barc201202106k.htm
 
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549
 
 
FORM 6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
February 10, 2012
 
Barclays PLC and

Barclays Bank PLC
(Names of Registrants)
 
 
 1 Churchill Place

London E14 5HP
England
(Address of Principal Executive Offices)

 
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.

 
Form 20-F x           Form 40-F

 
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 
Yes           No x

 
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):

 
This Report is a joint Report on Form 6-K filed by Barclays PLC and Barclays
Bank PLC. All of the issued ordinary share capital of Barclays Bank PLC is
owned by Barclays PLC.

 
This Report comprises:

 
Information given to The London Stock Exchange and furnished pursuant to
General Instruction B to the General Instructions to Form 6-K.


 
 
EXHIBIT INDEX
 
 
Final Results dated February 10, 2012







 




SIGNATURES

 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
 
 
BARCLAYS PLC
(Registrant)

 
Date: February 10, 2012
 
 
By: /s/ Patrick Gonsalves
----------------------
Patrick Gonsalves
Deputy Secretary
 
 
 
 
BARCLAYS BANK PLC
(Registrant)



Date: February 10, 2012
 
 
By: /s/ Patrick Gonsalves
----------------------
Patrick Gonsalves
Joint Secretary
 
 
 
 

 
 
 


 
 
 
 
 
 
 
 
 
Barclays PLC
Results Announcement
 
31 December 2011
 
 
 
 
 
 
 

 

 
 
 
Table of Contents
 
 
 
Preliminary Results Announcement
Page
Citizenship - Performance Highlights
1
Financials - Performance Highlights
2
Chief Executive's Review
4
Group Finance Director's Review
6
Condensed Consolidated Financial Statements
8
Results by Business
  
- Retail and Business Banking
  
-    UK
12
-    Europe
14
-    Africa
16
-    Barclaycard
18
- Corporate and Investment Banking
  
-    Barclays Capital
20
-    Barclays Corporate
22
- Wealth and Investment Management
  
-    Barclays Wealth
24
-    Investment Management
26
- Head Office Functions and Other Operations
27
Results by Quarter
28
Performance Management
  
- Remuneration
31
- Returns and Equity by Business
34
- Margins and Balances
35
Risk Management
37
- Funding Risk - Capital
38
- Funding Risk - Liquidity
41
- Credit Risk
46
- Market Risk
66
Financial Statement Notes
67
Shareholder Information
81
Index
82
 
BARCLAYS PLC, 1 CHURCHILL PLACE, LONDON, E14 5HP, UNITED KINGDOM. TELEPHONE: +44 (0) 20 7116 1000. COMPANY NO. 48839
 
 
 
 
The term Barclays or Group refers to Barclays PLC together with its subsidiaries. Unless otherwise stated, the income statement analyses compare the 12 months to 31 December 2011 to the corresponding 12 months of 2010 and balance sheet comparatives relate to 31 December 2010. The abbreviations '£m' and '£bn' represent millions and thousands of millions of pounds sterling respectively; the abbreviations '$m' and '$bn' represent millions and thousands of millions of US dollars respectively.
 
 
Adjusted profit before tax and adjusted performance measures have been presented to provide a more consistent basis for comparing business performance between periods. These measures exclude: the impact of own credit; gains on debt buy-backs; loss on disposal of a portion of the Group's strategic investment in BlackRock, Inc.; the impairment of the investment in BlackRock, Inc.; the provision for Payment Protection Insurance (PPI) redress; goodwill impairments; and gains and losses on acquisitions and disposals of subsidiaries, associates and joint ventures.
 
 
Relevant terms that are used in this document but are not defined under applicable regulatory guidance or International Financial Reporting Standards (IFRS) are explained in the Results glossary that can be accessed at www.barclays.com/investorrelations.
 
 
In accordance with Barclays policy to provide meaningful disclosures that help investors and other stakeholders understand the financial position, performance and changes in the financial position of the Group, and having regard to the BBA Disclosure Code, the information provided in this report goes beyond minimum requirements. Barclays continues to develop its financial reporting considering best practice and welcomes feedback from investors, regulators and other stakeholders on the disclosures that they would find most useful.
 
 
The Listing Rules of the UK Listing Authority (LR 9.7A.1) require that preliminary statements of annual results must be agreed with the listed company's auditors prior to publication, even though an audit opinion has not yet been issued. In addition, the Listing Rules require such statements to give details of the nature of any likely modification that may be contained in the auditors' report to be included with the annual report and accounts. Barclays PLC confirms that it has agreed this preliminary statement of annual results with PricewaterhouseCoopers LLP and that the Board of Directors has not been made aware of any likely modification to the auditors' report required to be included with the annual report and accounts for the year ended 31 December 2011.
 
 
The information in this announcement, which was approved by the Board of Directors on 9 February 2012, does not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2010, which included certain information required for the Joint Annual Report on Form 20-F of Barclays PLC and Barclays Bank PLC to the US Securities and Exchange Commission (SEC) and which contained an unqualified audit report under Section 495 of the Companies Act 2006 and which did not make any statements under Section 498 of the Companies Act 2006, have been delivered to the Registrar of Companies in accordance with Section 441 of the Companies Act 2006. The 2011 Annual Review and Summary Financial Statements will be posted or made available to shareholders together with the Group's full Annual Report and Accounts for 2011 for those shareholders who request it.
 
 
These results will be furnished as a Form 6-K to the SEC as soon as practicable following their publication. Statutory accounts for the year ended 31 December 2011, which also include certain information required for the Joint Annual Report on Form 20-F of Barclays PLC and Barclays Bank PLC to the SEC, can be obtained from Corporate Communications, Barclays Bank PLC, 745 Seventh Avenue, New York, NY 10019, United States of America or from the Director, Investor Relations at Barclays registered office address shown on the previous page, once they have been published in March. Once filed with the SEC, copies of the Form 20-F will also be available from the Barclays Investor Relations website www.barclays.com/investorrelations and from the SEC's website (www.sec.gov). 
 
 
Forward-looking statements
 
This document contains certain forward-looking statements within the meaning of Section 21E of the US Securities Exchange Act of 1934, as amended, and Section 27A of the US Securities Act of 1933, as amended, with respect to certain of the Group's plans and its current goals and expectations relating to its future financial condition and performance. Barclays cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "may", "will", "seek", "continue", "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe" or other words of similar meaning. Examples of forward-looking statements include, among others, statements regarding the Group's future financial position, income growth, assets, impairment charges, business strategy, capital ratios, leverage, payment of dividends, projected levels of growth in the banking and financial markets, projected costs, estimates of capital expenditures and plans and objectives for future operations and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, UK domestic, Eurozone and global economic and business conditions, the effects of continued volatility in credit markets, market related risks such as changes in interest rates and exchange rates, effects of changes in valuation of credit market exposures, changes in valuation of issued notes, the policies and actions of governmental and regulatory authorities (including requirements regarding capital and Group structures and the potential for one or more countries exiting the Euro), changes in legislation, the further development of standards and interpretations under IFRS applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of current and future litigation, the success of future acquisitions and other strategic transactions and the impact of competition - a number of such factors being beyond the Group's control. As a result, the Group's actual future results may differ materially from the plans, goals, and expectations set forth in the Group's forward-looking statements.
 
Any forward-looking statements made herein are as at the date they are made. Except as required by the UK Financial Services Authority (FSA), the London Stock Exchange plc (LSE) or applicable law, Barclays expressly disclaims any obligation or undertaking to release publicly updates or revisions to forward-looking statements to reflect any change in Barclays expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any additional disclosures that Barclays has made or may make in documents it has filed or may file with the LSE and/or the SEC.

 
 
Citizenship - Performance Highlights
 
We have a clear sense of our business purpose - to help individuals, businesses and economies progress and grow. We use the term "Citizenship", one of our four execution priorities, to capture that purpose and we monitor how well we are executing against this priority in three particular areas:
 
- Contributing to growth in the real economy - We support economic growth and job creation by operating a strong, profitable business that is focused on helping individuals, businesses, institutions and governments
        pursue their goals.
 
 
- The way we do business - Our clients' interests are at the heart of what we do at all times. We reinforce our business integrity every day by striving to improve the service that we provide; making responsible
       decisions in how we manage the business; and actively managing the social and environmental impacts of what we do.
 
 
- Supporting our communities - We play a broader role in the communities in which we live and work beyond what we deliver through our core business activities; we do this through community investment programmes and
       the direct efforts of our employees.
 
 
Contributing to growth in the real economy
 
 
- Delivered £43.6bn of gross new lending to UK businesses, including £14.7bn to SMEs, exceeding Project Merlin targets
 
 
- Increased lending to private non-financial companies in the UK by over 3%, compared to an industry-wide reduction in net lending of 5%
 
 
- Supported the formation of 108,000 new businesses and the return to health of 1,900 existing businesses
 
 
- Provided business advice and support to over 14,000 attendees through over 800 seminars in UK communities
 
 
- Agreed to invest up to £500m in the £2.5bn Business Growth Fund established by five UK banks to help small and medium sized businesses obtain the capital to grow
 
 
- Launched a £500m debt fund for financing UK infrastructure and £100m renewable energy fund for UK farmers 
 
 
- Provided over £230bn in credit facilities to businesses globally
 
 
- Raised over $1trillion of funding for institutions including $388bn for governments and public sector entities
 
 
- Supported almost 1 million home owners, including over 10,000 first time buyers, and issued over 5 million new credit payment cards and 2.7 million contactless debit cards
 
 
- Employed 141,100 people globally
 
 
The way we do business
 
 
- Reduced banking complaints (which excludes PPI) by 30% in the UK compared with 2010
 
 
- Improved customer satisfaction ranking in UK RBB to 4th, up from 11th in 2007
 
 
- Paid dividends to shareholders of £660m, up 24% compared with 2010; paid total tax globally (directly and indirectly) of £6.4bn, including £2.9bn in the UK  
 
 
Supporting our communities
 
 
- Invested £63m in global community activities, an increase of 15% compared with 2010
 
 
- Supported over 2 million people, primarily building their enterprise, employment and money management skills, including helping over 3,500 of them to find employment through a range of programmes
 
 
- Supported 73,000 colleagues in providing their time, skills and money to help disadvantaged people in our communities during 2011, up 20% on 2010
 
 
- Committed to offering 1,000 apprenticeships across our UK branches and contact centres
 
 
- Committed £50m to Big Society Capital, the UK Government's vehicle to help grow the social finance sector
 
 
- Committed to providing free banking services, business skills training, work experience and start-up grants to Free Schools and Academies in the UK
 

 
 
 

 
Financials - Performance Highlights
 
 "I am proud of what our people at Barclays achieved in 2011. Against the backdrop of challenging economic and market conditions, we maintained our focus on clients and customers while supporting the real economy, as well as the needs of our shareholders, colleagues and the communities in which we operate. As a result, we have delivered a strong set of results, both financially and in terms of our execution priorities. 
 
 
Barclays universal banking model continues to be a competitive strength. Revenues remained resilient overall, reflecting the strength of our customer franchise and the balanced mix of our business. We have intensified our cost discipline while selectively investing in growth areas that support our execution priorities. We are not satisfied with the return on equity we delivered in 2011 and are committed to delivering steady improvement moving forwards. Our rock solid capital, liquidity and funding positions provide us with the flexibility and confidence to meet the economic and regulatory challenges ahead.
 
These results are further evidence of Barclays ability to execute on our priorities as we deliver sustainable long term value for all of our stakeholders."
 
Bob Diamond, Chief Executive
 
 
 
Group Results  
31.12.11
31.12.10
  
 
£m
£m
% Change
Total income excluding own credit and debt buy-backs
28,454 
31,049 
(8)
Own credit gain
2,708 
391 
  
Gains on debt buy-backs
1,130 
- 
  
Total income net of insurance claims
32,292 
31,440 
3 
Credit impairment charges and other provisions
(3,802)
(5,672)
(33)
Impairment of investment in BlackRock, Inc.
(1,800)
- 
  
Net operating income  
26,690 
25,768 
4 
Operating expenses excluding provision for PPI redress, goodwill impairment and UK bank levy
(18,855)
(19,728)
(4)
Provision for PPI redress 
(1,000)
- 
  
Goodwill impairment1
(597)
(243)
  
UK bank levy
(325)
- 
  
Total operating expenses
(20,777)
(19,971)
4 
Share of post tax results of associates & JVs
60 
58 
  
(Losses)/gains on acquisitions and disposals
(94)
210 
  
Profit before tax  
5,879 
6,065 
(3)
Adjusted profit before tax2 
5,590 
5,707 
(2)
Profit after tax
3,951 
4,549 
(13)
Basic earnings per share  
25.1p
30.4p
(17)
Dividend per share  
6.0p
5.5p
9 
   
      
Capital and Balance Sheet  
      
Core Tier 1 ratio  
11.0%
10.8%
  
Risk weighted assets  
£391bn
£398bn
(2)
Adjusted gross leverage
20x
20x
- 
Group liquidity pool  
£152bn
£154bn
(1)
Net tangible asset value per share  
391p
346p
13 
Group loan: deposit ratio  
118%
124%
  
       
Performance Measures2 
      
Return on average shareholders' equity
5.8%
7.2%
  
Return on average tangible shareholders' equity
6.9%
8.7%
  
Cost: income ratio
64%
64%
  
Adjusted return on average shareholders' equity
6.6%
6.8%
  
Adjusted return on average tangible shareholders' equity
7.9%
8.2%
  
Adjusted cost: income ratio
67%
64%
  
 
  1
 Goodwill impairment has been excluded from adjusted profit before tax following the impairment of Spain (£550m) and FirstPlus (£47m) goodwill in 2011. 2010 adjusted profit before tax has been revised to exclude Barclays Bank Russia goodwill impairment of £243m.
  2
 Adjusted performance measures and profit before tax exclude the impact of £2,708m (2010: £391m) own credit gains, £1,130m (2010: £nil) gains on debt buy-backs (retirement of non-qualifying Tier 1 Capital under Basel 3), £58m (2010: £nil) loss on disposal of a portion of the Group's strategic investment in BlackRock, Inc. recycled through investment income, £1,800m (2010: £nil) impairment of investment in BlackRock, Inc., £1,000m (2010: £nil) provision for PPI redress, £597m (2010: £243m) goodwill impairment and £94m loss (2010: £210m gain) on acquisitions and disposals. The UK bank levy has not been included as an adjusting item.


 
Financials - Performance Highlights
 
 
- Total income increased 3% to £32,292m, adjusted income excluding own credit and debt buy-backs down 8%
 
 
- Profit before tax of £5,879m down 3%, adjusted profit before tax of £5,590m down 2%
 
 
- Credit impairment charge of £3,802m improved 33%, with an annualised loan loss rate of 77bps (2010: 118bps)
 
 
- Operating expenses, excluding PPI provision, goodwill impairment and UK bank levy, of £18,855m down 4%. Cost saving targets have been exceeded
 
 
- 2011 total incentive awards down 26% across the Group compared with a 3% reduction in profit before tax. Barclays Capital total incentive awards down 35% compared with 2010, with Barclays Capital profit before tax reducing
       32%
 
 
- Core Tier 1 ratio strengthened to 11.0% (2010: 10.8%), despite the impact of the third Capital Requirements Directive (CRD3), with risk weighted assets reduced to £391bn (2010: £398bn)
 
 
- Liquidity pool remained strong at £152bn (2010: £154bn)
 
 
- Net asset value per share increased 9% to 456p and net tangible asset value per share increased 13% to 391p
 
 
- Universal banking model helped to deliver broadly balanced adjusted profit before tax across the retail and investment banking businesses
 
 
- Sovereign exposure to Spain, Italy, Portugal, Ireland and Greece reduced to £7.1bn (2010: £8.2bn)
 
 
- Final dividend of 3.0p per share for the fourth quarter, making 6.0p for the year, an increase of 9%
 
 
 
Adjusted
  
Statutory
Profit Before Tax by Business
31.12.11
31.12.10
    
31.12.11
31.12.10
  
 
£m
£m
% Change
  
£m
£m
% Change
UK
1,420 
889 
60 
  
1,020 
989 
3 
Europe
(234)
(168)
39 
  
(661)
(139)
  
Africa
908 
723 
26 
  
910 
804 
13 
Barclaycard
1,208 
791 
53 
  
561 
791 
(29)
Retail and Business Banking
3,302 
2,235 
48 
  
1,830 
2,445 
(25)
Barclays Capital1 
2,965 
4,389 
(32)
  
2,965 
4,389 
(32)
Barclays Corporate2 
126 
(388)
nm
  
(70)
(631)
(89)
Corporate and Investment Banking
3,091 
4,001 
(23)
  
2,895 
3,758 
(23)
Barclays Wealth
207 
163 
27 
  
207 
163 
27 
Investment Management
96 
67 
43 
  
(1,762)
67 
  
Head Office Functions and Other Operations1 
(1,106)
(759)
46 
  
2,709 
(368)
  
Group profit before tax2 
5,590 
5,707 
(2)
  
5,879 
6,065 
(3)
 
 
1    Statutory profit before tax has been revised to reflect own credit gain of £2,708m (2010: £391m) within Head Office Functions and Other Operations, previously reported under Barclays Capital. Refer to page 20 for further information.
2      2010 adjusted profit before tax has been revised to exclude Russian goodwill impairment of £243m in Barclays Corporate.
 

 
 

 
Chief Executive's Review
 
2011 Performance Summary
 
 
Barclays has delivered solid results for the full year 2011 amidst a challenging economic, market and regulatory environment and has done so by continuing to support growth in the real economy. Our universal banking model enabled us to generate adjusted profit before tax of £5.6bn, driven by increased profits in the majority of our businesses. These results were underpinned by our relentless focus on clients and customers, which enabled us to improve our competitive position across all of our focus businesses.
 
 
Given the many uncertainties surrounding the current environment, we remain focused on our four execution priorities: capital, funding and liquidity; returns; income growth; and citizenship.
 
 
Disciplined cost management supported our efforts, with Group adjusted operating expenses reduced by over £500m in 2011. The success we've achieved to date has led us to increase our cost reduction target to £2bn by 2013 for non-performance costs, excluding the impact of the UK bank levy.
 
 
In addition to generating operational efficiencies, we have reduced total incentive awards across Barclays by 26%, which reflects the financial results for the Group. This appropriately balances our responsibility to our shareholders and the broader economic environment with our need to remain competitive by retaining the best talent to serve our clients.
 
 
These financial results for 2011 have been complemented by our continuing efforts to re-enforce our trusted position in the communities where we live and work, and by our contributions to the real economy. One very tangible way in which we have done that in 2011 is through helping to start up over 100,000 businesses here in the UK, and through exceeding our lending commitments under Project Merlin. Barclays has supported the UK economy in this way for over 300 years. We will continue to do everything we can to support our customers and clients and hope that our lending will grow as a result. We want to remain leaders in this space.
 
 
1.      Capital, Funding and Liquidity
 
Our rock solid capital, funding and liquidity remain a fundamental cornerstone of our strategy, a source of stability for our customers and clients and an advantage relative to our competitors.
 
 
- Our Core Tier 1 ratio remains robust at 11.0% and we have managed risk weighted assets tightly with significant reductions in credit market exposures and improved capital efficiency. Together with the lower levels of market
        activity, this has more than offset the impact of CRD3
 
 
- Despite the funding challenges faced by the sector, we maintained a strong liquidity position throughout 2011 and continue to access a variety of global funding sources, demonstrated by the diverse nature of our debt issuance
       by product, maturity and currency
 
 
- The liquidity pool of £152bn is composed of high quality assets, with over 90% in central bank deposits and highly liquid government bonds
 
 
2.      Returns
 
The Group continues to evolve and the strength of our universal banking model helped to achieve balanced profits across our retail and business banking and corporate and investment banking businesses. Our focus on delivering returns is a key driver in the way we manage the business:
 
 
- Our world class UK RBB and Barclaycard businesses have increased adjusted returns on equity in 2011 to 14.9% and 17.4% respectively
 
 
- In Barclays Capital, returns fell to 10.4%, reflecting the difficult market environment and the impact of CRD3. We are not complacent and will continue to evolve the business within the economic and regulatory environment. We
       are confident in our ability to generate target returns based on our client franchise and scalable platforms
 
 
- Africa region generated approximately £1.3bn of profit, equivalent to more than 20% of Group profits in 2011, with improved ROE of 10.0% for Africa RBB
 
 
- The investment programme in Barclays Wealth is on track and return on equity improved to 10.9% as we continue to grow this high return business
 
 
 
 
 
 
 
 
 
Chief Executive's Review
 
 
- Barclays Corporate returned to profitability and positive returns in 2011, excluding adjusting items, and we implemented significant restructuring in Spain, which depressed returns in 2011 as we continue to work to improve this
       business
 
 
- The adjusted return on average shareholders' equity of 6.6% (2010: 6.8%) was below our stated goal of 13% for 2013. Since setting the target the worse than predicted macro economic conditions, in addition to new regulatory
        constraints mean that we may not be able to deliver 13% returns by 2013 However, we will continue to focus on improving business performance, capital discipline, controlling funding costs, reducing expenses and growing
        income to deliver a steady improvement in returns moving forward and achieve 13% over time
 
 
- One important way we will improve returns is through cost efficiency. At the beginning of 2011, we announced plans to reduce the run rate of the non-performance cost base by £1bn annually by 2013. In 2011, we reduced
       Barclays operating expenses by over £500m through driving more efficiencies across the business. We continue to challenge the cost base and now anticipate exceeding our commitment, with £2bn of cost savings in 2013
       now targeted
 
 
3.      Income Growth
 
Another component of our plan to improve returns is income growth.
 
 
- While the macro environment has depressed income growth, we generated momentum by improving the competitive positions of all our major businesses. We grew net operating income in all of our businesses except Barclays
       Capital, where the macro conditions were the most acute
 
 
 
-    UK RBB; 11% increase, driven by mortgages and personal savings
 
 
 
-    Barclaycard; 21% increase, largely reflecting modest growth in customer balances
 
 
 
-    Africa RBB; 5% increase, or 11% in underlying currencies, driven by a strong performance in South Africa
 
 
 
-    Europe RBB; 14% increase, reflecting improved margins and reduced impairment
 
 
 
-    Barclays Corporate; 38% increase, principally due to lower impairment
 
 
 
-    Barclays Wealth; 13% increase, as we continued to deliver our investment programme
 
 
- As we deliver income growth, we remain focused on improving the quality of assets to ensure that we do not grow at the expense of future impairment
 
 
4.      Citizenship
 
Citizenship is our fourth execution priority. We have made good progress in 2011, but recognise that our agenda will take time and ongoing commitment to deliver.
 
We have included new disclosure on the Performance Highlights for 2011, grouped by our areas of focus: contributing to growth in the real economy; the way we do business; and supporting our communities.
 
We believe this focus on citizenship is critical to delivering sustainable returns for all our stakeholders.
 
Conclusion
 
We expect the economic and regulatory environment to continue to be challenging in 2012 but, as we have shown in the past year, Barclays is improving its competitive position across all of our businesses and working hard to support economic growth more broadly. Our focus on putting clients and customers at the centre of everything we do will enable us to generate the financial returns that we're targeting over time.
 
 
Bob Diamond, Chief Executive
 
 

 
 

 
Group Finance Director's Review
 
 
For 2011 we reported a slight decrease in profits, as reduction in income at Corporate and Investment Banking was partly offset by income improvements in all other businesses, a significant improvement in credit impairment and cost reductions. Prudent capital management led to a further increase in our Core Tier 1 ratio. Our funding and liquidity remains strong.
 
Income Statement
 
 
- Profit before tax of £5,879m decreased 3% on 2010. Group adjusted profit before tax of £5,590m decreased 2% on 2010. Adjusted results provide a more consistent basis for comparing business performance between periods
 
 
- Adjusted income declined 8% to £28,512m, principally reflecting a decrease in income at Barclays Capital. Income increased in most other businesses despite continued low interest rates and difficult macroeconomic conditions
 
 
- The RBB, Corporate and Wealth net interest margin remained stable at 204bps (2010: 203bps). Net interest income from RBB, Corporate, Wealth and Barclays Capital increased 5% to £13.2bn, of which the contribution from
        hedging  (including £463m of increased gains from the disposal of hedging instruments) increased by 3%
 
 
- Credit impairment charges decreased 33% to £3,802m, reflecting significant improvements across all businesses. Impairment charges as a proportion of Group loans and advances as at 31 December 2011 improved to 77bps,
       compared to 118bps for 2010. In addition, impairment of £1,800m was taken against our investment in BlackRock, Inc.
 
 
- Adjusted operating expenses, which exclude the £1bn provision for PPI redress and £597m (2010: £243m) goodwill impairment, were down £548m to £19,180m. Excluding the UK bank levy of £325m introduced in 2011, operating
       expenses were down 4% to £18,855m, which included £408m (2010: £330m) of restructuring charges 
 
 
- Despite cost savings, the adjusted cost: income ratio increased to 67% (2010: 64%), reflecting lower income, increased restructuring charges and the UK bank levy. At Barclays Capital the cost: net operating income ratio was 71%
       (2010: 65%) and the compensation: income ratio was 47% (2010: 43%), reflecting lower income in difficult conditions
 
 
- The effective tax rate increased to 32.8% (2010: 25.0%), principally due to non-deductible charges arising on the impairment of BlackRock, Inc. and goodwill and the UK bank levy
 
 
- Adjusted income in the fourth quarter was 13% below the run rate for the full year, principally reflecting the difficult market conditions affecting Barclays Capital and gains on the disposal of hedging instruments mainly taken in
       the  third quarter. Credit impairment charges for the quarter were in line with the full year run rate and adjusted operating costs continued to reduce below the 2011 run rate, even allowing for the full year charge for the UK bank
       levy taken in  Q4
 
 
Balance Sheet
 
 
- Net asset value per share increased 9% to 456p. Net tangible asset value per share increased 13% to 391p
 
 
- Total shareholders' equity (including non-controlling interests) at 31 December 2011 was £65.2bn (2010: £62.3bn). Excluding non-controlling interests, shareholders' equity increased £4.7bn to £55.6bn, driven by profit after tax of
       £3.0bn and positive available for sale and cash flow hedge reserve movements offset by negative currency translation and dividends paid
 
 
- Total assets increased to £1,564bn (2010: £1,490bn), principally due to an increase in the fair value of gross interest rate derivative assets as major forward curves decreased, partially offset by a decrease in reverse repurchase
       agreements
 
 
- The Group's loan to deposit ratio continued to improve to 118% (2010: 124%)
 
 
- Adjusted gross leverage remained stable at 20x and moved within a month end range of 20x to 23x. Excluding the liquidity pool, adjusted gross leverage remained flat at 17x
 
 
Capital Management
 
- At 31 December 2011, the Group's Core Tier 1 ratio was 11.0% (2010: 10.8%) reflecting the contribution from retained earnings and reductions in risk weighted assets, which more than offset the impact of CRD3
 


 
Group Finance Director's Review
 
 
- The Group continued to generate Core Tier 1 Capital from retained profits (excluding own credit, impairment of investment in BlackRock, Inc. and goodwill impairment, which are added back for regulatory capital purposes). This
        contribution of £2.6bn was largely offset by other movements in Core Tier 1 Capital, notably pension contributions and foreign currency movements, resulting in an increase in Core Tier 1 Capital of £0.2bn to £43.1bn
 
 
- Risk weighted assets decreased slightly to £391bn (2010: £398bn) largely reflecting foreign exchange movements and decreases in Barclays Capital from lower levels of activity, risk reduction and sales of credit market exposures,
       which more than outweighed the £30bn increase resulting from the implementation of CRD3 in December
 
 
- We expect that the strength of our Core Tier 1 ratio, our ability to generate capital organically and our optimal use of risk weighted assets will enable us to meet our targeted capital ratios after absorbing the impact of Basel 3
 
Funding and Liquidity
 
The Group's overall funding strategy is to develop a diversified funding base and maintain access to a variety of alternate funding sources, so minimising the cost of funding and providing protection against unexpected fluctuations. Within this, the Group aims to align the sources and uses of funding.
 
 
- Customer loans and advances are largely funded by customer deposits, with any excess being funded by long-term wholesale secured debt and equity. The total loan to deposit ratio as at 31 December 2011 was 118% (2010: 124%)
        and the loan to deposit and long-term funding ratio was 75% (2010: 77%)
 
 
- Wholesale funding is well managed:
 
 
 
-    Trading portfolio assets are largely funded by repurchase agreements. The majority of reverse repurchase agreements are matched by repurchase financing, with the remainder used to settle trading portfolio liabilities
 
 
 
-    Derivative assets and liabilities are largely matched
 
 
 
-    The liquidity pool is largely funded by wholesale debt maturing in less than one year, with a substantial portion maturing in more than one year
 
 
- As at 31 December 2011, the Group had £265bn of wholesale debt diversified across currencies, of which just £39bn was secured:
 
 
 
-    Term funding maturing in 2012 totals £27bn. Term funding raised in 2011 amounted to £30bn (2010: £35bn) compared to term funding maturities of £25bn. During January 2012, £5bn of term funding was raised
 
 
 
-    Approximately 10% of customer loans and advances at 31 December 2011 were secured against external funding, leaving significant headroom for further secured issuance
 
 
- At 31 December 2011 the liquidity pool was £152bn (2010: £154bn) and moved within a month-end range of £140bn to £167bn, with short-term funding being rolled over despite the stress in the wholesale funding markets. The
        liquidity pool comprises high quality, liquid unencumbered assets, diversified across currencies, broadly in line with wholesale debt requirements, with 93% (2010: 88%) of the pool comprising cash and deposits with central banks
        and government bonds
 
 
- The Group monitors compliance against anticipated Basel 3 metrics, including the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR). As at 31 December 2011, the Group met 82% of the LCR (2010: 80%) and
       97% of the NSFR (2010: 94%) requirements and is on track to meet the 100% compliance under Basel 3 required by 2015 and 2018 respectively
 
Dividends
 
 
- We will pay a final dividend for 2011 of 3p per share on 16 March 2012 giving a total declared dividend for 2011 of 6p per share
 
 
Outlook
 
 
- The performance in January of RBB and Corporate Banking was consistent with the good performance achieved in 2011. Though it is too soon to suggest a trend, improvement in market conditions resulted in an encouraging start
        to the year for Barclays Capital
 
 
Chris Lucas, Finance Director
 
 

 
 

 
Condensed Consolidated Financial Statements
 
Condensed Consolidated Income Statement
   
Year Ended
Year Ended
Continuing Operations
  
31.12.11
31.12.10
 
Notes1 
£m
£m
Net interest income
1
12,201 
12,523 
Net fee and commission income
  
8,622 
8,871 
Net trading income
  
7,660 
8,078 
Net investment income
  
2,305 
1,477 
Net premiums from insurance contracts
  
1,076 
1,137 
Other income
  
1,169 
118 
Total income  
  
33,033 
32,204 
       
Net claims and benefits incurred on insurance contracts
  
(741)
(764)
Total income net of insurance claims
  2
32,292 
31,440 
Credit impairment charges and other provisions
  
(3,802)
(5,672)
Impairment of investment in BlackRock, Inc.
  
