Barclays 2014 Annual Report Download - page 24

22 I Barclays PLC Annual Report 2014 barclays.com/annualreport
How we are doing
Becoming ‘Go-To’
2014 performance review
During 2014, we made good progress against the financial commitments
we set out to the markets for 2016. In our African operations we have
inceased our share of revenues from outside South Africa to 22.5% –
within our targeted range – and are top 3 by revenue in 2 of our 5 largest
markets. Our ROE increased to 9.3% and is on course to exceed 10%.
Our increased cost to income ratio reflects the investments we made into
the businesses.
We have simplified our product range and processes, continue to add
value through additional services, improving the customer experience
and introducing many digital innovations, from the Homeowners app
in South Africa, allowing applicants to track progress of mortgage
applications, to the launch of Barclays Mobile Banking in markets
outside of South Africa.
We have also successfully implemented systems and infrastructure
for corporate and business clients, such as Front Arena – an electronic
trading platform – in eleven countries; BARX – our foreign exchange
platform in nine countries; and Barclays.net – a streamlined and
full-feature online banking channel is now operational in South Africa,
Kenya and Uganda, which are all key geographical markets for our
African business. We continue to expand our insurance business across
the continent.
On a reported basis, total income net of insurance claims decreased
9% to £3,664m and profit before tax decreased 6% to £984m. Based
on average rates, the ZAR depreciated against GBP by 18% in 2014.
The deterioration was a significant contributor to the movement in the
reported results of Africa Banking.
The discussion of business performance in the paragraph below is
based on results on a constant currency basis unless otherwise stated.
Profit before tax increased 13% to £984m, reflecting good growth in
Corporate and Investment Banking (CIB) and Retail and Business
Banking (RBB). CIB experienced strong income growth, driven by the
corporate banking business outside of South Africa, and improved
investment banking trading performance across Africa. Continued
progress was made on the RBB South Africa turnaround strategy, with
increased net fee and commission income growth in the second half of
the year, and Wealth, Investment Management and Insurance delivered
strong growth outside of South Africa due to expansion initiatives.
Loans and advances to customers grew 5% driven by strong CIB
growth. Customer deposits grew 5% driven by RBB growth. RWAs
increased 1% as growth in loans and advances was partially offset
by ZAR depreciation against GBP.
Our future priorities
For Barclays Africa Group Limited, we are targeting an RoE of
18-20% and bringing our cost-to-income ratio down to the low 50s.
For Africa Banking we aim to become top 3 by revenue in our five
biggest markets and increasing the revenue share from outside
South Africa to 20-25%. To achieve these targets, growth outside
South Africa will be a priority for us and we will continue to focus
on four areas:
Q Turnaround our RBB franchise
Q Grow our Corporate business across the continent
Q Expand Wealth, Investment Management and Insurance into Africa
Q Develop and invest in diversity and talent
Investment
Bank
‘From our unique position with dual
home markets and truly global
reach, we are transforming the
Investment Bank so that we can
continue to help our target clients
achieve their ambitions.’
Thomas King
Chief Executive,
Investment Bank
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How Investment Banking contributes to
our Balanced Scorecard
Customer and client
Q Voted best Investment Bank in the UK by Euromoney
Q Ranked # 2 tied overall Fixed Income Market Share for
third consecutive year by Greenwich Associates
Q Advised on four of the top 10 global M&A deals in 2014,
including the two largest
Colleague
Q 400 full-time graduates and 590 interns hired in 2014
Q 14% female senior leaders
Q 22 Diversity Networks in place with over 8,800 members
Citizenship
Q Launched three socially responsible products in 2014:
Barclays Women in Leadership Index and ETNs; Barclays
Return on Disability ETNs and Barclays/MSCI Green Bond
Benchmark Indices
Q £5.9bn of clean-technology financing in 2014, including
£2.3bn of Green Bond financing
Conduct
Q Conduct Risk Committee launched and embedded with
sub-committees focusing on Conflicts, Suitability,
Submissions and Colleagues
Q 6,800 colleagues completed Conduct College training in
2014 representing over 99% of all front office employees
Company
Contribution to the Group 2014 2013a2012
Income (£m) 7,588 8,596 9,104
Profit before tax (£m) 1,377 2,020 2,554
ROE (%) 2.7 8.2 9.6
Cost: income ratio (%) 82 77 71
Loans and advances to
customers (£bn) 106.3 104.5 93.2
Total assets (£bn) 455.7 438.0 398.5
Note
a 2013 adjusted income and PBT have been restated to exclude the Q213 £259m
gain relating to assets not yet received from the US Lehman acquisition to aid
comparability.
Contribution to the Group’s total income
£m
£7,588m
Total income decreased 12% on prior year
driven by difficult market-making conditions
and continued low levels of activity.
Lorem ipsum Africa Banking