Interim Results - Part 4 of 4

Barclays PLC 2 August 2001 PART 4 BARCLAYS PLC NOTES (UNAUDITED) 1. Loans and advances to banks 30.06.01 31.12.00 30.06.00 £m £m £m Banking business United Kingdom 6,549 3,345 3,763 Other European Union 2,130 2,042 2,201 United States 1,501 2,056 1,684 Rest of the World 1,992 2,153 2,060 12,172 9,596 9,708 Less - provisions (23) (26) (30) 12,149 9,570 9,678 Trading business 38,207 26,856 30,607 Total loans and advances to banks 50,356 36,426 40,285 Of the total loans and advances to banks, placings with banks were £ 40.7bn at 30th June 2001 (31st December 2000: £32.2bn, 30th June 2000: £ 36.5bn) Placings with banks include reverse repos of £31.3bn (31st December 2000: £25.6bn, 30th June 2000: £27.8bn). The majority of the placings have a residual maturity of less than one year. 2. Loans and advances to customers 30.06.01 31.12.00 30.06.00 £m £m £m Banking business: United Kingdom 121,549 115,314 82,026 Other European Union 11,052 10,203 6,315 United States 6,081 6,376 5,527 Rest of the World 5,877 8,950 8,149 144,559 140,843 102,017 Less - provisions (2,476) (2,327) (2,039) - interest in suspense (84) (93) (85) 141,999 138,423 99,893 Trading business 37,268 23,687 34,547 Total loans and advances to 179,267 162,110 134,440 customers Of the total loans and advances to customers, reverse repos were £ 29.7bn (31st December 2000: £20.8bn, 30th June 2000: £28.2bn). Half-year ended 3. Provisions for bad and doubtful debts 30.06.01 31.12.00 30.06.00 £m £m £m Provisions at beginning of period 2,353 2,069 1,983 Acquisitions and disposals 26 119 - Exchange and other adjustments (17) (2) 6 Amounts written off United Kingdom (368) (283) (312) Other European Union (12) (13) (32) United States (7) (26) - Rest of the World (6) (12) (5) (393) (334) (349) Recoveries (analysed below) 32 60 53 Sub-total 2,001 1,912 1,693 Provisions charged against profit: New and increased specific provisions United Kingdom 477 403 440 Other European Union 18 17 18 United States 46 9 18 Rest of the World 27 55 21 568 484 497 Less: Releases of specific provisions United Kingdom (26) (31) (24) Other European Union (5) (7) (10) United States (3) (4) (2) Rest of the World (10) (7) (6) (44) (49) (42) Less: Recoveries United Kingdom (28) (55) (45) Other European Union (2) (3) (3) United States (1) - (4) Rest of the World (1) (2) (1) (32) (60) (53) Net specific provisions charge 492 375 402 General provision - charge/(release) 6 66 (26) Net provision charge to profit 498 441 376 Provisions at end of period 2,499 2,353 2,069 Total provisions for bad and doubtful debts at end of period comprise: Specific United Kingdom 1,434 1,343 1,184 Other European Union 108 112 105 United States 58 20 41 Rest of the World 132 118 88 Total specific provisions 1,732 1,593 1,418 General provisions 767 760 651 2,499 2,353 2,069 The geographic analysis of provisions shown above is based on location of office. 4. Other assets 30.06.01 31.12.00 30.06.00 £m £m £m Own shares 6 5 5 Balances arising from off-balance sheet financial instruments 12,958 12,100 12,763 Shareholders' interest in long-term assurance fund 884 820 607 London Metal Exchange warrants and other metals trading positions 829 1,001 190 Sundry debtors 2,039 1,592 1,723 Prepayments and accrued income 2,864 2,827 2,183 19,580 18,345 17,471 'Own shares' represent Barclays PLC shares held in employee benefit trusts that have not yet vested unconditionally with the eligible employees. 5. Other liabilities 30.06.01 31.12.00 30.06.00 £m £m £m Obligations under finance leases payable 166 159 148 Balances arising from off-balance sheet financial instruments 12,466 11,971 13,130 Short positions in securities 25,320 21,201 21,343 Current tax 768 642 521 Cash receipts from securitisation 686 747 994 Sundry creditors 4,302 3,464 3,188 Accruals and deferred income 3,988 4,457 3,289 Provisions for liabilities and charges 1,288 1,266 1,202 Dividend 383 632 295 49,367 44,539 44,110 Cash receipts from securitisation are in respect of the securitisation of a portfolio of investment debt securities which, did not qualify for linked presentation under Financial Reporting Standard 5. 