Barclays





	In Section 1:


	Introduction Chairman's Statement Group Chief Executive's Statement Financial Performance Group Finance Director The Leadership Team
			Barclays delivered a sound performance during 2002, while continuing with the transformation of the business and progressing our longer-term economic development The year was a curious one. The UK, our key market, once again grew more rapidly than other European countries, though in an increasingly lopsided way, biased toward public and personal consumption. The US recovered from an unusually weak performance in 2001 but, if anything, was even more unbalanced and consumption biased. Continental Europe and Japan were lacklustre. It was a year of great uncertainty about the future combined with extremely competitive business conditions. Financial markets were volatile and in decline in 2002; they remain so in 2003. This is partly the result of the collapse of over excited sentiment stirred up primarily by the dotcom boom. Partly it reflects uncertainty about how the national economic imbalances will unfold, especially with the threat of war in Iraq. Partly it reflects the very competitive and difficult conditions in some sectors. But it also reflects the uncertainty imposed on companies by the changing regulatory background. To take our own business: we have had to deal with 18 different government reviews over the past three years. There is a seemingly endless stream of new accounting rules. The capital requirements of the bank will change as a result of Basel II. A whole industry in corporate governance has been created spearheaded by: Sarbanes-Oxley in the US; the UK Government commissioned reports including the Higgs Review of the role and responsibilities of non-executive Directors, and the Smith Review of the role of audit committees. We see the prospect of plenty more on its way from Brussels. We have increasingly tough 'Know Your Client' rules from the FSA, which long standing customers find oppressive. And we have seen the emergence of price control – from the Competition Commission Inquiry. The sheer volume of this activity takes up management time and resources, which could otherwise be devoted to driving the business forward. It creates uncertainty and inhibits sensible risk taking. And makes it increasingly difficult to explain our business in simple terms to our stakeholders. We set out to be an open company, communicating extensively with our large and small shareholders, both about our financial results and about the way the company is organised and managed. Within our Annual Report this year there is more on risk management and corporate governance, including a more detailed remuneration report. Once again, we have set out in some detail our efforts under the heading of Corporate Social Responsibility, where the involvement of our employees in our Community Programme grows steadily and is a great source of pleasure. There are several changes to report at Board level. Sir Andrew Large, one of our Deputy Chairmen, left Barclays to become Deputy Governor (Financial Stability) of the Bank of England. Sir Andrew brought a wealth of experience in banking and regulation to the Board; we wish him well in his important role. John Stewart, the Deputy Group Chief Executive, has also left the Board. Mr Stewart was previously Chief Executive of The Woolwich and has played a key role in integrating the business into Barclays. Looking ahead, Sir Nigel Mobbs will be retiring at the AGM in April 2003 after 23 years' service with Barclays. He has made a huge contribution to the bank over this time. His knowledge and authority have made him an outstanding Chairman of the Audit Committee. It is sad that such length of service is frowned on by current governance fashions. Graham Wallace has indicated his intention to retire from the Board in the summer, after he leaves Cable & Wireless. The Board is grateful for the contribution that he has made since he joined Barclays in April 2001. We shall miss the contribution of these Directors. However, there are two new arrivals to the Board, both of whom are standing for re-election at the AGM. In July, we welcomed Dr Jürgen Zech to the Board as a non-executive Director. Dr Zech is a leading businessman in Germany and brings added financial experience to the team. Professor Sandra Dawson joins the Board as a non-executive Director in March. Professor Dawson is Professor of Management Studies and Director of the Judge Institute at Cambridge University, and brings both academic and management experience to Barclays. Lawrence Dickinson replaced Howard Trust as Group Secretary in September 2002. The Directors are immensely grateful to Mr Trust for his services to the Board over the past eight years. There are only two certainties about 2003. The first is that we shall have to cope again with the uncertain climate we faced in 2002. The second is that Barclays is well placed thanks to the spread of its business, the quality of its staff and its determination to succeed and seize the opportunities that arise. Sir Peter Middleton Chairman