Final Results - Year Ended 31 Dec 1999, Part 3
Barclays PLC
15 February 2000
Part 3
ADDITIONAL INFORMATION
CHANGES IN REPORTING OF GROUP STRUCTURE IN 1999
Since 1st January 1999, a number of changes have been made to the Group's
reporting structure. Major changes, for which comparative figures have been
restated as appropriate, are:
Retail Financial Services has re-organised the management of its business
around customer segments to deliver services and products. For reporting
purposes it is organised into Retail Customers, Wealth Management and
Barclaycard. Retail Customers and Wealth Management have absorbed the
relevant customer segments from the previous business groupings of UK Retail
Banking, International Premier, Private, Savings and Investment and Africa
and Caribbean, with Barclaycard remaining unaffected.
Retail Customers comprises UK Retail Banking (excluding UK Premier), the
African business, UK retail mutual funds and Barclays Life. Wealth
Management comprises the former International Premier, Private, Savings and
Investment business (excluding UK retail mutual funds and Barclays Life), UK
Premier and the Caribbean business.
The Structured Export Finance business and a number of large corporate
assets have been transferred from Barclays Capital to Corporate Banking.
Certain internal charges and costs have been re-allocated between Retail
Financial Services and Corporate Banking. In addition, Retail Financial
Services has revised its presentation of income and costs within its profit
and loss account. There is no effect on total Group revenue or costs as a
result of these changes. Where appropriate, staff numbers have been
restated.
Management of central information technology and operations' services for
Retail Financial Services, Corporate Banking and Group central functions in
the UK has been transferred to Retail Financial Services in the year. Prior
periods have been restated accordingly.
Head Office functions now include certain costs previously reported in
Central Services. In addition, Brand programme costs, previously reported
in Head Office functions, are now reported in Central Services. Prior
periods have been restated accordingly.
ACQUISITIONS AND DISPOSALS
In June 1999 the Group increased its holding in Banque du Caire Barclays
International (subsequently renamed Cairo Barclays SAE) from 49% to 60%.
This entity is now accounted for as a subsidiary.
Details of significant disposals in the period are set out under exceptional
items on page 20.
ACCOUNTING POLICIES
A change in accounting policy has arisen from the adoption in 1999 of
Financial Reporting Standard 12 'Provisions, Liabilities and Assets' (FRS
12). The Group has a number of vacant leasehold properties where
unavoidable costs exceed anticipated income for which a provision is now
required under FRS 12.
The change in policy has resulted in a prior year adjustment and the profit
and loss accounts and balance sheets for previous years have been restated.
This has resulted in a net charge to shareholders' funds of £81m as at 1st
January 1999 comprising the cumulative impact of prior year reductions in
net interest income, net provisions for property costs and associated tax
credits. Comparative figures have been restated with the effect that
shareholders' funds have been reduced by £63m at 1st January 1998. Profit
before tax for the year ended 31st December 1998 has been reduced by £23m.
CHANGES IN ACCOUNTING PRESENTATION
The classification of certain items of income and costs have been reviewed
and £50m has been offset between costs and income to more appropriately
reflect the nature of the transactions involved. In view of the amounts
involved no restatements have been made.
Weighted risk assets of associated companies, reported on a consolidated
basis in accordance with supervisory rules, are now included on page 8 in
the totals for the business grouping concerned. Previously these were
reported in Other operations. Comparatives have been restated.
There have been no other changes in accounting presentation from that
reflected in the 1998 Annual Report.
GROUP SHARE SCHEMES
The trustees of the Group's employee benefit trusts may make purchases of
Barclays PLC ordinary shares in the market following the announcement of the
Group's results in February 2000 for the purposes of the Group's employee
share 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.
NOTES
1. Loans and advances to banks 1999 1998
£m £m
Banking business
Loans and advances to banks 13,095 20,357
Less - provisions (24) (41)
13,071 20,316
Trading business 29,585 16,296
Total loans and advances to 42,656 36,612
banks
Of the total loans and advances to banks, placings with banks were
£39.1bn at 31st December 1999 (1998: £32.8bn). Placings with banks
include reverse repos of £29.1bn (1998: £13.9bn). The majority of the
placings have a residual maturity of less than one year.
