Final Results - Part 2 of 2

Barclays PLC 14 February 2002 PART 2 OF 2 ADDITIONAL INFORMATION CHANGES IN REPORTING OF GROUP STRUCTURE IN 2001 During 2000, significant changes were made to the Group's organisational structure, moving from five major business groups to an organisation based on strategic business units (SBUs), which are supported by shared services. Each SBU has been tasked with identifying and implementing value-maximising strategies, and achieving these by creating advantage for customers through superior products and services. From 1st January 2001, for reporting purposes, the SBUs have been organised into the following business groups: - Personal Financial Services (previously UK Personal Customers) - Woolwich - Barclays Private Clients (previously Wealth Management) - Barclaycard - Business Banking - Africa - Barclays Capital - Barclays Global Investors Group structure changes from 2000 The figures in the business group analyses have been restated to take account of the following changes relative to 2000: Retail Financial Services is presented as three separate business groups for reporting purposes - Personal Financial Services, Woolwich and Barclays Private Clients. The Masterloan consumer lending business, the Investment Management business and Barclays mortgage business were all part of UK Personal Customers. The Masterloan business is now part of Barclaycard, the Investment Management business is now part of Barclays Private Clients and the Barclays mortgage business is now part of Woolwich. UK Small Business is now reported within Business Banking and Africa (including Egypt) is reported separately. The wholesale clients within the UK and international large commercial banking businesses previously reported within Corporate Banking are now managed by and reported within Barclays Capital. The majority of central and head office costs have been re-allocated to the business groups based on the utilisation of the services supplied. Operating profit for business groups includes allocations of earnings on centrally held group capital based on economic capital. These were previously allocated on the basis of regulatory capital. ACQUISITIONS AND DISPOSALS During 2001 the Group increased its shareholding in Banco Barclays SA (formerly Banco Barclays e Galicia SA) from 50% to over 99%. The entity has been consolidated as a subsidiary undertaking since 1st January 2001. Details of disposals are set out under exceptional items on page 27. ACCOUNTING POLICIES There have been no significant changes to the Group's accounting policies following the adoption in 2001 of Financial Reporting Standard 18 'Accounting Policies'. There have been no other significant changes to the accounting policies as described in the 2000 Annual Report. Financial Reporting Standard 19 'Deferred Tax' and Financial Reporting Standard 17 'Retirement Benefits' will be fully effective for the years ending 31st December 2002 and 2003 respectively. CHANGES IN ACCOUNTING PRESENTATION Barclays Capital operating profit now includes internal fees received from management of Group capital in relation to structured capital market activities. Operating profit for business groups includes allocations of notional interest based on economic capital. For geographic analysis of the profit before tax, earnings on capital were allocated on the basis of the geographic location of capital. Previously earnings on capital were allocated on the basis of regulatory capital. Credit risk and country risk provisions for bad and doubtful debts are reported in total having previously been shown separately. Country risk provisions are now included in the coverage ratios for potential credit risk lendings. Credit derivatives are now reported separately having previously been incorporated within the interest rate category. Following the strategic alliance with Legal & General, costs relating to the regulated salesforce and field sales managers have been included in staff costs and their headcount included in Group staff numbers with effect from 1st August 2001. Prior to that date these costs were borne within the long term assurance fund and their headcount excluded from Group staff numbers. Costs have increased by £31m in 2001 as a result of this change. There have been no other changes in accounting presentation from that reflected in the 2000 Annual Report. GROUP SHARE SCHEMES The trustees of the Group's share schemes may make purchases of Barclays