Barclays 2014 Annual Report Download - page 239

barclays.com/annualreport Barclays PLC Annual Report 2014 I 237
Total operating expenses increased 8% to £2,342m largely reflecting
inflationary increases, resulting in higher staff costs, and increased
investment spend on key initiatives, including higher costs to achieve
Transform of £51m (2013: £23m), partially offset by savings from
Transform programmes.
Loans and advances to customers increased 5% to £35.2bn primarily
driven by strong corporate banking growth across Africa in CIB and
limited growth in RBB, mainly due to a modest reduction in the South
Africa mortgages portfolio.
Total assets increased 5% to £55.5bn due to the increase in loans and
advances to customers.
Customer deposits increased 5% to £35.0bn reflecting strong growth in
the South African RBB business.
RWAs increased 1% to £38.5bn on a reported basis, primarily driven by
growth in loans and advances to customers, partially offset by the
depreciation of ZAR against GBP.
2013 compared to 2012
Based on average rates, the ZAR depreciated against GBP by 16% in 2013.
The deterioration was a significant contributor to the movement in the
reported results of Africa Banking.
Profit before tax increased 3% to £1,049m. When excluding the impact of
the depreciation of average ZAR against GBP, profit before tax increased
approximately 19%.
Total income net of insurance claims declined 6% to £4,039m reflecting
adverse currency movements and continued pressure on RBB transaction
volumes, partially offset by strong balance sheet growth in CIB and the
impact from the full-year inclusion of the Edcon card portfolio acquired in
the second half of 2012.
Net interest income decreased 3% to £2,245m due to adverse currency
movements, partially offset by the benefit from the inclusion of the Edcon
card portfolio for the full year and the impact of growth in loans and
advances to customers in CIB and RBB.
Net fee and commission income declined 9% to £1,254m due to adverse
currency movements, partially offset by the benefit from the full-year
inclusion of the Edcon card portfolio and modest growth in RBB fee and
commission income.
Credit impairment charges decreased 31% to £479m driven by favourable
currency movements and lower provisions on the South African home
loans recovery book and business banking portfolio, partially offset by
increased impairment in the card business, reflecting the inclusion of the
Edcon portfolio for the full year and an increase in the loan loss rate on the
remaining portfolio. The total loan loss rate improved 30bps to 128bps.
Total operating expenses decreased 4% to £2,519m reflecting favourable
currency movements, partially offset by higher staff costs driven by
inflationary pressures and increased incentives, increased investment
spend on key initiatives including costs to achieve Transform of £26m
(2012: £nil) and the inclusion of the Edcon card portfolio for the full year.
Notes
a Average LTV of mortgage portfolio and new mortgage lending calculated on the balance weighted basis for South Africa.
b 2012 returns calculated using average allocated equity based on CRD III RWAs and capital deductions.
2014
£m
2013
£m
2012
£m
Key facts
Average LTV of mortgage portfolioa59.9% 62.3% 65.6%
Average LTV of new mortgage lendinga74.8% 74.9% 75.3%
Number of distribution points 1,349 1,396 1,451
Number of employees (full time equivalent) 45,000 45,900 45,000
ZAR/£ – Period end 18.03 17.37 13.74
ZAR/£ – Average 17.84 15.10 13.03
Performance measures
Return on average tangible equityb12.9% 11.3% 10.0%
Return on average equityb9.3% 8.1% 7.2%
Cost: income ratio 64% 62% 61%
Loan loss rate (bps) 93 128 158
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