2. Loans and advances to customers 1999 1998
£m £m
Banking business
Loans subject to non-recourse
finance arrangements 333 278
Less: non returnable finance (268) (269)
65 9
Loans and advances to customers 91,320 77,663
Finance lease receivables 5,660 5,776
97,045 83,448
Less - provisions (1,959) (1,902)
- interest in suspense (80) (77)
95,006 81,469
Trading business 18,532 14,641
Total loans and advances to 113,538 96,110
customers
Of the total loans and advances to customers, reverse repos were £16.9bn
at 31st December 1999 (1998: £11.7bn).
3. Provisions for bad and doubtful debts
1999 1998
Credit risk provisions £m £m
Provisions at beginning of year 1,862 1,761
Exchange and other adjustments (12) 5
Amounts written off
United Kingdom (546) (506)
Other European Union (44) (43)
United States (40) (7)
Rest of the World (21) (9)
(651) (565)
Recoveries (analysed below) 93 176
Sub-total 1,292 1,377
Provisions charged against
profit:
New and increased specific
provisions
United Kingdom 768 751
Other European Union 27 31
United States 45 11
Rest of the World 47 23
887 816
Less: Releases of specific
provisions
United Kingdom (114) (81)
Other European Union (21) (31)
United States (7) (8)
Rest of the World (15) (15)
(157) (135)
Less: Recoveries
United Kingdom (85) (156)
Other European Union (4) (4)
United States (4) (13)
Rest of the World - (3)
(93) (176)
Net specific provisions charge 637 505
General provision - release (16) (20)
Net credit risk charge to 621 485
profit
Provisions at end of year 1,913 1,862
Country risk provisions
Provisions at beginning of year 81 89
Exchange and other adjustments (11) 1
Amounts written off (net of - (16)
recoveries)
Net specific provision releases (2) (13)
General provision charge 2 20
Provisions at end of year 70 81
Total provisions at end of year 1,983 1,943
Total provisions for bad and doubtful debts at end of year comprise:
1999 1998
Specific - credit risk £m £m
United Kingdom 1,075 928
Other European Union 126 213
United States 23 23
Rest of the World 74 35
1,298 1,199
Specific - country risk 13 16
Total specific provisions 1,311 1,215
General provisions
- credit risk 615 663
- country risk 57 65
1,983 1,943
The geographic analysis of provisions shown above is based on location
of office.
4. Other assets 1999 1998
£m £m
Own shares 5 43
Balances arising from off-
balance sheet
financial instruments 13,390 13,725
Shareholders' interest in long- 555 530
term assurance fund
London Metal Exchange warrants
and other
metals trading positions 331 457
Sundry debtors 1,629 1,862
Prepayments and accrued income 2,203 2,552
18,113 19,169
'Own shares' represent Barclays PLC shares held in employee benefit trusts
that have not been expensed.
5. Other liabilities 1999 1998
£m £m
Obligations under finance 140 141
leases payable
Balances arising from off-
balance sheet
financial instruments 13,619 15,849
Short positions in securities 16,813 13,682
Current tax 462 479
Cash receipts from 1,049 -
securitisation
Sundry creditors 3,036 3,199
Accruals and deferred income 3,290 3,074
Provisions for liabilities and 1,247 1,353
charges
Dividend 484 414
40,140 38,191
Cash receipts from securitisation are in respect 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 table presents 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 amounts, the geographical presentation of which is based on the
location of the office recording the transaction, are stated before
deduction of the value of security held, specific provisions carried or
interest suspended.
Non-performing lendings 1999 1998
£m £m
Non-accrual lendings:
United Kingdom 1,007 985
Foreign 244 282
Accruing lendings where
interest is being suspended:
United Kingdom 326 266
Foreign 110 118
Other accruing lendings against
which provisions have been
made:
United Kingdom 423 457
Foreign 130 134
Sub-totals:
United Kingdom 1,756 1,708
Foreign 484 534
Accruing lendings 90 days
overdue, against which no
provisions have been made:
United Kingdom 343 309
Foreign 18 19
Reduced rate lendings:
United Kingdom 6 7
Foreign 2 -
Total non-performing lendings
United Kingdom 2,105 2,024
Foreign 504 553
2,609 2,577
UK non-performing lendings increased by £81m due to growth in consumer
balances (including credit card receivables).