PLC ordinary shares in the market at any time or times following this announcement of the Group's results for the purposes of those schemes' current and future requirements. The total number of ordinary shares purchased would not be material in relation to the issued share capital of Barclays PLC. RECENT DEVELOPMENTS As announced on 31st October 2001, Barclays and Canadian Imperial Bank of Commerce ('CIBC') have signed an agreement to combine their retail, corporate and offshore banking operations in the Caribbean to create FirstCaribbean International Bank ('FirstCaribbean'). Implementation of the combination is subject to, among other things, the receipt of certain approvals from government and regulatory authorities and shareholders of CIBC West Indies Holdings Limited ('CWIHL') and CIBC Bahamas Limited. The transaction is expected to be completed during the first half of 2002. Barclays will account for its interest in FirstCaribbean as an associated undertaking under UK accounting standards. At the time the transaction was announced, it was expected to result in an economic profit for Barclays in the region of £250m in respect of the disposal of its share of its existing Caribbean operations which will be recognised in the statement of total recognised gains and losses and goodwill of around £175m to arise in Barclays on the acquisition of its share of CWIHL. No significant change is currently expected to those amounts, except to the extent goodwill alters due to fair value adjustments, exchange rate movements and transaction costs. The transaction is expected to increase Barclays Tier 1 capital ratio and, going forward, to have a positive impact on earnings before goodwill and fair value amortisation, primarily as a result of synergies. On 1st November 2001, Barclaycard and Xansa (an IT services company) announced their intention to create a strategic alliance to deliver IT services to Barclaycard. Around 450 Barclaycard employees have transferred to Xansa from 1st February 2002. Barclays announced on 28th November 2001 that it has signed an agreement with Canary Wharf Limited to develop a new headquarters building in Docklands to bring together the majority of the non-branch employees who are currently based in the City and West End of London. Barclays will be seeking shareholder approval at the AGM on 25th April 2002 for the subdivision of each Barclays PLC ordinary share of £1 each (issued and unissued) into four ordinary shares of 25p each. If approved, this share split would be implemented as soon as practicable after the AGM. NOTES 1. Loans and advances to banks 2001 2000 £m £m Banking business: United Kingdom 7,116 3,345 Other European Union 2,278 2,042 United States 930 2,056 Rest of the World 1,924 2,153 12,248 9,596 Less - provisions (52) (40) 12,196 9,556 Trading business 35,693 27,345 Total loans and advances to banks 47,889 36,901 Of the total loans and advances to banks, placings with banks were £39.5bn at 31st December 2001 (2000: £32.7bn). Placings with banks include reverse repos of £32.0bn (2000: £26.1bn). The majority of the placings have a residual maturity of less than one year. 2. Loans and advances to customers 2001 2000 £m £m Banking business: United Kingdom 124,254 115,314 Other European Union 10,708 10,203 United States 6,614 6,376 Rest of the World 7,416 8,950 148,992 140,843 Less - provisions (2,664) (2,313) - interest in suspense (75) (93) 146,253 138,437 Trading business 34,240 23,198 Total loans and advances to customers 180,493 161,635 Total loans and advances to customers include reverse repos of £29.7bn (2000: £20.3bn). 3. Provisions for bad and doubtful debts 2001 2000 £m £m Provisions at beginning of year 2,353 1,983 Acquisitions and disposals 46 119 Exchange and other adjustments (1) 4 Amounts written off United Kingdom (814) (595) Other European Union (36) (45) United States (94) (26) Rest of the World (29) (17) (973) (683) Recoveries (analysed below) 142 113 Sub-total 1,567 1,536 Provisions charged against profit: New and increased specific provisions United Kingdom 1,157 843 Other European Union 35 35 United States 173 27 Rest of the World 75 76 1,440 981 Less: Releases of specific provisions United Kingdom (87) (55) Other European Union (10) (17) United States (10) (6) Rest of the World (26) (13) (133) (91) Less: Recoveries United Kingdom (106) (100) Other European Union (5) (6) United States (27) (4) Rest of the World (4) (3) (142) (113) Net specific provisions