Final Results - Part 3

Barclays PLC
8 February 2001


PART 3


                                 BARCLAYS PLC

Analysis of operating profit by business

Retail Financial Services

Retail Financial Services provides a broad range of financial services to its
personal customers worldwide together with small business customers primarily
in the United Kingdom.  Its purpose is to serve customers by understanding
their needs as individuals and by offering services and products that
anticipate and satisfy their requirements.

In 2000, the performance of Retail Financial Services is reported in three
major business groupings: Retail Customers, The Woolwich and Wealth
Management.


                                            Including     Excluding
                                             Woolwich      Woolwich
                                                 2000          2000        1999
                                                   £m            £m          £m
Net interest income                             2,761         2,649       2,471
Net fees and commissions                        1,419         1,370       1,300
Income from long-term assurance business*         171           166          44
Other operating income                            169           165         143
Total income                                    4,520         4,350       3,958
Total costs                                   (2,392)       (2,294)     (2,326)
Provisions for bad and doubtful debts           (418)         (410)       (320)
Operating profit**                              1,710         1,646       1,312



*     1999 includes a £75m provision for possible redress for personal pension
customers.

**   Including the two months results of The Woolwich since acquisition and £
6m of fair value adjustments.

Retail Financial Services performed strongly with a 30%, or £398m, increase in
operating profit to £1,710m.  Total income increased by 14% to £4,520m.
Adjusted for the impact of the personal pension redress provision of £75m in
1999 and the two months results of The Woolwich, operating profit and total
income rose 19% and 8%, respectively.

Net interest income increased 12%, to £2,761m, primarily as a result of strong
growth in lending and deposit balances.  In the UK, current accounts and
average UK savings balances benefited from good volume growth despite pressure
on margins.

Net fees and commissions grew 9%, or £119m, to £1,419m.  There was good growth
in Retail Customers and Wealth Management.

Income from long-term assurance business increased 44% or £52m, adjusting for
the £75m personal pension provisions raised in 1999.  No additional provision
for possible redress for personal pension customers has been taken in the
year.

Total customer funds (excluding The Woolwich), which include assets under
management and on-balance sheet deposits, grew 4% to £123bn (1999: £118bn).
Assets under management (excluding The Woolwich) increased 4%, or £2bn, to £
57bn, primarily due to growth in Private Banking and managed investment
portfolios.  Deposits (excluding The Woolwich) grew 6% as a result of strong
growth in European and offshore banking as well as in current accounts and UK
savings, specifically ISAs.  Loans to customers (excluding The Woolwich) rose
9% to £36bn
(1999: £33bn).



For The Woolwich total customer funds were £23.5bn, assets under management
were £3.0bn, deposits were £20.5bn and loans to customers were £32.7bn.



Total customers registered for on-line banking was 1,700,000 (1999: 500,000)
at the end of 2000, confirming Barclays position as the UK's leading on-line
bank.  On-line personal customers now have 2.7 products, compared to 2.3 for
all personal current account customers.



Total costs were held flat at £2,294m after adjusting for the impact of two
months results for The Woolwich (1999: £2,326m).  This was despite a
significant increase in strategic investment expenditure up 49%, or £47m, to £
143m and higher revenue related costs up 12%, or £13m, to £125m.  Total staff
costs, excluding restructuring costs, were down 2% compared with 1999
resulting principally from the job reduction programmes carried out during
1999 and 2000.



Provisions rose 31% to £418m (1999: £320m).  Adjusted for The Woolwich and an
£11m release of general provision in 1999 relating to the disposal of Merck
Finck, the underlying increase in provisions was 24%.  This growth was mainly
attributable to the volume growth in personal and small business unsecured
lending and as a result of difficult market conditions in Kenya and Zimbabwe.



Retail Customers



This business provides a wide range of services and products to personal and
small business customers throughout the United Kingdom, and to personal and
corporate customers in parts of Africa.  These results include the Barclays
mortgage operation.


                                                              2000        1999
                                                                £m          £m
Net interest income                                          2,015       1,916
Net fees and commissions                                       780         735
Income from long-term assurance business*                      161          32
Other operating income                                         139         114
Total income                                                 3,095       2,797
Total costs                                                 (1,573)     (1,588)
Provisions for bad and doubtful debts                         (398)       (325)
Operating profit                                             1,124         884



*1999 includes a £75m provision for possible redress for personal pension
customers.



