Barclays 2013 Annual Report Download - page 268

2013
Adjusted income declined to a net expense of £124m (2012: income of
£356m), predominately due to the non-recurrence of gains related to
hedges of employee share awards in Q112 of £235m and the residual
net expense from treasury operations, including an adjustment to the
carrying amount of subordinated liabilities.
Operating expenses decreased £53m to £131m, mainly due to the
non-recurrence of the £97m penalty arising from the industry wide
investigation into the setting of inter-bank offered rates recognised in
H112, partially offset by costs to achieve Transform of £22m and
regulatory investigation and legal costs.
Adjusted loss before tax of £248m moved from a profit of £189m in
2012. Statutory loss before tax improved to £468m (2012: £4,163m)
including an own credit charge of £220m (2012: £4,579m), partially
offset by the non-recurrence of the £227m gain on disposal of
investment in BlackRock Inc. in 2012.
Total assets decreased 35% to £26.7bn primarily reflecting a reduction
of group liquidity pool assets and a reallocation to the businesses.
CRD III RWAs decreased £2.3bn to £3.0bn primarily driven by
reallocation of liquidity pool assets to the businesses.
2012
Adjusted income increased to £356m (2011: expense of £89m)
principally due to changes in the value of hedges relating to employee
share awards which were closed out during Q112.
Operating expenses increased £139m to £184m mainly from higher
regulatory costs, including a charge relating to the allocation to Head
Office and Other Operations of the penalty of £97m (2011: £nil) arising
from the industry wide investigation into the setting of interbank
offered rates, Financial Services Compensation Scheme of £135m
(2011: £45m), UK bank levy to £19m (2011: £nil) and increased
strategic initiative costs.
Adjusted profit before tax increased to £189m (2011 loss of £135m).
Statutory loss before tax increased to £4,163m (2011: profit of
£1,822m) including an own credit charge of £4,579m (2011: £2,708m
gain) and non-recurrence of gains on debt buy-backs, partially offset
by the impact of the BlackRock Inc. investment disposal and income
from changes in the value of hedges relating to employee share awards
that were closed out during in Q112.
Total assets increased to £41.3bn (2011: £31.7bn) reflecting growth in
the liquidity bond portfolio held at Head Office, partially offset by the
sale of the strategic investment in BlackRock Inc.
CRD III RWAs increased £2.8bn to £5.3bn, principally reflecting
increases in sovereign bonds held for liquidity purposes and the
application of a more conservative approach to risk weighting these
exposures.
Financial review
Analysis of results by business continued
Head Office and Other Operations
2013
£m
2012
£m
2011
£m
Income Statement Information
Adjusted total expense net of insurance claims (124) 356 (89)
Own credit (charge)/gain (220) (4,579) 2,708
Gains on debt buy-backs –– 1,130
Gain/(loss) on disposal of investment in BlackRock, Inc – 227 (58)
Total income net of insurance claims (344) (3,996) 3,691
Credit impairment (charge)/release and other provisions 2 (6) (1)
Impairment of investment in BlackRock Inc. – – (1,800)
Net operating (loss)/income (342) (4,002) 1,890
Operating expenses (excluding UK bank levy and cost to achieve Transform) (94) (165) (45)
UK bank levy (15) (19) –
Cost to achieve Transform (22) – –
Operating expenses (131) (184) (45)
Other net income/(expense) 5 23 (23)
(Loss)/profit before tax (468) (4,163) 1,822
Adjusted (loss)/profit before taxa(248) 189 (135)
Adjusted attributable lossa,b (344) (64) (165)
Balance Sheet Information
Total assetsc£26.7bn £41.3bn £31.7bn
Risk weighted assets – CRD IIIc£3.0bn £5.3bn £2.5bn
Risk weighted assets – CRD IV fully loadedc£2.5bn
Number of employees (full time equivalent) 100 200 100
Notes
a Adjusted (loss)/profit before tax excludes the impact of an own credit charge of £220m (2012: charge of £4,579m, 2011: gain of £2,708m), gains on debt buy-backs (retirement of
non-qualifying Tier 1 Capital under Basel 3) of £nil (2012: £nil, 2011: £1,130m), gain/(loss) on disposal of the strategic investment in BlackRock Inc. of £nil (2012: gain of £227m,
2011: loss of £58m), impairment of investment in BlackRock Inc. of £nil (2012: £nil, 2011: £1,800m) and loss on disposals of £nil (2012: £nil; 2011: £23m).
b Adjusted attributable profit represents profit after tax excluding non-controlling interests’ share of those profits.
c 2013 total assets and risk weighted assets reflect a reduction in the liquidity pool and a reallocation to businesses of liquidity pool assets previously held centrally.
barclays.com/annualreport
266 Barclays PLC Annual Report 2013