Barclays 2013 Annual Report Download - page 38

Company
Contribution to total income
£10,733m Adjusted
total income
£10,733m
2013 2012 2011
Income (£m) 10,733 11,775 10,222
Profit before tax (£m) 2,523 3,990 2,415
ROE (%) 8.2 12.7 7.7
Cost: income ratio (%) 75.0 65.0 76.0
Compensation: income ratio (%) 43.2 39.6 48.4
While industry FICC revenues reduced in 2013, strong growth was seen
in the Equities franchise, which continued to outperform the market.
Total income decreased 9% to £10,733m, including a reduction of
£309m relating to the Exit Quadrant. FICC income decreased 17% to
£5,537m. 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.
The Investment Bank continued to make progress in delivering part of
the Transform strategy in 2013. The business incurred costs to achieve
Transform of £262m, primarily related to restructuring across Europe,
Asia and America. Operating expenses increased 5% to £8,012m,
driven by costs to achieve Transform, UK bank levy which increased
62% to £333m, cost increases related to infrastructure improvement,
and provisions for litigation and regulatory penalties of £220m in Q413,
mainly related to US residential mortgage-related business.
Profit before tax decreased 37% to £2,523m.
Total assets decreased £209.9bn to £863.8bn, primarily reflecting
decreases in derivative financial instruments, cash and balances at
central banks, and trading portfolio assets.
CRD IV RWAs reduced to £221.6bn (30 June 2013: £254.1bn) through
accelerated sell down of the Exit Quadrant assets and continued focus
on driving efficiency in the ongoing business.
For more information on performance, please see
pages 237 to 268
Future priorities
Our priorities to become the ‘Go-To’ Investment Bank are to:
 Focus our people and resources on building the deepest
relationships possible with our target clients so we become
a first call
 Invest in market-leading talent and technology to deliver the
best client experience and remain responsive to clients’
changing needs
 Make efficiency and control a competitive advantage by
increasing standardisation and automation across the platform
to reduce cost to serve and strengthen controls
Investment Bank
continued
Colleague
Our people are fundamental to the performance of our business.
We aim to support our colleagues to achieve their ambitions by:
 Providing world-class opportunities for career progression and global
mobility
 Delivering industry leading solutions for clients
 Embracing diversity and inclusion
 Rewarding competitively for performance
2013 saw the launch of our Purpose and Values agenda, embedding
them into all our HR processes including recruiting, promotion and
performance management. Employee engagement was a key theme
during the year with increased focus on Talent Management and
Succession Planning; initiatives which saw a number of senior
management moves across the Investment Bank. We continue to place
Diversity & Inclusion to the forefront of our Talent agenda, because it is
the right thing to do and because our clients are becoming increasingly
diverse.
Citizenship
The Investment Bank contributes to the 2015 Citizenship Plan across
our business.
In 2013 we supported a wide range of transactions that make a direct
difference to our communities. We did this across our core
competencies of capital raising, lending and distribution across various
sectors including public finance (governments, supranationals,
development banks and other public sector entities), alternative energy
and life sciences sectors.
In addition, we provided employment and training opportunities for
over 650 graduates, and our staff contributed over 48,000 volunteer
hours in 2013 to worthwhile causes around the globe.
Conduct
Conduct is about ensuring that our products and services are designed
and distributed to meet the needs of our clients and that we act with
integrity in everything we do. In 2013 we have continued to invest
heavily in this area through focus on the following:
 Culture and Organisation: Embedding our culture by completing
values and behaviour training for all our staff and re-balancing how
we assess and reward our people to place increased focus on
conduct, risk and control
 Frameworks: Developing a comprehensive conduct risk framework
and developing tools that support the consistent delivery of controls
 Governance: Putting in place an enhanced governance model
including the introduction of a Chief Controls Officer, Reputation Risk
Committee and Conduct Risk Steering Committee
 Control Initiatives: Strengthening control design around the trade
lifecycle including with relation to unauthorised trading and key
benchmark submissions
barclays.com/annualreport
36 Barclays PLC Annual Report 2013