Barclays 2013 Annual Report Download - page 244

Financial review
Key performance indicators continued
Performance metric Definition
Why it is important to the business and
performance update
Return on average risk weighted assets
(RoRWA)
RoRWA is calculated as profit after tax for the
year divided by average CRD III RWAs for the
year.
Adjusted RoRWA 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.
This measure indicates the return generated
by the management of the business based on
RWAs.
Adjusted return on average risk weighted
assets decreased to 0.8% (2012: 1.4%),
principally reflecting the decrease in profit
before tax and £440m write down of deferred
tax assets relating to Spain, despite the
reduction in RWAs.
Adjusted
2013 – 0.8%
2012 – 1.4%
2011 – 1.1%
Statutory
2013 – 0.3%
2012 – 0.0%
2011 – 1.0%
Core Tier 1 ratio
Capital requirements are part of the regulatory
framework governing how banks and
depositary institutions are managed. Capital
ratios express a bank’s capital as a percentage
of its risk weighted assets as defined by the
PRA.
Core Tier 1 Capital is broadly tangible
shareholders’ funds less certain capital
deductions (see page 201 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 PRA; 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 2013, the Group’s Core Tier 1 ratio
strengthened to 13.2% (2012: 10.8%)
primarily due to the rights issue and a
decrease in RWAs offset by new regulatory
deductions primarily related to foreseeable
dividends.
2013 – 13.2%
2012 – 10.8%
2011 – 11.0%
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242 Barclays PLC Annual Report 2013