charge 1,165 777 General provision - (release)/charge (16) 40 Net credit risk charge to profit 1,149 817 Provisions at end of year 2,716 2,353 Total provision for bad and doubtful debts at end of period comprise: Specific United Kingdom 1,605 1,343 Other European Union 89 112 United States 89 20 Rest of the World 188 118 Total specific provisions 1,971 1,593 General provisions 745 760 2,716 2,353 The geographic analysis of provisions shown above is based on location of office recording the transaction. The 2001 totals reflect a £40m UK specific provision charge within the Personal Financial Services lending book based on the introduction of a statistical methodology which enables the earlier recognition of specific impairment. There has been a corresponding release of UK general provision. 4. Other assets 2001 2000 £m £m Own shares 6 5 Balances arising from off-balance sheet financial instruments 13,730 12,100 Shareholders' interest in long-term assurance fund 921 820 London Metal Exchange warrants and other metals trading 1,236 1,001 positions Sundry debtors 2,330 1,592 Prepayments and accrued income 2,553 2,827 20,776 18,345 'Own shares' represent Barclays PLC shares held in employee benefit trusts that have not yet vested unconditionally with the eligible employees. 5. Other liabilities 2001 2000 £m £m Balances arising from off-balance sheet financial instruments 11,091 11,971 Short positions in securities 26,200 21,201 Current tax 589 642 Cash receipts from securitisation 605 747 Sundry creditors 4,445 3,623 Accruals and deferred income 4,377 4,457 Provisions for liabilities and charges 1,224 1,266 Dividend 728 632 49,259 44,539 Cash receipts from securitisation are in respect of the securitisation of a portfolio of investment debt securities which did not qualify for linked presentation under Financial Reporting Standard 5. 6. Potential credit risk lendings The following tables present an analysis of potential credit risk lendings in accordance with the US Securities and Exchange Commission guidelines. Additional categories of disclosure are included, however, to record lendings where interest continues to be accrued and where either interest is being suspended or specific provisions have been raised. Normal US banking practice would be to place such lendings on non-accrual status. The geographical presentation is based on the location of the office recording the transaction. Amounts are stated before deduction of the value of security held, specific provisions carried or interest suspended. Non-performing lendings 2001 2000 £m £m Non-accrual lendings: United Kingdom 1,292 1,223 Other European Union 90 96 United States 306 119 Rest of the world 235 101 Accruing lendings where interest is being suspended: United Kingdom 386 351 Other European Union 30 36 United States - - Rest of the world 145 109 Other accruing lendings against which provisions have been made: United Kingdom 1,044 873 Other European Union 20 71 United States 11 2 Rest of the world 43 76 Sub-totals: United Kingdom 2,722 2,447 Other European Union 140 203 United States 317 121 Rest of the world 423 286 Accruing lendings 90 days overdue, against which no provisions have been made: United Kingdom 237 296 Other European Union - 1 United States - - Rest of the world 27 17 Reduced rate lendings: United Kingdom 4 6 Other European Union - - United States - - Rest of the world 1 - Total non-performing lendings United Kingdom 2,963 2,749 Other European Union 140 204 United States 317 121 Rest of the world 451 303 3,871 3,377 2001 2000 £m £m Potential problem lendings United Kingdom 968 728 Other European Union 2 2 United States 369 313 Rest of the world 63 64 1,402 1,107 2001 2000 % % Provision coverage of non-performing lendings United Kingdom 74.9 72.9 Other European Union 78.6 72.1 United States 61.8 81.0 Rest of the world 59.2 64.7 Total 72.1 72.4 2001 2000 % % Provision coverage of total potential credit risk lendings United Kingdom 56.4 57.7 Other European Union 77.5 71.4 United States 28.6 22.6 Rest of the world 51.9 53.4 Total 52.9 54.5 The geographical coverage ratios reflect an allocation of general provision. UK non-performing loans increased by £214m to £2,963m reflecting increases in both personal and corporate lending balances. UK potential problem loans increased by £240m, primarily relating to corporate lending positions. Non-performing loans in the rest of the world were £451m, an increase of £148m, primarily reflecting the consolidation of Banco Barclays SA (formerly Banco Barclays e Galicia SA). US non-performing loans increased by £196m to £317m reflecting the inclusion of a small number of large loans where the expected loss is not likely to be significant. US coverage also reflects the practice of writing off non-performing loans earlier than is the practice in other geographic areas. 