved 44% to £311m with 90 day arrears rates on UK
personal loans improving to 1.7% (2010: 2.6%).
Operating expenses decreased 8% to £2,702m, excluding £400m
provision for PPI redress in 2011 and £123m one-off pension credit
in 2010. Including these items, operating expenses increased 10%
to £3,102m.
Total loans and advances to customers increased 5% to £121.2bn driven
by growth in mortgage balances. Average mortgage balances increased
6% reflecting strong positive net lending. Mortgage balances at 31
December 2011 were £107.8bn, a share by value of 9% (2010: 8%).
176 Barclays PLC Annual Report 2011 www.barclays.com/annualreport