Summary Press Release

Barclays PLC 8 February 2001 PART 1 February 8th, 2001 BARCLAYS PLC RESULTS FOR YEAR TO 31 DECEMBER 2000 * Operating profit rose 21% to £3,580 million from £2,964 million * Exceptional items of £214 million, up from a deficit in 1999 of £138 million. This includes sale of Dial and Barclays Property Investment Management * Profit before tax up 42% to £3,496 million from £2,455 million * Business as usual costs savings of £260 million * Woolwich acquisition expected to lead to pre tax synergies of more than £400 million per annum by 2004, up from forecast £240 million * Earnings per share based on operating profit above, up to 163.6p from 143.6p * Dividend per share up 16% to 58.0p from 50.0p * £26.3 million donated to the community Operating profit shown above includes the results of The Woolwich from 25th October 2000. It excludes the 1999 and 2000 restructuring charges, goodwill amortisation and costs directly associated with the integration of The Woolwich. Earnings per share based on this operating profit also exclude exceptional items. Barclays Group Chief Executive, Matthew Barrett commented: - '2000 has been a good year for Barclays. We began to reap the benefit of past investments. We expanded the reach and range of our products and services. We advanced our aim to transform our business and we continued to build the foundations for future growth and development. 2000 was a year of accomplishment for Barclays but the challenge remains and we have much more to do if we are to achieve our aspiration of being in the top quartile amongst the best in class in the global financial services industry.' For further information please contact: Media Relations Leigh Bruce Chris Tucker Communications Director PR Director Tel: 020 7699 2658 Tel: 0207 699 3161 Investor Relations Ian Roundell Head of Investor Relations Tel: 020 7699 2961 Photographs of the Barclays Chief Executive and Finance Director will be available from www.newscast.co.uk from 1.00pm. The full results document is available from: www.investor.barclays.com This document contains certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act 1995 with respect to certain of the Group's plans and its current goals and expectations relating to its future financial condition and performance; this includes the synergy expectations in relation to The Woolwich. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including UK domestic and global economic and business conditions, market related risks such as interest rates and exchange rates, the policies and actions of regulatory authorities, the impact of competition, and the Group's ability to achieve the estimated synergies related to the Woolwich (such as the ability to integrate businesses and IT systems within anticipated timeframes, the ability to and the success of cross-selling products and the ability to share data), a number of which are 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. 8th February 2001 BARCLAYS PLC - SUMMARY RESULTS FOR YEAR TO 31ST DECEMBER 2000 2000 1999 £m £m Operating profit* 3,580 2,964 Loss from joint ventures and associated undertakings (8) (14) Restructuring charge (232) (344) Integration costs (7) - Goodwill amortisation (51) (13) Exceptional items 214 (138) Profit before tax 3,496 2,455 Earnings per share 163.3p 117.5p Earnings per share (based on operating profit)* 163.6p 143.6p Dividends per share 58.0p 50.0p Economic profit 1,492 986 * Operating profit shown above includes the results of The Woolwich from 25th October 2000. It excludes the 1999 and 2000 restructuring charges, goodwill amortisation and costs directly associated with the integration of The Woolwich. Earnings per share and post-tax return on average shareholders' funds based on this operating profit also exclude exceptional items. Profit and loss items reported below are on a similar basis. * Operating profit rose 21% to £3,580 million (1999: £2,964 million). Earnings per share increased by 14% to 163.6p (1999: 143.6p). * Total operating income increased by 15% to £9,598 million. Net interest income increased 11% to £5,155 million and non-interest income increased 19% to £4,443 million. Excluding the contribution from The Woolwich, operating income rose by 13%. * Business as usual costs, excluding The Woolwich, were held at £4,142 million. On the same basis strategic investment expenditure increased by £197 million to £426 million and revenue related costs rose to £518 million from £ 300 million. * Economic profit increased 51% to £1,492 million from £986 million. * Post-tax return on average shareholders' funds improved to 25.2% (1999: 25.1%). * The total dividend increased by 16% with a second interim dividend of 38p (1999: 32.5p) making 58p per share for the year (1999: 50p). * Shareholders' funds were £13.2 billion at 31st December 2000 (1999: £8.5 billion) and the tier 1 ratio was 7.2% (1999: 7.5%). Excluding goodwill, the Group's economic capital requirement is estimated to be around £8.5 billion to support its current business requirements and to allow