(1,800)
- 
Net operating income
  
26,690 
25,768 
       
Staff costs
  
(11,407)
(11,916)
Administration and general expenses
3
(6,356)
(6,585)
Depreciation of property, plant and equipment
  
(673)
(790)
Amortisation of intangible assets
  
(419)
(437)
Operating expenses excluding provision for PPI redress, goodwill impairment and UK bank levy
  
(18,855)
(19,728)
Provision for PPI redress2 
14
(1,000)
- 
Goodwill impairment
  
(597)
(243)
UK bank levy
4  
(325)
-
Operating expenses
  
(20,777)
(19,971)
       
Share of post-tax results of associates and joint ventures
  
60 
58 
(Loss)/profit on disposal of subsidiaries, associates and joint ventures
5
(94)
81 
Gain on acquisitions
6
- 
129 
Profit before tax
  
5,879 
6,065 
Tax
7
(1,928)
(1,516)
Profit after tax
  
3,951 
4,549 
       
Attributable to:
      
Equity holders of the parent
  
3,007 
3,564 
Non-controlling interests
8
944 
985 
Profit after tax
  
3,951 
4,549 
 
 
 
1     For notes to the Financial Statements see pages 67 to 80.
2     Provision for the settlement of PPI claims following the conclusion of the Judicial Review proceedings. In addition the Group has recognised costs of £13m (2010: £162m) for the settlement of PPI claims unrelated to the Judicial Review.


 
Condensed Consolidated Financial Statements
 
Condensed Consolidated Statement of Comprehensive Income
       
   
Year Ended
Year Ended
Continuing Operations
  
31.12.11
31.12.10
 
Notes1 
£m
£m
Profit after tax
  
3,951 
4,549 
       
Other Comprehensive Income
      
Currency translation differences
17
(1,607)
1,184 
Available for sale financial assets
17
1,374 
(1,236)
Cash flow hedges
17
1,263 
(44)
Other
  
(74)
59 
Other comprehensive income for the year
  
956 
(37)
       
Total comprehensive income for the year
  
4,907 
4,512 
       
Attributable to:
      
Equity holders of the parent
  
4,576 
2,975 
Non-controlling interests
  
331 
1,537 
Total comprehensive income for the year
  
4,907 
4,512 
 
 
 
 
 
 
 
 
1     For notes, see pages 67 to 80.


 
Condensed Consolidated Financial Statements
 
Condensed Consolidated Balance Sheet
   
As at
As at
Assets
  
31.12.11
31.12.10
 
Notes1 
£m
£m
Cash and balances at central banks
  
106,894 
97,630 
Items in the course of collection from other banks
  
1,812 
1,384 
Trading portfolio assets
  
152,183 
168,867 
Financial assets designated at fair value
  
36,949 
41,485 
Derivative financial instruments
11
538,964 
420,319 
Loans and advances to banks
  
47,446 
37,799 
Loans and advances to customers
  
431,934 
427,942 
Reverse repurchase agreements and other similar secured lending
  
153,665 
205,772 
Available for sale financial investments
  
68,491 
65,110 
Current and deferred tax assets
7
3,384 
2,713 
Prepayments, accrued income and other assets
  
4,563 
5,143 
Investments in associates and joint ventures
  
427 
518 
Goodwill and intangible assets
13
7,846 
8,697 
Property, plant and equipment
  
7,166 
6,140 
Retirement benefit assets
15
1,803 
126 
Total assets
  
1,563,527 
1,489,645 
       
Liabilities
      
Deposits from banks
  
91,116 
77,975 
Items in the course of collection due to other banks
  
969 
1,321 
Customer accounts
  
366,032 
345,788 
Repurchase agreements and other similar secured borrowing
  
207,292 
225,534 
Trading portfolio liabilities
  
45,887 
72,693 
Financial liabilities designated at fair value
  
87,997 
97,729 
Derivative financial instruments  
11
527,910 
405,516 
Debt securities in issue
  
129,736 
156,623 
Accruals, deferred income and other liabilities
  
12,580 
13,233 
Current and deferred tax liabilities
7
2,092 
1,160 
Subordinated liabilities
  
24,870 
28,499 
Provisions  
14
1,529 
947 
Retirement benefit liabilities
15
321 
365 
Total liabilities
  
1,498,331 
1,427,383 
       
Shareholders' Equity
      
Shareholders' equity excluding non-controlling interests
  
55,589 
50,858 
Non-controlling interests
8
9,607 
11,404 
Total shareholders' equity
  
65,196 
62,262 
       
Total liabilities and shareholders' equity
  
1,563,527 
1,489,645 
 
 
 
 
 
1     For notes, see pages 67 to 80.
      


 
Condensed Consolidated Financial Statements
 
Condensed Consolidated Statement of Changes in Equity
Year Ended 31.12.11
Called up Share Capital and
Share Premium1 
Other Reserves1 
Retained Earnings
Total
Non-controlling Interests2
Total
Equity
 
£m
£m
£m
£m
£m
£m
Balance at 1 January 2011
12,339 
1,754 
36,765 
50,858 
11,404 
62,262 
Profit after tax
- 
- 
3,007 
3,007 
944 
3,951 
Currency translation movements
- 
(1,009)
- 
(1,009)
(598)
(1,607)
Available for sale investments
- 
1,380 
- 
1,380 
(6)
1,374 
Cash flow hedges
- 
1,290 
- 
1,290 
(27)
1,263 
Other
- 
- 
(92)
(92)
18 
(74)
Total comprehensive income for the year
- 
1,661 
2,915 
4,576 
331 
4,907 
Issue of shares under employee share schemes
41 
- 
838 
879 
- 
879 
Increase in treasury shares
- 
(165)
- 
(165)
- 
(165)
Vesting of treasury shares
- 
499 
(499)
- 
- 
- 
Dividends paid
- 
- 
(660)
(660)
(727)
(1,387)
Redemption of Reserve Capital Instruments
- 
- 
- 
- 
(1,415)
(1,415)
Other reserve movements
- 
88 
13 
101 
14 
115 
Balance at 31 December 2011
12,380 
3,837 
39,372 
55,589 
9,607 
65,196 
             
Year Ended 31.12.10
            
Balance at 1 January 2010
10,804 
2,628 
33,845 
47,277 
11,201 
58,478 
Profit after tax
- 
- 
3,564 
3,564 
985 
4,549 
Currency translation movements
- 
742 
- 
742 
442 
1,184 
Available for sale investments
- 
(1,245)
- 
(1,245)
9 
(1,236)
Cash flow hedges
- 
(100)
- 
(100)
56 
(44)
Other
- 
- 
14 
14 
45 
59 
Total comprehensive income for the year
- 
(603)
3,578 
2,975 
1,537 
4,512 
Issue of new ordinary shares
1,500 
- 
- 
1,500 
- 
1,500 
Issue of shares under employee share schemes
35 
- 
830 
865 
- 
865 
Increase in treasury shares
- 
(989)
- 
(989)
- 
(989)
Vesting of treasury shares
- 
718 
(718)
- 
- 
- 
Dividends paid
- 
- 
(531)
(531)
(803)
(1,334)
Redemption of Reserve Capital Instruments
- 
- 
- 
- 
(487)
(487)
Other reserve movements
- 
- 
(239)
(239)
(44)
(283)
Balance at 31 December 2010
12,339 
1,754 
36,765 
50,858 
11,404 
62,262 
             
 
 
Condensed Consolidated Cash Flow Statement
  
 
Year Ended
Year Ended
Continuing Operations
31.12.11
31.12.10
 
£m
£m
Profit before tax
5,879 
6,065 
Adjustment for non-cash items
8,193 
971 
Changes in operating assets and liabilities
16,693 
13,108 
Corporate income tax paid
(1,686)
(1,458)
Net cash from operating activities
29,079 
18,686 
Net cash from investing activities
(1,912)
(5,627)
Net cash from financing activities
(5,961)
159 
Effect of exchange rates on cash and cash equivalents
(2,933)
3,842 
Net increase in cash and cash equivalents
18,273 
17,060 
Cash and cash equivalents at beginning of the period
131,400 
114,340 
Cash and cash equivalents at end of the period
149,673 
131,400 
 
 
 
 
 
 
 
1        Details of Share Capital and Other Reserves are shown on page 76.
2       Details on Non-controlling Interests are shown on page 70.
 
 

 
 

 
Results by Business
 
UK Retail and Business Banking
          
 
 
 
Year Ended
  
Year Ended
  
Income Statement Information
  
31.12.11
  
31.12.10
  
   
£m
  
£m
% Change
Net interest income
  
3,413 
  
3,165 
8 
Net fee and commission income
  
1,157 
  
1,255 
(8)
Net trading loss
  
- 
  
(2)
nm
Net investment income
  
17 
  
- 
nm
Net premiums from insurance contracts
  
92 
  
130 
(29)
Other (expense)/income
  
(1)
  
1 
nm
Total income
  
4,678 
  
4,549 
3 
Net claims and benefits incurred under insurance contracts
  
(22)
  
(31)
(29)
Total income net of insurance claims
  
4,656 
  
4,518 
3 
Credit impairment charges and other provisions
  
(536)
  
(819)
(35)
Net operating income
  
4,120 
  
3,699 
11 
           
Operating expenses (excluding provision for PPI redress)
  
(2,702)
  
(2,809)
(4)
Provision for PPI redress
  
(400)
  
- 
nm
Operating expenses
  
(3,102)
  
(2,809)
10 
           
Share of post-tax results of associates and joint ventures
  
2 
  
(1)
nm
Gains on acquisition
  
- 
  
100 
nm
Profit before tax
  
1,020 
  
989 
3 
           
Adjusted profit before tax1 
  
1,420 
  
889 
60 
           
Balance Sheet Information
          
Loans and advances to customers at amortised cost
  
£121.2bn
  
£115.6bn
5 
Customer deposits
  
£111.8bn
  
£108.4bn
3 
Total assets
  
£127.8bn
  
£121.6bn
5 
Risk weighted assets
  
£34.0bn
  
£35.3bn
(4)
           
 
 
 
Adjusted1 
  
Statutory
Performance Measures
31.12.11
31.12.10
  
31.12.11
31.12.10
Return on average equity2 
14.9%
9.9%
  
10.6%
11.4%
Return on average tangible equity2 
28.6%
18.7%
  
20.3%
21.4%
Return on average risk weighted assets
3.0%
1.9%
  
2.1%
2.2%
Loan loss rate (bps)
44 
70 
  
44 
70 
Cost: income ratio
58%
62%
  
67%
62%
           
Key Facts
  
31.12.11
  
31.12.10
  
90 day arrears rates - UK loans
  
1.7%
  
2.6%
  
Number of UK current accounts
  
11.9m
  
11.6m
  
Number of UK savings accounts
  
15.1m
  
14.4m
  
Number of UK mortgage accounts
  
930,000 
  
916,000 
  
Number of Barclays Business customers
  
785,000 
  
760,000 
  
LTV of mortgage portfolio
  
44%
  
43%
  
LTV of new mortgage lending
  
54%
  
52%
  
Number of branches
  
1,625 
  
1,658 
  
Number of ATMs
  
3,629 
  
3,345 
  
Number of employees (full time equivalents)
  
34,100 
  
34,700 
  
 
 
 
 
1    Adjusted profit before tax and adjusted performance measures exclude the impact of the provision for PPI redress of £400m (2010: £nil) and gains on acquisitions of £nil (2010: £100m).
2     Return on average equity and return on average tangible equity comparatives have been revised to use 10% of average risk weighted assets (previously 9%) in the calculation of average equity and average tangible equity. 


 
Results by Business
 
UK Retail and Business Banking
 
 
- Adjusted profit before tax improved 60% to £1,420m. Profit before tax improved 3% to £1,020m after £400m provision for PPI redress and £100m gain on acquisition of Standard Life Bank in 2010
 
 
- Income improved 3% to £4,656m
 
 
- Net interest income improved 8% to £3,413m with net interest margin up to 151bps (2010: 145bps) and risk adjusted net interest margin up to 127bps (2010: 108bps)
 
 
 
-    Customer asset margin declined to 122bps (2010: 126bps) with average customer assets increasing 4% to £118.5bn
 
 
 
-    Customer liability margin improved to 87bps (2010: 68bps) reflecting the increase in the cost of funds and therefore the value generated from customer liabilities. Average customer liabilities increased 3% to £107.8bn
 
 
- Net fee and commission income down 8% to £1,157m following closure of the branch-based element of the financial planning business
 
 
- Credit impairment charges decreased 35% to £536m with annualised loan loss rate of 44bps (2010: 70bps)
 
 
 
-    Personal unsecured lending impairment improved 44% to £311m with 90 day arrears rates on UK personal loans improving to 1.7% (2010: 2.6%)
 
 
- Operating expenses decreased 8% to £2,702m, excluding £400m provision for PPI redress in 2011 and £123m one-off pension credit in 2010. Including these items, operating expenses increased 10% to £3,102m
 
 
- Total loans and advances to customers increased 5% to £121.2bn driven by growth in mortgage balances
 
 
 
-    Average mortgage balances increased 6%, with strong positive net lending. Mortgage balances of £107.8bn at 31 December 2011 (2010: £101.2bn) with share by value of 9% (2010: 8%). Gross new mortgage lending of £17.2bn
      (2010: £16.9bn), with share by value of 12% (2010: 13%). Mortgage redemptions down to £10.7bn (2010: £11.0bn), with net new mortgage lending of £6.5bn (2010: £5.9bn)
 
 
 
-    Average Loan to Value (LTV) ratio on the mortgage portfolio (including buy to let) on a current valuation basis was 44% (2010: 43%). Average LTV of new mortgage lending was 54% (2010: 52%)
 
 
- Total customer deposits increased 3% to £111.8bn
 
 
- Risk weighted assets decreased 4% to £34.0bn reflecting a decrease in unsecured lending balances partially offset by  the growth in mortgage balances
 
 
- Adjusted return on average equity improved to 14.9% (2010: 9.9%) and adjusted return on average tangible equity improved to 28.6% (2010: 18.7%)
 
 

 
 

 
Results by Business
 
Europe Retail and Business Banking
          
 
 
 
Year Ended
  
Year Ended
  
Income Statement Information
  
31.12.11
  
31.12.10
  
   
£m
  
£m
% Change
Net interest income  
  
786 
  
679 
16 
Net fee and commission income
  
429 
  
421 
2 
Net trading income
  
9 
  
20 
(55)
Net investment income
  
91 
  
67 
36 
Net premiums from insurance contracts
  
463 
  
479 
(3)
Other (expense)/income
  
(49)
  
9 
nm
Total income
  
1,729 
  
1,675 
3 
Net claims and benefits incurred under insurance contracts
  
(503)
  
(511)
(2)
Total income net of insurance claims
  
1,226 
  
1,164 
5 
Credit impairment charges and other provisions
  
(261)
  
(314)
(17)
Net operating income
  
965 
  
850 
14 
           
Operating expenses (excluding goodwill impairment)
  
(1,211)
  
(1,033)
17 
Goodwill impairment
  
(427)
  
- 
nm
Operating expenses  
  
(1,638)
  
(1,033)
59 
           
Share of post-tax results of associates and joint ventures
  
12 
  
15 
(20)
Gains on acquisition
  
- 
  
29 
nm
Loss before tax
  
(661)
  
(139)
nm
           
Adjusted loss before tax1 
  
(234)
  
(168)
39 
           
Balance Sheet Information
          
Loans and advances to customers at amortised cost
  
£43.6bn
  
£43.4bn
- 
Customer deposits
  
£16.4bn
  
£18.9bn
(13)
Total assets
  
£51.3bn
  
£53.6bn
(4)
Risk weighted assets
  
£17.4bn
  
£17.3bn
1 
           
 
 
 
Adjusted1 
  
Statutory
Performance Measures
31.12.11
31.12.10
  
31.12.11
31.12.10
Return on average equity2, 3
(6.0%)
(1.0%)
  
(21.8%)
(0.2%)
Return on average tangible equity2, 3
(7.9%)
(1.3%)
  
(29.0%)
(0.2%)
Return on average risk weighted assets3 
(0.9%)
(0.1%)
  
(3.3%)
(0.0%)
Loan loss rate (bps)
54 
71 
  
54 
71 
Cost: income ratio
99%
89%
  
134%
89%
           
Key Facts
  
31.12.11
  
31.12.10
  
30 day arrears rates - cards
  
5.9%
  
6.8%
  
Number of customers
  
2.7m
  
2.7m
  
           
Number of branches  
  
978 
  
1,120 
  
Number of sales centres
  
250 
  
243 
  
Number of distribution points
  
1,228 
  
1,363 
  
           
Number of employees (full time equivalents)
  
8,500 
  
9,400 
  
           
 
 
 
 
1     Adjusted loss before tax and adjusted performance measures excludes goodwill impairment of £427m (2010: £nil) and gains on acquisition of £nil (2010:  £29m).
2     Return on average equity and return on average tangible equity comparatives have been revised to use 10% of average risk weighted assets (previously 9%) in the calculation of average equity and average tangible equity.
3      2010 return on average equity, return on average tangible equity and return on average risk weighted assets reflect a deferred tax benefit of £205m.  
 


 
Results by Business
 
Europe Retail and Business Banking
 
 
- Adjusted loss before tax of £234m (2010: £168m) reflecting repositioning of the business due to the deteriorating economic environment and restructuring charges of £189m (2010: £22m)
 
 
 
-    Loss before tax of £661m (2010: £139m) reflecting £427m of Spanish goodwill impairment and restructuring charges of £189m
 
 
 
-    Spanish goodwill fully impaired due to the deteriorating economic environment in Spain in the fourth quarter of 2011 and ongoing economic uncertainty
 
 
- Income improved 5% to £1,226m reflecting higher average asset and liability volumes, improved margins and the appreciation of the average value of the Euro against Sterling
 
 
- Net interest income improved 16% to £786m with the net interest margin up to 128bps (2010: 116bps)
 
 
 
-    Average customer assets increased 5% to £43.7bn despite customer asset margin reduction to 87bps (2010: 102bps) due to increased funding costs
 
 
 
-    Average customer liabilities increased 3% to £17.7bn with customer liability margin up to 65bps (2010: 11bps) mainly due to re-pricing
 
 
- Net fee and commission income improved by 2% to £429m
 
 
- Net premiums from insurance contracts declined 3% to £463m, with a corresponding decline in net claims and benefits of £503m (2010: £511m)
 
 
- Credit impairment charges and other provisions decreased 17% to £261m principally due to lower charges in the cards portfolios reflecting lower 30 and 90 day arrears rates and lower recovery balances
 
 
 
-    The lower impairment was the main driver for the loan loss rate decreasing to 54bps (2010: 71bps)
 
 
- Operating expenses increased 17% to £1,211m excluding the £427m Spanish goodwill impairment, primarily due to restructuring charges of £189m
 
 
 
-    142 branches, largely in Spain, have been closed and the number of employees reduced by 900 during 2011
 
 
- Loans and advances to customers remained stable
 
 
- Customer deposits decreased 13% to £16.4bn, reflecting the competitive environment
 
 
- Adjusted return on average equity of negative 6.0% (2010: negative 1.0%) reflecting the repositioning of the business during 2011
 
 

 
 

 
Results by Business
 
Africa Retail and Business Banking
          
   
Year Ended
  
Year Ended
  
Income Statement Information
  
31.12.11
  
31.12.10
  
   
£m
  
£m
% Change
Net interest income  
  
2,096 
  
2,033 
3 
Net fee and commission income
  
1,271 
  
1,318 
(4)
Net trading income
  
70 
  
53 
32 
Net investment income
  
56 
  
58 
(3)
Net premiums from insurance contracts
  
432 
  
399 
8 
Other income
  
57 
  
54 
6 
Total income
  
3,982 
  
3,915 
2 
Net claims and benefits incurred under insurance contracts
  
(215)
  
(215)
- 
Total income net of insurance claims
  
3,767 
  
3,700 
2 
Credit impairment charges and other provisions
  
(464)
  
(562)
(17)
Net operating income
  
3,303 
  
3,138 
5 
           
Operating expenses  
  
(2,399)
  
(2,418)
(1)
           
Share of post-tax results of associates and joint ventures
  
4 
  
3 
33 
Profit on disposal of subsidiaries, associates and joint ventures
  
2 
  
81 
nm
Profit before tax
  
910 
  
804 
13 
           
Adjusted profit before tax1 
  
908 
  
723 
26 
           
Balance Sheet Information
          
Loans and advances to customers at amortised cost
  
£36.7bn
  
£45.4bn
(19)
Customer deposits
  
£30.1bn
  
£31.3bn
(4)
Total assets
  
£50.8bn
  
£60.3bn
(16)
Risk weighted assets
  
£33.4bn
  
£38.4bn
(13)
           
 
 
 
Adjusted1 
  
Statutory
Performance Measures
31.12.11
31.12.10
  
31.12.11
31.12.10
Return on average equity2 
10.0%
9.0%
  
10.0%
11.5%
Return on average tangible equity2 
16.6%
15.9%
  
16.7%
18.2%
Return on average risk weighted assets
1.7%
1.6%
  
1.7%
1.8%
Loan loss rate (bps)
121 
119 
  
121 
119 
Cost: income ratio
64%
65%
  
64%
65%
           
Key Facts
  
31.12.11
  
31.12.10
  
Number of customers
  
14.5m
  
14.4m
  
Number of ATMs
  
10,068 
  
9,530 
  
           
Number of branches  
  
1,354 
  
1,321 
  
Number of sales centres
  
139 
  
222 
  
Number of distribution points
  
1,493 
  
1,543 
  
           
Number of employees (full time equivalents)3
  
45,300 
  
47,700 
  
           
 
 
 
 
1   Adjusted profit before tax and adjusted performance measures exclude the impact of gains on acquisitions and disposals of £2m (2010: £81m).
2   Return on average equity and return on average tangible equity comparatives have been revised to use 10% of average risk weighted assets (previously 9%) in the calculation of average equity and average tangible equity.
3   The number of employees for 2010 has been revised to include 100 employees transferred from Head Office.
 
 
 

 
 

 
 
 
 
Results by Business
 
Africa Retail and Business Banking
 
 
- Adjusted profit before tax improved 26% to £908m reflecting business growth in South Africa and a significant improvement in credit impairments across the African continent offset by non-recurrence of a pension credit of £54m
       in  2010
 
 
- Profit before tax improved 13% to £910m, with 2010 including a gain of £77m from the sale of the custody business
 
 
- Income improved 2% to £3,767m with good underlying growth offset by currency movements
 
 
- Net interest income improved 3% to £2,096m with the net interest margin up to 307bps (2010: 294bps)
 
 
 
-    South Africa improved 9% to £1,628m due to strong liability growth and margin improvements, partially offset by the depreciation in the average value of the Rand against Sterling and a reduction in total advances to
      customers
 
 
 
-    The rest of the African businesses declined 12% to £468m due to Sterling appreciation and the impact of margin compression in both retail and corporate portfolios
 
 
- Average customer assets decreased 6% to £38.9bn, driven by depreciation of major African currencies against Sterling and lower volumes
 
 
- Customer asset margin stable at 311bps (2010: 312bps)
 
 
 
-    Improvement in South Africa driven by a continued move towards higher margin business, pricing improvements and a reduction in the cost of funding, offset by margin decline in the rest of the continent
 
 
- Average customer liabilities increased 6% to £29.5bn as underlying growth in retail and commercial deposits of 13% in South Africa offset by depreciation of the Rand against Sterling
 
 
- Customer liability margin stable at 227bps (2010: 225bps) as growth in high margin products within retail was offset by pressures on commercial margins
 
 
- Net fee and commission income declined 4% to £1,271m reflecting the impact of currency partially offset by the impact of volume growth and selected pricing increases
 
 
- Credit impairment charges decreased 17% to £464m reflecting improved economic conditions in South Africa and better recoveries across the continent, together with currency movements
 
 
- Operating expenses decreased 1% to £2,399m
 
 
 
-    Primarily driven by strong cost management, currency movements and restructuring benefits
 
 
 
-    Partially offset by a one-off pension credit in 2010 and inflationary pressures
 
 
- Total loans and advances to customers decreased 19% to £36.7bn primarily reflecting a 16% impact from currency movements
 
 
- Adjusted return on average equity increased to 10.0% (2010: 9.0%)
 
 

 
 

 
Results by Business
 
Barclaycard
          
 
 
 
Year Ended
  
Year Ended
  
Income Statement Information
  
31.12.11
  
31.12.10
  
   
£m
  
£m
% Change
Net interest income
  
2,860 
  
2,814 
2 
Net fee and commission income
  
1,171 
  
1,136 
3 
Net trading loss
  
(7)
  
(8)
(13)
Net investment income
  
10 
  
39 
(74)
Net premiums from insurance contracts
  
42 
  
50 
(16)
Other income
  
20 
  
1 
nm
Total income
  
4,096 
  
4,032 
2 
Net claims and benefits incurred under insurance contracts
  
(1)
  
(8)
(88)
Total income net of insurance claims
  
4,095 
  
4,024 
2 
Credit impairment charges and other provisions
  
(1,259)
  
(1,688)
(25)
Net operating income
  
2,836 
  
2,336 
21 
           
Operating expenses (excluding provision for PPI redress and goodwill impairment)  
  
(1,659)
  
(1,570)
6 
Provision for PPI redress
  
(600)
  
- 
nm
Goodwill impairment
  
(47)
  
- 
nm
Operating expenses
  
(2,306)
  
(1,570)
47 
Share of post-tax results of associates and joint ventures
  
31 
  
25 
24 
Profit before tax
  
561 
  
791 
(29)
           
Adjusted profit before tax1 
  
1,208 
  
791 
53 
           
Balance Sheet Information
          
Loans and advances to customers at amortised cost
  
£30.1bn
  
£26.6bn
13 
Total assets
  
£33.8bn
  
£30.3bn
12 
Risk weighted assets
  
£34.2bn
  
£31.9bn
7 
           
 
 
 
Adjusted1 
  
Statutory
Performance Measures
31.12.11
31.12.10
  
31.12.11
31.12.10
Return on average equity2 
17.4%
12.5%
  
6.8%
12.5%
Return on average tangible equity2 
23.0%
16.9%
  
9.0%
16.9%
Return on average risk weighted assets
2.6%
1.9%
  
1.2%
1.9%
Loan loss rate (bps)
391 
570 
  
391 
570 
Cost: income ratio
41%
39%
  
56%
39%
           
Key Facts
  
31.12.11
  
31.12.10
  
30 day arrears rates - UK cards
  
2.7%
  
3.4%
  
30 day arrears rates - US cards
  
3.1%
  
4.6%
  
30 day arrears rates - South Africa cards3 
  
4.9%
  
7.2%
  
Total number of Barclaycard customers
  
23.5m
  
21.7m
  
Total average outstanding balances - Cards
  
£22.8bn
  
£20.9bn
  
Total average extended credit balances - Cards
  
£19.1bn
  
£17.0bn
  
Average outstanding balances - Loans
  
£5.0bn
  
£5.5bn
  
Number of retailer relationships
  
87,000 
  
87,000 
  
Number of employees (full time equivalent)
  
10,400 
  
9,900 
  
           
 
 
 
1    Adjusted profit before tax and adjusted performance measures excludes the impact of the provision for PPI redress of £600m (2010: £nil) and £47m goodwill impairment in FirstPlus secured lending portfolio (2010: £nil).
2    Return on average equity and return on average tangible equity comparatives have been revised to use 10% of average risk weighted assets (previously 9%) in the calculation of average equity and average tangible equity. 
3    South Africa cards 30 day arrears rates revised to include approved debt counselling accounts.
 


 
Results by Business
 
Barclaycard
 
 
- Adjusted profit before tax improved 53% to £1,208m
 
 
 
-    Profit before tax declined 29% to £561m after £600m provision for PPI redress and £47m goodwill impairment in FirstPlus secured lending portfolio
 
 
 
-    International profit increased driven by significant improvements in the US and South Africa
 
 
 
-    Both the Egg consumer card assets and the MBNA corporate card portfolio acquired during the first half of 2011 delivered profits
 
 
- Income improved 2% to £4,095m, with growth in balances driven by UK Cards partially offset by higher customer balance repayments in the US and depreciation of US Dollar against Sterling
 
 
 
-    UK income improved 8% to £2,639m including contribution from Egg and MBNA portfolios, partially offset by continued run-off of FirstPlus
 
 
 
-    International income declined 7% to £1,456m due to customer balance repayments in the US and depreciation of the US Dollar against Sterling
 
 
- Net interest income improved 2% to £2,860m
 
 
 
-    Average customer assets increased 5% to £30.3bn
 
 
 
-    UK Cards average extended card balances increased 27% to £11.2bn due to acquisitions and balance transfers, partially offset by higher customer balance repayments in the US and continued run-off of FirstPlus
 
 
 
-    Customer asset margin up 17bps to 952bps, with net interest margin down 33bps to 944bps due to hedge impact
 
 
- Net fee and commission improved 3% to £1,171m
 
 
- Credit impairment charges decreased 25% to £1,259m principally driven by lower charges in the cards portfolios, reflecting improved underlying delinquency performance, lower bankruptcies and charge-offs
 
 
- Operating expenses increased 47% to £2,306m. Excluding the provision for PPI redress, FirstPlus goodwill impairment and the impact of the Egg and MBNA acquisitions, operating expenses were flat on prior year
 
 
- Total assets increased 12% to £33.8bn and risk weighted assets increased 7% to £34.2bn reflecting acquired portfolios and organic growth in the UK. These were partially offset by continued run-off of FirstPlus
 
 
- Adjusted return on average equity increased to 17.4% (2010: 12.5%) and adjusted return on average tangible equity increased to 23.0% (2010: 16.9%), reflecting increased profit after tax
 
 

 
 

 
Results by Business
 
Barclays Capital
          
 
 
 
Year Ended
  
Year Ended
  
Income Statement Information
  
31.12.11
  
31.12.10
  
   
£m
  
£m
% Change
Net interest income
  
1,177 
  
1,121 
5 
Net fee and commission income
  
3,026 
  
3,347 
(10)
Net trading income
  
5,264 
  
7,986 
(34)
Net investment income
  
873 
  
752 
16 
Other (expense)/income
  
(5)
  
3 
nm
Total income
  
10,335 
  
13,209 
(22)
           
Credit impairment charges and other provisions
  
(93)
  
(543)
(83)
Net operating income
  
10,242 
  
12,666 
(19)
           
Operating expenses
  
(7,289)
  
(8,295)
(12)
           
Share of post-tax results of associates and joint ventures
  
12 
  
18 
(33)
Profit before tax1 
  
2,965 
  
4,389 
(32)
           
Adjusted profit before tax1 
  
2,965 
  
4,389 
(32)
           
Balance Sheet Information
          
Loans and advances to banks and customers at amortised cost
  
£158.6bn
  
£149.7bn
6 
Customer deposits
  
£83.1bn
  
£70.3bn
18 
Total assets
  
£1,158.4bn
  
£1,094.8bn
6 
Assets contributing to adjusted gross leverage
  
£604.0bn
  
£668.1bn
(10)
Risk weighted assets
  
£186.7bn
  
£191.3bn
(2)
Liquidity pool
  
£152bn
  
£154bn
(1)
           
 
 
 
Adjusted1 
  
Statutory
Performance Measures
31.12.11
31.12.10
  
31.12.11
31.12.10
Return on average equity2 
10.4%
13.5%
  
10.4%
13.5%
Return on average tangible equity2 
10.8%
14.1%
  
10.8%
14.1%
Return on average risk weighted assets
1.2%
1.5%
  
1.2%
1.5%
Loan loss rate (bps)
8 
42 
  
8 
42 
Cost: income ratio  
71%
63%
  
71%
63%
Cost: net operating income ratio  
71%
65%
  
71%
65%
Compensation: income ratio
47%
43%
  
47%
43%
Average income per employee (000s)
£424
£529
  
£424
£529
           
Key Facts
  
31.12.11
  
31.12.10
  
Average DVaR (95%)
  
£57m
  
£53m
  
Number of employees (full time equivalents)
  
24,000 
  
24,800 
  
           
           
 
 
 
 
1     The impact of own credit movements in the fair value of structured note issuance of £2,708m (2010: £391m) is now included within the results of Head Office Functions and Other Operations, rather than Barclays Capital. This reflects the fact that these fair value movements relate to the credit worthiness of the issuer as a whole, rather than Barclays Capital in particular, and are not included within any assessment of Barclays Capital's underlying performance. Furthermore, delays to planned changes in accounting standards will mean own credit movements are likely to continue to be reflected in the income statement for the foreseeable future.
2     Return on average equity and return on average tangible equity comparatives have been revised to use 10% of average risk weighted assets (previously 9%) in the calculation of average equity and average tangible equity.