Potential problem lendings: In addition to the above, the following
table shows lendings which are current as to payment of principal and
interest, but where serious doubt exists as to the ability of the
borrower to comply with repayment terms in the near future.
1999 1998
£bn £bn
United Kingdom 0.6 0.6
Foreign 0.1 0.1
0.7 0.7
1999 1998
Credit risk provision coverage % %
of:
- credit risk non-performing 76.4 75.2
lendings
- total potential credit risk 60.0 59.4
lendings
1999 1998
Interest forgone on non- £m £m
performing lendings:
Interest income that would have
been recognised under original 165 182
contractual terms
Interest income included in (45) (63)
profit
Interest forgone 120 119
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:
1999 1998
Asia £bn £bn
Indonesia 0.1 0.1
South Korea 0.4 0.5
Thailand 0.1 0.1
0.6 0.7
Latin America
Brazil 0.8 0.9
1.4 1.6
Of the total of £1.4bn, £0.8bn (1998: £1.0bn) was related to banks,
£0.4bn (1998: £0.4bn) to governments and £0.2bn (1998: £0.2bn) to other
corporate bodies including project finance companies. The total was
mainly in respect of loans, off-balance sheet financial instruments and
debt securities. Off-balance sheet financial instruments and debt
securities are marked to market.
The Group has a Brazilian associate, Banco Barclays e Galicia SA, which
is equity accounted. At 31st December 1999 the 50% holding was included
in the balance sheet at a value of £33m (not included in the figures
above).
During the year the Group released a general provision of £8m in respect
of country transfer risk arising from its business world wide, including
exposure in these countries, reducing the total of such provisions to
£57m at 31st December 1999. This is in addition to £615m of general
provision held against credit risk.
8. European Economic and Monetary Union
The euro has been in existence for over twelve months. As expected the
introduction of the euro saw a rapid transition in the wholesale markets
from trading in national domestic currencies to trading in the euro.
The Group's operating infrastructure and euro settlement systems have
been working very effectively since the implementation of EMU at the
start of 1999.
UK Entry to EMU
Barclays incurred expenditure of £4m during 1999 across the Group in
developing plans for the possibility of the introduction of the euro in
the United Kingdom.
Given the considerable uncertainty around UK entry to EMU it is not
possible to estimate the final overall cost of preparing the Group's
systems and operations.
Costs in 2000 are likely to be incurred in maintaining a prudent
programme to validate and develop further our existing plans and to
conduct feasibility studies with selected suppliers and partners.
9. Year 2000
After more than three years of preparation the Barclays Group managed
the transition into the Year 2000 with no material disruption to
customers, staff or the Group's businesses around the world.
Activity during 1999
The principal focus during the year was risk mitigation and contingency
planning. The Group also finalised internal testing and correction, and
continued to work with other banks and external network providers
towards industry readiness of the key clearing, payment and settlement
infrastructures in the UK and, where appropriate, overseas.
Costs and benefits
The total amount spent on the Year 2000 Programme up to 31st December
1999 was £209m (including £15m of capitalised costs) of which £65m was
incurred in the year to December 1999. Year 2000 costs include
correction, testing, third party assurance and contingency planning.
In addition to the successful transition, the Group has benefited from
enhanced business resumption plans and contingency arrangements, updated
and rationalised systems and coding, and improved inventories of
hardware, software and suppliers.
10.Legal proceedings
Barclays is party to various legal proceedings, the ultimate resolution
of which is not expected to have a material adverse effect on the
financial position of the Group.
