Barclays 2013 Annual Report Download - page 254

Notes
a Adjusted profit before tax and adjusted attributable profit excludes the impact of the provision for PPI redress of £660m (2012: £1,180m; 2011: £400m).
b Adjusted attributable profit represents profit after tax excluding non-controlling interests’ share of those profits.
c 2013 total assets and risk weighted assets include an allocation of liquidity pool assets previously held centrally.
2013
£m
2012
£m
2011
£m
Income Statement Information
Net interest income 3,395 3,190 3,378
Net fee and commission income 1,098 1,154 1,157
Net investment income – – 17
Net premiums from insurance contracts 46 74 92
Other income/(expense) 1 (1) (1)
Total income 4,540 4,417 4,643
Net claims and benefits incurred under insurance contracts (17) (33) (22)
Total income net of insurance claims 4,523 4,384 4,621
Credit impairment charges and other provisions (347) (269) (536)
Net operating income 4,176 4,115 4,085
Operating expenses (excluding UK bank levy, costs to achieve Transform and provision for PPI redress) (2,812) (2,877) (2,844)
UK bank levy (21) (17) (22)
Costs to achieve Transform (175) – –
Provision for PPI redress (660) (1,180) (400)
Operating expenses (3,668) (4,074) (3,266)
Other net income 27 4 3
Profit before tax 535 45 822
Adjusted profit before taxa1,195 1,225 1,222
Adjusted attributable profita,b 917 875 841
Balance Sheet Information
Loans and advances to customers at amortised cost £136.5bn £128.1bn £121.2bn
Customer deposits £135.5bn £116.0bn £111.8bn
Total assetsc£152.9bn £134.6bn £127.1bn
Risk weighted assets – CRD IIIc£44.1bn £39.1bn £34.0bn
Risk weighted assets – CRD IV fully loadedc£44.1bn
2013
Income increased 3% to £4,523m driven by strong mortgage growth
and contribution from Barclays Direct (previously ING Direct UK,
acquired during Q113).
Net interest income increased 6% to £3,395m. Net interest margin was
down 6bps to 129bps primarily reflecting reduced contributions from
structural hedges, however, customer generated margin increased from
102bps to 106bps. Customer asset margin increased 15bps to 122bps
driven by lower funding costs and increased customer rates on new
mortgage lending. Customer liability margin decreased 8bps to 89bps
reflecting lower funding rates.
Net fee and commission income declined 5% to £1,098m due primarily
to lower fees from customers.
Credit impairment charges increased £78m to £347m primarily due to
the non-recurrence of provision releases in 2012 relating to unsecured
lending and mortgages. Excluding this, impairment was broadly in line
with prior year.
Adjusted operating expenses increased 4% to £3,008m due to costs to
achieve Transform of £175m. Statutory operating expenses decreased
by 10% to £3,668m due to the lower charge for PPI redress of £660m
(2012: £1,180m).
Adjusted profit before tax decreased 2% to £1,195m, while statutory
profit before tax was £535m (2012: £45m).
Loans and advances to customers increased 7% to £136.5bn due to
Barclays Direct, which added £4.4bn, and other mortgage growth.
Mortgage balances increased to £122.8bn (2012: £114.7bn), giving an
increase in share of UK stock balance to 9.9% (2012: 9.4%). Gross new
mortgage lending was £17.1bn (2012: £18.2bn) and mortgage
repayments were £14.4bn (2012: £10.6bn). Portfolio quality continued
to improve with an average balance weighted Loan to Value (LTV) ratio
on the mortgage portfolio (including buy-to-let) of 56% (2012: 59%).
Average balance weighted LTV of new mortgage lending was 64%
(2012: 65%).
Customer deposits increased 17% to £135.5bn driven by growth in
savings and Barclays Direct, which added £6.2bn.
£4,523m
total income net of insurance claims
Up from £4,384m in 2012
£1,195m
adjusted profit before tax
Down from £1,225m in 2012
Financial review
Analysis of results by business continued
UK Retail and Business Banking
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252 Barclays PLC Annual Report 2013