Barclays 2011 Annual Report Download - page 180

Financial review
Analysis of results by business continued
2011
£m
2010
£m
2009
£m
Income Statement Information
Net interest income 786 679 868
Net fee and commission income 429 421 352
Net trading income 9 20 14
Net investment income 91 67 118
Net premiums from insurance contracts 463 479 544
Other (expense)/income (49) 9 (6)
Total income 1,729 1,675 1,890
Net claims and benefits incurred under insurance contracts (503) (511) (572)
Total income net of insurance claims 1,226 1,164 1,318
Credit impairment charges and other provisions (261) (314) (338)
Net operating income 965 850 980
Operating expenses (excluding goodwill impairment) (1,211) (1,033) (887)
Goodwill impairment (427) – –
Operating expenses (1,638) (1,033) (887)
Share of post-tax results of associates and joint ventures 12 15 4
Profit on disposal of subsidiaries, associates and joint ventures – – 157
Gains on acquisition – 29 26
(Loss)/profit before tax (661) (139) 280
Adjusted (loss)/profit before taxa(234) (168) 97
Balance Sheet Information
Loans and advances to customers at amortised cost £43.6bn £43.4bn £41.1bn
Customer accounts £16.4bn £18.9bn £17.6bn
Total assets £51.3bn £53.6bn £51.0bn
Risk weighted assets £17.4bn £17.3bn £16.8bn
2011
Europe Retail and Business Banking adjusted loss before tax increased to
£234m (2010: £168m) reflecting repositioning of the business due to the
deteriorating economic environment and restructuring charges of £189m
(2010: £22m). Loss before tax of £661m (2010: £139m) reflecting £427m
of Spanish goodwill impairment and restructuring charges of £189m.
Spanish goodwill was fully impaired due to the deteriorating economic
environment in Spain in the fourth quarter of 2011 and ongoing economic
uncertainty.
Income improved 5% to £1,226m reflecting higher average asset and
liability volumes, improved margins and the appreciation of the average
value of the Euro against Sterling.
Note
a Adjusted profit before tax and adjusted performance measures excludes goodwill impairment of £427m (2010: £nil; 2009: £nil), gains on acquisition of £nil (2010: £29m; 2009: £26m)
and profit on disposal of subsidiaries, associates and joint ventures of £nil (2010: £nil; 2009: £157m).
Net interest income improved 16% to £786m with the net interest margin
up to 128bps (2010: 116bps). Average customer assets increased 5%
to £43.7bn despite customer asset margin reduction to 87bps (2010:
102bps) due to increased funding costs. Average customer liabilities
increased 3% to £17.7bn with customer liability margin up to 65bps (2010:
11bps) mainly due to re-pricing.
Net premiums from insurance contracts declined 3% to £463m, with a
corresponding decline in net claims and benefits of £503m (2010: £511m).
Credit impairment charges and other provisions decreased 17% to £261m
principally due to lower charges in the cards portfolios reflecting lower
30 and 90 day arrears rates and lower recovery balances. The lower
impairment was the main driver for the loan loss rate decreasing to 54bps
(2010: 71bps).
Retail and Business Banking
Europe Retail and Business Banking
178 Barclays PLC Annual Report 2011 www.barclays.com/annualreport