6. Potential credit risk lendings The following table presents an analysis of potential credit risk lendings in accordance with the US Securities and Exchange Commission guidelines. Additional categories of disclosure are included, however, to record lendings where interest continues to be accrued and where either interest is being suspended or specific provisions have been raised. Normal US banking practice would be to place such lendings on non-accrual status. The amounts, the geographical presentation of which is based on the location of the office recording the transaction, are stated before deduction of the value of security held, specific provisions carried or interest suspended. Non-performing lendings 30.06.01 31.12.00 30.06.00 £m £m £m Non-accrual lendings: United Kingdom 1,263 1,223 1,143 Other European Union 93 96 94 United States 289 119 74 Rest of the World 129 101 92 Accruing lendings where interest is being suspended: United Kingdom 352 351 297 Other European Union 48 36 11 United States - - - Rest of the World 181 109 92 Other accruing lendings against which provisions have been made: United Kingdom 1,008 873 336 Other European Union 25 71 40 United States 13 2 10 Rest of the World 80 76 62 Sub-totals: United Kingdom 2,623 2,447 1,776 Other European Union 166 203 145 United States 302 121 84 Rest of the World 390 286 246 Accruing lendings 90 days overdue, against which no provisions have been made: United Kingdom 248 296 330 Other European Union 1 1 1 United States - - - Rest of the World 30 17 15 Reduced rate lendings: United Kingdom 5 6 7 Other European Union - - - United States - - - Rest of the World 1 - - 30.06.01 31.12.00 30.06.00 £m £m £m Total non-performing lendings United Kingdom 2,876 2,749 2,113 Other European Union 167 204 146 United States 302 121 84 Rest of the World 421 303 261 3,766 3,377 2,604 30.06.01 31.12.00 30.06.00 £m £m £m Potential problem lendings United Kingdom 780 728 621 Other European Union 13 2 1 United States 66 313 46 Rest of the World 106 64 44 965 1,107 712 30.06.01 31.12.00 30.06.00 % % % Provision coverage of non-performing lendings United Kingdom 68.5 70.8 82.1 Other European Union 88.6 75.5 93.2 United States 63.2 71.1 91.7 Rest of the World 65.1 85.5 78.9 Total 68.6 72.4 82.7 30.06.01 31.12.00 30.06.00 % % % Provision coverage of total potential credit risk lendings United Kingdom 53.9 56.0 63.5 Other European Union 82.2 74.8 92.5 United States 51.9 19.8 59.2 Rest of the World 52.0 70.6 67.5 Total 54.6 54.5 65.0 The geographical coverage ratios reflect an allocation of general provisions. The United Kingdom coverage ratios at December reflected the incorporation of Woolwich plc where the high level of security held against the exposures reduces the level of provisions required. The increase in classified loans and reduction in coverage ratios for the Rest of the World largely reflects the inclusion for 2001 of the Brazilian operation Banco Barclays e Galicia SA. Half-year ended 30.6.01 31.12.00 30.6.00 Interest forgone on non-performing £m £m £m lendings: Interest income that would have been recognised under original contractual terms 151 143 103 Interest income included in profit (27) (29) (19) Interest forgone 124 114 84 7. Exposure to countries subject to International Monetary Fund liquidity support programmes Amounts outstanding, net of provisions, and commitments to counterparties in countries which make significant use of International Monetary Fund liquidity support programmes were as follows: 30.06.01 31.12.00 30.06.00 Europe £bn £bn £bn Turkey 0.2 * * Asia Indonesia 0.1 0.1 0.1 South Korea 0.3 0.2 0.2 Thailand 0.0 0.1 0.1 0.4 0.4 0.4 Latin America Argentina 0.5 0.9 * Brazil * * 0.8 Mexico * * 0.8 0.5 0.9 1.6 Total 1.1 1.3 2.0 * Non reportable The total comprises: 30.06.01 31.12.00 30.06.00 £bn £bn £bn Banks 0.7 0.8 1.2 Governments and sovereigns 0.1 0.1 0.2 Corporates and project financings 0.3 0.4 0.6 1.1 1.3 2.0 The Group has a 50% shareholding in Banco Barclays e Galicia SA which since 1st January 2001 has been consolidated as a subsidiary. As at 31st December 2000 this holding was included in the balance sheet as an associated undertaking at a value of £31m (31st December 1999: £33m). From 1st January 2001, following the completion of management changes, the Group considered itself to exert dominant influence so that it had control over the operations of Banco Barclays e Galicia SA. The entity is now consolidated as a subsidiary in accordance with Financial Reporting Standard 2. During the first half of 2001 the general provision in respect of country transfer