Barclays 2011 Annual Report Download - page 184

Financial review
Analysis of results by business continued
2011
£m
2010
£m
2009
£m
Income Statement Information
Net interest income 2,860 2,814 2,723
Net fee and commission income 1,171 1,136 1,271
Net trading loss (7) (8) (1)
Net investment income 10 39 23
Net premiums from insurance contracts 42 50 44
Other income 20 1 1
Total income 4,096 4,032 4,061
Net claims and benefits incurred under insurance contracts (1) (8) (20)
Total income net of insurance claims 4,095 4,024 4,041
Credit impairment charges and other provisions (1,259) (1,688) (1,798)
Net operating income 2,836 2,336 2,243
Operating expenses (excluding provision for PPI redress and goodwill impairment) (1,659) (1,570) (1,527)
Provision for PPI redress (600) – –
Goodwill impairment (47) – –
Operating expenses (2,306) (1,570) (1,527)
Share of post-tax results of associates and joint ventures 31 25 8
Profit on disposal of subsidiaries, associates and joint ventures – –3
Profit before tax 561 791 727
Adjusted profit before taxa1,208 791 724
Balance Sheet Information
Loans and advances to customers at amortised cost £30.1bn £26.6bn £26.5bn
Total assets £33.8bn £30.3bn £30.3bn
Risk weighted assets £34.2bn £31.9bn £30.6bn
2011
Barclaycard adjusted profit before tax improved 53% to £1,208m. Profit
before tax declined 29% to £561m after £600m provision for PPI redress
and £47m goodwill impairment in the FirstPlus secured lending portfolio.
Barclaycard’s international businesses profit increased driven by significant
improvements in the US and South Africa. Both the Egg consumer card
assets and the MBNA corporate card portfolio acquired during the first
half of 2011 delivered profits.
Income improved 2% to £4,095m, with growth in balances driven by UK
Cards partially offset by higher customer balance repayments in the US
and depreciation of US Dollar against Sterling. Barclaycard’s UK businesses
income improved 8% to £2,639m including contribution from Egg and
MBNA portfolios, partially offset by continued run-off of the FirstPlus
portfolio. Barclaycard’s International businesses income declined 7% to
£1,456m due to customer balance repayments in the US and depreciation
of the US Dollar against Sterling.
Note
a Adjusted profit before tax and adjusted performance measures excludes the impact of the provision for PPI redress of £600m (2010: £nil; 2009: £nil), £47m goodwill impairment in
Firstplus secured lending portfolio (2010: £nil; 2009: £nil) and profit on disposal of £nil (2010: £nil; 2009: £3m).
Net interest income improved 2% to £2,860m. Average customer assets
increased 5% to £30.3bn. UK Cards average extended card balances
increased 27% to £11.2bn due to acquisitions and balance transfers,
partially offset by higher customer balance repayments in the US and
continued run-off of the FirstPlus portfolio. Customer asset margin was
up 17bps to 952bps, with net interest margin down 33bps to 944bps due
to hedge impact.
Credit impairment charges decreased 25% to £1,259m principally driven
by lower charges in the cards portfolios, reflecting improved underlying
delinquency performance, lower bankruptcies and charge-offs.
Operating expenses increased 47% to £2,306m, reflecting the provision
for PPI redress, FirstPlus goodwill impairment and the impact of the Egg
and MBNA acquisitions. Excluding these items, operating expenses were
flat on prior year.
Retail and Business Banking
Barclaycard
182 Barclays PLC Annual Report 2011 www.barclays.com/annualreport