Barclays 2013 Annual Report Download - page 258

2013
Income declined 11% to £2,617m driven by foreign currency movements,
partially offset by the non-recurrence of fair value adjustments in the
commercial property finance portfolio in the prior year. On a constant
currency basis, income improved 5%, despite continued pressure on
transaction volumes in a competitive environment.
Net interest income declined 13% to £1,437m. On a constant currency
basis, net interest income improved 2%. Net interest margin was down
3bps to 316bps. Customer asset margin remained stable at 310bps,
with continued focus on competitive pricing of key products including
home loans, personal loans and vehicle and asset finance. Customer
liability margin decreased 2bps to 273bps driven by increased
competition and a change in product mix towards lower margin
savings products.
Net fee and commission income declined 13% to £924m. On a constant
currency basis, income increased 2%.
Credit impairment charges decreased 49% to £324m. On a constant
currency basis, credit impairment charges decreased 41% due to lower
provisions on the South African home loans recovery book and
business banking portfolio. This decrease was partly offset by
deterioration in the South African unsecured lending portfolio due to
the challenging economic environment. This fall in impairment resulted
in a loan loss rate of 128bps (2012: 202bps).
Operating expenses decreased 4% to £1,896m. On a constant currency
basis, costs increased 11% driven by a combination of increased
investment spend on infrastructure and inflation increases in South Africa.
Profit before tax increased 25% to £404m, primarily due to lower credit
impairment charges in the South African home loans recovery book
and business banking portfolio, along with the non-recurrence of fair
value adjustments on the commercial property finance portfolio in the
prior year.
Loans and advances to customers decreased 19% to £24.2bn as
foreign currency movements offset growth of 2%, particularly in vehicle
and asset finance. The average balance weighted LTV ratio on the
mortgage portfolio was 62% (2012: 66%). The average balance
weighted LTV of new mortgage lending was 75% (2012: 76%).
Customer deposits decreased 13% to £16.9bn. Excluding foreign
currency movements, deposits increased 8% reflecting growth in
individual deposits, particularly in investment products.
Total assets decreased 21% to £33.5bn mainly due to foreign currency
movements. On a constant currency basis, total assets were broadly in line.
CRD III RWAs decreased 9% to £22.4bn, primarily due to foreign
currency movements, partially offset by balance sheet growth.
£2,617m
total income net of insurance claims
Down from £2,928m in 2012
£404m
adjusted profit before tax
Up from £322m in 2012
Financial review
Analysis of results by business continued
Africa Retail and Business Banking
2013
£m
2012
£m
2011
£m
Income Statement Information
Net interest income 1,437 1,654 1,874
Net fee and commission income 924 1,065 1,179
Net premiums from insurance contracts 359 417 432
Other income/(expense) 81 (1) 94
Total income 2,801 3,135 3,579
Net claims and benefits incurred under insurance contracts (184) (207) (215)
Total income net of insurance claims 2,617 2,928 3,364
Credit impairment charges and other provisions (324) (632) (462)
Net operating income 2,293 2,296 2,902
Operating expenses (excluding UK bank levy and costs to achieve Transform) (1,842) (1,960) (2,154)
UK bank levy (28) (24) (23)
Costs to achieve Transform (26) – –
Operating expenses (1,896) (1,984) (2,177)
Other net income 7 10 5
Profit before tax 404 322 730
Attributable profit/(loss)a9 (4) 207
Balance Sheet Information
Loans and advances to customers at amortised cost £24.2bn £29.9bn £32.5bn
Customer deposits £16.9bn £19.5bn £20.3bn
Total assetsb£33.5bn £42.2bn £45.9bn
Risk weighted assets – CRD IIIb£22.4bn £24.5bn £27.8bn
Risk weighted assets – CRD IV fully loadedb£22.8bn
Notes
a Attributable profit/(loss) represents profit/(loss) after tax excluding non-controlling interests’ share of those profits/(losses).
b 2013 total assets and risk weighted assets include an allocation of liquidity pool assets previously held centrally.
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256 Barclays PLC Annual Report 2013