for future growth. * Retail Financial Services performed strongly with a 30% increase in operating profit to £1,710 million (1999: £1,312 million). Retail Customers and Wealth Management profits rose 27% and 22% to £1,124 million and £522 million respectively. The Woolwich's operating profit contribution was £70 million for the last two months of the year following the acquisition. Total costs were held flat at £2,294 million, excluding two months costs of The Woolwich of £98 million. * Barclaycard operating profit increased 4% to £418 million (1999: £ 401 million). Net interest income improved by 12% benefiting from continued strong growth in average UK extended credit balances. Net fees and commissions increased 9% as a result of growth in UK transaction volumes. * Corporate Banking operating profit increased 13% to £1,070 million (1999: £947 million). Net interest income rose by 6% reflecting growth in average customer lending balances. Net fees and commissions increased by 9% as a result of growth in lending related fees. Costs excluding strategic investment fell by 6%. * Barclays Capital operating profit increased 30% to £403 million (1999: £311 million) reflecting continued strong performances in both the Rates and the Credit businesses. The growth in profits was achieved despite difficult market conditions in the second half of 2000. * Barclays Global Investors operating profit increased 51% to £65 million (1999: £43 million) in a year of major investments and flat or declining markets in most parts of the business. Total assets under management grew to £550 billion (1999: £486 billion). * Total provisions for bad and doubtful debts rose by £196 million, or 32%, to £817 million, mainly as a result of higher levels of new and increased provisions reflecting strong volume growth in Retail Financial Services and Barclaycard. * The restructuring charge of £232 million for 2000 primarily relates to Retail Financial Services, Corporate Banking and Service Provision. The staff cost charge of £171 million is in respect of 4,800 job reductions, 2,700 of which were achieved in 2000. * The exceptional profit of £214 million included a £186 million profit on the sale of the Dial business in June 2000 and £18 million profit on the sale of Barclays Property Investment Management in October 2000. * From 1st January 2004, the Group expects to achieve annual pre-tax synergies of more than £400 million in respect of The Woolwich acquisition. One off integration costs are expected to be in the order of £200 million. CHIEF EXECUTIVE'S STATEMENT 2000 has been a good year for Barclays. We began to reap the benefit of past investments. We expanded the reach and range of our products and services. We advanced our aim to transform our business and we continued to build the foundations for future growth and development. Profit before tax was £3.5 billion, up 42% on last year. Earnings per share were 163.3 pence and our post tax return on equity 25.1%. The results reflect revenue growth of 15%, £260 million of productivity gains in business as usual costs and an almost doubling of strategic expenditure to £426m, demonstrating a good balance between short-term aims and investment in future growth. This is reflected in the total dividend pay-out for the year of 58 pence, a 16% increase over 1999. This financial performance was achieved against a backdrop of accelerated transformation of Barclays, achieving benefits for our customers, staff and shareholders. In 2000, customers gave us a vote of confidence. We gained new customers across the Group and did more business than ever before. We also laid the foundations for ensuring operational excellence in all we do as we transform from old bank to new bank. Our total shareholder return for 2000 was 21%, only average in terms of the international banks we benchmark ourselves against. This is a good result in absolute terms but not good enough in relative terms. Our ambition is to rank among the top quartile of our international peers. So we have much to do. Capitalising on previous investments and developing profitable growth opportunities In Retail Financial Services, we acquired new customers, increased business with existing customers, and expanded customer choice and access. We maintained our position as the UK's leading internet bank and now have 1.7 million personal and small business customers on-line. Our investment in managing customer data, which is at the leading edge of technology world-wide, allowed us to anticipate and respond to customer needs better than ever before. Products per current account customer rose to 2.3. The numbers are even more impressive online, where each customer holds on average 2.7 products. We invested £65 million in 2000 in a programme that will upgrade 1,000 branches by the end of March 2001. Our Wealth Management business put in place a far-reaching transformation programme to serve this expanding market in the future. It already serves over one million clients, over half outside the UK, and manages £74bn of assets on their