Barclays 2012 Annual Report Download - page 219

The strategic report Governance Risk review Financial review Financial statements Risk management Shareholder information
2011
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.
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.
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.
Adjusted return on average equity increased to 17.4% (2010: 12.5%)
and adjusted return on average tangible equity increased to 23.0%
(2010: 16.9%), reflecting increased profit after tax.
Total assets increased 12% to £33.8bn and risk weighted assets
increased 7% to £34.2bn reflecting acquired portfolios and organic
growth in the UK. These were partially offset by continued run-off of
the FirstPlus portfolio.
£4,170m
total income net of insurance claims
£1,506m
adjusted profit before tax
Note
a Adjusted profit before tax and adjusted performance measures excludes the impact of the provision for PPI redress of £420m (2011: £600m; 2010: £nil) and £nil
goodwill impairment in FirstPlus secured lending portfolio (2011: £47m; 2010: £nil).
AdjustedaStatutory
2012 2011 2010 2012 2011 2010
Performance Measures
Return on average equity 22.1% 17.4% 12.5% 15.2% 6.8% 12.5%
Return on average tangible equity 29.7% 23.0% 16.9% 20.5% 9.0% 16.9%
Return on average risk weighted assets 3.3% 2.6% 1.9% 2.3% 1.2% 1.9%
Loan loss rate (bps) 282 391 570 282 391 570
Cost: income ratio 41% 41% 39% 51% 56% 39%
Key Facts
30 day arrears rates – UK cards 2.5% 2.7% 3.4%
30 day arrears rates – US cards 2.4% 3.1% 4.6%
30 day arrears rates – South Africa cards 5.2% 4.9% 7.2%
Total number of Barclaycard customers 28.8m 22.6m 21.7m
Total average customer assets £32.5bn £30.3bn £28.8m
Payments Processed £240bn £219bn £199m
Number of retailer relationships 89,000 87,000 87,000
Number of employees (full time equivalent) 11,000 10,400 9,900
barclays.com/annualreport Barclays PLC Annual Report 2012 I 217