Operating profit in Retail Customers increased 27%, or £240m, to £1,124m.
Adjusted for the impact of the provision for the redress of personal pension
customers of £75m during the year ended 31st December 1999, operating profit
increased by 17% and total income by 11% to £3,095m.

Net interest income increased by 5%, mainly as a result of good volume growth
in current accounts and average UK savings balances.  Net fees and commissions
increased by 6% mainly as a result of additional current account and overdraft
lending activity and higher fee income from the Additions accounts, which more
than offset the absence of £19m ATM commissions received during 1999.
Additions accounts increased by 21% to 1,050,000 (1999: 871,000).

Total costs were flat at £1,573m resulting from the implementation of a number
of improvements in operational and processing activities throughout the
network, including centralisation of call centres.  These savings have been
partially offset by the additional costs associated with significant increased
strategic investment of £110m (1999: £79m) in infrastructure, particularly in
on-line banking.

Total customer funds, which include assets under management and on-balance
sheet deposits increased by 4% to £50bn (1999: £48bn).  Loans to customers
rose slightly to £24bn (1999: £23bn).

UK Personal Customers

Average current account deposits increased 9% to £9.5bn (1999: £8.7bn)
reflecting the rise in the number of current account customers due to the
improvement of the current account proposition.

Average UK savings balances grew 7% to £20.9bn (1999: £19.6bn), ahead of
market growth.   Overall average margins remained broadly flat.

Average UK mortgage lending increased 7% to £17.3bn (1999: £16.1bn).  Gross
new lendings remained flat at £4.8bn (1999: £4.8bn) and market share of
balances outstanding was broadly maintained at 4%.  Average margins decreased
from 1.21% to 1.12% during the year as a result of a change in the mix of
products, reflecting the high level of sales of the base rate tracker
mortgages.

Average consumer lending balances increased 7% to £6.4bn (1999 growth: 11%).
Against a background of increasing and historically high consumer debt, the
risk assessment criteria were further tightened to improve the overall quality
of the portfolio and as a result consumer lending balance growth was slower
than the market.

In November, individual pricing was introduced on the Barclayloan product as
part of a drive to increase product penetration for existing customers and
further improve asset quality.

Income from payment protection and underwriting benefited in line with
improved volumes of consumer lending, overdraft, credit card and mortgage
lending.

Annual premium income of UK based unit trusts, managed investment portfolios
and life and pension products totalled £222m (1999: £238m).  Sales of managed
investment portfolios were broadly similar at £80m and sales of UK based unit
trusts were down 9% at £89m because of exceptionally high sales in the period
up to the withdrawal of PEPs in 1999.  Sales of life and pension products were
down 14% at £53m; this was primarily as a result of the cessation of endowment
sales and the uncertainty around the introduction of stakeholder pensions.

UK Small Business

Total income within UK Small Business increased 9% during the year as a result
of growth in its customer base, combined with new product development and
enhanced customer information management techniques.  Deposits grew 4% to £
6.7m and lending balances grew 8% to £1.8m.

Fees and commissions were maintained at similar levels to 1999, despite
significant continuing competitive pressures on money transmission tariffs.
Margins were also held at levels similar to last year.

Total costs fell 4% during the year, benefiting from increased efficiency
arising from the continued centralisation of non-customer facing activities.
Removal of processing from the branch network has enabled relationship
managers increasingly to focus on customer activity.

UK Small Business launched a series of innovative new products and services
during 2000.  Most significant was the launch in August of the internet portal
Clearlybusiness.com, a joint e-commerce development with Freeserve, which
offers advice and information on starting-up and running a successful small
business.

The number of Small Business customers registered for on-line banking
continued to grow, up 123% to 150,000 (1999: 67,000).

Africa

Operating profit rose by 24%, or £24m, to £122m.  Total income across Africa
increased 20% to £290m.  Overall costs increased £5m to £140m, predominantly
due to the high inflationary environment in Zimbabwe.  Provisions increased to
£28m (1999: £9m), reflecting the difficult political and economic situations
experienced during the year in Kenya and Zimbabwe.