behalf. For the second consecutive year, Barclays was voted the top European brand amongst banks in a Time Fortune survey of 2,600 affluent customers. In 2000, significant investment went into building a leading edge multi-channel distribution platform, which will offer customers seamless service across electronic and physical channels with real-time information update. In Barclaycard, investment in information-based customer management increased our market share across most areas, including interest earning balances and number of cards. It launched a range of new tailored card packages and is growing rapidly in Europe, with over 1.2 million cards issued, 11% of the total. In Corporate Banking, our investment in mobile working technology means we can bring the full resources of Barclays to our business customers directly. We are also developing a full range of new customer propositions and Barclays B2B.com will be extending its internet based business service to all our business customer base. Barclays Capital, extended its presence and expanded its market share of capital raising for customers in the loan and bond markets outside the US by 41%, one of the fastest rates of organic growth of any of the top banks. It now has both the people and the technology to compete with the best. Barclays Global Investors is developing new marketplaces and customer segments. It extended its franchise into the retail market through the successful launch of iShares, which have already attracted £8 billion in funds. Across all our businesses, the adoption of stretching value-based goals and embedding them at every level of the organisation has been critical to accelerating the pace of transformation. We are becoming ever more innovative and customer-focused. Refining our Portfolio We have also made progress in refining our Group portfolio. In each instance, we have adopted strategies that are best suited to meeting our business objectives while ensuring maximum value creation. We are concentrating on the parts of the value chain where we have a leading competence while developing new ways of accessing expertise and scale where no such advantage currently exists. With The Woolwich, we bought a business that brings new customers, high quality distribution, as well as a strong position in mortgages, a key point in the financial lives of many customers. Our strategic alliance with Legal & General meets our objectives in a different way, providing customers with high quality choices through a value-maximising alliance of two organisations pooling their strengths. We also created value for shareholders through the profitable sale of Dial - the contract hire and fleet management business, which was not core to our future. We will maintain the same, open-minded attitude to our portfolio going forward, seeking to find the right solution to each opportunity or challenge, not the fashionable one. Delivering Operational Excellence We maintained a sharp focus on ensuring operational excellence as we continue to make the transition from old bank to new bank. We made significant progress on productivity with business as usual costs flat against 1999 despite strong volume growth. On the technology front, we are well on the way to transforming ourselves for the new economy and we believe that e-enablement of our internal IT and operations processes has the potential to contribute tangible cost benefits. Outlook A fundamental principle at Barclays is that while we seek to grow our business, we will not seek growth that deviates from our prudent approach to asset quality and portfolio balance. As we press ahead with our strategic agenda during the year there will be increased evidence of our customer-focused approach transforming everything we do. Furthermore we will launch a new proposition from our Wealth Management business, pursue synergy opportunities across the Group, accelerate our productivity improvement and continue to invest in our European presence. The fact that as a Group we are not isolated on these islands or overly dependent on a narrow range of products, customer segments or markets is a significant strength of Barclays. Our contribution from non-UK businesses now exceeds 20%. We intend to expand that proportion. We have made good progress across the Group in implementing the objectives I set out a year ago. Our people deserve the credit for the real progress in our transformation and the good results in 2000. I want to thank them all. 2000 was a year of accomplishment for Barclays. We have made a good start in implementing our agenda of change, but the challenge remains and we have much more to do if we are to achieve our aspiration of being in the top quartile amongst the best in class in the global financial services industry. Matthew W. Barrett Group Chief Executive FINANCIAL HIGHLIGHTS 2000 1999 RESULTS £m £m Net interest income 5,155 4,627 Non-interest income 4,443 3,746 Operating income 9,598 8,373 Operating expenses* (5,202) (4,787) Operating profit before provisions* 4,396 3,586 Provisions for bad and