Barclays 2013 Annual Report Download - page 256

2013
Income declined 6% to £666m, reflecting actions taken to reduce
assets, particularly in Spain and Italy, to address the continuing
economic challenges across Europe, partially offset by an increase due
to foreign currency movements.
Net interest income declined 2% to £420m due to the decline in
average customer balances. Net interest margin remained broadly in
line at 79bps (2012: 78bps) with improved pricing offset by higher
funding costs.
Net fee and commission income declined 25% to £187m, reflecting
reduced business volumes.
Net premiums from insurance contracts declined 17% to £276m due to
reduced business volumes, following rationalisation of product
offerings, leading to a corresponding 14% decline in net claims and
benefits to £308m.
Credit impairment charges increased 12% to £287m due to exposure
to the renewable energy sector in Spain, foreign currency movements
and increased coverage for high risk mortgage customers. This was
offset in part by improvement in collections performance.
Operating expenses increased by £435m to £1,242m, almost entirely
reflecting costs to achieve Transform of £403m. These related to
restructuring costs to significantly downsize the distribution network,
with the remaining increase driven by foreign currency movements
partially offset by cost savings resulting from restructuring.
Other net expense increased by £146m to £133m due to a valuation
adjustment relating to contractual obligations to trading partners
based in locations affected by our restructuring plans.
Loss before tax increased £653m to £996m, including costs to achieve
Transform of £403m and an increase in other net expenses.
Attributable loss increased to £964m (2012: £277m), including the
impact of a deferred tax assets write down relating to Spain and the
increase in loss before tax.
Loans and advances to customers fell by 6% to £37.0bn, driven by
asset reduction activity as part of the Transform strategy, partially
offset by foreign currency movements. Mortgage balances decreased
to £33.6bn (2012: £34.8bn). The average balance weighted LTV ratio
on the Spain mortgage portfolio was 63% (2012: 65%), on the Italy
mortgage portfolio was 60% (2012: 60%) and the Portugal mortgage
portfolio was 76% (2012: 78%).
£666m
total income net of insurance claims
Down from £708m in 2012
£996m
adjusted loss before tax
Up from £343m in 2012
Financial review
Analysis of results by business continued
Europe Retail and Business Banking
2013
£m
2012
£m
2011
£m
Income Statement Information
Net interest income 420 428 610
Net fee and commission income 187 248 376
Net investment income 78 52 91
Net premiums from insurance contracts 276 331 463
Other income/(expense) 13 8 (33)
Total income 974 1,067 1,507
Net claims and benefits incurred under insurance contracts (308) (359) (503)
Total income net of insurance claims 666 708 1,004
Credit impairment charges and other provisions (287) (257) (207)
Net operating income 379 451 797
Operating expenses (excluding UK bank levy, costs to achieve Transform and goodwill impairment) (813) (787) (1,128)
UK bank levy (26) (20) (21)
Costs to achieve Transform (403) – –
Goodwill impairment –– (427)
Operating expenses (1,242) (807) (1,576)
Other net (expense)/income (133) 13 12
Loss before tax (996) (343) (767)
Adjusted loss before taxa(996) (343) (340)
Adjusted attributable lossa,b (964) (277) (257)
Balance Sheet Information
Loans and advances to customers at amortised cost £37.0bn £39.2bn £42.7bn
Customer deposits £16.3bn £17.6bn £16.4bn
Total assetsc£45.0bn £46.1bn £50.2bn
Risk weighted assets – CRD IIIc£15.9bn £15.8bn £16.4bn
Risk weighted assets – CRD IV fully loadedc£16.2bn
Notes
a Adjusted loss before tax and adjusted attributable loss excludes the impact of goodwill impairment £nil (2012: £nil; 2011: £427m).
b Adjusted attributable loss represents loss after tax excluding non-controlling interests’ share of those losses.
c 2013 total assets and risk weighted assets include an allocation of liquidity pool assets previously held centrally.
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254 Barclays PLC Annual Report 2013