The Woolwich

The Woolwich is a predominantly UK-based financial services business.  It
provides a wide range of personal financial services, combined with the
provision of financial advice through one of the UK's largest independent
financial advisory (IFA) teams.  The Woolwich's emphasis has been on
innovation and the application of technology to deliver customised solutions
through its market leading Open Plan proposition.
                                                                    Period from
                                                                    25.10.00 to
                                                                       31.12.00
                                                                             £m
Net interest income                                                         119
Net fees and commissions                                                     49
Income from long-term assurance business                                      5
Other operating income                                                        4
Total income                                                                177
Total costs                                                                 (99)
Provisions for bad and doubtful debts                                        (8)
Operating profit before fair value amortisation                              70
Amortisation of fair value adjustments                                       (6)
Operating profit after fair value amortisation                               64

Operating profit for the period from 25th October to 31st December 2000 was £
70m before the amortisation of fair value adjustments (see page 11) and
includes £3m of mortgage incentives and £8m of software costs which have been
written off in accordance with Barclays accounting policies.

Net new lending on UK mortgages was £2.2bn for the year 2000, 40% higher than
last year and gross new lending was £6.7bn, both representing a market share
performance above The Woolwich's 5.3% market share of UK mortgage balances
outstanding.  As a result total UK mortgage balances rose 8.4% to £28.5bn at
the end of 2000.  The overall mortgage margin based on Barclays accounting
policies decreased slightly during the year to 0.83%.

Retail savings balances rose to £19.0bn (1999: £18.3bn) with increases being
experienced in both UK mainland and offshore operations.  This reversed
previous years' trends of net annual outflows which were the result of
competition from both established providers and new entrants to the market.
The overall deposit margin for the full year was maintained at 1.28% despite
continuing intense competition for retail funds.

Funds under management as at 31st December 2000 were £3bn, being composed of
unit trust balances and life assurance assets.

Total costs of £99m for the period included £14m ongoing strategic investment
expenditure primarily to support the Open Plan proposition as well as the cost
of Sedgwick Independent Financial Consultants which became a subsidiary in
October 2000.  The Woolwich exceeded its targeted number of Open Plan
customers for 2000 and ended the year with 544,000 (1999: 44,000) customers
with Open Plan.

Wealth Management

Wealth Management serves affluent and high net worth clients globally with
bespoke, relationship-based services in the areas of banking, asset
management, broking and long-term financial planning.  Wealth Management
serves over 1 million clients across 34 countries worldwide and manages £74bn
in client funds.  The business has extensive geographical diversity with over
a third of clients based outside the UK, mainly in France, Iberia and the
Caribbean.


                                                                2000       1999
                                                                  £m         £m
Net interest income                                              634        555
Net fees and commissions                                         590        565
Income from long-term assurance business                           5         12
Other operating income                                            26         29
Total income                                                   1,255      1,161
Total costs                                                    (721)      (738)
Provisions for bad and doubtful debts                           (12)          5
Operating profit                                                 522        428


Operating profit in Wealth Management increased 25%, or £106m, to £522m after
adjusting for the contribution of £12m from Merck Finck in 1999.  The
principal sources of profit growth were higher levels of activity in the
United Kingdom (15% to £161m), continental Europe (31% to £98m), the Caribbean
(62% to £76m) and offshore banking (23% to £184m).

Total income grew 10% to £1,255m, after adjusting for the adverse impact of
exchange rate movements and the sale of Merck Finck.

Net interest income increased 14%, or £79m, to £634m as a result of good
growth in lending and deposit balances across the businesses.  Particularly
strong growth was achieved in the UK with mortgage volumes increasing 19% and
also in continental Europe where lending and deposits grew 24% and 15%
respectively on a comparable basis.

Net fees and commissions grew 10%, or £52m, to £590m on a comparable basis.
This growth is attributable to increased investment sales, introduction of new
fee based products and higher dealing commissions.  Stockbroking volumes in
the UK increased to 8,100 average deals per day (1999: 6,600), and the leading
position in the UK, as measured by retail client orders was maintained.  The
overall growth was strong in a turbulent UK market.

Total customer funds, which include assets under management and on balance
sheet deposits, grew 9% to £74bn (1999: £68bn excluding discontinued
businesses) despite adverse market movements.  Loans to customers grew 20% to
£12bn (1999: £10bn).