risk arising from the Group's business world wide, including exposures in these countries, reduced to £56m (£57m as at 31st December 2000). This is in addition to £711m of general provision held against credit risk. 8. Cross-border outstandings At 30th June 2001 countries where Barclays cross-border outstandings exceeded 1% of assets were Germany, United States and France. In this context, assets comprise total assets as presented in the consolidated balance sheet and include acceptances. On this basis total assets amounted to £366,286m at 30th June 2001 (31 December 2000 £317,325m). Cross-border outstandings exceeding 1% of assets As % Total of assets £m At 30th June 2001 Germany 2.0 7,355 United States 1.8 6,766 At 31st December 2000 Germany 2.4 7,505 United States 1.9 6,104 Japan 1.1 3,493 As at 30th June 2001, the countries with aggregate cross-border outstandings between 0.75% and 1% of total Group Assets were France at £3,584m, Netherlands at £3,556m and Japan at £2,314m. At 31st December 2000 the countries in this category were Netherlands £3,174m and France £2,571m. 9. European Economic and Monetary Union (EMU) Barclays is maintaining a prudent programme to validate and develop further its existing plans and to conduct feasibility studies with selected suppliers and partners. Given the considerable uncertainty that continues to surround whether and when the UK may enter, it has not been possible to draw any definitive conclusions as to the final overall cost of preparing retail systems and operations. 10. Legal proceedings Barclays is party to various legal proceedings, the ultimate resolution of which is not expected to have a material adverse effect on the financial position of the Group. 11. Geographical Analysis Half-year ended 30.06.01 31.12.00 30.06.00 £m £m £m Profit before tax United Kingdom 1,509 1,327 1,432 Other European Union 199 202 196 United States 88 5 67 Rest of the World 127 120 147 1,923 1,654 1,842 Total assets United Kingdom 267,129 234,099 195,319 Other European Union 21,724 20,009 17,214 United States 49,139 38,662 47,777 Rest of the World 25,958 23,420 26,075 363,950 316,190 286,385 12. Contingent liabilities and commitments 30.06.01 31.12.00 30.06.00 Contingent liabilities £m £m £m Acceptances and endorsements 2,373 1,170 1,494 Guarantees and assets pledged as collateral security 14,498 15,180 17,241 Other contingent liabilities 6,178 6,503 5,953 23,049 22,853 24,688 Commitments Standby facilities, credit lines and other commitments 94,184 87,971 93,219 13. Off - balance sheet financial instruments, including derivatives The tables set out below analyse the contract or underlying principal amounts of derivative financial instruments held for trading purposes and for the purposes of managing the Group's structural exposures. 30.06.01 31.12.00 30.06.00 Foreign exchange derivatives £m £m £m Contract or underlying principal amount Forward foreign exchange 287,125 240,435 266,155 Currency swaps 143,769 125,812 106,463 Other exchange rate related contracts 83,084 105,603 91,943 513,978 471,850 464,561 Interest rate derivatives . Contract or underlying principal amount Interest rate swaps 1,461,078 1,247,705 1,151,077 Forward rate agreements 55,844 39,939 26,963 OTC options bought and sold 471,075 377,565 345,312 Other interest rate related contracts 821,909 460,674 328,378 2,809,906 2,125,883 1,851,730 Equity, stock index and commodity derivatives Contract or underlying principal amount. 102,867 101,516 105,231 Other exchange rate related contracts are primarily over the counter (OTC) options. Other interest rate related contracts are primarily exchange traded options and futures. Derivatives entered into as trading transactions, together with any associated hedging thereof, are measured at fair value and the resultant profits and losses are included in dealing profits. The tables below summarise the positive and negative fair values of such derivatives, including an adjustment for netting where the Group has the ability to insist on net settlement which is assured beyond doubt, based on a legal right that would survive the insolvency of the counterparty. Positive fair values 30.06.01 31.12.00 30.06.00 £m £m £m Foreign exchange derivatives 9,337 9,511 7,440 Interest rate derivatives 24,073 21,967 16,470 Equity, stock index and commodity derivatives 2,082 1,817 2,066 Effect of