Barclays 2011 Annual Report Download - page 179

£1,020m
profit before tax
£4,656m
total income net of insurance claims
Gross new mortgage lending increased to £17.2bn (2010: £16.9bn),
with a share by value of 12% (2010: 13%). Mortgage redemptions
decreased to £10.7bn (2010: £11.0bn), resulting in net new mortgage
lending of £6.5bn (2010: £5.9bn). Average Loan to Value (LTV) ratio
on the mortgage portfolio (including buy to let) on a current valuation
basis was 44% (2010: 43%). Average LTV of new mortgage lending
was 54% (2010: 52%).
Risk weighted assets decreased 4% to £34.0bn reflecting a decrease
in unsecured lending balances partially offset by the growth in
mortgage balances.
Adjusted return on average equity improved to 14.9% (2010: 9.9%)
and adjusted return on average tangible equity improved to 28.6%
(2010: 18.7%).
2010
UK Retail and Business Banking profit before tax increased 39% to £989m,
driven by good income growth and lower impairment charges, more
than offsetting an increase in operating expenses. The 2010 results also
reflected a gain of £100m on the acquisition of Standard Life Bank.
Income increased 6% to £4,518m reflecting strong balance sheet growth.
Net interest income increased 11% to £3,165m reflecting business growth.
The net interest margin for UK RBB remained stable at 145bps (2009:
145bps) with the risk adjusted net interest margin increasing to 108bps
(2009: 93bps).
Total average customer asset balances increased 11% to £113.7bn
reflecting good growth in Home Finance mortgage balances and the
acquisition of Standard Life Bank. The customer asset margin decreased
to 126ps (2009: 145bps) reflecting the impact of the revised internal funds
pricing mechanism. Total average customer deposit balances increased
12% to £104.5bn, reflecting good growth in personal customer balances
and the impact of Standard Life Bank. The customer liability margin
increased to 68bps (2009: 42bps) reflecting the impact of the revised
internal funds pricing mechanism. Total customer account balances
increased to £108.4bn (2009: £96.8bn).
AdjustedaStatutory
2011 2010 2009 2011 2010 2009
Performance Measures
Return on average equityb14.9% 9.9% 7.5% 10.6% 11.4% 7.5%
Return on average tangible equityb28.6% 18.7% 14.1% 20.3% 21.4% 14.1%
Return on average risk weighted assets 3.0% 1.9% 1.5% 2.1% 2.2% 1.5%
Loan loss rate (bps) 44 70 98 44 70 98
Cost: income ratio 58% 62% 59% 67% 62% 59%
Key Facts
90 day arrears rates – UK loans 1.7% 2.6% 3.8%
Number of UK current accounts 11.9m 11.6m 11.2m
Number of UK savings accountsc 15.1m 14.4m 13.2m
Number of UK mortgage accountsc 930,000 916,000 834,000
Number of Barclays Business customers 785,000 760,000 742,000
LTV of mortgage portfolioc 44% 43% 43%
LTV of new mortgage lendingc 54% 52% 48%
Number of branches 1,625 1,658 1,698
Number of ATMs 3,629 3,345 3,394
Number of employees (full time equivalent) 34,100 34,700 31,900
Notes
a Adjusted performance measures 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 Return on average equity and return on average tangible equity comparatives have been revised to use 10% of average risk weighted assets (previously 2010: 9%; 2009: 8%) in the
calculation of average equity and average tangible equity.
c Data for year ended 31 December 2010 and 2011 includes the impact of Standard Life Bank.
Credit impairment charges represented 70bps (2009: 98bps) of total gross
loans and advances to customers and banks. This translates to a reduction
in impairment charges of 21% to £819m, reflecting focused risk
management and improved economic conditions. Impairment charges
within Consumer Lending and Current Accounts decreased 29% to
£418m (2009: £592m), and 27% to £134m (2009: £183m) respectively.
Home Finance impairment charges remained low at £29m (2009: £26m).
As a percentage of the portfolio, three-month arrears rates for the UK
loans improved to 2.6% (2009: 3.8%).
Operating expenses increased 11% to £2,809m, reflecting higher pension
costs, increased regulatory-related costs and the impact of the acquisition
of Standard Life Bank. Excluding these items operating expenses were in
line with prior year.
Total loans and advances to customers increased to £115.6bn Average
mortgage balances grew 16%, reflecting strongly positive net lending and
the acquisition of Standard Life Bank. As at 31 December 2010 mortgage
balances were £101.2bn, a share by value of 8% (2009: 7%). Gross new
mortgage lending increased to £16.9bn (2009: £14.2bn), a share by value
of 13% (2009: 10%). Mortgage redemptions increased to £11.0bn (2009:
£8.5bn), resulting in net new mortgage lending of £5.9bn (2009: £5.7bn).
The average loan to value ratio of the mortgage portfolio (including
buy-to-let) on a current valuation basis was 43% (2009: 43%).
The average loan to value ratio of new mortgage lending was 52%
(2009: 48%).
Total assets increased 11% to £121.6bn driven by growth in Home
Finance. Risk weighted assets remained broadly flat at £35.3bn with
growth in Home Finance offset by a decline in Consumer Lending
balances and improvements in operational risk weighted assets.
Improvements in the adjusted return on average equity to 9.9% (2009:
7.5%) and adjusted return on average tangible equity to 18.7% (2009:
14.1%) reflected the increase in profit after tax which more than offset
the growth in average equity that was driven by growth in average risk
weighted assets.
Barclays PLC Annual Report 2011 www.barclays.com/annualreport 177
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