Barclays 2015 Annual Report Download - page 239

home.barclays/annualreport Barclays PLC Annual Report 2015 I 237
2015 compared to 2014
Loss before tax increased 24% to £1,459m driven by continued progress
in the exit of Businesses, Securities and loans, and Derivative assets.
RWAs reduced £29bn to £47bn including a £10bn reduction in
Derivatives, £9bn reduction in Securities and loans, and Business
reductions from the completion of the sales of the Spanish and UK
Secured Lending businesses. The announced sales of the Portuguese
and Italian retail businesses, which are due to be completed in H116, are
expected to result in a further £2.5bn reduction in RWAs.
Total income net of insurance claims reduced to an expense of £164m
(2014: income of £1,050m). Businesses income reduced 44% to £613m
due to the impact of the sale of the Spanish business and the sale and
rundown of legacy portfolio assets. Securities and loans income reduced
to an expense of £481m (2014: income of £117m) primarily driven by fair
value losses and funding costs on the ESHLA portfolio, the active
rundown of securities, exit of historical investment bank businesses and
the non-recurring gain on the sale of the UAE retail banking portfolio in
2014. Fair value losses on the ESHLA portfolio were £359m (2014:
£156m), of which £156m was in Q415, as gilt swap spreads widened.
Derivatives income reduced 76% to an expense of £296m reflecting the
active rundown of the portfolios and funding costs.
Credit impairment charges improved 54% to £78m due to higher
recoveries in Europe and the sale of the Spanish business.
Total operating expenses improved 40% to £1,199m reflecting savings
from the sales of the Spanish, UAE retail, commodities, and several
principal investment businesses, as well as a reduction in costs to
achieve, and conduct and litigation charges.
Loans and advances to banks and customers reduced 28% to £45.9bn
due to the reclassification of £5.5bn of loans relating to the announced
sales of the Portuguese and Italian businesses to assets held for sale,
and the rundown and exit of historical investment bank assets.
Derivative financial instrument assets and liabilities decreased 26% to
£210.3bn and 28% to £198.7bn respectively, largely as a result of trade
reduction.
Total assets decreased 36% to £303.1bn due to reduced reverse
repurchase agreements and other similar secured lending, and lower
derivative financial instrument assets.
Leverage exposure reduced £156.2bn to £121.3bn primarily in reverse
repurchase agreements, potential future exposure on derivatives and
trading portfolio assets.
RWAs decreased £28.7bn to £46.6bn and period end equity decreased
£3.8bn to £7.2bn primarily driven by the sale of the Spanish business,
the active rundown of legacy structured and credit products, and
derivative trade unwinds.
2014 compared to 2013
Loss before tax reduced 15% to £1,180m as Non-Core made good
progress in exiting and running down certain businesses and securities
during 2014. This drove a £34.6bn reduction in RWAs, making
substantial progress towards the Non-Core target reductions as outlined
in the Group Strategy Update on 8 May 2014.
Total income net of insurance claims reduced 54% to £1,050m.
Businesses income reduced 27% to £1,101m due to the sale and
rundown of legacy portfolio assets and the rationalisation of product
offerings within the European retail business. Securities and loans
income reduced 82% to £117m primarily driven by the active rundown
of securities, fair value losses on wholesale loan portfolios and the
non-recurrence of prior year favourable market movements on certain
securitised products, partially offset by a £119m gain on the sale of the
UAE retail banking portfolio. Derivatives income reduced £321m to an
expense of £168m reflecting the funding costs of the traded legacy
derivatives portfolio and the non-recurrence of fair value gains in the
prior year.
Credit impairment charges improved 81% to £168m due to the
non-recurrence of impairments on single name exposures, impairment
releases on the wholesale portfolio as a result of confirmation on
Spanish government subsidies in the renewable energy sector and
improved performance in Europe, primarily due to improved recoveries
and delinquencies in the mortgages portfolio.
Total operating expenses improved 25% to £2,011m reflecting savings
from strategic cost programmes, including lower headcount and the
results of the previously announced European retail restructuring. In
addition, costs to achieve reduced 61% to £212m.
Loans and advances to banks and customers reduced 22% to £63.9bn
due to a £12.9bn reclassification of loans relating to the Spanish
business, which was held for sale, and a reduction in Europe retail driven
by a run-off of assets.
Trading portfolio assets reduced 48% to £15.9bn due to the sale and
rundown of legacy portfolio assets.
Derivative financial instrument assets and liabilities increased 19% to
£285.4bn and 21% to £277.1bn respectively, driven by decreases in
major forward interest rates.
Total assets decreased 8% to £471.5bn with reduced reverse repurchase
agreements and other similar secured lending, and trading portfolio
assets, due to the rundown of legacy portfolio assets, offset by an
increase in derivative financial instrument assets. BCBS 270 leverage
exposure reduced to £277bn.
RWAs decreased £34.6bn to £75.3bn and average allocated equity
decreased £3.7bn to £13.4bn, reflecting the disposal of businesses,
rundown and exit of securities and loans, and derivative risk reductions.
(£164m) total income net of
insurance claims
£1,459m loss before tax
Barclays Non-Core
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