Business as usual costs reduced 6%, or £46m, absorbing the impact of inflation
and volume growth through business efficiency improvements.  Strategic
investment expenditure grew £21m to £33m in 2000, arising from major
initiatives to strengthen our customer propositions.  The key features were
the development of a single banking and investment relationship for our
customers including the qualification of UK relationship managers to provide
investment advice, and the development of a seamless multi-channel service.

Across the business there are now 225,000 customers who are registered to use
internet services, (1999: 73,000).

Barclaycard

Barclaycard is the leading credit card business in Europe with operations in
the United Kingdom, Germany, France, Spain and Greece.  It offers a full range
of credit card services to individual customers, together with card payment
facilities to retailers and other businesses.


                                                                2000       1999
                                                                  £m         £m
Net interest income                                              548        488
Net fees and commissions                                         521        480
Total income                                                   1,069        968
Total costs                                                    (410)      (397)
Provisions for bad and doubtful debts                          (239)      (170)
Loss from joint ventures                                         (2)          -
Operating profit                                                 418        401



Operating profit for Barclaycard increased 4% to £418m.

Net interest income increased 12% to £548m benefiting from continued strong
growth in average UK extended credit balances which rose 19% year on year to £
5.5bn.  This compared with the market growth rate of 13%.  The proportion of
interest earning balances to non-interest earning balances was maintained at
over 70%.

The net interest margin reduced compared to 1999, mainly as a result of the
balance consolidation promotions of 2000 and the increased range of rates
available to cardholders.

Recruitment of UK retail customers improved 15% on last year to 740,000.
Barclaycard has increased its share of the market across most measures such as
interest earning balances and number of cards.

Fees and commissions increased 9% to £521m, principally reflecting cardholder
turnover which grew by 12% year on year.

Barclaycard's international businesses in Europe recorded an operating loss of
£27m (1999: loss £16m).  This resulted from increased strategic investment
expenditure and higher provisions as the business continued to grow.  Average
extended credit balances increased 58% and the number of cards in issue
overseas increased 16% to 1.2 million.

Business as usual costs fell 2% despite fraud costs rising to £37m, a 47%
increase on 1999.  Strategic investment spend increased £19m, to £59m
representing the development of information management capabilities,
international expansion and e-commerce businesses.  Barclaycard continues to
invest in chip technology and fraud identification systems to mitigate growth
in fraud.

Provisions for bad and doubtful debts increased by 41% to £239m (1999: £170m).
This increase was attributable to strong lending growth across the UK and
international businesses and reflecting high levels of recruitment over the
last two years.

Barclaycard has continued to build on its technological developments.  It was
the first UK credit card company to offer products on the web and now has
390,000 registered users of its website for on-line services.  It also has
over 80,000 active merchant relationships, of which over 4,400 are utilising
Barclaycard's payment systems to provide shopping facilities on-line.

In 2000, Barclaycard launched a joint venture with Nomura called IndigoSquare.
This is an internet- based shopping portal, designed to provide a
comprehensive and easy-to-use on-line shopping facility with products
available from 80 retailers.  The goal is to have more than 350 retailers
supplying over 5 million products to 500,000 users by the end of 2001.
IndigoSquare represents a new business opportunity providing Barclaycard with
non-traditional revenue growth.

Corporate Banking

Corporate Banking provides relationship banking to the Group's corporate
customers.  UK customers are served by a network of 1,200 specialist
relationship managers who provide access to an extensive range of products.
Corporate Banking also offers customers access to business centres in the rest
of Europe, the United States and the Middle East.  In addition, the Miami
office provides finance and correspondent banking services to the Group's
customers in Latin America.

Corporate Banking's close working relationship with Barclays Capital ensures
that customers have access to the capital markets and to specialist investment
banking products which complement the product and service range.  Corporate
Banking now encompasses a new venture Barclays B2B.com which aims to provide a
range of internet-based business services designed to change the way UK
businesses trade with one another and will, over time, provide a direct
channel for the sale and delivery of a number of business services.

Corporate Banking has a strong competitive position in the United Kingdom,
where around a quarter of middle market companies bank with Barclays.