 
Results by Business
 
Barclays Capital
 
 
- Profit before tax of £2,965m (2010: £4,389m), driven by a 22% reduction in income to £10,335m in a challenging market environment, partially offset by reduced credit impairment charges and operating expenses, including
       compensation costs
 
 
Year Ended
Year Ended
  
Analysis of Total Income
31.12.11
31.12.10
  
 
£m
£m
% Change
Fixed Income, Currency and Commodities
6,325 
8,687 
(27)
Equities and Prime Services
1,751 
2,040 
(14)
Investment Banking
2,027 
2,243 
(10)
Principal Investments
232 
239 
(3)
Total income
10,335 
13,209 
(22)
 
 
 
-    Fixed Income, Currency and Commodities (FICC) declined 27% to £6,325m, reflecting lower contributions from Rates, Credit, and Commodities in a challenging trading environment. Currency improved 27% on 2010, benefiting
     from market volatility and strong client volumes
 
 
 
-    Equities and Prime Services declined 14%, with reduced performance in cash equities and equity derivatives offset by improved client flow in equity financing
 
 
 
-    Investment Banking reduced 10%. Equity underwriting was in line with the prior year, while financial advisory and debt underwriting were impacted by lower deal activity
 
 
- Income in the fourth quarter of 2011 of £1,818m, declined 19% on the third quarter of 2011. Investment Banking income improved 30%, reflecting strong performances in financial advisory and debt and equity underwriting. Equities
       and Prime Services income declined 10% and FICC income declined 32%
 
 
- Credit impairment charge of £93m (2010: £543m) reflecting charges primarily relating to leveraged finance, offset by a release of £223m of the impairment allowance relating to the Protium loan
 
 
- Operating expenses reduced 12% to £7,289m, reflecting a decrease in both non-compensation and compensation costs. 2011 bonus pool down 32% to £1.5bn compared to a decrease in headcount of 3%
 
 
- Assets contributing to adjusted gross leverage decreased 10% to £604bn primarily due to a reduction in reverse repurchase transactions.  Total assets increased 6% to £1,158bn, reflecting increases in the fair value of gross
        interest  rate derivative assets offset by a reduction in reverse repurchase agreements
 
 
- Credit market exposures of £15.2bn, reduced by £8.7bn primarily driven by sale of assets formerly held as Protium collateral and commercial real estate loans and properties
 
 
- Risk weighted assets down 2% to £187bn, reflecting lower levels of client activity, risk reduction and reduction in credit market exposures, more than offsetting the impact of CRD3
 
 
- Return on average equity of 10.4% (2010: 13.5%) and return on average risk weighted assets of 1.2% (2010: 1.5%), reflecting difficult market conditions
 
 

 
 

 
Results by Business
 
Barclays Corporate
          
 
 
 
Year Ended
  
Year Ended
  
Income Statement Information
  
31.12.11
  
31.12.10
  
   
£m
  
£m
% Change
Net interest income
  
2,036 
  
2,004 
2 
Net fee and commission income
  
929 
  
910 
2 
Net trading (expense)/income
  
(99)
  
80 
nm
Net investment income/(expense)
  
29 
  
(32)
nm
Other income
  
17 
  
12 
42 
Total income
  
2,912 
  
2,974 
(2)
Credit impairment charges and other provisions
  
(1,149)
  
(1,696)
(32)
Net operating income
  
1,763 
  
1,278 
38 
           
Operating expenses excluding goodwill impairment
  
(1,639)
  
(1,664)
(2)
Goodwill impairment
  
(123)
  
(243)
(49)
Operating expenses
  
(1,762)
  
(1,907)
(8)
           
Share of post-tax results of associates and joint ventures
  
2 
  
(2)
nm
Loss on disposal of subsidiaries, associates and joint ventures
  
(73)
  
- 
nm
Loss before tax
  
(70)
  
(631)
(89)
           
Adjusted profit/(loss) before tax1 
  
126 
  
(388)
nm
           
Balance Sheet Information and Key Facts
          
Loans and advances to customers at amortised cost
  
£64.6bn
  
£65.7bn
(2)
Loans and advances to customers at fair value
  
£17.2bn
  
£14.4bn
19 
Customer deposits
  
£77.7bn
  
£71.0bn
9 
Total assets
  
£88.7bn
  
£85.7bn
4 
Risk weighted assets
  
£69.7bn
  
£70.8bn
(2)
Number of employees (full time equivalents)
  
9,700 
  
11,900 
  
           
 
 
 
Adjusted1 
  
Statutory
Performance Measures
31.12.11
31.12.10
  
31.12.11
31.12.10
Return on average equity2 
1.3%
(4.1%)
  
(1.4%)
(7.1%)
Return on average tangible equity2 
1.4%
(4.4%)
  
(1.5%)
(7.7%)
Return on average risk weighted assets
0.1%
(0.5%)
  
(0.2%)
(0.8%)
Loan loss rate (bps)
162 
226 
  
162 
226 
Cost: income ratio
56%
56%
  
61%
64%
           
 
 
   
31.12.11
  
31.12.10
Income Statement Information by Geography
UK
Europe
RoW
Total
  
UK
Europe
RoW
Total
 
£m
£m
£m
£m
  
£m
£m
£m
£m
Income
2,199 
440 
273 
2,912 
  
2,279 
428 
267 
2,974 
Credit impairment charges and other provisions  
(355)
(716)
(78)
(1,149)
  
(459)
(1,072)
(165)
(1,696)
Operating expenses excluding goodwill impairment  
(1,099)
(248)
(292)
(1,639)
  
(984)
(209)
(471)
(1,664)
Goodwill impairment  
- 
(123)
- 
(123)
  
- 
- 
(243)
(243)
Share of post-tax results of associates and joint ventures  
2 
- 
- 
2 
  
(2)
- 
- 
(2)
Loss on disposal of subsidiaries, associates and joint ventures  
- 
- 
(73)
(73)
  
- 
- 
- 
- 
Profit/(loss) before tax  
747 
(647)
(170)
(70)
  
834 
(853)
(612)
(631)
                   
Adjusted profit/(loss) before tax1 
747 
(524)
(97)
126 
  
834 
(853)
(369)
(388)
 
 
 
 
1     Adjusted profit before tax and adjusted performance measures exclude the impact of loss on disposal of Barclays Bank Russia of £73m (2010: £nil) and £123m of Spain goodwill impairment (2010: £243m). 2010 adjusted profit before tax has been revised to exclude goodwill impairment of £243m on Barclays Bank Russia.
2     Return on average equity and return on average tangible equity comparatives have been revised to use 10% of average risk weighted assets (previously 9%) in the calculation of average equity and average tangible equity.


 
Results by Business
 
Barclays Corporate
 
 
·    Adjusted profit before tax improved to £126m (2010: loss of £388m), reflecting significant progress in restructuring overseas operations and improved credit impairment in Europe. Loss before tax improved to £70m (2010: £631m
      loss), including £123m impairment of Spanish goodwill and £73m loss on the disposal of Barclays Bank Russia (BBR)
 
 
 
-    UK profit before tax declined £87m to £747m including a decline in the net valuation of fair value loans. Excluding this item, underlying UK performance improved, reflecting increased net investment and fee and commission
      income and improving credit impairment, partially offset by an increase in costs mainly from the non-recurrence of a prior year pension credit and continued investment in infrastructure
 
 
 
-    Europe loss before tax reduced 24% to £647m, reflecting lower credit impairment partially offset by the goodwill impairment in Spain
 
 
 
-    Rest of the World loss before tax reduced 72% to £170m, principally due to the non-recurrence of a prior year goodwill impairment in BBR, lower operating expenses and an improvement in loan loss rates, partially offset by the
     loss on disposal of BBR
 
 
·  Net interest income improved 2% to £2,036m driven by increases in UK customer liabilities and customer liability margins
 
 
· Net interest margin down to 146bps (2010: 153bps), with average customer assets down 2% to £68.7bn and average customer liabilities up 16% to £70.6bn
 
 
·    Credit impairment charges reduced 32% to £1,149m, as overall loan loss rates improved to 162bps (2010: 226bps)
 
 
 
-    UK reduced 23% to £355m, benefiting from lower default rates and tightly controlled exposure to commercial real estate loans
 
 
 
-    Europe reduced 33% to £716m primarily due to lower impairment charges in Spain of £480m (2010: £898m), reflecting proactive risk managment action to reduce exposure to the property and construction sector
 
 
 
-    Rest of the World reduced 53% to £78m, primarily as a result of management action to reduce risk profile of portfolios
 
 
·   Operating expenses reduced by 2% to £1,639m, excluding the impact of goodwill impairment
 
 
 
-    A decrease in restructuring charges and benefits from streamlining operations and improving efficiencies more than offset the impact of the non-recurrence of the prior year pension credit
 
 
·   Total assets increased to £88.7bn (2010: £85.7bn) mainly driven by higher balances in the UK
 
 
·    Good growth in customer deposits to £77.7bn (2010: £71.0bn), largely within the UK, benefiting from product innovation
 
 
·     Risk weighted assets decreased 2% to £69.7bn reflecting reductions in net exposures in Europe and Rest of the World, partially offset by higher net balances in the UK
 
 
·    Adjusted return on average equity of 1.3% (2010: negative 4.1%)
 
 

 
 

 
Results by Business
 
Barclays Wealth
          
 
 
 
Year Ended
Year Ended
  
Income Statement Information
  
31.12.11
  
31.12.10
  
   
£m
  
£m
% Change
Net interest income
  
798 
  
678 
18 
Net fee and commission income
  
943 
  
869 
9 
Net trading income
  
5 
  
11 
(55)
Net investment income
  
- 
  
2 
nm
Other (expense)/income
  
(2)
  
- 
nm
Total income
  
1,744 
  
1,560 
12 
Credit impairment charges and other provisions
  
(41)
  
(48)
(15)
Net operating income
  
1,703 
  
1,512 
13 
           
Operating expenses
  
(1,493)
  
(1,349)
11 
           
Share of post-tax results of associates and joint ventures
  
(3)
  
- 
nm
Profit before tax
  
207 
  
163 
27 
           
Adjusted profit before tax
  
207 
  
163 
27 
           
Balance Sheet Information and Key Facts
          
Loans and advances to customers at amortised cost
  
£18.8bn
  
£16.1bn
17 
Customer deposits
  
£46.5bn
  
£44.8bn
4 
Total assets
  
£20.9bn
  
£17.8bn
17 
Risk weighted assets
  
£13.1bn
  
£12.4bn
6 
Total client assets
  
£164.2bn
  
£163.9bn
-
Number of employees (full time equivalents)
  
7,700 
  
7,700 
  
           
 
 
 
Adjusted
  
Statutory
Performance Measures
31.12.11
31.12.10
  
31.12.11
31.12.10
Return on average equity1 
10.9%
8.8%
  
10.9%
8.8%
Return on average tangible equity1 
15.0%
12.3%
  
15.0%
12.3%
Return on average risk weighted assets
1.5%
1.2%
  
1.5%
1.2%
Loan loss rate (bps)
21 
29 
  
21 
29 
Cost: income ratio
86%
86%
  
86%
86%
 
 
 
 
1      Return on average equity and return on average tangible equity comparatives have been revised to use 10% of average risk weighted assets (previously 9%) in the calculation of average equity and average tangible equity.
 


 
Results by Business
 
Barclays Wealth
 
 
- Profit before tax increased 27% to £207m. Strong income growth partly offset by increased investment in the growth of the business  
 
 
- Income improved 12% to £1,744m reflecting strong income growth in the High Net Worth businesses. Net operating income improved 13% to £1,703m with the loan loss rate reducing to 21bps (2010: 29bps)
 
 
- Net interest income improved 18% to £798m as customer deposit and loan balances have increased reflecting growth in High Net Worth client balances and an increase in margins on deposits
 
 
 
-    Net interest margin increased to 129bps from 122bps with average customer deposits up £3.6bn to £44.5bn and average loans up £3.0bn to £17.5bn
 
 
- Net fee and commission income improved 9% to £943m driven by higher transactional activity in the High Net Worth businesses
 
 
- Operating expenses increased 11% to £1,493m
 
 
 
-    Increase in investment spend and related restructuring costs to support the strategic investment programme
 
 
 
-    Cost of increase in client facing staff and infrastructure to support the High Net Worth businesses  
 
 
- Risk weighted assets increased 6% to £13.1bn. This compares to growth in lending of 17%, with an increased level of collateral in the lending portfolio
 
 
- Client assets increased marginally to £164.2bn (2010: £163.9bn) with strong net new asset growth in the High Net Worth businesses offset by market, foreign exchange and other movements
 
 
- Return on average equity increased to 10.9% (2010: 8.8%) and return on average tangible equity up to 15.0% (2010: 12.3%) with growth in income and profit before tax significantly higher than increased equity
 
 

 
 

 
Results by Business
 
Investment Management
      
 
Year Ended
Year Ended
  
Income Statement Information
31.12.11
31.12.10
  
 
£m
£m
% Change
Total income
53 
78 
(32)
       
Impairment of investment in BlackRock, Inc.
(1,800)
- 
nm
Net operating income
(1,747)
78 
nm
       
Operating expenses  
(15)
(11)
36 
       
(Loss)/profit before tax
(1,762)
67 
nm
       
Adjusted profit before tax1 
96 
67 
43 
       
Balance Sheet Information
      
Total assets
£4.1bn
£4.6bn
(11)
Risk weighted assets
£0.1bn
£0.1bn
-
 
 
- Adjusted profit before tax of £96m (2010: £67m), principally reflecting dividend income of £123m (2010: £100m) from the Group's available for sale holding in BlackRock, Inc. which represents a 19.7% (2010: 19.9%) interest
 
 
- The loss before tax of £1,762m (2010: profit of £67m) resulted from the £1,800m impairment of the Group's investment in BlackRock, Inc. The impairment reflects the recycling through the income statement of the cumulative
        reduction in market value of the Group's investment in BlackRock, Inc. as at 30 September 2011 previously recognised in equity
 
 
- The fair value of the holding as at 31 December 2011 was £4.1bn (2010: £4.6bn). Since 30 September 2011, the value of the holding has increased by £0.7bn, which has been taken to equity. For regulatory capital purposes, the
        increase is deducted from the Group's Core Tier 1. If the increase had been included in Core Tier 1 Capital, the Group's Core Tier 1 Capital ratio would have been 0.2% higher
 
 
 
 
 
1        Adjusted profit before tax excludes £1,800m impairment of investment in BlackRock, Inc. (2010: £nil) and £58m loss (2010: £nil) on disposal of a portion of the Group's strategic investment in BlackRock, Inc. recycled
          through investment income.
 
 

 
 

 
Results by Business
 
Head Office Functions and Other Operations
      
 
Year Ended
Year Ended
  
Income Statement Information
31.12.11
31.12.10
  
 
£m
£m
% Change
Total income net of insurance claims (excluding own credit and gains on debt buy-backs)
(334)
(178)
88 
Own credit1 
2,708 
391 
nm
Gains on debt buy-backs
1,130 
- 
nm
Total income net of insurance claims
3,504 
213 
nm
Credit impairment release/(charge) and other provisions
1 
(2)
nm
Net operating income
3,505 
211 
nm
       
Operating expenses (excluding UK bank levy)
(448)
(579)
(23)
UK bank levy
(325)
- 
nm
Operating expenses
(773)
(579)
34 
       
Loss on disposal of subsidiaries, associates and joint ventures
(23)
- 
nm
Profit/(loss) before tax1 
2,709 
(368)
nm
       
Adjusted loss before tax2 
(1,106)
(759)
46 
       
Balance Sheet Information and Key Facts
      
Total assets
£27.8bn
£20.9bn
33 
Risk weighted assets
£2.4bn
£0.6bn
nm
Number of employees (full time equivalents)3
1,400 
1,400 
  
 
 
- Adjusted loss before tax increased 46% to £1,106m, principally as a result of a £325m charge arising from the UK bank levy that came into force during 2011. Profit before tax improved significantly to £2,709m (2010: loss of £368m),
       reflecting own credit gains and gains on debt buy-backs
 
 
- Total income improved to £3,504m (2010: £213m) 
 
 
 
-    Own credit gains, increased to £2,708m (2010: £391m)
 
 
 
-    Gains on debt buy-backs of £1,130m (2010: £nil) resulting from the retirement of Tier 1 capital, which will not qualify as Tier 1 capital under Basel 3
 
 
 
-    Partially offset by the non-recurrence in 2011 of £265m income from currency translation reserves following the repatriation of capital from overseas operations that was recognised in 2010
 
 
- Operating expenses increased to £773m (2010: £579m) principally due to the UK bank levy of £325m and higher Financial Services Compensation Scheme (FSCS) costs, partially offset by non recurrence of a 2010 provision of
        £194m  in relation to resolution of the investigation into Barclays compliance with US economic sanctions
 
 
- The loss on disposal of £23m reflects losses from currency translation reserves recognised in the income statement following the disposal of Barclays Bank Russia
 
 
- Total assets increased 33% to £27.8bn due to purchases of government bonds to support the Group's hedging and liquidity management activities
 
 
 
 
 
 
 1
 The impact of own credit movements in the fair value of structured note issuance of £2,708m (2010: £391m) is now included within the results of Head Office Functions and Other Operations, rather than Barclays Capital. This reflects the fact that these fair value movements relate to the credit worthiness of the Group as a whole, rather than Barclays Capital in particular, and are not included within any assessment of Barclays Capital's underlying performance. Furthermore, delays to planned changes in accounting standards will mean own credit movements are likely to continue to be reflected in the income statement for the foreseeable future.
 2
Adjusted loss before tax excludes the impact of own credit gains of £2,708m (2010: £391m); gains on debt buybacks of £1,130m (2010: nil) and £23m (2010: nil) loss on disposal of subsidiaries associates and joint ventures.
 3
The number of employees for 2010 has been revised to exclude 100 employees transferred to Africa RBB.
 
 

 
 

 
Results by Quarter
 
Group Results
Q411
Q311
Q211
Q111
  
Q410
Q310
Q210
Q110
 
£m
£m
£m
£m
  
£m
£m
£m
£m
Adjusted basis
                  
Total income net of insurance claims
6,212 
7,001 
7,549 
7,750 
  
8,081 
7,238 
7,563 
8,167 
Credit impairment charges and other provisions
(951)
(1,023)
(907)
(921)
  
(1,374)
(1,218)
(1,572)
(1,508)
Net operating income
5,261 
5,978 
6,642 
6,829 
  
6,707 
6,020 
5,991 
6,659 
Operating expenses (excluding UK bank levy)
(4,414)
(4,659)
(4,940)
(4,842)
  
(5,252)
(4,756)
(4,868)
(4,852)
UK bank levy
(325)
- 
- 
- 
  
- 
- 
- 
- 
Share of post tax results of associates & JVs
6 
18 
19 
17 
  
16 
9 
18 
15 
Adjusted profit before tax
528 
1,337 
1,721 
2,004 
  
1,471 
1,273 
1,141 
1,822 
                   
Adjusting items
                  
Own credit
(263)
2,882 
440 
(351)
  
487 
(947)
953 
(102)
Gains on debt buy-backs
1,130 
- 
- 
- 
  
- 
- 
- 
- 
Disposal of strategic investment in BlackRock, Inc.
- 
- 
(58)
- 
  
- 
- 
- 
- 
Impairment of investment in BlackRock, Inc.
- 
(1,800)
- 
- 
  
- 
- 
- 
- 
Provision for PPI redress
- 
- 
(1,000)
- 
  
- 
- 
- 
- 
Goodwill impairment
(550)
- 
(47)
- 
  
(243)
- 
- 
- 
(Losses)/gains on acquisitions and disposals
(32)
3 
(67)
2 
  
76 
1 
33 
100 
Profit before tax
813 
2,422 
989 
1,655 
  
1,791 
327 
2,127 
1,820 
                   
Basic earnings per share
2.9p
9.7p
4.0p
8.5p
  
9.1p
0.4p
11.6p
9.3p
Adjusted cost: income ratio
76%
67%
65%
62%
  
65%
66%
64%
59%
Adjusted cost: net operating income ratio
90%
78%
74%
71%
  
78%
79%
81%
73%
Cost: income ratio
75%
47%
75%
65%
  
64%
76%
57%
60%
Cost: net operating income ratio
86%
66%
85%
75%
  
76%
94%
70%
74%
                   
 
 
UK RBB
                  
Adjusted basis
                  
Total income net of insurance claims
1,129 
1,273 
1,170 
1,084 
  
1,186 
1,161 
1,087 
1,084 
Credit impairment charges and other provisions
(156)
(105)
(131)
(144)
  
(170)
(202)
(222)
(225)
Net operating income
973 
1,168 
1,039 
940 
  
1,016 
959 
865 
859 
Operating expenses
(752)
(675)
(622)
(653)
  
(762)
(725)
(628)
(694)
Share of post tax results of associates & JVs
1 
1 
(1)
1 
  
1 
(4)
- 
2 
Adjusted profit before tax
222 
494 
416 
288 
  
255 
230 
237 
167 
                   
Adjusting items
                  
Provision for PPI redress
- 
- 
(400)
- 
  
- 
- 
- 
- 
Gains on acquisitions and disposals
- 
- 
- 
- 
  
- 
- 
29 
71 
Profit before tax
222 
494 
16 
288 
  
255 
230 
266 
238 
                   
 
 
Europe RBB
                  
Adjusted basis
                  
Total income net of insurance claims
247 
375 
309 
295 
  
263 
299 
297 
305 
Credit impairment charges and other provisions
(83)
(62)
(47)
(69)
  
(89)
(92)
(62)
(71)
Net operating income
164 
313 
262 
226 
  
174 
207 
235 
234 
Operating expenses
(291)
(263)
(368)
(289)
  
(283)
(255)
(246)
(249)
Share of post tax results of associates & JVs
2 
2 
4 
4 
  
4 
4 
4 
3 
Adjusted (loss)/profit before tax
(125)
52 
(102)
(59)
  
(105)
(44)
(7)
(12)
                   
Adjusting items
                  
Goodwill impairment
(427)
- 
- 
- 
  
- 
- 
- 
- 
Gains on acquisitions and disposals
- 
- 
- 
- 
  
- 
- 
- 
29 
(Loss)/profit before tax
(552)
52 
(102)
(59)
  
(105)
(44)
(7)
17 
                   
 


 
Results by Quarter
 
Africa RBB
Q411
Q311
Q211
Q111
  
Q410
Q310
Q210
Q110
 
£m
£m
£m
£m
  
£m
£m
£m
£m
Adjusted basis
                  
Total income net of insurance claims
906 
994 
955 
912 
  
983 
935 
900 
882 
Credit impairment charges and other provisions
(87)
(109)
(126)
(142)
  
(137)
(95)
(164)
(166)
Net operating income
819 
885 
829 
770 
  
846 
840 
736 
716 
Operating expenses
(534)
(642)
(618)
(605)
  
(678)
(671)
(549)
(520)
Share of post tax results of associates & JVs
1 
- 
1 
2 
  
5 
(3)
- 
1 
Adjusted profit before tax
286 
243 
212 
167 
  
173 
166 
187 
197 
                   
Adjusting items
                  
Gains on acquisitions and disposals
- 
2 
- 
- 
  
77 
- 
4 
- 
Profit before tax
286 
245 
212 
167 
  
250 
166 
191 
197 
                   
 
 
Barclaycard
                  
Adjusted basis
                  
Total income net of insurance claims
983 
1,140 
1,012 
960 
  
1,036 
1,030 
981 
977 
Credit impairment charges and other provisions
(271)
(340)
(344)
(304)
  
(393)
(405)
(425)
(465)
Net operating income
712 
800 
668 
656 
  
643 
625 
556 
512 
Operating expenses
(458)
(430)
(400)
(371)
  
(420)
(386)
(364)
(400)
Share of post tax results of associates & JVs
5 
8 
7 
11 
  
7 
5 
7 
6 
Adjusted profit before tax
259 
378 
275 
296 
  
230 
244 
199 
118 
                   
Adjusting items
                  
Provision for PPI redress
- 
- 
(600)
- 
  
- 
- 
- 
- 
Goodwill impairment
- 
- 
(47)
- 
  
- 
- 
- 
- 
Profit/(loss) before tax
259 
378 
(372)
296 
  
230 
244 
199 
118 
                   
 
 
Barclays Capital1 
                  
Adjusted and statutory basis
                  
Fixed Income, Currency and Commodities
971 
1,438 
1,715 
2,201 
  
2,031 
1,773 
2,138 
2,745 
Equities and Prime Services
305 
338 
563 
545 
  
625 
359 
563 
493 
Investment Banking
506 
389 
520 
612 
  
725 
501 
461 
556 
Principal Investments
36 
89 
99 
8 
  
115 
19 
4 
101 
Total income
1,818 
2,254 
2,897 
3,366 
  
3,496 
2,652 
3,166 
3,895 
Credit impairment charges and other provisions
(90)
(114)
80 
31 
  
(222)
(12)
(41)
(268)
Net operating income
1,728 
2,140 
2,977 
3,397 
  
3,274 
2,640 
3,125 
3,627 
Operating expenses
(1,458)
(1,758)
(2,006)
(2,067)
  
(2,201)
(1,881)
(2,154)
(2,059)
Share of post tax results of associates and JVs
(3)
6 
6 
3 
  
2 
6 
7 
3 
Adjusted profit before tax and profit before tax
267 
388 
977 
1,333 
  
1,075 
765 
978 
1,571 
                   
 
 
Barclays Corporate
                  
Adjusted basis
                  
Total income net of insurance claims
665 
776 
768 
703 
  
807 
766 
683 
718 
Credit impairment charges and other provisions
(253)
(282)
(327)
(287)
  
(342)
(405)
(642)
(307)
Net operating income
412 
494 
441 
416 
  
465 
361 
41 
411 
Operating expenses
(393)
(407)
(427)
(412)
  
(437)
(398)
(343)
(486)
Share of post tax results of associates & JVs
1 
2 
2 
(3)
  
(2)
- 
- 
- 
Adjusted profit/(loss) before tax
20 
89 
16 
1 
  
26 
(37)
(302)
(75)
                   
Adjusting items
                  
Goodwill impairment
(123)
- 
- 
- 
  
(243)
- 
- 
- 
Losses on disposal
(9)
- 
(64)
- 
  
- 
- 
- 
- 
(Loss)/profit before tax
(112)
89 
(48)
1 
  
(217)
(37)
(302)
(75)
 
 
1      The impact of movements in own credit is now included within the results of Head Office Functions and Other Operations, rather than Barclays Capital.
 


 
Results by Quarter
 
Barclays Wealth
Q411
Q311
Q211
Q111
  
Q410
Q310
Q210
Q110
 
£m
£m
£m
£m
  
£m
£m
£m
£m
Adjusted and statutory basis
                  
Total income net of insurance claims
449 
447 
426 
422 
  
417 
386 
387 
370 
Credit impairment charges and other provisions
(10)
(12)
(9)
(10)
  
(13)
(8)
(17)
(10)
Net operating income
439 
435 
417 
412 
  
404 
378 
370 
360 
Operating expenses
(384)
(369)
(375)
(365)
  
(363)
(351)
(320)
(315)
Share of post tax results of associates & JVs
(1)
(1)
- 
(1)
  
- 
- 
- 
- 
Adjusted profit before tax and profit before tax
54 
65 
42 
46 
  
41 
27 
50 
45 
                   
 
 
Investment Management
                  
Adjusted basis
                  
Total income net of insurance claims
22 
32 
33 
24 
  
20 
24 
5 
29 
Operating expenses
(6)
(3)
(6)
- 
  
(8)
- 
(3)
- 
Adjusted profit before tax
16 
29 
27 
24 
  
12 
24 
2 
29 
                   
Adjusting items
                  
Disposal of strategic investment in BlackRock, Inc.
- 
- 
(58)
- 
  
- 
- 
- 
- 
Impairment of investment in BlackRock, Inc.
- 
(1,800)
- 
- 
  
- 
- 
- 
- 
Profit/(loss) before tax
16 
(1,771)
(31)
24 
  
12 
24 
2 
29 
                   
 
 
Head Office Functions and Other Operations1
                  
Adjusted basis
                  
Total income net of insurance claims
(7)
(290)
(21)
(16)
  
(127)
(15)
57 
(93)
Credit impairment charges and other provisions
(1)
1 
(3)
4 
  
(8)
1 
1 
4 
Net operating income
(8)
(289)
(24)
(12)
  
(135)
(14)
58 
(89)
Operating expenses (excluding UK bank levy)
(138)
(112)
(118)
(80)
  
(100)
(89)
(261)
(129)
UK bank levy
(325)
- 
- 
- 
  
- 
- 
- 
- 
Share of post tax results of associates & JVs
- 
- 
- 
- 
  
(1)
1 
- 
- 
Adjusted loss before tax
(471)
(401)
(142)
(92)
  
(236)
(102)
(203)
(218)
                   
Adjusting items
                  
Own credit
(263)
2,882 
440 
(351)
  
487 
(947)
953 
(102)
Gains on debt buy-backs
1,130 
- 
- 
- 
  
- 
- 
- 
- 
(Losses)/gains on acquisitions and disposals
(23)
1 
(3)
2 
  
(1)
1 
- 
- 
Profit/(loss) before tax
373 
2,482 
295 
(441)
  
250 
(1,048)
750 
(320)
                   
 
 
 
1      The impact of movements in own credit is now included within the results of Head Office Functions and Other Operations, rather than Barclays Capital.
 

