> Annual Review home > Business Review > UK Retail Banking
Our UK Retail Banking business provides a wide range of products and services to personal and smaller (local) business customers, including current accounts, savings and investment products, Woolwich branded mortgages and general insurance. More affluent customers are provided with investment products and advice through Premier banking. 33,000 people are employed in this business providing customer service and developing products. We have registered higher levels of employee satisfaction, and strengthened our management team in the year.
Our strategy in the UK is simple: to become the best retail bank in the country. We will aim to do this by putting customers at the heart of our business, improving our operations and levels of service, and developing new products that meet our customers' needs in a changing world. We are also extending our online and telephone banking, so that customers can bank with us in the way that best suits them – we already service around 480,000 online customers every day. Achieving our ultimate goal will take time, but we have accelerated the rate of investment in the last year, and the business has made excellent progress during that time.
We have taken full advantage of favourable market conditions this year growing our market share across a number of product areas.
| Performance | ||
| 2006 | 2005 | |
| £m | £m | |
| Income | 3,828 | 3,586 |
| Impairment charge | (209) | (150) |
| Operating expenses | (2,408) | (2,390) |
| Associates and joint ventures | 2 | (6) |
| Profit before tax | 1,213 | 1,040 |
The year in review
We believe that the UK Retail Banking transformation is well under way. Profit before tax increased 17%, and a 7% rise in total income to £3,828m reflects growth in deposits, mortgage and loan balances as well as current accounts which increased by 375,000 during the year. Costs remained steady at £2,408m with gains from the sale and leaseback of property being substantially reinvested in the business to improve customer service.
One of our key priorities in 2006 was improving the performance of our mortgage business. In February 2006 we took back control of the servicing of our mortgage book, and since then we have made significant improvements in our processes; for example, the average time taken to get a mortgage offer out to a customer has been cut considerably. We have also put a renewed effort behind marketing our mortgages and developed new products – see 'making more of mortgages'. The result has been a significant rise in new lending, and a greater share of net lending in the mortgage market.
More mortgages
2006 was a year of real success for our
mortgage business. We invested more in
marketing and advertising our range of
products, as well as launching pioneering
new ones like the Woolwich's new 10-year
fixed rate and Lifetime Tracker mortgages.
It was great to see our products
featuring so regularly in the Best Buy
tables in the national newspapers. in May
we were included in ten different tables in
the same weekend.
The Woolwich also won the Your Money
magazine award for Best Mortgage
Provider, and the Your Mortgage award for
Best First Time Buyer Mortgage Lender.
Our average savings book has also grown this year, up 8% on 2005. Here too we have introduced new products, and attracted an extra 180,000 savings accounts during the year. The number of household insurance policies increased by 34% to 825,000.
UK Retail Banking has also worked hard at building links with other parts of the Group, both to develop new business opportunities, and to ensure that customers with wider needs get the best possible service from us.
For example, we now have a new process for referring Premier banking customers to Barclays Wealth, which can offer more complex financial planning and investment advice.
The ongoing programme to enhance the branch network continued in 2006. 200 branches were refurbished during the year, and there are now award-winning self-service terminals in over 400 branches.
A part of this programme is the full integration of the Woolwich network into Barclays-branded branches, which will take place during 2007. The aim behind this is to give both sets of customers a better service, with more modern branches in the most convenient locations. As the programme gets under way we are ensuring that we communicate fully to all customers affected by the changes.