netting (22,343) (20,748) (13,213) Cash collateral meeting offset criteria (191) (447) - 12,958 12,100 12,763 Negative fair values 30.6.01 31.12.00 30.6.00 £m £m £m Foreign exchange derivatives 8,779 9,685 8,080 Interest rate derivatives 24,313 21,229 16,026 Equity, stock index and commodity derivatives 2,126 2,588 2,237 Effect of netting (22,343) (20,748) (13,213) Cash collateral meeting offset criteria (409) (783) - 12,466 11,971 13,130 14. Market risk Market risk is the risk of loss arising from adverse movements in the level or volatility of market prices, which can occur in the interest rate, foreign exchange, equity and commodity markets. It is incurred as a result of both trading and asset/liability management activities. The market risk management policies of the Group are determined by the Group Risk Management Committee, which also determines overall market risk appetite. The Group's policy is that exposure to market risk arising from trading activities is concentrated in Barclays Capital. The Group's banking businesses are also subject to market risk, which arises in relation to non-trading positions, such as capital balances, demand deposits and customer originated transactions and flows. The Group uses a 'value at risk' measure as the primary mechanism for controlling market risk. Daily Value at Risk (DVAR) is an estimate, with a confidence level of 98%, of the potential loss which might arise if the current positions were to be held unchanged for one business day. Daily losses exceeding the DVAR figure are likely to occur, on average, only twice in every one hundred business days. Actual outcomes are monitored regularly to test the validity of the assumptions made in the calculation of DVAR. Barclays Capital trading activities In Barclays Capital, the formal process for the management of risk is through the Barclays Capital Risk Management Committee. Day-to-day responsibility for market risk lies with a dedicated global market risk management unit that operates independently of the business areas. Barclays Capital uses the historical simulation method for calculating DVAR. The length of the historical sample is two years. In August 2000, Barclays Capital introduced an enhanced historical simulation methodology for calculating DVAR. The previous methodology segregated interest rate exposures into two categories: government and non-government. For risk measurement purposes, all non-government exposures were assumed to trade at LIBOR, and were therefore implicitly assumed to have the same price volatility as an interest rate swap. The new methodology maps interest rate exposures into eight categories: government, interest rate swaps and six credit grades for non-government exposures. The greater definition provided allows the system to discriminate between the market risk of holding bonds with different credit qualities, for example AAA securities as against non-investment grade securities. In particular, it provides a better measure of the effectiveness of hedging strategies such as shorting governments or swaps against non-government bond portfolios. It has not been possible to apply the new methodology retrospectively to daily positions prior to August 2000 and so the figures tabulated below are based on the old methodology. On this basis there has been no significant change in overall market risk exposure in 2001 with DVAR averaging £17.0m for the first half of 2001 compared to £17.1m for the second half of 2000. The new basis compared to the old basis, has on average, led to an increase in reported DVAR of £3.1m. The impact has ranged from a reduction of £0.3m to an increase of £6.0m. As at 30th June 2001 DVAR was £22.9m under the new basis and £22.2m under the old basis (old basis, 31st December 2000 £19.0m, 30th June 2000 £12.7m). DVAR Half-year ended 30.06.01 Average High* Low* £m £m £m Interest rate risk 16.2 22.3 10.3 Foreign exchange risk 1.8 5.1 0.6 Equities risk 3.8 6.4 2.1 Commodities risk 2.0 3.1 0.9 Diversification effect (6.8) Total DVAR 17.0 22.2 11.4 DVAR Half-year ended Half-year ended 31.12.00 30.06.00 Average High* Low* Average High* Low* £m £m £m £m £m £m Interest rate risk 16.3 23.4 11.3 16.1 23.7 10.7 Foreign exchange risk 2.6 4.3 1.8 3.2 4.7 1.9 Equities risk 4.1 7.1 2.2 3.7 6.3 1.4 Commodities risk 1.5 3.5 0.9 1.3 1.7 1.0 Diversification effect (7.4) (6.4) Total DVAR 17.1 24.5 