doubtful debts (817) (621) Provisions for contingent liabilities and commitments 1 (1) Operating profit* 3,580 2,964 Loss from joint ventures and associated undertakings (8) (14) Restructuring charge (232) (344) Woolwich integration costs (7) - Goodwill amortisation (51) (13) Exceptional items 214 (138) Profit before tax 3,496 2,455 Profit attributable to shareholders 2,473 1,759 Economic profit 1,492 986 BALANCE SHEET Shareholders' funds 13,187 8,483 Loan capital 6,370 4,597 Total capital resources 21,157 13,432 Total assets 316,190 254,793 Weighted risk assets 147,040 115,878 PER ORDINARY SHARE p p Earnings 163.3 117.5 Earnings (based on operating profit*) 163.6 143.6 Dividend 58.0 50.0 Net asset value 794 568 PERFORMANCE RATIOS % % Post-tax return on average shareholders' funds 25.1 21.2 Post-tax return on average shareholders' funds (based on operating profit*) 25.2 25.1 RISK ASSET RATIO Tier 1 7.2 7.5 Total 11.0 11.3 GROUP YIELDS, SPREADS & MARGINS % % Gross yield 7.09 6.84 Interest spread 2.60 2.88 Interest margin 3.11 3.40 EXCHANGE RATES Period end - US$/£ 1.49 1.62 Average - US$/£ 1.52 1.62 Period end - EUR/£ 1.60 1.61 Average - EUR/£ 1.64 1.52 * Excluding the 1999 and 2000 restructuring charges, goodwill amortisation and costs directly associated with the integration of The Woolwich. Earnings per share and post-tax return on average shareholders' funds based on this operating profit also exclude exceptional items. SUMMARY OF RESULTS PROFIT BEFORE TAX 2000 1999 £m £m Retail Financial Services 1,710 1,312 Barclaycard 418 401 Corporate Banking 1,070 947 Barclays Capital 403 311 Barclays Global Investors 65 43 Other operations (1) 13 Head office functions (93) (77) Operating profit* 3,572 2,950 Restructuring charge (232) (344) Integration costs (7) - Goodwill amortisation (51) (13) Exceptional items 214 (138) 3,496 2,455 * Operating profit shown above includes the results of The Woolwich from 25th October 2000. It excludes the 1999 and 2000 restructuring charges, goodwill amortisation and costs directly associated with the integration of The Woolwich but includes loss from joint ventures and associated undertakings of £8m (1999: £14m). 2000 1999 TOTAL ASSETS £m £m Retail Financial Services 80,128 41,383 Barclaycard 8,705 7,343 Corporate Banking 52,869 47,422 Barclays Capital 156,869 144,807 Barclays Global Investors 259 232 Other operations and Head office functions 4,380 5,383 Goodwill 4,269 183 Retail life-fund assets attributable to policyholders 8,711 8,040 316,190 254,793 WEIGHTED RISK ASSETS Retail Financial Services 47,246 26,152 Barclaycard 8,523 7,210 Corporate Banking 54,651 48,218 Barclays Capital 34,431 32,032 Barclays Global Investors 653 456 Other operations 1,536 1,810 147,040 115,878 CONSOLIDATED PROFIT AND LOSS ACCOUNT 2000 1999 £m £m Interest receivable 11,788 9,320 Interest payable (6,635) (4,696) Profit on redemption/repurchase of loan capital 2 3 Net interest income 5,155 4,627 Net fees and commissions receivable 3,369 2,932 Dealing profits 677 556 Other operating income 397 258 Total non-interest income 4,443 3,746 Operating income 9,598 8,373 Administration expenses - staff costs (3,219) (3,057) Administration expenses - other (1,967) (1,807) Depreciation and amortisation (306) (280) Operating expenses (5,492) (5,144) Operating profit before provisions 4,106 3,229 Provisions for bad and doubtful debts (817) (621) Provisions for contingent liabilities and commitments 1 (1) Operating profit 3,290 2,607 Loss from joint ventures and associated undertakings (8) (14) Exceptional items 214 (138) Profit on ordinary activities before tax 3,496 2,455 Tax on profit on ordinary activities (944) (644) Profit on ordinary activities after tax 2,552 1,811 Minority interests (equity and non-equity) (79) (52) Profit for the financial year attributable to the members of Barclays PLC 2,473 1,759 Dividends (927) (746) Profit retained for the financial year 1,546 1,013 Earnings per ordinary share 163.3p 117.5p Earnings per ordinary share before restructuring charge, goodwill amortisation, integration costs and exceptional items 163.6p 143.6p Dividend per ordinary share: First interim 20.0p 17.5p Second interim (payable 30 April 2001) 38.0p 32.5p FURTHER ANALYSIS OF PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER 2000 The Woolwich period from Barclays Group 25.10.00 PLC Barclays Results to(excluding PLC (including 31.12.00 The Year The Adjustments Woolwich) ended Woolwich) (a) (b) (c) 31.12.99 £m £m £m £m £m Interest receivable 11,788 (36) 454 11,370 9,320 Interest payable (6,635) 4 (335) (6,304) (4,696) Profit on redemption/ - repurchase of loan capital 2 - - 2 3 Net interest income 5,155 (32) 119 5,068 4,627 Net fees and commissions 3,369 - 49 3,320 2,932 receivable Dealing profits 677 - - 677 556 Other operating income 397 - 9 388 258 Total non-interest income 4,443 - 58 4,385 3,746 Operating income 9,598 (32) 177 9,453 8,373 Administration expenses - (3,047) - (42) (3,005) (2,865) staff costs Administration expenses - (1,900) - (47) (1,853) (1,655) other Depreciation and