                                                                2000       1999
                                                                  £m         £m
Net interest income                                            1,324      1,252
Net fees and commissions                                         752        690
Other operating income                                           (6)          1
Total income                                                   2,070      1,943
Total costs                                                    (870)      (863)
Provisions for bad and doubtful debts                          (124)      (120)
Loss from associated undertakings                                (6)       (13)
Operating profit                                               1,070        947


Corporate Banking operating profit increased 13% to £1,070m in 2000.  This
reflected the combined effect of continued growth in total income of 7%, a
significant increase in strategic investment and an increase in overseas
provision levels.

Net interest income rose 6%.  Average customer lending balances increased 10%
to £47bn as a result of strong growth in UK lending and in the rest of Europe.
Average customer deposit balances increased 6% to £37bn.

UK middle market lending volumes grew strongly, resulting from the
implementation of the new sales strategy, providing relationship managers with
a more focused sales management approach, together with mobile working
technology.  Lending growth was concentrated towards larger and higher quality
customers and as a result the overall quality of the portfolio has improved.
The Sales Financing product range, which includes factoring and invoice
discounting, saw rapid growth in total volumes, up 63% to £7.1bn.  This
resulted from the ongoing investment programme to develop this business.

Growth in customer lending within the rest of Europe was predominantly in the
established operations in Germany and France.  Lending exposure to Latin
America fell.

UK lending margins were maintained in line with the improved quality of the
lending portfolio.  Overseas margins were held as stability returned to Latin
American markets.

The growth in average UK deposits was stronger in branch based accounts which
attract a higher margin compared with treasury deposit products.  As a result,
the overall deposit margin was maintained, despite competitive pressures and a
reduced contribution from non-interest bearing current accounts.

Net fees and commissions increased 9% to £752m.  Lending related fees rose
strongly as a result of the growth in the use of on and off balance sheet
financing products and strong sales of products relating to structured trade
and export finance.  Money transmission income reduced slightly due to
intensifying competitive pressure.  Foreign exchange related income increased
in line with volume growth.  Increased use of electronic products, such as
BusinessMaster, has led to over 35% of UK corporate customers now being
registered for these services.

The loss from associated undertakings primarily reflected the Group's
Brazilian associate, Banco Barclays e Galicia SA.

Costs excluding strategic investment fell 6%, with the continued reduction in
headcount and the sale of Dial (the contract hire business) in June 2000 being
contributory factors.  There was a significant increase in strategic
investment to £93m (1999: £37m) including investment in Barclays B2B.com and
enhancements to the Corporate Banking middle market franchise.

Together with Accenture and Oracle, Barclays B2B.com was created in 2000 to
e-enable the delivery of business services to companies with a turnover of
between £5m and £250m.  Its initial offering, the Barclays B2B exchange, has
created a secure marketplace enabling buyers and sellers to benefit from lower
processing costs and increased management control in their business
transactions.  Barclays B2B.com had over 2,000 businesses registered to trade
on-line at the end of 2000.

The net provisions charge increased to £124m (1999: £120m) and included a
charge for two larger non-UK items.  The net charge was also impacted by lower
levels of releases and recoveries at £76m (1999 £85m).  UK provisions, while
showing a slightly rising trend, currently remain at relatively low levels.

Barclays Capital

Barclays Capital conducts the Group's investment banking business.  It
operates in the wholesale markets to provide corporate, institutional and
government clients with solutions to their financing and risk management
needs.  Barclays Capital is the Group's principal point of access to the
wholesale markets and provides financing and risk management products to the
Group's other businesses.

The Barclays Capital business model focuses on two broad areas of activity
where the Group has a strong and growing competitive presence: Rates, which
includes sales, trading and research relating to government bonds, money
markets, foreign exchange, commodities, and their related derivative
instruments; and Credit, which includes origination, sales, trading and
research relating to loans, securitised assets, corporate bonds and their
related derivative instruments, equity derivatives and private equity
investment.

During 2000 Barclays Capital continued to capture profitable growth
opportunities, especially in continental Europe, where the capital markets are
developing rapidly following the introduction of the euro.


                                                                2000       1999
                                                                  £m         £m
Net interest income                                              483        400
Dealing profits                                                  672        549
Net fees and commissions                                         268        163
Other operating income                                            39         40
Total income                                                   1,462      1,152
Total costs                                                    (998)      (805)
Provisions for bad and doubtful debts                           (61)       (36)
Operating profit                                                 403        311

Operating profit increased 30% to £403m reflecting continued strong
performance in both the Rates and the Credit businesses.  The growth in
profits was achieved despite difficult market conditions in the second half of
2000.

