Barclays 2015 Annual Report Download - page 232

230 I Barclays PLC Annual Report 2015 home.barclays/annualreport
Financial review
Analysis of results by business
2015 compared to 2014
Profit before tax increased 22% to £1,634m. Strong growth was
delivered through the diversified consumer and merchant business
model with asset growth across all geographies. The cost to income
ratio improved to 42% (2014: 43%) whilst investment in business
growth continued. The business focus on risk management was
reflected in stable 30 day delinquency rates and improved loan loss rates.
Total income increased 13% to £4,927m driven primarily by business
growth in US cards and the appreciation of the average USD rate against
GBP.
Net interest income increased 16% to £3,520m driven by business
growth. Net interest margin also improved to 9.13% (2014: 8.75%)
reflecting growth in interest earning lending.
Net fee, commission and other income increased 7% to £1,407m due to
growth in payment volumes, partially offset by the impact of rate
capping from European Interchange Fee Regulation.
Credit impairment charges increased 6% to £1,251m primarily reflecting
asset growth and updates to impairment model methodologies, partially
offset by improved performance in UK Cards. Delinquency rates
remained broadly stable and the loan loss rate reduced 19bps to 289bps.
Total operating expenses increased 11% to £2,075m due to continued
investment in business growth, the appreciation of the average USD rate
against GBP and the impact of one-off items, including a write-off of
intangible assets of £55m relating to the withdrawal of the Bespoke
product.
Loans and advances to customers increased 9% to £39.8bn reflecting
growth across all geographies.
Total assets increased 15% to £47.4bn primarily due to the increase in
loans and advances to customers.
Customer deposits increased 40% to £10.2bn driven by the deposits
funding strategy in the US.
RWAs increased 4% to £41.3bn primarily driven by the growth in the US
cards business.
2014 compared to 2013
Profit before tax increased 13% to £1,339m. Strong growth in 2014 was
delivered through a diversified consumer and merchant business model,
with customer numbers increasing to 29m (2013: 26m) and asset
growth across all geographies generating a 6% increase in income.
Growth has been managed on a well-controlled cost base, with the
business focusing on scale through insourcing of services, consolidation
of sites and digitalisation, resulting in an improvement in the cost to
income ratio to 43% (2013: 45%). The business focus on risk
management is reflected in stable 30 day delinquency rates and falling
loan loss rates. The diversified and scaled business model has allowed
the business to deliver a strong return on average equity of 16.0% (2013:
15.5%).
Total income increased 6% to £4,356m reflecting growth in the UK
consumer and merchant, Germany and US businesses, partially offset by
depreciation of average USD against GBP.
Net interest income increased 8% to £3,044m driven by volume growth.
Net interest margin decreased to 8.75% (2013: 8.99%) due to a change
in product mix and the impact of promotional offers, particularly in the
US, partially offset by lower funding costs.
Net fee, commission and other income increased 3% to £1,312m due to
growth in payment volumes.
Credit impairment charges increased 8% to £1,183m due to asset
growth and enhanced coverage for forbearance. Delinquency rates
remained broadly stable and the loan loss rate reduced 24bps to
308bps.
Total operating expenses increased 1% to £1,874m driven by higher
costs to achieve of £118m (2013: £49m), partially offset by depreciation
of average USD against GBP, VAT refunds, and savings from strategic
cost programmes, including insourcing of services, consolidation of sites
and digitalisation.
Loans and advances to customers increased 16% to £36.6bn reflecting
growth across all geographies, including the impact of promotional
offers and the acquisition of portfolios in the US.
Total assets increased 20% to £41.3bn due to the increase in loans and
advances to customers.
Customer deposits increased 43% to £7.3bn driven by the deposits
funding strategy in the US.
RWAs increased 12% to £39.9bn primarily driven by the growth in loans
and advances to customers.
£4,927m total income
£1,634m profit before tax
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