Barclays 2013 Annual Report Download - page 252

Notes
a UK adjusted income excludes the impact of an own credit charge of £220m (2012: £4,579m charge, 2011: gain of £2,708m), and gain on debt buy backs £nil (2012: £nil,
2011: gain of £1,130m).
b Americas adjusted income also excludes gain on disposal of strategic investment in BlackRock, Inc. of £nil (2012: £227m, 2011: loss of £58m).
c Total income net of insurance claims based on counterparty location.
d 2012 income derived from South Africa has been revised following a review of the 2012 method of allocation. £511m of 2012 income has now been allocated from South Africa
to other African countries.
The Group’s activities have been organised under the following
business groupings:
 UK RBB is a leading UK high street bank providing current account
and savings products and Woolwich branded mortgages. UK RBB
also provides unsecured loans and general insurance as well as
banking and money transmission services to small and medium
sized businesses.
 Europe RBB provides retail services in Spain, Italy, Portugal and
France, as well as business lending to small and medium sized
enterprises, through a variety of distribution channels.
 Africa RBB provides retail services across Africa and the Indian Ocean.
 Barclaycard is an international payments services provider for
consumer and business customers including credit cards and
consumer lending.
 The Investment Bank provides large corporate, government and
institutional clients with a full spectrum of solutions to meet their
strategic advisory, financing and risk management needs.
 Corporate Banking provides integrated banking solutions to large
corporates, financial institutions and multinationals in the UK and
internationally.
 Wealth and Investment Management focuses on private and
intermediary clients worldwide, providing international and private
banking, investment management, fiduciary services and brokerage.
 Head Office Functions and Other Operations comprise head office
and central support functions, businesses in transition and
consolidation adjustments.
In order to align aggregated businesses’ results more closely to those
of the Group, the following elements, previously included within the
Head Office and Other Operations results have been allocated to the
businesses:
 Intra-group allocation of funding costs and other income items now
includes the majority of the costs of subordinated debt instruments,
preference shares and allocation of liquidity costs; increased
allocation of intra-group interest; and the elimination of fees to the
Investment Bank for Structured Capital Markets activities.
 Head Office operating cost items, including the UK bank levy and
Financial Services Compensation Scheme costs, have been allocated
to businesses wherever practicable using the most appropriate driver
of that cost.
The impact of the above allocations was an increase in Head Office and
Other Operations profit before tax in 2012 of £1,281m (2011: £900m),
offset by decreases in Investment Bank profit before tax in 2012 of
£701m (2011: £573m), UK RBB of £220m (2011: £136m), Corporate
Banking of £111m (2011: £24m), Africa RBB of £98m (2011: £80m),
Barclaycard of £58m (2011: £35m), Europe RBB of £57m (2011: £43m),
and Wealth and Investment Management of £36m (2011: £9m).
Portfolio reallocations also occurred to better reflect the management
of the relevant businesses. The reallocations resulted in increases in
profit before tax in 2012 in Barclaycard of £37m (2011: £52m),
Corporate Banking of £28m (2011: £31m), and Investment Bank of
£17m (2011: £17m), offset by decreases in Europe RBB of £52m
(2011: £70m), and Africa RBB of £30m (2011: £30m).
Income by geographic region (audited)c
Adjusteda,b Statutory
2013
£m
2012
£m
2011
£m
2013
£m
2012
£m
2011
£m
Continuing operations
UKa11,681 12,040 11,981 11,461 7,461 15,819
Europe 4,019 4,457 4,207 4,019 4,457 4,207
Americasb7,034 7,327 6,083 7,034 7,554 6,025
Africa and Middle East 4,137 4,472 4,967 4,137 4,472 4,967
Asia 1,284 1,065 1,274 1,284 1,065 1,274
Total 28,155 29,361 28,512 27,935 25,009 32,292
Statutory income from individual countries which represent more than 5% of total income (audited)c
2013
£m
2012
£m
2011
£m
Continuing operations
UK 11,461 7,461 15,819
US 6,760 7,333 5,802
South Africa 2,884 3,700d3,942
Returns and equity by business
Returns on average equity and average tangible equity are calculated as
profit for the period attributable to ordinary equity holders of the parent
divided by average allocated equity or average allocated tangible equity
for the period as appropriate, excluding non-controlling and other
equity interests. Average allocated equity has been calculated as 10.5%
of average risk weighted assets for each business, adjusted for capital
deductions, including goodwill and intangible assets, reflecting the
assumptions the Group uses for capital planning purposes. The higher
capital level currently held, reflecting Core Tier 1 capital ratio of 13.2%
as at 31 December 2013, is allocated to Head Office and Other
Operations. Average allocated tangible equity is calculated using the
same method but excludes goodwill and intangible assets.
Financial review
Analysis of results by business continued
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250 Barclays PLC Annual Report 2013