Barclays





In Section 1:


Introduction Chairman's Statement Group Chief Executive's Statement Financial Performance Group Finance Director The Leadership Team
	Let me review briefly the financial performance of our main businesses. The ambitious plans in Personal Financial Services, Business Banking and Barclays Private Clients showed signs of early success, and we saw in Barclays Capital, BGI and Barclaycard good payback on prior years' investments. As a result, 2002 business performance across the portfolio was solid. We continued to invest in the future (a total of Ł381 million was directed at strategic investment), accompanied by careful tactical management of all other costs. Personal Financial Services, incorporating Woolwich, increased operating profit by 8%, driven primarily by tight cost management combined with a 13% fall in provisions (despite a 14% increase in risk weighted assets). The significant increase in new business volumes, particularly in mortgages and savings, created a short term drag on income growth because of the associated origination costs. Investment remained high – the launch of Openplan in Barclays channels would be a good example – and the fundamental transformation of the retail business progressed well. In Barclays Private Clients, operating profit fell sharply largely as a result of the Ł178 million adverse year on year swing in income from the closed life funds business that I referred to earlier. Excluding the impact of the closed long term assurance fund, income fell 3%, which was a resilient performance given the difficult trading conditions for the wealth management industry in 2002. This performance reflected the benefits of the business' diversity in both product and geography. The development of Barclays Private Clients is one of our strategic priorities and so a high level of strategic investment was maintained throughout 2002. Barclaycard had a very strong year, with operating profit rising by 21%. This was driven by income growth of 14%. Customer recruitment reached record levels and credit exposure remained tightly managed. We made good progress in the international cards business, which recorded operating profits for the last four months in 2002. Business Banking also had a very strong year with operating profit rising by 15% driven by income growth of 5% and cost reduction of 4%. These cost efficiencies reflected sustained commitment to productivity improvement over the past three years. Provisions were in line with our expectations. Barclays Capital's operating profit fell 10%. Income was up 7%, a record year. Operating costs fell 1%, demonstrating Barclays Capital's ability to flex its expense base. Net revenue (income minus provisions) was 4% lower than in 2001 despite absorbing a substantial increase in provisions. These results were the second best in Barclays Capital's history and demonstrate the ability of its distinctive business model to weather a much more difficult business environment. Barclays Global Investors saw operating profit rise by 41% despite falling stock market indices. This was a very strong performance. I believe there will be very few investment managers who have managed to increase profits in 2002.	Click to go to each page