 
 

 
Performance Management
 
Remuneration
 
 
We recognise the understandable importance that all of our stakeholders attach to the judgements that we must apply in managing remuneration. We take that responsibility seriously and, as a consequence, we seek to manage remuneration in a way that is consistent with protecting future revenue flows and our ability to maximise returns to shareholders while enhancing our customer and client service standards.
 
 
Ensuring that we have the right people, in the right roles, is vital to our ability to generate shareholder returns by serving our customers and clients effectively, especially in the highly competitive, global markets in which we operate across our businesses. This requires that we are competitive in the way in which we manage remuneration.
 
 
We manage remuneration decisions on the basis of total compensation, comprising salaries, bonuses and long term incentives. An important tool in ensuring an appropriate balance between competitiveness and responsibility is the mix between the fixed and variable components of remuneration. We have set the fixed component of remuneration - which largely comprises salaries - at a level consistent with market rates and the prevailing regulatory requirements. We then use the variable component of remuneration to create the flexibility that allows our cost base to respond to changes in economic and business conditions and to provide a clear and explicit link between remuneration and current and future performance. That link includes, in particular for senior roles, paying a substantially higher proportion of bonuses in shares and the inclusion of clawback provisions in deferred bonuses to help ensure sustained performance over the longer term.
 
 
We have increased the use of deferred bonuses to better align the incentive created by the variable component of remuneration to sustained performance. Deferred bonuses are payable only once an employee meets certain conditions, including a specified period of service, such that the related costs are recognised over that period. This creates a timing difference between the communication of the bonus pool (being the total bonus awards granted that are decided upon by management and approved by the Board Remuneration Committee) and the charges that appear in the income statement for any year. As such, set out below are the components of remuneration that relate to management's and the Board's decisions on the bonus pool reconciled to the income statement charge, recognised in accordance with accounting standards.
 
 
Incentive awards
 
 
·      Total bonus pool down 25% and total incentive awards down 26% versus 2010, with adjusted Group PBT reducing 2%
 
·     Total bonus pool as a percentage of profit before tax (pre-bonus) down year on year from 33% to 28%
 
·      Barclays Capital bonus pool down 32% and total incentive awards down 35% versus 2010, with Barclays Capital PBT reducing 32%
 
·      Average value of bonus per Group employee down 21% year on year to £15,200; average value of bonus per Barclays Capital employee down 30% to £64,000
 
·     Current year cash bonus capped at £65,000 for all Barclays Capital employees
 
·      Proportion of bonus pool that is deferred significantly exceeds the FSA's Remuneration Code requirements and is expected to be amongst the highest deferral levels globally; 75% of the bonus pool in Barclays Capital is deferred
 
·      Annual incentives for the Executive Directors and the eight highest paid senior executive officers down 48% versus 2010 on a like-for-like basis
 
 
Bonus Pool Component
Expected Grant Date
Expected Payment Date(s)1
Year(s) in which Income Statement Charge Arises2
Current year cash bonus
February 2012
February 2012
2011
Current year share bonus
February/March 2012
February 2012 to
September 2012
2011
Deferred cash bonus
March 2012
March 2013 (33.3%)
March 2014 (33.3%)
March 2015 (33.3%)
2012 (48%)
2013 (35%)
2014 (15%)
2015 (2%)
Deferred share bonus
March 2012
March 2013 (33.3%)
March 2014 (33.3%)
March 2015 (33.3%)
2012 (48%)
2013 (35%)
2014 (15%)
2015 (2%)
 
 
 
 
 
 
 
 
 
 
  1
 Payments are subject to all performance conditions being met prior to the expected payment date. In addition, employees receiving a deferred cash bonus may be awarded a service credit of 10% of the initial value of the award at the time that the final instalment is made, subject to continued employment.
  2
 The income statement charge is based on the period over which performance conditions are met.


Performance Management
 
Total Incentive Awards Granted - Current Year and Deferred
 
 
 
 
Barclays Group
  
Barclays Capital
 
Year Ended
Year Ended
    
Year Ended
Year Ended
  
 
31.12.11
31.12.10
    
31.12.11
31.12.10
  
   
£m
£m
% Change
  
£m
£m
% Change
Current year cash bonus
832 
1,601 
(48)
  
381 
1,139 
(67)
Current year share bonus
66 
73 
(10)
  
3 
57 
(95)
Total current year bonus
898 
1,674 
(46)
  
384 
1,196 
(68)
               
Deferred cash bonus
618 
568 
9 
  
576 
530 
9 
Deferred share bonus
634 
609 
4 
  
576 
535 
8 
Total deferred bonus
1,252 
1,177 
6 
  
1,152 
1,065 
8 
               
Bonus pool  
2,150 
2,851 
(25)
  
1,536 
2,261 
(32)
               
Sales commissions, commitments and other incentives
428
633
(32)
  
201
399
(50)
               
Total incentive awards granted
2,578
3,484
(26)
  
1,737
2,660
(35)
               
Bonus pool as % of PBT (pre bonus)1
28%
33%
    
35%
36%
  
Bonus pool as % of adjusted PBT (pre bonus)1
29%
34%
    
35%
36%
  
Proportion of bonus that is deferred
58%
41%
    
75%
47%
  
Total employees (full time equivalent)
141,100 
147,500 
(4)
  
24,000 
24,800 
(3)
Bonus per employee
£15,237 
£19,329 
(21)
  
£64,000 
£91,169 
(30)
               
 
 
 
Year Ended
Year Ended
Reconciliation of Total Incentive Awards Granted to Income Statement Charge
31.12.11
31.12.10
 
£m
£m
Total incentive awards for 2011
2,578
3,484
Less: deferred bonuses awarded for 2011
(1,252)
(1,177)
Add: current year charges for deferred bonuses from previous years
995
904
Other2
206
139
Income statement charge for performance costs
2,527
3,350
 
·      Employees only become eligible to receive payment from a deferred bonus once all of the relevant conditions have been fulfilled, including the provision of services to the Group
 
 
·     The income statement charge for performance costs reflects the charge for employees' actual services provided to the Group during the relevant calendar year (including where those services fulfil performance conditions relating
       to previously deferred bonuses). It does not include charges for deferred bonuses where performance conditions have not been met
 
 
·      As a consequence, while the 2011 incentive awards granted were down 26% compared to 2010, the income statement charge for performance costs was down 25%
 
 
1        Calculated as bonus awards divided by profit before tax excluding the income statement charge for bonus awards.
 
2       Difference between incentive awards granted and income statement charge for sales commissions, commitments and other incentives.
 


 
Performance Management
 
 
 
 
 
 
Year Ended
Year Ended
  
Income Statement Charge
31.12.11
31.12.10
  
 
£m
£m
% Change
Performance costs
2,527
3,350
(25)
Salaries
6,277
6,151
2
Other share based payments
167
168
(1)
Social security costs
716
719
-
Post retirement benefits
727
528
38
Total compensation costs
10,414
10,916
(5)
       
Bank payroll tax
76
96
(21)
Other1
917
904
1
Non compensation costs
993
1,000
(1)
       
Total staff costs
11,407
11,916
(4)
 
·      Total staff costs reduced 4% to £11,407m, principally reflecting the £823m reduction in performance costs offset by the impact of a £304m pension credit recognised in 2010
 
 
·      Performance costs reduced 25% to £2,527m, principally reflecting reduced charges for current year cash bonuses
 
 
·       It is currently anticipated that deferred bonuses will be charged to the income statement in the following years:
 
 
Actual
  
Expected
Year in which Income Statement Charge is Expected to be 
Year Ended
Year Ended
  
Year Ended
2013 and
Taken for Deferred Bonuses2
31.12.10
31.12.11
  
31.12.12
beyond
   
£m
£m
  
£m
£m
Deferred bonuses from 2009 and earlier bonus pools
904
405
  
139
23
Deferred bonuses from 2010 bonus pool
-
590
  
387
205
Deferred bonuses from 2011 bonus pool
-
-
  
601
651
Income statement charge for deferred bonuses
904
995
  
1,127
879
 
·    Salaries increased 2% to £6,277m in line with inflation on a moderately declining average headcount
 
 
·     The post retirement benefits charge increased 38% to £727m reflecting the non-recurrence of a £304m credit in 2010. There have been no material changes or augmentations to any of the post retirement benefit programmes in 2011
 
 
Glossary
 
 
Current year cash bonus - Bonus paid to employees in cash on a discretionary basis in respect of performance in the period. 
 
 
Current year share bonus - Bonus paid to employees in shares on a discretionary basis in respect of performance in the period. In keeping with regulatory requirements, the shares may be subject to a minimum retention period.
 
 
Deferred cash bonus - Performance award granted on a discretionary basis and paid in cash to employees for, and subject to, providing future service over a period of usually three years. These awards also include provisions for potential clawback in accordance with the FSA Remuneration Code.
 
 
Deferred share bonus - Performance award granted on a discretionary basis and paid in shares to employees for, and subject to, providing future service over a period of usually three years. These awards also include provisions for potential clawback in accordance with the FSA Remuneration Code.
 
 
Incentive awards - Total of current year and deferred bonus plus sales commissions, guaranteed incentives and long term incentive plan awards.
 
 
Sales commissions, commitments and other incentives - Includes commission-based arrangements, guaranteed incentives and Long Term Incentive Plan awards.
 
 
 
 
 
1        Includes staff training, redundancy and recruitment.
 
2       The actual amount charged depends upon whether performance conditions have been met and will vary compared with the above expectation.
 
Performance Management
 
 
Returns and Equity by Business
 
 
Returns on average equity and average tangible equity are calculated using profit after tax and non-controlling interests for the period, divided by average allocated equity or tangible equity as appropriate.
 
 
Average allocated equity has been calculated as 10% (previously 9%) of average risk weighted assets for each business, reflecting the planning assumptions the Group uses for capital purposes, adjusted for capital deductions, including goodwill and intangible assets. The higher level of capital currently held, reflecting the current Core Tier 1 capital ratio of 11.0%, is allocated to Head Office Functions and Other Operations.
 
 
Average allocated tangible equity is calculated using the same method but excludes goodwill and intangible assets. Comparatives throughout this document have been calculated based on 10% of risk weighted assets.
 
 
 
 
Adjusted1 
  
Statutory
 
Year Ended
Year Ended
  
Year Ended
Year Ended
Return on Average Equity
31.12.11
31.12.10
  
31.12.11
31.12.10
 
%
%
  
%
%
UK RBB
14.9 
9.9 
  
10.6 
11.4 
Europe RBB
(6.0)
(1.0)
  
(21.8)
(0.2)
Africa RBB
10.0 
9.0 
  
10.0 
11.5 
Barclaycard
17.4 
12.5 
  
6.8 
12.5 
Barclays Capital
10.4 
13.5 
  
10.4 
13.5 
Barclays Corporate
1.3 
(4.1)
  
(1.4)
(7.1)
Barclays Wealth
10.9 
8.8 
  
10.9 
8.8 
Investment Management
24.1 
6.5 
  
nm
6.5 
Group
6.6 
6.8 
  
5.8 
7.2 
 
 
 
Adjusted1
  
Statutory
Return on Average Tangible Equity
%
%
  
%
%
UK RBB
28.6 
18.7 
  
20.3 
21.4 
Europe RBB
(7.9)
(1.3)
  
(29.0)
(0.2)
Africa RBB2 
16.6 
15.9 
  
16.7 
18.2 
Barclaycard
23.0 
16.9 
  
9.0 
16.9 
Barclays Capital
10.8 
14.1 
  
10.8 
14.1 
Barclays Corporate
1.4 
(4.4)
  
(1.5)
(7.7)
Barclays Wealth
15.0 
12.3 
  
15.0 
12.3 
Investment Management
24.1 
6.5 
  
nm
6.5 
Group
7.9 
8.2 
  
6.9 
8.7 
 
 
 
Average Equity
  
Average Tangible Equity
 
£m
£m
  
£m
£m
UK RBB
6,821 
6,954 
  
3,562 
3,694 
Europe RBB
2,703 
2,506 
  
2,032 
1,844 
Africa RBB
2,866 
2,750 
  
1,064 
908 
Barclaycard
4,634 
4,263 
  
3,503 
3,149 
Barclays Capital
20,501 
22,122 
  
19,750 
21,176 
Barclays Corporate
7,208 
8,034 
  
6,928 
7,473 
Barclays Wealth
1,724 
1,647 
  
1,259 
1,179 
Investment Management
359 
585 
  
359 
585 
Head Office Functions and Other Operations3 
4,997 
976 
  
4,994 
975 
Group
51,813 
49,837 
  
43,451 
40,983 
 
 
 
 
 
  1
 Adjusted performance measures exclude the impact of own credit gains, gains on debt buy-backs (retirement of non-qualifying Tier 1 Capital under Basel 3), loss on disposal of a portion of the Group's strategic investment in BlackRock, Inc. recycled through investment income, impairment of investment in BlackRock, Inc., provision for PPI redress, goodwill impairment and loss/gain on acquisitions and disposals. The UK bank levy has not been included as an adjusting item.
 
  2
 The return on average tangible equity for Africa RBB is calculated based on average tangible equity including amounts relating to Absa's non-controlling interests.
 
  3
 Includes risk weighted assets and capital deductions in Head Office Functions and Other Operations, plus the residual balance of average shareholders' equity and tangible equity. 
 


 
 
Performance Management
 
Margins and Balances
    
 
Year Ended
Year Ended
Analysis of Net Interest Income
31.12.11
31.12.10
 
£m
£m
Retail and Business Banking, Corporate and Wealth customer interest income
    
- Customer assets
 6,983 
 6,956 
- Customer liabilities
 2,866 
 2,167 
 
 9,849 
 9,123 
Retail and Business Banking, Corporate and Wealth non-customer interest income
    
- Product structural hedge1
 1,168 
 1,403 
- Equity structural hedge2
 824 
731 
- Other
 148 
 116 
Total Retail and Business Banking, Corporate and Wealth net interest income
 11,989 
 11,373 
Barclays Capital3
 1,177 
 1,121 
Head Office and Investment Management2
(965)
29 
Group net interest income  
 12,201 
 12,523 
 
 
Retail and Business Banking, Corporate and Wealth Net Interest Income
 
 
Barclays distinguishes the relative net interest contribution from each of customer assets and customer liabilities, and separates this from the contribution delivered by non-customer net interest income, which principally arises from the Group hedging activities.
 
 
Customer interest income
 
 
·      Customer net interest income increased 8% to £9,849m, driven by increases in the customer liability margin and growth in average customer asset and liability balances. Retail customer liabilities grew principally due to demand for
        savings products in the UK
 
 
·      The customer asset margin declined to 2.20% (2010: 2.25%), reflecting an increase in the cost of funds across each of the individual RBB, Corporate and Wealth businesses. This was partially offset by increased customer pricing
        across most of the businesses
 
 
·      The customer liability margin increased to 1.06% (2010: 0.86%) reflecting the increase in the cost of funds and therefore value generated from RBB, Corporate and Wealth customer liabilities
 
 
Non-customer interest income
 
 
·      Non-customer net interest income decreased 5% to £2,140m, reflecting a 7% reduction in the benefits from Group hedging activities to £1,992m. Group hedging activities utilise structural interest rate hedges to mitigate the impact
        of the low interest rate environment on customer liabilities and the Group's equity
 
 
·      Product structural hedges generated a lower contribution of £1,168m (2010: £1,403m), as hedges were maintained at lower market interest rates. The extended duration profile constructed in H1 2011 continues to moderate this
        impact. Based on the market curve as at the end of 2011 and the on-going hedging strategy, fixed rate returns on product structural hedges are expected to continue to make a significant but declining contribution in 2012
 
 
·      The contribution from equity structural hedges in RBB, Corporate and Wealth increased to £824m (2010: £731m) including a £216m increase in gains on sale of hedging instruments
 
 
 
 1 
Product structural hedges convert short term interest margin volatility on product balances (such as non-interest bearing current accounts and managed rate deposits) into a more stable medium term rate and are built on a monthly basis to achieve a targeted maturity profile.
 
  2
 Equity structural hedges are in place to manage the volatility in net earnings generated by businesses on the Group's equity, with the impact allocated to businesses in line with their economic capital usage.
 
  3
 Includes contribution from equity structural hedging. Total Group income from equity structural hedges increased to £2,109m (2010: £1,788m) including £1,285m (2010: £1,057m) that was allocated to Barclays Capital and Head Office, primarily due to increased gains on sale of hedging instruments partially offset by a decline in ongoing hedging contribution.
 
 
 
Performance Management
 
Other Group Net Interest Income
 
·      Barclays Capital net interest income increased 5% to £1,177m, including a £247m increase in gains on sale of hedging instruments
 
 
·      Head Office and Investment Management net interest expense of £965m (2010: £29m income) principally reflects a reduction in income which is transferred from trading income within Head Office relating to interest rate swaps
       used  for hedge accounting purposes, together with an increase in amounts transferred to businesses relating to gains arising from the sale of hedging instruments 
 
 
 
 
 
 
Net Interest Margin
 
 
·      The net interest margin for RBB, Corporate and Wealth remained stable at 2.04% (2010: 2.03%). Consistent with prior periods the net interest margin is expressed as a percentage of the sum of average customer assets and
        liabilities,  to reflect the impact of the margin generated on retail and commercial banking liabilities
 
 
·      The net interest margin expressed as a percentage of average customer assets only, improved to 3.77% (2010: 3.67%)
 
 
·      An analysis is provided below for RBB, Corporate and Wealth for each of the component parts of net interest income
 
Year Ended 31.12.11
UK RBB
Europe RBB
Africa RBB
Barclaycard
Barclays Corporate
Barclays Wealth
Total RBB, Corporate and Wealth
 
%
%
%
%
%
%
%
Customer asset margin
1.22 
0.87 
3.11 
9.52 
1.35 
0.77 
2.20 
Customer liability margin
0.87 
0.65 
2.27 
- 
1.00 
0.99 
1.06 
               
Non-customer generated margin
0.46 
0.47 
0.32 
(0.08) 
0.29 
0.36 
0.36 
               
Net interest margin
1.51 
1.28 
3.07 
9.44 
1.46 
1.29 
2.04 
               
Average customer assets (£m)
 118,503 
 43,749 
 38,877 
 30,289 
 68,667 
 17,546 
 317,631 
Average customer liabilities (£m)
 107,761 
 17,702 
 29,473 
 - 
 70,632 
 44,536 
 270,104 
               
Year Ended 31.12.10
              
Customer asset margin
1.26 
1.02 
3.12 
9.35 
1.43 
0.81 
2.25 
Customer liability margin
0.68 
0.11 
2.25 
- 
0.76 
0.87 
0.86 
               
Non-customer generated margin
0.47 
0.41 
0.18 
0.42 
0.41 
0.37 
0.40 
               
Net interest margin
1.45 
1.16 
2.94 
9.77 
1.53 
1.22 
2.03 
               
Average customer assets (£m)
 113,713 
 41,509 
 41,328 
 28,811 
 69,831 
 14,529 
 309,721 
Average customer liabilities (£m)
 104,508 
 17,263 
 27,731 
 - 
 60,946 
 40,985 
 251,433 
 
 
·      The customer asset margin is presented as a percentage of interest earned on customer assets (excluding the impact of hedging), relative to the average internal funding rate divided by average customer assets. The customer
        liability margin is calculated as the interest on customer liabilities (excluding the impact of hedging), relative to the average internal funding rate, divided by average customer liabilities
 
 
·      The non-customer generated margin is calculated as non-customer interest income (principally comprising the impact of both the product and equity structural hedge) as a percentage of the sum of average customer assets and
        liabilities, consistent with the presentation of the net interest margin
 
 
·      The Group's internal funding rate prices intra-group funding and liquidity to appropriately give credit to businesses with net surplus liquidity and to charge those businesses in need of wholesale funding at a rate that is driven by
        prevailing market rates including a term premium. The objective is to price internal funding for assets and liabilities in line with the cost of alternative funding, which ensures there is consistency between retail and wholesale
        sources
 
 

 
Risk Management
 
Overview
 
 
·      Barclays has clear risk management objectives and a well-established strategy to deliver these objectives. The approach to identifying, assessing, reporting, controlling and managing risks is formalised in the Principal Risks
        Policy  and associated control framework
 
 
·      During 2011, the Principal Risks Policy was updated, resulting in risks being grouped into four categories with no significant change to the underlying risk types. Further information will be provided in the Annual Report
 
 
·      The Group's Principal Risks and the current associated uncertainties1, together with references to where areas of significant risk affecting the 2011 results are described, are as follows:
 
Principal Risks and Associated Uncertainties1
  
Topics Covered
Page
Funding Risk
      
- Impact of Basel 3 as regulatory rules are finalised
- Impacts on capital ratios from weak profit performance
- Volatility in cost of funding due to economic uncertainty
- Reduction in available depositor and wholesale funding
  
- Capital base, risk weighted assets and balance sheet leverage
- Liquidity pool and funding structure
38
 
41
 
Credit Risk
      
- Impact of potentially deteriorating sovereign credit quality, particularly debt servicing and refinancing capability
- Extent and sustainability of economic recovery, including impact of austerity measures on the European economies
- Increase in unemployment due to a weaker economy, fiscal tightening and other measures
- Impact of rising inflation and potential interest rate rises on consumer debt affordability and corporate profitability
- Possibility of further falls in residential property prices in the UK, South Africa and Western Europe
- Potential liquidity shortages increasing counterparty risks
- Potential for large single name losses and deterioration in specific sectors and geographies
- Possible deterioration in remaining credit market exposures
- Potential exit of one or more countries from the Euro as a result of the European debt crisis
  
- Total assets by valuation basis and underlying asset class
- Loans and advances to customers and banks
- Impairment, potential credit risk loans and coverage ratios
- Retail credit risk
- Wholesale credit risk
- Barclays Capital credit market exposures
- Group exposures to selected countries
46
 
47
 
49
 
52
57
64
59
Market Risk
      
- Reduced client activity leading to lower revenues
- Decreases in market liquidity due to economic uncertainty
- Impact on income from uncertain interest and exchange rate environment
- Asset returns underperforming pension liabilities
  
- Analysis of market risk and, in particular, Barclays Capital's DvaR
- Analysis of interest margins
- Retirement benefit liabilities
66
35
75
Operational Risk
      
- Implementation of strategic change and integration programmes across the Group
- Continued regulatory and political focus, driven by the global economic climate
- Impact of new, wide ranging, legislation in various countries coupled with changing regulatory landscape
- Increasingly litigious environment
- The crisis management agenda and breadth of regulatory change required in global financial institutions
  
- Significant litigation matters
- Significant investigations
- Significant regulatory matters
78
80
80
 
 
 
 


 
 
1      The associated uncertainties may affect more than one Principal Risk
 
 

 

 
Funding Risk - Capital
 
 
 
Key Capital Ratios
As at
As at
 
31.12.11
31.12.10
Core tier 1
11.0%
10.8%
Tier 1
12.9%
13.5%
Total capital
16.4%
16.9%
     
Capital Resources
£m
£m
Shareholders' equity (excluding non-controlling interests) per balance sheet
55,589 
50,858 
     
Non-controlling interests per balance sheet
9,607 
11,404 
 - Less: other tier 1 capital - preference shares
(6,235)
(6,317)
 - Less: other tier 1 capital - Reserve Capital Instruments
- 
(1,275)
 - Less: non-controlling tier 2 capital
(573)
(572)
Other regulatory adjustments
(138)
(317)
     
Regulatory adjustments and deductions:
    
Own credit cumulative gain (net of tax)
(2,680)
(621)
Defined benefit pension adjustment
(1,241)
99 
Unrealised losses on available for sale debt securities
555 
340 
Unrealised gains on available for sale equity (recognised as tier 2 capital)
(828)
- 
Cash flow hedging reserve
(1,442)
(152)
Goodwill and intangible assets
(7,560)
(8,326)
50% excess of expected losses over impairment (net of tax)
(506)
(268)
50% of securitisation positions
(1,577)
(2,360)
Other regulatory adjustments
95 
368 
Core tier 1 capital
 43,066 
 42,861 
     
Other tier 1 capital:
    
Preference shares
6,235 
6,317 
Tier 1 notes1 
530 
1,046 
Reserve Capital Instruments
2,895 
6,098 
     
Regulatory adjustments and deductions:
    
50% of material holdings
(2,382)
(2,676)
50% tax on excess of expected losses over impairment
129 
(100)
Total tier 1 capital
 50,473 
 53,546 
     
Tier 2 capital:
    
Undated subordinated liabilities
1,657 
1,648 
Dated subordinated liabilities
15,189 
16,565 
Non-controlling tier 2 capital
573 
572 
Reserves arising on revaluation of property
25 
29 
Unrealised gains on available for sale equity
828 
- 
Collectively assessed impairment allowances
2,385 
2,409 
     
Tier 2 deductions:
    
50% of material holdings
(2,382)
(2,676)
50% excess of expected losses over impairment (gross of tax)
(635)
(168)
50% of securitisation positions
(1,577)
(2,360)
     
Total capital regulatory adjustments and deductions:
    
Investments that are not material holdings or qualifying holdings
(1,991)
(1,622)
Other deductions from total capital
(597)
(628)
Total regulatory capital  
 63,948 
 67,315 
 
 
 
 
 
 
 
 
 
1    Tier 1 notes are included in subordinated liabilities in the consolidated balance sheet.
    
 
 
 


 
 
Funding Risk - Capital
 
 
·      Core Tier 1 capital increased by £0.2bn to £43.1bn primarily driven by:
 
 
 
-      £2.6bn capital generated from retained profits excluding own credit gain, impairment of investment in BlackRock, Inc. and goodwill impairment, which are added back for regulatory capital purposes
 
 
 
-      £1.1bn reduction in the value of the investment in BlackRock, Inc. prior to impairment
 
 
 
-      £0.5bn net increase from the impact of share awards on shareholders' funds
 
 
 
-      £1.3bn reduction reflecting contributions made to the UK Retirement Fund in 2011
 
 
 
-      £1.3bn reduction due to foreign currency movements, primarily due to the depreciation of the South African Rand and Euro against Sterling
 
 
 
-      £0.8bn increase resulting from lower regulatory deductions
 
 
·      Total capital resources decreased by £3.4bn to £63.9bn principally as a result of the debt buy-back in December 2011 of £1.9bn Reserve Capital Instruments and £0.5bn Tier 1 notes that will not qualify as Tier 1 capital under Basel 3 and the redemption of a further £1.3bn of Reserve Capital Instruments
 
 
 
Total Assets and Risk Weighted Assets by Business
 
 
 
Total Assets by Business
  
Risk Weighted Assets by Business
 
As at  31.12.11
As at
31.12.10
  
As at
31.12.11
As at
31.12.10
 
£m
£m
  
£m
£m
UK RBB
127,845 
121,590 
  
33,956 
35,274 
Europe RBB
51,310 
53,609 
  
17,436 
17,269 
Africa RBB
50,759 
60,264 
  
33,419 
38,401 
Barclaycard
33,838 
30,324 
  
34,186 
31,913 
Barclays Capital
1,158,351 
1,094,799 
  
186,700 
191,275 
Barclays Corporate
88,674 
85,735 
  
69,712 
70,796 
Barclays Wealth
20,866 
17,849 
  
13,076 
12,398 
Investment Management
4,066 
4,612 
  
125 
74 
Head Office Functions and Other Operations
27,818 
20,863 
  
2,389 
631 
Total
1,563,527 
1,489,645 
  
390,999 
398,031 
           
 
 
Risk Weighted Assets by Risk
    
 
As at
As at
 
31.12.11
31.12.10
 
£m
£m
Credit risk
245,224 
260,998 
Counterparty risk
    
 - Internal model method
33,131 
29,466 
 - Non-model method
4,953 
14,397 
Market risk
    
 - Modelled - VaR
26,568 
9,209 
 - Modelled - Charges add-on and Non-VaR  
17,560 
3,769 
 - Standardised
27,823 
48,073 
Operational risk
35,740 
32,119 
Total risk weighted assets
390,999 
398,031 
 
 
 


 
Funding Risk - Capital
 
 
·      Group risk weighted assets decreased by 2% to £391bn (2010: £398bn) driven by:
 
 
 
-      £30bn increase from implementation of CRD3 incorporating Basel 2.5, predominantly in modelled market risk
 
 
 
-      £26bn reduction across credit, counterparty and market risk in Barclays Capital, due to lower levels of activity combined with risk reduction, offset by a £4bn increase relating to market stress
 
 
 
-      £11bn reduction from currency movements, primarily depreciation of the Rand and Euro against Sterling
 
 
 
-      £9bn reduction due to credit market exposure sell down in Barclays Capital
 
 
 
-      £5bn increase from business growth, £2bn relating to UK RBB and Barclays Corporate, reflecting delivery against Project Merlin targets, and £3bn from Barclaycard acquisitions
 
 
 
Balance Sheet Leverage
As at
31.12.11
As at
31.12.10
 
£m
£m
Total assets1 
1,563,527 
1,489,645 
Counterparty netting
(440,592)
(340,467)
Collateral on derivatives
(51,124)
(37,289)
Net settlement balances and cash collateral
(61,913)
(48,108)
Goodwill and intangible assets
(7,846)
(8,697)
Customer assets held under investment contracts2
(1,681)
(1,947)
Adjusted total tangible assets
1,000,371 
1,053,137 
Total qualifying Tier 1 capital
50,473 
53,546 
Adjusted gross leverage
20 
20 
Adjusted gross leverage (excluding liquidity pool)
17 
17 
Ratio of total assets to shareholders' equity
24 
24 
Ratio of total assets to shareholders' equity (excluding liquidity pool)
22 
21 
 
 
·      Barclays continues to manage its balance sheet within limits and targets for balance sheet usage
 
 
·      Adjusted gross leverage was 20x (2010: 20x) as the reduction in qualifying Tier 1 Capital to £50.5bn (2010: £53.5bn) was offset by the reduction in adjusted total tangible assets by 5% to £1,000bn
 
 
·      At month ends during 2011 the ratio moved in the range from 20x to 23x with fluctuations arising primarily within collateralised reverse repurchase lending and high quality trading portfolio assets
 
 
·      Adjusted total tangible assets include cash and balances at central banks of £106.9bn (31 December 2010: £97.6bn). Excluding these balances, the balance sheet leverage would be 18x (2010: 18x). Excluding the liquidity pool,
        leverage would be 17x (2010: 17x)
 
 
·      The ratio of total assets to total shareholders' equity was 24x (2010: 24x) and moved within a month end range of 24x to 28x, driven by trading activity fluctuations noted above and changes in gross interest rate derivatives and
        settlement balances
 
 
·      The Basel 3 guidelines include a proposed leverage metric, to be implemented by national supervisors in parallel run from 1 January 2013 (migrating to a Pillar 1 measure by 2018). Based on our interpretation of the current proposals
        the Group's Basel 3 leverage ratio as at 31 December 2011 would be within the proposed limit of 33x
 
 
 
1        Includes Liquidity Pool of £152bn (2010: £154bn).
 
2       Comprising financial assets designated at fair value and associated cash balances.
 
 

 
 

 
Funding Risk - Liquidity
 
Liquidity Pool
 
The Group liquidity pool as at 31 December 2011 was £152bn (2010: £154bn) and moved within a month-end range of £140bn to £167bn during the year. The liquidity pool is held unencumbered and is not used to support payment or clearing requirements. It is intended to offset stress outflows and comprises the following cash and unencumbered assets.
 
