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Results by nature of income and expense | |
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Net Interest Income In the tables below, income and cost totals excluding, where appropriate, the results of The Woolwich, related integration costs, restructuring costs, the results of former BZW businesses and the write-down of leases are shown to assist in the analysis of the ongoing business performance. |
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| 2000 | 1999 | 1998 | ||
| £m | £m | £m | ||
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| Interest receivable | 11,788 | 9,320 | 9,952 | |
| Interest payable | (6,635) | (4,696) | (5,604) | |
| Profit on redemption/ | ||||
| repurchase of loan capital | 2 | 3 | 3 | |
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| 5,155 | 4,627 | 4,351 | ||
| Write-down of leases | – | – | (40) | |
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| 5,155 | 4,627 | 4,311 | ||
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| Excluding The Woolwich, | ||||
| former BZW businesses | ||||
| and write-down of leases | 5,068 | 4,627 | 4,353 | |
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Net interest income increased 11% to £5,155m. Adjusting for
the impact of The Woolwich acquisition (including interest
forgone on the cash element of the acquisition cost), loss of
interest income arising from the share repurchases and
business disposals, underlying net interest income also
increased by 11%.
In Retail Financial Services net interest income increased 7% to £2,649m excluding net interest arising in The Woolwich. This was primarily as a result of strong growth in Wealth Management and increased UK lending and deposit balances. In Wealth Management, particularly strong growth was achieved in the UK, with average Premier Banking mortgage balances increasing by 19% and, in continental Europe, where average lendings and deposits grew by 24% and 15% respectively. In Small Business average deposits grew by 4% to £6.7bn and average lending balances grew 8% to £1.8bn. In UK Personal Customers, current accounts and average savings balances benefited from good volume growth, despite some pressure on margins. Excluding The Woolwich, the overall UK retail lending margin reduced primarily as a result of pricing decisions in respect of consumer lending products and a change in mix of mortgage products. The overall UK retail deposit margin, excluding The Woolwich, experienced some downward pressure in the second half of the year. Net interest income in Barclaycard improved 12% to £548m benefiting from continued strong growth in average UK extended credit balances which rose 19% year on year to £5.5bn. This compared with the market growth rate of 13%. The net interest margin fell slightly compared to 1999, mainly as a result of the balance consolidation promotions of 2000 and the increased range of rates available to cardholders. Corporate Banking net interest income rose 6% to £1,324m. Average customer lending balances increased 10% to £47bn as a result of strong growth in UK lending and in the rest of Europe. Average customer deposit balances increased 6% to £37bn with relatively strong growth in the UK. The overall UK lending margin in Corporate Banking was maintained in line with the improving quality of the portfolio. In Barclays Capital net interest income increased 21% to £483m primarily as a result of continued strong growth in revenues from structured capital markets and the credit portfolio. Overall banking margins reduced to 3.11% from 3.40% as a result of increased volumes in lower margin wholesale business in Barclays Capital and also reductions in UK margins in Retail Financial Services, Barclaycard and Corporate Banking. Additionally, the two month impact of the acquisition of The Woolwich on the Group’s mix of interest earning assets has been to reduce the Group margin by 6 basis points. The benefit of free funds was flat at 0.51% (1999 0.52%). The rise in short-term market rates of interest reduced the contribution to the net margin from the central management of Group interest rate exposure to 0.05% from 0.21%. The overall benefit of free funds on a hedged basis has reduced to 0.56% from 0.73% in 1999 as a result of a decrease in the effective rate of the hedge and a reduction in the proportion of free funds to interest earning assets. In 1999 net interest income increased by £274m or 6% excluding the contribution from the former BZW businesses and the write-down of leases. This reflected volume growth in Retail Financial Services and Corporate Banking and an improved contribution from the central management of Group capital. |
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| Prevailing average Interest rates | ||||
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| 2000 | 1999 | 1998 | ||
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| UK: | ||||
| Barclays Bank PLC base rate | 5.96 | 5.35 | 7.23 | |
| London Inter-Bank Offered | ||||
| Rate (LIBOR): | ||||
| three month sterling | 6.10 | 5.54 | 7.43 | |
| three month eurodollar | 6.47 | 5.37 | 4.90 | |
| United States prime rate | 9.24 | 7.99 | 8.36 | |
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Average interest earning assets and liabilities – banking business |
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| 2000 | 1999 | 1998 | ||
| £m | £m | £m | ||
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| Average interest earning assets: | ||||
| Group | 166,200 | 136,267 | 127,396 | |
| Domestic | 104,845 | 87,407 | 82,095 | |
| International | 61,355 | 48,860 | 45,301 | |
| Average interest bearing liabilities: | ||||
| Group | 147,367 | 118,496 | 109,225 | |
| Domestic | 89,130 | 73,850 | 66,492 | |
| International | 58,237 | 44,646 | 42,733 | |
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Yields, spreads and margins – banking business |
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| 2000 | 1999 | 1998 | ||
| % | % | % | ||
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| Gross yield (a) | ||||
| Group | 7.09 | 6.84 | 7.81 | |
| Domestic | 7.90 | 7.66 | 8.90 | |
| International | 5.71 | 5.38 | 5.84 | |
| Interest spread (b) | ||||
| Group | 2.60 | 2.88 | 2.69 | |
| Domestic | 3.54 | 3.89 | 3.40 | |
| International | 1.01 | 1.10 | 1.30 | |
| Interest margin (c) | ||||
| Group | 3.11 | 3.40 | 3.42 | |
| Domestic | 4.19 | 4.47 | 4.44 | |
| International | 1.25 | 1.47 | 1.55 | |
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Notes
(a) Gross yield is the interest rate earned on average interest earning assets. (b) Interest spread is the difference between the interest rate earned on average interest earning assets and the interest rate paid on average interest bearing liabilities. (c) Interest margin is net interest income as a percentage of average interest earning assets. Domestic business is conducted primarily in sterling and is transacted by Retail Financial Services, Barclaycard, Corporate Banking, Barclays Capital and Group Treasury. International business is conducted primarily in foreign currencies. In addition to the business carried out by overseas branches and subsidiaries, international business is transacted in the UK by Barclays Capital, mainly with customers domiciled outside the UK. The yields, spreads and margins shown opposite have been computed on this basis, which generally reflects the domicile of the borrower. They exclude profits and losses on the redemption and repurchase of loan capital, one-off write-downs of leases and the unwinding of the discount on vacant leasehold property provisions. The net interest income and average balances of the trading business are shown separately on the Average balance sheet. |
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