12.4 17.9 27.7 11.5 * The high (and low) DVAR figures reported for each category did not necessarily occur on the same day as the high (and low) DVAR reported as a whole. A corresponding diversification effect cannot be calculated and is therefore omitted from the above table. AVERAGE BALANCE SHEET AND NET INTEREST INCOME (UNAUDITED) 30.06.01 30.06.01 30.06.01 30.06.00 30.06.00 30.06.00 Average Interest Average Average Interest Average Balance Rate Balance Rate Assets £m £m % £m £m % Treasury bills and other eligible bills: In offices in the UK 3,427 88 5.1 4,839 83 3.4 In offices outside 1,100 47 8.5 814 44 10.8 the UK Loans and advances to banks: In offices in the UK 6,829 174 5.1 7,745 205 5.3 In offices outside 6,001 158 5.3 6,703 191 5.7 the UK Loans and advances to customers: In offices in the UK 114,205 4,312 7.6 75,388 3,111 8.3 In offices outside 25,080 798 6.4 18,577 564 6.1 the UK Lease receivables: In offices in the UK 4,459 137 6.1 4,845 174 7.2 In offices outside 230 10 8.7 510 28 11.0 the UK Debt securities: In offices in the UK 34,356 1,043 6.1 23,737 711 6.0 In offices outside 5,130 173 6.7 12,743 380 6.0 the UK Average assets of 200,817 6,940 6.9 155,901 5,491 7.0 banking business Average assets of 139,933 3,031 4.3 96,014 2,173 4.5 trading business Total average 340,750 9,971 5.9 251,915 7,664 6.1 interest earning assets Provisions (2,446) (2,054) Non-interest earning 47,875 44,269 assets Total average assets and Interest income 386,179 9,971 5.2 294,130 7,664 5.2 Percentage of total average assets in offices 30.3 33.3 outside the UK Average interest earning assets and net interest income: Banking business 200,817 3,006 3.0 155,901 2,473 3.2 Trading business 139,933 (92) (0.1) 96,014 (122) (0.3) Discount rate adjustment on (2) - - (4) - provisions Profit on repurchase - - - 2 - of loan capital Total average interest earning assets and net 340,750 2,912 1.7 251,915 2,349 1.9 interest income Total average interest earning assets related to: Interest income 9,971 5.9 7,664 6.1 Interest expense (7,057) (4.2) (5,313) (4.2) Discount rate (2) - (4) - adjustment on provisions Profit on repurchase of loan capital - - 2 - 2,912 1.7 2,349 1.9 Notes (i) Loans and advances to customers and banks include all doubtful lendings, including non-accrual lendings. Interest receivable on such lendings has been included to the extent to which either cash payments have been received or interest has been accrued in accordance with the income recognition policy of the Group. (ii) Average balances are based upon daily averages for most UK banking operations and monthly averages elsewhere. (iii) The average balance sheet does not include the retail life-fund assets attributable to policyholders nor the related liabilities. AVERAGE BALANCE SHEET AND NET INTEREST INCOME (UNAUDITED) 30.06.01 30.06.01 30.06.01 30.06.00 30.06.00 30.06.00 Average Interest Average Average Interest Average balance rate balance Rate Liabilities and shareholders' £m £m % £m £m % funds Deposits by banks: In offices in the UK 27,644 613 4.4 19,153 440 4.6 In offices outside the UK 12,249 232 3.8 12,877 243 3.8 Customer accounts - demand accounts: In offices in the UK 13,704 113 1.6 13,225 89 1.3 In offices outside the UK 1,797 21 2.3 1,754 24 2.7 Customer accounts - savings accounts: In offices in the UK 36,365 606 3.3 25,403 453 3.6 In offices outside the UK 1,348 29 4.3 1,275 31 4.9 Customer accounts - Other time deposits - retail: In offices in the UK 36,881 1,002 5.4 26,019 754 5.8 In offices outside the UK 5,764 140 4.9 5,384 144 5.3 Customer accounts - Other time deposits - wholesale: In offices in the UK 29,616 669 4.5 23,484 584 5.0 In offices outside the UK 8,452 215 5.1 8,776 239 5.4 Debt securities in issue: In offices in the UK 29,326 784 5.3 15,820 398 5.0 In offices outside the UK 9,455 254 5.4 7,759 229 5.9 Dated and undated loan capital and other subordinated liabilities Principally in offices in the 7,030 237 6.7 4,369 155 7.1 UK Internal funding of trading (39,515) (981) 5.0 (29,389) (765) 5.2 business Average liabilities of 180,116 3,934 4.4 135,909 3,018 4.4 banking business Average liabilities of 139,403 3,123 4.5 97,058 2,295 4.7 trading business Total average interest bearing liabilities 319,519 7,057 4.4 232,967 5,313 4.6 Interest free customer deposits: In offices in the UK 10,417 9,136 In offices outside the UK 2,051 