Barclays continued to make good progress in 2005. Profit before tax rose by 15%, driven by strong income(a) growth of 23%. Return on equity was 21.1% and economic profit increased 12% to £1,752m(b).
The year saw very strong performances from Barclays Capital, Barclays Global Investors, Barclays Wealth Management and International Retail and Commercial Banking, and a strong performance from UK Banking.
We also saw encouraging trends in the UK Retail Bank as the transformation programme already under way continued.
The one mainstream business with lower profits this year was Barclaycard. While business volume and revenue growth were strong in Barclaycard, they were not sufficient to offset an increase in credit card loan losses in the UK.
We declared a final dividend for the year of 17.4p per ordinary share. This, combined with the interim dividend of 9.2p per ordinary share, gives a total payment for the year of 26.6p, an increase of 11%. The Group delivered a total shareholder return (share price appreciation plus dividend growth) of just under 9% for the year. For the first two years of our current four-year goal period (2004-2007), our total shareholder return (TSR) was 34%(c).
In 2005, we took a controlling 57% stake in Absa Group Limited. Absa is one of the top banks in South Africa and has the largest retail franchise in this important marketplace. We aim to build the leading financial services business in South Africa and to become the pre-eminent bank in sub-Saharan Africa. The Absa acquisition was consistent with our strategic objective of increasing Barclays non-UK earnings by developing retail and commercial banking operations in attractive overseas markets.
Notes
- Total income net of insurance claims.
- Economic profit comprises profit after tax and minority interests, less a charge representing the Group's cost of capital.
- This positions Barclays in the second quartile of its peer group. Please see the PSP Performance Scale.