 
Cash and Deposits with Central Banks1 
Government Bonds2 
Other Available Liquidity
Total3 
 
£bn
£bn
£bn
£bn
As at 31.12.11
105 
36 
11 
152 
As at 31.12.10
96 
40 
18 
154 
 
 
Liquidity Risk Management Framework
 
Barclays has a comprehensive Liquidity Risk Management Framework (the Liquidity Framework) for managing the Group's liquidity risk. The Liquidity Framework meets the FSA's standards and is designed to ensure that the Group maintains sufficient financial resources of appropriate quality for the Group's funding profile. This is achieved via a combination of policy formation, review and governance, analysis, stress testing, limit setting and monitoring. Together, these meet internal and regulatory requirements. 
 
 
Since June 2010, the Group has reported its liquidity position against backstop Individual Liquidity Guidance (ILG) provided by the FSA. The Group also monitors compliance against anticipated Basel 3 metrics, including the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR). As at 31 December 2011, the Group met 82% of the LCR (2010: 80%) and 97% of the NSFR (2010: 94%) requirements and is on track to meet the 100% compliance under Basel 3 required by 2015 and 2018 respectively.
 
 
Under the Liquidity Framework, the Group has established a Liquidity Risk Appetite (LRA), which is measured with reference to the liquidity pool as a percentage of anticipated stressed net contractual and contingent outflows for each of three stress scenarios. These scenarios are aligned to the FSA's prescribed stresses and cover a market-wide stress event, a Barclays-specific stress event and a combination of the two. Under normal market conditions, the liquidity pool must be in excess of 100% of three months' anticipated outflows for a market-wide stress and one month's anticipated outflows for each of the Barclays-specific and combined stresses. As at 31 December 2011, the liquidity pool as a percentage of the anticipated net outflows under each of the stress scenarios was:
 
 
 
 
Market-wide
3 month
Barclays-specific
1 month
Combined
1 month
Liquidity pool as a percentage of anticipated net outflows
  
127%
  
107%
  
118%
             
 
 
Barclays monitors the money markets closely, in particular for early indications of the tightening of available funding. In these conditions, the nature and severity of the stress scenarios are reassessed and appropriate action taken with respect to the liquidity pool. This may include further increasing the size of pool or monetising the pool to meet stress outflows.
 
Funding Structure
 
The Group's overall funding strategy is to develop a diversified funding base (both geographically and by depositor type) and maintain access to a variety of alternative funding sources, to minimise the cost of funding while providing protection against unexpected fluctuations. 
 
 
Within this, the Group aims to align the sources and uses of funding. As such, retail and commercial customer loans and advances are largely funded by customer deposits. Other assets together with other loans and advances and unencumbered assets, are funded by long term wholesale debt and equity.
 
 
Trading portfolio assets and reverse repurchase agreements are largely funded in the wholesale markets by repurchase agreements and trading portfolio liabilities, whilst derivative assets are largely matched by derivatives liabilities.
 
 
The liquidity pool is predominantly funded through wholesale markets.
 
 
 
 
 
 
1        Of which over 95% is placed with the Bank of England, US Federal Reserve, European Central Bank, Bank of Japan and Swiss National Bank.
 
2       Of which over 80% comprised UK, US, Japanese, French, German and Dutch securities.
 
3        £140bn of which is FSA eligible.
 


 
 
Funding Risk - Liquidity
 
Deposit Funding
 
Funding of Loans and Advances to Customers1
Loans and Advances
to Customers
Customer
 Deposits
Loan to
Deposit Ratio
 
£bn
£bn
%
RBB
231.6 
158.7 
 146 
Barclays Corporate1
64.6 
77.7 
 83 
Barclays Wealth
18.8 
46.5 
 40 
Total funding excluding secured
315.0 
282.9 
 111 
Secured funding
  
28.7 
  
Sub-total including secured funding
315.0 
311.6 
 101 
       
RBB, Corporate and Wealth
315.0 
282.9 
 111 
Barclays Capital
63.4 
46.0 
 138 
Group Centre
0.9 
- 
 nm 
Trading settlement balances and cash collateral
52.6 
37.1 
 142 
Total
431.9 
366.0 
 118 
 
 
 
 
 
 
The total loan to deposit ratio as at 31 December 2011 was 118% (2010: 124%) and the loan to deposit and long-term funding ratio was 75% (2010: 77%).
 
 
RBB, Barclays Corporate and Barclays Wealth activities are largely funded with customer deposits. As at 31 December 2011, the loan to deposit ratio for these businesses was 111% (2010: 114%) and the loan to deposit and secured funding ratio was 101% (2010: 105%). The funding gap for these businesses is met using asset backed securities and covered bonds secured primarily over customer loans and advances such as residential mortgages and credit card receivables.
 
 
The excess of Barclays Capital's loans and advances over customer deposits is funded with long-term debt and equity. 
 
 
Included within RBB and Barclays Capital are Absa related balances totalling £38.0bn of loans and advances to customers funded by £33.0bn of customer deposits and the gap of £5.0bn is funded with wholesale borrowings. This is managed separately by Absa due to local currency and funding requirements. During 2011, Absa has issued additional senior unsecured debt to further extend its funding term and diversify its funding base, reducing its reliance on wholesale money market funding.
 
 
Given that, contractually, current accounts are repayable on demand and savings accounts at short notice, the balance sheet is modelled to reflect behavioural experience in both assets and liabilities. The maturity profile resulting from this behavioural modelling is set out below.
 
       
Behavioural Maturity Profile Cash Inflow (Outflow)
Behavioural Maturity Profile
Loans and Advances to Customers
Customer Deposits
Customer
Funding Surplus/ (Deficit)
Less
than
 One Year
Greater
 than
One Year
 
£bn
£bn
£bn
£bn
£bn
RBB
231.6 
158.7 
(72.9)
13.8 
59.1 
Barclays Corporate
64.6 
77.7 
13.1 
(1.1)
(12.0)
Barclays Wealth
18.8 
46.5 
27.7 
(4.0)
(23.7)
Total funding excluding secured
315.0 
282.9 
(32.1)
8.7 
23.4 
Secured funding
  
28.7 
28.7 
(10.1)
(18.6)
Total RBB, Corporate and Wealth funding
315.0 
311.6 
(3.4) 
(1.4)
4.8
 
The relatively low cash outflow within one year demonstrates that customer funding remains broadly matched from a behavioural perspective. 
 
 
 
 
 
 
1        In addition Barclays Corporate holds £17.2bn (2010: £14.4bn) loans and advances as financial assets held at fair value.


 
 
Funding Risk - Liquidity
 
 
Wholesale funding
 
 
Funding of Other Assets1 as at 31 December 2011
 
Assets
£bn
  
Liabilities
£bn
Trading portfolio assets
 104 
  
Repurchase agreements
 207 
Reverse repurchase agreements
 103 
      
         
Reverse repurchase agreements
 45 
  
Trading portfolio liabilities
 45 
         
Derivative financial instruments
 536 
  
Derivative financial instruments
 525 
         
Liquidity pool
 152 
  
Less than 1 year wholesale debt
 130 
Other unencumbered assets2 
 175 
  
Greater than 1 year wholesale debt and equity
 196 
 
- Trading portfolio assets are largely funded by repurchase agreements. The majority of reverse repurchase agreements (i.e. secured lending) are matched by repurchase agreements. The remainder of reverse repurchase agreements
        are used to settle trading portfolio liabilities
 
 
- Derivative assets and liabilities are largely matched. A substantial proportion of balance sheet derivative positions qualify for counterparty netting and the remaining portions are largely offset once netted against cash collateral
       received and paid
 
 
- The liquidity pool is largely funded by wholesale debt maturing in less than one year, with a significant portion maturing in more than one year. Other unencumbered assets (mainly being available for sale investments, trading
        portfolio assets and loans and advances to banks) are largely matched by wholesale debt maturing over an average of 5 years and equity
 
 
- Repurchase agreements and other secured funding are largely collateralised by government issued bonds and other highly liquid securities. The percentage of secured funding using each asset class as collateral is set out below:
 
 
 
Secured Funding by Asset Class
Govt
Agency
MBS
ABS
Corporate
Equity
 Other
 
%
%
%
%
%
%
%
As at 31.12.11
66 
6 
9 
3 
7 
7 
2 
As at 31.12.10
64 
7 
9 
3 
7 
7 
3 
 
 
Composition of Wholesale Funding3
 
 
The Group maintains access to a variety of sources of wholesale funds in USD, EUR and GDP, including those available from money markets, repo markets and from term investors, across a variety of distribution channels and geographies. We are an active participant in money markets, have direct access to US, European and Asian capital markets through our global investment banking operations and long-term investors through our global client base. As a result, wholesale funding is well diversified by product, maturity, geography and major currency.
 
 
 
 
1     Excludes balances relating to Absa, which are managed separately due to local currency and funding requirements.
 
2     Predominantly unencumbered available for sale investments, trading portfolio assets, financial assets designated at fair value and loans and advances to banks funded by greater than one year wholesale debt and equity.
 
3     The composition of wholesale funds comprises balance sheet reported Deposits from Banks, Financial Liabilities at Fair Value, Debt Securities in Issue and Subordinated Liabilities, excluding cash collateral and settlement
       balances and Absa.
 


 
Funding Risk - Liquidity
 
 
Maturity Profile
 
 
 
Maturity of Wholesale Funding
Not more than three months
Over three months but not more than six months
Over six months but not more than one year
Sub-total less than one year
Over one year but not more than three years
Over three years
Total
 
£bn
£bn
£bn
£bn
£bn
£bn
£bn
Deposits from Banks
34.1 
0.9 
0.9 
35.9 
0.3 
1.7 
37.9 
Certificates of Deposit and Commercial Paper
35.0 
7.5 
4.0 
46.5 
1.9 
1.0 
49.4 
Asset Backed Commercial Paper
8.9 
0.2 
- 
9.1 
- 
- 
9.1 
Senior unsecured MTNs (Public benchmark)
4.7 
0.1 
2.5 
7.3 
11.1 
14.6 
33.0 
Senior unsecured MTNs (Privately placed)
3.1 
1.6 
3.4 
8.1 
6.5 
11.7 
26.3 
Senior unsecured structured notes
3.2 
2.1 
3.9 
9.2 
12.4 
28.0 
49.6 
Covered bonds/ABS
0.3 
2.5 
0.8 
3.6 
6.3 
14.2 
24.1
Subordinated liabilities
- 
- 
- 
- 
0.8 
23.0 
23.8 
Other1 
7.7 
1.5 
1.4 
10.6 
1.4 
- 
12.0 
Total
97.0 
16.4 
16.9 
130.3 
40.7 
94.2 
265.2 
               
Of which secured
10.9 
3.9 
2.1 
16.9 
6.9 
14.9 
38.7 
Of which unsecured
86.1 
12.5 
14.8 
113.4 
33.8 
79.3 
226.5 
 
 
- The above includes £27bn of maturing term financing2
 
 
- The liquidity risk is carefully managed primarily through the LRA stress tests, against which the liquidity pool is held. Although not a requirement, as at 31 December 2011, the liquidity pool was equivalent to more than one year of
        wholesale debt maturities
 
 
- As at 31 December 2011, approximately 10% of customer loans and advances were secured against external funding, leaving significant headroom and flexibility to raise secured funding
 
 
- Excluding wholesale funding of the liquidity pool, the average maturity of wholesale funding was at least 58 months
 
 
Term Financing
 
As outlined above, the Group has £27bn of term debt maturing in 2012 and a further £16bn maturing in 2013. 
 
 
The Group continues to attract deposits in unsecured money markets and to raise additional secured and unsecured term funding in a variety of markets. During 2011, the Group issued approximately £30bn of term funding, comprising:
 
 
- £3.8bn equivalent of public benchmark senior unsecured medium term notes
 
 
- £5.0bn equivalent of privately placed senior unsecured medium term notes
 
 
- £10.1bn equivalent of senior unsecured structured notes
 
 
- £10.3bn equivalent of public covered bonds/ABS
 
 
- £1.0bn equivalent of public subordinated debt
 
 
This term funding raised during 2011 re-financed all wholesale term debt maturing in 2011, funded strategic balance sheet growth and further strengthened the Group's term liquidity position. In January, £5bn of funding was raised.
 
 
 
1        Primarily comprised of Fair Value Deposits and secured financing of physical gold.
 
2       Term funding maturities are maturities of senior unsecured MTNs, structured notes, covered bonds/ABS and subordinated debt where the original maturity of the instrument was more than 1 year. In addition, as at 31
         December, £1.2bn of these instruments were not term financing as they had an original maturity of less than 1 year.
 


 
Funding Risk - Liquidity
 
 
Currency Profile
 
 
As at 31 December 2011, the proportion of wholesale debt held in each currency by wholesale funding type was as follows:
 
Currency Split by Product Type
USD
EUR
GBP
Other
 
% 
% 
% 
% 
Deposits from banks
36 
27 
27 
10 
CDs and CP
59 
25 
15 
1 
ABCP
85 
8 
7 
- 
Senior unsecured MTNs
26 
40 
13 
21 
Structured notes
35 
21 
22 
22 
Covered bonds/ABS
31 
29 
39 
1 
Subordinated debt
16 
52 
32 
- 
Wholesale debt
37 
30 
22 
11 
         
Currency composition of liquidity pool
27 
42 
17 
14 
 
 
·      To manage cross-currency refinancing risk Barclays manages to FX cash-flow limits, which limit the risk at specific maturities
 
·      The Group's liquidity pool is also well diversified by major currency and the Group monitors the three LRA stress scenarios for major currencies
 
 
 

 
Credit Risk
 
Analysis of Total Assets by Valuation Basis
    
 
 
     
Accounting Basis
  
Sub Analysis
Assets as at 31.12.11
Total Assets
  
 
Cost Based
Measure
Fair Value
  
Credit Market Exposures1 
 
£m
  
£m
£m
  
£m
Cash and balances at central banks
106,894 
  
106,894 
- 
  
- 
             
Items in the course of collection from other banks
1,812 
  
1,812 
- 
  
- 
             
Debt securities
123,364 
  
- 
123,364 
  
1,681 
Equity securities
24,861 
  
- 
24,861 
  
- 
Traded loans
1,374 
  
- 
1,374 
  
- 
Commodities2 
2,584 
  
- 
2,584 
  
- 
Trading portfolio assets
152,183 
  
- 
152,183 
  
1,681 
             
Loans and advances
21,960 
  
- 
21,960 
  
2,513 
Debt securities
2,095 
  
- 
2,095 
  
- 
Equity securities
4,018 
  
- 
4,018 
  
773 
Other financial assets3 
7,574 
  
- 
7,574 
  
- 
Held in respect of linked liabilities to customers under investment contracts
1,302 
  
- 
1,302 
  
- 
Financial assets designated at fair value
36,949 
  
- 
36,949 
  
3,286 
             
Derivative financial instruments
538,964 
  
- 
538,964 
  
1,242 
             
Loans and advances to banks
47,446 
  
47,446 
- 
  
- 
             
Loans and advances to customers
431,934 
  
431,934 
- 
  
5,780 
             
Reverse repurchase agreements and other similar secured lending
153,665 
  
153,665 
- 
  
- 
             
Debt securities  
63,610 
  
- 
63,610 
  
259 
Equity securities
4,881 
  
- 
4,881 
  
- 
Available for sale financial investments
68,491 
  
- 
68,491 
  
259 
             
Other assets
25,189 
  
22,261 
2,928 
  
2,733 
             
Total assets as at 31.12.11
1,563,527 
  
764,012 
799,515 
  
14,981 
             
Total assets as at 31.12.10
1,489,645 
  
792,294 
697,351 
  
23,625 
             
             
 
 
 
1        Further analysis of Barclays Capital credit market exposures is on pages 64 to 65. Undrawn commitments of £180m (2010: £264m) are off-balance sheet and therefore not included in the table above.
 
2       Commodities primarily consist of physical inventory positions.
 
3        These instruments consist primarily of reverse repurchase agreements designated at fair value.
 
 

 
 

 
Credit Risk
 
 
Analysis of Loans and Advances to Customers and Banks
 
 
 
 
 
Loans and Advances at Amortised Cost Net of Impairment Allowances, by Industry Sector and Geography1
             
 
United Kingdom
Europe
Americas
Africa and Middle East
Asia
Total
As at 31.12.11
£m
£m
£m
£m
£m
£m
Banks
9,251 
13,503 
13,349 
2,956 
5,648 
44,707 
Other financial institutions
18,474 
20,059 
44,965 
2,264 
3,888 
89,650 
Manufacturing
6,185 
3,341 
1,396 
1,439 
543 
12,904 
Construction
3,391 
771 
32 
348 
65 
4,607 
Property
16,230 
3,193 
869 
3,600 
212 
24,104 
Government
493 
3,365 
907 
3,072 
1,031 
8,868 
Energy and water
1,599 
2,448 
2,165 
818 
384 
7,414 
Wholesale and retail distribution and leisure
10,308 
3,008 
656 
2,073 
161 
16,206 
Business and other services
16,473 
4,981 
1,584 
2,907 
355 
26,300 
Home loans
112,260 
38,508 
566 
19,437 
501 
171,272 
Cards, unsecured loans and other personal lending
27,409 
6,417 
9,293 
6,158 
785 
50,062 
Other
8,363 
5,554 
1,312 
7,471 
586 
23,286 
Net loans and advances to customers and banks
230,436 
105,148 
77,094 
52,543 
14,159 
479,380 
Impairment allowance
4,005 
2,920 
2,128 
1,446 
98 
10,597 
             
As at 31.12.10
            
Banks
4,709 
8,831 
17,304 
1,660 
3,802 
36,306 
Other financial institutions
19,930 
18,153 
43,210 
2,879 
3,533 
87,705 
Manufacturing
6,660 
4,793 
904 
1,543 
866 
14,766 
Construction
3,607 
1,259 
34 
909 
54 
5,863 
Property
13,746 
3,024 
797 
4,822 
418 
22,807 
Government
534 
1,219 
354 
3,648 
546 
6,301 
Energy and water
2,183 
3,617 
2,426 
520 
485 
9,231 
Wholesale and retail distribution and leisure
11,594 
2,859 
644 
1,888 
372 
17,357 
Business and other services
15,171 
6,142 
1,198 
3,394 
323 
26,228 
Home loans
104,934 
37,347 
214 
25,241 
319 
168,055 
Cards, unsecured loans and other personal lending
25,950 
7,768 
7,340 
4,297 
1,313 
46,668 
Other
8,034 
4,843 
1,398 
9,103 
1,076 
24,454 
Net loans and advances to customers and banks
217,052 
99,855 
75,823 
59,904 
13,107 
465,741 
Impairment allowance
4,429 
2,793 
2,958 
1,857 
395 
12,432 
 
 
Within European financial institutions were loans (excluding settlement balances and cash collateral) to French and German counterparties of £3,199m (2010: £2,161m) and £1,474m (2010: £1,621m) respectively.
 
 
 
 
 
 
 
 
 
 
1        The analysis of loans and advances and impairment by geography has been aligned to the geographic regions used for reporting income presented on page 67.
 


 
Credit Risk
 
Loans and Advances Held at Fair Value, by Industry Sector and Geography1 
    
             
As at 31.12.11
United Kingdom
Europe
Americas2
Africa and Middle East
Asia
Total
 
£m
£m
£m
£m
£m
£m
Banks
11 
364 
10 
126 
1 
512 
Other financial institutions
142 
76 
892 
134 
21 
1,265 
Manufacturing
16 
211 
154 
7 
18 
406 
Construction
158 
- 
- 
19 
2 
179 
Property
8,443 
1,147 
575 
133 
3 
10,301 
Government
5,609 
- 
- 
19 
8 
5,636 
Energy and water
32 
203 
46 
104 
- 
385 
Wholesale and retail distribution and leisure
63 
15 
243 
36 
2 
359 
Business and other services
3,381 
76 
201 
34 
- 
3,692 
Other
90 
66 
55 
317 
71 
599 
Total
17,945 
2,158 
2,176 
929 
126 
23,334 
             
As at 31.12.10
            
Banks
 49 
 766 
 5 
 193 
 52 
1,065 
Other financial institutions
 90 
 230 
 439 
 252 
 49 
1,060 
Manufacturing
 39 
 67 
 187 
 49 
 5 
347 
Construction
 199 
 - 
 - 
 45 
 5 
249 
Property
 7,003 
 2,793 
 1,858 
 43 
 237 
11,934 
Government
 4,848 
 - 
 - 
 189 
 51 
5,088 
Energy and water
 14 
 259 
 57 
 34 
 6 
370 
Wholesale and retail distribution and leisure
 70 
 14 
 705 
 11 
 - 
800 
Business and other services
 2,650 
 69 
 442 
 80 
 5 
3,246 
Other
 103 
 114 
 76 
 69 
 1 
363 
Total
 15,065 
 4,312 
 3,769 
 965 
 411 
24,522 
             
 
 
Impairment Allowance
    
 
Year Ended
Year Ended
 
31.12.11
31.12.10
 
£m
£m
At beginning of period
12,432 
10,796 
Acquisitions and disposals
(18)
78 
Exchange and other adjustments
(440)
331 
Unwind of discount
(243)
(213)
Amounts written off
(5,165)
(4,310)
Recoveries
265 
201 
Amounts charged against profit
3,766 
5,549 
At end of period
10,597 
12,432 
     
 
 
 
 
 
 
 
 
1        The analysis of loans and advances and impairment by geography has been aligned to the geographic regions used for reporting income presented on page 67.
 
2       Exposures to financial institutions includes £693m (31 December 2010: £nil) of loans backed by retail mortgage collateral.
 


 
Credit Risk
 
Credit and Other Impairment Charges by Business
         
Year Ended 31.12.11
Loan Impairment1 
Available
 for
Sale Assets
Reverse Repurchase Agreements
Credit Impairment Total
 
£m
£m
£m
£m
UK RBB
536 
- 
- 
536 
Europe RBB
241 
20 
- 
261 
Africa RBB
464 
- 
- 
464 
Barclaycard  
1,259 
- 
- 
1,259 
Barclays Capital2 
129 
12 
(48)
93 
Barclays Corporate
1,122 
27 
- 
1,149 
Barclays Wealth
41 
- 
- 
41 
Investment Management
- 
1,800 
- 
1,800 
Head Office Functions and Other Operations
(2)
1 
- 
(1)
Total
3,790 
1,860 
(48)
5,602 
         
Year Ended 31.12.10
        
UK RBB
819 
- 
- 
819 
Europe RBB
314 
- 
- 
314 
Africa RBB
562 
- 
- 
562 
Barclaycard  
1,688 
- 
- 
1,688 
Barclays Capital2 
642 
(95)
(4)
543 
Barclays Corporate
1,551 
145 
- 
1,696 
Barclays Wealth
48 
- 
- 
48 
Investment Management
- 
- 
- 
- 
Head Office Functions and Other Operations
1 
1 
- 
2 
Total
5,625 
51 
(4)
5,672 
 
 
·      Loan Impairment charges reduced 33% reflecting the generally improving underlying trends across the majority of retail and wholesale businesses
 
 
·      This lower impairment and a 2% increase in loans and advances resulted in a lower overall Group loan loss rate of 77bps (2010: 118bps)
 
 
·      The higher impairment charge against available for sale assets was driven by a charge of £1,800m in Investment Management reflecting the impairment of the investment in BlackRock, Inc., which has been recycled through the
         income statement, having been previously recognised in equity
 
 
·      Further detail can be found in the Retail Credit Risk and Wholesale Credit Risk sections on pages 51 and 57
 
 
 
1        Includes charges of £24m (2010: £76m) in respect of undrawn facilities and guarantees.
 
2       Credit market related charges within Barclays Capital comprised a write back of £14m (2010: £660m charge) against loans and advances and a write back of £35m (2010: £39m write back) against available for sale assets.
 


 
Credit Risk
 
Credit Risk Loans and Coverage Ratios
            
 
 
 
CRLs
  
Impairment Allowance
  
CRL Coverage
 
As at 31.12.11
As at 31.12.10
  
As at 31.12.11
As at 31.12.10
  
As at 31.12.11
As at 31.12.10
 
£m
£m
  
£m
£m
  
%
%
Home loans
3,790 
4,294 
  
834 
854 
  
22.0
19.9
Cards, unsecured and other retail lending
6,626 
8,277 
  
4,540 
6,029 
  
68.5
72.8
Retail  
10,416 
12,571 
  
5,374 
6,883 
  
51.6
54.8
                 
Wholesale (excluding loan to Protium)1 
10,926 
11,751 
  
5,223 
5,017 
  
47.8
42.7
Loan to Protium1 
- 
7,560 
  
- 
532 
  
         -
7.0
Wholesale
10,926 
19,311 
  
5,223 
5,549 
  
47.8
28.7
                 
Group (excluding loan to Protium)
21,342 
24,322 
  
10,597 
11,900 
  
49.7
48.9
Group
21,342 
31,882 
  
10,597 
12,432 
  
49.7
39.0
 
 
The information below is based on Group (excluding loan to Protium) as the Protium loan was repaid in 2011. This facilitates comparison between periods.
 
 
Credit Risk Loans
 
- Credit Risk Loans (CRL) balances in the wholesale portfolio decreased 7% primarily due to falls in:
 
 
 
-    Barclays Corporate, where lower balances in the UK reflected the high level of write-offs and balance reductions. Balances in Europe remained stable with higher balances in Portugal and Italy reflecting deteriorating credit
     conditions offset by lower balances in Spain
 
 
 
-    Africa RBB, principally due to the depreciation in the value of the Rand against Sterling, repayments and a slowdown in new CRLs
 
 
- CRL balances in retail portfolios decreased 17%, reflecting the write-off of balances following a reduction in the period between accounting charge-off and write-off from 18 months to 12 months across the majority of unsecured
       portfolios, as well as lower rate of inflows, debt sales and customer repayments
 
 
- The main exception was Europe RBB where the overall balance was largely unchanged as decreases in Spain, principally resulting from a series of unsecured portfolio sales in 2011, were offset by increases, mainly in the mortgage
        portfolios as a consequence of higher delinquent balances in deteriorating economic conditions
 
 
Coverage Ratios
 
- The CRL coverage ratio increased slightly to 49.7% (2010: 48.9%) reflecting:
 
 
 
-    an increase in the wholesale portfolio ratio to 47.8% (2010: 42.7%)
 
 
 
-    a decrease in the retail portfolio ratio to 51.6% (2010: 54.8%)
 
 
 
 
 
1       As at 31 December 2010, wholesale gross loans and advances included a £7,560m loan to Protium, against which an impairment of £532m was recognised. In April 2011, Barclays entered into several agreements to acquire
         all third party interests in Protium in order to help facilitate the Group's early exit from the underlying exposures. As a result, Protium was consolidated by the Group and the loan eliminated from the Group balance sheet.
         Refer to page 65 for further information.
 


 
Credit Risk
 
Retail and Wholesale Loans and Advances to Customers and Banks
    
As at 31.12.11
Gross
L&A
Impairment Allowance
L&A Net of Impairment
Credit
Risk Loans1 
CRLs % of Gross L&A1 
Loan Impairment Charges2 
Loan Loss Rates
 
£m
£m
£m
£m
%
£m
bps
Total retail
241,138 
5,374 
235,764 
10,416 
4.3 
2,422 
100 
               
Wholesale - customers
201,348 
5,178 
196,170 
10,892 
5.4 
1,362 
68 
Wholesale – banks
47,491 
45 
47,446 
34 
0.1 
6 
1 
Total wholesale
248,839 
5,223 
243,616 
10,926 
4.4 
1,368 
55 
               
Loans and advances at amortised cost
489,977 
10,597 
479,380 
21,342 
4.4 
3,790 
77 
               
Loans and advances held at fair value
23,334 
na
23,334 
        
Total loans and advances
513,311 
10,597 
502,714 
        
               
As at 31.12.10
              
Total retail
235,335 
6,883 
228,452 
12,571 
5.3 
3,296 
140 
               
Wholesale - customers
204,991 
5,501 
199,490 
11,716 
5.7 
2,347 
114 
Wholesale – banks
37,847 
48 
37,799 
35 
0.1 
(18)
(5)
Total wholesale
242,838 
5,549 
237,289 
11,751 
4.8 
2,329 
96 
               
Loans and advances at amortised cost
478,173 
12,432 
465,741 
24,322 
5.1 
5,625 
118 
               
Loans and advances held at fair value
24,522 
na
24,522 
        
Total loans and advances
502,695 
12,432 
490,263 
        
 
 
- Gross loans and advances to customers and banks at amortised cost increased 2% principally reflecting growth in balances across the majority of the wholesale and retail businesses
 
 
- Further detail can be found in the Retail Credit Risk and the Wholesale Credit Risk sections on pages 52 and 57
 
 
 
 
 
1     31 December 2010 excludes from credit risk loans (CRLs) the loan to Protium of £7,560m against which an impairment of £532m was held. See page 65 for further information.
 
2     Loan impairment charges, comprising impairment on loans and advances and charges in respect of undrawn facilities and guarantees, see page 49.
 