2001 2000 £m £m Interest forgone on non-performing lendings: Interest income that would have been recognised under original contractual terms 279 246 Interest income included in profit (50) (48) Interest forgone 229 198 7. Exposure to countries subject to International Monetary Fund liquidity support programmes Amounts outstanding, net of provisions, and commitments to counterparties in countries which make significant use of International Monetary Fund liquidity support programmes were as follows: 2001 2000 £bn £bn Europe Turkey 0.2 * Asia Indonesia 0.1 0.1 South Korea * 0.2 Thailand * 0.1 0.1 0.4 Latin America Argentina 0.3 0.9 Brazil 0.7 * 1.0 0.9 Total 1.3 1.3 * Did not make significant use of IMF liquidity support programmes at the end of the year. The total comprises: 2001 2000 £bn £bn Banks 0.7 0.8 Governments and sovereigns 0.1 0.1 Corporates and project financings 0.5 0.4 1.3 1.3 8. European Economic and Monetary Union (EMU) The changes required to deal with the introduction of euro notes and coins on 1st January 2002, and the demise of the eurozone currencies were delivered successfully. United Kingdom entry to EMU Barclays is maintaining a prudent planning programme to validate and develop further its existing plans and is conducting feasibility studies with selected suppliers and partners. Given the considerable uncertainty that continues to surround whether and when the UK may enter, it has not been possible to draw any definitive conclusions as to the final overall costs of preparing retail systems and operations. Barclays incurred minimal expenditure during 2001 with respect to any decision to introduce the euro in the UK. No significant incremental costs are expected in 2002. 9. Legal proceedings Barclays is party to various legal proceedings, the ultimate resolution of which is not expected to have a significant effect on the financial position or profitability of the Group. 10. Geographical Analysis 2001 2000 Profit before tax £m £m United Kingdom 2,863 2,862 Other European Union 410 315 United States 85 67 Rest of the world 250 252 3,608 3,496 2001 2000 Total assets £m £m United Kingdom 266,867 235,343 Other European Union 20,278 18,788 United States 48,701 38,662 Rest of the world 20,803 23,397 356,649 316,190 The geographic presentation above is generally based on the office recording the transaction. 11. Contingent liabilities and commitments 2001 2000 Contingent liabilities £m £m Acceptances and endorsements 2,460 1,170 Guarantees and assets pledged as collateral security 14,826 15,180 Other contingent liabilities 7,313 6,503 24,599 22,853 Commitments Standby facilities, credit lines and other commitments 99,917 87,971 12. Derivatives The tables set out below analyse the contract or underlying principal amounts of derivative financial instruments held for trading and non trading purposes. 2001 2000 Foreign exchange derivatives £m £m Contract or underlying principal amount Forward foreign exchange 242,277 240,435 Currency swaps 146,297 125,812 Other exchange rate related contracts 75,114 105,603 463,688 471,850 Interest rate derivatives Contract or underlying principal amount Interest rate swaps 1,556,457 1,233,609 Forward rate agreements 103,447 39,939 OTC options bought and sold 502,703 377,565 Other interest rate related contracts 675,246 460,674 2,837,853 2,111,787 Credit derivatives 16,640 14,096 Equity, stock index and commodity derivatives Contract or underlying principal amount 96,218 101,516 Other exchange rate related contracts are primarily over the counter (OTC) options. Other interest rate related contracts are primarily exchange traded options and futures. Derivatives entered into as trading transactions, together with any associated hedging thereof, are measured at fair value and the resultant profits and losses are included in dealing profits. The tables below summarise the positive and negative fair values of such derivatives, including an adjustment for netting where the Group has the ability to insist on net settlement which is assured beyond reasonable doubt, based on a legal right that would survive the