11. Geographical analysis
1999 1998
Profit before tax £m £m
United Kingdom 1,872 1,483
Other European Union 318 241
United States 131 67
Rest of the World 139 104
2,460 1,895
1999 1998
Total assets £m £m
United Kingdom 171,772 154,446
Other European Union 17,017 18,490
United States 39,536 24,886
Rest of the World 26,468 21,672
254,793 219,494
12. Contingent liabilities and commitments
1999 1998
Contingent liabilities £m £m
Acceptances and endorsements 1,530 1,384
Guarantees and assets pledged
as collateral security 12,044 8,784
Other contingent liabilities 5,360 5,069
18,934 15,237
Commitments
Standby facilities, credit
lines and other commitments 82,479 68,191
13. Off-balance sheet financial instruments, including derivatives
The tables set out below analyse the contract or underlying principal
amounts of derivative financial instruments held for trading purposes
and for the purposes of managing the Group's structural exposures.
Foreign exchange derivatives 1999 1998
£m £m
Contract or underlying
principal amount
Forward foreign exchange 225,518 263,958
Currency swaps 88,453 79,447
Other exchange rate related 65,456 101,310
contracts
379,427 444,715
Interest rate derivatives
Contract or underlying
principal amount
Interest rate swaps 975,720 787,486
Forward rate agreements 49,577 99,960
OTC options bought and sold 266,085 222,589
Other interest rate related 72,390 104,003
contracts
1,363,772 1,214,038
Equity, stock index and
commodity derivatives
Contract or underlying 63,105 51,347
principal amount
Other exchange rate related contracts are primarily 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 doubt, based on a legal
right that would survive the insolvency of the counterparty.
Positive fair values 1999 1998
£m £m
Foreign exchange derivatives 7,178 9,913
Interest rate derivatives 16,160 20,083
Equity, stock index and 2,872 2,240
commodity derivatives
Effect of netting (12,820) (18,511)
13,390 13,725
Negative fair values
Foreign exchange derivatives 7,583 12,062
Interest rate derivatives 15,590 19,603
Equity, stock index and 3,266 2,695
commodity derivatives
Effect of netting (12,820) (18,511)
13,619 15,849
14. 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 Risk Management Committee, which also determines overall market
risk appetite. 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 daily '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 Trading Activities
In Barclays Capital, the formal process for the management of risk is
through the Barclays Capital 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.
In the fourth quarter of 1998, Barclays Capital closed its non-client
related proprietary trading businesses and substantially reduced its
secondary market corporate bond inventory. The lower risk appetite,
with the focus on the major currency fixed income markets, was
maintained in the first half of 1999, with DVAR utilisation remaining
broadly at the end 1998 level. DVAR utilisation increased in the second
half of 1999 due to increased position sizes to take advantage of
specific market opportunities and increases in the volatility of key
risk factors. Year-end DVAR was £20.2m.
The daily average, maximum and minimum values of DVAR were estimated as
below.
DVAR
Twelve months to
31st December 1999
Average High* Low*
£m £m £m
Interest rate 13.7 30.2 6.2
risk
Foreign exchange 2.8 11.7 0.8
risk
Equities risk 1.7 3.7 0.6
Commodities risk 1.2 2.2 0.5
Diversification (3.3)
effect
Total DVAR 16.1 32.5 7.7
* 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.
During 1999, Barclays Capital adopted historical simulation as the
standard method for calculating DVAR, having previously used mainly
variance/covariance calculations. The figures provided above are based
on daily data for the full year produced using the new method.
The decision to change the methodology was based on research which
showed that, compared with the previous approach, historical simulation
gives better risk aggregation, a more accurate estimate of options risk,
and a more realistic assessment of the statistical distribution of low
probability extreme losses. The method, along with the market risk
management and control infrastructure, has been approved by the
Financial Services Authority under the internal models approach for
calculating regulatory capital for general market risk.
In contrast to the previous method, the new method gives equal weighting
to all of the historic data used in the calculation, and therefore does
not respond as quickly to changes in market volatility. During periods
of low market volatility, the new method therefore gives a higher DVAR
estimate than the old method, and vice versa. Market volatility was
particularly low at the end of 1999. Although DVAR utilisation as at
31st December 1999 was recorded as £20.2m under the new method, the
utilisation under the old method would only have been £11.2m (1998:
£12.2m). There is a similar, albeit smaller, impact on average
utilisation, which was higher with the new method than the old method.
