Group Performance
Barclays delivered strong financial results in 2005. Profit before tax was £5,280m, an increase of 15% from 2004. Earnings per share rose 7%, and economic profit(a) was up 12%. Return on average shareholders' equity was 21% and we have increased the total dividend payout 11%.
Income(b) rose 23%, an increase which was broadly spread across the Group with most businesses reporting double digit income growth and UK Retail Banking returning to modest top line growth.
Operating expenses grew in line with income, reflecting significant investment directed to the global businesses, higher performance-related expenses, the expansion of International Retail and Commercial Banking and head office relocation. Excluding the first time contribution of Absa, income and operating expenses increased 16%.
Impairment charges increased 44% to £1,571m (2004: £1,093m). This reflected some large one-off releases and recoveries in 2004, the impact of acquisitions in 2005 and changes in methodology. Excluding these factors, the rate of growth in impairment charges was 24%, driven by a continued increase in arrears balances and lower rates of recovery from customers in UK credit cards. Impairment charges rose at a slower rate in unsecured loans and were minimal in UK mortgages. Wholesale and corporate credit conditions were stable.
Notes
- Economic profit is defined in the Chairman's statement.
- Total income net of insurance claims.
- Includes other credit provisions.
- Share of post-tax results of associates and joint ventures (together with profit on disposal of associates and joint ventures, where relevant).
- Profit before tax.
- Operating expenses compared to total income net of insurance claims.
- Absa has changed its financial year-end to 31st December to conform with Barclays, the comparable period comprises unaudited results for the nine months ended 31st December 2004.