 

 
 

 
Credit Risk
 
Retail Credit Risk
        
               
               
 
 
Retail Loans and Advances at Amortised Cost
    
As at 31.12.11
Gross
 L&A
Impairment Allowance
L&A Net of Impairment
Credit Risk Loans
CRLs % of Gross L&A
Loan Impairment Charges
Loan Loss  Rates
 
£m
£m
£m
£m
%
£m
bps
UK RBB
 120,312 
 1,623 
 118,689 
 3,014 
2.5 
 491 
 41 
Europe RBB1 
 44,488 
 684 
 43,804 
 1,708 
3.8 
 241 
 54 
Africa RBB
 26,363 
 731 
 25,632 
 2,362 
9.0 
 386 
 146 
Barclaycard
 31,738 
 2,069 
 29,669 
 2,821 
8.9 
 1,232 
 388 
Barclays Corporate2 
 1,453 
 188 
 1,265 
 182 
12.5 
 49 
 337 
Barclays Wealth
 16,784 
 79 
 16,705 
 329 
2.0 
 23 
 14 
Total
 241,138 
 5,374 
 235,764 
 10,416 
4.3 
 2,422 
 100 
               
As at 31.12.10
              
UK RBB
 113,800 
 1,737 
 112,063 
 3,166 
2.8 
 739 
 65 
Europe RBB1 
 44,500 
 833 
 43,667 
 1,729 
3.9 
 314 
 71 
Africa RBB
 32,499 
 1,002 
 31,497 
 3,367 
10.4 
 439 
 135 
Barclaycard
 29,281 
 2,981 
 26,300 
 3,678 
12.6 
 1,668 
 570 
Barclays Corporate2 
 1,671 
 255 
 1,416 
 301 
18.0 
 115 
 688 
Barclays Wealth
 13,584 
 75 
 13,509 
 330 
2.4 
 21 
 15 
Total
 235,335 
 6,883 
 228,452 
 12,571 
5.3 
 3,296 
 140 
 
 
- Gross loans and advances to customers in the retail portfolios increased 2% reflecting higher balances in:
 
 
 
-    UK RBB, where a 6% increase primarily reflected growth in mortgage balances
 
 
 
-    Barclaycard, where an 8% increase was mainly due to the acquisition of credit card portfolios in 2011, partially offset by balance run-offs in FirstPlus
 
 
 
-    Barclays Wealth, where a 24% increase reflected growth in collateralised lending to High Net Worth individuals
 
 
 
-    This was partially offset by a 19% decrease in Africa RBB primarily due to the depreciation in the value of the Rand against Sterling and lower originations in South Africa Home Loans
 
 
 
-    Balances in Europe RBB remained broadly stable as growth in Italian Home Loans was offset by lower balances in Spain as new mortgage business reduced
 
 
- The loan impairment charge reduced 27% as a result of lower charges across all businesses, principally:
 
 
 
-    Barclaycard, as a result of reduced delinquency rates and customer balance repayments, principally in the US
 
 
 
-    UK RBB, mainly reflecting the low interest rate environment, low arrears rates and lower flows in collections in UK personal loans
 
 
 
-    Africa RBB, mainly reflecting improved economic conditions in South Africa and better recoveries across the continent
 
 
- Lower impairment charges coupled with higher loan balances led to a fall in the retail loan loss rate to 100bps (2010: 140bps)
 
 
 
 
 
1        Europe RBB includes loans and advances to business customers at amortised cost.
 
2       Barclays Corporate primarily includes retail portfolios in India and UAE. For 2010 it also included retail portfolios in Russia which were sold in 2011.
 


 
Credit Risk
 
Analysis of Retail Gross Loans & Advances to Customers
  
As at 31.12.11
Secured
Home
Loans
Credit Cards,
Overdrafts and
Unsecured Loans
Other
Secured Retail
Lending1 
Business
Lending
Total
Retail
 
£m
£m
£m
£m
£m
UK RBB
 107,775 
 7,351 
 - 
 5,186 
120,312 
Europe RBB
 37,099 
 4,994 
 - 
 2,395 
44,488 
Africa RBB
 19,691 
 2,715 
 3,405 
 552 
26,363 
Barclaycard
 - 
 28,557 
 3,181 
 - 
31,738 
Barclays Corporate
 421 
 728 
 284 
 20 
1,453 
Barclays Wealth
 7,120 
 1,860 
 7,804 
 - 
16,784 
Total
 172,106 
 46,205
 14,674 
 8,153 
241,138 
           
As at 31.12.10
          
UK RBB
 101,281 
 8,375 
 - 
 4,144 
113,800 
Europe RBB
 36,509 
 5,670 
 - 
 2,321 
44,500 
Africa RBB
 24,743 
 3,058 
 4,186 
 512 
32,499 
Barclaycard
 - 
 25,472 
 3,809 
 - 
29,281 
Barclays Corporate
 398 
 1,016 
 225 
 32 
1,671 
Barclays Wealth
 5,915 
 2,108 
 5,561 
 - 
13,584 
Total
 168,846 
 45,699 
 13,781 
 7,009 
235,335 
             
 
 
Secured Home Loans
 
- Total Home Loans to retail customers increased 2% as lending was increased to meet customer demand, whilst maintaining a broadly stable lending criteria
 
 
- Home Loans as a proportion of retail gross loans and advances remained broadly unchanged at 71%
 
 
- The principal Home Loan portfolios listed below account for 93% of total Home Loans in the Group's retail portfolios
 
Home Loans Principal Portfolios2
      
As at 31.12.11
Gross Loans and Advances
> 90 Day
Arrears
Gross
Charge-off
Rates
Recoveries
Proportion of
Outstanding Balances
Recoveries
Impairment
Coverage Ratio
 
£m
%
%
%
%
UK
107,775 
0.3 
0.6 
0.6 
15.3 
South Africa3 
17,585 
3.2 
3.7 
6.9 
19.4 
Spain
14,918 
0.5 
0.6 
1.6 
32.5 
Italy
15,935 
1.0 
0.5 
1.3 
29.3 
Portugal
3,891 
0.6 
1.1 
2.0 
15.0 
           
As at 31.12.10
          
UK
101,281 
0.3 
0.5 
0.7 
8.6 
South Africa3 
22,575 
3.9 
3.5 
6.7 
23.0 
Spain
16,264 
0.4 
0.7 
1.6 
32.0 
Italy
13,809 
0.8 
0.6 
1.2 
29.0 
Portugal
3,713 
0.4 
0.7 
1.5 
12.6 
 
 
 
 
 
 
1     Other Secured Retail Lending includes Absa Vehicle and Auto Finance in Africa RBB, FirstPlus in Barclaycard and Investment Leverage portfolio in Barclays Wealth.
2     Excluded from the above analysis are: Wealth Home Loans, which are managed on the basis of individual customer exposures, France Home Loans and other small Home Loans portfolios.
3     South Africa Home Loans recoveries impairment coverage ratio has been revised to exclude interest and fees in suspense.


 
Credit Risk
 
 
·      Arrears rates remained stable in the UK as targeted balance growth and better customer affordability criteria continued to be supported by the low base rate environment
 
 
·      Arrears rates for South Africa Home Loans decreased but gross charge-off rates increased as contracts in debt counselling were terminated and legal actions were commenced which resulted in an increase in the recoveries book
 
 
·      The fall in recoveries impairment coverage ratio for South Africa Home Loans reflected, in part, the impact of a revised Loss Given Default (LGD) model implementation in the second half of 2011. The lower LGD reflected higher
        levels of cash collected in the recoveries portfolio
 
 
- Arrears rates in Spain remained broadly stable, but increased in Portugal and Italy due to the deterioration in economic conditions including the impact of austerity measures
 
Principal Home Loan Portfolios - Distribution of Balances by LTV (Updated Valuations)1 
 
 
 
 
 
 
UK
Spain2 
South Africa
Italy
Portugal2 
 
31.12.11
31.12.10
31.12.11
31.12.10
31.12.11
31.12.10
31.12.11
31.12.10
31.12.11
31.12.10
 
%
%
%
%
%
%
%
%
%
%
<=75%
77.6 
78.5 
72.1 
75.7 
58.8 
56.1 
70.7 
72.3 
49.0 
51.0 
>75% and <=80%
7.5 
6.8 
6.6 
6.6 
8.7 
8.1 
16.8 
16.8 
11.4 
12.5 
>80% and <=85%
5.3 
4.8 
5.7 
5.5 
8.3 
8.5 
10.2 
8.6 
13.7 
11.8 
>85% and <=90%
3.6 
3.6 
4.0 
3.2 
7.2 
7.9 
1.3 
1.3 
9.4 
10.5 
>90% and <=95%
2.4 
2.6 
2.6 
2.3 
5.3 
6.6 
0.5 
0.4 
8.8 
8.9 
>95%
3.6 
3.7 
9.0 
6.7 
11.7 
12.8 
0.5 
0.6 
7.7 
5.3 
                     
Marked to market LTV3 
44.3 
42.6 
60.1 
57.5 
45.2 
45.0 
46.9 
45.3 
69.6 
68.0 
Average LTV on new mortgages
54.0
51.6
61.3
61.1
61.2
61.0
59.6
59.0
67.7
69.0
New mortgages proportion above 85% LTV
0.8 
0.5 
1.3 
0.7 
29.9 
29.8 
- 
- 
5.5 
12.2 
                     
New mortgages (£m)
17,202 
16,875 
502 
1,963 
1,381 
1,593 
3,719 
3,544 
495 
633 
 
 
·      The risk profile on the principal home loan portfolios is reflected by the moderate average Loan to Value (LTV) of the existing portfolios and range of LTVs of new mortgage lending
 
 
·      Although period end marked to market LTVs have increased marginally across all principal Home Loan portfolios compared to December 2010, the portfolios continue to remain well secured. The increase in average LTV for new
        mortgage business in the UK was driven by more tailored lending criteria which allowed for additional business to be written at higher LTVs within the existing underwriting criteria. Any increase to impairment from the change in
        risk profile is factored into impairment models
 
 
·      In the UK, buy to let mortgages comprised 6% of the total stock (2010: 6%)
 
 
·      The average LTV on new mortgages for Spain remained stable and was within the Group approved risk profile. New lending has primarily been driven by new mortgages for house purchase rather than remortgages, for which the
        demand contracted significantly
 
 
 
 
 
 
 
 
1     Excluded from the above analysis are: Wealth Home Loans, which are managed on the basis of individual customer exposures, France Home Loans and other small Home Loans portfolios.
 
2     Spain and Portugal marked to market methodology based on balance weighted approach.
 
3     Portfolio marked to market based on current valuations, including recoveries balances.
 


 
Credit Risk
 
 
Credit Cards, Overdrafts and Unsecured Loans
 
·      The principal portfolios listed below account for 79% of total Credit Cards, Overdrafts and Unsecured Loans in the Group's retail portfolios
 
 
 
Principal Portfolios
As at 31.12.11
Gross
Loans and Advances
30 Day
Arrears
90 Day
Arrears
Gross
Charge-off
Rates
Recoveries
Proportion of
Outstanding Balances
Recoveries Impairment Coverage
Ratio
 
£m
%
%
%
%
%
UK cards1
13,162 
2.7 
1.2 
6.0 
5.1 
85.2 
US cards2
8,303 
3.1 
1.5 
7.6 
3.5 
92.1 
UK personal loans 3
5,166 
3.4 
1.7 
6.5 
19.0 
82.8 
Barclays Partner Finance
2,122 
2.4 
1.3 
4.6 
6.3 
84.8 
South Africa cards4
1,816 
4.9 
2.7 
5.5 
6.7 
72.9 
Europe RBB cards5
1,684 
5.9 
2.6 
10.1 
13.8 
89.5 
Italy salary advance loans6
1,629 
2.6 
1.3 
6.3 
6.6 
11.7 
South Africa personal loans
1,164 
6.4 
3.9 
8.3 
6.9 
72.4 
UK overdrafts
1,322 
6.0 
3.9 
9.7 
17.5 
90.6 
             
As at 31.12.10
            
UK cards
12,297 
3.4 
1.5 
8.4 
9.1 
83.9 
US cards
7,453 
4.6 
2.5 
12.2 
8.1 
93.8 
UK personal loans3
5,756 
4.7 
2.6 
7.9 
18.5 
82.5 
Barclays Partner Finance
2,143 
2.8 
1.3 
6.8 
8.3 
94.1 
South Africa cards4
2,113 
7.2 
4.7 
7.2 
8.7 
80.4 
Europe RBB cards5
1,814 
6.8 
3.2 
13.1 
18.2 
91.4 
Italy salary advance loans6 
1,609 
2.9 
1.0 
7.3 
5.0 
7.5 
South Africa personal loans
1,435 
6.6 
4.5 
8.4 
5.3 
79.0 
UK overdrafts
1,430 
7.2 
4.9 
10.9 
18.2 
92.9 
 
 
·      Total Credit Cards, Overdrafts and Unsecured Loans increased 1% primarily due to increased lending in UK Cards and the acquisitions of credit card portfolios in 2011
 
 
·      30 day arrears rates reduced in 2011 in all the principal portfolios, with 90 day arrears rates reducing in all portfolios except Italy salary advance loans
 
 
·      90 day arrears reduced to 1.2% (2010: 1.5%) in UK Cards and to 1.5% (2010: 2.5%) in US Cards, reflecting better, although still subdued, economic conditions during 2011, the impact of customer loan repayments and a continued
       revision of the credit approval policy in Barclaycard
 
 
 
 
 
1     UK Cards excludes £1.5bn relating to Egg credit card assets, which were recognised on acquisition at fair value (with no related impairment allowance). An impairment allowance of £20m is held on Egg balances post
       acquisition.
 
2     Risk metrics exclude the impact of the $1.4bn Upromise portfolio acquired in December 2011.
 
3     Gross Loans and Advances for UK personal loans as at 31 December 2010 have been revised to exclude £740m of UK smaller specialist loans as they are no longer considered to be a principal portfolio.
 
4     South Africa cards 30 and 90 days arrears revised to include approved debt counselling accounts.
 
5     Europe RBB cards includes Spain, Portugal and Italy card assets.
 
6    The recoveries impairment coverage ratio for Italy salary advance loans is lower than other unsecured portfolios as these loans are extended to customers where the repayment is made via a salary deduction at source by
      qualifying employers and Barclays is insured in the event of termination of employment or death. Recoveries represent balances where insurance claims are pending that we believe are largely recoverable, hence the
      lower coverage.
 
 

 
Credit Risk
 
 
Retail Forbearance Programmes
 
·      Forbearance on the Group's principal portfolios in US, UK and Europe are presented below. Additional portfolios will be added to this disclosure should the forbearance in respect of such portfolios become material
 
 
·      The level of forbearance extended to customers in other retail portfolios is not material and, typically, does not currently play a significant part in the way customer relationships are managed
 
 
 
Principal Portfolios
As at 31.12.11  
Gross L&A
 Subject to Forbearance Programmes
Forbearance  Proportion of Outstanding Balances
Impairment Coverage on Gross L&A Subject to Forbearance
Marked to Market LTV of Home Loan Forbearance Balances
 
£m
%
%
%
Home Loans
        
UK
1,613 
1.5 
0.8 
31.6 
Spain
145 
1.0 
3.7 
67.4 
Italy
171 
1.1 
2.6 
46.5 
         
Credit Cards, Overdrafts and Unsecured Loans
        
UK cards1
946 
7.1 
38.2 
na
UK personal loans
201 
3.8 
28.2 
na
US cards
125 
1.7 
19.7 
na
         
As at 31.12.10
        
Home Loans
        
UK
1,446 
 1.4 
 0.9 
 31.8 
Spain
151 
 1.0 
 0.8 
 61.6 
Italy
186 
 1.4 
 0.6 
 47.4 
         
Credit Cards, Overdrafts and Unsecured Loans
        
UK cards2 
908 
 7.2 
 30.6 
na
UK personal loans
215 
 3.7 
 31.7 
na
US cards
150 
 2.1 
 18.4 
na
 
 
- Retail forbearance is available to customers experiencing financial difficulties. Forbearance solutions take a number of forms depending on individual customer circumstances. Short term solutions focus on temporary reductions to
       contractual payments and may change from capital and interest payments to interest only. For customers with longer term financial difficulties, term extensions may be offered, which may also include interest rate concessions
 
 
- Forbearance in principal Home Loans portfolios increased 8% to £1,929m (2010: £1,783m), principally in the UK
 
 
- Within UK Home loans, term extensions accounted for the majority of forbearance balances. Since January 2008 an additional £1.5bn of interest only mortgages have received a term extension, which have not been classified as
       forbearance as they were interest only mortgages and the contractual monthly payments did not alter
 
 
- In Spain, forbearance accounts are usually full account restructures. In Italy, the majority of balances relate to specific schemes required by the Government (e.g. debt relief scheme following the earthquake of 2009) and are
        weighted towards payment holidays and interest suspensions
 
 
- Forbearance in principal Credit Cards, Overdrafts and Unsecured Loans portfolios remains stable at £1,272m (2010: £1,273m)
 
 
- Impairment allowances against UK cards forbearance increased to reflect revised expectations on debt repayment. As a result, the impairment coverage ratio increased to 38.2% (2010: 30.6%)
 
 
 
 
 
 
1     UK Cards excludes £43m relating to credit card assets acquired from Egg UK, which were recognised on acquisition at fair value (with no related impairment allowance).
 
2     UK cards revised to include partnership card assets.
 


 
Credit Risk
 
 
 
Wholesale Credit Risk
        
               
               
 
 
Wholesale Loans and Advances at Amortised Cost1
        
As at 31.12.11
Gross
L&A
Impairment Allowance
L&A Net of Impairment
Credit
Risk
Loans
CRLs %
 of
Gross L&A
Loan Impairment Charges
Loan
 Loss
Rates
 
£m
£m
£m
£m
%
£m
bps
UK RBB
 2,743 
 63 
 2,680 
 285 
10.4 
 45 
 164 
Africa RBB
 11,998 
 298 
 11,700 
 723 
6.0 
 78 
 65 
Barclaycard2 
 476 
 8 
 468 
 3 
0.6 
 27 
 567 
Barclays Capital3,4
 161,194 
 2,555 
 158,639 
 5,253 
3.3 
 129 
 8 
Barclays Corporate
 67,999 
 2,231 
 65,768 
 4,309 
6.3 
 1,073 
 158 
- UK
 53,668 
 545 
 53,123 
 1,267 
2.4 
 345 
 64 
- Europe
 12,576 
 1,574 
 11,002 
 2,876 
22.9 
 699 
 556 
- Rest of World
 1,755 
 112 
 1,643 
 166 
9.5 
 29 
 165 
Barclays Wealth
 2,471 
 51 
 2,420 
 317 
12.8 
 18 
 73 
Head Office
 1,958 
 17 
 1,941 
 36 
1.8 
(2)
nm
Total
 248,839 
 5,223 
 243,616 
 10,926 
4.4 
 1,368 
 55 
               
As at 31.12.10
              
UK RBB
 3,889 
 77 
 3,812 
345 
8.9 
 80 
 206 
Africa RBB
 14,644 
 362 
 14,282 
1,154 
7.9 
 123 
 84 
Barclaycard2 
 338 
 5 
 333 
7 
2.1 
 20 
 592 
Barclays Capital3,4
 152,711 
 3,036 
 149,675 
5,370 
3.5 
 642 
 42 
Barclays Corporate
 66,961 
 1,986 
 64,975 
4,591 
6.9 
 1,436 
 214 
- UK
 50,599 
 539 
 50,060 
 1,503 
3.0 
 447 
 88 
- Europe
 14,094 
 1,333 
 12,761 
 2,935 
20.8 
 940 
 667 
- Rest of World
 2,268 
 114 
 2,154 
 153 
6.7 
 49 
 216 
Barclays Wealth
 2,884 
 66 
 2,818 
218 
7.6 
 27 
 94 
Head Office
 1,411 
 17 
 1,394 
66 
4.7 
 1 
 7 
Total
 242,838 
 5,549 
 237,289 
11,751 
4.8 
 2,329 
 96 
 
- Gross loans and advances to customers and banks increased 2% principally as a result of a rise of 6% in Barclays Capital. For more detail, see analysis of Barclays Capital wholesale loans and advances on page 58
 
 
- This was partially offset by a 18% decrease in balances in Africa RBB primarily due to the depreciation in the value of the Rand against Sterling and from lower demand
 
 
- The loan impairment charge improved 41% principally reflecting lower charges in:
 
 
 
-    Barclays Capital, mainly as a result of charges in leveraged finance being partially offset by a release of £223m relating to the loan to Protium which has now been repaid
 
 
 
-    Barclays Corporate, due to lower credit impairment charges in Spain reflecting lower exposure to the property and construction sector. Charges also reduced in the UK business, reflecting lower default rates and tightly
     controlled exposure to commercial real estate loans. However, weak credit conditions in Portugal led to a higher charge in 2011
 
 
- The substantial reduction in the impairment charge and higher loan balances led to a lower wholesale loan loss rate of 55bps in 2011 (2010: 96bps)
 
 
 
 
 
 
1        Loans and advances to business customers in Europe RBB are included in the Retail Loans and Advances to Customers at Amortised Cost table on page 52.
 
2       Barclaycard wholesale loans and advances represent corporate credit and charge cards.
 
3        Barclays Capital gross loans and advances includes cash collateral and settlement balances of £75,707m as at 31 December 2011 and £56,486m as at 31 December 2010. Excluding these balances CRLs as a proportion of
          gross loans and advances were 6.1% and 5.6% respectively.
 
4       Barclays Capital credit risk loans exclude the loan to Protium of £7,560m held as at 31 December 2010.
 


 
Credit Risk
 
Analysis of Barclays Capital Wholesale Loans and Advances at Amortised Cost
    
               
As at 31.12.11
Gross
L&A
Impairment Allowance
L&A Net
of Impairment
Credit
Risk
Loans1 
CRLs % of Gross L&A1 
Loan Impairment Charges
Loan
 Loss
Rates
 
£m
£m
£m
£m
%
£m
bps
Loans and advances to banks
              
Interbank lending
19,655 
45 
19,610 
34 
0.2 
(5)
(3)
Cash collateral and settlement balances
23,066 
- 
23,066 
- 
- 
- 
- 
Loans and advances to customers
              
Corporate lending
38,326 
730 
37,596 
1,515 
4.0 
194 
51 
Government lending
3,276 
- 
3,276 
- 
- 
- 
- 
ABS CDO Super Senior
3,390 
1,548 
1,842 
3,390 
100.0 
6  
18 
Other wholesale lending
20,840 
232 
20,608 
314 
1.5 
(66)
(32) 
Cash collateral and settlement balances
52,641 
- 
52,641 
- 
- 
- 
- 
Total
161,194 
2,555 
158,639 
5,253 
3.3 
129 
8 
               
As at 31.12.10
              
Loans and advances to banks
              
Interbank lending
21,547 
48 
21,499 
35 
0.2 
(18)
(8)
Cash collateral and settlement balances
14,058 
- 
14,058 
- 
- 
- 
- 
Loans and advances to customers
              
Corporate lending
41,891 
798 
41,093 
1,483 
3.5 
285 
68 
Government lending
2,940 
- 
2,940 
- 
- 
- 
- 
ABS CDO Super Senior
3,537 
1,545 
1,992 
3,537 
100.0 
(137)
(387)
Other wholesale lending
26,310 
645 
25,665 
315 
1.2 
512 
195 
Cash collateral and settlement balances
42,428 
- 
42,428 
- 
- 
- 
- 
Total
152,711 
3,036 
149,675 
5,370 
3.5 
642 
42 
 
 
·      Barclays Capital wholesale loans and advances increased 6% to £161,194m (2010: £152,711m). This was driven by an increase in cash collateral balances partially offset by the acquisition of Protium and a reduction in corporate
        lending
 
 
·      Included within corporate lending and other wholesale lending portfolios are £3,204m (2010: £3,787m) of loans backed by retail mortgage collateral classified as lending to financial institutions
 
 
 
 
 
 
 
Wholesale Forbearance
 
- Whilst there are no standardised wholesale forbearance programmes, as part of the ongoing provision of lending facilities to corporates and businesses, credit terms are reviewed and may be revised where this is the optimum
       strategy for the performance of our customers' businesses and therefore Barclays loans and advances
 
 
- Wholesale client relationships are individually managed with lending decisions made with reference to specific circumstances and on bespoke terms. As changes in original terms are made for a variety of reasons and in a variety of
       ways including those not related to the customer's ability to repay a loan, comprehensive data is not currently compiled to quantify the lending where changes in original terms have been agreed as a result of forbearance
 
 
- Impairment is assessed for each individual counterparty and recognised where relevant impairment triggers have been reached, including where customers are in arrears and require renegotiation of terms
 
 
- A control framework exists along with regular sampling to ensure watch list and impairment policies are implemented as defined and to ensure that all assets have suitable levels of impairment applied. Portfolios are subject to
       independent assessment
 
 
 
 
 
 
1     Barclays Capital Credit Risk Loans as at 31 December 2010 exclude the loan to Protium. Other wholesale lending CRLs and CRLs of Gross L&A including the loan to Protium were £7,875m and 29.9% respectively.
 


 
Credit Risk
 
Group Exposures to Selected Eurozone Countries
 
 
- The Group continues to closely monitor its exposure to Eurozone countries. During 2011 the Group's sovereign exposure to Spain, Italy, Portugal, Ireland and Greece reduced by 14% to £7.1bn
 
 
 
-    Spanish sovereign exposure reduced 45% to £2.5bn due to the disposal of available for sale government bonds, held for the purpose of interest rate hedging and liquidity, that have been replaced by interest rate swaps with
     alternative counterparties
 
 
 
-    Italian sovereign exposure increased 57% to £3.5bn principally due to the acquisition of government issued bonds reflecting improved yields and holdings as part of the Treasury liquidity management portfolio
 
 
 
-    Portuguese sovereign exposure reduced 21% to £0.8bn, principally due to a reduction in government bonds held as available for sale
 
 
- Italian non-sovereign exposures increased £1.1bn to £21.9bn, principally due to a £2.2bn increase in new mortgage lending (with an average LTV of 59.6%), offset by £0.9bn reduction in exposures to financial institutions
 
 
- Ireland exposures increased 5% to £5.7bn, principally reflecting increased lending to financial institutions of £4.3bn (31 December 2010: £3.8bn), including £0.9bn of trading assets and £1.3bn of loans to entities domiciled in Ireland
       whose principal business and exposures are outside of Ireland. Exposure to domestic Irish banks remains minimal
 
 
- Exposure to Greece remains minimal and the sovereign exposure is predominantly marked to market on a daily basis through income
 
 
- In addition to these countries subject to particular market focus, the Group had £2.4bn (2010: £2.2bn) net exposure to Belgium, which was downgraded to AA during the fourth quarter of 2011. This principally comprised sovereign
       debt, of which £1.7bn was held as available for sale, with a negative AFS reserve of £26m, and £0.3bn held for trading
 
 
Basis of preparation
 
- The following tables are prepared on the same basis as the 2011 Interim Results Announcement and present the maximum direct balance sheet exposure to credit risk by country, with the totals reflecting allowance for impairment,
       netting and cash collateral held where appropriate
 
 
- Trading and derivatives balances relate to investment banking activities, principally as market-maker for government bond positions. Positions are held at fair value, with daily movements taken through profit and loss
 
 
- Available for sale assets are principally investments in government bonds and other debt securities held for the purposes of interest rate hedging and liquidity for local banking activities. Balances are reported on a fair value basis,
       with movements in fair value going through equity
 
 
- Loans and advances held at amortised cost comprise: (i) retail lending portfolios, predominantly mortgages secured on residential property; and (ii) corporate lending portfolios, largely reflecting established corporate banking
      businesses in Spain, Italy and Portugal and investment banking services provided to multinational and large national corporate clients. Settlement balances and cash collateral are excluded from this analysis
 
 
- Sovereign exposures reflect direct exposures to central and local governments1, the majority of which are used for hedging interest rate risk relating to local activities. These positions are being actively replaced by non-government
       instruments such as interest rate swaps. The remaining portion is actively managed reflecting our role as leading primary dealer, market maker and liquidity provider to our clients
 
 
- Financial institution and corporate exposures reflect the country of operations of the counterparty (including foreign subsidiaries and without reference to cross-border guarantees)
 
 
- Retail exposures reflect the country of residence of retail customers
 
 
- The Group enters into credit mitigation arrangements for which the reference asset is government debt. The selected countries (pages 60 to 63) include only credit mitigation arrangements with counterparties in the relevant
       country. The analysis of credit derivatives referencing sovereign debt reflects derivative counterparty netting and includes all credit derivatives, regardless of counterparty location
 
 


 
1     In addition, the Group held cash with the central banks of these countries totalling £0.8bn as at 31 December 2011. Other immaterial balances with central banks are classified within loans to financial institutions.
 
 
Credit Risk
 
Exposure by Country and Counterparty
    
           
As at 31.12.11
Spain
Italy
Portugal
Ireland
Greece
 
£m
£m
£m
£m
£m
Sovereign
 2,530 
 3,493 
 810 
 244 
 14 
Financial institutions
 987 
669 
 51 
 4,311 
 2 
Residential mortgages
 14,654 
 15,934 
 3,651 
 94 
 5 
Corporate
 5,345 
 2,918 
 3,295 
 977 
 67 
Other retail lending
 3,031 
 2,335 
 2,053 
 86 
 18 
Total
 26,547 
 25,349 
 9,860 
 5,712 
 106 
           
As at 31.12.10
Spain
Italy
Portugal
Ireland
Greece
 
£m
£m
£m
£m
£m
Sovereign
 4,641 
 2,224 
 1,023 
 296 
 31 
Financial institutions
 1,586 
 1,572 
 165 
 3,769 
 21 
Residential mortgages
 15,977 
 13,741 
 3,476 
 109 
 4 
Corporate
 6,398 
 2,828 
 3,598 
 1,123 
 103 
Other retail lending
 3,081 
 2,599 
 2,074 
 125 
 19 
Total
 31,683 
 22,964 
 10,336 
 5,422 
 178 
 
 
Exposures on loans and advances to other geographies including Europe as a whole are set out on page 47.
 
 
 
 
 
 
 
Spain
Trading Portfolio
  
Derivatives
        
Fair Value through Profit and Loss
Trading Portfolio Assets
Trading Portfolio Liabilities
Net
 Trading Portfolio
  
Gross Assets
Gross Liabilities
Cash Collateral
Net Derivatives
Designated as FV through P&L
Total
as at
31.12.11
  
Total
as at
31.12.10
 
£m
£m
£m
  
£m
£m
£m
£m
£m
£m  
  
£m
Sovereign
 684 
 (684)
 - 
  
 64 
 (64)
 - 
 - 
 - 
 - 
  
 - 
Financial institutions
 367 
 (247)
 120 
  
 7,359 
 (7,023)
(336) 
 - 
 101 
 221 
  
 422 
Corporate
 167 
 (155)
 12 
  
  656 
 (251)
  - 
405 
 212 
 629 
  
 356 
 
 
 
 
 
Fair Value through Equity
Available for Sale Assets as at 31.12.11
  
Total
as at
 
Cost1
  AFS Reserve
Total
  
31.12.10
 
£m
£m
£m  
  
£m
Sovereign
2,519 
(51)
 2,468 
  
 4,491 
Financial institutions
507 
(17)
 490 
  
 669 
Corporate
2 
-
 2 
  
 36 
           
 
 
Held at Amortised Cost
Loans and Advances as at 31.12.11
  
Total
 
Gross
  Impairment Allowances  
Total
  
as at 31.12.10
 
£m
£m
£m  
  
£m
Sovereign
 62 
-
 62 
  
 150 
Financial institutions
 282 
(6)
 276 
  
 495 
Residential mortgages
 14,729 
(75)
 14,654 
  
 15,977 
Corporate
 5,901 
(1,187)
 4,714 
  
 6,006 
Other retail lending
 3,144 
(113)
 3,031 
  
 3,081 
 
 
 
 
 
 
1    'Cost' refers to the fair value of the asset at recognition, less any impairment booked. 'AFS Reserve' is the cumulative fair value gain or loss on the assets that is held in equity. 'Total' is the fair value of the assets at the balance
      sheet date.