The table below provides comparative data for 1998 and 1999 using the
previous approach.
DVAR calculated using previous approach
Twelve months to Twelve months to
31st December 1999 31st December 1998
Average High* Low* Average High* Low*
£m £m £m £m £m £m
Interest rate 10.7 28.5 4.8 15.1 36.6 9.5
risk
Foreign exchange 1.8 6.9 0.7 5.8 13.9 1.2
risk
Equities risk 1.6 3.7 0.6 3.0 7.9 1.3
Commodities risk 1.2 2.2 0.5 1.2 2.9 0.6
Diversification (2.1) (4.2)
effect
Total DVAR 13.2 31.0 7.7 20.9 43.3 12.2
* 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.
15. US GAAP
There are some significant differences between accounting practices in
the United States (US GAAP) and those in the United Kingdom (UK GAAP).
Key figures on a UK GAAP basis and as estimated on a US GAAP basis are:
1999 1999 1998 1998
£m £m £m £m
UK GAAP US GAAP UK GAAP US GAAP
Net income 1,759 1,695 1,317 1,370
Shareholders' funds 8,483 8,262 7,842 7,781
AVERAGE BALANCE SHEET AND NET INTEREST INCOME
31.12.99 31.12.99 31.12.99 31.12.98 31.12.98 31.12.98
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 3,697 175 4.7 2,445 154 6.3
in offices outside the 898 90 10.0 963 103 10.7
UK
Loans and advances to
banks:
in offices in the UK 7,762 361 4.7 10,561 605 5.7
in offices outside the 8,224 442 5.4 11,138 535 4.8
UK
Loans and advances to
customers:
in offices in the UK 68,752 5,549 8.1 62,304 5,757 9.2
in offices outside the 16,154 893 5.5 11,596 863 7.4
UK
Lease receivables:
in offices in the UK 5,059 346 6.8 5,499 452 8.2
in offices outside the 537 67 12.5 240 21 8.8
UK
Debt securities:
in offices in the UK 15,256 851 5.6 13,804 910 6.6
in offices outside the 9,928 546 5.5 8,846 552 6.2
UK
Average assets of 136,267 9,320 6.8 127,396 9,952 7.8
banking business
Average assets of 67,278 3,655 5.4 77,599 3,809 4.9
trading business
Total average interest 203,545 12,975 6.4 204,995 13,761 6.7
earning assets
Provisions (1,955) (1,847)
Non-interest earning 42,526 39,957
assets
Total average assets
and interest income 244,116 12,975 5.3 243,105 13,761 5.7
Percentage of total
average assets in 31.0 29.6
offices outside the UK
Average interest
earning assets and net
interest income:
Banking business 136,267 4,630 3.4 127,396 4,352 3.4
Trading business 67,278 (31) - 77,599 (25) -
Write-down of leases - - (40) -
Discount rate
adjustment on (6) - (4) -
provisions
Profit on
redemption/repurchase 3 - 3 -
of loan capital
Total average interest
earning assets and net 203,545 4,596 2.3 204,995 4,286 2.1
interest income
Total average interest
earning assets related
to:
Interest income 12,975 6.4 13,761 6.7
Interest expense (8,376) (4.1) (9,434) (4.6)
Write-down of leases - - (40) -
Discount rate
adjustment on (6) - (4) -
provisions
Profit on
redemption/repurchase 3 - 3 -
of loan capital
4,596 2.3 4,286 2.1
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
31.12.99 31.12.99 31.12.99 31.12.98 31.12.98 31.12.98
Average Interest Average Average Interest Average
Balance Rate Balance Rate
Liabilities and £m £m % £m £m %
shareholders' funds
Deposits by banks:
in offices in the UK 14,210 479 3.4 17,911 719 4.0
in offices outside the 11,506 460 4.0 11,726 505 4.3
UK
Customer accounts -
demand accounts:
in offices in the UK 12,786 168 1.3 11,072 201 1.8
in offices outside the 1,827 35 1.9 2,088 44 2.1
UK
Customer accounts -
savings accounts:
in offices in the UK 24,517 772 3.1 22,635 1,110 4.9
in offices outside the 1,307 55 4.2 1,120 63 5.6
UK
Customer accounts -
other time deposits -
retail:
