Barclays 2012 Annual Report Download - page 221

The strategic report Governance Risk review Financial review Financial statements Risk management Shareholder information
Credit market exposures decreased 39% to £9,310m, reflecting net
sales and paydowns and other movements of £5,436m, foreign
exchange movements of £459m, offset by net fair value gains and
impairment charges of £44m.
Risk weighted assets decreased 5% to £178.0bn, principally reflecting
reductions in risk exposures, including legacy asset sell downs, and
foreign exchange movements. This was partially offset by an increased
operational risk charge and a more conservative approach to sovereign
exposures.
2011
Investment Bank profit before tax declined to £2,965m (2010: £4,389)
driven by a 22% reduction in income to £10,335m in a challenging
market environment, partially offset by reduced credit impairment
charges and operating expenses, including compensation costs.
FICC declined 27% to £6,325m, reflecting lower contributions from
Rates, Credit, and Commodities in a challenging trading environment.
Currency improved 27% on 2010, benefiting from market volatility and
strong client volumes. Equities and Prime Services declined 14%, with
reduced performance in cash equities and equity derivatives offset by
improved client flow in equity financing. Investment Banking reduced
10%. Equity underwriting was in line with the prior year, while financial
advisory and debt underwriting were impacted by lower deal activity.
Credit impairment charge of £93m reflecting charges primarily relating
to leveraged finance, offset by a release of £223m of the impairment
allowance relating to the Protium loan.
Operating expenses reduced 12% to £7,289m, reflecting a decrease in
both non-compensation and compensation costs. The 2011 bonus pool
decreased 32% to £1.5bn compared to a decrease in headcount of 3%.
Return on average equity decreased to 10.4% (2010: 13.5%) and return
on average risk weighted assets to 1.2% (2010: 1.5%), reflecting
difficult market conditions.
Assets contributing to adjusted gross leverage decreased 10% to
£604bn primarily due to a reduction in reverse repurchase transactions.
Total assets increased 6% to £1,158bn, reflecting increases in the fair
value of gross interest rate derivative assets offset by a reduction in
reverse repurchase agreements.
Credit market exposures of £15.2bn, reduced by £8.7bn primarily
driven by sale of assets formerly held as Protium collateral and
commercial real estate loans and properties.
Risk weighted assets down 2% to £187bn, reflecting lower levels of
client activity, risk reduction and reduction in credit market exposures,
more than offsetting the impact of CRD III.
£11,7 2 2m
total income
£4,063m
profit before tax
Analysis of total income
2012
£m
2011
£m
2010
£m
Fixed Income, Currency and Commodities 7,403 6,325 8,687
Equities and Prime Services 1,991 1,751 2,040
Investment Banking 2,123 2,027 2,243
Principal Investments 205 232 239
Total income 11,722 10,335 13,209
Adjusted Statutory
2012 2011 2010 2012 2011 2010
Performance Measures
Return on average equity 13.7% 10.4% 13.5% 13.7% 10.4% 13.5%
Return on average tangible equity 14.2% 10.8% 14.1% 14.2% 10.8% 14.1%
Return on average risk weighted assets 1.5% 1.2% 1.5% 1.5% 1.2% 1.5%
Loan loss rate (bps) 30 8 42 30 8 42
Cost: income ratio 62% 71% 63% 62% 71% 63%
Cost: net operating income ratio 64% 71% 65% 64% 71% 65%
Compensation: income ratio 39% 47% 43% 39% 47% 43%
Average income per employee (000s) £494 £424 £529 £494 £424 £529
Other measures
Average DVaR (95%) £38m £57m £53m
Number of employees (full time equivalent) 24,000 23,600 24,800
barclays.com/annualreport Barclays PLC Annual Report 2012 I 219