• Chairman’s statement

Barclays had an excellent 2006. Profit before tax rose by 35%, with outstanding performances from Barclays Capital and Barclays Global Investors. Of particular note is the continued turnaround in UK Retail Banking, which this year delivered very strong growth along with UK Business Banking. We also saw a very strong performance from Absa, in its first full year contribution and are ahead of plan in delivering the income and cost synergies from the acquisition.

Profit before tax at Barclaycard decreased as good income growth was offset by higher impairment charges and increased costs from the continued development of the international businesses. We started to see in the second half of 2006 the benefit of the actions taken to address the deterioration in the UK consumer credit environment.

The Group declared a final dividend for the year of 20.5p per share, making a total payment for the year of 31p, an increase of 17%. We delivered a total shareholder return (share price appreciation plus reinvested dividend payments) of 25% for the year.

The strong performance for the year is a tribute to the immense contribution made by my predecessor, Matthew Barrett, initially as Chief Executive and subsequently as Chairman. Profit before tax increased from £2.5bn to £7.1bn during his time with the Group and Barclays would not be in the strong position it is today without his contribution. I look forward to working with the Board and the executive team to build on this platform and continue to take Barclays forward.

Corporate governance

As Chairman, it is my responsibility to ensure that the highest standards of corporate governance are in place and I am committed to maintaining Barclays strong reputation in this area.

2006 saw a number of Board changes. On the executive side, Frits Seegers joined Barclays as a Director and Chief Executive of Global Retail and Commercial Banking in July. Gary Hoffman, who was Chairman of UK Banking and of Barclaycard, was appointed as Group Vice Chairman. He is accountable for a range of issues, including corporate responsibility, public policy and equality and diversity. David Roberts, previously Chief Executive of International Retail and Commercial Banking, left Barclays at the end of the year. I would like to thank David for his significant contribution to the Group.

On the non-executive side, Fulvio Conti joined the Board as previously reported. Fulvio is Chief Executive Officer of Enel SpA, the Italian energy group. Sir David Arculus retired from the Board after serving for nine years. Bob Steel resigned as a Director, following his appointment as Under Secretary of the Treasury of the United States of America.

Finally, Chris Lucas will be joining the Group and the Board on 1st April 2007 as Group Finance Director. Chris was previously with PricewaterhouseCoopers and has worked across financial services for most of his career. He will succeed Naguib Kheraj who will be leaving the Board on 31st March 2007. Naguib has made an outstanding contribution to Barclays, for which we are most grateful. We wish him well for the future.

Responsible banking

A key objective of the Board is for Barclays to be a leader in the area of corporate responsibility. 2006 saw significant progress towards this objective.

We continued to give high priority to financial inclusion and improving access to banking services and affordable credit. The number of UK Cash Card accounts designed for low income and vulnerable people increased by 22% to 464,000, while Absa remains the leading bank provider of Mzansi basic bank accounts and launched an innovative new service to help beneficiaries of social grants.

In terms of environmental management, Barclays UK operations are now carbon neutral. Our involvement in the Business Leaders' Initiative on Human Rights continues and we retain membership of the Dow Jones Sustainability and FTSE4Good ethical indices. We achieved third position in the Business in the Community Corporate Responsibility Index.

Full details are contained in our eighth Corporate Responsibility report, and at www.barclays.com/corporateresponsibility.