Barclays 2012 Annual Report Download - page 202

Capital KPIs
Definition Why is it important to the business and management
Core Tier 1 ratio
2012 – 10.9%
2011 – 11.0%
2010 – 10.8%
Capital requirements are part of the regulatory
framework governing how banks and
depository institutions are managed. Capital
ratios express a bank’s capital as a percentage
of its risk weighted assets as defined by the
UK FSA. Core Tier 1 is broadly tangible
shareholders’ funds less certain capital
deductions (see page 164 for a reconciliation).
The Group’s capital management activities seek
to maximise shareholders’ value by prudently
optimising the level and mix of its capital
resources. The Group’s capital management
objectives are to maintain sufficient capital
resources to: ensure the financial holding
company is well capitalised relative to the
minimum regulatory capital requirements
set by the FSA; ensure locally regulated
subsidiaries can meet their minimum regulatory
capital requirements; support the Group’s risk
appetite and economic capital requirements;
and support the Group’s credit rating.
During 2012, the Group’s Core Tier 1 ratio
remained strong, closing at 10.9%.
The Group is targeting a transitional CRD IV
minimum Common Equity Tier 1 ratio of 10.5%
by 2015.
Adjusted gross
leverage
2012 – 19x
2011 – 20x
2010 – 20x
Adjusted gross leverage is defined as the
multiple of adjusted total tangible assets over
total qualifying Tier 1 capital. Adjusted total
tangible assets are total assets less derivative
counterparty netting, assets under
management on the balance sheet, settlement
balances, and cash collateral on derivative
liabilities, goodwill and intangible assets.
Tier 1 capital is defined by the UK FSA.
Barclays believes that there will be more
capital and less leverage in the banking
system and that lower levels of leverage are
regarded as a helpful measure of stability
going forward. This is consistent with the
views of our regulators and investors.
In 2012, adjusted gross leverage reduced to
19x principally due to the increase in
qualifying Tier 1 Capital to £51.6bn (2011:
£50.5bn).
Income growth KPIs
Definition Why is it important to the business and management
Total income Defined as total income net of insurance
claims.
Total income is a key indicator of financial
performance to many of our stakeholders and
income growth a key execution priority for
Barclays management.
Adjusted total income increased 2% despite
challenging economic conditions and the
continuing low interest rate environment.
Adjusted RoE
2012 – £29,043m
2011 – £28,512m
2010 – £31,049m
Statutory RoE
2012 – £24,691m
2011 – £32,292m
2010 – £31,440m
Income by geography Defined as total income net of insurance
claims generated in distinct geographic
segments. Geographic segmental analysis is
based on customer location and the definition
of the countries within each region is provided
in the glossary.
The goal of increasing the international
diversification of our income helps to reduce
statutory risk by providing exposure to
different economic cycles and is demonstrated
by our ratio of non-UK to UK business income.
UK statutory income in the below table
includes the impact of an own credit charge of
£4,579m in 2012, gain of £2,708m in 2011 and
gain of £391m in 2010.
Adjusted Statutory
Geographic split of income 2012 2011 2010 2012 2011 2010
%% % %% %
UK 41 43 39 31 49 40
Europe 13 15 16 15 13 15
Americas 26 21 25 32 19 25
Africa and the Middle East 16 17 16 18 15 16
Asia 4 4 4 4 4 4
barclays.com/annualreport200 I Barclays PLC Annual Report 2012
Financial review
Key performance indicators continued