Dealing profits rose 22%, or £123m, to £672m.  The Rates businesses continued
to perform well, in particular interest rate derivatives.  In the Credit
businesses, equity derivatives and credit repackaging made good contributions
but in the second half these were offset in part by difficult market
conditions in the secondary bond market due to the widening of credit spreads.

Risk management continued to be an important focus as operating profit growth
significantly exceeded the increase in risk utilisation; average daily value
at risk (DVaR) increased 9%, while weighted risk assets rose 7%.

Net interest income increased 21% to £483m primarily as a result of continued
strong growth in revenues from structured capital markets and the credit
portfolio.

Net fees and commissions rose 64% to £268m reflecting the increased number and
size of transactions completed in the Credit businesses.  Fees and commission
growth was strong across all the Credit businesses, in particular primary
loans, primary bonds and structured capital markets.  Primary loans activity
included large acquisition related lending across Europe, America and Asia,
whilst in primary bonds, Barclays Capital strengthened its position in euros
and maintained its leading position in sterling new issues.

Provisions for bad and doubtful debts grew 69% to £61m (1999: £36m) and were
mainly related to overseas exposures.

Total costs rose 24% to £998m (1999: £805m).  Revenue related costs grew due
to higher performance related remuneration.  There was also increased
strategic investment in product, client coverage and distribution
capabilities, most notably the distribution and coverage networks in Germany,
France and Switzerland.

Business as usual costs increased 4%, mainly reflecting growth in headcount in
the second half of the year.  Headcount increased by 8% over the previous
year.

Barclays Global Investors

Barclays Global Investors (BGI) is the world's largest institutional asset
manager, delivering high value investment products and strategies to clients
by managing all dimensions of performance: return, risk and cost.  BGI offers
innovative and competitive investment products in both the advanced active and
index categories as well as value chain extensions such as securities lending,
cash management, securities crossing and portfolio restructuring.  BGI counts
some of the most sophisticated investing institutions in the world among its
1,800 clients, in over 36 countries.


                                                               2000        1999
                                                                 £m          £m
Net fees and commissions                                        435         318
Net interest income                                              10           6
Other operating income                                          (1)           1
Total income                                                    444         325
Total costs                                                   (379)       (281)
Loss from associated undertakings                                 -         (1)
Operating profit                                                 65          43


Operating profit grew 51% to £65m in a year of major investments and flat or
declining markets in most parts of the business.  This was mainly as a result
of a 37% growth in fees and commissions.  This revenue growth resulted from
strong active product growth and performance, which generated significant
incentive fees (active fees comprised almost 50% of total fees and
commissions).  There was also strong securities lending revenue growth,
reflecting value chain extension strategies to enhance the profitability of
indexing.

Total assets under management grew 13% to £550bn from £486bn at 31st December
1999; £34bn of the increase was attributable to net new business and £30bn was
attributable to market and exchange rate translation movements.  Assets under
management consist of £435bn of indexed funds and £115bn under advanced active
management.  Most geographical regions experienced good growth in assets.

The strong profit performance was achieved notwithstanding a 21% increase in
business as usual costs which reflected the growth in business volumes.
Strategic investment expenditure increased to £51m (1999: £35m) with
investments aimed at ensuring sustained growth and increased market share in
one of the fastest growing sectors in the financial services industry.
Revenue related costs grew £31m with a 53% increase in performance related
remuneration reflecting the strong revenue and profit performance for the
year.

Notable accomplishments in 2000 include a successful and extensive launch of
iShares (exchange-traded funds) in the US, UK and Canada; the introduction of
several new Advanced Active products in the US, UK and Europe; and
first-to-market internet-based product and service offerings that both open
new markets to BGI and enhance client service.

Other operations

Property management includes Barclays Group Property Services which is
responsible for the management of the Group's operational premises and
property related services.  Property costs also include the central
administration of certain operational property costs.

Central services includes a variety of activities which support the operating
businesses and Service Provision which provides central information technology
services.

