Barclays 2012 Annual Report Download - page 215

The strategic report Governance Risk review Financial review Financial statements Risk management Shareholder information
2011
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.
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).
Operating expenses excluding the £427m Spanish goodwill impairment
increased 17% to £1,211m, primarily due to restructuring charges of
£189m. 142 branches, largely in Spain, have been closed and the
number of employees reduced by 900 during 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.
Loans and advances to customers remained stable. Customer deposits
decreased 13% to £16.4bn, reflecting the competitive environment.
Adjusted return on average equity of negative 6.0% (2010: negative
1.0%) reflecting the repositioning of the business during 2011.
Notes
a Adjusted profit before tax and adjusted performance measures excludes goodwill impairment of £nil (2011: £427m; 2010: £nil) and gains on acquisition of £nil
(2011: £nil; 2010: £29m).
b 2010 return on average equity, return on average tangible equity and return on average risk weighted assets reflect a deferred tax benefit of £205m.
AdjustedaStatutory
2012 2011 2010 2012 2011 2010
Performance Measures
Return on average equityb(8.0%) (6.0%) (1.0%) (8.0%) (21.8%) (0.2%)
Return on average tangible equityb(9.2%) (7.9%) (1.3%) (9.2%) (29.0%) (0.2%)
Return on average risk weighted assetsb(1.1%) (0.9%) (0.1%) (1.1%) (3.3%) (0.0%)
Loan loss rate (bps) 80 54 71 80 54 71
Cost: income ratio 92% 99% 89% 92% 134% 89%
Key Facts
90 day arrears rates – Spain home loans 0.7% 0.5% 0.4%
90 day arrears rates – Portugal home loans 0.7% 0.6% 0.4%
90 day arrears rates – Italy home loans 1.0% 1.0% 0.8%
90 day arrears rates – Total Europe RBB home loans 0.8% 0.7% 0.5%
30 day arrears rates – cards 6.2% 5.9% 6.8%
Number of customers 2.7m 2.7m 2.7m
Number of branches 923 978 1,120
Number of sales centres 219 250 243
Number of distribution points 1,142 1,228 1,363
Number of employees (full time equivalent) 7,900 8,500 9,400
barclays.com/annualreport Barclays PLC Annual Report 2012 I 213
£915m
total income net of insurance claims
£239m
loss before tax