Credit Risk
 
Italy
Trading Portfolio
  
Derivatives
        
Fair Value through Profit and Loss
Trading Portfolio Assets
Trading Portfolio Liabilities
Net
 Trading Portfolio
  
Gross Assets
Gross Liabilities
Cash Collateral
Net Derivatives
Designated as FV through P&L
Total
as at
31.12.11
  
Total
as at
31.12.10
 
£m
£m
£m
  
£m
£m
£m
£m
£m
£m  
  
£m
Sovereign
 2,097 
 (1,531)
 566 
  
 1,083 
 (506)
 -
 577 
 1 
 1,144 
  
 1,004 
Financial institutions
 429 
 (142)
 287 
  
6,224 
 (4,791)
 (1,319)
114 
 55 
 456 
  
 794 
Corporate
 134 
 (134)
 - 
  
 502 
 (325)
 (92)
 85 
 86 
 171 
  
 93 
 
 
 
 
 
Fair Value through Equity
Available for Sale Assets as at 31.12.11
  
Total
as at
 
Cost1
  AFS Reserve
Total
  
31.12.10
 
£m
£m
£m  
  
£m
Sovereign
 2,457 
 (123)
 2,334 
  
 1,220 
Financial institutions
 141 
 (3)
 138 
  
 226 
Corporate
 28 
 (1)
 27 
  
 19 
           
 
 
Held at Amortised Cost
Loans and Advances as at 31.12.11
  
Total
 
Gross
  Impairment Allowances  
Total
  
as at 31.12.10
 
£m
£m
£m  
  
£m
Sovereign
 15 
 - 
 15 
  
 - 
Financial institutions
 83 
 (8)
 75 
  
 552 
Residential mortgages
 16,023 
 (89)
 15,934 
  
 13,741 
Corporate
 2,850 
 (130)
 2,720 
  
 2,716 
Other retail lending
 2,515 
 (180)
 2,335 
  
 2,599 
 
 
 
 
 
 
 
 
Portugal
Trading Portfolio
  
Derivatives
        
Fair Value through Profit and Loss
Trading Portfolio Assets
Trading Portfolio Liabilities
Net
 Trading Portfolio
  
Gross Assets
Gross Liabilities
Cash Collateral
Net Derivatives
Designated as FV through P&L
Total
as at
31.12.11
  
Total
as at
31.12.10
 
£m
£m
£m
  
£m
£m
£m
£m
£m
£m  
  
£m
Sovereign
 143 
 (76)
 67 
  
 216 
 (216)
 - 
 - 
 2 
 69 
  
 121 
Financial institutions
 24 
 (13)
 11 
  
 336 
 (336)
  - 
 - 
 - 
 11 
  
 106 
Corporate
 129 
 (21)
 108 
  
 445 
 (223)
 (2)
 220 
 - 
 328 
  
 63 
 
 
 
 
 
Fair Value through Equity
Available for Sale Assets as at 31.12.11
  
Total
as at
 
Cost1
  AFS Reserve
Total
  
31.12.10
 
£m
£m
£m  
  
£m
Sovereign
 875 
 (159)
 716 
  
 886 
Financial institutions
 2 
 - 
 2 
  
 9 
Corporate
 675 
 2 
 677 
  
 896 
           
 
 
Held at Amortised Cost
Loans and Advances as at 31.12.11
  
Total
 
Gross
  Impairment Allowances  
Total
  
as at 31.12.10
 
£m
£m
£m  
  
£m
Sovereign
 25 
 - 
 25 
  
 16 
Financial institutions
 38 
 - 
 38 
  
 50 
Residential mortgages
 3,665 
 (14)
 3,651 
  
 3,476 
Corporate
 2,484 
 (194)
 2,290 
  
 2,639 
Other retail lending
 2,252 
 (199)
 2,053 
  
 2,074 
 
 
 
 
 
1    'Cost' refers to the fair value of the asset at recognition, less any impairment booked. 'AFS Reserve' is the cumulative fair value gain or loss on the assets that is held in equity. 'Total' is the fair value of the assets at the balance
      sheet date.


Credit Risk
 
 
 
 
Ireland
Trading Portfolio
  
Derivatives
        
Fair Value through Profit and Loss
Trading Portfolio Assets
Trading Portfolio Liabilities
Net
 Trading Portfolio
  
Gross Assets
Gross Liabilities
Cash Collateral
Net Derivatives
Designated as FV through P&L
Total
as at
31.12.11
  
Total
as at
31.12.10
 
£m
£m
£m
  
£m
£m
£m
£m
£m
£m  
  
£m
Sovereign
 98 
 (64)
 34 
  
 45 
 (4)
 (36)
 5 
 - 
 39 
  
 59 
Financial institutions
 1,416 
 (39)
 1,377 
  
5,889
 (3,909)
 (1,846)
134 
 50 
 1,561 
  
 1,149 
Corporate
 73 
 (30)
 43 
  
 658 
 (658)
 - 
 - 
 9 
 52 
  
 164 
 
 
       
 
 
Fair Value through Equity
Available for Sale Assets as at 31.12.11
  
Total
as at
 
Cost1
  AFS Reserve
Total
  
31.12.10
 
£m
£m
£m  
  
£m
Sovereign
 215 
 (10)
 205
  
 237 
Financial institutions
 274 
 (25)
 249
  
 584 
           
 
 
Held at Amortised Cost
Loans and Advances as at 31.12.11
  
Total
 
Gross
  Impairment Allowances  
Total
  
as at 31.12.10
 
£m
£m
£m  
  
£m
Financial institutions
 2,651 
 (150)
 2,501
  
 2,036 
Residential mortgages
 104 
 (10)
 94
  
 109 
Corporate
 946 
 (21)
 925
  
 959 
Other retail lending
 86 
 - 
 86
  
 125 
 
 
 
 
 
 
 
 
Greece
Trading Portfolio
  
Derivatives
        
Fair Value through Profit and Loss
Trading Portfolio Assets
Trading Portfolio Liabilities
Net
 Trading Portfolio
  
Gross Assets
Gross Liabilities
Cash Collateral
Net Derivatives
Designated as FV through P&L
Total
as at
31.12.11
  
Total
as at
31.12.10
 
£m
£m
£m
  
£m
£m
£m
£m
£m
£m  
  
£m
Sovereign
 7 
 - 
 7 
  
 1 
 -
-
 1 
 - 
 8 
  
 15 
Financial institutions
 2 
 - 
 2 
  
 1,109 
 (253)
 (856)
 - 
 - 
 2 
  
 21 
Corporate
 3 
 - 
 3 
  
 - 
 - 
 - 
 - 
 - 
 3 
  
 7 
 
 
 
 
 
Fair Value through Equity
Available for Sale Assets as at 31.12.11
  
Total
as at
 
Cost1
  AFS Reserve
Total
  
31.12.10
 
£m
£m
£m  
  
£m
Sovereign
6 
- 
 6 
  
 16 
           
 
 
Held at Amortised Cost
Loans and Advances as at 31.12.11
  
Total
 
Gross
  Impairment Allowances  
Total
  
as at 31.12.10
 
£m
£m
£m  
  
£m
Residential mortgages
 5 
 - 
 5 
  
 4 
Corporate
 64 
 - 
 64 
  
 96 
Other retail lending
 27 
 (9)
 18 
  
 19 
 


 
 
1    'Cost' refers to the fair value of the asset at recognition, less any impairment booked. 'AFS Reserve' is the cumulative fair value gain or loss on the assets that is held in equity. 'Total' is the fair value of the assets at the balance
      sheet date.
 
 
 
Credit Risk
 
 
Credit Derivatives Referencing Sovereign Debt
 
 
- The Group enters into credit mitigation arrangements (principally credit default swaps and total return swaps) primarily for risk management purposes for which the reference asset is government debt
 
 
- These have the effect of reducing the Group's gross exposure in the event of sovereign default
 
As at 31.12.11
Spain
Italy
Portugal
Ireland
Greece
 
£m
£m
£m
£m
£m
Fair value
          
- Bought
326 
681 
346 
170 
669 
- Sold
(324)
(583)
(322)
(170)
(729)
Net derivative fair value
2 
98 
24 
- 
(60)
           
Contract notional amount1
          
- Bought
(2,924)
(4,742)
(1,027)
(854)
(1,019)
- Sold
2,765 
4,270 
977 
805 
1,098 
Net derivative notional amount
(159)
(472)
(50)
(49)
79 
           
Impact of credit derivatives in the event of sovereign default (notional less fair value of protection)
(157)
(374)
(26)
(49)
19 
 
- Credit derivatives are arrangements whereby the default risk of an asset (reference asset) is transferred from the buyer to the seller of protection
 
 
- The majority of credit derivatives referencing sovereign assets are bought and sold to support customer transactions and for risk management purposes
 
 
- The contract notional amount represents the value of the reference asset being insured, while the fair value represents the change in the value of the reference asset, adjusted for the creditworthiness of the counterparty providing the protection
 
 
- The net derivative notional amount represents a reduction in exposures and should be considered alongside the direct exposures as disclosed in the preceding pages
 
 
- In addition, the Group has indirect sovereign exposure through the guarantee of certain savings and investment funds, which hold a proportion of their assets in sovereign debt. As at 31 December 2011, the net liability in respect of these guarantees was £41m
 
 
 
 
 
 
1        This reflects counterparty netting where there is a legally enforceable right of net-off.
 
 

 
 

 
Credit Risk
 
Barclays Capital Credit Market Exposures
 
 
 
         
Year Ended 31.12.11
Credit Market Exposures1 
As at 31.12.11
As at 31.12.10
As at 31.12.11
As at 31.12.10
Fair Value (Losses)/ Gains and Net Funding
Impairment Release/ (Charge)
Total (Losses)/ Gains
 
$m
$m
£m
£m
£m
£m
£m
Protium assets2 
3,508 
10,884 
2,272 
7,028 
(555)
223 
(332)
               
US Residential Mortgages
              
ABS CDO Super Senior
2,844 
3,085 
1,842 
1,992 
(29)
(6)
(35)
US sub-prime and Alt-A
644 
1,025 
416 
662 
(4)
35 
31 
               
Commercial Mortgages
              
Commercial real estate loans and properties
8,228 
11,006 
5,329 
7,106 
486 
- 
486 
Commercial Mortgaged Backed Securities
156 
184 
101 
119 
- 
- 
- 
Monoline protection on CMBS
14 
18 
9 
12 
32 
- 
32 
               
Other Credit Market  
              
Leveraged Finance3 
6,278 
7,636 
4,066 
4,930 
43 
(203)
(160)
SIVs, SIV -Lites and CDPCs
9 
618 
6 
399 
(32)
- 
(32)
Monoline protection on CLO and other
1,729 
2,541 
1,120 
1,641 
(13)
- 
(13)
               
Total
23,410 
36,997 
15,161 
23,889 
(72)
49 
(23)
 
 
- Barclays Capital's credit market exposures primarily relate to commercial real estate, leveraged finance, and collateral previously securing the loan to Protium. These exposures arose before the market dislocation in mid-2007
 
 
- During 2011, credit market exposures decreased by £8,728m to £15,161m, reflecting net sales and paydowns and other movements of £8,442m, foreign exchange rate movements of £263m and fair value losses and impairment of
       £23m.  The net sales, paydowns and other movements of £8,442m included:
 
 
 
-    £4,218m relating to assets formerly held as collateral for the loan to Protium Finance LP, comprising £2,697m net sales, £959m loan and interest repayments and £562m paydowns and other movements
 
 
 
-    £2,141m of commercial real estate loans and properties sales and paydowns
 
 
 
-    £820m reduction in leveraged loans primarily relating to five counterparties
 
 
- In January 2012, Barclays completed the sale of £405m ($628m) of a commercial real estate equity security at fair value representing 50% of its stake in Archstone
 
 
 
 
1     As the majority of exposure is held in US Dollars, the exposures above are shown in both US Dollars and Sterling.
 
2     Prior to 27 April 2011 when Protium was acquired by the Group the exposure was a loan. This was carried at the amount equivalent to the fair value of the underlying collateral from 31 December 2010.
 
3     Includes undrawn commitments of £180m (31 December 2010: £264m).
 
 

 

 
 
Credit Risk
 
 
Protium Assets
 
 
   
Acquisition Date
      
Acquisition Date
  
 
As at
31.12.11
As at
27.04.11
As at
31.12.10
  
As at
31.12.11
As at
27.04.11
As at
31.12.10
 
$m
$m
$m
  
£m
£m
£m
US sub-prime and Alt-A
1,490 
4,406 
4,402 
  
965 
2,665 
2,710 
Commercial Mortgage-Backed Securities
1,422 
3,092 
3,257 
  
921 
1,870 
2,103 
Monoline protection
- 
- 
225 
  
- 
- 
145 
CLO and other assets
596 
1,952 
1,636 
  
386 
1,181 
1,189 
Total collateral
3,508 
9,450 
9,520 
  
2,272 
5,716 
6,147 
               
Cash and cash equivalents
na
231 
1,364 
  
na
140 
881 
               
Total assets
3,508 
9,681 
10,884 
  
2,272 
5,856 
7,028 
               
Loan to Protium
- 
- 
10,884 
  
- 
- 
7,028 
 
 
- On 16 September 2009, Barclays Capital sold assets of $12,285m, including $8,384m in credit market assets, to Protium Finance LP (Protium). As part of the transaction, Barclays extended a $12,641m 10 year loan to Protium
 
 
- In April 2011, Barclays entered into several agreements to acquire all third party interests in Protium in order to help facilitate the Group's early exit from the underlying exposures.  As a result, Protium was then consolidated by the
       Group. Subsequently, Protium sold its assets to Barclays entities and the loan has been repaid
 
 
- As part of this transaction, £459m ($750m) was invested in Helix, an existing fund managed by Protium's investment manager. The orginal investment represented 86% of the Helix fund, which has been consolidated by the Group.
       The fund's investments primarily comprise government and agency securities. As at 31 December 2011, the fair value of Barclays investment in the fund was $729m
 
 

 
 

 
Market Risk
 
 
Analysis of Barclays Capital's Market Risk Exposure
 
- Barclays Capital's regulatory market risk models, including recently implemented models for CRD3, are used to calculate regulatory capital for designated trading book portfolios, and are reviewed by the FSA. The four principal
       models are Daily Value at Risk (DVaR), Stressed Value at Risk, Incremental Risk Charge and the All Price Risk measure
 
 
- Barclays Capital DVaR model is graded Green, as defined by the FSA which is consistent with a good working model. This rating was maintained throughout the year
 
 
- For internal risk management purposes, DVaR is calculated at a 95% confidence level for the trading book and certain banking books. The calculation is based on historical simulation of the most recent two years of data
 
 
Year Ended 31.12.11
  
Year Ended 31.12.10
DVaR (95%)
Daily Avg
High1 
Low1 
  
Daily Avg
High1 
Low1 
 
£m
£m
£m
  
£m
£m
£m
Interest rate risk
17 
47 
7 
  
33 
50 
21 
Spread risk
45 
69 
25 
  
48 
62 
30 
Commodity risk
12 
18 
7 
  
16 
25 
9 
Equity risk
18 
34 
9 
  
14 
29 
6 
Foreign exchange risk
5 
8 
2 
  
6 
15 
2 
Diversification effect
(40)
na
na
  
(64)
na
na
Total DVaR
57 
88 
33 
  
53 
75 
36 
               
Expected shortfall2 
71 
113 
43 
  
78 
147 
47 
               
3W3 
121 
202 
67 
  
144 
311 
72 
 
 
- Barclays Capital's average total DVaR was £57m during 2011, an 8% increase from 2010. However, the tail risk indicated by the average expected shortfall and 3W measures fell 9% to £71m and 16% to £121m respectively
 
 
- The diversification effect reduced 38% to an average of £40m in 2011 due to higher cross asset correlation as the European debt crisis worsened
 
 
- The three main risk factors affecting DVaR were spread, interest rate and equity risk. From 2010 levels, average DVaR for spread fell by £3m (6%) and interest rate DVaR fell by £16m (48%) reflecting cautious positioning. Equity
        DVaR increased by £4m (29%) on continued growth of the global equities business and product offerings
 
 
 
 
 
 
 
 
1     The high and low DVaR figures reported for each category did not necessarily occur on the same day as the high and low DVaR reported as a whole. Consequently a diversification effect balance for the high and low DVaR
       figures would not be meaningful and is therefore omitted from the above table.
 
2     The average of all one day hypothetical losses beyond the 95% confidence level DVaR.
 
3     The average of the three largest one day estimated losses.
 
 

 
 

 
Financial Statement Notes
 
Going Concern
 
 
The Group's business activities and financial position, the factors likely to affect its future development and performance, and its objectives and policies in managing the financial risks to which it is exposed and its capital are discussed in the Results by Business, Performance Management and Risk Management sections.
 
 
The Directors confirm they are satisfied that the Group has adequate resources to continue in business for the foreseeable future. For this reason, they continue to adopt the going concern basis for preparing accounts.
 
Accounting Policies
 
 
The Group has continued to apply the accounting policies used for the 2010 Annual Report.
 
 
A number of amendments to IFRS have been issued that are required to be applied from 1 January 2011. These amendments have not resulted in any changes to the Group's accounting policies.
 

 

 
 
 
 
 
1.        Net Interest Income
    
 
Year Ended
Year Ended
 
31.12.11
31.12.10
 
£m
£m
Cash and balances with central banks
392 
271 
Available for sale investments
2,137 
1,483 
Loans and advances to banks
350 
440 
Loans and advances to customers
17,271 
17,677 
Other
439 
164 
Interest income
20,589 
20,035 
     
Deposits from banks
(366)
(370)
Customer accounts
(2,526)
(1,410)
Debt securities in issue
(3,524)
(3,632)
Subordinated liabilities
(1,813)
(1,778)
Other
(159)
(322)
Interest expense
(8,388)
(7,512)
     
Net interest income
12,201 
12,523 
 
 
2.        Income by Geographic Segment1
    
 
Year Ended
Year Ended
 
31.12.11
31.12.10
 
£m
£m
UK
15,819
12,714
Europe
4,207
4,828
Americas
6,025
7,742
Africa and Middle East
4,967
4,997
Asia
1,274
1,159
Total income net of insurance claims
32,292
31,440
 
 
 
 
 
 
 
1        Total income net of insurance claims based on counterparty location.
 
 

 
 

 
Financial Statement Notes
 
3.            Administration and General Expenses
 
 
Year Ended
Year Ended
 
31.12.11
31.12.10
 
£m
£m
Property and equipment
1,763 
1,813 
Outsourcing and professional services
1,869 
1,705 
Operating lease rentals
659 
637 
Marketing, advertising and sponsorship
585 
631 
Subscriptions, publications, stationery and communications
740 
750 
Travel and accommodation
328 
358 
Other administration and general expenses
400 
566 
Impairment of property, equipment and intangible assets
12 
125 
Administration and general expenses
6,356 
6,585 
 
Administration and general expenses decreased 3% to £6,356m (2010: £6,585m), principally reflecting the benefits of restructuring and the non-recurrence of the one-off provision in respect of the resolution of a review of Barclays compliance with US economic sanctions that occurred in 2010. These reductions have been offset in part by an increase in outsourcing and professional services as a result of Barclaycard acquisitions, restructuring charges and increased regulatory costs.
 
4.            UK Bank Levy
 
 
UK legislation was enacted in July 2011 to introduce an annual bank levy, which applies to elements of the Group's consolidated liabilities and equity held as at the year end. The levy has resulted in an additional charge to the income statement of £325m, which was recognised as at 31 December 2011 and is presented within operating expenses. The IFRS Interpretations Committee is considering the timing of recognition of the levy going forward.
 
5.            Loss on Disposal of Subsidiaries, Associates and Joint Ventures
 
 
On 15 February 2011, Barclays announced its intention to sell Barclays Bank Russia (BBR) as part of refocusing its Russian activities and commenced plans to dispose of the business. The disposal of BBR was completed on 25 October 2011. A loss on disposal of £73m has been recognised in the income statement within Barclays Corporate and the accumulated foreign exchange losses of £23m, previously recognised directly in equity, have been recycled through the income statement within Head Office Functions.
 
 
6.           Acquisitions
 
 
In April 2011, Barclays acquired the third party investments in Protium for their carrying value of £163m and restructured the related management arrangements. This resulted in the general partner interest being acquired by Barclays for a nominal consideration and the remaining interest in Protium held by Protium's investment manager, redeemed for consideration of £50m (in accordance with the performance fees that would have been due under the original agreement, based on investment performance to date). Barclays became the sole owner and controlling party of Protium, which is consolidated by the Group. There was no gain or loss and no goodwill arising as the impairment on the loan had already been calculated by reference to Protium's net asset value of £5,856m. 
 
 
As part of this transaction, $750m of proceeds from a partial redemption of the loan to Protium was invested into Helix, an existing fund managed by Protium's investment manager. This represents a majority interest in the fund, which has also been consolidated by the Group.
 
 
The pre-acquisition carrying amounts of the acquired assets and liabilities, stated in accordance with the Group's accounting policies, were equal to their fair value on acquisition as set out below. There was no gain or loss and no goodwill arising on the transaction.
 
 
 


 
Financial Statement Notes
 
 6.           Acquisitions (continued)
 
Total Fair Value
Assets
£m
Trading portfolio assets
4,731 
Financial assets designated at fair value
1,004 
Derivative financial instruments
5 
Loans and advances to banks
472 
Reverse repurchase agreements
29 
Other assets
46 
Total assets
6,287 
   
Liabilities
  
Deposits from banks
1 
Trading portfolio liabilities
93 
Financial liabilities designated at fair value
76 
Derivative financial instruments
23 
Repurchase agreements
24 
Other liabilities
51 
Total liabilities
268 
   
Net assets acquired
6,019 
   
Group share of assets acquired
6,019 
   
Consideration:
  
- Cash
163 
- Loan
5,856 
Total
6,019 
 
 
The Group's exposure to Protium prior to acquisition represented a loan. Subsequent to acquisition the underlying assets held by Protium were consolidated by the Group and have been integrated into the corresponding business lines.
 
 
The contribution of Protium and related underlying assets on the Group's profit before tax for the year of £55m reflects a £223m impairment release and £36m net interest income on the loan prior to acquisition, offset by £204m post acquisition fair value movements in the underlying assets and gains arising on the unwind of structured assets.
 
 
During the year, Barclays acquired £2.1bn gross consumer credit card assets from Egg UK, a £130m corporate card portfolio from MBNA Europe Bank Limited and a $1.4bn Upromise by Sallie Mae credit card portfolio from FIA Card Services, N.A. (part of the Bank of America Group). These acquisitions were asset purchases and therefore, have not been included in the table above. In addition, Barclays acquired the Baubecon portfolio of German residential properties following a debt restructuring transaction for £0.8bn. The properties have a current fair value of £1bn and are accounted for as investment properties.
 
 


 
Financial Statement Notes
 
7.            Tax
 
 
The tax charge for 2011 was £1,928m (2010: £1,516m) on profit before tax of £5,879m (2010: £6,065m), giving an effective tax rate of 32.8% (2010: 25.0%). The effective tax rate reflects the non-deductible charges for the impairment of the investment in BlackRock, Inc. of £1,800m (2010: nil), goodwill impairment of £597m (2010: £243m) and the UK bank levy of £325m (2010: nil).
 
 
The effective tax rate for both periods differs from the UK tax rate of 26.5% (2010: 28.0%) because of these non-deductible charges and the impact of non-taxable gains and income, the effect of profits and losses outside of the UK being taxed at local statutory tax rates that are different to the UK statutory tax rate, non-creditable taxes, non-deductible expenses, and the benefit from recognising deferred tax assets that were previously unrecognised.
 
 
 
 
Assets
  
Liabilities
Current and Deferred Tax Assets and Liabilities
31.12.11
31.12.10
  
31.12.11
31.12.10
 
£m
£m
  
£m
£m
Current tax
374  
196  
  
(1,397)
(646)
Deferred tax
3,010  
2,517  
  
(695)
(514)
Total
3,384  
2,713  
  
(2,092)
(1,160)
 
 
Deferred tax assets, which principally relate to Barclays businesses in the US and Spain, increased by 20% to £3,010m largely due to improved financial performance in the US supporting additional deferred tax assets not previously recognised.
 
8.           Non-controlling Interests
 
 
 
Profit Attributable to Non-controlling Interest
  
Equity Attributable to Non-controlling Interest
 
Year Ended
Year Ended
  
Year Ended
Year Ended
 
31.12.11
31.12.10
  
31.12.11
31.12.10
 
£m
£m
  
£m
£m
Barclays Bank PLC Issued:
          
- Preference shares
465 
478 
  
5,929 
5,933 
- Reserve Capital Instruments (RCIs)
46 
113 
  
- 
1,418 
- Upper Tier 2 instruments
3 
3 
  
586 
586 
Absa Group Limited
401 
362 
  
2,861 
3,208 
Other non-controlling interests
29 
29 
  
231 
259 
 
944 
985 
  
9,607 
11,404 
 
 
The decrease in Absa Group Limited equity attributable to non-controlling interest to £2,861m (2010: £3,208m) is principally due to £583m depreciation of African currencies against Sterling and £162m of dividends paid, offset by retained profits of £401m.
 
 
The reduction in RCIs to nil (2010: £1,418m) is due to the buy back, at the Group's option, of instruments with a nominal value of $1.25bn and $0.75bn during June and December 2011 respectively.
 


 
Financial Statement Notes
 
9.           Earnings Per Share
    
 
Year Ended
Year Ended
 
31.12.11
31.12.10
 
£m
£m
Profit attributable to equity holders of the parent
 3,007 
 3,564 
Dilutive impact of convertible options
- 
(10)
Profit attributable to equity holders of the parent including dilutive impact of convertible options
 3,007 
 3,554 
     
Basic weighted average number of shares in issue1 
11,988m
11,719m
Number of potential ordinary shares
538m
733m
Diluted weighted average number of shares
12,526m
12,452m
     
Basic earnings per ordinary share  
25.1p
30.4p
Diluted earnings per ordinary share
24.0p
28.5p
 
 
The decrease in the number of potential ordinary shares is primarily driven by a decrease in the average share price and options exercised under employee share schemes.
 
 
 
 

 
 
10.         Dividends on Ordinary Shares
 
 
It is the Group's policy to declare and pay dividends quarterly. A final dividend in respect of 2011 of 3p per ordinary share will be paid on 16 March 2012 to shareholders on the Share Register on 24 February 2012 and accounted for as distribution of retained earnings in the year ending 31 December 2012. The financial statements for 2011 include the following dividends paid during the year:
 
 
 
 
 
 
 
Year Ended 31.12.11
  
Year Ended 31.12.10
Dividends Paid During the Period
Per Share
Total
  
Per Share
Total
 
Pence
£m
  
Pence
£m
Final dividend paid during period
2.5p
298 
  
1.5p
 176 
Interim dividends paid during period
3.0p
362 
  
3.0p
 355 
 
 
For qualifying US and Canadian resident ADR holders, the final dividend of 3p per ordinary share becomes 12p per ADS (representing four shares). The ADR depositary will post the final dividend on 16 March 2012 to ADR holders on the record at close of business on 24 February 2012.
 
 
 
 
 
 
1        The number of basic weighted average number of shares excludes own shares held in employee benefit trusts or for trading.
 
 

 
 

 
Financial Statement Notes
 
11.         Derivative Financial Instruments
        
 
 
 
Contract Notional
  
Fair Value
As at 31.12.11
Amount
  
Assets
Liabilities
 
£m
  
£m
£m
Foreign exchange derivatives
4,452,874 
  
63,822 
(67,280)
Interest rate derivatives
35,541,980 
  
372,570 
(357,440)
Credit derivatives
1,886,650 
  
63,312 
(61,348)
Equity and stock index and commodity derivatives
1,214,487 
  
35,602 
(38,484)
Derivative assets/(liabilities) held for trading
43,095,991 
  
535,306 
(524,552)
         
Derivatives in Hedge Accounting Relationships
        
Derivatives designated as cash flow hedges
157,149 
  
2,150 
(1,726)
Derivatives designated as fair value hedges
74,375 
  
1,447 
(1,238)
Derivatives designated as hedges of net investments
12,010 
  
61 
(394)
Derivative assets/(liabilities) designated in hedge accounting relationships
243,534 
  
3,658 
(3,358)
         
Total recognised derivative assets/(liabilities)
43,339,525 
  
538,964 
(527,910)
         
As at 31.12.10
        
Foreign exchange derivatives
3,513,911 
  
60,420 
(62,141)
Interest rate derivatives
41,764,637 
  
270,730 
(251,941)
Credit derivatives
1,952,475 
  
47,017 
(45,044)
Equity and stock index and commodity derivatives
1,286,181 
  
40,419 
(44,037)
Derivative assets/(liabilities) held for trading
48,517,204 
  
418,586 
(403,163)
         
Derivatives in Hedge Accounting Relationships
        
Derivatives designated as cash flow hedges
149,763 
  
760 
(925)
Derivatives designated as fair value hedges
83,968 
  
924 
(1,012)
Derivatives designated as hedges of net investments
6,622 
  
49 
(416)
Derivative assets/(liabilities) designated in hedge accounting relationships
240,353 
  
1,733 
(2,353)
         
Total recognised derivative assets/(liabilities)
48,757,557 
  
420,319 
(405,516)
 
 
 
The fair value of gross derivative assets increased by 28% to £539bn (2010: £420bn) reflecting decreases in the major forward curves, offset by the impact of optimisation initiatives.
 
 
Derivative asset exposures would be £492bn (2010: £378bn) lower than reported under IFRS if netting were permitted for assets and liabilities with the same counterparty or for which we hold cash collateral. Derivative liabilities would be £478bn (2010: £362bn) lower, reflecting counterparty netting and collateral placed.
 
 

 
 

 
Financial Statement Notes
 
12.         Financial Instruments Held at Fair Value
 
 
The table below shows the financial assets and liabilities that are recognised and measured at fair value analysed by level within the fair value hierarchy.
 
