Barclays 2013 Annual Report Download - page 262

2013
Total income decreased 9% to £10,733m, including a reduction of
£309m relating to the Exit Quadrant.
Fixed Income, Currency and Commodities (FICC) income decreased
17% to £5,537m. Macro Products and Credit Products income
decreased 23% to £3,110m and 9% to £2,427m respectively, driven by
Rates and Securitised Products, as market uncertainty around central
banks’ tapering of quantitative easing programmes impacted activity.
Europe and the US were particularly impacted, whilst Asia benefitted
from improved currency income. The prior year benefitted from the
European Long Term Refinancing Operation (LTRO) in H112, the ECB
bond buying programme and reduced benchmark interest rates in H212.
Equities and Prime Services income increased 22% to £2,672m
reflecting higher commission income and increased client volumes.
Investment Banking income increased 3% to £2,200m driven by
increased equity underwriting fees, partly offset by declines in financial
advisory activity.
Principal Investments income declined to £62m (2012: £206m) due to
disposals and lower private equity income.
Exit Quadrant income reduced £309m to £262m due to accelerated
disposals throughout 2013 and the prior year benefitting from higher
gains on US residential mortgage assets and sale of, and gains on, US
commercial real estate assets. 2013 included a gain of £259m as a
result of greater certainty regarding the recoverability of certain assets
not yet received from the 2008 US Lehman acquisition and current year
reversal of £111m income relating to a litigation matter.
Net credit impairment charges of £220m (2012: £204m) were driven by
a charge against a single name exposure in Q213.
Operating expenses increased 5% to £8,012m, driven by costs to
achieve Transform of £262m primarily related to restructuring
initiatives across Europe, Asia and America, and UK bank levy which
increased 62% to £333m primarily due to an increase in the rate. Other
costs included £325m (2012: £221m) relating to infrastructure
improvement, including increased costs to meet the requirement of the
Dodd-Frank Act, CRD IV and other regulatory reporting change
projects. There were provisions for litigation and regulatory penalties of
£220m in Q413, mainly relating to US residential mortgage-related
business. 2012 was impacted by a £193m penalty relating to the setting
of inter-bank offered rates.
£10,733m
total income
Down from £11,775m in 2012
£2,523m
profit before tax
Down from £3,990m in 2012
Financial review
Analysis of results by business continued
Investment Bank
2013
£m
2012
£m
2011
£m
Income Statement Information
Net interest income 349 530 1,227
Net fee and commission income 3,236 3,029 2,805
Net trading income 6,610 7,688 5,322
Net investment income 530 521 868
Other income 8 7 –
Total income 10,733 11,775 10,222
Credit impairment charges and other provisions (220) (204) (93)
Net operating income 10,513 11,571 10,129
Operating expenses (excluding UK bank levy and costs to achieve Transform) (7,417) (7,425) (7,527)
UK bank levy (333) (206) (199)
Costs to achieve Transform (262) – –
Operating expenses (8,012) (7,631) (7,726)
Other net income 22 50 12
Profit before tax 2,523 3,990 2,415
Attributable profita1,548 2,680 1,636
Balance Sheet Information
Loans and advances to banks and customers at amortised costb£143.8bn £143.5bn £159.1bn
Customer depositsb£81.9bn £75.9bn £83.1bn
Total assetsc£863.8bn £1,073.7bn £1,158.7bn
Risk weighted assets – CRD IIIc£142.6bn £177.9bn £186.6bn
Risk weighted assets – CRD IV fully loadedc£221.6bn
Notes
a Attributable profit represents profit after tax excluding non-controlling interests’ share of those profits.
b As at 31 December 2013 loans and advances included £112bn of loans and advances to customers (including settlement balances of £35.4bn and cash collateral of £36bn) and loans
and advances to banks of £31.8bn (including settlement balances of £5.2bn and cash collateral of £14.7bn). Customer deposits included £34.5bn relating to settlement balances and
£27bn relating to cash collateral.
c 2013 total assets and risk weighted assets reflect a reallocation of liquidity pool assets to other businesses.
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260 Barclays PLC Annual Report 2013