insolvency of the counterparty. Positive fair values 2001 2000 £m £m Foreign exchange derivatives 8,262 9,511 Interest rate derivatives 32,659 21,718 Credit derivatives 508 249 Equity, stock index and commodity derivatives 1,990 1,817 Effect of netting (29,173) (20,748) Cash collateral meeting offset criteria (516) (447) 13,730 12,100 2001 2000 Negative fair values £m £m Foreign exchange derivatives 7,554 9,685 Interest rate derivatives 31,432 21,207 Credit derivatives 161 22 Equity, stock index and commodity derivatives 2,031 2,588 Effect of netting (29,173) (20,748) Cash collateral meeting offset criteria (914) (783) 11,091 11,971 13. Market risk Market Risk is the risk of loss arising from adverse movements in the level or volatility of market prices which can occur in the interest rate, foreign exchange, equity and commodity markets. It is incurred as a result of both trading and asset/liability management activities. The market risk management policies of the Group are determined by the Group Governance and Control Committee. The Group's policy is that exposure to market risk arising from trading activities is concentrated in Barclays Capital. The Group's banking businesses are also subject to market risk, which arises in relation to non-trading positions, such as capital balances, demand deposits and customer originated transactions and flows. The Group uses a 'value at risk' measure as the primary mechanism for controlling market risk. Daily Value at Risk (DVaR) is an estimate, with a confidence level of 98%, of the potential loss which might arise if the current positions were to be held unchanged for one business day. Daily losses exceeding the DVaR figure are likely to occur, on average, only twice in every one hundred business days. Actual outcomes are monitored regularly to test the validity of the assumptions made in the calculation of DVaR. Barclays Capital In Barclays Capital, the formal process for the management of risk is through the Barclays Capital Risk Management Committee and Group Risk Management Committee. Day-to-day responsibility for market risk lies with the Chief Executive of Barclays Capital, supported by a dedicated global market risk management unit that operates independently of the business areas. Barclays Capital uses the historical simulation method for calculating DVaR. The length of the historical sample is two years. In August 2000, Barclays Capital introduced an enhanced historical simulation methodology for calculating DVaR. The previous methodology segregated interest rate exposures into two categories: government and non-government. For risk measurement purposes, all non-government exposures were assumed to trade at LIBOR, and were therefore implicitly assumed to have the same price volatility as an interest rate swap. The enhanced methodology maps interest rate exposures into eight categories: government, interest rate swaps and six credit grades for non-government exposures. The greater definition provided allows the system to discriminate between the market risk of holding bonds with different credit qualities, for example AAA securities as against non-investment grade securities. In particular, it provides a better measure of the effectiveness of hedging strategies such as shorting government bonds or swaps against non-government bond portfolios. It has not been possible to apply the new methodology retrospectively to daily positions prior to August 2000 and so the figures tabulated below are based on the old methodology. On this basis there has been no significant change in overall market risk exposure in 2001 with DVaR averaging £16.9m in 2001 compared to £17.5m for 2000. The new basis compared to the old basis, has on average, led to an increase in reported DVaR of £2.0m since inception. The impact has ranged from a reduction of £2.9m to an increase of £6.0m. As at 31st December 2001 DVaR was £21.3m under the new basis and £23.0m under the old basis (2000 old basis: £19.0m). DVaR Twelve months to Twelve months to 31st December 2001 31st December 2000 Average High* Low* Average High* Low* £m £m £m £m £m £m Interest rate risk 15.9 24.5 10.2 16.2 23.7 10.7 Foreign exchange 2.3 6.2 0.6 2.9 4.7 1.8 risk Equities risk 3.3 6.4 2.1 3.9 7.1 1.4 Commodities risk 1.7 4.3 0.6 1.4 3.5 0.9 Diversification (6.3) (6.9) effect Total DVaR 16.9 24.4 11.0 17.5 27.7 11.5 * 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. A corresponding diversification effect cannot be calculated and is therefore omitted from the above table. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' FUNDS 2001 2000 £m £m At beginning of year 13,187 8,483 Proceeds of shares issued (net of expenses) 210 3,554 Exchange rate translation differences 3 17 Repurchase of ordinary shares* (101) (311) Shares issued to the QUEST in relation to share option schemes for staff (107) (114) Other items (39) 12 Profit retained 1,355 1,546 At end of year 14,508 13,187 * Including nominal amount of £5m (2000: £20m). STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 2001 2000 £m £m Profit attributable to the members of Barclays PLC 2,465 2,473 Exchange rate translation differences 3 15 Other items (24) 8 Joint ventures and associated undertakings (15) 6 Total recognised gains relating to the year 2,429 2,502 Historical cost profits and losses There is no material difference between profit before tax and profit retained, as reported, and historical cost profits. AVERAGE BALANCE SHEET AND NET INTEREST INCOME 31.12.01 31.12.01 31.12.01 31.12.00 31.12.00 31.12.00 Average Interest Average Average Interest Average Balance Rate Balance Rate Assets £m £m % £m £m % Treasury bills and other eligible bills: in offices in the UK 3,952 189 4.8 4,491 146 3.3 in offices outside the UK 1,114 89 8.0 844 88 10.4 Loans and advances to banks: in offices in the UK 7,615 346 4.5 6,579 355 5.4 in offices outside the UK 5,827 265 4.5 6,361 397 6.2 Loans and advances to customers: in offices in the UK 116,279 8,406 7.2 83,651 6,810 8.1 in offices outside the UK 23,573 1,498 6.4 20,693 1,298 6.3 Lease receivables: in offices in the UK 4,384 245 5.6 4,683 316 6.7 in offices outside the UK 226 18 8.0 366 39 10.6 Debt securities: in offices in the UK 36,858 2,069 5.6 26,973 1,630 6.0 in offices outside the UK 5,189 333 6.4 11,559 709 6.1 Average assets of banking business 205,017 13,458 6.6 166,200 11,788 7.1 Average assets of trading business 132,904 5,436 4.1 98,156 4,808 4.9 Total average interest earning 337,921 18,894 5.6 264,356 16,596 6.3 assets Provisions (2,513) (2,115) Non-interest earning assets 48,825 43,125 Total average assets and interest 384,233 18,894 4.9 305,366 16,596 5.4 income Percentage of total average assets in offices outside the UK 27.5% 31.4% Average interest earning assets and net interest income: Banking business 205,017 6,108 3.0 166,200 5,161 3.1 Trading business 132,904 (388) (0.3) 98,156 (216) (0.2) Discount rate adjustment on (4) - (8) - provisions Profit on repurchase of loan - - 2 - capital Total average interest earning assets and net interest income 337,921 5,716 1.7 264,356 4,939 1.9 Total average interest earning assets related to: Interest income 18,894 5.6 16,596 6.3 Interest expense (13,174) 3.9 (11,651) (4.4) Discount rate adjustment on (4) - (8) - provisions Profit on repurchase of loan - - 2 - capital 5,716 1.7 4,939 1.9 Notes (i) Loans and advances to customers and banks include all doubtful lendings, including non-accrual lendings. Interest receivable on such lendings has been included to the extent to which either cash payments have been received or interest has been accrued in accordance with the income recognition policy of the Group. (ii) Average balances are based upon daily averages for most UK banking operations and monthly averages elsewhere. (iii)The average balance sheet does not include the retail life-fund assets attributable to policyholders nor the related liabilities. AVERAGE BALANCE SHEET AND NET INTEREST INCOME 31.12.01 31.12.01 31.12.01 31.12.00 31.12.00 31.12.00 Average Interest Average Average Interest Average balance rate balance rate Liabilities and shareholders' funds £m £m % £m £m % Deposits by banks: in offices in the UK 27,547 1,144 4.2 21,465 932 4.3 in offices outside the UK 10,548 366 3.5 13,736 545 4.0 Customer accounts - demand accounts: in offices in the UK 14,646 209 1.4 13,302 220 1.7 in offices outside the UK 1,734 37 2.1 1,707 50 2.9 Customer accounts - savings accounts: in offices in the UK 37,341 1,153 3.1 27,349 1,005 3.7 in offices outside the UK 1,297 50 3.9 1,312 62 4.7 Customer accounts - other time deposits - retail: in offices in the UK 38,521 1,906 4.9 28,639 1,634 5.7 in offices outside the UK 5,611 251 4.5 5,785 316 5.5 Customer accounts - other time deposits - wholesale: in offices in the UK 31,474 1,315 4.2 22,596 1,165 5.2 in offices outside the UK 7,240 340 4.7 10,005 553 5.5 Debt securities in issue: in offices in the UK 30,378 1,546 5.1 