 
 
 
Valuations Based on
    
 
Quoted Market Prices
Observable Inputs
Significant Unobservable Inputs
    
 
(Level 1)
(Level 2)
(Level 3)
  
Total
As at 31.12.11
£m
£m
£m
  
£m
Trading portfolio assets
61,530 
81,449 
9,204 
  
152,183 
Financial assets designated at fair value
4,179 
24,091 
8,679 
  
36,949 
Derivative financial assets
2,550 
525,147 
11,267 
  
538,964 
Available for sale assets
30,857 
34,761 
2,873 
  
68,491 
Total Assets
99,116 
665,448 
32,023 
  
796,587 
           
Trading portfolio liabilities
(26,155)
(19,726)
(6)
  
(45,887)
Financial liabilities designated at fair value
(39)
(84,822)
(3,136)
  
(87,997)
Derivative financial liabilities
(2,263)
(517,066)
(8,581)
  
(527,910)
Total Liabilities
(28,457)
(621,614)
(11,723)
  
(661,794)
           
As at 31.12.10
          
Trading portfolio assets
48,466 
114,660 
5,741 
  
168,867 
Financial assets designated at fair value
5,406 
25,175 
10,904 
  
41,485 
Derivative financial assets
3,023 
408,214 
9,082 
  
420,319 
Available for sale assets
25,619 
36,201 
3,290 
  
65,110 
Total Assets
82,514 
584,250 
29,017 
  
695,781 
           
Trading portfolio liabilities
(30,247)
(42,345)
(101)
  
(72,693)
Financial liabilities designated at fair value
(4)
(94,088)
(3,637)
  
(97,729)
Derivative financial liabilities
(2,567)
(396,695)
(6,254)
  
(405,516)
Total Liabilities
(32,818)
(533,128)
(9,992)
  
(575,938)
           
 
Transfers between Level 1 and Level 2 primarily comprised government bonds that had more observable market prices.
 
 
The significant movements in the Level 3 positions during the year ended 31 December 2011 are as follows:
 
 
- Purchases of £9.0bn, primarily comprising £5.1bn of assets acquired as part of the acquisition of Protium, £2.1bn of other non-asset backed debt instruments, £0.6bn of asset backed products and £0.4bn of derivative products
 
 
- Sales of £7.8bn including the sale of £2.8bn Protium assets post acquisition, the sale of £1.9bn of non-asset backed debt instruments, £1.0bn of asset backed products, £1.0bn of legacy commercial real estate loans and £0.3bn of
       Private Equity investments
 
 
- Settlements of £1.8bn including the £0.8bn Baubecon debt restructuring and repayments received on other legacy commercial real estate loans
 
 
- Net Transfers into Level 3 of £2.6bn primarily comprised transfers of inflation linked bond trading portfolio assets, for which fair values have become less observable in the market
 
 
- Issuances of £1.0bn, comprising £0.4bn of derivatives products, £0.3bn of structured notes and £0.3bn of non-asset backed products
 
 
Movements on the fair value of Level 3 assets recognised in the income statement totalled £0.3bn (2010: £0.3bn)
 


 
 
Financial Statement Notes
 
12.         Financial Instruments Held at Fair Value (continued)
 
 
Unrecognised gains as a result of the use of valuation models using unobservable inputs
 
The amount that has yet to be recognised in income that relates to the difference between the transaction price (the fair value at initial recognition) and the amount that would have arisen had valuation models using unobservable inputs been used on initial recognition, less amounts subsequently recognised, was as follows:
 
 
 
 
Year Ended
Year Ended
 
31.12.11
31.12.10
 
£m
£m
Opening balance
137 
99 
Additions
93 
56 
Amortisation and releases
(113)
(18)
Closing balance
117 
137 
 
 
Stress tests are applied on significant unobservable parameters (within Level 3) to generate a range of potentially possible alternative valuations. The results of the most recent stress test showed a potential to increase the fair values by up to £2.0bn (2010: £1.7bn) or to decrease the fair values by up to £2.1bn (2010: £1.8bn) with substantially all the potential effect being recorded in the income statement rather than equity. It is not possible to reliably stress the £2.0bn receivable included within Level 3 assets arising from the Lehman acquisition since, its value is dependent on the outcome of legal proceedings. Further detail is provided in note 19.
 
 
The stresses applied take account of the nature of valuation techniques used, as well as the availability and reliability of observable proxy and historical data. In all cases, an assessment is made to determine the suitability of available data. The sensitivity methodologies are based on a range, standard deviation or spread data of a reliable reference source or a scenario based on alternative market views. The level of shift or scenarios applied is considered for each product and varies according to the quality of the data and variability of underlying market. The market pricing and valuation of derivatives continue to evolve, particularly in respect of collateralisation and credit risk. Valuation methodologies are consistent with observed market practice in this area and will continue to develop as practice evolves.
 
 

 
 
 
13.         Goodwill and Intangible Assets
 
As at
As at
 
31.12.11
31.12.10
 
£m
£m
Goodwill
5,305 
6,219 
Intangibles
2,541 
2,478 
Total
7,846 
8,697 
 
 
Goodwill principally comprised £3,145m held in UK RBB (2010: £3,148m), £1,078m in Africa RBB (2010: £1,307m) and £64m in Europe RBB (2010: £505m).
 
 
Goodwill is reviewed for indicators of impairment quarterly and tested for impairment on an annual basis by comparing the carrying value to its recoverable amount. In May 2011 the goodwill in FirstPlus of £47m was fully impaired reflecting the continued run-off of the loan portfolio and the impact of payment protection insurance redress. As a result of the annual impairment assessment, the Spanish goodwill of £550m was fully impaired in December 2011. This was due to a revision in cashflow forecasts, an increase in the pre-tax discount rate to 16% (2010: 12%) and a reduction in the terminal growth rate to 1% (2010: 2%), reflecting the deteriorating economic environment in the fourth quarter of 2011 and ongoing economic uncertainty in Spain.
 
 
 
 


 
Financial Statement Notes
 
14.         Provisions
    
 
As at
As at
 
31.12.11
31.12.10
 
£m
£m
Redundancy and restructuring
216 
177 
Undrawn contractually committed facilities and guarantees
230 
229 
Onerous contracts
116 
74 
Payment Protection Insurance redress
565 
-
Litigation
140 
151 
Sundry provisions
262 
316 
 Total
1,529 
947 
 
 
Following the conclusion of the Judicial Review, a £1bn provision was raised in the second quarter of 2011 for PPI redress. The provision was based on the FSA's policy statement and industry claims experience. Of this £435m had been utilised as at 31 December 2011 and, given the continued uncertainty in the compensation, the remaining £565m provision is currently considered best estimate to cover expected future settlements.
 
 
For the year ended 31 December 2011, costs of PPI redress of £13m (2010: £162m) relating to claims settled prior to the conclusion of the Judicial Review, are included in the income statement. Of this, £5m (2010: £87m) was included in income and £8m (2010: £75m) within operating expenses.
 
 
15.         Retirement Benefits
 
 
The Group's IAS 19 pension deficit across all schemes as at 31 December 2011 was £0.2bn (2010: £2.9bn). This reflects net recognised assets of £1.5bn (2010: net recognised liabilities of £0.2bn) and unrecognised actuarial losses of £1.7bn (2010: £2.7bn). The net recognised assets comprised retirement benefit assets of £1.8bn (2010: £0.1bn) and liabilities of £0.3bn (2010: £0.3bn).
 
 
The Group's main scheme is the UK Retirement Fund (the Fund). As at 31 December 2011, the Fund's IAS 19 scheme assets exceeded liabilities by £0.3bn (2010: deficit of £2.6bn). The most significant reasons for this change were favourable asset returns and deficit contributions paid over the year.
 
 
The latest triennial funding valuation of the Fund was carried out with an effective date of 30 September 2010, and showed a deficit of £5.0bn. The Bank and Trustee agreed a recovery plan to eliminate the deficit in the Fund. As part of this recovery plan, deficit contributions of £1.8bn were paid to the Fund in December 2011 and a further £0.5bn will be paid in 2012. Further deficit contributions are payable each year from 2017 to 2021 starting at £0.65bn for 2017 and increasing by approximately 3.5% per annum until 2021. These deficit contributions are in addition to the regular contributions to meet the Group's share of the cost of benefits accruing over each year.
 
 
The latest annual funding update prepared by the Scheme Actuary as at 30 September 2011 showed a funding deficit of £6.4bn, which was prior to the payment of £1.8bn deficit contributions in December 2011.
 
 
From 1 January 2013, in accordance with IAS 19 amendments, the Group balance sheet will fully reflect any pension deficit, including the unrecognised actuarial losses, which total £1.7bn as at 31 December 2011. The charge for 2011 would have been £0.1bn higher under the revised standard, and a charge of £1.7bn would have been recognised in Other Comprehensive Income.
 
 

 
 

 
Financial Statement Notes
 
16.         Share Capital and Warrants
 
 
Called up share capital comprises 12,199 million (2010: 12,182 million) ordinary shares of 25p each.
 
 
As at 31 December 2011 there were unexercised warrants to subscribe for 379.2 million (2010: 379.2 million) new ordinary shares at a price of £1.97775. The warrants may be exercised at any time up to close of business on 31 October 2013.
 
17.         Other Reserves
 
 
Currency Translation Reserve
 
The currency translation reserve represents the cumulative gains and losses on the retranslation of the Group's net investment in foreign operations, net of the effects of hedging. Currency translation movements in 2011 of £1,607m (2010: £1,184m), including £598m (2010: £442m) associated with non-controlling interests, are largely due to the depreciation of the Rand, Euro and Indian Rupee against Sterling.
 
 
The impact of the currency translation reserve recognised in the income statement during the year was nil (2010: £279m), as the £23m loss from the disposal of BBR was offset by other movements.
 
 
Available for Sale Reserve
 
The available for sale reserve represents the unrealised change in the fair value of available for sale investments since initial recognition.
 
 
The available for sale reserve increased £1,380m to £25m, largely driven by £2,748m gains from changes in fair value, offset by £1,557m of net gains transferred to the income statement after recognition of impairment on the Group's investment in BlackRock, Inc.
 
 
Cash Flow Hedge Reserve
 
The cash flow hedge reserve represents the cumulative gains and losses on effective cash flow hedging instruments that will be recycled to the income statement when hedged transactions affect profit or loss.
 
 
Movements in the cash flow hedge reserve principally reflected increases in the fair value of interest rate swaps held for hedging purposes, partially offset by related gains transferred to net profit.
 
 

 
 
 
18.         Contingent Liabilities and Commitments
    
 
Year Ended
Year Ended
 
31.12.11
31.12.10
 
£m
£m
Securities lending arrangements
 35,996 
 27,672 
Guarantees and letters of credit pledged as collateral security
 14,181 
 13,783 
Performance guarantees, acceptances and endorsements
 8,706 
 9,175 
Contingent liabilities
 58,883 
 50,630 
     
Documentary credits and other short-term trade related transactions
 1,358 
 1,194 
     
Standby facilities, credit lines and other commitments
 240,282 
 222,963 
 
 
Securities Lending Arrangements
 
Up to the disposal of Barclays Global Investors on 1 December 2009, the Group facilitated securities lending arrangements for its managed investment funds whereby securities held by funds under management were lent to third parties. Borrowers provided cash or investment grade assets as collateral equal to 100% of the market value of the securities lent plus a margin of 2%-10%. The Group agreed with BlackRock, Inc. to continue to provide indemnities to support these arrangements for three years following the disposal. The fair value of the collateral held was £37,072m (2010: £28,465m) and that of the stock lent was £35,996m (2010: £27,672m).
 

 

 
 
 
Financial Statement Notes
 
18.        Contingent Liabilities and Commitments (continued)
 
 
The Financial Services Compensation Scheme
 
The FSCS is the UK's compensation fund for customers of authorised financial services firms that are unable to pay claims. The FSCS raises levies on all UK deposit taking institutions. Previously compensation has been paid out by loan facilities provided by HM Treasury to FSCS in support of FSCS's obligations to the depositors of banks declared in default. The outstanding loan facilities, totalling approximately £18.5bn, are to be reviewed from 1 April 2012 and the ongoing terms are still to be agreed with HM Treasury. While it is anticipated that the substantial majority of these loans will be repaid wholly from recoveries from the institutions concerned, there is the risk of a shortfall, such that the FSCS may place additional levies on all FSCS participants. Barclays has included an accrual of £58m in other liabilities as at 31 December 2011 (2010: £63m) in respect of levies raised by the FSCS, based on the indicative costs published by the FSCS. 
 
 
Barclays Capital US Mortgage Activities
 
Barclays activities within the US residential mortgage sector during the period of 2005 through 2008 included: sponsoring and underwriting of approximately $39bn of private-label securitisations; underwriting of approximately $34bn of other private-label securitisations; sales of approximately $150m of loans to government sponsored enterprises (GSEs); and sales of approximately $3bn of loans to others. In addition, Barclays sold approximately $4bn of loans to Protium in 2009. As a result of Barclays acquisition of Protium in April 2011, Barclays reacquired the loans previously sold to Protium. Some of the loans sold by Barclays were originated by a Barclays subsidiary. Barclays also performed servicing activities through its US residential mortgage servicing business which Barclays acquired in Q4 2006 and subsequently sold in Q3 2010.
 
 
In connection with Barclays loan sales and some of its sponsored private-label securitisations, Barclays made certain loan level representations and warranties (R&Ws) generally relating to the underlying borrower, property and/or mortgage documentation. Under certain circumstances, Barclays may be required to repurchase the related loans or make other payments related to such loans if the R&Ws are breached. As at 31 December 2011, Barclays R&Ws in respect of approximately $1bn of loans sold to others (which excludes the reacquired loans previously sold to Protium and loans sold to GSEs) had expired. The R&Ws with respect to the balance of the loans sold to others were not subject to expiration provisions. However, such loans were generally sold at significant discounts and contained more limited R&Ws than loans sold to GSEs. Third party originators provided loan level R&Ws directly to the securitisation trusts for approximately $34bn of the $39bn in Barclays sponsored securitisations. Barclays or a subsidiary provided loan level R&Ws to the securitisation trusts for approximately $5bn of the Barclays sponsored securitisations. R&Ws made by Barclays in respect of such securitised loans, and the loans sold by Barclays to GSEs, are not subject to expiration provisions. Total unresolved repurchase requests associated with all loans sold to others and private-label activities were $21m at 31 December 2011. Current provisions are adequate to cover estimated losses associated with outstanding repurchase claims. However, based upon a large number of defaults occurring in US residential mortgages, there is a potential for additional claims for repurchases.
 
 
Claims against Barclays as an underwriter of RMBS offerings have been brought in certain civil actions (see page 79). Additionally, Barclays has received inquiries from various regulatory and governmental authorities regarding its mortgage-related activities and is cooperating with such inquiries. 
 
 
It is not practicable to provide an estimate of the financial impact of the potential exposure in relation to the foregoing matters.
 
 

 
 

 
Financial Statement Notes
 
19.         Legal Proceedings
 
 
Lehman Brothers Holdings Inc.
 
On 15 September 2009, motions were filed in the United States Bankruptcy Court for the Southern District of New York (the Court) by Lehman Brothers Holdings Inc. (LBHI), the SIPA Trustee for Lehman Brothers Inc. (the Trustee) and the Official Committee of Unsecured Creditors of Lehman Brothers Holdings Inc. (the Committee). All three motions challenged certain aspects of the transaction pursuant to which BCI and other companies in the Group acquired most of the assets of Lehman Brothers Inc. (LBI) in September 2008 and the court order approving such sale. The claimants were seeking an order voiding the transfer of certain assets to BCI; requiring BCI to return to the LBI estate alleged excess value BCI received; and declaring that BCI is not entitled to certain assets that it claims pursuant to the sale documents and order approving the sale (the Rule 60 Claims). On 16 November 2009, LBHI, the Trustee and the Committee filed separate complaints in the Court asserting claims against BCI based on the same underlying allegations as the pending motions and seeking relief similar to that which is requested in the motions. On 29 January 2010, BCI filed its response to the motions and also filed a motion seeking delivery of certain assets that LBHI and LBI have failed to deliver as required by the sale documents and the court order approving the sale (together with the Trustee's competing claims to those assets, the Contract Claims). Approximately $4.2bn (£2.7bn) of the assets acquired as part of the acquisition had not been received by 31 December 2011, approximately $3.0bn (£2.0bn) of which were recognised as part of the accounting for the acquisition and are included in the balance sheet as at 31 December 2011. This results in an effective provision of $1.2bn (£0.8bn) against the uncertainty inherent in the litigation.
 
 
On 22 February 2011, the Court issued its Opinion in relation to these matters, rejecting the Rule 60 Claims and deciding some of the Contract Claims in the Trustee's favour and some in favour of BCI. On 15 July 2011, the Court entered final Orders implementing its Opinion. BCI and the Trustee have each filed a notice of appeal from the Court's adverse rulings on the Contract Claims. LBHI and the Committee have withdrawn their notices of appeal from the Court's ruling on the Rule 60 Claims, rendering the Court's Order on the Rule 60 Claims final.
 
 
If the final Orders relating to the Contract Claims were to be unaffected by future proceedings, Barclays estimates that after taking into account the effective provision of $1.2bn (£0.8bn), its loss would be approximately $4.3bn (£2.8bn). Any such loss, however, is not considered probable and Barclays is satisfied with the current level of provision.
 
 
In addition, LBHI had been pursuing a claim for approximately $500m relating to bonuses that BCI was allegedly obligated to pay to former Lehman employees. On 14 September 2011, the Court issued a decision dismissing that claim and entered a final Order to that effect on 21 September 2011. LBHI has stated that it will not appeal that decision, rendering the Order dismissing that claim final.
 
 
American Depositary Shares
 
Barclays Bank PLC, Barclays PLC and various current and former members of Barclays PLC's Board of Directors have been named as defendants in five proposed securities class actions (which have been consolidated) pending in the United States District Court for the Southern District of New York (the Court). The consolidated amended complaint, dated 12 February 2010, alleges that the registration statements relating to American Depositary Shares representing Preferred Stock, Series 2, 3, 4 and 5 (the ADS) offered by Barclays Bank PLC at various times between 2006 and 2008 contained misstatements and omissions concerning (amongst other things) Barclays portfolio of mortgage-related (including US subprime-related) securities, Barclays exposure to mortgage and credit market risk and Barclays financial condition. The consolidated amended complaint asserts claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. On 5 January 2011, the Court issued an order and, on 7 January 2011, judgment was entered, granting the defendants' motion to dismiss the complaint in its entirety and closing the case. On 4 February 2011, the plaintiffs filed a motion asking the Court to reconsider in part its dismissal order. On 31 May 2011, the Court denied in full the plaintiffs' motion for reconsideration. The plaintiffs have appealed both decisions (the grant of the defendants' motion to dismiss and the denial of the plaintiffs' motion for reconsideration) to the United States Court of Appeals for the Second Circuit.
 
 
Barclays considers that these ADS-related claims against it are without merit and is defending them vigorously. It is not practicable to estimate Barclays possible loss in relation to these claims or any effect that they might have upon operating results in any particular financial period.
 
 
 
 
 


 
Financial Statement Notes
 
19.         Legal Proceedings (continued)
 
 
US Federal Housing Finance Agency and Other Residential Mortgage-Backed Securities Litigation
 
The United States Federal Housing Finance Agency (FHFA), acting for two US government sponsored enterprises, Fannie Mae and Freddie Mac (collectively, the GSEs), filed lawsuits against 17 financial institutions in connection with the GSEs' purchases of residential mortgage-backed securities (RMBS). The lawsuits allege, among other things, that the RMBS offering materials contained materially false and misleading statements and/or omissions. Barclays Bank PLC and/or certain of its affiliates or former employees are named in two of these lawsuits, relating to sales between 2005 and 2007 of RMBS, in which Barclays Capital Inc. was lead or co-lead underwriter.
 
 
Both complaints demand, among other things: rescission and recovery of the consideration paid for the RMBS; and recovery for the GSEs' alleged monetary losses arising out of their ownership of the RMBS. The complaints are similar to other civil actions filed against Barclays Bank PLC and/or certain of its affiliates by other plaintiffs, including the Federal Home Loan Bank of Seattle, Federal Home Loan Bank of Boston, Federal Home Loan Bank of Chicago, Cambridge Place Investment Management, Inc., HSH Nordbank AG (and affiliates) and Stichting Pensioenfonds ABP, relating to their purchases of RMBS. Barclays considers that the claims against it are without merit and intends to defend them vigorously.
 
 
The original amount of RMBS related to claims against Barclays in these cases totalled approximately $6.8bn, of which approximately $2.0bn was outstanding as at 31 December 2011. Cumulative losses reported on these RMBS as at 31 December 2011 were approximately $0.1bn. If Barclays was to lose these cases it could incur a loss of up to the outstanding amount of the RMBS as at the time of judgment (taking into account further principal payments after 31 December 2011), plus any cumulative losses on the RMBS at such time and any interest, fees and costs, less the market value of the RMBS at such time. Barclays has estimated the total market value of the RMBS as at 31 December 2011 to be approximately $1.1bn. Barclays may be entitled to indemnification for a portion of any losses.
 
 
Devonshire Trust
 
On 13 January 2009, Barclays commenced an action in the Ontario Superior Court seeking an order that its early terminations earlier that day of two credit default swaps under an ISDA Master Agreement with the Devonshire Trust (Devonshire), an asset-backed commercial paper conduit trust, were valid. On the same day, Devonshire purported to terminate the swaps on the ground that Barclays had failed to provide liquidity support to Devonshire's commercial paper when required to do so. On 7 September 2011, the court ruled that Barclays early terminations were invalid, Devonshire's early terminations were valid and, consequently, Devonshire was entitled to receive back from Barclays cash collateral of approximately C$533m together with accrued interest thereon. Barclays is appealing the court's decision. If the court's decision were to be unaffected by future proceedings, Barclays estimates that its loss would be approximately C$500m, less any impairment provisions taken by Barclays for this matter.
 
 
Other
 
Barclays is engaged in various other legal proceedings both in the United Kingdom and a number of overseas jurisdictions, including the United States, involving claims by and against it which arise in the ordinary course of business, including debt collection, consumer claims and contractual disputes. Barclays does not expect the ultimate resolution of any of these proceedings to which Barclays is party to have a material adverse effect on its results of operations, cash flows or the financial position of the Group and Barclays has not disclosed the contingent liabilities associated with these claims either because they cannot reliably be estimated or because such disclosure could be prejudicial to the conduct of the claims. Provisions have been recognised for those cases where Barclays is able reliably to estimate the probable loss where the probable loss is not de minimis.
 
 
In addition, the Bank has been named as a defendant in a number of lawsuits, including class actions, filed in US federal courts involving claims by purported classes of purchasers and sellers of LIBOR-based derivative products or Eurodollar futures or option contracts between 2006 and 2009; further details are provided on the following page. 
 
 


 
Financial Statement Notes
 
20.      Competition and Regulatory Matters   
 
This note highlights some of the key competition and regulatory challenges facing Barclays, many of which are beyond our control. The extent of the impact of these matters on Barclays cannot always be predicted but may materially impact our businesses and earnings.
 
Regulatory change
 
The scale of regulatory change remains challenging with a significant tightening of regulation and changes to regulatory structures globally, especially for banks that are deemed to be of systemic importance. Concurrently, there is continuing political and regulatory scrutiny of the operation of the banking and consumer credit industries which, in some cases, is leading to increased or changing regulation which is likely to have a significant effect on the industry. Examples include Basel 3, the emerging proposals on bank resolution regimes and proposals relating to over-the-counter derivatives clearing and global systemically important banks.
 
In the UK, the FSA's current responsibilities are to be reallocated between the Prudential Regulatory Authority (a subsidiary of the Bank of England) and a new Financial Conduct Authority. In addition, the Independent Commission on Banking (the ICB) completed its review of the UK banking system and published its final report on 12 September 2011. The ICB recommended (amongst other things) that: (i) the UK and EEA retail banking activities of a UK bank or building society should be placed in a legally distinct, operationally separate and economically independent entity (so-called "ring-fencing"); and (ii) the loss-absorbing capacity of ring-fenced banks and UK-headquartered global systemically important banks (such as Barclays Bank PLC) should be increased to levels higher than the Basel 3 proposals. The UK Government published its response to the ICB recommendations in December 2011 and indicated that primary and secondary legislation relating to the proposed ring-fence will be completed by May 2015, with UK banks and building societies expected to be compliant as soon as practicable thereafter, and the requirements relating to increased loss-absorbing capacity of ring-fenced banks and UK-headquartered global systemically important banks will be applicable from 1 January 2019.
 
The US Dodd-Frank Wall Street Reform and Consumer Protection Act contains far reaching regulatory reform. The full impact on Barclays businesses and markets will not be known until the principal implementing rules are adopted in final form by governmental authorities, a process which is underway and which will take effect over several years.
 
Payment Protection Insurance (PPI)
 
On 20 April 2011, the judicial review proceedings brought by the British Bankers' Association in October 2010 against the FSA and the Financial Ombudsman Service regarding the assessment and redress of PPI complaints were dismissed. On 9 May 2011, Barclays announced that it would not be participating in any application for permission to appeal against the High Court judgment and that Barclays had agreed with the FSA that it would process all on-hold and any new complaints from customers about PPI policies that they hold. Barclays also announced that, as a goodwill gesture, it would pay out compensation to customers who had PPI complaints put on hold during the judicial review. Barclays took a provision of £1bn in the second quarter of 2011 to cover the cost of future redress and administration as disclosed under note 14.
 
Interchange
 
The Office of Fair Trading, as well as other competition authorities elsewhere in Europe, continues to investigate Visa and MasterCard credit and debit interchange rates. These investigations may have an impact on the consumer credit industry as well as having the potential for the imposition of fines. Timing is uncertain but outcomes may be known within the next 2-4 years.
 
London Interbank Offered Rate (LIBOR)
 
The FSA, the US Commodity Futures Trading Commission, the SEC, the US Department of Justice Fraud Section of the Criminal Division and Antitrust Division and the European Commission are amongst various authorities conducting investigations into submissions made by Barclays and other panel members to the bodies that set various interbank offered rates. Barclays is co-operating in the relevant investigations and is keeping regulators informed. In addition, Barclays has been named as a defendant in a number of class action lawsuits filed in US federal courts involving claims by purported classes of purchasers and sellers of LIBOR-based derivative products or Eurodollar futures or options contracts between 2006 and 2009. The complaints are substantially similar and allege, amongst other things, that Barclays and other banks individually and collectively violated US antitrust and commodities laws and state common law by suppressing LIBOR rates during the relevant period. It is not currently possible to predict the ultimate resolution of the issues covered by the various investigations and lawsuits, including the timing and the scale of the potential impact on the Group of any resolution.
 
 

 
 

 
Shareholder Information
 
Results Timetable1 
Date
    
 
 
Ex-dividend date
22 February 2012
Dividend Record date
24 February 2012
Dividend Payment date
16 March 2012
 
 
Q1 2012 Interim Management Statement
26 April 2012
  
2012 Annual General Meeting
27 April 2012
  
2012 Interim Results Announcement
27 July 2012
  
 
 
Q3 2012 Interim Management Statement
31 October 2012
     
Change
Exchange Rates2 
31.12.11
31.12.10
31.12.103 
Period end - US$/£
1.54 
1.55 
1%
Average - US$/£
1.61 
1.55 
(4%)
Period end - €/£
1.19 
1.16 
(3%)
Average - €/£
1.15 
1.17 
2%
Period end - ZAR/£
12.52 
10.26 
(18%)
Average - ZAR/£
11.60 
11.31 
(2%)
       
Share Price Data
31.12.11
31.12.10
  
Barclays PLC (p)
176.05 
261.65 
  
Absa Group Limited (ZAR)
141.00 
140.00 
  
BlackRock, Inc. (US$)
178.24 
190.58 
  
       
For Further Information Please Contact
      
       
 
 
Investor Relations
Media Relations
Charlie Rozes +44 (0) 20 7116 5752
Giles Croot +44 (0) 20 7116 6132
       
More information on Barclays can be found on our website: www.barclays.com
 
 
Registered Office
 
1 Churchill Place, London, E14 5HP, United Kingdom. Tel: +44 (0) 20 7116 1000. Company number: 48839
 
 
Registrar
 
The Registrar to Barclays, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom.
 
 
Tel: 0871 384 20554 or +44 121 415 7004 from overseas.
 
 
Listing
 
The principal trading market for Barclays PLC ordinary shares is the London Stock Exchange. Trading on the New York Stock Exchange is in the form of ADSs under the ticker symbol 'BCS'. Each ADS represents four ordinary shares of 25p each and is evidenced by an ADR. The ADR depositary is JP Morgan Chase Bank, whose international telephone number is +1-651-453-2128, domestic telephone number is 1-800-990-1135 and address is JPMorgan Chase Bank, PO Box 64504, St. Paul, MN 55164-0504, USA.
 
 
Dividend Reinvestment Plan
 
Shareholders may have their dividends reinvested in Barclays shares by joining the Barclays Dividend Reinvestment Plan (DRIP). The DRIP is a straightforward and cost-effective way of using your dividends to build your shareholding in Barclays. For further details, including application information, please visit www.barclays.com or alternatively contact: The Plan Administrator to Barclays DRIP, Share Dividend Team, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom, or by telephoning 0871 384 20554 from the UK or +44 121 415 7004 from overseas.
 
 
 
 
 
1        Note that these announcement dates are provisional and subject to change.
 
2       The average rates shown above are derived from daily spot rates during the year used to convert foreign currency transactions into Sterling for accounting    purposes. 
 
3        The change is the impact to Sterling reported information.
 
4       Calls to this number are charged at 8p per minute if using a BT landline. Call charges may vary if using other providers.
 
 

 
 

 
Index
 
Africa Retail and Business Banking
16
  
Liquidity pool
41
Accounting policies
67
  
Liquidity risk management framework
41
Acquisitions
68
  
Loans and advances to customers and banks
47
Administration and general expenses
68
  
Loss on disposal of subsidiaries,
  
Balance sheet
10
  
associates and joint ventures
68
Balance sheet leverage
40
  
Margins and balances
35
Barclaycard
18
  
Market risk
66
Barclays Capital
20
  
Net interest income
67
Barclays Corporate
22
  
Non-controlling interests
70
Barclays Wealth
24
  
Other reserves
76
Capital ratios
38
  
Performance summary
4
Capital resources
38
  
Principal risks
37
Cash flow statement
11
  
Profit before tax
3
Chief Executive's review
4
  
Provisions
75
Competition and regulatory matters
80
  
Remuneration
31
Contingent liabilities and commitments
76
  
Results by quarter
28
Country exposures (selected Eurozone)
59
  
Results timetable
81
Credit impairment charges and other credit
    
Retail credit risk
52
provisions
49
  
Retail forbearance programmes
56
Credit market exposures
64
  
Retirement benefits
75
Credit risk
46
  
Returns and equity by business
34
Credit risk loans
50
  
Risk weighted assets
39
Derivative financial instruments
72
  
Share capital
76
Dividends on ordinary shares
71
  
Share price data
81
Earnings per share
71
  
Statement of comprehensive income
9
Europe Retail and Business Banking
14
  
Statement of changes in equity
11
Financial instruments held at fair value
73
  
Tax
70
Finance Director's review
6
  
Tier 1 capital ratio
38
Funding structure
41
  
Total assets
39, 46
Head Office Functions and Other Operations
27
  
Total capital ratio
38
Income statement
8
  
UK Retail and Business Banking
12
Investment Management
26
  
Wholesale credit risk
57
Legal proceedings
78
      
 
 
 
The glossary of terms can be found on:
http://group.barclays.com/Investor-Relations/Financial-results-and-publications/Results-announcements