Barclays 2011 Annual Report Download - page 188

Financial review
Analysis of results by business continued
2011
£m
2010
£m
2009
£m
Income Statement Information
Net interest income 2,036 2,004 2,083
Net fee and commission income 929 910 1,002
Net trading (expense)/income (99) 80 18
Net investment income/(loss) 29 (32) (46)
Gains on debt buy-backs and extinguishments – –85
Other income 17 12 39
Total income 2,912 2,974 3,181
Credit impairment charges and other provisions (1,149) (1,696) (1,558)
Net operating income 1,763 1,278 1,623
Operating expenses excluding goodwill impairment (1,639) (1,664) (1,466)
Goodwill impairment (123) (243) –
Operating expenses (1,762) (1,907) (1,466)
Share of post-tax results of associates and joint ventures 2 (2) –
Loss on disposal of subsidiaries, associates and joint ventures (73) – –
(Loss)/profit before tax (70) (631) 157
Adjusted profit/(loss) before taxa126 (388) 73
Balance Sheet Information and Key Facts
Loans and advances to customers at amortised cost £64.6bn £65.7bn £70.7bn
Loans and advances to customers at fair value £17.2bn £14.4bn £13.1bn
Customer deposits £77.7bn £71.0bn £66.3bn
Total assets £88.7bn £85.7bn £88.8bn
Risk weighted assets £69.7bn £70.8bn £76.9bn
Number of employees (full time equivalents) 9,700 11,900 12,900
2011
Barclays Corporate adjusted profit before tax improved to £126m (2010:
loss of £388m), reflecting significant progress in restructuring overseas
operations and improved credit impairment in Europe. Loss before tax
improved to £70m (2010: £631m loss), including £123m impairment of
Spanish goodwill and £73m loss on the disposal of Barclays Bank Russia
(BBR).
UK profit before tax declined £87m to £747m including a decline in the net
valuation of fair value loans. Excluding this item, underlying UK performance
improved, reflecting increased net investment and fee and commission
income and improving credit impairment, partially offset by an increase in
costs mainly from the non-recurrence of a prior year pension credit and
continued investment in infrastructure. Europe loss before tax reduced 24%
to £647m, reflecting lower credit impairment partially offset by the goodwill
impairment in Spain. Rest of the World loss before tax reduced 72% to
£170m, principally due to the non-recurrence of a prior year goodwill
impairment in BBR, lower operating expenses and an improvement in
loan loss rates, partially offset by the loss on disposal of BBR.
Note
a Adjusted profit before tax and performance measures exclude the impact of loss on disposal of Barclays Bank Russia of £73m (2010: £nil; 2009: £nil) and £123m of Spain goodwill
impairment (2010: £243m: 2009: £nil). 2010 adjusted loss before tax has been revised to exclude goodwill impairment of £243m on Barclays Bank Russia. 2009 adjusted profit before tax
has been revised to exclude gains on debt buy-backs and extinguishments of £85m.
Net interest income improved 2% to £2,036m driven by increases in UK
customer liabilities and customer liability margins. Net interest margin
decreased to 146bps (2010: 153bps), with average customer assets
decreasing 2% to £68.7bn and average customer liabilities increasing
16% to £70.6bn.
Credit impairment charges reduced 32% to £1,149m, as overall loan loss
rates improved to 162bps (2010: 226bps). UK reduced 23% to £355m,
benefiting from lower default rates and tightly controlled exposure to
commercial real estate loans. Europe reduced 33% to £716m primarily
due to lower impairment charges in Spain of £480m (2010: £898m),
reflecting proactive risk management action to reduce exposure to the
property and construction sector. Rest of the World reduced 53% to
£78m, primarily as a result of management action to reduce risk profile
of portfolios.
Operating expenses reduced by 2% to £1,639m, excluding the impact
of goodwill impairment. A decrease in restructuring charges and benefits
from streamlining operations more than offset the impact of the
non-recurrence of the prior year pension credit.
Barclays Corporate
186 Barclays PLC Annual Report 2011 www.barclays.com/annualreport