1,666 Other non-interest bearing 38,830 40,896 liabilities Minority interests and shareholders' funds 15,362 9,465 Total average liabilities, shareholders' funds and interest expense 386,179 7,057 3.7 294,130 5,313 3.6 Percentage of total average Non-capital liabilities in offices Outside the UK 30.4 31.2 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' FUNDS (UNAUDITED) Half-year ended 30.06.01 31.12.00 30.06.00 £m £m £m Share capital At beginning of period 1,662 1,477 1,495 Shares issued 2 185 2 Repurchase of shares - - (20) At end of period 1,664 1,662 1,477 Share premium account At beginning of period 4,950 1,606 1,583 Premium arising on shares issued 38 3,344 23 At end of period 4,988 4,950 1,606 Revaluation reserve At beginning of period 35 37 37 Exchange rate translation differences - (2) - At end of period 35 35 37 Capital redemption reserve At beginning of period 227 227 207 Repurchase of ordinary shares - - 20 At end of period 227 227 227 Other capital reserve At beginning of period 469 469 320 Redemption of preference shares of subsidiary undertaking 148 - 149 At end of period 617 469 469 Profit retained At beginning of period 5,844 5,421 4,841 Profit retained 924 521 1,025 Exchange rate translation differences - (8) 27 Repurchase of ordinary shares - - (291) Transfer to capital redemption reserve - - (20) Shares issued to the Quest in relation to share option schemes for staff (15) (102) (12) Transfer to other capital reserve (148) - (149) Other Items (30) 12 - At end of period 6,575 5,844 5,421 Total reserves 12,442 11,525 7,760 Total shareholders' funds 14,106 13,187 9,237 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (UNAUDITED) Half year ended 30.06.01 31.12.00 30.06.00 £m £m £m Profit attributable to the members of Barclays PLC 1,307 1,153 1,320 Exchange rate translation differences (1) (12) 27 Other items (10) 8 - Joint ventures and associated undertakings (19) 6 - Total recognised gains and losses recognised during 1,277 1,155 1,347 the period Historical cost profits and losses There is no material difference between profit before tax and profit retained, as reported, and historical cost profits. CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED) Half-year Full year Note 30.06.01 30.06.01 30.6.01 30.6.01 31.12.01 31.12.01 £m £m £m £m £m £m Net cash inflow from operating activities 1 2,484 7,766 8,486 Dividends received from associated undertakings 2 1 1 Returns on investments and servicing of finance: Interest paid on loan capital and other subordinated liabilities (166) (164) (346) Preference dividends paid by subsidiary undertaking (5) (16) (24) Payment to reserve capital (56) - (24) instrument holders Dividends paid (10) (7) (10) to minority shareholders Net cash outflow from returns on investment and servicing of finance (237) (187) (404) Tax paid (328) (419) (636) Capital expenditure and financial investment: Capital (166) (93) (365) expenditure Sale of 36 46 112 property and equipment Purchase of (8,594) (11,324) (14,490) investment securities Redemption of 5,107 2,145 5,666 investment securities Sale of 3,871 2,628 4,115 investment securities Net cash inflow/(outflow) from capital expenditure and 254 (6,598) (4,962) financial investment Acquisitions and disposals: Acquisition of 2 (45) - (2,421) subsidiary undertakings Sale of - - 13 associated undertakings Sale of other 3 4 283 307 group undertakings Net cash (outflow)/inflow from acquisitions and disposals (41) 283 (2,101) Equity dividend (632) (484) (779) paid Net cash 1,502 362 (395) inflow/(outflow) before financing Financing: Issue of Reserve Capital 520 510 1,350 Instruments (net of expenses) Issue of loan 1,724 - 861 capital and other subordinated liabilities (net of expenses) Repurchase of (254) (9) (212) loan capital and other subordinated liabilities Repurchase of - (311) (311) ordinary shares Issue of ordinary shares 25 13 81 (net of contribution to the Quest) Redemption of (148) (149) (149) preference shares Net cash inflow 1,867 54 1,620 from financing Increase in 4 3,369 416 1,225 cash NOTES TO CONSOLIDATED CASHFLOW STATEMENT (UNAUDITED) 1. Reconciliation of operating profit to net operating cashflows Half year Full Year 30.6.01 30.6.00 31.12.00 £m £m £m Operating profit 1,933 1,674 3,290 Provisions for bad and doubtful debts 498 376 817 Depreciation and amortisation 260 127 302 Net (decrease) / increase