I am pleased to report that 2005 was another record year for Barclays. Profit before tax grew 15% to £5.3bn, and we increased our dividend by 11%. Our performance in 2005 has been underpinned by three strong pillars: our portfolio of businesses, our geographical presence, and the talents and skills of our people, and is the consequence of having a well-grounded and robust strategy, and implementing it well.
Our ambition is to position Barclays as one of the handful of universal banks leading the global industry. Our portfolio helps us to achieve this, through diversity in both business and geography.
We have a simply stated business purpose: to help our customers and clients achieve their goals. Our strategic priorities are derived from that business purpose. I will talk about these in more detail below, but in summary they are to:
- build the best bank in the UK
- accelerate the growth of our global businesses
- expand our retail and commercial banking activities internationally in selected markets, and
- enhance operational excellence.
Our business model is different to our competitors'. It involves being prepared to invest heavily to grow. It involves developing businesses aggressively in response to our view of sources of growth in the industry. It involves creating a good balance of businesses, and a broad base of income and profit growth. It also involves being disciplined about earnings – because we believe in the principle of earn, invest and grow.
The acquisition of a controlling stake in Absa, which we completed in 2005; the development of our other International Retail and Commercial Banking businesses; and the continued rapid growth of Barclays Capital, Barclays Global Investors and Barclaycard International, are all designed to enable us to grow faster by ensuring that we have a good spread of activities both by business and by geography.
We have a clear view about sources of growth in the financial services industry over the coming years. We see significant growth opportunities in the UK but we see at least as many internationally. Our selective diversification by geography, by product, and by customer segment helps us improve financial performance, manage risk, and create opportunities for synergies.
Long-term success, as well as good short-term performance, depends on having the right strategy and executing it effectively. Our performance in 2005 shows that we are delivering good profit growth, and are benefiting from having a portfolio of businesses which is integrated but well spread. We are accelerating the pace at which we execute our strategy because the strategy is a good one, and it is serving our shareholders and customers well.
It is good to be able to report record profits in 2005. But it is more important still to be able to say that a portfolio of good businesses, growing geographical presence, and the talent of the great people we employ, position us well for the future.
