Barclays 2013 Annual Report Download - page 261

For more information on Barclaycard
business model and strategy please
see pages 30 to 33
2012
Income increased 1% to £4,344m reflecting continued growth across
the business and contributions from portfolio acquisitions. This was
partially offset by higher funding costs, non-recurrence of gains from
the disposal of hedging instruments in 2011 and depreciation of ZAR
against GBP. UK income decreased 1% to £2,601m including
contribution from 2011 portfolio acquisitions and business growth,
offset by increased funding costs. International income improved 4% to
£1,743m driven by higher US outstanding balances and contribution
from portfolio acquisitions.
Net interest income remained flat at £3,009m. Contributions from
business growth and acquisitions were offset by lower net interest
margin of 866bps (2011: 970bps), which stabilised in the second half
of the year. Average customer assets increased 6% to £33.5bn due to
portfolio acquisitions and business growth. Customer asset margin was
down 14bps to 956bps due to higher funding costs.
Non-interest income improved 6% to £1,335m driven by increased
volumes in the Business Payment and US portfolios.
Credit impairment charges decreased 20% to £1,049m resulting from
improved delinquency, lower charge-offs and better recovery rates,
primarily in the first half of 2012. The loan loss rate improved by 100bps
to 294bps. 30 day arrears rates for consumer cards in UK were down to
2.5% (2011: 2.7%), in the US were down to 2.4% (2011: 3.1%) and in
South Africa were up to 7.4% (2011: 4.8%).
Adjusted operating expenses increased 2% to £1,842m reflecting
portfolio acquisitions, provision for certain other insurance products
and investment spend. Statutory operating expenses decreased 8% to
£2,262m due to the lower charge for PPI redress of £420m (2011:
£600m).
Adjusted profit before tax improved 22% to £1,482m, while statutory
profit before tax increased by £497m to £1,062m due to the lower
charge for PPI redress.
Customer deposits increased £2.2bn to £2.8bn due to business funding
initiatives in the US and Germany.
Total assets increased 10% to £38.2bn primarily driven by business
growth and acquisitions.
CRD III RWAs increased 7% to £37.8bn, principally due to growth in
assets and an increased operational risk charge.
Notes
a Adjusted performance measures exclude the impact of the provision for PPI redress of £690m (2012: £420m; 2011: £600m) and goodwill impairment in Firstplus secured lending
portfolio of £nil (2012: £nil; 2011: £47m).
b 2012 30 day arrears rates on South Africa cards restated to reflect the Edcon portfolio acquisition.
AdjustedaStatutory
2013 2012 2011 2013 2012 2011
Performance Measures
Return on average tangible equity 24.5% 26.9% 21.4% 11.1% 18.0% 8.0%
Return on average equity 18.4% 19.8% 16.1% 8.3% 13.3% 6.0%
Return on average risk weighted assets 2.8% 3.1% 2.5% 1.4% 2.2% 1.1%
Cost: income ratio 43% 42% 42% 57% 52% 57%
Loan loss rate (bps) 337 294 394 337 294 394
Key Facts
30 day arrears rates – UK cards 2.4% 2.5% 2.7%
30 day arrears rates – US cards 2.1% 2.4% 3.1%
30 day arrears rates – South Africa cardsb 8.1% 7.4% 4.8%
Total number of Barclaycard customers 35.5m 32.8m 25.3m
Total number of Barclaycard clients 350,200 315,500 309,400
Value of payments processed £254bn £235bn £214bn
Number of employees (full time equivalent) 12,100 11,100 10,900
barclays.com/annualreport Barclays PLC Annual Report 2013 259
The Strategic Report Governance Risk review Financial review Financial statements Shareholder informationRisk management