amortisation (255) 1 (10) (246) (267) Operating expenses (5,202) 1 (99) (5,104) (4,787) Operating profit before 4,396 (31) 78 4,349 3,586 provisions Provisions for bad and (817) - (8) (809) (621) doubtful debts Provisions for contingent liabilities and commitments 1 - - 1 (1) Operating profit before restructuring charge 3,580 (31) 70 3,541 2,964 Loss from joint ventures and associated undertakings (8) - - (8) (14) Restructuring charge (232) - - (232) (344) Integration costs (7) (7) - - - Goodwill amortisation (51) (38) - (13) (13) Exceptional items 214 - - 214 (138) Profit on ordinary activities 3,496 (76) 70 3,502 2,455 before tax The table above analyses the results for the year ended 31st December 2000 (as reported on page 8) into: (a) adjustments relating to the acquisition of The Woolwich, which comprise: * £11m interest receivable, £4m interest payable and £1m depreciation and amortisation (net £6m) reflecting the amortisation of fair value adjustments; * £25m interest receivable to imitate the position had The Woolwich not been purchased i.e. the £2.5bn cash paid could have been used to generate interest income; and * £38m goodwill amortisation and £7m integration costs to reflect costs that would not otherwise have been incurred. (b) The Woolwich results for the post acquisition period; and (c) results of Barclays PLC excluding The Woolwich, which are comparable to the Group results for 1999. The results shown on page 8 include the 1999 and 2000 restructuring charges, goodwill amortisation and integration costs within operating expenses. The table above presents operating expenses excluding these items. CONSOLIDATED BALANCE SHEET 2000 1999 Assets: £m £m Cash and balances at central banks 1,243 1,166 Items in course of collection from other banks 2,509 2,492 Treasury bills and other eligible bills 5,564 7,176 Loans and advances to banks - banking 9,570 13,071 - trading 26,856 26,555 36,426 39,626 Loans and advances to customers - banking 138,423 95,006 - trading 23,687 21,562 162,110 116,568 Debt securities 70,770 53,919 Equity shares 4,062 5,604 Interests in joint ventures and associated undertakings 122 106 Intangible fixed assets - goodwill 4,269 183 Tangible fixed assets 2,059 1,800 Other assets 18,345 18,113 307,479 246,753 Retail life-fund assets attributable to policyholders 8,711 8,040 Total assets 316,190 254,793 Liabilities: Deposits by banks - banking 32,445 26,915 - trading 17,311 17,571 49,756 44,486 Customer accounts - banking 140,352 105,027 - trading 18,616 18,939 158,968 123,966 Debt securities in issue 31,883 23,329 Items in course of collection due to other banks 1,176 1,400 Other liabilities 44,539 40,140 Undated loan capital - convertible to preference shares 335 309 Undated loan capital - non-convertible 2,298 1,440 Dated loan capital - non-convertible 3,737 2,848 292,692 237,918 Minority interests and shareholders' funds: Minority interests: equity 108 82 Minority interests: non-equity 1,492 270 Called up share capital 1,662 1,495 Reserves 11,525 6,988 Shareholders' funds: equity 13,187 8,483 14,787 8,835 307,479 246,753 Retail life-fund liabilities attributable to policyholders 8,711 8,040 Total liabilities and shareholders' funds 316,190 254,793 KEY FACTS (UNAUDITED) 2000 1999 Number of UK branches 2,129 1,899 Number of overseas branches 624 620 Number of UK Barclays Group ATMs 3,800 3,200 Employees worldwide 75,300 74,300 RETAIL FINANCIAL SERVICES Retail Customers Current account customers 8.3m 8.1m Savings account customers 4.2m 3.8m Customers registered for telephone banking 1,200,000 1,000,000 Customers registered for on-line banking 1,700,000 500,000 Small business customers 440,000 440,000 Africa - customer deposits £1.6bn £1.6bn The Woolwich Open plan customers 544,000 44,000 Total UK mortgage balances £28.5bn £26.3bn Wealth Management Continental European customers 313,000 307,000 Total customer funds £74bn £70bn Stockbrokers - deal volumes per day 8,100 6,600 BARCLAYCARD Barclaycard UK customers 7.9m 7.5m Barclaycards issued overseas 1.2m 1.0m Customers registered for on-line services 388,000 111,000 Retailer relationships 81,000 79,000 Number of retailer transactions processed 1.2bn 1.1bn CORPORATE BANKING Number of UK Corporate Banking connections 113,600 112,400 - Mid corporate connections 97,000 96,400 - Larger business connections 14,000 13,800 - Large corporate connections 2,600 2,200 Customers registered for electronic banking 43,000 29,400 Number of current accounts 238,000 231,000 Number of deposit accounts 101,000 102,000 BARCLAYS GLOBAL INVESTORS Total assets under management £550bn £486bn Number of institutional clients 1,800 1,500 BARCLAYS CAPITAL 2000 1999 League table Issuance League table Issuance position value position value Sterling bonds 1st £12bn 1st £9bn Syndicated loans (Europe, 1st US$89bn 1st US$43bn Middle East, Africa) Syndicated loans (ex USA) 1st US$98bn 2nd US$49bn All syndicated loans 4th US$116bn 6th US$59bn All international bonds 11th US$48bn 13th US$36bn MORE TO FOLLOW

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