19,904 1,057 5.3 in offices outside the UK 11,083 522 4.7 7,279 457 6.3 Dated and undated loan capital and other subordinated liabilities principally in offices in the UK 7,495 464 6.2 4,643 335 7.2 Internal funding of trading business (42,480) (1,953) 4.6 (30,355) (1,704) 5.6 Average liabilities of banking 182,435 7,350 4.0 147,367 6,627 4.5 business Average liabilities of trading 134,609 5,824 4.3 98,297 5,024 5.1 business Total average interest bearing liabilities 317,044 13,174 4.2 245,664 11,651 4.7 Interest free customer deposits: in offices in the UK 10,282 9,468 in offices outside the UK 2,151 1,858 Other non-interest bearing 38,891 37,637 liabilities Minority interests and shareholders' funds 15,865 10,739 Total average liabilities, shareholders' funds and interest expense 384,233 13,174 3.4 305,366 11,651 3.8 Percentage of total average non-capital liabilities in offices outside the UK 26.5% 30.5% SUMMARY CONSOLIDATED CASH FLOW STATEMENT 2001 2000 Note £m £m Net cash inflow from operating activities 1 431 8,486 Dividends received from associated undertakings 3 1 Net cash outflow from returns on investment and (620) (404) servicing of finance Tax paid (1,004) (636) Net cash outflow from capital expenditure and (322) (4,962) financial investment Acquisitions and disposals 6 (2,101) Equity dividend paid (1,014) (779) Net cash outflow before financing (2,520) (395) Net cash inflow from financing 2,158 1,620 (Decrease)/increase in cash (362) 1,225 NOTES TO SUMMARY CONSOLIDATED CASHFLOW STATEMENT 1. Reconciliation of operating profit to net operating cashflows 2001 2000 £m £m Operating profit 3,621 3,290 Provisions for bad and doubtful debts 1,149 817 Depreciation and amortisation 528 302 Net increase in accrued expenditure and prepayments 114 188 Provisions for contingent liabilities and commitments 1 (1) Other provisions for liabilities and charges 194 313 Interest on dated and undated loan capital and other 464 335 subordinated liabilities Increase in shareholders' interest in the long-term (164) (165) assurance fund Profit on repurchase of loan capital - (2) Net decrease in net interest and commission receivable 76 369 Net profit on disposal of investments and fixed assets (83) (60) Other non-cash movements 23 35 5,923 5,421 Net change in items in transit and items in course of 439 (241) collection Net increase in other credit balances 4,717 1,857 Net increase in loans and advances to banks and customers (33,055) (7,942) Net increase in deposits and debt securities in issue 33,780 13,611 Net (increase)/decrease in other assets (2,568) 1,235 Net increase in other debt securities and equity shares (6,957) (7,079) Net (increase)/decrease in treasury and other eligible bills (1,901) 1,676 Other non-cash movements 53 (52) Net cash inflow from operating activities 431 8,486 OTHER INFORMATION Financial Summary 2001 2000 1999 1998 1997 £m £m £m £m £m Profit before tax 3,608 3,496 2,455 1,882 1,697 Profit after tax 2,598 2,552 1,811 1,362 1,177 Total capital resources 24,629 21,157 13,432 11,890 10,810 p p p p p Earnings per ordinary share 148.2 163.3 117.5 87.2 74.6 Dividends per ordinary share 66.5 58.0 50.0 43.0 37.0 Net asset value per ordinary share 870 794 568 519 494 Dividend cover (times) 2.2 2.7 2.4 2.0 2.0 Risk asset ratios: % % % % % Tier 1 ratio 7.8 7.2 7.5 7.3 7.2 Total ratio 12.5 11.0 11.3 10.6 9.9 Performance ratios Return on average shareholders' funds: % % % % % Pre-tax 24.2 34.4 28.9 23.5 22.0 Post-tax 17.5 25.1 21.2 16.9 15.2 Return on average total assets: Pre-tax 0.9 1.1 1.0 0.8 0.8 Post-tax 0.6 0.8 0.7 0.6 0.5 Return on average weighted risk assets: Pre-tax 2.3 2.7 2.2 1.7 1.6 Post-tax 1.7 1.9 1.6 1.2 1.1 Non interest income/total income 46.1 46.3 44.7 41.1* 48.7** Operating expenses/total income *** 53.4 54.2 57.2 65.9 63.0 * Excluding the impact of the Finance Act 1998. ** Excluding the impact of the Finance (No 2) Act 1997. *** Excluding the restructuring charges in the three years ended 31st December 2001, Woolwich integration costs and fair value adjustments in 2001 and 2000, goodwill amortisation, the results of the former BZW businesses and the impact of the Finance Act 1998 and the Finance(No 2) Act 1997. The financial information above is extracted from the published accounts for the last five years, restated where appropriate to accord with the current accounting policies. PROFIT BEFORE TAX 31.12.01 30.06.01 31.12.00 30.6.00 (half-year ended - unaudited) £m £m £m £m Personal