Barclays 2013 Annual Report Download - page 243

Performance metric Definition
Why it is important to the business and
performance update
Total income Defined as total income net of insurance
claims.
Adjusted income excludes adjusting items for
movements in own credit, gains on debt
buy-backs, and loss/gains on acquisitions and
disposals.
Total income is a key indicator of financial
performance to many of Barclays’
stakeholders and income growth is a key
execution priority for Barclays’ management.
Adjusted total income decreased 4% to
£28,155m due to challenging economic
conditions and the continuing low interest
rate environment.
Adjusted
2013 – £28,155m
2012 – £29,361m
2011 – £28,513m
Statutory
2013 – £27,935m
2012 – £25,009m
2011 – £32,292m
Profit before tax Profit before tax and adjusted profit before tax
are the two primary profitability measures
used by management to assess performance.
Profit before tax is stated in accordance with
International Financial Reporting Standards
and represents total income less impairment
charges and operating expenses.
Adjusted profit before tax excludes adjusting
items for movements in own credit, gains on
debt buy-backs, loss/gains on acquisitions
and disposals, impairment of investment in
BlackRock Inc., provisions for PPI and interest
rate hedging products redress, and goodwill
impairment.
Profit before tax is a key indicator of financial
performance to many of our stakeholders.
Adjusted profit before tax is presented to
provide a consistent basis for comparing
business performance between periods.
Adjusted profit before tax decreased by 32%
to £5,167m due to costs to achieve Transform
and a 4% reduction in income. Profit before
tax in the Investment Bank decreased 37% to
£2,523m.
Adjusted
2013 – £5,167m
2012 – £7,599m
2011 – £5,482m
Statutory
2013 – £2,868m
2012 – £797m
2011 – £5,770m
Loan loss rate The loan loss rate is quoted in basis points
and represents total annualised loan
impairment divided by gross loans and
advances to customers and banks held at
amortised cost at the balance sheet date.
The granting of credit is one of Barclays major
sources of income and its most significant
risk. The loan loss rate is an indicator of the
cost of granting credit.
The loan loss rate decreased to 64bps (2012:
70bps) reflecting an 8% reduction in
impairment charge on loans and advances
principally due to lower impairments in the
wholesale businesses.
2013 – 64 bps
2012 – 70 bps
2011 – 77 bps
Return on average tangible shareholders’
equity (RoTE)
RoTE is calculated as profit for the year
attributable to equity holders of the parent
divided by average shareholders’ equity for
the year, excluding non-controlling interests,
goodwill and intangible assets.
Adjusted RoTE excludes post tax adjusting
items for movements in own credit, gains on
debt buy-backs, loss/gains on acquisitions
and disposals, impairment of investment in
BlackRock, Inc., provisions for PPI and interest
rate hedging products redress, and goodwill
impairment. Average tangible shareholders’
equity for adjusted RoTE excludes the impact
of own credit on retained earnings.
This measure indicates the return generated
by the management of the business based on
the tangible shareholders’ equity.
Adjusted return on average tangible
shareholders’ equity decreased to 5.3%
(2012: 10.6%), principally reflecting the
decrease in profit before tax, £440m write
down of deferred tax assets relating to Spain
and the rights issue equity raised of £5.8bn.
Adjusted
2013 – 5.3%
2012 – 10.6%
2011 – 8.1%
Statutory
2013 – 1.2%
2012 – (1.4%)
2011 – 7.1%
Other Financial KPIs
The other financial KPIs outlined below were used alongside the six Transform Financial Commitments.
Together they set out the way in which the performance of the Group has been measured during 2013.
Other Financial KPIs
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