in offices in the UK 23,998 1,231 5.1 22,703 1,574 6.9
in offices outside the 5,076 234 4.6 5,262 266 5.1
UK
Customer accounts -
other time deposits -
wholesale:
in offices in the UK 19,555 848 4.3 17,379 890 5.1
in offices outside the 6,067 306 5.0 5,904 307 5.2
UK
Debt securities in
issue:
in offices in the UK 15,656 777 5.0 14,554 913 6.3
in offices outside the 7,130 379 5.3 6,181 340 5.5
UK
Dated and undated loan
capital and other
subordinated 4,092 263 6.4 3,372 244 7.2
liabilities principally
in offices in the UK
Internal funding of (29,231) (1,317) 4.5 (32,682) (1,576) 4.8
trading business
Average liabilities of 118,496 4,690 4.0 109,225 5,600 5.1
banking business
Average liabilities of 71,535 3,686 5.2 79,513 3,834 4.8
trading business
Total average interest
bearing liabilities 190,031 8,376 4.4 188,738 9,434 5.0
Interest free customer
deposits:
in offices in the UK 8,677 8,333
in offices outside the 1,597 1,278
UK
Other non-interest 35,190 36,652
bearing liabilities
Minority interests and
shareholders' funds 8,621 8,104
Total average
liabilities, 244,116 8,376 3.4 243,105 9,434 3.9
shareholders' funds and
interest expense
Percentage of total
average non-capital
liabilities in offices 30.3 30.0
outside the UK
CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS' FUNDS
1999 1998
£m £m
At beginning of year 7,842 7,557
Proceeds of shares issued (net of 214 110
expenses)
Exchange rate translation (70) 32
differences
Repurchase of ordinary shares* (504) (501)
Goodwill written back on disposals 138 10
Shares issued to the QUEST; in
relation to share option schemes (154) (67)
for staff
Other items 4 30
Profit retained 1,013 671
At end of year 8,483 7,842
* Including nominal amount of £28m (1998: £29m).
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
1999 1998
£m £m
Profit attributable to the members 1,759 1,317
of Barclays PLC
Exchange rate translation (70) 32
differences
Other items 4 30
Total recognised gains relating to 1,693 1,379
the period
Prior period adjustment (as (81)
explained on page 41)
Total gains and losses recognised
since 31st December 1998 1,612
Historical cost profits and losses
There is no material difference between profit before tax and profit
retained, as reported, and historical cost profits.
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
Note 1999 1998
£m £m
Net cash inflow/(outflow)
from operating activities 1 8,923 (1,337)
Dividends received from 5 3
associated undertakings
Net cash outflow from returns
on investment and servicing (290) (252)
of finance
Tax paid (636) (547)
Net cash (outflow)/inflow
from capital expenditure and (7,890) 2,333
financial investment
Acquisitions and disposals 242 584
Equity dividend paid (676) (591)
Net cash (outflow)/inflow (322) 193
before financing
Net cash inflow from 400 264
financing
Increase in cash 78 457
NOTE TO CONSOLIDATED CASHFLOW STATEMENT
1. Reconciliation of operating profit to net operating cashflows
1999 1998
£m £m
Operating profit 2,598 1,898
Provisions for bad and doubtful 621 492
debts
Depreciation and amortisation 276 270
Net decrease in accrued
expenditure and prepayments (149) (719)
Provisions for contingent
liabilities and commitments 1 76
Other provisions for 401 79
liabilities and charges
Interest on dated and undated
loan capital and other 263 244
subordinated liabilities
Associated undertakings - 14 (22)
loss/(profit) included
Increase in shareholders'
interest in the long-term (32) (95)
assurance fund
Profit on redemption/repurchase (3) (3)
of loan capital
