Barclays 2014 Annual Report Download - page 234

232 I Barclays PLC Annual Report 2014 barclays.com/annualreport
Analysis of results by business
Financial review
Personal and Corporate Banking
£8,828m
total income
£2,885m
profit before tax
2014 compared to 2013
Profit before tax increased 29% to £2,885m driven by 3% growth in
Personal income, lower impairment due to the improving economic
environment in the UK, and the continued reduction in operating
expenses due to progress on the Transform strategy. This resulted in
a 2.2% increase in return on average equity to 11.9%. In Personal,
income increased £119m alongside significant cost reductions, with
the net closure of 72 branches as part of ongoing branch network
optimisation, as well as investment in the customer experience across
multiple channels. Corporate increased both loans and deposits, and
Wealth undertook a substantial reorganisation to reduce the number of
target markets while simplifying operations.
Total income increased 1% to £8,828m. Personal income increased
3% to £4,159m due to balance growth and improved savings margins,
partially offset by lower fee income. Corporate income was broadly in
line at £3,592m (2013: £3,620m), with balance growth in both lending
and deposits, offset by margin compression. Wealth income was
broadly in line at £1,077m (2013: £1,063m) driven by growth in the UK
business, offset by client and market exits as part of the reorganisations
in the US and EU businesses, and lower fee income.
Net interest income increased 7% to £6,298m driven by lending and
deposit growth and margin improvement. Net interest margin
improved 9bps to 3.00% primarily due to the launch of a revised
overdraft proposition, which recognises the majority of overdraft
income as net interest income as opposed to fee income, and higher
savings margins within Personal and Wealth. These factors were
partially offset by lower Corporate deposit margins.
Notes
a RWAs are on a CRD IV fully loaded basis. CRD IV rules came into effect in 2013; therefore no 2012 comparatives are available.
b 2012 returns calculated using average allocated equity based on CRD III RWAs and capital deductions.
2014
£m
2013
£m
2012
£m
Income statement information
Net interest income 6,298 5,893 5,730
Net fee and commission income 2,443 2,723 2,777
Other income 87 107 72
Total income 8,828 8,723 8,579
Credit impairment charges and other provisions (482) (621) (626)
Net operating income 8,346 8,102 7,953
Operating expenses (5,005) (5,460) (5,456)
UK bank levy (70) (66) (49)
Costs to achieve Transform (400) (384) –
Total operating expenses (5,475) (5,910) (5,505)
Other net income 14 41 7
Profit before tax 2,885 2,233 2,455
Attributable profit 2,058 1,681 1,703
Balance sheet information
Loans and advances to customers at amortised cost £217.0bn £212.2bn £203.8bn
Total assets £285.0bn £278.5bn £215.7bn
Customer deposits £299.2bn £295.9bn £256.4bn
Risk weighted assetsa£120.2bn £118.3bn n/a
Average allocated tangible equityb£13.1bn £13.2bn £11.4bn
Average allocated equityb£17.5bn £17.3bn £15.4bn