Management of Group capital is the earnings on that part of the Group's
capital which is not allocated to business groups.  Allocations to business
groups are based generally on weighted risk assets.  The Group maintains
hedges with respect to its capital and its current account balances, which are
designed both to reduce the impact of short-term interest rate fluctuations on
profits and to increase profitability over the interest rate cycle.  The
hedges increase profitability when average short-term interest rates are lower
than average medium-term interest rates and depress profitability when average
short-term interest rates are higher than average medium-term interest rates.
Management of Group capital also includes residual balances arising from
centrally managed transition activities.


                                                               2000        1999
                                                                 £m          £m
Property management                                              41          21
Central services                                               (75)        (52)
Management of Group capital                                      33          44
Operating profit                                                (1)          13



The increased surplus on Property management reflects an increase in the
profit on disposal of properties (2000: £11m, 1999: £3m) and an increase in
costs recharged to Group businesses.  The Central services deficit for the
year increased by £23m as a result of increased strategic investment in
e-commerce and other infrastructure technology by Service Provision.



The surplus reported in Management of Group capital is attributable to credits
arising in transition businesses that are managed centrally.  These have been
partly offset by a deficit from the central management of Group capital,
compared with a surplus in 1999.  This is mainly attributable to increased
interest allocations to business groups, reflecting higher short term interest
rates and increased usage of regulatory capital by individual businesses
(partly as a result of the acquisition of The Woolwich).  The basis of
allocation to the businesses remains in line with previous years.  Lower
average medium term rates have also had an adverse effect on the earnings from
capital balances as have the costs of share buy-backs.

Head office functions

Head office functions comprises the Group's central executive, Group finance,
corporate communications, human resources and Group risk.


                                                         2000             1999
                                                           £m               £m
Operating cost                                           (93)             (77)

Restructuring charge

                                                                2000       1999
                                                                  £m         £m

Staff costs                                                      171        192
Administrative expenses - other                                   61        152
                                                                 232        344


Of the total restructuring charge of £232m, £134m relates to Retail Financial
Services with the remainder arising mainly in Corporate Banking and Central
Services.

The staff costs charge of £171m relates to some 2,700 job reductions in 2000
and a further 2,100 staff who were in the process of being served notice at
31st December 2000.

Expenditure of £166m was incurred in the year against the provisions raised
for the 1999 programme and a further £118m in respect of the 2000 programme.
Accrued provision at 31st December 2000 amounted to £132m.

Woolwich integration costs

                                                                2000       1999
                                                                  £m         £m

Staff costs                                                        1          -
Administration expenses - other                                    6          -
                                                                   7          -


Total integration costs, including those incurred in 2000 in respect of The
Woolwich acquisition, are expected to be in the order of £200m by the end of
2003.

Integration synergies

The scheme document and listing particulars in respect of the acquisition of
The Woolwich issued on 4th September 2000, set out expected synergy benefits
in relation to both revenue and costs by the end of 2003.

As a result of further work carried out following the acquisition of The
Woolwich, these estimates have been revised.  The Group expects to realise
pre-tax synergies of more than £400m from 1st January 2004.  This is
represented by pre-tax annual cost savings of £150m and pre-tax revenue
synergies, net of attributable costs, of at least £250m.  These revised
estimates are shown in the table below.

Pre-tax profit and loss impact of synergies (from 1st January 2004)


                                                  Announced        Revised plan

                                                         £m                  £m
Gross revenue synergies                                                     360
Attributable operating costs                                              (110)
Net revenue synergies                                    90                 250
Cost savings                                            150                 150
Total pre-tax effect                                    240                 400


The revised plan profit and loss impact is compared to the base position
announced at the time of The Woolwich acquisition.

The above estimated synergies are forward looking statements within the
meaning of the United States Private Securities Litigation Reform Act 1995
(see page (i)).

Value Based Management

In 2000, Barclays introduced Value Based Management (VBM) to align management
decision taking at all levels of the Barclays Group with the interests of its
shareholders.  The adoption of VBM goes beyond metrics and targets, to involve
a fundamental change in virtually all aspects of management, from strategy
development and resource allocation through to organisation structure and
people management.

VBM has brought additional discipline and focus to strategy development and
business planning.  The businesses have undertaken a revised strategy
development process based on generation of alternative business models to
enable identification and selection of the value-maximising alternatives.  The
aim is to focus on profitable growth in all our businesses by systematically
looking for opportunities to achieve it.