Net decrease/(increase) in net
interest and commission 691 (23)
receivable
Net profit on disposal of
investments and fixed assets (51) (106)
Other non-cash movements 7 53
4,637 2,144
Net change in items in transit
and items in course of 96 (311)
collection
Net increase/(decrease) in 560 (4,253)
other credit balances
Net (increase)/decrease in
loans and advances to banks and (23,862) 8,652
customers
Net increase/(decrease) in
deposits and debt securities in 32,100 (14,958)
issue
Net (increase)/decrease in (307) 3,215
other assets
Net (increase)/decrease in
other debt securities and (1,922) 3,642
equity shares
Net (increase)/decrease in
treasury and other eligible (2,462) 777
bills
Other non-cash movements 83 (245)
Net cash inflow/(outflow) from 8,923 (1,337)
operating activities
BARCLAYS PLC
OTHER INFORMATION
Financial Summary 1999 1998 1997 1996 1995
£m £m £m £m £m
Profit before tax 2,460 1,895 1,719 2,293 2,021
Profit after tax 1,811 1,362 1,177 1,677 1,410
Total capital resources 13,432 11,890 10,810 10,608 10,964
P p P p P
Earnings per ordinary 117.5 87.2 74.6 103.6 83.8
share
Dividends per ordinary 50.0 43.0 37.0 31.5 26.0
share
Net asset value per 568 519 494 467 429
ordinary share
Dividend cover (times) 2.4 2.0 2.0 3.4 3.2
Risk asset ratios: % % % % %
Tier 1 ratio 7.5 7.3 7.2 7.5 7.6
Total ratio 11.3 10.6 9.9 10.3 10.8
Performance ratios
Return on average % % % % %
shareholders' funds:
Pre-tax 29.0 23.6 22.3 31.4 30.1
Post-tax 21.2 16.9 15.2 22.9 20.9
Return on average total
assets:
Pre-tax 1.0 0.8 0.8 1.3 1.2
Post-tax 0.7 0.5 0.5 0.9 0.8
Return on average
weighted risk assets:
Pre-tax 2.2 1.7 1.6 2.3 2.3
Post-tax 1.6 1.2 1.1 1.7 1.5
Non interest income/total 44.7 41.4* 46.6** 47.8 47.4
income
Operating expenses/total 57.4 65.8 62.9 65.2 69.6
income***
* Excluding the impact of the Finance Act 1998.
** Excluding the impact of the Finance (No 2) Act 1997.
*** Excluding the 1999 restructuring charge, 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 of the Group.
PROFIT BEFORE TAX 31.12.99 30.6.99 31.12.98 30.6.98
(half-year ended - unaudited) £m £m £m £m
Retail Financial Services 897 816 767 710
Corporate Banking* 489 458 447 544
Barclays Capital 138 178 (426) 156
Barclays Global Investors 15 28 23 29
Businesses in Transition** - - 24 24
Other operations 23 (10) (93) (74)
Head office functions (47) (30) (40) (32)
Goodwill amortisation (7) (6) (6) (6)
Provision for litigation - - (76) -
settlement***
1,508 1,434 620 1,351
Restructuring charge 1 (345) - -
Exceptional items (19) (119) 5 (4)
Former BZW businesses - - (14) (19)
Write-down of leases - - - (40)
Write-down of fixed asset - - (4) -
investments
1,490 970 607 1,288
31.12.99 30.6.99 31.12.98 30.6.98
TOTAL ASSETS £m £m £m £m
Retail Financial Services 48,726 45,776 46,197 42,729
Corporate Banking 47,422 46,662 45,341 42,519
Barclays Capital 144,811 135,941 114,706 150,094
Barclays Global Investors 232 199 183 167
Businesses in Transition - - 554 531
Other operations and Head 5,562 5,174 5,428 6,165
office functions
Retail life-fund assets
attributable to policyholders 8,040 7,513 7,085 6,751
254,793 241,265 219,494 248,956
WEIGHTED RISK ASSETS
Retail Financial Services 33,362 31,687 31,546 29,770
Corporate Banking 48,218 47,683 45,869 42,489
Barclays Capital 32,032 31,652 29,344 36,053
Barclays Global Investors 456 297 207 150
Businesses in Transition - - 594 531
Other operations 1,810 2,675 2,240 2,528
115,878 113,994 109,800 111,521
* Figures are stated prior to the write-down of leases.