in accrued expenditure and prepayments (323) 93 188 Provisions for contingent liabilities and commitments 2 (1) (1) Other provisions for liabilities and charges 70 143 313 Interest on dated and undated loan capital and other subordinated liabilities 237 155 335 Increase in shareholders' interest in the long-term assurance fund (90) (75) (165) Profit on redemption/repurchase of loan - (2) (2) capital Net (increase) / decrease in net interest and commission receivable (255) (50) 369 Net profit on disposal of investments and fixed assets (44) (31) (60) Other non-cash movements 20 21 35 2,308 2,430 5,421 Net change in items in transit and items in course of collection (250) (314) (241) Net increase in other credit balances 5,175 4,256 1,857 Net increase in loans and advances to banks and customers (26,569) (16,081) (7,942) Net increase in deposits and debt securities in issue 38,796 22,434 13,611 Net (increase) / decrease in other assets (1,205) 536 1,235 Net increase in other debt securities and equity shares (13,420) (3,356) (7,079) Net (increase) / decrease in treasury and other eligible bills (2,192) (2,291) 1,676 Other non-cash movements (159) 152 (52) Net cash inflow from operating activities 2,484 7,766 8,486 NOTES TO CONSOLIDATED CASHFLOW STATEMENT ( UNAUDITED) 2. Cash flow in respect of the purchase of subsidiary undertakings during the period Half-year ended Full year 30.6.01 30.6.00 31.12.00 £m £m £m Cash consideration, including acquisition expenses 45 - 2,494 Cash at bank and in hand acquired - - (73) Net cash outflow in respect of the purchase of subsidiary undertakings 45 - 2,421 3. Sale of subsidiary and associated undertakings Half-year ended Full year 30.6.01 30.6.00 31.12.00 £m £m £m Goodwill written off 7 - - Advances and other accounts 402 940 949 Deposits and other borrowings (416) (870) (849) Net (liabilities) / assets disposed of (7) 70 100 Net (loss) / profit on disposal (4) 178 207 (11) 248 307 Amounts not yet settled (including deferred consideration) 15 35 - Settled by net cash received 4 283 307 4. Analysis of cash balances 30.6.01 1.1.01 Change 30.6.00 1.1.00 Change £m £m £m £m £m £m Cash and balances at central bank 1,048 1,243 (195) 588 1,166 (578) Loans and advances to other banks 5,642 2,094 3,548 1,978 967 1,011 repayable on demand 6,690 3,337 3,353 2,566 2,133 433 Half-year ended Full year 30.6.01 30.6.00 31.12.00 £m £m £m Balance at beginning of period / year 3,337 2,133 2,133 Net increase in cash before the effect of exchange rate movements 3,369 416 1,225 Effect of exchange rate movements (16) 17 (21) 3,353 433 1,204 Balance at end of period / year 6,690 2,566 3,337 ALTERNATE BARCLAYS PLC/WOOLWICH PLC PRO FORMA DISCLOSURE Basis of preparation of pro forma results In order to provide a benchmark against which the Group's future performance can be compared, pro forma results have been prepared for the six months ended 31st December 2000 and six months ended 30th June 2000 assuming that the acquisition of Woolwich plc took place on 1st January 2000. The pro forma results for the six months ended 31st December 2000 and six months ended 30th June 2000 have been prepared on the following basis: Changes in accounting policies. The results for Woolwich plc have been restated using Barclays Group accounting policies. This has resulted in mortgage incentives and software costs, previously capitalised and amortised, being expensed as incurred. Changes in accounting estimates The results for Woolwich plc have been adjusted to reflect the Barclays depreciation rates and other accounting estimates. Adjustment to reflect net funding of the acquisition of Woolwich plc Interest received has been reduced by £52m in the six months to 30th June 2000 and £76m in the six months to 31st December 2000 to reflect interest foregone had the cash element of the acquisition been paid on 1st January 2000. This is based on the assumption that the amount would have been deposited at the internal transfer price of cash, which is calculated based on an average of one-month sterling LIBOR over the period. Results of businesses disposed of The results of any businesses disposed of during 2000 by either Barclays or Woolwich plc have been eliminated, together with any profits or losses on disposal. Proceeds of £286m are assumed to have been received on 1st January 2000 and interest received adjusted on the