Financial Services 230 268 256 167 Woolwich* 267 238 128 102 Barclays Private Clients 294 326 308 337 Barclaycard 280 275 230 234 Business Banking 544 608 538 564 Barclays Africa 65 68 53 57 Barclays Capital 308 377 266 309 Barclays Global Investors 38 33 25 34 Other operations (9) (7) 28 (11) Head office functions (23) (46) (30) (17) Operating profit 1,994 2,140 1,802 1,776 Restructuring charge (108) (63) (126) (106) Woolwich integration costs (70) (19) (7) - Woolwich fair value adjustments (17) (16) (6) - Goodwill amortisation (114) (115) (45) (6) Exceptional items - (4) 36 178 1,685 1,923 1,654 1,842 TOTAL ASSETS Personal Financial Services 7,244 6,934 6,562 6,304 Woolwich** 57,630 55,962 55,243 18,693 Barclays Private Clients 13,736 13,266 13,352 12,735 Barclaycard 9,342 9,496 9,805 8,882 Business Banking 44,243 44,932 41,364 40,011 Barclays Africa 2,756 2,656 2,291 2,345 Barclays Capital 202,030 211,547 168,894 182,619 Barclays Global Investors 265 263 259 255 Other operations and Head office functions 7,142 6,301 5,440 6,339 Goodwill 4,091 4,198 4,269 188 Retail life-fund assets 8,170 8,395 8,711 8,014 356,649 363,950 316,190 286,385 WEIGHTED RISK ASSETS Personal Financial Services 6,097 5,906 5,598 5,530 Woolwich** 30,142 29,397 28,620 9,640 Barclays Private Clients 9,167 8,666 8,390 7,730 Barclaycard 9,405 9,320 9,623 8,883 Business Banking 46,390 45,531 44,017 41,891 Barclays Africa 1,943 1,859 1,661 1,602 Barclays Capital 52,675 51,237 45,946 45,222 Barlcays Global Investors 548 535 653 653 Other operations and Head office functions 2,506 2,371 2,532 2,332 158,873 154,822 147,040 123,483 * Comprises the contribution from Woolwich plc since the acquisition on 25th October 2000 and the Barclays mortgage business. ** Solely Barclays mortgage business at 30th June 2000. Consolidated profit and loss account by half-year (unaudited) 31.12.01 30.06.01 31.12.00 30.06.00 £m £m £m £m Interest receivable 6,518 6,940 6,297 5,491 Interest payable (3,418) (3,936) (3,613) (3,022) Profit on repurchase of loan capital - - - 2 Net interest income 3,100 3,004 2,684 2,471 Net fees and commissions receivable 1,972 1,786 1,767 1,602 Dealing profits 441 570 262 415 Other operating income 234 218 199 198 Total non-interest income 2,647 2,574 2,228 2,215 Operating income 5,747 5,578 4,912 4,686 Administration expenses - staff costs (1,921) (1,793) (1,613) (1,606) Administration expenses - other (1,215) (1,088) (1,065) (902) Depreciation and amortisation (273) (264) (177) (129) Operating expenses (3,409) (3,145) (2,855) (2,637) Operating profit before provisions 2,338 2,433 2,057 2,049 Provisions for bad and doubtful debts (651) (498) (441) (376) Provisions for contingent liabilities etc 1 (2) - 1 Operating profit 1,688 1,933 1,616 1,674 (Loss)/income from joint ventures and (3) (6) 2 (10) associated undertakings Exceptional items - (4) 36 178 Profit on ordinary activities before tax 1,685 1,923 1,654 1,842 Tax on profit on ordinary activities (462) (548) (456) (488) Profit on ordinary activities after tax 1,223 1,375 1,198 1,354 Minority interests (equity and non-equity) (65) (68) (45) (34) Profit attributable to the members of 1,158 1,307 1,153 1,320 Barclays PLC Dividends (727) (383) (632) (295) Profit retained 431 924 521 1,025 Earnings per ordinary share 69.6 p 78.6 p 74.4 p 88.9 p Dividends per ordinary share 43.5 p 23.0 p 38.0 p 20.0 p Registered office 54 Lombard Street, London, EC3P 3AH, England, United Kingdom. Tel: 020 7699 5000 Website www.barclays.com Registrar The Registrar to Barclays PLC, PO Box 82, The Pavilions, Bridgwater Road, Bristol, BS99 7NH Tel: 0870 702 0196 Listing The principal trading market for Barclays PLC ordinary shares is the London Stock Exchange. Ordinary shares are also listed on the New York Stock Exchange and the Tokyo 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 £1 and is evidenced by an ADR. The ADR depositary is JPMorgan Chase Bank (tel: (781) 575 4328). For further information; please contact: John Varley Finance Director 020 7699 5000 - Switchboard Cathy Turner Head of Investor Relations 020 7699 3638 - Direct Line Leigh Bruce Corporate Communications Director 020 7699 2658 - Direct Line More information on Barclays, including the 2001 results, can be found on our website at the following address: http://www.investor.barclays.com This information is provided by RNS The company news service from the London Stock Exchange

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