During 2000, significant changes were announced to the Group's organisation
structure, moving from five major business groups to an organisation based on
smaller strategic business units, or SBUs, which are supported by shared
services.  Each SBU is tasked with identifying and implementing
value-maximising strategies, and achieving these by creating advantage for
customers, through superior products and services.  We will be reporting on
this new structure in 2001.

Shareholder Returns

In order to manage for value, demanding performance goals have been
established which are explicitly linked to shareholder value and are
consistent with being a top-tier performer.  These performance goals are
specified in terms of two primary measures of shareholder value performance:
growth in economic profits and total shareholder returns relative to peers.

Economic Profit

Economic profit is the post-tax attributable profit generated by a business
over and above the cost of capital.  A business or activity that generates a
positive economic profit creates value for our shareholders, whereas a
business that generates a negative economic profit destroys value.

Economic profit for the Group is defined as profit after tax and minority
interests less a charge for the cost of average shareholders' funds.  This is
calculated using a capital asset pricing model.  The assumptions made include
estimates of the future equity market risk premium of 4.5% and the relative
risk of Barclays shares compared to the FTSE, measured by beta.  A forward
looking beta of 1.2 has been used.  Our target is to double the economic
profit of the Group every four years.


                                                                2000       1999
                                                                  £m         £m
Profit after tax and minority interests                        2,473      1,897

Average shareholders' funds*                                   8,922      8,286
Post tax cost of equity                                          11%        11%
Cost of average shareholders' funds                            (981)      (911)
Economic profit                                                1,492        986



* In 2000, average shareholders' funds excludes unamortised goodwill.

In 1999 profit after tax and minority interests excluded the charge for the
write-back of goodwill on disposals of £138m.

Economic profit as defined above but risk adjusted (replacing credit risk
provisions with risk tendency (see page 47) was £1,388m (1999: £911m).

Economic capital

Economic capital, which is distinct from regulatory capital, is a management
tool that estimates risk on the basis of contribution to overall Group
volatility.  The higher the volatility, and hence risk, the more capital is
required.  Economic capital is the basis of calculating the cost of risk used
to derive economic profit in SBUs.

The calculation of economic capital is an integral part of the work to
introduce the VBM principles and is being further developed as part of the
process.

Total Shareholder Returns

Total Shareholder Returns (TSRs) are defined as the combination of share price
appreciation and dividend yield realised by investors.  Our target is to
achieve and sustain top quartile TSRs relative to our comparators.


                                                     Year to 31st December 2000

Barclays TSR                                                              20.6%
Comparator Group* TSR                                                     21.0%


*    Abbey National, ABN Amro, Bank of Scotland, Citigroup, Halifax, HSBC,
Lloyds TSB, Prudential, Royal Bank of Scotland, Standard Chartered and UBS.

Risk tendency

The Group uses a grading structure which estimates the probability of default
by different categories.  This, together with similar risk calibration of
categories of personal sector lendings, is used from the overall lending
portfolio averaged across the economic cycle (termed risk tendency).

Risk tendency estimates assist in portfolio management decisions, such as
exposure limits to any single counterparty or borrower, the desired aggregate
exposure levels to individual sectors and pricing policy.  These estimates
also provide a guide to changes in the underlying credit quality of the
lending portfolio over time.

Based upon the composition of the lending portfolio as at 31st December 2000,
the underlying level of risk tendency, averaged across the economic cycle, is
estimated at around £1,030m (31st December 1999: £750m).  The methodology has
been refined to provide a more forward looking view across the economic cycle.

Risk tendency rose £280m during the year including an amount in respect of all
portfolios, with The Woolwich estimated to be around £80m.  The increase
excluding The Woolwich is primarily as a result of growth in the credit card
portfolio at Barclaycard and the consumer lending portfolio in Retail
Financial Services and some methodology changes to make the models more
forward looking.  There has also been an increase at Barclays Capital due to
methodology enhancements and some asset growth.  The growth in UK corporate
lending has been concentrated towards high quality customers and the increase
in Corporate Banking risk tendency is largely as a result of asset growth.


                                                         Risk             Risk
                                                     Tendency         Tendency
                                                     31.12.00         31.12.99
                                                           £m               £m
Retail Financial Services*                                485              325
Barclaycard                                               235              170
Corporate Banking                                         225              210
Barclays Capital                                           85               45
                                                        1,030              750



*    Including The Woolwich estimated to be around £80m.