same basis as for the funding adjustment above. No adjustment is made for acquisitions and disposals in 2001, the affect of which is immaterial. Goodwill amortisation. Amortisation of £103m per six month period based on goodwill balance of £4,121m over its estimated economic life of 20 years has been included in the pro forma accounts. Costs of acquisition Incremental costs incurred by Woolwich plc in relation to the acquisition have not been included. ALTERNATE BARCLAYS PLC/WOOLWICH PLC PRO FORMA DISCLOSURE (CONTINUED) PRO FORMA CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR BARCLAYS PLC AND WOOLWICH PLC (EXCLUDING BUSINESSES DISPOSED OF IN 2000) (UNAUDITED) Half year ended Actual Pro forma 30.6.01 31.12.00 30.6.00 £m £m £m Interest receivable 6,968 7,037 6,509 Interest payable (3,944) (4,181)(3,825) Profit on redemption/repurchase of loan capital - - 2 Net interest income 3,024 2,856 2,686 Net fees and commissions receivable 1,786 1,865 1,732 Dealing profits 570 262 415 Other operating income 218 214 218 Total non-interest income 2,574 2,341 2,365 Operating income 5,598 5,197 5,051 Administration expenses - staff costs (1,738) (1,595)(1,594) Administration expenses - other (1,062) (1,100)(1,035) Depreciation and amortisation (152) (147) (147) Operating expenses (2,952) (2,842)(2,776) Operating profit before provisions 2,646 2,355 2,275 Provisions for bad and doubtful debts (498) (453) (397) Provisions for contingent liabilities and (2) - 1 commitments (Loss)/income from joint ventures and associated undertakings (6) 2 (12) Operating profit 2,140 1,904 1,867 Restructuring charge (63) (126) (106) Woolwich Integration costs (19) (7) - Woolwich fair value adjustments (16) (6) - Goodwill amortisation (115) (110) (109) Exceptional items (4) - - Profit on ordinary activities before tax 1,923 1,655 1,652 The basis for preparation of the 2000 numbers above is set out on page 69. US GAAP DATA (UNAUDITED) The following unaudited financial information has been adjusted from data prepared under UK GAAP to reflect significant differences from US GAAP. 30.6.01 30.6.01 30.6.00 30.6.00 UK US UK US GAAP GAAP GAAP GAAP £m £m £m £m Profit attributable to the members Of Barclays PLC - Net income 1,307 1,065 1,320 1,082 Shareholders' funds 14,106 13,645 9,237 8,578 Total assets 363,950 381,827 286,385 289,639 PER ORDINARY SHARE Pence Pence Pence Pence Earnings 78.6 64.1 88.9 72.9 Diluted Earnings - US GAAP - 63.4 - 72.1 Dividend 23.0 38.0 20.0 32.5 Net asset value 848 820 626 581 PERFORMANCE RATIOS % % % % Net income as a percentage of average total assets 0.7 0.5 0.9 0.7 average shareholders' funds 19.0 15.9 29.6 25.5 Dividends as a percentage of net income 29.3 59.3 22.3 44.7 Average shareholders' funds as a percentage of average total assets 3.6 3.3 3.0 2.8 OTHER INFORMATION Registered office 54 Lombard Street, London, EC3P 3AH, England, United Kingdom. Tel: 020 7699 5000 Registrar The Registrar to Barclays PLC, PO Box 82, The Pavilions, Bridgwater Road, Bristol, BS99 7NH Tel: 0870 702 0196 Listing The principal trading market for Barclays PLC ordinary shares is the London Stock Exchange. Ordinary shares are also listed on the New York Stock Exchange and the Tokyo Stock Exchange. Trading on the New York Stock Exchange is in the form of ADSs under the ticker symbol 'BCS'. Each ADS represents four ordinary shares of £1 and is evidenced by an ADR. The ADR depositary is Morgan Guaranty Trust Company of New York (tel: (781) 575 4328). Filings with the SEC Statutory accounts for the year ended 31st December 2000, which also include the joint annual report on Form 20-F of Barclays PLC and Barclays Bank PLC to the Securities and Exchange Commission in the United States of America, can be obtained from the Vice President, Corporate Communications, Barclays Bank PLC, 222 Broadway, New York, NY 10265 or from the Head of Investor Relations at Barclays registered office address shown above. For further information; please contact: John Varley Finance Director 020 7699 5000 - Switchboard Ian Roundell Investor Relations Director 020 7699 2961 - Direct Line Leigh Bruce Corporate Communications Director 020 7699 2658 - Direct Line More information on Barclays, including the 2001 interim results, can be found on our website at the following address: http://www.investor.barclays.com

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