** Businesses in Transition 1998 profit before tax excludes the residual
losses of the former BZW businesses which are shown separately.
*** The 1998 provision relates to the settlement of the Atlantic
litigation.
Consolidated profit and loss account by half-year (unaudited)
31.12.99 30.6.99 31.12.98 30.6.98
£m £m £m £m
Interest receivable 4,823 4,497 4,938 5,014
Interest payable (2,477) (2,219) (2,728) (2,876)
Write-down of leases - - - (40)
Profit on
redemption/repurchase of 3 - - 3
loan capital
Net interest income 2,349 2,278 2,210 2,101
Net fees and commissions 1,515 1,417 1,429 1,350
receivable
Dealing profits 236 325 (230) 197
Other operating income 115 129 168 156
Total non-interest income 1,866 1,871 1,367 1,703
Operating income 4,215 4,149 3,577 3,804
Administration expenses - (1,389) (1,668) (1,425) (1,386)
staff costs
Administration expenses - (872) (935) (969) (860)
other
Depreciation and (143) (137) (138) (137)
amortisation
Operating expenses (2,404) (2,740) (2,532) (2,383)
Operating profit before 1,811 1,409 1,045 1,421
provisions
Provisions for bad and (301) (320) (363) (129)
doubtful debts
Provisions for contingent (1) - (76) -
liabilities etc
Operating profit 1,509 1,089 606 1,292
Exceptional items (19) (119) 5 (4)
Write-down of fixed asset - - (4) -
investments
Profit on ordinary 1,490 970 607 1,288
activities before tax
Tax on profit on ordinary (397) (252) (153) (380)
activities
Profit on ordinary 1,093 718 454 908
activities after tax
Minority interests (equity (30) (22) (23) (22)
and non-equity)
Profit attributable to the
members of Barclays PLC 1,063 696 431 886
Dividends (484) (262) (414) (232)
Profit retained 579 434 17 654
Earnings per ordinary 71.3 p 46.2 p 28.9 p 58.3 p
share
Dividends per ordinary 32.5 p 17.5 p 27.5 p 15.5 p
share
Results by half year for the ongoing business (unaudited)
31.12.99 30.6.99 31.12.98 30.6.98
£m £m £m £m
Net interest income 2,349 2,278 2,211 2,142
Net fees and commissions 1,515 1,417 1,431 1,340
receivable
Dealing profits 236 325 (225) 198
Other operating income 115 129 165 154
Total non-interest 1,866 1,871 1,371 1,692
income
Operating income 4,215 4,149 3,582 3,834
Operating expenses (2,405) (2,395) (2,523) (2,354)
Operating profit before 1,810 1,754 1,059 1,480
provisions
Provisions for bad and (301) (320) (363) (129)
doubtful debts
Provisions for contingent
liabilities and (1) - (76) -
commitments
Operating profit 1,508 1,434 620 1,351
Restructuring charge 1 (345) - -
Exceptional items (19) (119) 5 (4)
Former BZW businesses - - (14) (19)
Write-down of leases - - - (40)
Write-down of fixed asset - - (4) -
investments
Profit before tax 1,490 970 607 1,288
The above table presents the consolidated profit and loss account for the
ongoing business. The restructuring charge in 1999 and the residual losses
relating to the former BZW businesses and the impact of the Finance Act 1998
are shown separately.
For further information; please contact:
David Allvey
Finance Director
020 7699 3564 - Direct Line
020 7699 5000 - Switchboard
Ian Roundell
Head of Investor Relations
020 7699 2961 - Direct Line
Leigh Bruce
Director, Corporate Communications
020 7699 2658 - Direct Line
More information on Barclays, including the 1999 results, can be found on
our website at the following address: http://www.investor.barclays.com
Latest directors dealings
- 1 day ago IntegraFin Holding
- 1 day ago Spirent Communications
- 1 day ago CRH (CDI)
- 1 day ago Bezant Resources
- 1 day ago EJF Investments Ltd NPV